You are preparing are open enrollment and want to better understand your benefits options.
This blog post will help. It covers all of the standard employee benefits offerings, so you can get a jumpstart with open enrollment this year.
- Health Insurance
- Health Savings Options: HSA, FSA, HRA
- Paid Time Off
- Performance Pay
- Short and Long-Term Disability
- Commuter Benefits
Employer Benefits List
Health insurance is a type of insurance coverage that covers medical and healthcare expenses. Health insurance reduces financial risk by reimbursing individuals or paying the provider directly for predefined costs in exchange for monthly premiums. Health insurance covers healthcare costs. The most common health insurance plans are PPOs, HMOs, and HDHPs. Health insurance is designed to cover all or a portion of healthcare costs. This often includes preventative care, doctor’s visits, prescriptions, lab work, or surgical requirements.
Health Savings Options: HSA, FSA, HRA
- An HSA or Health Savings Account is a personal savings account for health expenses. An HSA is not a health plan but can be used in conjunction with HSA-eligible health plans, like HDHPs, to save tax-free dollars on health expenses. HSAs allow for tax-deductible contributions, tax-free interest and tax-free withdrawals (for medical expenses). In 2019, individuals can contribute up to $3,500 in tax-free savings and families can contribute $7,000.
- An FSA or Flexible Spending Account is a pre-tax health account (sometimes referred to as a medical FSA or health FSA) that can be used to pay for eligible healthcare expenses. An FSA is provided by employers and gives eligible employees a tax-free account to save money for expected qualifying health expenses. Using an FSA can reduce your applicable income taxes and save you money on predicted health expenses.
- An HRA or Health Reimbursement Account is an employer-funded health account that allows for tax-free reimbursement of out-of-pocket medical expenses. These accounts are owned by the employer, not the employee. As such, when an employee leaves their employer the funds stay with the employer. Your HRA is not your healthcare plan.
Paid time off or PTO is the hours employees are paid even when they aren’t working. These include sick days, vacation days, and personal days. These are often ‘earned’ based on hours or days worked. Employees have the flexibility to take this time when they need or want it.
A 401(k) is the gold standard of retirement savings with dedicated funds to save tax-free money. The maximum 401(k) contribution limit in 2018 is $18,500, but if you’re at least 50 years old the limit increases to $24,500. With a 401(k), generally speaking, you must wait to use those dollars until you are 59 and 1/2 years of age.
Performance Pay is financial incentives (like cash bonuses, stock grants) based on incentive-based performance goals. Generally speaking, higher performance is rewarded with higher financial incentives.
Short and Long-Term Disability – These are in place to help provide financial relief if you are no longer able to work.
- Short-Term Disability or STD pays a portion of your salary (income) after your exhaust all of your sick and/or PTO time. Short-term disability generally lasts from 9 to 52 weeks (1 year), but check your plan specifics to confirm.
- Long-Term Disability or LTD also pays a portion of your salary (income) after your exhaust all of your sick and/or PTO time and short-term disability. Long-term disability generally lasts for a specific amount of years (like 2 or 5 years), until you reach a specific age (like 65), but check your plan specifics to confirm.
Commuter Benefits (sometimes referred to as qualified transportation fringes) are voluntary tax-free funds that reduce commuting expenses. This includes work-related transit, bicycling, and parking costs. Employees can add pre-payroll contributions to reduce their tax burden for these qualified costs.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.