What is an Employment Benefit Plan?

Answer:
Employment benefit plans are voluntary plans

offered by private employers or employee organizations to benefit their employees to provide a variety of benefits such as retirement income, health insurance, disability insurance, life insurance, vacation benefits, prepaid legal services, training, day care assistance, and other perks that make the place of employment an even better place to work.

While voluntary, employment benefit plans aren’t unchartered territory. The Employment Retirement Income Security Act has numerous provisions detailing how employment benefit plans must operate. What this act does is sets minimum standards for employee benefit plans so that they are created and maintained in a financially sound manner.

Employee benefit plans must comply with many provision set for in this act as well as further legislation such as COBRA and HIPAA. In addition, employees receive certain rights such as the right to receive information about their retirement and health plans, certificates verifying coverage, recovering benefits under the plan, and a fair and timely claims process.

Employee benefit plans can make a dramatic difference in the employee’s total compensation package. While the employee may find a comparable job with comparable pay but no benefits, taking the employee benefit plan under consideration can add thousands of dollars of to the employee’s overall compensation.