The broader value of employee benefits

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You might be surprised to learn that workplace benefits account for about one-third of total compensation among U.S. employees.
 

Article highlights
  

  • Know your offerings
  • Advantages of group coverage
  • Benefits are getting creative

According to the Bureau of Labor Statistics, benefits are worth an additional $11.18 an hour to the average national hourly wage of $24.10.1

Given how valuable workplace benefits can be, it’s important to understand your full benefits package beyond paid time off, a 401(k) and health insurance. There could be other insurance that could help you protect the ones you love.

 

Take disability insurance. There’s a one in four chance that a 20-year-old will need disability coverage during his or her career.2 Yet many people don’t prepare for this possibility until it’s too late. A plan through your employer is often the easiest (and may be the least expensive) way to get this important coverage.

For additional insights into the value of employee benefits, we asked three benefits experts for their thoughts:

  • Audrey Im is AVP of health and welfare benefits at Lincoln Financial Group.
  • Michael Thompson is CEO, National Alliance of Healthcare Purchaser Coalitions.
  • Joanne Forbes is Area VP, Health & Welfare Consulting with Hill, Chesson & Woody Employee Benefit Services.

Take advantage of employer benefits

“Employees may not be fully aware of everything that’s available to them,” says Im. “Employee benefits are there to provide protection so our employees and their families can focus on other things.”

“Clearly, you need to know that a benefits package is supportive of what you and your family need,” says Thompson. “It starts with medical, but it doesn’t end with medical. Do you need strong disability, life insurance or dental? Look at all of these.”

Employee benefits pick up part of the tab 

According to Forbes, most people sign up for employer-based coverage because of the convenience—and cost-effectiveness. “Even if your employer doesn’t pay for it, but offers it to you on a voluntary basis, it will typically run less than what an individual policy will cost you.”

“If employees were to go out on the street and try to get disability coverage on their own, they would be paying a lot more,” says Im.

“For disability and life insurance, there may be no medical underwriting when you’re first enrolling,” says Im, adding that if you miss the enrollment window, then underwriting may be required for both policies.

Employee benefits cover many situations

One of the biggest advantages of using your employee benefits is the amount of life situations it covers. Unfortunately, there are trying times in your family’s life where you will need assistance from various benefits such as disability, accidental, and critical illness insurance.

“People may not realize that pregnancy is considered a covered short-term disability, too,” says Im.

Im adds that voluntary benefits can also help bridge your health insurance gaps. “If you have a high-deductible plan, critical illness or accident insurance can help give you the income to pay for expenses that your medical insurance doesn’t cover,” she says.

Employee benefits are getting creative

“We’re seeing a growth in tele-medicine,” says Forbes. “I have an app on my phone and within 10 minutes I’m face-to-face with a doctor. There’s a convenience aspect to employees. They don’t lose three hours of work, and the cost of the doctor’s visit is less than half of going to a physician.”

“I see a lot of interest in financial wellness, actually helping employees with broader financial planning in their lives, not just the 401(k),” says Thompson. “Employers know that the wellbeing of their business and the wellbeing of their workforce are highly integrated.”

Get more information on some of the benefits your employer may provide and how they can help you maintain your financial goals.

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1 “Employer Costs for Employee Compensation.” Bureau of Labor Statistics. March 10, 2016.  http://www.bls.gov/news.release/ecec.nr0.htm

2 “Disability Facts.” Social Security Administration. June 2015. https://www.ssa.gov/disabilityfacts/facts.html