Restricted stock units (RSUs) are a common part of many compensation packages that Amazon offers. RSUs are basically promises of future stock in the company. They are usually issued in a block, with varying numbers of shares vesting over a future time period, meaning the units aren’t yours all at once. RSUs provide an incentive for you to stay with the company because you can’t take unvested units with you if you leave. A typical RSU block at Amazon vests over four years. Typically, 5% vests after the first year, 15% after the second, and 20% every six months after that. Here’s an example.

	Vested Shares	Unvested Shares
Initial RSU Grant	0	1000
Year 1	50	950
Year 2	200	800
Year 2.5	400	600
Year 3	600	400
Year 3.5	800	200
Year 4	1000	0

An important consideration is whether to hold on to the units once they vest and become shares of Amazon stock. In general, we suggest you sell them when you have the opportunity. Your investment in Amazon is already strong – you work hard every day and already have your future compensation tied to the company’s success through those RSUs while you wait for them to vest. There’s nothing wrong with this, but it’s best to reduce company-specific (in this case Amazon-specific) risk to the extent that you can and sell those RSUs when they vest.

Amazon enforces certain trading windows – time periods when its employees can trade their shares of Amazon stock. This means there are times of year when you aren’t allowed to buy or sell shares of AMZN, whether those shares are held in a brokerage account or in your 401(k). The only way around these black-out dates is with a previously established scheduled trading plan, called a 10b5-1. You should have access to all of the details of Amazon’s policy, and we recommend you review that and share it with anyone who has trading authority on your account. Typically, Amazon trading windows open two days after reporting of quarterly financials. The trading windows close at end of day on the third business day of the third month each quarter. The exact date varies, so Amazon employees receive an email at the start of each trading window.

Basic Life and AD&D

Amazon provides basic life insurance along with accidental death and dismemberment (AD&D) insurance at no cost to its employees. These policies are pretty straightforward. If you pass away during your tenure with Amazon, your named beneficiary, such as your spouse, children or other close family member, will receive the death benefit from these policies. They are issued without a doctor’s visit for proof of good health. Here are the basics.

Policy	Benefit
Basic Life	2x your annual base salary up to $500,000
AD&D*	2x your annual base salary up to $500,000
*AD&D is a benefit on top of your life insurance policy that is only paid out if death is caused by a covered accident, whether you’re at home or at work

The most important thing to remember about these benefits is that they are based on your annual base salary, which may not include a substantial percentage of your total compensation. Many companies don’t consider RSUs or stock options as part of your base salary, meaning the life insurance benefit may be less than what you really need. Here are some important things to consider.

1. What exactly constitutes your annual base pay, according to your company?
2. How much money are you spending each year and is there a gap between your annual base pay and that figure? In other words, how much of your spending is covered by those extra sources of income, like RSUs?
3. If something were to happen to you, what worries, goals, and wishes would you want taken care of for your family in your absence? College for your kids? Paying of the mortgage?

Answering these questions can help you determine whether there’s a gap in coverage, meaning the death benefit offered by the policy won’t cover your family’s cost of living and other goals.

A final note about AD&D: Because this benefit is only paid out in the unlikely event that death is caused by a covered accident, we disregard the dollar value of this benefit when calculating how much life insurance a client should purchase. We suggest you do the same as you figure out your insurance needs.

Supplemental Life Insurance Options

Say you’ve established that there’s a gap in your coverage, and you need more insurance than Amazon’s basic coverage provides. Amazon offers several choices for purchasing supplemental life insurance. Premiums are deducted from your paycheck on an after-tax basis. Here are the basics.

Policy	Benefit
Guaranteed Issue (no doctor’s visit required)	3x your annual base salary or $500,000, whichever is less.
Proof of Good Health (Requires a doctor’s visit)	4 to 10x your annual salary; $2,000,000 maximum benefit.
Automatic Acceleration (no doctor’s visit required)	Coverage increases by 1x your annual base salary once per year up to 10x salary or $500,000, whichever is higher. $2,000,000 maximum benefit.

Supplemental life insurance may be a way to help cover the gap, but keep in mind that most company-provided life insurance policies won’t move with you if you leave the company. If you’re between jobs for a period of time without any independent coverage, you won’t have any coverage at all. A life insurance policy from an independent carrier may be worth considering. Again, we can help you determine how much and what type of life insurance you may need.

Amazon provides both short- and long-term disability coverage at no cost to its employees. This coverage provides you a percentage of your salary if you aren’t able to work due to a covered illness or injury. Maternity benefits are also included in this type of coverage. Your plan document will go into the details of the types of illness and injuries that are covered, and how to submit a claim. 

Basics of coverage

Here are the basics of Amazon’s coverage.

	Waiting Period	Benefit	Duration
Short Term	7 days	60% weekly pay, max $2,300/week	26 weeks
Long Term	180 days	60% monthly pay, max $25,000/month	To age 65

Just like with life insurance, it’s important to verify what Amazon considers your weekly or monthly pay to be. It probably doesn’t include RSU grants and other sources of income, which could create a significant portion of your compensation, and you may have a gap. Just like with insurance, an independent disability policy might be a good choice for you and your family.

