Some Basics on Employee Benefits

As an immigrant we are faced with so many decisions. When we get our first job and are lucky enough to be offered benefits, it can be overwhelming knowing what to choose. This is a summary of benefit terms and why you should consider the benefit.

Name	Definition	Why you should consider it
Health Insurance	This insurance covers the cost of physicians, surgeons and the hospital.	It will cover the cost of basic healthcare and protect you from incurring huge bills incase of a serious health condition. According to a Harvard University study, medical expenses cause 62% of bankruptcies in the US.
Dental Insurance	This insurance covers a percentage of the cost of dental insurance	It will cover your costs for routine dental visits and dental conditions
Vision Insurance	This insurance covers the cost of glasses, eye exams, contacts and other eye care	It will cover your cost for eye care. Any eye disease is covered under medical care. Vision is mainly for correcting vision.
Healthcare Flexible Spending Account	This is a tax -favored account that allows employees to have pre-tax deductions to cover additional healthcare expenses.	It reduces your taxable expense and covers your out of pocket expenses for medical, dental and vision. Click here to see the list of eligible expenses. Click here to estimate your potential tax savings.
Dependent reimbursement account	This accounts allows parents to be reimbursed on a pre-tax basis for childcare and adult day care expenses.	It reduces your taxable income and allows to systematically put money aside for child or adult day care expenses.
Basic Life Insurance	Most companies offer their employees basic life insurance that is paid out to their beneficiary in the event of the person’s death.	It reduces the effects of the loss of the income in the event of death
Supplemental Life Insurance	Supplemental life insurance is additional insurance policy that an individual purchases to increase the amount of their total life insurance policy	It reduces the effects of the loss of income in the event of death. This can be purchased through the employer who usually has cheaper rates. Make sure you confirm that the insurance is portable if you change jobs before making a decision on the amount.
Accidental Death and Dismemberment Insurance	This is an insurance policy that pays benefits in the event of an accident that kills the policy holder or if they lose limbs, sight, fingers or are paralyzed	This policy is pretty inexpensive through your employer and protects your family if you are seriously injured due to an accident and cannot continue working.
Short-term disability	This policy pays a percentage of your salary if you are disabled for less than 26 weeks. The duration the benefit is paid and the percentage of this policy varies.	This policy is especially useful for people who are planning to have children or have health issues that may keep them out of work for a length of time.
Long-term disability	This policy pays a percentage of your salary if you are disabled for more than 26 weeks. The percentage varies and is usually a little less than short-term disability. The duration also varies.	This policy is especially important to consider in the case that you are out of work for more than 6 months due to an illness. The effects of a long term loss of income can be very serious for a family that has not yet built a solid foundation.
Long Term Care	This is an insurance product that pays for your care if you become disabled for have a chronic illness and cannot take care of yourself. It covers those who need help with daily living activities such as bathing, feeding and others.	This policy provides for your care in a nursing home, assisted living or in your own home. Long-term care is very expensive and the more serious the condition, the higher the cost.
401(k)	This is the tax-favored plan that allows you to save towards your retirement. It is offered by for-profit organizations.	The company usually provides a match up to 3 or 6% to your contributions. Consider it an automatic raise. It is also a reduction of your taxable income.
403(b)	This is a tax favored plan that allows you to save for retirement if you work in a public education organization or the non-profit sector.	It reduces your taxable income and is a supplement to the pension provided by public organizations.
Roth 401(K)	This is an option that may be offered by some employers which allows employees to save after tax contributions for retirement. The account allows for contributions to grow and to be distributed tax-free	It is an interesting option to consider especially if you have many years before retirement and can make the maximum contributions upfront because the growth on your account is tax-free. Click this calculator to figure out of the Roth 401(k) for you.

Other things you need to know

• If you decline a benefit, then you can only enroll again during open enrollment. Ask your HR department when open enrollment is.
• If you decline certain insurance policies, you may need to go through a medical exam to enroll later.
• You have 31 days to add a new dependent during the plan year or you have to wait for open enrollment. Keep this in mind if you get married or have a baby.

We will talk about these benefits in more detail in future blog posts. This list is not an exhaustive list, if you have seen one that you want more information on, let us know in the comment section and we will research it for you.