Healthcare may be something you’ve heard about in political debates, or seen on the card your mom hands you as you leave for the dentist. For most of us, it’s something we knew we could use at our back-to-school doctor's appointment because our parents had it. But suddenly, like what seems to happen with most things post-graduation, healthcare is something we need to know more details about, and maybe even make decisions about on our own. Health insurance can seem complicated and overwhelming at first. With more information and a little guidance, the process of getting health coverage can be very rewarding, since you’ll know if something unexpected comes up, you’ll be covered.
The terms we’ve heard but don’t really understand
Premium: A premium is like the cost of the insurance policy; it’s the amount to be paid. So it may seem like common sense to pick a health insurance with the lowest premium. However, if something happens to you requiring medical attention you may end up paying more out of pocket if you buy the health coverage with the lowest premium.
Deductible: A deductible is a specific, set amount of money that you must pay before an insurance company will pay a claim. This means once you pay a certain amount of money in a certain timeframe, the insurance company will pay the rest.
Co-payment: A co-payment, or co-pay, is a fixed amount you pay for a covered health care service after you’ve paid your deductible. For example, if you go for an annual check-up doctor's appointment, you may pay just $30 and insurance covers the rest of the cost of the appointment.
Do I really need healthcare?
You may be young now, but everyone finds themselves needing medical attention at some point. “Even if you are healthy, annual physicals can identify and detect early signs of underlying conditions,” says Matthew Rust, managing consultant at One Digital Health and Benefits. “Even the lowest cost major medical plans have catastrophic coverage, allowing your out-of-pocket expenses such as co-pays, deductibles and coinsurance to eventual get capped for the year in a worst-case scenario.” Unexpected accidents or illnesses can happen at any time, and if you are uninsured, you could be billed hundreds of thousands of dollars from the hospital after receiving the medical intervention you need.
Many women think they can rely on the federal government during pregnancy and maternity leave, but Rust warns against this. “Medicaid is hard to qualify for and many of the top providers will not accept it,” he explains. If having children is something you’re planning for the future, healthcare is even more imperative.
But can’t I just stay on my parents’ plan?
The answer is yes...for now. The Affordable Care Act (ACA) allows children to be covered under their parent’s plan until the age of 26. Rust recommends all recent grads, “Check with the HR department of their parent’s company because some plans terminate on the 26th birthday, some at the end of the child’s birth month and some at the end of the 26th year.”
“When I started my new job, I decided not to get on their employer healthcare,” explains Taylor, who recently started working for a large hotel in D.C. “I’m probably only going to be at this job for a year or two, and I feel fortunate that my parents were willing to keep supporting me in this way.”
Your parents are probably paying a higher premium having a child covered on their health plan, so it’s important to have a discussion with them. Once you get a job, they may want you to get your own health care, especially if they are able to lower their coverage to employee plus spouse or employee-only plan with a lower premium.
If you were no longer covered on your parents’ plan when you started college, you may have received health insurance through your school. However, if you graduate and don’t receive employer-based healthcare, you will need to get on Obamacare by shopping online for a government subsidized plan.
Should I join my employer’s healthcare instead of shopping for my own?
For the majority of new workers, getting healthcare through your employer is the best deal. The ACA requires companies with over 50 full-time equivalent employees to offer health insurance coverage or pay a penalty. “Your employer subsidies a significant portion of the premium, usually at least 50%,” said Rust. “Group coverage is typically a better option than individual coverage because it is significantly subsidized and you don’t have to pay taxes on the premium.”
Simply put, health care is expensive. Getting health care provided by your employer will save you money each month, which can be especially important to recent grads with an entry-level salary.
However, if you are working a freelance position or at a start-up or small business, employer healthcare may not be an option. Luckily, almost anyone can shop on the health insurance market for individual healthcare plans.
Who can help me understand and pick a health coverage plan?
With so many new words or unclear numbers, health insurance plans can feel like reading a different language. Lauren McGoodwin, founder & CEO of Career Contessa, a career development platform helping women build successful and fulfilling careers, has advice for women feeling confused.
“HR is a great place to start. Often times your company's HR team is very involved in setting up these plans and if they don't know the answer, they might know who at the health insurance company would be the next best contact,” says McGoodwin. “Parents are great but I’m hesitant to recommend them because usually people read that as ‘mom and dad tell me what to do.’ Empower yourself to be in charge and knowledgeable about your health plan.”
Turn to your parents as a last resort for specific and personal questions, but don’t feel like you have to do things exactly as they did at your age. Do your own research on health insurance by reading online, reaching out to friends also starting new jobs and meeting with human resource or health coverage representatives at your company.
What should I do when working with that person to select the right healthcare for me?
Now that you know to talk to someone with experience in understanding healthcare plans, you may be wondering how to make the most of this conversation.
“My best advice is to to ask all the questions! Don't be embarrassed or scared to ask anything,” says Lawrence. “For young women, you especially want to know about preventive care, including birth control, checkups, screenings for diabetes and HIV, contraceptives and family planning counseling. Maternity leave policies are very good to know and even counseling or mental health coverage.”
What are trends in employer health care I should know about?
Recent graduates may be interested in saving now for a time later down the road when they have more health concerns or want to start a family. “Some plans include health saving accounts where employees can set aside money tax free into a bank account that they own,” explains Rust. “You would receive a debit card to access your Health Savings Account (HSA) to pay for qualified Medical, Dental, Vision and prescription drug expenses that come up in the future."
McGoodwin echoes this option. “This is a tax-advantage medical saving account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP),” she says. One of the best parts? “The funds contributed to an account are not subject to federal income tax at the time of deposit.”
Some plans roll over from year to year, but some are use or lose, which may influence your decision to set up an HSA or not. If this is an option you’re interested in, talk to your HR department or hiring manager.
Choosing a health care plan can feel like another one of those “adult” things that’s easier to put off than really look into. However, it is one of the great benefits of securing a job, a step towards independence and something you'll be extremely grateful you thought about should any unexpected accidents, surgeries, or emergencies come up in the future.