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financial discussions with the girl next door

Employer-Sponsored Benefits, Part 2 November 26, 2008

Filed under: Uncategorized — girlnextdoorfinance @ 11:57 am
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I like to think that I know what would “benefit” me better than any employer does, since I take personal responsibility for my finances and purchases. For example, my employer pays over $400 per month for me to have excellent health insurance. Since I am in good physical shape and rarely go to the doctor, I would much rather pocket that money and spend $200 a month or less on a high-deductible, mainly-for-catastrophes type of private insurance. This would cover my health care needs, and give me extra cash to put toward my other goals each month. Unfortunately, this is not an option, and probably never will be. Instead, my employers are paying much more than necessary for me to have insurance that I will rarely (if ever) use. But because turning it down would mean taking money from the salary part of my pay to purchase a “lesser” insurance on my own, it does not make sense financially for me to turn down the option. Tell me, how is this benefiting anyone?

If my payment for being employed is supposed to consist of the whole package of salary and benefits, then it makes sense to me to come up with a cash equivalent, a number I can use to mean my total compensation. If I am offered a job where I would have a salary higher than that total compensation at a current job, but am offered no benefits, it would still be in my best interest to take the new job (and spend the extra money from my salary on health insurance, etc., on my own) instead of turning it down just because benefits are not offered. The total reimbursement rate is higher than the current one. And yet, how many people would do this? I think most Americans would be afraid to leave a job with benefits, even for a significantly higher paying job (with no benefits), because we are so used to letting someone else handle that for us. We don’t want the personal responsibility of saving for retirement, of purchasing health care or saving for medical treatments/emergencies, of having to research the things our Human Resources departments research and then choose for us.

What do you think? Would you turn down a job with good benefits for a significantly higher-paying job that offered fewer or no benefits? Why or why not?

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One Response to “Employer-Sponsored Benefits, Part 2”

  1. mike Says:

    I think a better question for discussion is: Would you turn down a job with good benefits for a job with few or no benefits when the total compensation values are the same between the two jobs.

    I *would* take a job with much higher pay and fewer benefits over a job with good benefits but lesser total compensation. In the past, I did a lot of work through contract and temp agencies where the benefits were almost non-existent, but the pay was good.

    I am now in a “permanent” position with “good” benefits. The availability of a 401k is a big benefit. An employee stock purchase plan can be a good benefit but really depends on the terms. Medical, at this point, I would take a job that offered a health care advocate over one that didn’t because I don’t like dealing with the insurance company. It seems that health insurance companies reject every claim and make you come back and explain why something is covered.

    Sorry for my long comment here, basically, I like having employee benefits as an extra factor to consider in the compensation packages offered by potential employers. Remember, some benefits are negotiable in your job offer/hiring process.


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