We’ve all been there. You’re excited about a potential new job and whether this is your 1st job out of college or your 4th, you still look at the benefits package with confusion and distrust. In the process of a job search, you may be offered similar salaries. But, beyond salary, there are a number of factors to decide between job offers–paid time off, transportation benefits, and most importantly healthcare benefits.
Without good employer coverage, healthcare costs can be incredibly expensive. Understanding your prospective job’s potential health benefits is as important as negotiating a salary.
Before we get started, it’s important to remember, if you’ve received a job offer, or even if you’re further along in an interview process, it is perfectly acceptable to ask about an organization’s health benefits. If you’re interviewing with a larger company, you will typically have access to an HR representative who can answer your questions. If it’s a smaller company, you may have to ask your questions directly to a future boss or supervisor. They might not have the answers but they should be able to get them for you!
When considering a future employer or choosing between offers, here are a few things to think about:
1. Insurance Plan Options
The Affordable Care Act (ACA/Obamacare) created requirements for employers to help pay for your health insurance. There are a number of factors that can exempt employers from providing coverage, but the most common is company size. Employers with 50 or more employees are mandated to offer insurance, any fewer and they are exempt. If you’re looking at joining a company with fewer than 50 employees, odds are they still offer health insurance, but it should be your first question!
Once you confirm your employer will offer insurance coverage, you should also ask what kind of plans they offer. The type of insurance plans you can enroll in may impact which doctors will be in network and that could impact your ability to keep the same primary care physician or specialist. Smaller employers may have employees buy coverage through a state level exchange while larger employers may offer specific plan options for employees to choose from. Larger companies are more likely than small companies to offer more than one plan type. Most HR personnel should be able to provide you with a benefit summary or be able to explain the basics of their insurance plan options.
In 2018, 80% of companies offered just one type of plan.* If your prospective employer offers only one type of plan, it’s likely that it is a PPO or Preferred Provider Organization. However, 29% of companies only offer HDHPs or High Deductible Health Plans.* HDHPs can leave you at risk for high medical costs in the case of an emergency or unexpected injury or illness. If your future employer only offers HDHPS, be sure to ask them about additional savings options they offer to offset the costs of an HDHP. (read more about PPOs and HDHPs in HIP’s Health Plans 101)
It’s also important to ask about the timeline for coverage. There is often a waiting period between when you start a job and when coverage from your new employer begins. It’s important to know when you get coverage because you may need to make alternate arrangements until your new insurance kicks in. If you’re just out of college, you may want to stay on your parents’ plan for the first few months of your new job (Federal Law allows you to stay on a parents insurance plan until you’re 26). If that’s not an option you could also consider getting a short term insurance plan.
If you’re moving from one company’s insurance plan to another, you might hear about COBRA. COBRA is a federal law that allows you to keep your previous employers’ insurance plan until your new one kicks in. However, if you maintain an old insurance plan, your former employer will not contribute to cost sharing–you will be responsible for 100% of the premium payments. Beyond COBRA, you could also find an individual, non-group plan through your state’s exchange or the federal exchange.
3. Who’s paying?
During a benefits discussion, you should understand how much you will contribute towards your health coverage and how much your new employer will contribute. Employer contributions are applied to your insurance premiums (monthly payment to your insurer). Additionally, if you will have dependents on your plan (children or spouses) you should ask how much the employer will contribute to family plans. Employers often pay less towards dependents than towards you, the policyholder.
On average in 2018, employees contributed 18% towards their insurance premiums, meaning employers contributed 82%. The majority of employees in 2018 paid between 0-25% of their insurance premiums.* Understanding how much your employer will contribute to insurance premiums is an important data piece to compare job offers.
The percentage of premiums your future employer covers also depends on what type of plan you select. Many employers select a “reference plan” that they use to base their coverage decisions on. If you select a plan with higher premiums or costs than the reference plan you may pay more.
If the employer offers high deductible health plans, be sure to ask if they offer HSAs or FSAs to help offset high medical costs. (see HIP’s Health Plan 101 guide that explains HDHPs, HSAs, and FSAs).
4. Other Potential Discounts
If the cost of your insurance seems like it might go up with a new employer, you might also ask about other additional discounts your employer could offer. Many employers offer health insurance discounts or additional coverage for employees who sign up for wellness programs or don’t smoke.
5. Other health questions
- Does the employer offer dental insurance or vision insurance?
- Does the office have a gym? If not, can you get any kind of additional funding for exercise classes or a gym membership?
- What is the sick leave policy? Can you work from home when you’re sick?
- When considering a job offer it’s important to understand the health benefits of a future employer.
- You should understand and ask about:
- Types of plans offered (consider how will this impact your doctor network)
- When does coverage begin?
- How much does the employer contribute towards premiums? How much will they contribute towards dependents?
- Are there other discounts the employer offers such as wellness programs?
*Data gathered from Kaiser Family Foundation’s 2018 Employer Health Benefits Survey