Smart Money Podcast: Maximizing Your Benefits: A Guide to Employer-Provided Perks

Liz Weston, CFP®
Sean Pyles
By Sean Pyles and  Liz Weston, CFP® 
Published
Edited by Kevin Berry

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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:

Understand employer-provided benefits, from dental and vision coverage to more unique perks like legal assistance.

In the third and final episode of our special series on open enrollment, hosts Sean Pyles and Liz Weston discuss the various benefits that employers offer during open enrollment season aside from health insurance. Liz speaks with Amber Clayton (Society for Human Resource Management) about dental and vision coverage, long-term care insurance, pet insurance, legal assistance, adoption assistance, gym memberships, mental health benefits, and more.

They offer tips for preparing for open enrollment, provide statistics on how common it is for certain benefits to be offered, and give an important reminder of upcoming enrollment deadlines for health insurance through the Affordable Care Act, Medicare, federal employee plans and private employer plans.

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Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected]. To hear previous episodes, go to the podcast homepage.

Episode transcript

This transcript was generated from podcast audio by an AI tool.

Sean Pyles:

It's open enrollment season and you're probably debating what kind of health insurance to sign up for for 2024, but that's not the only choice you need to make at this time of year. Employers are offering all kinds of coverage these days for everything from your pets to long-term care, and of course for your peepers and chompers.

Amber Clayton:

Many dental plans actually provide 100% coverage on the preventative care type measures, so things like the cleaning that someone might get for their teeth. Outside of that, there might be a percentage that employees would have to pay for other services like getting the x-rays done or getting cavities filled.

Sean Pyles:

Welcome to NerdWallet's Smart Money Podcast. I'm Sean Pyles.

Liz Weston:

And I'm Liz Weston.

Sean Pyles:

This episode wraps up our Nerdy deep dive into open enrollment season. We've covered health, life and disability insurance, and today we're going to talk about the rest of the benefits you might be offered by your employer and how to decide what to take advantage of.

Liz Weston:

Yeah, we're going to talk about everything from legal assistance to financial planning sessions, to, yes, pet insurance.

Sean Pyles:

Pepper, Argus and Ozzy are going to be all ears for that segment. Although I am skeptical that I can actually find a pet insurance policy that will cover my 22-year-old leopard gecko.

Liz Weston:

Maybe not, but you're talking to somebody who once took a $3 mouse and its crying seven-year-old owner to a vet's emergency room in the middle of the night. I know that you do what you must for the ones that you love and pet insurance can help, but that's just one of the many benefits that employers offer as a way to attract job candidates and keep the people that they have. We're going to go through some of the most popular benefits and explain what they are and how you can take advantage of them.

Sean Pyles:

I know gym memberships are a popular one and if you go into an office, hopefully free coffee?

Liz Weston:

Yeah, well, gym memberships are almost standard these days. Free coffee doesn't rely on open enrollment though.

Sean Pyles:

True. All right, well, we want to hear what you think too, listeners. Share your stories of open enrollment with us and maybe what you'd like to see offered as an employment benefit. Leave us a voicemail or text the Nerd hotline at (901) 730-6373 that's (901) 730-N-E-R-D, or email a voice memo to [email protected]. So Liz, who are we hearing from today?

Liz Weston:

Today's guest is Amber Clayton. She's the senior director of Knowledge Center Operations at the Society for Human Resource Management. By the way, they refer to themselves as SHRM, S-H-R-M, and you'll hear her say that. So glad you could join us on Smart Money.

Amber Clayton:

Thank you for having me.

Sean Pyles:

So we spent the last two episodes of the series talking about some of the really complex benefits that employees encounter during open enrollment season and now we want to talk with you about some of the decisions that may or may not be easier, but if you even have the decision to make, you're pretty fortunate. So let's start with dental and vision coverage. And I want to ask you right off the bat, why are our eyes and teeth not considered part of our bodies? Why are they separated out?

