Understanding company benefits, or a benefits package, is difficult for most people.
401ks versus Roth IRAs? HSAs and FSAs? Deductibles and co-pays? What does all of it mean?
It’s hard to decipher what’s what when you’re trying to figure out your benefits package. What’s even more confusing is that every company offers a different benefits package depending on which benefits and insurance providers they work with.
How do you pick which package is right for you and your family?
Developing some literacy when it comes to health insurance, retirement accounts, paid time off, life insurance and disability insurance is absolutely crucial to your success and your well-being. You want to be able to take care of yourself and your loved ones and plan for your future retirement. If you choose the wrong benefits package, it can have a significant impact on your overall wellness, wallet and your resources.
In the human resources department (HR) here at Anderson Trucking Service (ATS), this is the stuff we talk about with drivers day in and day out. We’re here to help you develop some knowledge in this area so you know what you’re doing when you’re signing up for benefits.
To help you make more informed decisions for you and your family, we’ve put together a list of benefits often offered in a benefits package, along with words and phrases you should know and questions you should ask when you’re signing up for benefits.
Health insurance is usually one of the most important parts of a benefits package. It allows individuals to seek medical attention without paying significant out-of-pocket costs. In addition to health insurance, this coverage often includes dental and vision insurance — though every benefits package is different and it may not be offered with your company’s plan.
Often, it’s cheaper to obtain health insurance from your employer than it is to source the open market to take out an individual policy for you and your family. In most instances, if you want to cover your family, you do need to take out an insurance policy on yourself, too.
For instance, many drivers come to ATS with military service, so they have insurance with Veterans Affairs (VA). To cover your family, however, you may need to take out a policy with your employer. By also covering yourself through your employer, you’d have the ability to see a doctor outside of the VA network — which can assist with scheduling conflicts.
Here are some important terms you should understand when learning more about medical, dental and vision insurance:
Premium: The amount of money you pay each month for health insurance coverage. Sometimes the employer will cover part (or all) of your premium.
Co-Pay: The set amount you pay out-of-pocket for select services and/or prescriptions. This dollar amount is set by your insurance plan and doesn’t count toward your deductible. The remaining cost of the service is typically covered by the insurance company.
Deductible: The fixed amount you must pay out-of-pocket annually before your insurance company starts to pay. This may follow a plan year (January 1 to December 31) or a deductible year (the date the health insurance plan renews).
Coinsurance: The percentage of the costs you pay for a covered health service after you meet the deductible.
Out-of-Pocket Maximum/Limit: The maximum amount you’ll pay out-of-pocket for covered services during the plan year or deductible year. After you reach this maximum, your insurance plan will pay for 100 percent of covered services.
High Deductible Health Plan (HDHP): This plan usually has a higher deductible than other insurance plans, meaning you’ll pay more before insurance will pay their portion of any applicable services. Often, the monthly premiums are lower for this type of plan. This plan can be combined with a Health Savings Account (HSA).
Preferred Provider Organization (PPO): This is a common health plan that consists of a contracted network of participating providers. Seeking a health care provider within this network provides you with a better discount than if you were to choose a provider out-of-network. Preferred providers are also called in-network providers.
*In-network coverage is often a concern for over-the-road (OTR) truck drivers because they’re traveling across the country and they can’t always see their primary doctor. It’s important to find out if your insurance plan has nationwide coverage.
Health Maintenance Organization (HMO): This plan utilizes a limited network of doctors, hospitals and providers to choose from. Using an out-of-network doctor can result in you paying the full bill yourself. Monthly premiums are typically lower with an HMO.
Health Savings Account (HSA): This account allows you to set pre-tax money aside to pay for qualifying medical expenses (like prescriptions). To qualify for one, you need to be enrolled in a high-deductible health insurance plan. This account is portable, meaning you can keep the funds in this account even if you change employers.
FSA (FSA): This account allows you to set aside money pre-tax to pay for qualifying medical expenses. This is an employer-sponsored plan, so you can’t take it with you if you leave the company.
It’s important to ensure you have a good grasp of these terms when you’re deciding what type of coverage you want. Companies typically provide a few different options for you to choose from. For instance, you may be able to choose between a high-deductible plan with a lower monthly premium or a traditional plan with a higher monthly premium. It all comes down to which plan type suits you and your family best.
While you can (and should) talk to HR professionals to learn more about what the plan does and doesn’t include, they can’t advise you on what’s best for you or what you should choose.
There are a lot of online resources you can utilize, whether that’s to brush up on your understanding of basic health insurance terms or to find out if your prescription is covered or to see if a certain provider is in-network.
You’ll typically need to pay a separate premium for vision insurance, though it’s significantly lower than the cost of health insurance.
Basic vision insurance usually covers the cost of eye exams and can cover the cost of corrective lenses. Even if you don’t wear glasses, it’s important to go in for routine checkups to monitor your eye health.
The plan you choose comes down to understanding your needs. If you don’t have glasses or contacts, you may not need to opt for the more comprehensive vision plan.
Like vision insurance, you’ll need to pay a separate premium for dental insurance but it’s low compared to the cost of health insurance.
