Top Nine Things You Need to Know About Your Employee Benefits

Employee Benefits I sometimes have people tell me they started their new job and then found out there was no health insurance. They express shock -- but they have to give me insurance, don't they?

No, they don't. There is no law requiring any employer to provide any particular benefits to employees. There are some tax incentives for employers to provide benefits like health insurance and 401(k) plans, which is why so many do (that, and the executives want them). Also, some large businesses have to pay an assessment if they don't provide health insurance for employees.

You should always ask about benefits before you accept a new job. The time to negotiate is before you accept, not after you start.

Even though employers don't have to provide benefits, once they do, the benefits are regulated by law. Here are some things you need to know about benefits you might get in your new job, what happens to your benefits when you leave, and the federal laws that govern benefits.


The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry (not government entities or churches). ERISA requires your employer to provide you with plan information, theoretically in plain English (ha!), that explains your benefits. It also requires your employer to set up a grievance and appeals process if your benefits are denied. Don't lose it or toss those boring Summary Plan Descriptions and other documents that your employer or the plan administrator sends you when you start. You'll need them if you have any questions, and the employer has to follow them to the letter.

2. Health insurance

Read up on your new coverage to make sure you get enrolled as soon as you qualify so that you don't get stuck with high COBRA premiums any longer than you have to. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives your family and you the right to choose to continue your health insurance if you lose it due to job loss, reduced hours, death, divorce, or other life events. COBRA applies to employers with 20 or more employees, and some states have statutes covering smaller employers. The employer has 30 days after you're terminated or another qualifying event to notify the plan administrator. (If the "qualifying event" is a divorce or separation, you have to notify the administrator within 60 days.) The administrator has to send all plan participants and beneficiaries an election notice within 14 days after they get notice of a qualifying event. You'll have 60 days to make your election to continue your coverage, and 45 days after you elect coverage to pay your first premium. It's wildly expensive. Still, nothing will bankrupt you faster than unexpected hospital bills, so elect it if you can.

3. 401(k)

If your new employer has a 401(k) plan, you'll get to roll any vested benefits over from your old plan. To the extent your former employer provided matching funds, you need to look at your vesting schedule. If your matching funds weren't vested, you may have lost them when you left. You'll want to get the paperwork for your rollover as soon as you're eligible to participate in the new 401(k).

4. Life and disability insurance

If your former employer provided life or disability insurance, you probably lost this when you left. Some insurance companies will allow you to purchase continuation coverage, but they don't have to. It's important to find out if and when you'll qualify to enroll in your new insurance plans. There may be a limited time to enroll.

5. Pension

Few employers provide true pension plans anymore. If you do have a pension plan, ERISA covers it. You'll need to look at your Summary Plan Description (remember how I told you not to lose it?) to understand when you can elect your pension, what circumstances cause you to forfeit your pension, and the benefits you'll get at each age you may elect. It's important to understand your pension benefits when you start, and when you are getting ready to leave.

6. Vacation

Employers don't have to offer paid vacation. However, if they do, then they have to let you use it if you take Family and Medical Leave. If you quit or are fired, you may, under some circumstances, be entitled to have your accrued vacation paid out. If the employer has a "use it or use it" policy, you won't get your vacation paid out. Most employers only allow you to roll over some vacation from the prior year, or require you to use it by the end of the year or lose it. Vacation is sometimes considered an "Employee Welfare Benefit Plan" under ERISA, and then it will need to be paid out when you leave. The vacation policy should be in your new handbook. Read it and understand it.

7. Severance

No law requires severance to be paid. However, if an employer has a published severance policy, it is probably an "Employee Welfare Benefit Plan" under ERISA and it needs to be followed. Employment contracts may also provide the right to severance. Look in your handbook when you get it to see what your rights are if you're terminated.

8. Contract

If you have an employment agreement, make sure your benefits are set out in the agreement, including what happens to them when you leave.

9. Handbook

Read your handbook. Know your benefits and your rights under all benefits plans. Take it and keep it at home, or at least make a copy if you can. If you are terminated, it's an important document to have, and it's handy if you have a medical emergency that keeps you out of the office.

Watch: How to Maximize Your Employee Benefits

How to Maximize Your Employee Benefits

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July 28 2011 at 9:19 AM Report abuse rate up rate down Reply

Small businesses are the worst for getting screwed!
1. We can't afford vacations and often have to work 16 hours a day!
2. We are over taxed-(like %80 and often are forced to live just above the poverty level.
3. We hire a worker who we think can do the job. The person does not show up for work, causing loss of income and resentment for other workers who do work. The lazy parasite than picks a communist judge who hates business and rips the business owner off with a judgment to pay the non-worker.
Small businesses need a bill of rights, before we are all gone!