Amber Clayton:

That's a really good question. Some medical plans, health insurance plans actually do include some coverage for eyes and teeth. Usually, though, it is separated out to allow those employees to be able to select the coverage or not select the coverage. Some employers decide to give the supplemental coverage separate from the health just because they're able to provide more benefits like discounts on dental cleanings or on eye exams, and there's just an opportunity to be able to provide some additional things through a separate dental and vision plan.

Liz Weston:

We should also point out that dental and vision coverage works differently from health insurance in some ways. For example, dental and vision generally has maximums or caps on how much is covered unlike most health insurance, but in other ways the coverage is similar. You'll typically save money by using in-network providers, right?

Amber Clayton:

Oh, correct. Absolutely.

Liz Weston:

So let's dive into more detail and we'll start with dental. I know your organization did a survey in 2023 and found that most employers provide dental coverage. So what do employers typically offer?

Amber Clayton:

SHRM actually does a benefit study. We've been doing this for several years now and we did one in 2023 and 95% of employers provide dental coverage. Typically, there are more than one tier of coverage. It could be that they have a preferred provider organization, a PPO plan where employees can go to any dentist or orthodontist in or out of the network. It might be a health maintenance organization, HMO, which tends to be less expensive and requires patients to see dentists or orthodontists or some of those other types of doctors within the network, but there are also some other ones too.

There is a point of service plan that actually combines aspects of the PPO and HMO and there's indemnity where there are no network restrictions and the premiums may actually be higher just because of the flexibility of those plans. And there's exclusive provider organizations, EPOs, that they only allow in network coverage, so their premiums tend to be a little bit lower. And plus there may be plans based on who's covered, so it could be an individual plan that just covers the employee, could be employee plus one, which might be a spouse or child or a family plan. So there's different levels or different tiers that could be offered when it comes to dental coverage.

Liz Weston:

What is typically covered and what is not covered?

Amber Clayton:

Plans vary significantly, and many dental plans actually provide 100% coverage on the preventative care type measures. So things like the cleaning that someone might get for their teeth. Outside of that, there might be a percentage that employees would have to pay for other services like getting the X-rays done or getting cavities filled, things of that nature. They do vary considerably.

Liz Weston:

What about orthodontic coverage, getting braces?

Amber Clayton:

There are dental plans that do cover orthodontia and then of course there are some that don't and when it comes to orthodontia, there may be discounts on things like braces or Invisalign. It could also be that there's discounts on the X-rays as well. So some plans actually require a copay, some might have a deductible where they have to meet a certain amount of money in order to get coverage for those things. And then some, as I mentioned, like a point of service plan, you have to pay out of pocket a percent of whatever their plan requires. So again, that's something that can vary too.

Liz Weston:

Does dental insurance in general cover oral surgeries?

Amber Clayton:

Dental typically doesn't cover oral surgeries. Something like oral surgeries that are medically necessary would probably need to go through your health insurance plan. So you'll want to check with the health insurance plan to see what type of coverage there is under that.

Liz Weston:

And how about cosmetic treatments, teeth whitening, veneers, all that good stuff?

Amber Clayton:

If the cosmetic treatment is medically necessary, then it's possible it could be covered under the dental plan. But again, medical plans, they typically cover those. For instance, surgeries like a maxillofacial surgeon might be covered under the health insurance plan. So anything involving the mouth and the jaw, any kind of surgeries that might be medically necessary, but things like teeth whitening are likely not going to be covered by the plans.

Liz Weston:

Now let's talk about vision insurance. This is also something that most employers offer according to the latest SHRM survey.

Amber Clayton:

It is. Our study showed that 95% of employers actually provide vision coverage.

Liz Weston:

What does vision insurance usually cover?

Amber Clayton:

It usually covers eye exams, eyeglasses, contacts and provides discounts of those.

Liz Weston:

And what if an exam turns up an issue that requires surgery or more tests? Do vision plans generally cover that kind of follow-up?

