The Financial Compass

Based on the conversations we have with prospects and newer clients at Stillwater, the average American worker spends less time on their employee benefits elections than they should. Why? Most people do not understand their options. It’s overwhelming and time consuming to learn.

What if I told you that for high performing professionals, those benefits could be equal to 30-40+ percent of your total compensation. Would you spend more time or consider hiring a professional to support you in making those decisions? Most should.

When Stillwater thinks of employee benefits, we break it down into different categories to help our clients mentally account for everything. Here in this post, we will focus on numbers one and two.

1. Medical & Healthcare Benefits
2. Dental & Vision Benefits
3. Income Protection Benefits
4. Retirement & Financial Wellness Benefits
5. PTO & Leave Benefits
6. Voluntary & Supplemental Benefits
7. Executive & Specialized Benefits
8. Wellness & Fringe Benefits

Medical & Healthcare Benefits

• Health Insurance (HMO, PPO, EPO, POS & HDHP)
• Health Savings Account (HSA)
• Flexible Spending Account (FSA)
• Dependent Care FSA
• Health Reimbursement Account (HRA)

Health insurance tends to be the one area of employee benefits where people spend the most time. However, they tend to focus purely on the cost of the monthly premium. For those starting their careers, cost is a major factor. For high performers with strong cash flow, we help them shift their mindset from cost alone, to benefits and cost as a pair. First, it’s helpful to understand the different types of health insurance plans offered.

Health Maintenance Organization (HMO)—where doctors, hospitals, and other healthcare professionals have agreed to accept payment at a specified level for any service they perform in a dedicated network

• Typically, the least expensive option due to the smaller provider network
• In network coverage only—pay full cost for out-of-network care
• Primary care physician (PCP) acts as gatekeeper for specialist referrals

Preferred Provider Organization (PPO)—the plan with the most freedom

• Most expensive option because it offers in-network and out-of-network coverage
• Larger networks come with higher cost
• No PCP referral required

Exclusive Provider Organization (EPO)—a hybrid health insurance plan that operates like an HMO by strictly covering in-network care, but mirrors a PPO with a larger network and by eliminating the gatekeeping of a PCP in some cases

• Lower monthly premiums than PPO plans while maintaining a large network
• In network coverage only—pay full cost for out-of-network care
• Potentially a good choice if your preferred doctors are all in-network

Point-of-Service (POS)—another hybrid health insurance plan but more expensive than EPOs due to the ability to seek out out-of-network care with a referral

• PPO, POS, EPO, HMO & HDHP → order from most expensive to least expensive as a general rule—can vary by carrier, region, and group size
• Flexibility to see out of network doctors for care
• May still require PCP for coordination of care

High-Deductible Health Plan (HDHP)—most commonly structured as PPOs but IRS determines eligibility based upon deductible and out-of-pocket max

• Lowest premiums, but highest deductibles and out-of-pocket maxes (OOPM)
• Large networks and specialist referrals not required for PPOs
• No primary care physician (PCP) required for PPOs

Health Savings Accounts (HSA)—paired with high-deductible health plans (HDHP) acting as a savings or investment account for qualified medical expenses

• Triple tax advantaged: tax deduction for contributions, grows tax free, and can be distributed tax free if used for qualified medical expenses
• Limits: $4,400/single | $8,750/family for 2026
• Some employers will make contributions—does not expand the annual limits
• Portable if you leave your job—unlike FSAs or HRAs
• Eligible for those with ACA Bronze or Catastrophic plans for those on marketplace

Flexible Spending Account (FSA)—employer-sponsored, tax-advantaged spending accounts used to pay for out of pocket qualified medical expenses commonly paired with HMO or PPO plans

• Employer owned, unliked HSAs which are employee owned and managed
• Contributions are pre-tax and effectively become a tax deduction, like HSAs
• Limits: $3,400 per person | $680 annual rollover of unused funds for 2026
• Use it or lose it—have to use rollover within 2.5 months otherwise funds go back to your employer—all employers do not offer the rollover or grace period

Dependent Care FSA—just like a healthcare FSA, except for qualified dependent care expenses

• Employer owned, tax-advantaged spending account
• Contributions are pre-tax and treated as a tax deduction
• Limits: $3,750/year Married Filing Separately | $7,500/year Single or Married Filing Jointly for 2026
• Use it or lose it with no rollover eligibility but grace period to file claims for prior year qualified expenses—company specific rules

Health Reimbursement Account (HRA)—paired with HMO or PPO plans, an account funded by employers to help employees reimburse themselves for qualified out-of-pocket medical expenses

• Account owned, managed, and contributed to by employer
• Annual contributions outlined by employer and subject to change
• Helps employees cover their deductible and potentially other qualified out of pocket medical expenses beyond that
• Employer determines rollover eligibility, if any, otherwise use it or lose with no portability between jobs

This shows the level of depth we offer clients here at Stillwater Private Wealth. Education plays a large role so clients can make informed decisions.

