Benefits!

 It’s the most wonderful time of the year…OPEN ENROLLMENT. Or maybe you just started a new job?

We’ve put together a comprehensive guide to selecting benefits at work.

We’ve also put together specific resources on selecting benefits at the companies that employ our clients. Click here for specific benefit information on Asana, BarkBox, Etsy, Spotify, Palantir , Squarespace, Coinbase, Olo and Facebook (Meta).

We recorded a timely and TIMELESS webinar on our approach to employee benefits.

FAQs

What are typical benefits provided by an employer?

Health Insurance

This is usually a shared cost with your employer. There are so many confusing and unique choices. We’ve put together a worksheet to help you pick the right plan for your family. Note that the cheapest plan is not always the best option. For more information on common health insurance plan lingo, visit Health Insurance 101.

Cost comparison calculator: Download spreadsheet here.

Health Savings Account (HSA)

A Health Savings Account is a tax-preferred account specifically for medical expenses. If you participate in a High Deductible Health Plan (HDHP), then you are able to contribute to an HSA. HSAs are the most tax-efficient vehicle created by Congress. Contributions you make are deducted from income pre-tax, growth is tax-deferred, and withdrawals for qualified medical expenses are tax-free.

BKFI Tip: Consider maxing out your HSA annually, investing your contributions, and paying for medical expenses out-of-pocket. This will take full advantage of the tax-free growth of your savings, and build a nest egg for future medical costs.

Healthcare Flexible Spending Account (FSA)

An FSA for Healthcare allows you to contribute pre-tax to an account for out-of-pocket medical expenses throughout the year. FSA funds are ‘use it or lose it’ and typically must be spent by March 15th of the year following your contribution. For example, 2021 contributions must be spent by March 15th, 2022 or they’ll be forfeited to your employer.

Dependent Care Flexible Spending Account

A Dependent Care FSA allows pre-tax funds to be set aside for childcare expenses - up to $5,000/year. If you have kids in daycare, or after-school care, this can save you some money in taxes. This account is also ‘use it or lose it’.

Disability Insurance

Disability Insurance provides you with income if sickness or injury causes you to be unable to work. There are two types of Disability Insurance - short-term and long-term. Short-term kicks in quickly and often provides a percentage of your weekly pay for up to a few months. Long-term often kicks in after the short-term period is over and pays a smaller percentage of your salary. Many employer plans will allow you to remain on long-term disability until you recover, or reach normal retirement age - whichever comes first.

BKFI Tip: When your employer pays the premiums for disability insurance, the benefits are taxable to you when you receive them. Consider this when estimating whether your employer provided disability coverage is enough.

Life Insurance

Life Insurance is often provided by employers - either as a flat amount or a multiple of your salary. Supplemental coverage for you, your spouse, and your dependents is often available for an additional cost. Life Insurance can help replace lost income in the event you pass away unexpectedly.

BKFI Tip: If you need life insurance, be sure not to link all of it to your employer’s coverage. Consider getting your own policy that you can keep even if you leave your job.

Bonus BKFI Tip: Make sure you list a beneficiary on your life insurance policy to ensure your wishes are met.

A 401(k) or 403(b)

These employer-sponsored retirement plans are a great way to save for your future. Many employers offer a matching contribution - free money they put in your retirement account as long as you contribute as well. You can often save on a pre-tax or Roth basis to have this money invested and growing tax-deferred until you retire and start taking withdrawals.

BKFI Tip: Have you maxed out your 401(k) for 2020? If not, there’s still time to go in and update your contributions. Unlike many other elections, 401(k) and 403(b) contributions can often be changed throughout the year.

What about Voluntary Benefits?

Voluntary benefits often provide additional, sometimes overlooked perks. Here’s a few that come to mind:

Legal Plans

Legal Insurance Plans are often a low-cost way to access an attorney. Many legal plans provide access to drafting important estate planning documents or reviewing contracts for home purchases.

Charitable Match

Many employers provide charitable gift matching for their employees. If there’s a cause important to you, you may be able to double your impact with money from your employer.

Sabbaticals

Burned out from COVID? Looking for a break? If your company offers a sabbatical plan, take this time to review it. You might only be a year or two away from a month-long recharge.

Can I adjust My Benefits During the year?

It depends. Health Insurance and FSA elections are often locked in for the entire year unless you have a qualifying event. Common qualifying events that may allow you to go through open enrollment again include getting married, having a baby, or moving.

Other benefits like your 401(k) or HSA contributions can often be adjusted throughout the year via your payroll system.