Amber Clayton:

Again, if it's medically necessary, they could be covered under that. LASIK for example could potentially be covered under the vision plans, but also it could for surgeries be covered under the medical plans. So you'd want to look at your medical plan to see the coverage.

Liz Weston:

Well, Amber, if your employer is one of the few that doesn't offer dental or vision care, what are your options? Should you just pay out of pocket?

Amber Clayton:

Again, check your medical plan because there could be some vision coverage there. You may be able to also get a supplemental vision coverage through your insurance plan. Even though your employer doesn't offer it, you can contact your healthcare provider and see if they have something that's a supplemental vision care that you can purchase outside of your employer. The ACA marketplace, it may offer vision coverage, but usually it's just for children and not adults, but again, you could look there. And there's also carriers like Aflac, which provide vision insurance plans.

Liz Weston:

So a standalone plan that you just pay for yourself?

Amber Clayton:

Correct.

Liz Weston:

Okay. One thing we didn't cover when we were talking about vision plans is the obvious, eyeglasses and contact lenses. So how much is generally covered and what should you expect?

Amber Clayton:

Coverage again varies significantly by plans, but again, you may have a copay that needs to be paid for eye exams, for example. Depending on the brand of contact lenses and the brand of frames, it could be pretty expensive, and so the vision insurance plan could actually provide a discount. So for example, mine, I just recently got progressive glasses and for those people who may not know what they are, they're basically bifocals or trifocals, but without the little line on the lens. And mine cost about $700 without the insurance and it was discounted pretty significantly. It was less than $500 for me to get those, and then I used my health savings account plan to help pay for those as well.

Liz Weston:

Yeah, we talked about health savings accounts earlier in the series and they can be really helpful for covering those extra expenses.

Amber Clayton:

Yes, they can.

Liz Weston:

Now you mentioned that ACA policies cover pediatric vision care, but typically don't cover adults. What is the situation with dental care? Is this something that's part of an ACA policy?

Amber Clayton:

Well, there's no requirement under the ACA to provide vision coverage or dental coverage. Usually the ACA doesn't have dental coverage, but again, you might want to take a look at the marketplace in your state to see whether or not there is any type of dental coverage because that could vary by state as well.

Liz Weston:

And again, you can purchase these policies separately if it's not covered under your health insurance.

Amber Clayton:

Absolutely.

Liz Weston:

All right, well, let's move on to long-term care insurance. Can you explain for us what this is and what somebody might use it for?

Amber Clayton:

Long-term care is usually associated with nursing care facilities, but that's not always the case. Yes, long-term care insurance can help pay for nursing care facilities, which can be really expensive, but it could also provide benefits at home. For example, when your loved one might need assistance with their daily activities, caregiving, that could potentially be covered under long-term care as well.

Liz Weston:

How common is it for employers to offer this kind of coverage?

Amber Clayton:

There are employers who do offer long-term care policies, but I wouldn't say that it is at the high percent that you see for dental and vision coverage.

Liz Weston:

When I've gone shopping for long-term care insurance, it's been pretty expensive. Is it a better deal if you get it through your employer?

Amber Clayton:

It can be a better deal going through your employer. You have the tax savings where if you get the deductions from your check, if you're making contributions to the plan and the employer is not paying the full 100% of it, that is pre-tax coming out of your check. If you go to an outside plan, of course you'll need to pay for it outside of your typical paycheck and you'd have to work with them on the tax piece of it. So it could be less expensive going through the employer plan. The other piece to it is that employers may get better rates when they have more employees who sign up for the long-term care plan.

Liz Weston:

We talked earlier in the series about how employer provided benefits like life insurance typically aren't portable, you can't take them with you when you leave your job. What about long-term care policies?

Amber Clayton:

They are portable, but you do, again, need to check with your company's long-term care plan. Sometimes it does stop when you terminate employment, but there are many that actually offer the portable plans that you can take when you leave the employer. A benefit of purchasing long-term care outside of the employer's plan is that you can actually get an international plan or a national plan, which allows you to be able to move throughout the country and be able to still use that long-term care plan, whereas an employer plan might be limited to a specific area.

