Your First Health Insurance Plan: What You Need to Know
You've graduated from college and landed your first job, congrats! Soon you'll be enjoying a steady salary and the benefits that come along with it. At this time, you may be eligible for your first health insurance plan through your employer. Here's what you need to know about health insurance.
Consider Your Options
As a new grad, you may still be on your parents' health insurance. Just keep in mind that you're only eligible to stay on your parents' plan until the age of 26. So if you're offered your first health insurance plan through work, be sure to consider all of your options. If you decide that your parents' plan is a better option for you, you can decline what is offered to you at work while you're still of age. However, if the insurance plan offered at work is a better fit for your needs, sign up and make sure there is no lapse in coverage.
What Is the Health Insurance Premium?
A health insurance premium is a monthly cost for health coverage. While many companies may some amount of the premium, there will likely be a set amount that you're responsible for. Additionally, some employers have a 90-day waiting period for offering benefits like health insurance. So if you want to transition off of your parents' plan or if you don't have insurance, you may not be eligible for health insurance right away.
Health Insurance Plans
Your employer may offer one standard health insurance plan or they may give you the opportunity to choose from various health insurance plans. For instance, you may be able to choose between a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO).
Under an HMO, you will have access to doctors in a particular network and you may need referrals or authorizations for your visits. The good news is that an HMO typically has a lower premium and may have a low deductible. A PPO, on the other hand, may offer more choices and flexibility when it comes to types of care but it may also have a higher premium and deductible.
Before choosing a plan, do your research and evaluate the pros and cons of the plans offered to you. Whichever plan you choose will be yours for about a year before you're eligible to change plans as open enrollment only occurs once a year. If you're new to a company, you may have a health insurance plan for a few months before transitioning to a new plan during the next open enrollment.
What Are the Costs?
When signing up for your first health insurance plan, you'll want to know the costs so you can avoid any surprises later. Some questions to ask may include:
- What is your portion of the monthly health insurance premium?
- How much are the copayments? A copay is a flat fee that is paid during each visit. You want to know what it will cost for typical doctor's visits, etc.
- How much is the coinsurance? You may have coinsurance, which covers a percentage of your costs after you pay your deductible.
- How much is the deductible? A deductible is how much you pay out-of-pocket before your health insurance covers anything.
Getting Care
There's nothing worse than needing health care, but not having insurance. Knowing where to go is all about resources. When you get your first health insurance plan, you want to know the who, what, and where of getting care. You may need to choose a primary care physician or get a referral for one. Understand where you're eligible to get care so that when you need it, you know where to go. Be sure to shop around for the plan that best fits your needs — hospitals and care physicians offer different prices.
If You're Not Covered
If your company doesn't sponsor a health insurance plan for you, you'll want to look on HealthCare.gov for your own plan. Each state has their own marketplace; you'll need to fill out an application and choose a health insurance plan that works for you.