Perks and Benefits 101: Explanations and Questions to Ask Before You Take the Job was originally published on uConnect External Content.
Once you’ve found a job and company that you’re really excited about, salary might top your list of priorities. But while salary is important, it’s only part of the overall offer. To get the full scope of what you’ll really earn at a job, you need to factor in the perks and benefits that a company offers, too.
“Look at it as more of a package than just a job with a paycheck,” says Leslie Slay, senior vice president of employee benefits services at Woodruff Sawyer, an insurance brokerage and consulting firm.
Compensation traditionally includes non-salary benefits like health insurance and retirement plans. And many companies also offer perks—including flexible schedules, educational opportunities, and wellness programs—to support employees in other ways. “More and more, perks and benefits are becoming integrated together” to support employees in a more holistic way, says Bobbi Kloss, director of human capital management services at Benefit Advisors Network.
On average, a benefits package makes up about 30% of an employee’s total compensation in the U.S. So it’s definitely worth paying attention to the perks and benefits a company offers as you’re looking for a job in addition to the salary.
Employee benefits and perks can be confusing, though. In fact, about a third of all workers and 54% of millennials said they don’t understand the employee benefits they signed up for, according to a 2020 survey by Voya Financial. So as a job seeker it’s often up to you to ask a prospective employer plenty of questions to make sure the benefits they’re offering meet your needs.
Better understanding the benefits and perks you’re offered will help you make the best choice about which job offer to accept. To help guide you, here’s an overview of 15 common employee perks and benefits you might come across as you look for your next job:
Health insurance pays (or helps pay) for your medical expenses as they come up in exchange for a premium, or money paid—by you and/or your employer—to the insurance provider each month. Health insurance plans typically cover doctor visits, prescription drugs, emergency care, and certain medical procedures.
Health insurance plans vary from company to company and you’ll likely have a few to choose from. Some companies pay the full premium on their employee’s behalf, but usually you have to contribute to the cost with a certain amount that comes out of your paycheck before taxes. You may have some other out-of-pocket expenses, too, such as copays when you visit your doctor. Many insurance plans also have a deductible, which is an amount of money you’re responsible for paying before your health coverage kicks in. Make sure you’re aware of these costs before you choose a plan to enroll in.
And to ensure a company plan meets your needs, Kloss suggests checking that it covers treatments for any medical conditions you have or prescription medications you take, and that your preferred doctors are in the plan’s network.
If you have dependents (most commonly children or a partner you support financially) or plan to soon, you should also check that the plan will cover everyone and how much it will cost you. For example, a company may pay 100% of your health insurance premium but you may be stuck paying the full premium for everyone else in your family (which can add up fast). Read more about what all those health insurance terms mean here.
Dental and Vision Insurance
Dental and vision insurance cover your dental and eye-care needs. Dental insurance typically covers routine exams, cleanings, x-rays, and some portion of procedures like root canals and fillings. Vision insurance generally covers eye exams and prescription lenses.
Many employers offer dental and vision insurance, either as part of health insurance or as separate benefits. But whereas some employers cover a portion or all of the costs of health insurance, most companies require you to pay in full for dental and vision insurance, Slay says.
Just as you would with health insurance, check if the plans will let you keep your dentist and eye doctor (if you’d rather not switch) and cover any pre-existing conditions or treatments that you need.
Flexible Spending Account
A flexible spending account (FSA) allows you to put pre-tax money aside to pay for the year’s out-of-pocket healthcare costs, like over-the-counter medications, copays for doctor visits, medical devices like crutches or blood sugar tests, or vision and dental care needs like glasses or contacts. Your employer may also contribute up to $500 to your FSA without you contributing anything (they can match you dollar for dollar on top of the $500), so be sure to check if a company will pay into your account before determining your own contributions. Total FSA contributions are capped at a certain amount each year (for example, they were capped at $2,750 for 2021).
Life insurance is an insurance policy that pays a set amount of money to your chosen beneficiary (or beneficiaries) when you die. If you’re just starting your career and don’t have any children or others who depend on you financially, life insurance may not seem necessary. But it’s still something you should consider, Slay says—especially if your company covers your full premium.
