Starting your first full-time, salaried job is exciting, but it can also put you in some unfamiliar situations. For instance, among the many decisions you'll encounter at your first job, choosing a health insurance plan is one of the most important - and possibly the most daunting. If you've been covered by a parent or guardian's insurance plan in the past, the choices - and expenses - associated with selecting your own plan can seem overwhelming. Fortunately, Adecco can help guide you through this process.
The job is yours - now what?
Before getting started, take a moment to congratulate yourself on earning a position with an employer that offers full health insurance coverage - it's an accomplishment. And remember, while choosing a health plan can seem intimidating, selecting the plan that best fits your needs will be easier if you remember to take your time and weigh your options.
While your employer typically pays the majority of your health plan costs, most health insurance plans have three types of costs associated with them: a premium, a deductible and a co-pay, also known as coinsurance.
- The premium is the fee that is typically taken out of each paycheck by your employer. In your new-hire paperwork, your employer should present you with a list of plan options with the premium costs affiliated with each plan.
- The deductible costs are the minimum amount of healthcare fees the employee is responsible for; this is typically the first couple hundred dollars each year.
- Co-pay, or coinsurance, is a cost you may have to pay if your program coverage limits the percentage of fees it pays to a doctor. Usually your insurance pays 70% - 80% of the doctor's charges. The remaining percentage paid by you as the insured is referred to as coinsurance. A co-payment is a small fixed amount you pay when visiting the doctor.
- HMO? PPO? EPO? Ohh? You may hear others refer to health plans by their acronyms, here's what they mean.
A health maintenance organization (HMO) is a type of managed care organization (MCO) that provides healthcare coverage through hospitals, doctors, and other providers with which the HMO has a contract.
A preferred provider organization or participating provider organization (PPO), is a managed health insurance organization of medical doctors, hospitals, and other providers who have contracted with an insurance company to provide healthcare at reduced rates to the insured.
An exclusive provider organization (EPO) is similar to a PPO, but under this plan you receive no coverage at all if you are cared for by a non-preferred provider.
Consumer Driven Health Plans (CDHP) are health plans that allow their members to choose their own healthcare providers and manage their individual health expenses.
Consider your needs.
Be sure to think about your healthcare costs before your first day so you'll be prepared to ask informed questions. To determine the health plan that best fits your needs, take a moment to think about how often you see a doctor on average each year. Also, tally the regular prescriptions you fill.
Don't be afraid to ask your hiring manager and colleagues for input regarding doctors who participate in your plan. And ask for some time to decide on a health plan - most employers give new hires at least a few days to enroll.
Remember to clarify when your benefits start and if there is a gap between when your old benefits end and your new plan begins. If there is, be sure to sign up for COBRA coverage. COBRA (Consolidated Omnibus Budget Reconciliation Act) is a law passed by Congress to provide continued health insurance coverage that might otherwise be terminated.
Make an informed decision.
The best way to avoid feeling overwhelmed is to do your homework; it only takes a little time. Be sure to work with the HR representative at your employer to help you with all of your questions. And good luck in your new job!
This is the first in a three-part series from the career experts at Adecco - visit adeccousa.com often for additional tips on getting your first job off to the right start.
Questions to ask about your health plan options.
- What is the premium?
- What is the deductible?
- What is the coverage on emergency visits?
- Does it cover prescription drugs?
- What is the out-of-pocket maximum?
- To calculate your healthcare expenses visit www.planforyourhealth.com
- Revolution Health offers benefit navigation tools
- Aetna and the Financial Planning Association host an informative site for recent college grads to consult when choosing a health plan: www.allaboutthebenefits.com