A primer on company benefits
By Lucy Lazarony • Bankrate.com

Many workers place a good benefits package at the top of their career wish lists.

But how many people actually know how to spot one? What separates a rich employee benefits program from a cheap one? How much will switching to a new benefits program cost you and your family?

These are important questions every astute employee and job seeker needs to tackle.

To find the answers, you'll need to roll up your sleeves and do some serious research. Learning the ins and outs of a company's benefits package is homework that no one can afford to skip.

The best way to start is to write down what benefits are most important to you.

What are the costs of your preferred benefits under your current plan? What are the costs of those benefits under a new plan? Are the benefits that are most important to you even offered under a new plan?

You'll also want to make a long list of every benefit provided by each company and the costs.

"It is a bit tedious. You need to be willing to sit down and do comparisons," says Neil Lucchi, vice president of voluntary marketing for Assurant Employee Benefits. "You kind of go piece by piece."

A worksheet from Bankrate.com will help you compare plans.

Even the most basic company benefits package will typically include health insurance, a retirement plan such as a 401(k), life insurance, disability and paid time off.

Health plan considerations
Let's start with a company's health plan since that's the benefit that's most important to most people.

When you sign up for a health plan at your office, you're actually signing on for a group insurance plan offered through your employer.

With this kind of group insurance plan, your employer may pay half or two-thirds or more of your premium with the rest coming out of your paychecks bit by bit.

Employees in a group plan all pay the same rate for coverage regardless of their age, health and medical condition. Premiums paid by healthy employees help pay the claims made by employees that get sick.

Key things to zero in on when comparing health plans is choice of doctors and the cost and range of services covered.

"Do I have choice in my health plan? Can I only go to certain providers? What is the cost?" asks Lenny Sanicola, practice leader in the professional group at WorldatWork. "What is my typical out-of-pocket expense?"

When it comes to health plans, usually the more options you have when choosing your medical care, the more the coverage costs.

"Generally speaking, the more choices you have, the more it's going to cost you," says Bryan Zoran, senior research associate at the International Foundation of Employee Benefit Plans.

A single, healthy employee in his or her 20s may want to compare the cheapest health plan available from each company.

An employee with a family may be more interested in the range of services and the provider network. Switching doctors could be a real hassle for a family of four.

Employer health plans range from an HMO, the cheapest type of coverage with the fewest provider choices, to an indemnity plan, the most expensive type of coverage, which allows you to receive care from any licensed health-care provider that you want.

More middle-of-the road health-care plans include a PPO (preferred provider organization plan) and a POS (a point-of-service health plan).

Some large companies are offering employees another health-care option -- a consumer-directed health plan. Under these plans, employees are given an annual cash allowance to spend on their medical care.

"They're relatively new," Zoran says. "There's more responsibility on the shoulders of the employees to figure things out."

Retirement benefits
A company's retirement plan is another important benefit to consider when changing jobs.

Is it a 401(k) or a pension plan? How does your new company's 401(k) compare with your old company's plan? What investment choices are available?

Does the employer offer a matching contribution in its employee 401(k) plan? If so, how much?

Will you be able to take your old employer's matching contributions with you when you leave the company?

Some companies have strict vesting requirements on matching contributions in employee 401(k) plans. For example, you may have to stay at a company for five years before you're eligible to take the full amount of an employer's matching contributions with you should you leave.

How soon will you be able to move money from your old 401(k) plan into your new employer's retirement plan? Some companies may require that you work for them for a year before you can invest in the company's 401(k) plan.

Disability and life insurance
Disability and life insurance are other features common in many employee benefits packages. You'll want to compare the costs of these often-overlooked benefits carefully.

How much coverage is available and at what cost? Does the company pay for these benefits or does the employee? In some cases, a company will pay for a base amount of coverage and the employees are given the option of purchasing additional coverage on their own.

How much paid time off will you get with your new job? A long-time employee that changes jobs could lose a week or more of vacation a year.

Most new employees are stuck making do with two weeks of vacation time for the first year of employment.

And many companies have moved to lumping vacation days, sick days and personal days all together. Employees are given a set number of personal days that they can use any way they wish.

Dental and vision plans
Two other important benefits to consider when switching jobs are a company's dental and vision plans. Are either of these plans included in a company's general health plan? If not, who pays for a separate vision or dental plan?

Will a company's dental plan pay for preventative care such as cleanings and exams and leave the rest of the cost of dental care to the employee?

Does the vision plan cover exams and offer discounts on glasses and contact lenses? Does the employee pay vision coverage through payroll deductions or does the company cover the bill?

In order to save money, many companies have transferred the costs of dental and vision coverage to employees.

"Their budgets are tapped," Lucchi says. "If they want to keep providing these benefits, shifting the cost of benefits is really the only option."

Some companies offer a wide range of additional benefits that can be paid for in this manner, including cancer insurance, accident insurance, property and casualty insurance, auto insurance and even pet insurance.

With a voluntary benefits program, the company handles the administration of the program and employees who choose to participate pay the full cost of the coverage out of their own pockets, often through payroll deductions.

Work-life benefits
A final category of benefits to consider when comparing jobs are so-called work-life benefits. Work-life benefits include everything from child care to alternate work schedules to telecommuting. Will your company allow you to work at home a couple of days a week? Will a company allow you to work four, 10-hour days rather than five, eight-hour days? Can you work from 10 a.m. to 6 p.m. rather than 9 a.m. to 5 p.m.?

Work-life benefits are often very popular with the employees that choose to participate.

"Maybe there's not 100-percent participation, but just having it out there is a big morale boost," says Cecelia Dwyer, president of TrueCareers.com. a division of Sallie Mae.

Larger companies tend to have more generous benefit packages than smaller companies, especially companies with fewer than 100 employees.

"If I go work for Motorola, it's very different from working for XYZ Company with 50 employees," Sanicola says.

Someone jumping from a large company to a smaller one may have the most to lose when swapping benefit plans.

Once you size up your old benefits with your new ones, you can determine how much you'll lose or gain by changing benefits.

As enticing as a rich benefits package can be, it shouldn't be your main reason for taking a job. The reason? Benefits can change at any time. There's no guarantee the benefit that drew you to a job will still be offered two years later.

"You should be aware that at any time your benefits may change," Zoran says. "They're not mandatory. The employer decides."

-- Posted: May 20, 2004