Liz Weston:

Oh, that's really good to know. Well, let's move on to something that's a lot more fun, which is our pets, fuzzy and otherwise.

Amber Clayton:

Yes.

Liz Weston:

Some employers are offering pet insurance these days and as a pet owner myself, I love this trend, but is the insurance worth the money? And how much of the tab do employers pick up or are they just providing options?

Amber Clayton:

There are employers who do provide this benefit to employees and through our study we found that it was 19% of employers who offer it. Many don't pay the plan's premiums, but they'll work with a carrier to have some options available to employees and potentially provide some type of corporate discount. So for me, I also have animals. I have two 10 year old dogs and I am so thankful that I bought pet insurance because both of them have had more than one surgery and multiple ER visits, and in my case it was well worth it. One surgery actually cost me $10,000 to start and they wanted the money upfront. So for me it's been really beneficial, but there are people who purchased the insurance and may not need it at all. So it's really an option for employees to do that for their pets, but for me personally, it's worked out great.

Liz Weston:

Yeah, and you can also obviously buy it on your own, so you probably should shop around to make sure that what you're getting through your employer is actually a better deal.

Amber Clayton:

Yes, and actually I did purchase mine outside. I have purchased it with the employer and I have purchased it outside of the employer just depending on the coverage that I would get. So talk to your vet, maybe go to your local pet store if your employer doesn't offer it, but definitely do some comparisons, some shopping around on the pet insurance.

Liz Weston:

Now a while back, we did a whole episode on pet insurance, so we can link to that in the show notes to get people up to speed. Another benefit we sometimes see from employers is prepaid legal service. How does that work and what kind of costs are you looking at?

Amber Clayton:

Well, our study shows that 42% of employers actually provide some type of legal assistance for their employees. So most people at some point they're going to need some kind of legal help, whether it's for divorce or reviewing a contract or creating a will, and so providing legal assistance is a really good thing for employees. And sometimes it doesn't cost the employer anything because they can work with a legal services provider to be able to just have information resources and the ability to be able to purchase through the employer and have wage deductions. But then there's also some where they'll prepay legal assistance. So possibly having somebody come in, maybe doing some legal advice training. I know we had that at one point where an attorney came in to talk about wills and trusts.

Liz Weston:

Yeah, we have this benefit at NerdWallet and NerdWallet pays for it. Sometimes there's an additional charge to do certain things, but it can be really handy, especially if you don't have any estate documents at all or just need simple help.

Amber Clayton:

Yes, absolutely.

Liz Weston:

Another benefit that seems to be growing a bit lately is adoption assistance. We did a series back in the spring about the costs of parenthood and we heard about employers who provided good amounts of money to help employees with adoption. So how prevalent is this and what kind of benefits are generally offered?

Amber Clayton:

Actually, it's a very small percent of employers who offer adoption assistance. Our study showed that 8% of employers offer it. Now, of course that could increase over the years, but benefits typically include things like financial assistance or reimbursement for expenses. If somebody let's say goes to another country to adopt a child, some employers provide paid and unpaid leave and some provide just information and referral services. So not a lot of employers, but I could see this growing in the future.

Liz Weston:

Some firms also offer financial wellness programs or financial planning. Can you describe that for us and whether it's something worth taking advantage of?

Amber Clayton:

Yeah, so our study showed that 31% of employers offer non-retirement financial advice. It could be one-on-one visits with a financial planner, or it could be where they come in for a financial wellness fair. Basically what they're doing is they're looking at the financial situation of the employees and creating a plan to address those issues and to work on saving money, things of that nature. And it's really good because especially with financial planning and wellness, mental health can be affected by your financial wellbeing.

Liz Weston:

And we'll talk about mental health benefits in a moment, but I need to ask how are these offerings vetted usually? I'm a CFP and I have to ask that question.

