Healthcare Through Your Job: What You Should Know

Good health care plans can protect you against paying for big medical expenses on your own, out of pocket. So when you are evaluating a job offer, consider the employer’s health care plan along with the salary.

The Basics

When reviewing your health benefits package, you’ll likely come across these key terms: 

• Copay: A fixed amount of money that you pay the service provider for a visit or prescription (your health insurer covers the rest).
• Deductible: The amount of money that you have to pay upfront before your health insurance provider begins paying.
• Monthly premium: A monthly fee that you have to pay to your insurer to be covered for doctor visits, hospital visits, or prescriptions. Often, this fee is taken directly out of your paycheck.

What are your health care coverage options?

The following list outlines different types of plans, which vary based on how you pay for the coverage:

Fee-for-service plans allow you to see any providers of your choosing, and your insurance company will pay for a portion of the cost of service. These types of plans generally require you to submit a claim to get reimbursed, and some services are not guaranteed (like services from some independent practitioners at the hospital). 

Managed care plans require you to see a certain provider based on a preapproved list. While more restrictive in provider choice, these plans cover more preventive care than the fee-for-service option. There are three different types of managed care plans:

• Health maintenance organization (HMO): This plan has a limited number of physicians and hospitals in its network, and you pay out-of-pocket costs at the time of care. HMOs are very comprehensive, cover most preventive care services, and don’t require much paperwork.
• Preferred provider organization (PPO): PPOs require you to see only providers selected by the insurer. If you see providers that haven’t been selected by the insurer, you pay more out of pocket.
• Point of service (POS) plan: A POS plan is a combination of HMOs and PPOs. You select a primary care physician— a “gatekeeper” who coordinates your care and refers you to specialists as needed. If you see plan-approved providers, you will have a lower copay or deductible than if you go to nonapproved providers—unless you were referred by your coordinating physician.

There are also two types of tax-free savings accounts that allow you to pay your medical bills. Visit the U.S. Office of Personnel Management’s website for more detailed information about the different plans.

How much will it cost me? 

Determining the overall cost of your health care isn’t always straightforward. It’s important to weigh the coverage benefits against the amount you’ll pay. Consider the following expenses when you compare plans:

• Premiums: Sometimes your employer will cover all or part of this cost for you and/or a dependent. Be sure to ask your company about who pays what.
• Cost at time of service: This can be the copay or any out-of-pocket costs you’re responsible for before you reach your deductible. Consider your disposable income when determining if the coverage is affordable.

Determining the Option That is Best for You

When evaluating an insurance plan, you already may have certain needs or personal preferences that you should take into account. Consider the following:

• The affordability of premiums, out-of-pocket expenses, and upfront costs
• If you or a family member has a pre-existing condition requiring treatment or medications
• How often you or your family typically visits the doctor every year
• Prescription drug needs
• Dental and vision benefits

Ask the Right Questions

Consumer Reports recommends that you get the answers to these key questions about the company health plan:

• What are the plans benefits and limitations?
• What do you have to pay for and what does the employer pay for?
• What providers are covered under each plan and whether your current doctor(s) are covered?
• What tax-free accounts are available?
• When can you and/or your family join the plan?

Before selecting a health care plan offered by your employer, do your homework and ask the right questions so you select the most affordable and comprehensive plan. Keep in mind that if your employer doesn’t offer health insurance, you still have options for getting insurance independently.

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