Navigating the New Employee Insurance Maze

So you thought the job search was tough. Well, get ready, because you’ve got some decisions to make now that you’re an employee. Anyone who has gone through orientation their first week on the job knows the piles of forms, policies, employee handbooks and benefit enrollment forms you have to deal with. Some are pretty easy, but the maze of healthcare benefits with different medical, dental, vision plans, STD, LTD, FSA, HSA and all the other acronyms make it tough to decide. Depending on your company, there can be an entire “cafeteria” line to choose from.

There are a lot of factors to consider when choosing insurance coverage. Most company-sponsored plans are less expensive than buying insurance on the open market. That may change with the Affordable Care Act, known informally as ObamaCare. It may just make a difficult process more challenging.

A recent article in Forbes, “Health Insurance For New Startup Businesses,” gave some pointers for startups on choosing benefit plans for their employees. The same tips can apply to new employees who have to make decisions about employee benefits within a rather short eligibility period. For some plans, you may have 30 days or less to make a decision before the ship sails and you’re left standing unprotected on the dock. 

The first tip was to make a census of your employees. There is certain information companies need to determine the types of plans they can offer. The same goes for an employee enrolling in insurance coverage. To enroll yourself and your dependents on health insurance, you’ll need names, birthdates and social security numbers. Even for the new baby. Be sure you have the proper documentation to fill out other employment documents, like your I-9. If your company uses E-Verify, you’ll need one piece of documentation with a picture ID.

Next, know how much you want to spend. The ACA has a lot of guidelines and tests to determine whether plans qualify and companies can avoid penalties depending on the cost of their plans and how much employees pay for coverage. Regardless of cost, employees have to determine how much of a payroll deduction they can handle each pay period for insurance and still pay the rent, car payments and cell phone bills. Not to mention other expenses. Before you sign up for the premium healthcare plan, do the math.

Go over plan options. Plans can vary widely, with deductibles, out-of-pocket maximums and co-pays. They also offer different levels of services. The lowest cost plan may not be the best coverage for you or your family. You may not want the extra hassle of managing a flexible spending account. Why get a plan that doesn’t include your family doctors? There are a lot of things to consider when choosing a plan, so read the plan documents and ask a lot of questions.

If you had a benefit plan that you liked at your last job, read the summary plan descriptions and compare. What is most important for you and your family? Consider your family history before passing on supplemental plans that cover cancer, accidents, or establish a flexible spending account to cover deductibles or other expenses if you are out sick for a long time. Match the plan to your or your family’s needs and pick the one that measure up the best.

Consider your long-term plans for health insurance. A young, single, healthy guy who works out and rarely sees a doctor may be comfortable with a low-cost, high deductible catastrophic plan. A woman with a family that includes a couple of young children may want comprehensive coverage. Insurance needs change with a person’s situation, age and overall health. 

Healthcare reform is going to change the insurance game. New employees are already overwhelmed by the demands of a new job and the need to make a lot of decisions about health care insurance very quickly. Stay informed about your health insurance plans. One strategy is to choose insurance coverage based on a “worst-case” scenario. In other words, choose a plan that will cover the most if the worst should happen. Good advice, but it may not give you the affordability or flexibility you need. Stay informed, consider your options, and ask a lot of questions to make decisions you can live and stay healthy with.

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