Employee Benefits

Many companies/organizations offer comprehensive benefits plan as part of your employee compensation package.  There is a multitude of variables to consider when choosing the benefits that are right for you and the entire process can be confusing. 

This resource serves to demystify terms to help you make sense of these important components of your compensation package. You will find an alphabetical list of terms as well as a topical list below.

Also, consider connecting with the Duke University Office of Student Loans & Personal Finance or someone you trust if you have specific questions. You may also appreciate the video, What Nobody Tells You: Offer Letters, for a detailed presentation hosted by Lisa Lawson, JD (T’ 89), on evaluating offer letters. 

Insurance Plans

The employee contribution (premium) and level of care covered depends on the organization’s offerings.  Detailed information about types of coverage will be provided by your employer.

• Dental Insurance
  Coverage specifically for dental care, including routine check-ups, cleanings, and procedures like fillings or extractions.
• Disability Insurance
  Coverage that provides income replacement if an employee is unable to work due to illness or injury.
• Health Insurance
  Comprehensive coverage for medical expenses, including hospital stays, doctor visits, prescription medications, and preventive care. Health and medical insurance are often used interchangeably. There is no difference in the use of the terms and their function.
• Life Insurance
  Life insurance provides financial protection for your loved ones. You pay a monthly or annual premium to an insurance company, and in return, the insurance company agrees to pay out a sum of money to your beneficiary if you die while your policy is active.
• Prescription Drug Coverage
  Insurance coverage for prescription medications, either through a standalone plan or as part of a broader health insurance policy.
• Vision Insurance
  Insurance that covers eye care expenses, including eye exams, prescription glasses, and contact lenses.

Medical Services Coverage

• Emergency Care
  Coverage for urgent and emergency medical services, including ambulance transportation and emergency room visits.
• Home Healthcare
  Coverage for healthcare services provided at home, often for individuals recovering from illness or surgery.
• Hospitalization Coverage
  Insurance for inpatient hospital stays, covering room and board, surgery, and other associated costs.
• Outpatient Services
  Coverage for medical services that don’t require an overnight hospital stay, such as outpatient surgery or diagnostic tests.
• Physical Therapy
  Coverage for rehabilitative services to address injuries or conditions affecting physical function.
• Specialist Care
  Coverage for consultations and treatments provided by medical specialists, beyond primary care physicians.

Insurance Types

• Catastrophic Health Insurance
  Catastrophic plans are designed for young, healthy individuals. They have low premiums and high deductibles, providing coverage primarily for major medical expenses after the deductible is met.
• Children’s Health Insurance Program (CHIP)
  CHIP provides health coverage for eligible children in low-income families, offering comprehensive benefits tailored to the unique healthcare needs of children.
• COBRA (Consolidated Omnibus Budget Reconciliation Act)
  Allows individuals to continue their employer-sponsored health insurance for a limited time (usually 18 to 36 months) after leaving a job, but at their own expense.
• Employer-Sponsored Health Insurance
  Health insurance offered by employers to their employees, where the employer typically subsidizes a portion of the premium costs.
• Exclusive Provider Organization (EPO)
  EPO plans combine features of HMOs and PPOs. They do not require referrals for specialists, but they typically only cover services provided within the plan’s network, except in emergencies.
• Health Maintenance Organization (HMO)
  HMO plans require members to choose a primary care physician (PCP) and generally necessitate referrals from the PCP to see specialists. They often have lower out-of-pocket costs and focus on preventive care.
• High Deductible Health Plan (HDHP)
  HDHPs have higher deductibles but often lower premiums. They are often paired with Health Savings Accounts (HSAs) to help individuals save for qualified medical expenses on a pre-tax basis.
• Indemnity Insurance
  Also known as fee-for-service insurance, indemnity plans offer flexibility in choosing healthcare providers. They reimburse a percentage of the charges for covered services after the deductible is met.
• Long-Term Care Insurance
  Insurance designed to cover the costs of long-term care services, including nursing home care, home health care, and assisted living.
• Medicaid
  A state and federally funded program that provides health coverage for low-income individuals and families. Eligibility and benefits can vary by state.
• Medicare
  A federal health insurance program primarily for individuals aged 65 and older. It also covers certain younger individuals with disabilities.
• Point of Service (POS)
  POS plans blend elements of HMO and PPO plans. Members choose a primary care physician and need referrals to see specialists, but they can also seek care outside the network, albeit with higher out-of-pocket costs.
• Preferred Provider Organization (PPO)
  PPO plans offer more flexibility in choosing healthcare providers, allowing members to see specialists without referrals. They provide partial coverage for out-of-network services but offer better coverage within the preferred network.
• Self-Funded Health Plans
  Employers take on the financial risk for providing healthcare benefits to employees, paying for medical claims out of their own funds rather than purchasing insurance.
• Short-Term Health Insurance
  Temporary coverage designed to fill gaps in insurance, often used by individuals between jobs or waiting for other coverage to begin.

Specialized Health Care Coverage

• Alternative Medicine
  Coverage for non-traditional medical treatments such as acupuncture, naturopathy, or massage therapy.
• Chiropractic Care
  Coverage for services provided by chiropractors, addressing musculoskeletal issues through manual adjustments.
• Mental Health Coverage
  Benefits that cover mental health services, including therapy, counseling, and psychiatric care. Some health insurance plans cover mental health as part of their offerings.

Health Savings and Reimbursement Accounts

• Flexible Spending Account (FSA)
  An account that allows employees to set aside pre-tax dollars for eligible healthcare and dependent care expenses. Funds do not rollover into next calendar year.
• Health Reimbursement Account (HRA)
  An employer-funded account that reimburses employees for qualified medical expenses.
• Health Savings Account (HSA)
  A tax-advantaged savings account that allows individuals with high-deductible health plans to save for medical expenses. Generally, grants fund rollover and investment.

Retirement Benefits

Includes various retirement plans offered by employers. You may notice plans described differently depending on the industry and organization you work for.

• 401(k)/403(b) Plan
  A retirement savings plan sponsored by an employer that allows employees to contribute a portion of their salary on a pre-tax basis. Many often include contributions (matching or not) made by the employer.
• ESOP (Employee Stock Ownership Plan)
  A retirement plan that allows employees to become partial owners of the company by acquiring company stock.
• Stock Options/Equity
  Programs that give employees the option to buy company stock at a predetermined price, fostering a sense of ownership.
• Vested/Vesting
  The process by which an employee accrues non-forfeitable rights over employer-contributed benefits, such as retirement funds. For example, matching dollars usually take years to vest, meaning an employee must stay with the company long enough to be eligible to receive them.

Leave and Time Off

• Paid Time Off (PTO)
  A policy that combines vacation, sick leave, and personal days into a single bank of days that employees can use for various reasons.
• Maternity/Paternity Benefits
  Coverage or support for expenses related to pregnancy, childbirth, and postnatal care, including maternity leave and accommodations.

Education Benefits

Tuition Reimbursement
A program where employers reimburse employees for expenses related to education and professional development.

Work Arrangements

Hybrid Work
Flexible work model that supports a blend of in-office, remote, and on-the-go workers. It may be structured or offer employees the autonomy to choose to work wherever and however they are most productive.

Support Programs

• Disease Management Programs
  Specialized programs to support individuals with chronic conditions, offering education, monitoring, and support for managing their health.
• Employee Assistance Program (EAP)
  A benefit that provides employees with confidential counseling and support services for personal or work-related issues.

Health and Wellness

• Preventive Care
  Services aimed at preventing health issues, often covered at no additional cost, including vaccinations, screenings, and annual check-ups.
• Telemedicine
  Virtual healthcare services that allow employees to consult with healthcare professionals remotely for non-emergency medical issues.
• Wellness Programs
  Initiatives designed to improve the health and well-being of employees, often including fitness incentives (gym membership) and health screenings.