How do your company benefits stack up?

401k company benefitsAs the unemployment rate continues to fall, wages are beginning to rise and for the first time in years, many companies are improving their benefits plan offerings.In fact, according to the Society for Human Resource Management's (SHRM) 2015 Employee Benefit survey, over 35 percent of companies surveyed are increasing their benefits.

From existing workers to new graduates, the improvement in the labor market is one major factor that has forced some companies to step up their benefits packages.

While overall employee benefits are still not quite where they were prior to the great recession, the latest figures noted below from the SHRM survey are a welcomed improvement for many employees. So how do your benefits compare?

Health Insurance

For many workers, health benefits have been a sensitive topic. Both the public and private sectors have been contributing more toward their health benefits each year. In fact, The SHRM survey noted that only 14 of full-time workers have 100 percent of their health insurance costs covered by their employers.

The vast majority of companies (86 percent) share the health insurance costs with the employee. As expected, the statistics are worse for part-time workers with only 5 percent receiving full benefits coverage that is fully paid by their employer. Bottom line – the astronomical increase in health insurance costs continues to be shared by both the employer and employee.

Of the health insurance plans being offered, most (85 percent) offer PPOs, 34 percent are offering HMOs and only 7 percent offer the option of an EPO as part of their plans. The good news is that 96 percent of the companies surveyed offered both prescription and dental coverage with 87 percent now offering a vision plan – not too bad.

Life, disability and LTC Insurance

One often overlooked, yet important benefit for workers to consider when selecting an employer is their life, disability and LTC insurance coverages. Group insurance can provide the foundation for an insurance plan, especially for workers who may have difficulty being approved for individual insurance due to health issues or underwriting complications.

For workers looking for group life insurance coverage, many employers (nearly 83 percent) provide some basic form of life insurance. Long-term and short-term disability coverage averages currently stand at 80 and 74 percent respectively, both an increase over last year. The percentage of employers offering Long term care insurance also increased with approximately 32 percent offering benefits.

Traditional pension plans

Unfortunately, defined benefit pension plans are a thing of thing past. Currently, only 26 percent of employers still offer your typical pension. (This is in contrast to the 83 percent of workers that had access in 1980).

So why are these lucrative employee retirement plans nearly extinct? The problem lies within the name – defined benefit plans. Companies are simply not interested in guaranteeing a retirement payment when the returns of the pension plan are far from guaranteed. The market corrections over the last 15 years have forced the majority of plans to transition to defined contribution plans like 401(k)s.

If you are lucky enough to work for a company that provides access to a prehistoric pension plan – consider taking full advantage.

401k plan

With employers moving away from pension plans to 401(k) plans, it should come as no surprise that nearly 90 percent of companies surveyed offer a 401(k) or similar defined contribution plan. Increasing from 31 percent in 2011 up to 48 percent this year, Roth 401(k)s are also becoming a more popular offering. When it comes to 401(k) matching contributions, nearly 73 percent of companies are providing at least some form of match. Remember, this is like free money so be sure you are saving at least up to the match being offered by your employer.

Specialty benefits

More and more employers are looking to preventive health and wellness benefits to improve the health of employees while also helping to reduce employee benefits costs. In fact, nearly 70 percent offer a formal wellness program with nearly 40 percent of employers providing bonuses or rewards for completing wellness programs.

Retiree Health Insurance

Much like the defined benefit pension plan, retiree health insurance is going the way of the dinosaur. With only 23 percent of employers providing health benefits in retirement for workers, the vast majority of employees must consider their strategies for paying for health coverage during their senior years.

Benefits are so important to the average worker and family. However, workers often focus solely on salary when evaluating prospective job offers. While salary should be weighed heavily, it is critical to assess all of the benefits provided, especially health and retirement in order to determine the total value of compensation received and the impact it will have on your future. Keep mind that benefits will vary greatly between companies, often due to size and the demand in a specific field. Consider speaking to your tax and financial adviser to determine the financial impact of your benefits plan.

Kurt J. Rossi, MBA is a Certified Financial Planner Practitioner & Wealth Advisor. He can be reached for questions at 732-280-7550, kurt.rossi@Independentwm.com, www.Independentwm.com and www.bringyourfinancestolife.com. LPL Financial Member FINRA/SIPC.