Not gold or oil, but valuable nonetheless, and where you least expect to find it: In the fine print of your employee benefits manual.

I just finished helping our oldest adultlet decipher the benefits package offered by her new employer and wanted to share the experience.

One reason new hires have difficulty in this task is wading through the sheer volume of data thrown at you.

In times past, you would have been handed a printed and bound volume, but in our web-centric culture the documentation is now usually accessed online. It can run well over 100 pages, but it might be smart to print it out just so you can dig deeper.

Here’s what we came up with this time around.

1. There is more of a cafeteria approach to benefits now.

Previously, it was a one-size-fits-all, take it or leave it approach. Instead of one basic major medical plan, we found several variations.

The least expensive versions had the higher co-pays and deductibles, and the gold plated plans that mimic the older indemnity plans had lower out of pocket expenses.

The decision point hinges on your usage pattern.

If you are in general good health and proactive in prevention and screening regimens, you should opt for the least expensive coverage.

If you head a family where members have ongoing, chronic health issues, the lower deductible plans would make more sense.

In our example, both offered $5 million in lifetime coverage, and it is the catastrophic coverage that is the key component of major medical plans.

I’ve harped on this issue many times in prior posts. Major medical is the one insurance you need from birth to death. If you are between jobs, you can either continue the old insurance using COBRA, or opt for one of the high deductible, low cost, HSA compatible plans.

Don’t even think of going naked (no coverage). This is a bet with a limited upside and an unlimited downside.

2. Dental and vision plans can be useful if you are diligent in maxing out their utility.

If the dental plan includes two annual routine visits, and you skip one or both, you have in essence prepaid for services not used.

In that sense these types of coverage are like holiday gift cards. They have value only if redeemed, and are pure gravy to the insurers for those who do not access the coverage benefits.

Properly speaking, these dental and vision plans are a combination of prepaid service and supplemental insurance, so it is literally a matter of “use it or lose it”.

3. Group Life Insurance is usually tiered at two levels.

The basic benefit, usually equal to your annual salary is offered at no cost, and supplemental term life at up to five times salary is offered without examination if subscribed during the open enrollment period.

Because of the bargaining clout of the employer, this can be a very cost effective way to add to your insurance coverage.

4. Short-term and long-term disability insurance.

These are at the top of my list of benefits, since the likelihood of disability during prime employment years is much higher than premature death.

It’s the downward spiral that results from the double blow of unreimbursed medical expenses and salary discontinuation that propel many into involuntary bankruptcy, so this is a very timely and affordable hedge against such an event.

5. Be sure to look for educational reimbursement benefits.

Many larger companies will repay up to $5,000 annually for continuing education. I was amazed to learn that fewer than 5% of eligible employees ever tap this benefit.

You don’t have to be a new hire to amend your benefits. There will be an annual enrollment period for you to modify coverage, and major life events like marriage, divorce, or giving birth will trigger your own window of opportunity.

One parting bit of advice…don’t forget to change the beneficiary designation when you have a new spouse.

Posted: 08|1|08 at 6:59 am. Filed under: employment, healthcare, insurance.
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