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More and more American workers rely upon employer-provided retirement, health, disability and life insurance plans to provide protection for themselves and their families and to enhance their total compensation packages. And, whether as workers or dependents, women are very much impacted by these plans, yet our lack of knowledge about even their most basic provisions seriously disadvantages us and jeopardizes our financial futures. What do you need to know to be savvy? Here's some key facts that all women need to know about employee benefit plans.

RETIREMENT BENEFITS

1. Start saving early, even if you start small. The effect of compounded interest is phenomenal. Save $1,000 per year for ten years, beginning at age 25, and you will have greater retirement savings at age 65 than your friend who saves the same amount for 20 years beginning at age 35.
   
2. If your employer has a contributory pre-tax plan, like a "401(k)" or tax-sheltered annuity ("403(b)") program, set aside as much as you can afford. Since your plan contributions are pre-tax, the amount of your taxable income -- and your income tax withholding on that income -- will decrease.
   
3. If your employer doesn’t have a retirement plan, set aside your own tax-deferred retirement savings in an IRA. Your bank or a mutual fund company can help you get started.
   
4. Don’t let a participant loan feature in your employer’s retirement plan lure you into borrowing against your future. Your retirement savings should be just that -- retirement savings -- and should not be used to pay for current expenses. Set aside an emergency nest-egg of at least 3-6 months of your income so that you won't have to dip into your retirement savings. If you're currently making contributions to your employer's plan or IRA, consider redirecting those dollars to your emergency fund until you have accumulated a sufficient sum, then immediately resume your plan contributions.
   
5. How do you know if you're saving enough for retirement? Statistics show that women tend to live longer than men, so we should be saving as much as possible for our retirement years. A competent financial planner is probably your best source of assistance, but there are other tools available that can help you better assess your savings needs on your own. One resource, Quicken's retirement planning tool, is available on the Internet (Just go to Quicken.com, then click on Retirement, then Planning.). Quicken's site also has a college planning tool to help you assess your savings needs for your children's college education.

WELFARE BENEFITS
(Health, Disability, Life Insurance)

1. Find out how your health coverage works. Many managed care arrangements require pre-authorization of certain tests and procedures and referrals to specialists. Also, you may only have a limited period during which to provide notice to your health plan of new dependents (a new spouse or baby) who need to be covered. If you fail to follow your health plan's rules, you may be faced with significant monetary penalties or bear total financial responsibility for unauthorized procedures. Contact your health plan representative if you have questions.
   
2. Understand your employer’s sick leave and disability policies. Most employers provide some paid-time off for illness or paid disability leave for illnesses which extend beyond just a few days. If your employer provides disability coverage, it probably won't replace 100% of your income during disability even when coupled with any Social Security disability benefits to which you may be entitled. Protect yourself by setting aside a sufficient emergency nest-egg, and ask yourself whether your income replacement needs in the event of a disability are sufficient to warrant investment in an individual disability policy that would replace part of your lost income.
   
3. Take advantage of group coverage rates on life and disability policies. If your employer provides optional group life or disability insurance policies, you probably won’t be able to purchase more affordable coverage anywhere. A competent financial planner or insurance consultant can help you determine how much coverage you really need.
   
4. Take advantage of pre-tax reimbursement plans. Ask whether your employer offers a "cafeteria plan" which would allow you to set aside pre-tax dollars for expenses like health care premiums, medical expenses, or child care expenses that you incur during the year. Depending on your effective income tax rates, the savings could be quite significant.
   
5. Take advantage of educational assistance programs. Many employers offer tuition assistance programs that will pick up some, if not all, of the cost of certain courses and specific job-related training. Your human resources or benefits department can provide you with information about your employer's policies.

SELF-EMPLOYMENT

When you're starting your own business, it's easy to decide to spend as little as possible on non-essential items. But, as you evaluate your essentials, keep these points in mind:

1. Health and disability insurance coverage may be more important for a self-employed person than for a person who works for another employer, since a single serious illness could wipe out your business as well as your savings. Work with a competent financial planner to determine how to best afford the coverages that you need.
   
2. The importance of retirement savings cannot be overstated. Get in the savings habit, even if you can't save much initially, and increase your retirement savings as your income from your business increases.

DIVORCE OR DEATH OF SPOUSE

Divorce and death are realities, even though we all would like to think that "it won't happen to me". But the pain, anger and sense of loss that we feel during these personal tragedies doesn't have to be accompanied by avoidable economic losses. Understanding your legal rights can help you better protect yourself.

1. If you would lose dependent coverage under your husband's employer-provided health plan as a result of his death or a divorce, federal law requires that you be offered the opportunity to continue your coverage – albeit at full cost – for at least 18 months; some state laws provide for even more generous continuation coverage. Also, even if you have been awarded custody of your children, you may be able to obtain a Qualified Medical Child Support Order ("QMCSO") requiring your husband's employer-provided health plan to continue to provide coverage for them.
   
2. The Employee Retirement Income Security Act ("ERISA"), a federal law which governs the operation of private employer welfare and retirement plans, requires that certain types of retirement plans provide survivor annuities to a surviving spouse in the event of a participant’s death unless the spouse waives the right to the survivor benefits.
   
3. The laws of most states provide that retirement plan benefits which accrued to your spouse during your marriage are marital assets subject to equitable division in the event of divorce. Generally, a qualified domestic relations order ("QDRO") will be required for the division of benefits under private employers' plans. Special rules apply to retirement benefits of federal, state or local governments and their agencies.