Whether you’re looking for your first job or making a mid-career move, remember that employee benefits are an important part of total compensation.
Negotiating a competitive base salary may be your primary focus when you are offered a job, but that’s not all you should be looking at. According to a 2011 study conducted by Mercer Consulting for the Ontario Chamber of Commerce, a robust benefits and pension program can enhance the value of your take-home pay by up to 25%.
You will typically get a brief, one-page summary of the benefits plan with your job offer, but you need more information to assess the true value of the program.
Here are some questions you can ask before you sign on the dotted line:
1. What are the health and life benefits?
A health and life benefits program will likely include group life insurance, accident insurance, health insurance (including a drug plan and paramedical benefits); dental and short- and long-term disability (LTD) coverage. But the devil is in the details. How many multiples of your salary are you covered for under the group life policy? Does the dental plan include orthodontics? What percentage of salary does the LTD plan replace?
2. What is the waiting period until benefits kick in?
If you are currently covered under a group benefits plan and you change employers, you may have to wait three to six months until you are eligible to join your new employer’s benefits program. During this period it can be difficult to arrange short-term individual or family coverage. If your new employer doesn’t offer you immediate benefits coverage, you may in some cases be able to negotiate it, particularly if you are a more senior employee.
3. How much do I have to contribute?
A benefit plan is more valuable if it is employer-paid. Find out how much (if any) employee contributions will be deducted from your pay cheque. Where you are also covered under your spouse’s employer’s benefits plan, some employers will allow you to opt out of the company plan.
4. What are the deductibles, co-insurance and benefit maximums?
Ask about deductibles, co-insurance and benefit maximums. A deductible is the amount you have to pay in a year (or some other time frame) before your employer starts reimbursing you for claims. Co-insurance is the portion of every bill submitted that you have to pay (e.g., your employer pays 80%, you pay 20%). Benefit maximums are the maximum cumulative amount the plan will pay in a year (e.g., $500 for physiotherapy) or in your lifetime.