Sizing Up Your New Job's Health Insurance Options
Starting work at a new company often involves selecting a health insurance plan. If the employer offers options that you didn't have at your old job, take some time to review your choices carefully. The advice below can help you find the perfect plan for you and your family
Types of health-care plans
Many employers offer just one type of health insurance. Others let you choose from two or three. Here are the most common plans you might encounter:
Health Maintenance Organization (HMO). Often the least expensive option — and the least flexible. You choose a primary care physician within the HMO. Most nonemergency care covered by the plan must be administered by your primary care physician or another health-care professional within the HMO, based on a referral by your primary care physician.
Preferred Provider Organization (PPO). Premiums might be higher than with an HMO, but you generally don't need a referral from your primary care physician in order to see a specialist or other health-care provider.
Point-of-Service Plan (POS). Combining elements of an HMO and PPO, this plan lets you retain your coverage if you see a health care provider outside of the plan, as long as you have a referral from your primary care physician.
Things to consider
If you and your spouse are both employed, carefully compare the terms of your individual health-care plans. What made sense at your last job might not be the best choice in your new job.
If your employer offers a choice of health plans, make sure your preferred health-care providers are included in the one you choose. If you're in doubt, contact your doctors' billing offices and ask about the coverage plans they accept.
Stretching your dollars
Your new employer may also offer benefits that can help you manage your health-care costs or provide extra income protection for you and your family. These options might include:
- Flexible Spending Accounts (FSAs). Look at your expenses for the past year and determine how much pre-tax money you want to put aside in the coming year for health-care expenditures and dependent care expenditures, such as day care. The downside of FSAs is that you lose any money you don't claim within the benefit period (usually 12-15 months).
- Health Spending Accounts (HSAs) are sometimes offered by employers to employees with high-deductible health plans. HSAs use pre-tax money, but any amount not spent during the year can remain invested. Unlike FSAs, the money in an HSA isn't lost if you don't use it within a specified time.
- Life and disability insurance. Many employers provide a baseline level of life and disability coverage to employees. Look at the terms of the policies and determine whether you need to supplement them with additional insurance.
Take the next step...
Simplify your finances! Consolidate your retirement plans with your new employer or roll them over to an IRA. Call us at 1.800.247.8000, ext. IRA (472) or meet with a local expert from The Principal.
