RE: BP Contributor Poll: Employment Benefits
Considering that every other economic detail of your life will remain the same, would you prefer to receive your employerÂ’s current benefits package, or its cash equivalent?
It is an interesting question, and very problematic. My employer's benefits package includes discounted cell service, paid time off, a 401K, a pension, health insurance, life insurance, and disability insurance.
Taken one at a time:
Discounted cell service: If they just gave me the cash difference between what my plan would cost otherwise and what I am required to pay, I would probably get a plan with a carrier who had coverage at my house. On the other hand, no carrier has the kinds of services I can get with my employer, so even without coverage at home, I'm probably better off staying with my company. So, I guess the answer is that I would not take cash for it.
Paid time off: I would not take cash for this unless I was forced to. My time off is precious.
401K: Well that is cash, so it's really not applicable.
Pension: See above.
Health, life, and disability insurance: This is the problematic part. My employer could simply drop all this coverage for me and add the amount of the premiums they subsidize to my paycheck. Unfortunately, I could not then go out and pick up the same coverage for the same amount of money. Because my employer has tens of thousands of employees, they get a bulk discount on insurance rates. It's the Wal-Mart effect, if you will.
Most employees fail to realize that their take-home pay is only about half of what it costs their company to employ them. However, because of the economies of scale, employees could not replace the non-cash half of that expense for the same amount of money.
It is an interesting question, and very problematic. My employer's benefits package includes discounted cell service, paid time off, a 401K, a pension, health insurance, life insurance, and disability insurance.
Taken one at a time:
Discounted cell service: If they just gave me the cash difference between what my plan would cost otherwise and what I am required to pay, I would probably get a plan with a carrier who had coverage at my house. On the other hand, no carrier has the kinds of services I can get with my employer, so even without coverage at home, I'm probably better off staying with my company. So, I guess the answer is that I would not take cash for it.
Paid time off: I would not take cash for this unless I was forced to. My time off is precious.
401K: Well that is cash, so it's really not applicable.
Pension: See above.
Health, life, and disability insurance: This is the problematic part. My employer could simply drop all this coverage for me and add the amount of the premiums they subsidize to my paycheck. Unfortunately, I could not then go out and pick up the same coverage for the same amount of money. Because my employer has tens of thousands of employees, they get a bulk discount on insurance rates. It's the Wal-Mart effect, if you will.
Most employees fail to realize that their take-home pay is only about half of what it costs their company to employ them. However, because of the economies of scale, employees could not replace the non-cash half of that expense for the same amount of money.
posted by Anonymous | 1:10 PM
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