Company Health Insurance: What is the normal deal?
July 27, 2005 4:49 AM Subscribe
I just started working at a company where health insurance kicks in after 90 days, you pay half for a year, and then the company picks up the full cost. Is this normal?
As the 90 day mark approaches, I look at my budget and think, uh, how am I going to afford this? Take home pay is less than $20,000, but I get by fairly well. But a few hundred bucks a month might break me. And if I can't afford it, what do I do? Look for a new job? Tell them I can't afford to do the company health insurance and hope they'll get the not-so-subtle hint?
As the 90 day mark approaches, I look at my budget and think, uh, how am I going to afford this? Take home pay is less than $20,000, but I get by fairly well. But a few hundred bucks a month might break me. And if I can't afford it, what do I do? Look for a new job? Tell them I can't afford to do the company health insurance and hope they'll get the not-so-subtle hint?
If you can't afford it, you might consider that you're overinsured. If you're young, it's unlikely that you need full coverage and instead might take a look at getting some catastrophic health insurance.
That aside, what your company is offering you is incredibly generous, even when you're paying half.
posted by Captaintripps at 5:25 AM on July 27, 2005
That aside, what your company is offering you is incredibly generous, even when you're paying half.
posted by Captaintripps at 5:25 AM on July 27, 2005
Both the 90-day waiting period and the asking the employee to pay half provisions are fairly standard. "A few hundred bucks a month" for half of single coverage is pretty steep, however. Does the employer offer a cafeteria plan? That would make the insurance less expensive, at least, since you wouldn't pay tax on that money. Alternatively, take Captaintripps' suggestion and get some cheap, high-deductible insurance for the year that the company doesn't pay for.
Coverage varies state by state. Since you're in New York, check here, or search on Google.
posted by anapestic at 6:07 AM on July 27, 2005
Coverage varies state by state. Since you're in New York, check here, or search on Google.
posted by anapestic at 6:07 AM on July 27, 2005
The waiting period and paying half is normal. You are lucky they will pick up the whole tab eventually, normally that is an incentive companies offer higher ranking employees I believe.
A few hundred bucks a month does seem quite high. What plan are they using and is there a way for you to maybe pick some other coverage?
posted by Julnyes at 6:53 AM on July 27, 2005
A few hundred bucks a month does seem quite high. What plan are they using and is there a way for you to maybe pick some other coverage?
posted by Julnyes at 6:53 AM on July 27, 2005
Fifty then full? That's a helluva' good deal in these times. We go 60/40, but only after the employee's on for 90 days. Health insurance is our biggest expense after payroll. Darn few companies are picking up 100 percent these days, and darn few are going fifty percent on the front end either.
You sound like you're new to the work force. Welcome.
posted by Elvis at 7:25 AM on July 27, 2005
You sound like you're new to the work force. Welcome.
posted by Elvis at 7:25 AM on July 27, 2005
You've been given an incredibly generous offer. It's almost unheard-of for an employer to pay the full cost of insurance; most employers' best offer would be for you to pay half forever, not just for a year.
"A few hundred bucks a month" is absurd, though. That's on the order of what it costs to insure a family of four. Are you sure that's an accurate amount?
posted by majick at 7:40 AM on July 27, 2005
"A few hundred bucks a month" is absurd, though. That's on the order of what it costs to insure a family of four. Are you sure that's an accurate amount?
posted by majick at 7:40 AM on July 27, 2005
My company (I am partner in charge of the business end) recently went 100% on our health insurance, at my insistence; we don't pay spouses, though. Cost are increasing at such an astronomical rate that when we were offered an 11% increase in our rates by the insurer our broker told us that was a good deal. So beginning in September we'll pay $360 per employee a month. Crazy!
Anyway, that was off topic, but I did want to say that a lot of universities offer low cost insurance for even part time students.
posted by miss tea at 7:41 AM on July 27, 2005
Anyway, that was off topic, but I did want to say that a lot of universities offer low cost insurance for even part time students.
posted by miss tea at 7:41 AM on July 27, 2005
It's definitely not normal. Be grateful for your fortune.
posted by Optimus Chyme at 8:14 AM on July 27, 2005
posted by Optimus Chyme at 8:14 AM on July 27, 2005
The question of how much you pay vs them is a matter that could be debated till the end of of time. I don't know that I'd necessarily qualify any one way as 'reasonable,' 'unfair,' or 'generous' - compensation for work is a big picture thing and a full ride on insurance might be balanced out by lower than average salary or poor hours or who knows what. However being asked to shoulder some percentage of the cost is the norm.
The several hundred for HALF, however, is not. They've either got a very comprehensive plan, are sleeping with the insurance agent or are averaging the cost across all the employees. If it's the last one then that's definately unfair - you should not be paing a huge cost because of the high risk/older insurees.
