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  • Writer's pictureisabelleclausen

4 Questions to Ask About Your Employee Benefits Package

Updated: Mar 16, 2022

Employee benefits

Did you know that according to a Bankrate 2021 article, 55% of Americans are expected to search for a new job over the next 12 months? Furthermore, the article shared that 77% of Gen Z workers and 63% of Millennial workers will be looking for new positions in this next year.

If you’re someone who wants to search for a new job in this next year, it’s important to understand what important employee benefits you should look into as you learn more about different benefits packages.

I believe that some of the most important benefits packages are:

1. Health Insurance

2. Life and and disability insurance

3. Retirement Benefits

4. Remote Work/Paid Time Off

Here are four questions I think you should ask yourself as you analyze different benefits packages:

1. Does my health insurance cover my family members?

2. Do I have options when it comes to my health deductible and coinsurance?

3. Does the company have an advisor for retirement plans and life and disability insurance policies?

4. Are there any expectations or rules I should know about when it comes to remote working or paid time off?

Let’s dive into each of these questions!

1. Does my health insurance cover my family members?

This is a common question that many people wonder as they get married and start to expand their families. For single people, employer provided health insurance is great! But what happens as your family grows?

What normally happens is the premium (the price) you pay for your health insurance increases when you apply for family coverage.

According to the 2021 KFF report, the average annual premiums for family coverage was $22,221, with the employer paying about $16,243 and the employee paying about $5,969. This adds up to the employer paying about 73% of the premiums and the employee paying about 27%.

To contrast these prices to coverage for a single person, the average premium for single health insurance coverage is about $7,739. The employer paid about 83% and the employee paid about 17%.

Please refer to Figure B from the KFF Report for more details.

As you start a new position or see yourself expanding your family in the near future, be sure to check in with your human resources department to see how your health insurance costs will change so that you can adequately adjust your budget.

2. Do I have options when it comes to my health deductible and coinsurance?

I find that it can be confusing to understand the difference between the terms: deductible, coinsurance, and out-of-pocket maximum.

My favorite way to remember the difference between these three terms is the “D” in deductible stands for “deduction from your wallet”. The “CO” in coinsurance stands for “collaboration”. The “Out” in out-of-pocket maximum means “out of the picture”. Let me explain.

When you pay your deductible, this is the amount of money you must pay from your own wallet before the insurance kicks in. You are deducting money from your wallet when you pay your deductible.

When your coinsurance is utilized, this means that you and your insurance company are splitting the cost between any dollar amount that exceeds your deductible. Usually, you pay 20% of the cost, and your health insurance company pays 80%. But each company can have slight variations in the coinsurance ratio.

When you reach your out-of-pocket maximum, you have paid the most medical bills to pay for this circumstance. After you reach this maximum, you are out of the picture. You reach this maximum by paying your copay, deductible, and a certain amount of coinsurance (your portion).

To better understand this, I am going to be sharing an excerpt from a NerdWallet blog post. They share a great example that is very easy to digest:

The first example that this blog post elaborates on is when a woman named Prudence goes to visit an MRI and then later goes to the ER.

Prudence is single and has an annual deductible of $1,200. After she pays her deductible, her coinsurance is an 80/20 split, meaning her health insurance pays 80% of the medical bills and she pays 20%.

The article further explains that the MRI copay is $50 and the price for the MRI is $1,000. Since her deductible is $1,200, she will have to pay the $1,000 (which counts toward her deductible) and the $50 (which does not count toward her deductible).

Now, her total out-of-pocket costs is $1,050.

The article goes on to say that later in the year, poor Prudence goes to the ER from a hiking accident, and the cost for the ER is $3,400. Her copay for this is $100. But since she only has to pay $200 of the ER cost to meet her deductible, the remaining balance past her deductible is $3,200. Of this remaining balance, Prudence will pay 20% ($640) and her insurance will pay 80% ($2,560).

After both the MRI and the ER instances, Prudence has paid a total of $1,990. If she has any more accidents, she will just have to pay the 20% coinsurance portion until she reaches her plan’s out-of-pocket maximum.

Thank you to NerdWallet for providing this helpful example.

For some people, their deductible might be very high, which can cause people to have to pay a lot of money before their co-insurance kicks in. For individuals with a high deductible, an HSA can be a great resource!

According a 2021 Health Equity survey, 77% of respondents shared that having an HSA gave them “peace of mind” in 2021. If you would like to know more about HSA plans, please check out this Investopedia article.

3. Does the company have an advisor for retirement plans and life and disability insurance policies?

One of the biggest struggles that we see with clients when they meet with us for guidance is that they are struggling to understand their retirement benefits at work.

With so many options, plans, and packages, it is difficult for employees to have confidence in choosing their retirement plan when they don’t have someone to guide them and bounce ideas off of.

According to a 2021 NAPFA survey, when asked the question: “How do you save for your retirement?”, the top answer among responders of all ages was through their 401k.

So many people’s primary retirement savings is through their employer sponsor’s plans, but most people don’t understand these plans enough due to the fact that they are not receiving proper advice from financial professionals.

The same can be true when analyzing employer-sponsored life and disability insurance. With the various clauses, benefits, and costs, it can be difficult for employees to know which option is right for them.

When analyzing your retirement and insurance benefits, ask yourself these three questions:

1. Do I understand all the details?

2. Is it personalized to my needs?

3. Am I maximizing my benefits?

If you are unsure about the answers to any of these questions, it would be smart to reach out to your financial advisor.

He or she can take a look at your employer sponsored retirement plan to analyze if the investment allocation meets your risk tolerance, time horizon, and economic outlook. The advisor can also look at your insurance packages to see if your coverage matches your lifestyle needs if something were to happen to you.

A retirement plan and insurance package should be personalized to you, and your advisor can help you with this.

For some reference information, here are items to be aware of when reviewing your 401k:

  • The maximum 2022 elective contribution (the amount the employee contributes) is $20,500 (if you are 50 years old or older, you can add an additional $6,500 to this).

  • The way an employer contributes to a 401k is though the form of matching the employee’s contribution up to a certain amount. The maximum combined 2022 employer and employee contribution is $61,000 (if you are 50 or older, this amount increases by $6,500).

4. Are there any expectations or rules I should know about when it comes to remote working or paid time off?

The final part of this blog post involves the topic of paid time off. As the pandemic has caused many workers to work remotely from home, many employers are still offering Paid Time Off (PTO) to workers, but workers are taking less of it.


One reason is because it was difficult to travel during the pandemic. Another reason is that some people felt more stressed returning to a large pile of work after their time off. Many people felt odd to take time off even though they didn’t have anywhere to go during the pandemic (, 2020).

If you’re looking for a new job this year, talk to your recruiter about the expectations for vacation time or paid time off so that you know what to expect and don’t have to feel guilty or stressed if you choose to take a break from work during the year.

Knowing the expectations and rules can give you an added sense of confidence when creating your calendar.

I hope that these tips and questions were helpful and gave you some extra insight if you are considering changing career paths or positions in your company. If you have questions or if you would like to set up a quick call to talk about your employee benefits packages, please reach out to us!


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

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