You decide who you want to leave the money to, such as your parents or another family member, to help cover funeral costs, for example. You could even name your favorite charity as the beneficiary.
Disability insurance offers compensation or income replacement when you’re unable to work because of an injury or illness that’s not job-related. “I can’t tell you how critical disability insurance is; it protects your paycheck,” Slay says. Disability insurance is usually optional, but worth looking into, she says—just find out what your employer offers and what it will cost you. Some policies are fully paid by an employer and others require you to pay some of the costs in the form of a paycheck deduction, Slay says.
There are two types of disability insurance: short term and long term. Short-term disability insurance varies according to your plan, but typically covers you if you’re out of work for less than six months and on average pays about 60% of your regular salary, according to the Bureau of Labor Statistics. Most long-term disability insurance lasts for 10 years or less (but some policies last until you reach retirement age) and covers about 60% of your annual earnings.
A 401(k) is a retirement-savings plan that’s commonly sponsored by your employer. Plans can vary, but generally you contribute to the fund as a pre-tax paycheck deduction and pay taxes on the money when you withdraw it during retirement. Many companies match employees’ 401(k) contributions, either dollar for dollar, where they put in what you put in, or with a partial match—for example, adding 50 cents for every dollar you contribute, up to a certain percentage of your salary. Yearly employee 401(k) contributions are capped (the limit is $19,500 for 2021), but the employer match doesn’t count toward the limit.
Retirement may seem like a long time away. But Slay urges early career employees to contribute as much as they can to their 401(k), especially if there’s an employer match. The match can help you grow your savings faster and if you’re not taking advantage of it, you’re essentially leaving money on the table that your employer is offering to give you. Plus, in an emergency you may be able to pull money out of your 401(k) before retirement (and without paying a tax penalty) for certain expenses, like buying a home or paying medical bills.
Some companies have taken a new approach to employee retirement benefits recently to meet their workers’ current needs, Slay says. For example, some help employees pay down student loan debt by making direct payments to their lender, while others make a larger 401(k) contribution to employees currently paying off student debt.
Paid Time Off
Paid time off (PTO) can include paid holidays, sick leave, federal and state holidays, personal days, and vacation days.
Typically, the amount of PTO offered by your company is based on how long you’ve worked for them, and you accrue more PTO over time (for example, if you get 15 days of PTO per year, that means you accrue about 0.058 hours of PTO for every hour you work, or roughly 10.5 hours of PTO per month). If, say, you’re looking to start a new job right before a holiday or planned trip, you might want to ask the company if it has a policy about using PTO before you’ve technically accrued it.
How a company offers PTO varies, too. For example, some designate a separate number of personal, sick, or vacation days, which is sometimes required by state law. But, Slay says, more employers are lumping all PTO in together to make taking off easier for employees. Some companies even offer unlimited PTO.
Time off is an important factor in your overall compensation, so make sure to ask about how many PTO days you get. Often, you can negotiate your PTO, Slay says, particularly since the pandemic has shown more companies the benefits of giving their workers more time off. “PTO is one of those areas where you can ask for things that are a little different and you might get them.” Also, be sure to check if you can carry over unused PTO into a new year and whether you’ll be paid for any unused days when you leave the company.
Family and Medical Leave
The Family and Medical Leave Act (FMLA) is a U.S. law that enables employees to take unpaid leave for certain family and medical reasons. Employees can take up to 12 weeks off for the birth or adoption of a child, a family member with a medical condition who needs care, their own health condition that prevents them from performing job functions, and other reasons.
Under this law, your job is protected and your health insurance continues during this leave. Companies with more than 50 employees are required to comply with the law and you’re eligible if you’ve worked for the company for at least 12 months and meet other requirements. If you’re considering going to work for a smaller company, be sure to find out their policies for family and medical leave.
Parental leave enables employees to take off following the birth of a child, an adoption, or the arrival of a newly placed foster child, or for a child otherwise needing parental care, according to the U.S. Department of Labor. Though the FMLA requires some employers to offer unpaid leave in these instances, there’s no broad guarantee of parental leave in the U.S.—which means it comes down to the employer.
