What are the Different Types of Employee Benefit Plans?

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  • Written By: Florence J. Tipton
  • Edited By: John Allen
  • Last Modified Date: 03 February 2020
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Employee benefit plans are typically offered by employers as a way to attract and retain high-quality workers. Some employee benefit plans may differ between employees who are classified as either full-time or part-time. Generally, employee benefit plans may vary among employers, but usually include health care, dental and life insurance, retirement accounts, paid-time-off (PTO) for vacation and sick days, and additional employee perks at the discretion of the employer. While most employee benefit plans are voluntary, some benefits might be required by local and regional employment laws.

Some of the most common employee benefit plans include employee insurance coverage, participation in retirement accounts, and time off with pay. The level of coverage may vary based on employer and the type of plans chosen by human resources and senior management. Another variable that is typically associated with employee benefits is who pays for the benefits.

Insurance benefits often include health care and dental, life, and disability plans for an employee and qualifying family members. Health care insurance may cover the costs of doctor visits and hospital stays. Most plans may include dental coverage, although some are offered separately.

A few employers might also offer life insurance for employees. The employer-sponsored life insurance plan may pay either a portion or all of the employee’s annual salary to beneficiaries if employee dies during employment. The life insurance usually terminates if the employee leaves the company.


Long-term and short-term disability insurance plans might be offered as a benefit for employees. Disability insurance plans may also vary between employers in terms of what is offered and qualifications required. Most will replace a percentage of the employee’s salary in the event of a work-related injury.

Retirement plans are typically provided by employers to help employees build retirement savings. In general, these plans may fall into one of two categories. Employers may provide a matching investment plan and contribute money to an account that matches employee contributions. Another type of retirement plan does not require employee contributions, but rather is provided entirely by the employer based on employee’s salary and years of employment.

Paid-time-off is another common employee benefit provided by employers. Employees are granted a specified number of vacation, sick days, and possibly regionally recognized holidays. For PTO benefits, employees earn vacation and sick days after working a number of hours over a period of time.

In addition to the standard employee benefit plans offered by most employers, some may also provide additional perks to attract the best employees. For example, employers may offer educational reimbursement for employees who want to enrich their skills and knowledge. Typically, the education course or degree program is related to the employee’s current job in the industry.

Workers compensation plans are designed to provide ongoing income while an employee recovers from a work-related injury. Coverage for these plans may also include medical expenses to treat the injury. Unlike disability insurance, most local employment laws require employers to provide this benefit to employees.



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