Deciphering Health Benefit Terms in Job Offers

Receiving an offer for your first ever full-time job is an exciting experience that prompts a mix of emotions. You’re feeling accomplished about nailing the interview and wowing the hiring manager, but you may be feeling anxious about the big decision you have to make. Along with that, your offer documents may contain lingo that you’ve never encountered before and you’re not sure what to make of it. Fear not! ECS is here to demystify a crucial part of the benefits package you’re receiving from the future employer: healthcare.

What Type of Plan Is It?

First, identify what type of insurance plan the organization offers. Below are some common types of plans and what they encompass:

• Preferred provider organization (PPO) plans supply you with a network of providers that participate with the insurance. This type of plan allows you to see out-of-network providers as well, but the insurance may only cover a portion of the costs.
• Health maintenance organizations (HMOs) also provide you with a network of providers. However, these plans are often less flexible if you venture out-of-network and will require you to be responsible for the cost of your care.
• Point of service (POS) plans have similar elements to both PPO and HMO plans. These plans will provide you with a network of providers and may require you to get a referral if you venture out-of-network or see a specialist.
• Like the name implies, High Deductible Health Plans (HDHP) differ from other common plans in that you have a higher threshold to meet before your insurance begins to cover your care. In some instances, in-network services like preventive care may be covered regardless of whether or not you have met your deductible yet.

Know Your Vocabulary

As you’re diving into the details of your employer's plan, it is important to understand the meaning of the following terminology:

• Flexible Spending Account (FSA): an account that helps you pay for certain out-of-pocket healthcare costs, like copayments. You, and potentially your employer, may contribute to this.
• Health Savings Account (HSA): like an FSA, you set this money aside to help you pay for healthcare costs. However, these types of accounts are often specifically linked with High Deductible Health Plans.
• Deductible: an amount of money that you must pay before your insurance begins covering the cost of your care and services. At the start of each year, your deductible will reset to zero.
• Premium: the amount you pay every month for coverage. This will likely be deducted from your paycheck.
• Coinsurance: you must meet your deductible for the year in order to pay this fee. When you receive care, you will pay for a percentage of the total cost for that service.
• Copayment: a flat dollar amount that you pay for certain services. Depending on your plan, these services may not require you to first meet the deductible. Review what the deductible in your plan applies to.

Other Considerations

Along with your health insurance, there are other services or programs that the employer may have in place to support you. Some organizations have separate dental and vision plans, as well as wellness programs that may promote exercise, educate employees on nutrition, or communicate stress management techniques. These are great components of a benefits plan if you value these types of offerings. Also common are Employee Assistance Programs (EAPs), which connect you to resources or counseling that can aid you in your personal or professional life.

What Best Fits Your Needs?

While you’re reviewing the details of your offer letter and benefits package, take some time to reflect. Consider the things that you value, not only in the job itself, but in the employer as well. Contemplate your immediate needs and any that may arise in the future. It is important to have a long-term view while considering these factors and how they align with the offered benefits.

“The most essential prerequisite to understanding is to be able to admit when you don't understand something.” ― Richard Saul Wurman