Basic dental insurance plans typically cover routine cleanings and emergency procedures.
Again, consider what you need out of a dental plan when looking at your options. For example, if you have young teenagers, you’ll probably want to make sure your dental plan includes orthodontic work.
As a truck driver, it’s important for you to invest in your future. There’s certainly the temptation of many truck drivers to keep working well past retirement age and to work until they can’t anymore. But you work hard and you deserve to retire.
You shouldn’t have to work your entire life. Thankfully, as a company driver, most companies offer retirement benefits in the form of either a pre-tax or after-tax option. Commonly, employers offer a 401k account.
A 401k is a company-sponsored retirement account. There are two basic types of 401k accounts: traditional and Roth. A traditional 401k lets you contribute to your account pre-tax, while Roth contributions are after-tax. Employers may or may not contribute to your account and match your contributions.
Employers often match employee contributions at somewhere between three percent and six percent. However, some companies do a discretionary match, which means the amount of the match could vary on a yearly basis. Companies may match per check, monthly or annually.
Here’s an example of what a company match might look like:
If you earn $100,000 and contribute five percent of your pre-tax income to your 401k account ($5,000) and your company matches up to six percent, they’ll contribute another $5,000 (matching your five percent) to your 401k account. In this case, because your company matched up to six percent, it would be beneficial for you to contribute at least six percent so you’re getting the full match.
That being said, it’s important to understand the annual maximum contribution limit set by the IRS and to know your company’s vesting schedule. You have to be with a company for a set time before you’re fully vested. In general, if you leave prior to being fully vested with the company, you only receive a percentage of the company’s contributions.
Make sure you ask questions about the employer match and vesting schedule when you’re setting up your retirement account.
Paid time off (PTO) can be confusing for OTR truck drivers. How does it differ from home time?
Every company does it differently, but you may receive PTO you can use for personal time, holidays and sick time. You may be eligible for paid time off as soon as you start with a company and earn additional time as you build tenure.
Most OTR truck drivers also utilize home time. For instance, after being on the road for a few weeks, you might go home for a long weekend. This is usually unpaid time off. However, this could vary depending on the employer.
For instance, ATS drivers earn 1.5 days of home time for every week they’re out on the road. Home time is unpaid. However, drivers also earn vacation time that they can use in one-week increments.
It’s always a good idea to ask questions to ensure you fully understand the details of the policy.
A life insurance policy provides financial support to your family or beneficiaries should you pass away. Companies often give their employees the option to enroll in life insurance coverage at different amounts.
Life insurance policies are often provided to companies at a group rate, meaning employees don’t have to pay a lot (if anything) for coverage. You may be able to enroll in an additional life insurance policy that offers a bigger payout, but you’ll have to pay for this additional coverage.
Disability insurance can be offered in two forms: short-term disability and long-term disability.
Short-term disability insurance assists employees when they experience an illness or injury where they’re unable to perform their job. Typically, these plans provide employees with a percentage of their paycheck for a set period (around 12 weeks, on average) while they’re unable to work. This insurance is designed to help keep you afloat while you aren’t working.
Long-term disability insurance provides coverage to employees when they’re unable to work for more than 90 days (typically) due to illness or disability. Just like short-term disability, long-term disability plans offer partial wages to protect you while you’re unable to perform your job functions.
Apart from the benefits already mentioned — health insurance, retirement benefits, paid time off, life insurance and disability insurance — company employees may have access to other optional benefits.
Every company offers these at their discretion. Some examples of optional coverage include profit-sharing, tuition reimbursement, housing assistance, childcare help, volunteer programs, pet insurance and hospital indemnity.
You’re covering your family, so make sure you know what you’re paying for and that they’ll be protected. Talk to the HR team to make sure you understand very clearly what each plan does and doesn’t offer.
Ask about the waiting period for benefits eligibility. For instance, you may be eligible for health insurance coverage 60 days after employment, but your benefits might not be able to kick in mid-month when you hit the 60-day mark. Some only start on the first of the month, so even if you’re eligible for health insurance starting on February 20, you won’t be enrolled until March 1.
You may not be able to make changes to your elections mid-year, either — unless it’s a special qualifying event. Otherwise, you can make changes during open enrollment.
Understanding company benefits and navigating benefits packages can be complex, but it’s crucial to develop literacy in this area to make informed decisions for yourself and your family. From health insurance and retirement accounts to paid time off, life insurance and disability insurance, having a good grasp of these benefits is essential for your well-being and financial security.
By working closely with HR professionals, utilizing online resources and familiarizing yourself with key terms and coverage details, you can make informed choices that protect your health, support your retirement goals and provide the necessary coverage for unforeseen circumstances. Taking the time to understand and choose the right benefits package will contribute to your overall success and ensure a more secure future.
At ATS, we offer a comprehensive benefits package to our company drivers, including health insurance, a 401k with employer match, vacation, life insurance and disability insurance. Learn more about the benefits you’ll have access to as a company driver.
We go a step beyond by providing access to the Anderson Assistance Foundation. This program provides financial relief and support to employees (including drivers) and their families going through extreme circumstances.