My little brother recently secured his first full-time job with benefits. (“Little” goes in italics because he’s a giant.)
His employer sent him an official offer a few days ago. Unlike me — who immediately signed all the papers because I was way too giddy about having my first “real” job — he’s diligently reviewing all the fine print.
Aside from the common “what’s a good 401(k)?” question, he’s stumbling through the health insurance portion. He knows he gets coverage… but what does it actually cover?
What does HMO mean? And why are there so many options on this thing?
He’s asking all the right health insurance questions — or at least more than I did. (I shoved my papers at Dad, who looked over them.)
If you’re finding yourself in the same bewildering situation, Glassdoor recently wrote “8 Must-Ask Questions About Your Company’s Health Insurance Options.”
I loved this resource too much not to share. (Jake, you better read this!)
I also chatted with Erin O’Neill, The Penny Hoarder’s people and culture manager, and included her insight and tips, as well. She’s our health insurance activist and guru, so take note.
And chances are, you’ll find an O’Neill at your company to help you out (though admittedly she’s pretty one-of-a-kind).
1. Is this an HMO or PPO?
Also… what the heck does that mean? Don’t ask that. I’ll tell you (and HealthCare.gov will help).
HMO stands for Health Maintenance Organization.
Under this type of plan, you’ll be limited to doctors who agree to work with the HMO. It won’t typically cover out-of-network expenses unless there’s a real emergency. Generally, the network coverage is smaller, and rates are lower.
PPO stands for Preferred Provider Organization. This is just a larger network of doctors. However, you’re often going to pay more for this coverage.
Do your research and find out what’s going to be best for you and your medical needs.
2. Are dental and vision covered?
Be sure to ask if dental and vision are covered.
If not, you can look into individual plans. For example, I have high-maintenance eyes, so I’m sticking it out on my family’s vision plan until I’m too old and have to get my own.
3. Can I include my spouse or family?
You’ll want to see if you can get your spouse or kids in on the coverage.
And if you’re not married but partnered, ask if your domestic partner will be covered.
4. When does coverage kick in?
Sometimes your coverage doesn’t start on day one; there might be a waiting period.
Be sure to know the timeline and whether you’ll need to figure out another option for a few months. If you’re still on Mom and Dad’s plan, ask if you can squeeze just a little bit more out of that. If not, consider short-term health insurance.
Glassdoor encourages you look into COBRA, a temporary coverage plan. However, my editor, Caitlin Constantine, says this option hasn’t been the most affordable in her experience. If you want to get an estimate, here’s a calculator.
5. When is the open enrollment period?
If for some reason you don’t want to immediately opt in, be sure to ask when you can if you need to.
Or, if you bring on a “new” spouse or kids, you’ll want to know when these humans can be added to your plan — if at all. (See No. 2).
6. Is there a monthly premium? Any deductibles? Copayments?
Here are some terms you’ll need to know:
- You might have to pay a monthly premium to keep your coverage active. Think of it like a gym membership fee. If there is one, it might automatically be taken out of your paycheck. Ask how that works.
- A deductible is a base amount you need to pay each year before health insurance fully kicks in. (This site, Very Well, explains it very well.) You’ll want to ask your employer what your deducible includes and to what level.
- O’Neill added this important note. After your deductible is met, you might still have to pay something out of pocket (OOP). You know how you go to the walk-in clinic, hand over your insurance card, then the nice receptionist still asks you for $80? That’s your co-pay.
You’ll want to ask what that maximum out-of-pocket limit will be (the total of your deductible plus coinsurance).
7. Where does the insurance work?
Do you travel internationally a lot? Or maybe you have family in South Carolina you frequently visit?
Be sure you ask about any geographic restrictions.
8. Will my current doctor(s) be included?
I get it: You become attached to a doctor you trust. That’s important.
If you’re not willing to budge, be sure your doctor is covered.
You can ask HR, consult the insurance company or even call your physician. If you do opt to call your physician, O’Neill suggests having the insurance’s name and the policy number on hand to get the quickest, most accurate answer.
9. Will my current conditions be covered?
If you walk into your new job with pre-existing conditions, you’ll definitely want to be sure that necessary care is covered — whether it’s routine appointments or prescriptions.
O’Neill says you can ask for a drug summary, as well as a detailed drug list. Certain drugs fall into specific tiers, based on pricing. She says this is especially useful if you take recurring drugs (think: birth control, insulin).
10. Give me a summary.
Ask your future employer for a summary of your insurance plan — or plans if it offers multiple options. If you want to use HR lingo, it’s called an SBC, or summary of benefits and coverage.
“It’s always best to ask for an SBC,” O’Neill says. “This is also good to have in advance, because while no one can discriminate against you for medical conditions, if you have this document, you can scope out specific services/coverages you may need without asking the HR rep.”
O’Neill suggests you check out information about specialist versus primary care co-pays, mental health co-pays and emergency health services.
It can get tricky and confusing, so a summary may help clear up any haziness you might experience.
11. Are there any extra perks?
Perhaps your plan doesn’t cover services like vision, acupuncture, chiropractic and general wellness services, but it might offer some discounts.
O’Neill says this is outside the SBC (that summary), so you’ll want to ask about these perks separately.
O’Neill’s final thoughts: “Insurance sucks. The more informed you are, the better.”
It’s a complicated world to dive into, but as long as you ask the right questions, you can prevent any surprise medical bills.
Your Turn: Did you ask all the right health insurance questions when you got your new job?
Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder.