Starting a Job
Starting a new job can be a major change especially if it's in a new career field. Making sure your insurance needs are covered is of the utmost importance because employee benefits can vary widely from company to company. A new job will affect your health and disability insurance.
Your health insurance options will vary based on whether you have coverage from your previous employer and whether or not your new employer offers coverage. If your new employer offers health insurance coverage, it's likely that you may have to wait anywhere from 30 to 90 days before coverage begins due to a standard waiting period.
You have health insurance and your new employer offers coverage:
If you have coverage from your previous employer you should inquire about extending it under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Should you be eligible, COBRA gives you the right to continue your existing health insurance coverage up to 18 or 36 months depending on the circumstances in which you left your previous job. You will be responsible for paying the monthly premium; however, the rate will be the same as the group insurance rate which is usually less expensive than the rate of an individual policy. This should get you by until you become eligible or decide to participate under your new employer's group health insurance plan. In the case that you have coverage under an individual or spouse's health plan, you may want to switch to your new employer's plan if the employer pays for the new coverage. You should also compare how the coverage being offered compares to your existing coverage. Is it an HMO, PPO or Fee-for Service Plan? Are there deductibles or co-payments and if so how much? How are prescriptions covered? Do your current physicians participate?
You do not have health insurance and your employer offers coverage:
Don't worry if you have no health insurance and you need to wait 30 to 90 days before you're eligible under your new employer's health plan. Many health insurance companies sell temporary insurance polices that protect you against major medical expenses. These plans usually have a deductible you must pay and then they will reimburse you for a specified percentage of your medical expenses. You might want to get a policy until you're eligible for coverage with your new employer.
You have health insurance but your new employer offers none:
If you have coverage from your previous employer you should inquire about extending it under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Should you be eligible, COBRA gives you the right to continue your existing health insurance coverage up to 18 or 36 months depending on the circumstances in which you left your previous job. You will be responsible for paying the monthly premium; however, the rate will be the same as the group insurance rate which is usually less expensive than the rate of an individual policy. Depending upon the insurance company, once your coverage under COBRA expires you may be able to covert your insurance from COBRA to an individual policy. If you already have existing individual health insurance coverage or coverage through a spouse's policy…keep it!
You do not have health insurance and your new employer offers none:
It's time to start shopping! Health insurance is extremely important, and a lack of coverage could result in tremendous financial loss for you if you're injured or become ill.
To start with, you need to understand the 3 basic types of individual health insurance.
This type of plan lets you visit the healthcare provider of your choice, and it reimburses you for a portion of the expenses. The portion of the medical expenses you are responsible for is called co-insurance which is usually twenty-percent of the charges that are considered reasonable and customary (reasonable and customary charges are the prevailing fees charged by healthcare providers in a particular region of the country). Many fee-for-service plans also have a deductible that must first be met before medical expenses are eligible for reimbursement. In addition, most plans also have "maximum-out-of-pocket expenses" or "stop-loss" provisions that limit the amount of co-insurance a patient is responsible for. After co-insurance payments reach a policy's stop-loss provision, the insurance company pays for the remainder of the annual expenses at one hundred percent of reasonable and customary charges. Fee-for-service plans, like all other types of health insurance, have lifetime limits which place a cap on the total amount of medical expenses an insurance company will pay for. You should look for a policy with unlimited lifetime benefits or at least $1,000,000 in coverage.
Health Maintenance Organizations (HMOs):
HMOs are managed care health plans that restrict you to a designated network of healthcare providers. Under an HMO, you must select a primary care physician in the network. If you become ill or injured (non emergency) then you must first visit your primary care physician before being referred to a specialist. HMO's usually pay for all of your medical expenses except for a small co-payment which is your responsibility for each visit to your healthcare provider. HMOs will not reimburse you for any medical expenses if you obtain care outside of the HMO network unless your HMO plan has a POS (Point of Service) option. POS gives you the flexibility of going outside the HMO network for medical treatment; however, the insurance company will only reimburse you for a portion of the expenses subject to co-insurance. HMOs are the most restrictive types of health plans available but are also among the least expensive types of health insurance.
Preferred Provider Organizations (PPOs):
PPO's are types of managed care plans that give you financial incentive to use specified or preferred healthcare providers. If you visit a preferred healthcare provider the insurance company will usually pay for all of the medical expenses after you pay a small co-payment which is usually $10-$20. PPOs also give you the flexibility of using doctors or hospitals out of the PPO network; however, you will be responsible for co-insurance payments similar to those in fee-for-service health insurance plans. PPOs differ from HMOs in that you have the freedom to choose any healthcare provider at anytime.
One of the most often overlooked, yet most important types of insurance is disability insurance. Disability insurance protects your ability to earn an income by replacing a portion of your lost income should you become disabled. Your employer may or may not offer disability insurance coverage. It's important to find out if coverage is offered and if so what type. There are two basic forms of disability insurance coverage: short-term and long-term. Each can be purchased as an individual or group policy (a group policy can only be offered through an employer or affinity group).
Short-term Disability Insurance - As its name implies, short-term disability insurance provides benefits for a short period of time, usually three to six months. This policy normally has a waiting period of 7 to 14days (the period of time you must wait from the onset of your disability before benefits become payable).
Long-term Disability Insurance - Long-term disability insurance provides benefits for a longer period of time which can be anywhere from two years to a lifetime. The most common benefit period on a long-term policy is to age 65. In addition, this policy can have a waiting period of 30 to 365 days (the period of time you must wait from the start of your disability before benefits become payable).
If you have any liquid assets, such as stock or money in a savings account, you may not need short-term disability insurance if the assets' value is large enough to cover your monthly expenses for three to six months. On the other hand, your liquid assets probably would not be sufficient if you had a long-term disability.