So you’ve landed your first “big girl” or “big-boy” job – congratulations! Exploring the details of your benefits package is one of the most adult things you can do, so air-five: you’re #adulting! But do you know how to navigate your benefits package? The type of benefits you receive probably depends on the size of your company. There are a few benefits that are pretty standard across the board no matter who you work for, and then there are some extras you may or may not want depending on your situation. Most employers understand the better benefits they offer, the happier employees will be! Here’s a breakdown of common benefits.
If you work for the government or a large company, you’ll likely receive a better benefits package than your startup-employed friends. However, health insurance is usually pretty standard. Some health insurance plans even include all forms of wellness programs, from weight loss management to exercise to stress relief to substance abuse issues. Adult tip: pay attention to deductibles (how much you pay out of pocket before insurance kicks in), co-pays, and in-network providers vs. out-of-network as these can vary widely from plan to plan.
Paid time off
These typically include sick days, vacation days, holidays, personal days, volunteer days, and bereavement leave. Some employers are just using the all-encompassing term “paid time off” to let their employees decide how to use their time away from work. Adult tip: it can vary by company how many hours new employees start off with, so be sure to know if your paid time off is accrued by the total number of hours worked or given in one lump sum at the beginning of each year. Also, know whether sick time is offered in addition to vacation time or if they’re all lumped in together.
There are two types of disability insurance, and both are pretty expensive for companies to provide. Short-term disability insurance guarantees an employee will receive a percentage of income if they can’t work due to an injury or illness. Long-term disability insurance provides the same protection if you can’t work for a longer period of time, generally three to six months, and usually cuts off after a defined number of years. Typically, 50-70 percent of your salary is covered. These are good benefits to have because you never know what life will throw at you (or that neighbor baseball prodigy kid with a killer arm)! Adult tip: if these insurances are offered by your new employer, be sure to know if one (or both) are offered at no charge to you or if you need to pay toward the premium yourself.
Dental and vision insurance
Dental plans are more common and usually include both preventative check-ups and emergency procedures—like those pesky root canals. But vision plans are important to a lot of people, too—especially if you’re the type that frequently misplaces your glasses. Adult tip: as with medical insurance, pay attention to deductibles, co-pays, and in-network providers vs. out-of-network as these can vary widely from plan to plan.
Most employees expect a life insurance policy to be included in a benefits package, particularly if they have a family. You hope you never have to use it, but it’s good to have just in case the unthinkable happens.Many companies offer life insurance coverage that equals 1X or 2X your annual salary at no cost to you – but is it enough to help cover expenses if you were to die tomorrow? Adult tip: if your employer offers optional additional life insurance, it’s usually very affordable and only costs a few extra dollars each pay period. Well worth the peace of mind, no?
Most employers will offer and contribute to a 401K or an IRA. Some will even set up a pension plan, meaning they’ll pay for your retirement and it won’t be dependent on the ups and downs of the stock market. Pensions are expensive for companies to fund, though, so they’re increasingly rare (if your new employer offers one – pat yourself on the back and take advantage of it!) Many employers provide a company match up to a certain percentage, which is basically extra free money toward your retirement. Adult tip: Familiarize yourself with the employer match (if any), and if possible, contribute at least as much as they match. Many retirement plans also offer tools on their website to help you forecast different contribution scenarios.
Healthcare flexible spending accounts (FSA)
These accounts are becoming more common as out-of-pocket costs go up. They allow the employee to determine how to allocate money towards co-payments, deductibles, and other healthcare costs. You can choose how much money to deduct from each paycheck (pre-tax) to be put in your FSA, which can then be used to pay for the aforementioned qualified medical expenses. Probably not something you think about if you’re single and healthy, but an FSA is a big deal if you have health concerns or a dependent family member with a health issue. Adult tip: If you have a health insurance deductible, it’s wise to consider setting a weekly FSA deduction to cover the deductible amount.