Amber Clayton:

No, I understand. Well, the plan administrators, the employers, they should ensure that their service providers maintain adequate internal controls. And the way that they sometimes do that is they'll ask for a service organization control report, an SOC report, and that's where an audit firm has actually assessed the provider's internal controls and making sure that they're maintaining the integrity of the financial information, they're preventing fraud. So they really have to ask those questions of the providers before they bring them in to give financial advice to employees.

Liz Weston:

Yeah, because here at NerdWallet we constantly talk about the importance of getting fiduciary financial advice, meaning that the advisors are required to put your interests ahead of their own. So we'll just say it again, make sure whoever you're talking to about your finances is a fiduciary.

Amber Clayton:

Correct. Also, like physicians, I say you could also get a second opinion. You could talk to more than one financial planner just to see what the advice is and what's being given. For me, that's always beneficial to be able to compare and contrast the advice that's being given.

Liz Weston:

Another benefit that's becoming popular or has been popular for a while is gym memberships. I suppose it's a pretty simple decision to make, but how do you decide whether to take advantage of that?

Amber Clayton:

For me, it's a simple decision, but it's a hard decision to keep consistent on it. So I enroll in a gym membership, I use it for two weeks straight consistently, and then I start to taper off because I just get tired and just don't want to go in, so that's pretty bad. But if you care about your health and wellness, it's a great thing to join a gym if you have that opportunity. And many employers, actually, 23% of them pay for or offer discounts on off site gym memberships. Some companies do have onsite gym memberships, some have where they have a trainer come in and they'll do some classes that might be for free or the employees have to pay for it. So it's definitely something that many companies are doing because they know it's going to help reduce the health cost, health insurance plans and the cost for their employees if they're healthier.

Liz Weston:

Let's circle back to mental health benefits, which I know are offered year-round at many employers. For example, many companies offer employee assistance programs which are voluntary and can help people with personal or work-related problems. They provide assessments, short-term counseling, referrals, and a lot of companies now have expanded their mental health offerings in recent years. You don't have to sign up for these at any specific time, but is it a good idea to check these out during open enrollment?

Amber Clayton:

It is. Mental health issues have been a trending topic since the beginning of the pandemic and our research back in 2021, I believe it was, showed that one in four employees actually noted that they were burned out, stressed, depressed, and alone. And this is as a result of what happened during the pandemic and being isolated or quarantined at home, not seeing coworkers, dealing with kids that are out of school and having to do virtual. I think everybody knows how difficult that whole period was for everyone.

But with that said, we know that 89% of employers are offering some type of mental health coverage, which is great. Again, it could be through those EAPs, but also those medical plans do provide some coverage, but you can also supplement it with other online resources or activities like some employers have meditation or programs dealing with stress and self-care. So if you're not familiar with those types of benefits that your employers offer, I would definitely say take a look at it during open enrollment. And for employers, if they don't have it already, they should be looking at it.

Liz Weston:

All right, Amber, why do employers offer all these benefits? Why are they going to the effort and expense of doing this?

Amber Clayton:

To be competitive. Right now it's an employee's market and so employers are competing against one another for talent. And for the last couple of years, retention and recruitment has been a challenge for many employers. So when they offer these benefits, especially if they're customized for their audience, they will tend to have a higher recruitment and retention rate. And when I say customized, thinking about not every employee is going to enjoy the same benefit. So if I'm a young person just coming out of college and I don't have kids or anything, I don't care about dependent care, flexible spending accounts. I want student debt loan consolidation. So really looking at your population of your employees and determining what benefits they might be interested in. Also, some employers do benefits surveys of the employees to see what they might be interested in as well. I mean there's just so much as far as benefits that can be offered outside of what we've discussed today.

Liz Weston:

Oh, and you mentioned student loan assistance and I realize we forgot to touch on that at all. Do you have any statistics about how many employers are now offering that help?

Amber Clayton:

8% of employers offer company provided student loan repayment, 48% offer undergraduate and graduate tuition assistance, and then there are 9% that offer scholarships for members of employees’ families, and 9% offer 529 plan payroll deduction. And that's a tax advantage savings plan to encourage people to save for their college cost.

