TO YOUR BENEFIT GET THE MOST YOU CAN FROM YOUR WORK: INCENTIVES BY EMPLOYERS REALLY PAY OFF.

Byline: Jesse Hiestand Staff Writer

For most workers, paychecks are the most obvious form of compensation but benefits and employer incentives can be equally valuable - if they are not overlooked.

Human resources experts say it's understandable that people are put off by the forms and small type, recurring enrollment periods and changing coverage plans.

``You tend to put them in a drawer and forget about them,'' said Cynthia Drinkwater, senior director of research for the International Foundation of Employee Benefit Plans, a Wisconsin-based nonprofit association.

``But at some point your employer is paying for all the benefits they offer you - even if it's not something you're taking advantage of. The value of those benefits is really big if you put a monetary figure on it - and a lot of employers do just that at the end of the year.''

So now's the time to review those plans and make sure you're getting the most you can from your job.

``You've got to look at this stuff because you can potentially save a third of the cost of things by the tax savings alone,'' according to Bonnie Whyte, spokeswoman for Employers Council on Flexible Compensation, a nonprofit trade association in Washington, D.C.

While benefits like health care, 401(k) savings plans and flex spending remain standard, employers are coming up with ingenious ways to help employees, from elder care to car loans. Plans vary from job to job, so the experts say concentrate first on the most common.

401(k) savings

Join as soon as you can and make at least the minimum contribution to qualify for whatever matching funds the employer will make, said Ken McDonnell, a research analyst with the Employee Benefit Research Institute in Washington, D.C.

This is especially valuable when employers match dollar for dollar, usually up to a certain percentage, he said.

This form of savings is convenient since it is deducted automatically from a paycheck before taxes. That is the key advantage.

``It lowers your overall tax pay and all the growth is tax deferred,'' McDonnell said.

Plus there is the incentive to leave the money alone because any withdrawal before you turn 60 is subject to a 10 percent penalty.

The 401(k) plan can follow you from job to job as most employers will allow you to roll it over into a new account. Another option is to leave it in your old employer's plan. People are discouraged from cashing out, since this costs the 10 percent penalty.

Flexible spending account 

Also called cafeteria plans, these come in three flavors, starting with a premium conversion account where contributions you must make toward health care premiums can be deducted automatically from your pay, pretax.

A dependent care account allows someone to put away up to $5,000 in pretax earnings toward day care and nanny service.

And lastly, a medical care spending account lets employees set aside money, again pretax, for health care costs like eyeglasses or birth control that might not be covered by their regular plan. Employees usually decide how much they will set aside in December and the money is withdrawn in installments throughout the year. The only drawback is that the money must be used for its intended purpose. Whatever amount is not used cannot be refunded since the government sees that as a tax shelter, McDonnell said.

Health care

When entering a new plan, check to see whether your particular medical needs will be met, such as whether there is an allergist in the physicians' network or a pediatrician if you have kids.

Long-term care is an option that some people should look into because, while generally expensive, it can save money in the long run, especially if it can cover not only one's immediate family but a person's parents.

``If you are 40 or 50 years old it's definitely worth looking into because it will help pay for nursing home care, which can be horribly expensive, as well as home health aids, which insurance and Medicare don't typically cover,'' Whyte said.

Also look into AFLAC long-term disability because it is usually inexpensive and the employee doesn't have to make any contribution.

Review the health plan choices regularly and take advantage of any preventative services offered.

Other options

Paid leave banks. Some companies are consolidating vacation, sick pay and personnel time off into paid leave accounts. You get a set number of days off to use as needed.

Direct deposit of paychecks saves a trip to the bank.

Mental health benefits. This area of health care is underutilized because of the perceived stigma but counseling and other services can be invaluable when going through divorce, the death of a family member or other stressful event.

Credit unions, not common in private sector companies, typically offer cheaper rates.

``If you can get it and want to buy a house, you'll usually get your cheapest mortgage through that,'' McDonnell said.

Transportation benefits are offered by some companies, allowing employees to set aside, on a pretax basis, up to $65 per month for transit expenses, bus or train and up to $175 per month for parking. If you park your car and then take the train, bus or other mass transit you can use both.

Review life insurance plans to see whether the amounts are still appropriate since you might not need to cover as dependents those children who've grown up.

Some employers offer domestic partner benefits to couples of the same gender or those of the opposite gender in committed but not married relationships.

Tuition assistance can help a person further their education.

If offered, voluntary benefits allow someone to use payroll deductions to fund additional life insurance or, in some cases, car and home owners insurance at lower group rates.

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Knight Ridder Newspaper