More than half of U.S. employers offer paid new child leave to women, and 45% offer paid new child leave to men, according to a 2020 study by the Society for Human Resource Management and Oxford Economics. However, specific policies vary for the companies that do offer parental leave, so find out about a prospective employer’s rules if you plan to start a family soon, Slay says. Ask whether the leave is paid or unpaid, whether your job will be there waiting for you when you return, and how much time off you’re allowed.
Remote Work Options
Remote work gives employees the freedom to work from home or anywhere else outside of a traditional office setting, either full time or part time in a hybrid schedule. The COVID-19 pandemic made remote work a necessity, and it was such a hit with workers that many have said they’ll quit their jobs rather than go back to the office. Employers realize that remote work has benefits for them, too, such as opening up a much broader, more diverse talent pool to hire from, so many organizations plan to allow remote work in some fashion post-pandemic.
While more employers will be offering fully or partially remote positions after the pandemic off the bat, the ability to work from home is something you can likely negotiate, Kloss says. “I think employers are recognizing after COVID that they can be more flexible in those areas than they ever thought possible.” So find out whether you’ll be able to work remotely some or all of the time and what the company’s policies are for remote work schedules, virtual meetings, and communication. Also ask whether they provide equipment or stipends for internet, phone, or other expenses for remote workers.
A flexible schedule is when your employer allows you to work hours and days outside of the traditional nine-to-five, Monday-to-Friday schedule. For instance, you might work 10 hours a day, four days a week or set core hours when you’re available, such as 9 AM to 1 PM, and have flexibility the rest of the day to complete your work whenever you’d like. Like with remote work, the pandemic led more companies to offer flexible schedules to accommodate different work styles and time zones as well as employees who have children or other caretaking responsibilities.
Flexible schedules are another perk that you can likely negotiate—just make sure you and your employer both come away with a clear idea of which days and times you’ll work.
Workplace wellness programs aim to improve an employee’s mental and physical health and offer more resources beyond health insurance. Wellness programs have traditionally included health screenings and tools to help people lose weight or stop smoking, according to the Kaiser Family Foundation.
But organizations have taken a broader, more holistic approach to their wellness programs in recent years by offering individualized supports that take into account an employee’s emotional, social, physical, and financial needs, Kloss says. Wellness-based perks—such as fitness subsidies, meals, and access to mental wellness apps and counseling—are becoming more common.
Even more so than with other perks and benefits, wellness program offerings vary widely, so find out the specifics of what a company offers and consider how it meets your needs.
Most companies offer some type of education benefit, including access to online courses, on-the-job training, tuition reimbursement for continuing education, and learning and development stipends to cover educational expenses.
If you’re just starting your career, these programs can help you succeed long term by keeping your skills fresh, which could increase your chances for promotions or raises, Slay says. Education benefits and perks also signal that a company values and invests in its employees and their growth. So be sure to ask what a company you’re planning to work for offers if education is important to you.
Mentor programs pair you with someone at your company who’s more experienced and can answer questions and offer guidance to help you advance in your career. “Mentorship is huge,” Slay says. Mentors can serve as advocates to help you navigate the technical and political parts of a job as well as you build and expand your network.
Mentorship programs help employees feel valued, create a culture of learning and increase job satisfaction and productivity, Slay says. So find out whether a company provides formal or informal mentoring and what their programs entail.
Diversity, Equity, and Inclusion Programs
Diversity, equity, and inclusion (DEI) programs and initiatives encourage the representation and participation of different and often underrepresented groups, such as women, people of color, people with disabilities, and the LGBTQ community. The programs may include mentorship opportunities, targeted recruitment efforts, and employee resource groups (ERGs).
As with many employee benefits and perks, some DEI programs are more robust than others. So it’s a good idea to find out the specifics of what a company offers and how it aligns with your values and needs, rather than just noting that they’ve ticked the box in offering a DEI program.
Before you accept a job offer, make sure you have a good grasp of the company’s benefits and perks and how they fit into your overall compensation structure. Ask plenty of questions to get all the details of how each benefit and perk aligns with your needs and negotiate to get what you want. Keep in mind, too, that when you’re searching for open jobs on The Muse, you can set filters so you’ll only see open positions at companies that offer the benefits and perks that matter most to you.