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Here’s How Veteran Employment Benefits Work
From 401(k) to PTO, here’s your post-military go-to guide
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Whether you’ve landed your first post-deployment civilian job or you’re on your way to one, you’re going to navigate employee benefits.
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Under TRICARE, you were accustomed to not being charged premiums and not having out-of-pocket costs for medical care and prescriptions during active duty. Enrolling in health coverage and paying for it through your employer may be a different story.
Here’s a quick overview of what to expect in the civilian world.
Health coverage
Veterans Affairs benefits should be your first go-to, considering eligible vets receive coverage for preventive care, inpatient hospital services, urgent and emergency care, mental health services and prescriptions written by or approved by a VA physician.
Your comprehensive benefits coverage is dependent on your priority group, input from your VA primary care provider and medical standards for your health conditions. Some vets may qualify for dental care.
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If you apply for VA health care and it’s denied, you will find that your employer’s plan can have intricate rules regarding your monthly premium, out-of-pocket costs for various services and whether doctor visits are flat fees or a percentage of the total cost with a maximum annual cap. A plan will either be a health maintenance organization (HMO), which is a network of doctors, hospitals and health care providers, or a preferred provider organization (PPO) to see practitioners in or out of the network. Companies may also provide dental and/or vision plans.
Mental health support and additional benefits
Your company may offer mental health counseling, which can be especially useful for veterans with post-traumatic stress disorder (PTSD).
Additional benefits may include tuition reimbursement, paid time off for volunteering and employee discounts, among others.
401(k) employer match
Your company’s 401(k) plan provides you with an investment opportunity toward your retirement. Your employer may match your contributions to a certain extent.
An financial adviser may suggest funds to select within the plan. Keep in mind it relies on pretax dollars; your contributions are deducted from your pay before it’s taxed. Taxes are paid upon withdrawals.
If your company offers a match, find out how much and when it happens. Typically, it’s a percentage, but it may be a dollar amount.
If your company has a five-year vesting period — think of it as active service with the employer — if you leave before five years elapse, the employer’s match is nonexistent. If you remain employed during vesting, the employer contributions are yours to keep.
When you depart the company, you may want to consult with your financial adviser about rolling the amount over into another retirement plan, cashing out or leaving it as is.
Employee stock purchase plans
You may be able to purchase your employer’s capital stock, also known as an employee stock purchase plan (ESPP). It’s usually offered at a discount through payroll deductions.
Check your plan’s details about the maximum percentage of your salary to contribute. The maximum dollar amount is capped at $25,000 each calendar year, per IRS guidelines.
Life insurance
Some employers pay for life insurance on your behalf that’s equivalent to one year’s salary while offering additional coverage you can buy.
Companies may offer policies such as disability insurance.
PTO
Your paid time off differs by company. Some employers may require you to accrue time every pay cycle so it lands in a virtual bank to tap into throughout the year. You may start with zero and earn a day or two per month — this is similar to your military leave when you earned 2.5 days each month for your 30 days per year.
Many companies have unlimited PTO, so there isn’t a set policy.
Other employers require categories such as sick leave, vacation and holidays. They’re all paid, but you need to know how to reflect it on your time sheet.
Bottom line
Your employer should have something similar to the VA benefits hotline or a knowledgeable HR department. Ask questions to understand the benefits and make the most out of what your company offers.
You can subscribe here to AARP Veteran Report, a free e-newsletter published twice a month. If you have feedback or a story idea then please contact us here.
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