"Fringe benefit" for grad students

[ibtes]

A funding letter I received says "The research assistantship also qualifies you for a significant fringe benefit, which amounts to about $612 per month (the actual amount varies depending upon the kind of University-approved medical insurance you select)." 

$612 per month would mean about &7,500 a year and I don't think health insurance alone would worth that much. I'm just curious what the "fringe benefit" usually includes besides health insurance? Also, do we pay tax on this?

[TakeruK]

1 hour ago, ibtes said:

A funding letter I received says "The research assistantship also qualifies you for a significant fringe benefit, which amounts to about $612 per month (the actual amount varies depending upon the kind of University-approved medical insurance you select)." 

$612 per month would mean about &7,500 a year and I don't think health insurance alone would worth that much. I'm just curious what the "fringe benefit" usually includes besides health insurance? Also, do we pay tax on this?

That sounds vague but I think it does mean health insurance. Yes, health insurance can be worth that much!! At my PhD school, the monthly premiums for the health insurance plan that covers staff, postdocs and faculty costs something like $550 per month (employees who get benefits only pay $80 per month though, the rest is covered by the employer). My PhD school clearly separated students from staff/employees and our student health plan was $3000 per year (we get benefits too so we pay around $500 out of pocket). When a plan is negotiated for students only, the costs are often lower because students are usually young and healthy (and to be frank, unlikely to seek medical services unless severely hurt). However, many other places lump their RA and TA student employees with their regular employees so the cost of the plan to them goes way up. $7500 per year is high but actually not that surprising. I've seen HMO-type plans with full premiums around $650-$700 per month, so that would match what you're saying.

In addition, if you are counted as an employee, you may also be eligible for a large number of other benefit plans too. For example, a dental plan, a disability insurance plan, a life insurance plan etc. Or, perhaps they will cover some or all of your dependents health insurance too, so the $7,500 refers to either adding up these other benefits here and/or maxing out the number of dependents you have. I would not be surprised if the offer letter uses the highest cost possibility in order to maximize the value of the fringe benefit listed.

[ibtes]

21 hours ago, TakeruK said:

That sounds vague but I think it does mean health insurance. Yes, health insurance can be worth that much!! At my PhD school, the monthly premiums for the health insurance plan that covers staff, postdocs and faculty costs something like $550 per month (employees who get benefits only pay $80 per month though, the rest is covered by the employer). My PhD school clearly separated students from staff/employees and our student health plan was $3000 per year (we get benefits too so we pay around $500 out of pocket). When a plan is negotiated for students only, the costs are often lower because students are usually young and healthy (and to be frank, unlikely to seek medical services unless severely hurt). However, many other places lump their RA and TA student employees with their regular employees so the cost of the plan to them goes way up. $7500 per year is high but actually not that surprising. I've seen HMO-type plans with full premiums around $650-$700 per month, so that would match what you're saying.

In addition, if you are counted as an employee, you may also be eligible for a large number of other benefit plans too. For example, a dental plan, a disability insurance plan, a life insurance plan etc. Or, perhaps they will cover some or all of your dependents health insurance too, so the $7,500 refers to either adding up these other benefits here and/or maxing out the number of dependents you have. I would not be surprised if the offer letter uses the highest cost possibility in order to maximize the value of the fringe benefit listed.

Wow! Thanks for the very detailed explanation. Indeed my undergraduate student health insurance is about $2,500 so I've never thought that an employee's insurance can be worth $6,000 - 7,000. So it's true when my TA told me that her insurance is way better than mine, haha.

[rising_star]

14 hours ago, ibtes said:

Wow! Thanks for the very detailed explanation. Indeed my undergraduate student health insurance is about $2,500 so I've never thought that an employee's insurance can be worth $6,000 - 7,000. So it's true when my TA told me that her insurance is way better than mine, haha.

More money does not equal better when it comes to health insurance for a variety of reasons. It's more that your undergrad health insurance is being subsidized by the institution and by the abundance of young (presumably healthy) people. 

[TakeruK]

On 2/27/2018 at 9:45 PM, rising_star said:

More money does not equal better when it comes to health insurance for a variety of reasons. It's more that your undergrad health insurance is being subsidized by the institution and by the abundance of young (presumably healthy) people. 

Indeed. For my PhD school, both the employee and student plans were very very similar, except the students' plan cost way less because of the demographic. Also, the student plan has specific benefits negotiated by students (e.g. lots of mental health benefits, sleep disorders etc.) while the employee plan had more benefits that were relevant to the staff demographic.