A planar wafer-level packaging method is provided for a laser and a monitor photo detector. The laser and photo detector are affixed to a planar substrate. The planar substrate provides electrical connections to the components. A lens cap with a microlens is formed and affixed to the substrate with a seal. The lens cap forms a hermetically sealed cavity enclosing the laser and photo detector. The inside surface of the lens cap has a reflective coating with a central opening over the emitting aperture of the laser. The central opening has an anti-reflective coating. Light from the laser is directed and shaped by the lens cap to couple into an external light guide. Residual light from the edge of the laser reflects off the inside surface of the lens cap and is incident upon the photo detector. In an alternate method, the laser may be packaged using flip-chip assembly.