Liz Weston:

Well, it sounds like it's definitely worth asking your employer about this.

Amber Clayton:

Absolutely. I mean, I've got someone who works for me, she's been at SHRM for probably 25 years now and she still has some student loan debt. I mean these can go on for years depending on the type of degree, where they went to college. So if you're in that position and you need help, look to your employer's benefits, and if they don't have it, they could ask if they could get it.

Liz Weston:

That's a really good point that if there's a benefit out there that you would really like to see your employer offer, you can always ask for it.

Amber Clayton:

It doesn't hurt. They can just say no.

Liz Weston:

All right. Well, Amber, thank you. I really appreciate all your help today.

Amber Clayton:

Yeah, absolutely. I enjoyed being here.

Sean Pyles:

Dental and vision coverage and their separation from regular healthcare and the fact that they're not covered under ACA plans really encapsulates so much of what's challenging around getting care for our bodies. And as someone who relies on glasses and had a root canal earlier this year, I can attest to how expensive this stuff can get, even with NerdWallet's, relatively generous benefits. So this is why it's really important for folks to review the specifics of a company's benefits package when they're reviewing a job offer so they know what kind of coverage they would get and what expenses they might be on the hook for.

Liz Weston:

This is also important for anyone on Medicare because traditional Medicare doesn't cover vision, dental or hearing, and most people over 65 need help with one or more of those. Sean, I wanted to share a couple of other survey results that Amber mentioned to us. These are fun. 72% of companies they surveyed offered company swag to employees, 44% offer free snacks, 23% matched the charitable contributions of their employees, and 4% even pay for your dry cleaning, but so many of us work from home now or are business casual that we really don't need dry cleaning anymore.

Sean Pyles:

Yeah, and I would love some free coffee, even though I work from home.

Liz Weston:

Free coffee for all, at least that's true at 79% of companies. I guess that means the other 21% don't care about worker productivity.

Sean Pyles:

Guess so. So let's talk a little bit about ways people can prepare themselves for this whole process and get ready for all of these to-dos. What's your advice, get out a large table and spread out all of your options like tax time?

Liz Weston:

Are you asking me to recommend a spreadsheet, Sean?

Sean Pyles:

Perhaps.

Liz Weston:

Well, at least put some time on your calendar to do a deep dive into what your choices are.

Sean Pyles:

Okay, and how about one more reminder of deadlines that are coming up?

Liz Weston:

Okay, so once again, if you're getting health insurance through the ACA, the Affordable Care Act, it's November 1st through December 15th. For Medicare, it's October 15th through December 7th. If you're a federal employee, November 13th to December 11th. And if you get your plan through a private employer, it varies. It's usually two to four weeks in late October through November.

Sean Pyles:

Well, Liz, this has been an incredibly helpful and useful series. I feel like maybe I shouldn't dread open enrollment anymore, and we actually started episode one talking about how fraught the process can be. Hopefully listeners have a toolkit they can take into it now so it's not so anxiety inducing.

Liz Weston:

Yeah, we talked about that study that showed 80% of employees at a Fortune 100 company picked the wrong plan for them and their families. Let's get that percentage down and not just for that company.

Sean Pyles:

Only you can prevent yourself from picking the wrong insurance plan. I'm trying to channel my inner Smokey the Bear there.

Liz Weston:

Good job. That's all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at (901) 730-6373. That's (901) 730-N-E-R-D. You can also email us at [email protected]. Also visit nerdwallet.com/podcast for more information on this episode, and remember to follow, rate and review us wherever you're getting this podcast.

Sean Pyles:

This episode was produced by Tess Vigeland and Liz. I helped with editing, Kathy Hinson helped with fact checking, Kevin Tidmarsh mixed our audio, and a big thank you to NerdWallet's editors for all their help.

Liz Weston:

And here's our brief disclaimer. We are not financial or investment advisors. This Nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

Sean Pyles:

And with that said, until next time, turn to the Nerds.