1 Employee Benefits

1. 1 Employee Benefits Benefits are a KEY part of your overall compensation! 30 – 40% (plus) of your total compensation will most likely be your employee benefits.

2. 2 Strategic Use of Benefits To get the most benefit from your benefits: • Educate yourself to make the right decisions • Understand your benefits to use the right plans the right ways

3. 3 Interviewing Stage Start thinking about benefits and their costs before you even interview. Ask or find out about: • Health Insurance Plan(s) • Retirement Plan(s) • Other Benefits?

4. 4 Job Offer Negotiate! (Not just salary) Example: New Out-of-State Job • Moving Expenses? • Apartment/House hunting trips? • Temporary Living Expenses? • Benefits Start Date?

5. 5 Strategic Use of Benefits Benefits Game Plan for New Grads 4 Key Areas 1. Health & Dental Insurance 2. Life & Disability Insurance 3. Financial Planning 4. “Other” Benefits

6. 6 Health Insurance Purpose of health insurance is to spread risk – a healthy person paying premiums helps cover the costs of a person who incurs more expenses.

7. 7 Health Insurance Why you want insurance even if you’re the healthy one: things can change QUICKLY. • Average costs: • an office visit is over $150. • an emergency room visit is over $1,000. • a broken wrist is over $7,000. • a broken leg is over $15,000. • an appendicitis is over $17,000.

8. 8 Evaluating Plans General Guidelines: • More provider choice and access will usually be more expensive. • Picking a plan isn’t easy – but there is help available (Through your job or online - e. g. CNNMoney.com – Healthplan Navigator)

9. 9 Health Insurance – Plan Types Nothing’s Simple – Lots to Know! • Traditional • PPO/POS • HMO (closed or open) • CDHP High Deductible • HRA • HSA • Medicare/Medicaid • COBRA

10. 10 Dental Insurance Dental Insurance - often almost a prepayment plan. What to look at: • What is covered? • How often? • How much out-of-pocket? • Providers/Network?

11. 11 Health (& Dental) Insurance Once you’ve picked a plan: • Examine (or re-examine) your choices carefully and annually • Use the Right Plan the Right Way Correct Facilities Correct Doctors or Dentists Correct Medications (Generic?)

12. 12 Flexible Spending Accounts (FSA’s) Avoid taxes on money you are going to spend anyway! Dependent & Health Care FSA’s (NOT HSA) Avoid Federal & State Income Tax + FICA Tax. Examples of Health Care Expenses Covered: Deductibles and co-payments, prescriptions, dental expenses, glasses, contacts, etc. Dependent Care Expenses Covered: Institutions that provide custodial care for dependent adults or children, before and/or after school programs, private baby-sitters

13. 13 Life & Disability Insurance Make sure you have the appropriate amount of coverage! How much life insurance do you really need? • Whole Life • Term Disability Insurance – just because you’ve never heard of it doesn’t mean you don’t need it. • Short term disability (STD) • Long term disability (LTD)

14. 14 Financial Planning Starting habits to build a solid financial foundation: • Money Management/Budgeting • Retirement Planning

15. 15 Financial Planning Smart money decisions now could have a PROFOUND impact on how you live later. (Not everyone thinks this is a great restaurant, and getting in and out gets a lot harder as you get older.)

16. 16 Paying for your Benefits • Out-of-Pocket Expenses: • Pre-tax • After-tax

17. 17 Financial Planning– Money Management Educate Yourself! Financial Education Classes – especially if available through your job (e.g. in-person and online classes) Books – Many available (e.g. Personal Finance for Dummies) Websites: CNN – MONEY101 – solid resource Financial vendors also offer many free online resources: TIAA-CREF: http://www.tiaa-cref.org/ Principal Financial Group:http://www.principal.com/ ING: http://www.ingretirementplans.com

18. 18Financial Planning– Retirement • IRA (Roth & Classic) • Defined Benefit • Defined Contribution (401K) • Profit Sharing • Social Security (Santa Claus & the Tooth Fairy too?)

19. 19 Financial Planning– Retirement Key Retirement Strategies • Diversify • Keep contributing • Leave it alone when you change jobs!

20. 20 “Other” Benefits In addition to the biggies of health, dental, and retirement – there are MANY other benefits to think about: • Vacation • Sick Leave • PTO • AD&D insurance • Vision • Hearing • Personal and Professional Development

21. 21 “Other” Benefits • Facilities (Gym? Daycare? Cafeteria?) • Transportation & Parking • Staff Discounts • Programs and Activities (Wellness? Bowling? Softball?) • Pet ins. • Concierge • Laundry • Shopping • Oil Changes • Reservations

22. 22 Unemployment & Worker’s Compensation • Unemployment Insurance: All states • Worker’s compensation: Not all states mandate it (e.g. Texas).

23. 23 Unions If you have a Union environment, they will probably negotiate your benefits for you. - Right to Work law

24. 24 More Resources THIS WAS JUST A START! Many Good Resources: • egrad: http://www.egrad.com/ • CNN/Money - personal finance education website: http://money.cnn.com/magazines/moneymag/money101/ • Quintessential Careers:http://www.quintcareers.com/ • About.com under, “financial plans, and/or career” • Google search for “Personal finance for recent college graduates” Good Books: Personal Finance for Dummies The Everything Personal Finance in Your 20s & 30s Book