As open enrollment winds down, grab what's yours

NEW YORK Wed Nov 23, 2011 11:38am EST

Rachel Rouillard (L) checks insurance forms before a craniosacral therapy session for her four-year-old son Will, following surgery on Will's back to remove recurring cysts caused by chronic cystic hygroma, in Rochester, New Hampshire April 16, 2010.  REUTERS/Brian Snyder

Rachel Rouillard (L) checks insurance forms before a craniosacral therapy session for her four-year-old son Will, following surgery on Will's back to remove recurring cysts caused by chronic cystic hygroma, in Rochester, New Hampshire April 16, 2010.

Credit: Reuters/Brian Snyder

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NEW YORK (Reuters) - When it comes to boosting your compensation, you likely think about marching into your boss's office and demanding a raise. The thought of it probably makes you break out in a cold sweat.

But here's a little tip: You're focusing on the wrong thing. Sure, a fat raise would be great. But in this tough economy, don't bet on it; average raises for 2012 are expected to be a slim 3 percent, according to survey data from HR consultants Mercer. And if you push the issue too far, at 9 percent national unemployment, there are plenty of folks only too eager to take your job.

To really crank up your compensation, you don't have to confront your boss with any ultimatums. You just have to crack open your employee handbook. If raises might offer a potential 3 percent boost, employee benefits represent 10 times that amount of your total compensation. For private-sector workers, benefits now comprise 29.6 percent of what you're taking home -- even if you don't realize it. And if you're a government staffer, that number spikes even higher, at 34.6 percent.

And yet, most people aren't taking full advantage of the benefits being offered to them. In fact, a recent study from Prudential reveals that 68 percent of employees make little to no effort in selecting their benefits. So basically, you're giving up free money -- and you have no one but yourself to blame.

As president and chief executive officer of Irvine, California-based ScanMyPhotos.com, Mitch Goldstone finds himself in the awkward position of reminding staffers to use the benefits that are available to them. "Total compensation goes far beyond just salary," says Goldstone, who boasts that his firm has had zero turnover in recent years. "I have to walk around the office, pleading with them to take advantage. It's like I'm playing the dad role, constantly reminding the kids."

Some benefits are employer-paid, like 401(k) matches; some are employee-paid, like having the option of heavily-discounted life insurance. Either way, you can materially improve your finances by doing a little due diligence. After all, we're still in the thick of open enrollment season, which means that there's time to work those benefits to your best advantage. The likeliest ways to uncover that hidden compensation:

-- Leverage insurance discounts. Large employers are often able to negotiate steep discounts in home and auto insurance, thanks to their vast purchasing power. "But employees are not taking full advantage of that," says Chris Covill, a partner at Mercer and head of the firm's Integrated Benefits Practice. "That's in the neighborhood of $500 to $600 annual savings right there."

Coverage for long-term care can also make a lot of sense, particularly for those over 50; many health plans won't cover costs for facilities like nursing homes, which can add up quickly in the event of debilitating injuries like strokes.

-- Boost your health coverage if it makes sense. "People know the amount that's being withheld from their paycheck for health coverage, but they usually don't know how much their employer is paying," says Ken McDonnell, a director at the Washington, D.C.-based Employee Benefit Research Institute. And that can be substantial.

If a relatively small increase in your monthly premium can lead to vastly superior coverage, then consider taking the short-term hit. Especially if you have major life changes in the pipeline, like pregnancy, that will surely lead to greater medical costs.

-- Look for the reintroduced 401(k) match. During the financial meltdown of 2008-9, many companies suspended or eliminated their 401(k) matches. As a result "some employees dropped out and didn't re-enroll," says Mercer's Covill. But 75 percent of companies that ditched their matches have since reinstated them, according to a study by Towers Watson -- and that means you could be leaving cash on the table as we speak. In fact, at companies that offered matches for retirement contributions in 2010, more than 20 percent of staffers didn't chip in a dime. Unless you're in dire financial straits, there's really no excuse for passing on free money.

-- Think outside the box. Beyond health coverage and 401(k)s, there are an array of other areas where you could unearth hidden compensation. These days many firms, terrified of the costs associated with chronic health conditions, will cover at least a portion of your gym membership. Many company intranets now feature online "malls," with special discounts negotiated with major retailers. Tuition reimbursement, company-sponsored daycare, flexible spending accounts and more: They all represent ways to improve your bottom line, right now.

The key takeaway: Before the window of enrollment season closes, stop obsessing about your annual salary, and instead focus on your total compensation and how to maximize it. "For 21 years, my goal as a business owner has been to never have an employee ask for a raise," says ScanMyPhotos's Goldstone. "With the total compensation package, I always beat them to raise."

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The author is a Reuters contributor. The opinions expressed are his own.

(Editing by Lauren Young and Jilian Mincer)

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