Key terms to know include deductible, out-of-pocket max (OOPM), co-pays, co-insurance percentage, drug formulary, and more. The deductible tells you what you are responsible for before most insurance coverage kicks in. You meet your deductible first with the help of certain co-pays, more insurance coverage then begins with co-insurance, your out-of-pocket max is eventually reached at which point insurance covers the rest of qualified medical expenses. Whether those expenses are incurred in or out-of-network is important to consider as the financial implications can be wildly different.

That is an oversimplified explanation and summary of key terms, but those are just the most common you will run into. There are countless other terms, deadlines, maximums, and considerations to keep in mind. It becomes its own job. The most important things to understand from a financial planning perspective are your deductible, out-of-pocket max, drug formulary, and in-network providers.

Dental & Vision Insurance

Dental and vision insurance work similarly in the sense you pay a monthly premium, they include deductibles, co-pays, and co-insurance percentages, but tend not to have out-of-pocket maxes (OOPM) like their health insurance counterparts.

Understanding your network, coverage in and out of network, and plan type is equally important. Common dental coverage typically includes preventative care costs like cleanings, exams, and X-rays, a percentage of basic procedures like cavities or extractions, and a lower percentage of major procedures like crowns, bridges or dentures.

Common vision coverage typically includes annual exams, an annual eyewear allowance for contact or eyeglass frames, and lenses covered in full or with a co-pay. Eye related surgeries are covered by health insurance if they are deemed medically necessary, otherwise they tend to not be covered by vision insurance alone.

Large dental or vision bills tend to surprise employees who do not take the time to fully understand their coverage. Relying on your doctor’s office to understand the financial impact can be costly mistake because they get paid one way or another.

Income Protection Benefits

• Group Term Life Insurance
• Group Permanent Life Insurance
• Group Short-Term Disability (STD)
• Group Long-Term Disability (LTD)
• Accidental Death & Dismemberment (AD&D)
• Critical Illness, Accident & Hospital Indemnity Insurance

Retirement & Financial Wellness Benefits

• 401(k) Plans
• 403(b) Plans
• Stock Options (ISOs/NSOs)
• Restricted Stock Units or Awards (RSUs/RSAs)
• Pension Plans or Defined Benefit Plans
• Retirement Benefit Accounts
• Trump Account Contributions
• Student Loan Assistance

Paid Time Off & Leave Benefits

• PTO
• Paid Holidays
• Jury Duty
• Bereavement Leave
• Personal Leave
• Sick Leave

Voluntary & Supplement Benefits

• Pet Insurance
• Legal Plans
• ID Theft Protection
• Supplemental Life Insurance

Executive & Specialized Benefits

• Deferred Compensation Plans
• Directors & Officers (D&O) Liability Insurance
• Executive Disability Coverage

Wellness & Fring Benefits

• Wellness Stipends
• Health Insurance Stipends
• Gym Memberships
• Commuter Benefits
• Remote Work Stipends
• Tuition Assistance
• Professional Development

If this feels like a lot, it’s because it is. That is why it can equal 30-40+ percent of total compensation packages for high performing professionals. There’s a lot to consider and doing so alone could mean leaving money on the table or being unaware of gaps that could impact your financial plan.

This is why we help clients at Stillwater navigate their open enrollment periods. For those who work for themselves, we help connect you with employee benefit specialists, insurance brokers, and help you identify the right retirement plan for you and your business.

Open enrollment is either here now, or right around the corner. Take the time to review your benefits this year or hire someone who can help.

DISCLAIMER 

The information provided does not constitute medical, insurance, legal, tax, or financial advice. Before making any medical, insurance, investment or financial decisions, you should consult with a medical professional, qualified insurance professional, attorney, tax advisor, or financial professional who can consider your individual circumstances.

SOURCES

+ Aetna. Accessed July 2026. HMO, PPO, POS, EPO, & HDHP: What’s the Difference? Information describing common types of health insurance plans and their features. Accessed July 2026. (aetna.com)

+ Aetna. Accessed July 2026. HSA vs. FSA vs. HRA: What Is the Difference Between Them? Information comparing health savings accounts, flexible spending accounts, and health reimbursement arrangements. (aetna.com)

+ HealthEquity. Updated April 2025. Health Reimbursement Arrangements (HRA) Guide. Information explaining how health reimbursement arrangements work and their key benefits. (healthequity.com)

+ Principal. Accessed July 2026. Dental Insurance. Information describing dental insurance coverage, benefits, and plan options. (principal.com)

+ Guardian. Last updated January 30, 2026. Life Insurance vs. Disability Insurance: Why You Should Consider Having Both. Last updated January 30, 2026. Information comparing life insurance and disability insurance and their respective purposes. (guardianlife.com)