It’s open enrollment season for employee benefits, but if you are like most people, you will probably default to what you did last year. That’s a shame, because spending some time with your various plan options can help you save money and take advantage of your company’s buying power. Here are some overlooked and underused corporate benefits: Health Insurance: For the 150 million Americans, who participate in employer-sponsored health insurance plans, there is some good news. A recent Kaiser Family Foundation survey found that the average family premium costs increased by just 3 percent between 2015 and 2016, to $18,412, a continuation of a trend that has been going on for the past 15 years.
Unfortunately, the news is not all good. Employees are shouldering a larger part of overall health care expenses, due to sizable increases in deductibles, which have soared by 49 percent since 2011 to an average of $1,478. Some of that big jump is due to the use of high deductible health insurance plans, which can help families decrease their monthly premium payments.
With out of pocket expenses moving higher, not enough people are using Health Savings Accounts (HSAs), which allows you to pay for those unreimbursed costs, with Uncle Sam’s assistance. HSA contributions are either pre-tax or tax-deductible; you control how the contributions are invested; earnings and interest are tax-free; and withdrawals for qualified medical expenses are tax-free. And unlike flexible savings accounts, HSAs have no “use it or lose it” clauses, so you can rollover your contributions year after year, regardless of where you are working. Plus, once you reach age 65, all non-medical withdrawals are taxed at your current tax rate.
Insurance: Many companies offer affordable group rates for life, disability and long term care insurance, so you should definitely explore these options. This is a case where the buying power of a big group can help you find coverage that may not be available in the open market, especially when it comes to disability and long term care insurance, both of which are notoriously expensive in the private market. The most important thing to determine is whether the coverage is "portable", which means that you can take the policy with you, if you leave the company.
Retirement: More than half of large employers offer Roth 401ks to plan participants, yet only about 10 percent of employees are using them. With a Roth, workers make contributions using after-tax dollars and then they are able to take tax-free withdrawals at retirement. Roth 401ks are great for those who expect their tax brackets to rise in the future and higher income employees as well, because, Roth 401ks are not subject to minimum distribution requirements after age 70½, as long as they are rolled over to a Roth IRA.
Miscellaneous benefits: Only about 5 percent of employees use stress and mental health counseling services called Employee Assistance Programs (EAPs). The reasons that workers steer clear include: they don’t think EAPs are confidential, even though they have robust privacy protections under HIPAA; they feel there is a stigma associated with reaching out for help; they erroneously think they have to ask permission from the company; or they don’t know the services exist.
Anther valuable benefit that is going unused is company-based reimbursement for continuing education expenses for undergraduate, graduate and certificate classes. The time commitment necessary for extra coursework, as well as the requirement that workers’ earn at least a “B” to qualify for reimbursement from many companies, scares off a slew of would-be academic part-timers. Finally, corporate discounts and partnerships may help you save on cell phone contracts, computers and even on tickets to local events.