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A guide to the importance of employee benefits—like employee financial wellness—and why you should take advantage of them
The perks of employment: employee benefits
Employee benefits are great, right?! They help nurture a good and healthy relationship between employer and employee. Whether it's health insurance or retirement savings, as an employee, it can be difficult to know how and when to use these benefits. After all, you're young, do you really need life insurance (maybe?!) or a retirement plan (yes, you sure do).
We're here to help coach you through all 10 themes of financial wellness—and help you understand which employer-sponsored benefits you should consider. Including, identifying if, and how much employer-sponsored life insurance you could consider. But, first, let's get down to the basics of open enrollment.
What is open enrollment?
Insurance can be complicated. New hire docs seem endless—and, somehow, in Latin?! We get it. Whether you're fresh into the workforce and off your parents' plans, in need of a healthcare change, looking into employee benefits at prospective jobs, or simply just looking to better understand your insurance costs… you’re in the right place.
Open enrollment is the season of the year when your employer and benefit providers allow you to evaluate, re-enroll or change your plans. Typically, you can only change your benefits—like your health insurance—after a life-changing event (e.g., marriage, spouse's change of work, divorce, death), or, during a very specific time period called, "open enrollment," which typically lasts about one month. Your HR team will communicate all the ways you can update your employee benefits—make sure you take the time to do this.
More on this in a minute.
What are employee benefits?
Some examples of employee benefits (a.k.a. perks or fringe benefits) are:
There are different kinds of health insurance—vision, dental, medical—that come with different plans, different co-pays, and different rules. Picking which health insurance plan is right for your lifestyle and needs can be tricky. We can help you learn how to choose your health insurance plan.
Life insurance
Learn more about life insurance with this easy-to-follow guideline for determining if and how much life insurance you could consider so that your family is well-supported in the event of your passing.
Retirement benefits or accounts
Check out these resources to dive deeper into retirement benefits and planning: how much you should save for retirement and retirement planning in a crisis. If you’re lost or stuck with your 401k account, learn more about what to do if you don't have a 401k or if you don’t know what to do with an old 401k.
PTO - "Paid Time Off," a.k.a. your sick and vacation days
Some companies offer two separate pools for "sick" and "vacation" days, while some just lump them all into one bucket. Be sure to know what's what before booking that vacay!
Open enrollment: the scheduling analogy
Open enrollment is a pretty general term, but when it comes to insurance and healthcare, it's vital to understand what it is and why it even exists.
Think of it like this: you enroll for classes in college before the semester starts. You also only have a finite period to register, typically known as the “add-drop deadline,” and then when it’s closed, you’re pretty much stuck in your schedule.
In terms of healthcare, the process is similar, but just a little bit different.
Your employer researches, reviews and selects plans
Your employer offers you various options in your onboarding package, and again during open enrollment (or after a life-changing event like marriage, spouse's change of work, divorce, death)
You choose your plans during a finite period of time and enjoy your benefits
Not every company's open enrollment is the same period of time. Some companies follow calendar-year benefit plans starting Jan. 1; their open enrollment often takes place in November. Check with your employer to see your specific deadlines.
You'll have an open enrollment period right after you start your job, and again during the company's annual open enrollment period. After this period of time, you are pretty much stuck in your plan (the "add/drop" period is over) without one of those life changing/qualifying events.
Now, if you're preparing for the birth of a baby or expecting another major life change like getting married, you may be eligible to edit your insurance plan outside of the specified open enrollment plan. Check with your HR team.
The importance of employee benefits
Employee wellness is a big deal. Especially in a competitive labor market! Employee benefits range from financial wellness support (ayo, Pocketnest clients!) to life insurance and retirement plans. Remember: these benefits are often part of your compensation package—so, if you don't elect in things like an employer retirement match, you're leaving free money on the table!
Sure, you could buy and finance your own individual or family insurance plan. But, that tends to be WAY more expensive. Your employer works with what's called a benefit provider. And that benefit provider offers your employer benefits packages at a "wholesale" price. That means that your employer is able to either subsidize your cost so it's less cash from your wallet—or, in some cases, they cover the expenses altogether.
Not to mention, sweet employee perks make you want to stick around longer! Research shows that employers who offer employee financial wellness benefits experience better employee recruitment, retention and productivity. So, it's kind of a win-win sitch!
End game
Really look into what benefits your employer provides to ensure that you can maximize your perks. Fully understanding the ins and outs of your employee financial wellness offerings and other employee benefits are fundamental to a successful future.
Pop into the To-Do section of the app and make sure you're up to date on this week's list!