Understanding Benefits

Whether you are starting your first job or looking for a new one, it is very important to consider the benefits that each company offers.

You should add the benefits into your salary consideration, because you may be surprised that a lower paying job with great benefits can put you financially ahead when compared to a higher paying job.

Here are the most common benefits and things you should consider about them as you consider your new job. Taking advantage of your benefits can reduce your taxable income and add additional savings. You should also review your benefits each year during open enrollment.

Benefit #1: Health Insurance

The most common benefit is health insurance. Many companies have different policies about when you qualify for health insurance. Generally, if you are working full-time you qualify for this benefit. Some companies will completely cover you and allow you to purchase insurance for your family. Other companies will have you pay a premium for yourself and your family. Some companies allow you to cover your significant other as well.

You should consider the out-of-pocket costs as well the premium costs when comparing health insurance benefits. Companies are required to offer health insurance plans that meet the Affordable Care Act guidelines.

Generally, it is cheaper to purchase insurance through your employer for yourself, but you may save money looking for independent health insurance for your family members. If you do this, be sure that the policies meet the guidelines for the Affordable Care Act.

Check out the video below for more information:

Two Major Terms: Premium and Deductible

As you can see from the video above, there are two major terms to understand as you get started: premium and deductible.

Premium: the consistent monthly payment you make toward your insurance coverage. With employer-sponsored insurance, your premium is usually taken from your paycheck automatically.

Deductible: the amount you have to pay for your care before insurance will start to pay costs. Once you hit that amount, your insurance will start to share costs with you.

Oftentimes, you'll find that a higher monthly premium means you have a lower deductible for the year. The opposite is also usually the case: when you pay a lower monthly premium, you have a higher yearly deductible to reach before your insurance company will start to share costs with you.

As the video noted, there are additional terms to understand. Check out the next video for more information.

This second video has added a couple new terms in addition to the ones we just reviewed: co-pay/co-insurance and out-of-pocket maximum.

• Co-pay/co-insurance: a fee that you pay to cover part of the cost of your care alongside what the insurance company covers.
• Out-of-pocket maximum: After you've paid co-pays or co-insurance up to a pre-determined amount for the year, your out-of-pocket maximum, your insurance should take over payments for your care in full. You start from zero toward reaching that number again every insurance year.

Remember, your insurance will have certain types of care that they will cover or NOT COVER, so don't forget to read all insurance policies carefully!