Graduating Student Seeking Health Care Advice

[Guest LMikle]

I am a marketing grad in the process of looking for a job. Many of the copies I've met with mention they offer health insurance but don't give any specifics. Others don't mention it at all. As a result, I realize I don't really understand what is considered "Standard Practice" and have some questions, I hope you might help answer.

Do most companies offer health insurance? (what %)

Does it generally include dental? What about vision?

What kind of coverage is considered average? Is it an HMO?

If a company says they offer a pre-tax savings plan and catastrophic coverage are they being cheap or is that pretty common?

I apologize if I sound uninformed. I'm hoping you can help me change that. Thanks SO much for your advice.

Lorrie

[Guest kowen]

Most larger companies offer health coverage with varying degrees of cost sharing. I've found that the companies with better health plans will stress specifics more often. Many companies offer Section 125 plans that would allow you select HMO, indemnity, dental, vision, etc plus the possibility of receiving cash depending on what other options you select. The pre-tax savings plan sounds like a health savings account coupled with a high deductible plan. These plans are new and allow you to build an account balance that can be used to pay for health expenses without being taxed. You could also use the money for other purposes but withdrawals would be subject to taxes and penalties.

[papogi]

Most companies offer health insurance. About 55% of very small companies (3-9 employees) offer it, while about 98% of large companies (over 200 employees) offer the benefit. The figure rises as the number of employees rises. About 65% of employers offer dental, but there the percentage is even wider than with medical. Very, very few small employers offer dental, while the vast majority of large employers do. I have less reliable data on vision, but just from being in this industry, I can tell you that many more employers do not offer than do offer it. It follows the same trend, however (very few small employers do, while more large employers do). The “average” coverage is a difficult question, and runs deeper than just whether the plan is a PPO, and HMO, or an indemnity plan. Plan design and employee/employer cost sharing all play a huge role. I can tell you that in 2003, the average monthly employee contribution to single coverage was about $42 (16% of the total premium), and $201 (27% of the total premium) for family coverage. I can also tell you that over half of the covered American workforce is in PPO’s, while a little under 25% are in HMO’s. PPO enrollment picked up steam in the late 1990’s, and has since largely topped off. Many employers offer and HMO and a PPO. You will have to look at your particular options to see which is best (costs, access to providers, whether or not any of your current providers are in one of the networks, etc.). Catastrophic coverage with some sort of pre-tax savings underneath (HSA, or Health Savings Accounts) is a growing plan design, but is not close to “common” at this point. It does not necessarily mean that the employer is cheap, but does tell you that the employer is utilizing some new strategies to cut medical costs. This is a very brief summary, but should answer some basic questions.

[E as in ERISA]

If you get more than one job offer and are comparing alternatives, its a good idea to get an idea of the total compensation and benefits package. E.g., what benefits they provide, what the cost is, the eligibility and vesting requirements for retirement plans, etc. It sounds like you are on your way.