The Hidden Costs Of Overlooked Benefits

July 29, 2015

August is an overlooked month. Every other month of the year has a holiday or is associated with an exciting beginning, but not August. Many of us try to sneak in one last summer weekend or some back to school shopping but other than that, August is usually a lull in the calendar. A great way to make August productive is to examine the employee benefits programs that you aren’t taking advantage of so that you know which options you do want to sign up for during open enrollment this fall. A few minutes now can help you be prepared to maximize your benefits and possibly save thousands of dollars instead of rushing through a decision or just doing what you did last year.

Disability Insurance

On average, people have a 25% chance of becoming disabled before they retire, yet less than a third of private sector workers have disability insurance. Signing up for group disability coverage through work is a cost-effective way to protect against a loss of income due to illness or injury. Use this disability insurance needs calculator to estimate the amount of coverage you may need and compare that to the level of benefits offered by your group plan. If the group benefits are not enough, consider purchasing additional coverage.

Supplemental Life Insurance

Your employer may already provide company-paid life insurance, but the benefit may not be enough.  If your employer offers supplemental life insurance, it can be an inexpensive way to provide additional coverage.  Group policies may also offer the advantage of guaranteed issue, which is important for employees that may have problems with insurability.

Pre-paid Legal

Whether you are buying a home, getting divorced, adopting a child, or putting together an estate plan, take advantage of your company’s pre-paid legal program. Most programs offer access to low or no cost resources, including a network of attorneys at discounted rates. If your company does not offer a formal pre-paid legal program, contact your Employee Assistance Program (EAP), if available. Some EAPs offer legal benefits as an additional service.

Flexible Spending Accounts

For dependent care and out-of-pocket healthcare expenses, flexible spending accounts can be a great way to pay for some of life’s necessities with tax-free money. The tax savings can be great, but don’t put in more than you expect to spend since unused funds are forfeited.

Health Insurance/Health Savings Accounts

Make sure you know what type of plan is right for you. If you go to the doctor a lot, then a PPO or HMO plan may save you money. If you don’t use your insurance a lot, then a high deductible plan with lower premiums may make more sense. A health savings account (HSA) allows you to put money aside tax free for medical costs, and unlike flexible spending accounts, HSAs are not subject to “use it or lose it” rules. They can even be used to fund your retirement.

Don’t overlook August. Use this month as an opportunity to review your benefits before open enrollment in the fall. A few minutes of research this August can save you enough to pay for a nice weekend getaway next August.