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Employee Benefits

Explore employee benefit options, from medical benefits to work-life balance programs.

Medical and retirement benefits are usually fixed and, therefore, non-negotiable. [©Jupiter Images, 2009]
©Jupiter Images, 2009
Medical and retirement benefits are usually fixed and, therefore, non-negotiable.

Employee benefit packages typically include medical and retirement accounts, paid holidays and vacations, sick leave, life insurance, and long-term disability. According to the Bureau of Labor Statistics, as of March 2008, about three-quarters of private industry and state and local government workers have access to medical benefits while, two-thirds have access to retirement benefits.

Work-life balance benefit programs have become an increasingly popular addition to employee benefits because they boost employee morale, create a supportive work environment and help retain employees. Work-life balance programs include wellness programs, employee assistance programs (EAPs) and workplace flexibility. Prospective employees can negotiate benefits during the hiring process, although it is best to wait until an offer of employment has been extended.

Medical Benefits

Employers may offer more than one medical plan, and employees can choose the one that is most cost-effective. Plans may also include dental and vision care as a separate add-on plan so employees can choose to enroll or not. The types of medical plans include:

  • Health Maintenance Organizations (HMOs offer lower group rates, but employees must stay within a network of providers and get referrals from their primary doctor.
  • Preferred Provider Organizations (PPOs) and Point of Service (POS) plans are similar to HMOs, but they offer more flexibility to see out-of-network professionals.
  • Health Savings Accounts Plans allow employees to make pre-tax deposits into a savings account that is used to pay for medical expenses as they arise.

Retirement Benefits

Retirement plans offered by employers can make saving for retirement more feasible for employees. A 401(k) plan is the most common. Employees can contribute up to the maximum amount each year and employers often match contributions. The contributions are made pre-tax, and the money is invested into mutual funds or company stock. Earnings are tax-deferred until the money is withdrawn.

Employers with up to 100 employees can offer a SIMPLE IRA. Workers can contribute up to $6,000 every year, and employers are required to match a percentage of the employee's contribution.

Profit-sharing plans are another retirement option some companies offer. Employers contribute money every year to an investment account, depending on the company's annual profitability. Contributions and earnings accumulate tax-free until workers make withdrawals.

Paid Holidays, Vacations and Sick Leave

As of March 2008, paid holidays were available to 77 percent of private industry workers and 68 percent of state and local government workers. Paid vacation leave was available to 78 percent of private industry workers and 60 percent of state and local government employees. Access to sick leave is more frequent in state and local government than in private industry. Full-time workers are more apt to receive paid-leave benefits than part-time workers.

Life Insurance and Long-Term Disability

Life insurance and long-term disability are usually optional programs with either one-time employee contributions or a set withdrawal amount every pay period. In some programs, the life insurance coverage equals the employee's salary, but it could pay double or more . Coverage may be reduced after the employee reaches a particular age.

Long-term disability is offered in the event that the employee cannot work due to illness or injury. It frequently pays around 60 percent of the person's base salary, starting after six months and continuing until the employee is no longer disabled .

Work-Life Balance Programs

Wellness programs were designed to reduce benefits costs by providing employees and their families help with nutrition assistance, physical fitness and stress management. Helping employees lead healthier lifestyles with fewer illnesses results in less costly benefits coverage for organizations. Examples of common wellness programs include smoking cessation clinics, exercise/fitness programs, weight control programs and periodic physical examinations.

According to the Employee Benefit Research Institute, 40 percent of workers have access to an EAP, often a component of an organization's wellness program. EAPs were developed to help maintain job performance for workers struggling with personal issues, such as alcoholism, mental health, drug addiction and elder care. Assistance is confidential and short term.

Workplace flexibility options, such as flextime, part-time work, telecommuting and job sharing, were designed to attract and maintain good employees. Employees who prove themselves on the job are more likely to receive the benefits of workforce flexibility. Employers would rather retain trained employees who can be counted on then incur the expense of training new employees.

Negotiating Employee Benefits

Medical and retirement benefits are usually fixed and, therefore, non-negotiable, unless the employer is very small. Softer benefits, such as flexible work schedules, parental leave time or extra vacation days, may be easier to negotiate. Job candidates can often research benefits on the company's Web site, or they can talk to contacts who already work at the company to find out what benefits are standard and ask for advice on what to negotiate.

Prospective employees should wait until a job offer has been made to negotiate benefits. Job candidates that bring unique abilities to the company will have a greater success at negotiating additional benefits because the company will feel like they are getting something in return.

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