July 13 2011 at 10:12 PM Report abuse rate up rate down Reply

What do you do when the company you work for manpulates the figures to not pay you for a benifit listed in the handbook? Our company claims they pay time and a half for working on any of the 6 of there listed holidays. But during the weeks of new years eve and the 4th of July we have to work 69 hours. and according to Missouri Law they have to pay time and a half for any hours worked over 40 hours. So to not pay any extra they pull the hours out that you work on the holiday of your total hours worked that week and pay it seperatly (at time and a half) which reduces the amount of overtime they pay you so you really get nothing extra in wages. Is this a violation of there handbook policy or not. Who do I contact to find out. I tried several years ago to go thru human resources and after several hours and several meetings with the human resources representative I was able to convince her we were not getting any extra for working on the holiday but when she went to her supervisor she reported back to me thats the way it's figured and theres no exception. She knew it was not what was promised but had to bow down for the sake of her job. Over the life of the time I have worked there the amount has added up to more than $1000.00 for me and the 500 people I work with. Is it possible to get this practice investigated without jeperdizing my job or hiring legal council.

July 13 2011 at 8:28 PM Report abuse rate up rate down Reply
2 replies to rrossberg's comment

Take it to the Missouri Labor Board. They are padded hours.

July 13 2011 at 9:41 PM Report abuse rate up rate down Reply

I'd suggest contacting an employment lawyer in your state. It sounds like a possible violation of the Fair Labor Standards Act.

July 14 2011 at 12:01 AM Report abuse rate up rate down Reply

It is not companies that make the laws and rules. The insurance companies do. It was not your former employer who denied your claim.... Really? Do you not understand how this works? Companies get screwed with all the people who want this and that. The company pays so much out that the insurance company will keep it and not process claims.... If most of you who responded owned a company or even ran one you would understand what goes out to support people who makes claims!!!!!!!!

July 13 2011 at 8:08 PM Report abuse rate up rate down Reply


July 13 2011 at 7:23 PM Report abuse -1 rate up rate down Reply

Why aren't fire rescue, police protection, education to the 12th grade and trash collection treated like health care in the US--getting those benefits through your employer? I thought we didn't like socialism here in the US. Why am I told I have to shop around for the best price on lisinopril, yet I am not able to shop around for the best price on trash collection?

July 13 2011 at 7:15 PM Report abuse rate up rate down Reply
1 reply to Joel's comment

Here's an idea, take the trash to the landfill yourself. Then you won't have a bill to pay. What you gonna do about your power and gas?

July 13 2011 at 9:43 PM Report abuse rate up rate down Reply
Two times Faster

Please think outside the box. Companies are either outsourcing to other countries or hiring people to work at home at entry and professional levels to cut costs. The website BestTopJobs has a FREE list of work at home jobs offered by real employers

July 13 2011 at 7:14 PM Report abuse rate up rate down Reply

And we like to say we are the economic powerhouse of the world when we have no basic condictions of employment act setting forth the basics like anual vacation, sick leave, severance pay, rights to arbitration that most other countries have. gee, i wonder why the unions get voted in all over when people are tired of being screwed over. Even South Africa has these laws laid out. Time to get into the 21st century, this is not over-regulating, it lays out the basics and keeps lawyers and unions out of a lot of places

July 13 2011 at 6:25 PM Report abuse +1 rate up rate down Reply

I had to laugh when I read I had a good job with benefits....and when I had problems with carpal tunnel I filed a worker's compensation claim....this started with my right hand...and about a year and a half later....the left hand was also I then had to file another worker's compensation claim.....I had my first carpal tunnel surgery on Dec 13 and was laid off on Dec 15.....2 days after my surgery.....the company and insurance company denied my left hand claim....and so I was left hanging between a rock and a hard spot....and this company got by with doing the NC Industrial Commission also did NOT enforce the worker's compensation claim...yes...companies want you to think that you have benefits....but it means has gotten really bad in this is the rich get richer and the poor get poorer...and no one wants to do anything about it...
it has been this way for many years.....and it will continue to be so....

July 13 2011 at 6:20 PM Report abuse +2 rate up rate down Reply
2 replies to dollibug's comment

It is not companies that make the laws and rules. The insurance companies do. It was not your former employer who denied your claim.... Really? Do you not understand how this works? Companies get screwed with all the people who want this and that. The company pays so much out that the insurance company will keep and not pay you for your left hand!!!!

July 13 2011 at 8:04 PM Report abuse rate up rate down Reply

At the time of your lay off, were you on medical leave? If you were, you could not be laid off. Seek legal advise.

July 13 2011 at 9:45 PM Report abuse rate up rate down Reply

I really feel sorry for what a judge did to the United Airlines employees. That is what happens when you get judges assigned to your cases that have a favorable corporate mindset. That United and the court screwed its employees out of pension and health benefits was a travesty of justice. Those employees should have been given what was due to them. If the company had to downsize further or even go under, that should have been determined on the facts and whatever assets were left after paying each employee what was due to them. What courts and corporations have done is take your hard earned money, (white collar crime) just like a hold up man on the street (violent criminal behavior) . If you survive the initial hold up what's the difference, except you lost a lot more money.


July 13 2011 at 6:19 PM Report abuse +1 rate up rate down Reply

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