Medical Plan Comparison

Amazon offers five health insurance plans from two different insurers, with various deductibles, copays and coverage limits. Choosing the right plan for you and your family is an important step that may require an in-depth look at the types of care you anticipate needing in the coming year. Changes to your health insurance plan can only be made under qualifying events – a change to your marital status, the birth of children, a change to your or your spouse’s employment status, etc. – or during Amazon’s open enrollment period.

Broadly speaking, the five health insurance plans can be divided into two groups:

• The Shared Deductible Plan and the Health Savings Plan have lower payments for premiums, but higher deductibles for medical expenses.
• The Standard Plan, In-Network Only Plan, and the Kaiser Permanente HMO Plan have higher payments for premium, but lower deductibles for medical expenses.

The first two plans will be better for people who expect to have few annual medical expenses, and who have money set aside to cover the higher costs that have to be paid out of pocket.

The last three plans will be better for people who expect to have higher annual medical expenses (for themselves or a spouse / child covered under the plan.

Shared Deductible Plan

Has low paycheck contributions and a relatively high deductible ($1,000 for individuals, $3,000 for families). Amazon covers 50% of the deductible with money set aside in a Health Reimbursement Account (HRA). This plan is best for employees with few regular medical expenses, are looking for low premiums, and can still have a comparatively low annual deductible.

Health Savings Plan

Has low paycheck contributions and the highest deductibles ($1,500 for individuals, $4,500 for families). Amazon contributes $500 to $1,500 to a Health Savings Accounts instead of contributing to the deductible (as with the Shared Deductible Plan). Employees can save additional money tax-free in the HSA. This plan is best for employees with few regular medical expenses, are looking for low premiums, have families on their Amazon health insurance, and have additional money to set aside in a tax-advantaged account for healthcare costs.

The Standard Plan

This plan is similar to the Standard Plan, but with a higher premium and lower deductible ($100 for individuals, $300 for families). It is the most restrictive for choosing your care provider. Except for emergencies, the plan will not cover expenses incurred out-of-network. Any services must be through a referral from your primary care provider. This plan is best for employees with expected medical costs, want to keep out-of-pocket costs down, and are willing to accept significant restrictions on the specialists they are allowed to see.

In-Network Only Plan

This plan is similar to the Standard Plan, but with a higher premium and lower deductible. It is the most restrictive for choosing your care provider. Except for emergencies, the plan will not cover expenses incurred out-of-network. Any services must be through a referral from your primary care provider. This plan is best for employees with expected medial costs, want to keep out-of-pocket costs down, and are willing to accept significant restrictions on the specialists they are allowed to see.

Kaiser Permanente HMO (CA, CO, WA)

If you prefer coverage from Kaiser Permanente, Amazon employees are eligible to participate in an HMO under their network. There is no deductible and the annual out-of-pocket maximum is $1,500 per person and $3,000 for a family.

Vision and Dental Insurance

Amazon employees are also eligible to receive vision insurance coverage through Vision Service Plan (VSP) and dental coverage through Delta Dental of Washington. Basic and Enhanced plans are available through these providers.

Funding Your Healthcare

Depending on which plan you enroll in, you may be eligible for a Health Savings Account (HSA), a Health Reimbursement Arrangement (HRA) or a Flexible Spending Account (FSA).

Flexible Spending Account (FSA)

Flexible Spending Accounts (FSAs) allow you to contribute money on a pre-tax basis (reducing income and Social Security taxes). Any funds in the account not used by the deadline (generally March 31 or May 31) are forfeit. These should generally only be used for known expenses. There are two types of FSAs: Health Care FSAs and Dependent Care FSAs.

Health Care FSA

Allows you to contribute between $120 and $2,600. Money contributed is not included in taxable income and is not taxed when used for medical expenses. The Health Care FSA cannot be used if you’re enrolled in the Health Savings Plan.

Dependent Care FSA

Allows you to contribute up to $5,000 per year for child care expenses. Money contributed is not included in taxable income. The Dependent Care FSA can be used by anyone, regardless of health plan. This is ideal for employees with young children and fixed daycare expenses.

Maternity benefits

The limits and rules for short-term disability are different if you’re a new mother recovering from childbirth. Here’s what to expect.

	Waiting Period	Benefit	Duration
Maternity benefit	None	100% weekly pay, no maximum	Up to 4 weeks prior to birth with doctor’s authorization, plus 10 consecutive weeks after birth

Parental leave

New fathers and adoptive parents are eligible for leave benefits as well. Full and part time employees receive up to six weeks of leave, to be taken within the first year after birth or adoption placement. As an added benefit for those on parental or maternity leave, Amazon offers their Ramp Back program, which allows employees to return to work gradually over an eight-week period.

Amazon offers a number of great benefits that may be useful to you or your family. Here are just a few.

• Adoption assistance
• Employee Assistance Program – Resources and referrals for counseling for bereavement, marital issues, mood disorders, etc.
• Estate planning assistance – Amazon provides you with free access to their list of preferred attorneys who can give you legal advice and help you draw up estate planning documents at no cost to you.
• Referrals for childcare, eldercare and pet care.
• Personal Accident InsurEstance
• Critical Illness Insurance