I'm assuming you're under 30 or at least under 40. When I was self employed and under 35 I was buying Blue Cross/Blue Shield from an agent for just myself and paying about $115 a month. A friend who I refered to the same agent who was 22 at the time was quoted $75. We're both male and you may have to pay a higher price because of your girly bits but not THAT much higher.
Before you commit to this plan I'd google around for insurance agents and see if you are a member of any organizations that offer access to group health plans and what they would cost. I'm a member of the ACM and they have plans through Seabury and Smith but you can also just go to them direct at Healthinsurance.Com and see what you can buy there.
There's no reason not to shop around on health insurance any different than you would for other major life purchases.
posted by phearlez at 8:14 AM on July 27, 2005
The several hundred for HALF, however, is not. They've either got a very comprehensive plan, are sleeping with the insurance agent or are averaging the cost across all the employees. If it's the last one then that's definately unfair - you should not be paing a huge cost because of the high risk/older insurees.
I'm assuming you're under 30 or at least under 40. When I was self employed and under 35 I was buying Blue Cross/Blue Shield from an agent for just myself and paying about $115 a month. A friend who I refered to the same agent who was 22 at the time was quoted $75. We're both male and you may have to pay a higher price because of your girly bits but not THAT much higher.
Before you commit to this plan I'd google around for insurance agents and see if you are a member of any organizations that offer access to group health plans and what they would cost. I'm a member of the ACM and they have plans through Seabury and Smith but you can also just go to them direct at Healthinsurance.Com and see what you can buy there.
There's no reason not to shop around on health insurance any different than you would for other major life purchases.
posted by phearlez at 8:14 AM on July 27, 2005
Check with your HR department before going private. If you decide to buy private insurance, you may not be allowed back on the company health plan in a year.
posted by luneray at 10:25 AM on July 27, 2005
posted by luneray at 10:25 AM on July 27, 2005
What field are you in? I've worked in technology since, oh, 1990 and have never paid anything for health insurance; every one of my employers has paid 100% from day one. So, whether this is normal or not will depend on what line of work you're in, probably.
posted by kindall at 10:52 AM on July 27, 2005
posted by kindall at 10:52 AM on July 27, 2005
Best answer: Depending on the size of the company and its line of business, the plan might good, decent, or terrible. For example, in law and finance, the wait is sometimes zero and never more than sixty days, and the company contribution to the premium is never less than 75%. Not offering family coverage (employee + spouse + kids) is unthinkable -- you'd lose half your workforce if you tried.
While you're probably not in such a line of business, you ought to talk with some friends who work for competing companies just to make sure your company is not trying to put something over that it's market doesn't allow.
In terms of the size of your premium, other posters are right and wrong. You might want to consider opting out in favor of a catastrophic plan, if you're sure you're not going to be incurring any of the big ticket items they exclude (preganancy/childbirth being the biggie).
However, the assertion that the premium seems wrong or too high is unjustified on the evidence we have. Group health plans are all about the expected health care consumption of the company's average worker, not about any individual's. With a small enough company, a small disporportion of a more expensive category (anyone over 60, women under 40) can make everyone's rates high. And there's really no actuarial justification for giving single people a notably cheaper rate. Single men are at higher risk of all kinds of accidents and maladies than married men who support (and hence cover with their insurance) their wives, and single women aren't immune from incurring, or these days even particularly unlikely to incur, maternity costs, which are a huge factor in insurance pricing.
posted by MattD at 11:26 AM on July 27, 2005
While you're probably not in such a line of business, you ought to talk with some friends who work for competing companies just to make sure your company is not trying to put something over that it's market doesn't allow.
In terms of the size of your premium, other posters are right and wrong. You might want to consider opting out in favor of a catastrophic plan, if you're sure you're not going to be incurring any of the big ticket items they exclude (preganancy/childbirth being the biggie).
However, the assertion that the premium seems wrong or too high is unjustified on the evidence we have. Group health plans are all about the expected health care consumption of the company's average worker, not about any individual's. With a small enough company, a small disporportion of a more expensive category (anyone over 60, women under 40) can make everyone's rates high. And there's really no actuarial justification for giving single people a notably cheaper rate. Single men are at higher risk of all kinds of accidents and maladies than married men who support (and hence cover with their insurance) their wives, and single women aren't immune from incurring, or these days even particularly unlikely to incur, maternity costs, which are a huge factor in insurance pricing.
posted by MattD at 11:26 AM on July 27, 2005
Normal? A good deal? Incredibly generous? You all have obviously had very different experiences than mine, because I've never spent a dime on my own health insurance, and that six-months-pay-half business sounds weird and a little stingy. If a company made me an offer like that I'd wonder whether they had some kind of cash flow problems.
posted by Mars Saxman at 11:43 AM on July 27, 2005
posted by Mars Saxman at 11:43 AM on July 27, 2005
I've lived in Seattle for 9 years and have only paid for a portion of my insurance once (and that was 10% briefly). My current job offers full coverage effective the 1st day of the 1st month after you were hired. Additionally, we also cover ALL dependents (including domestic partnerships).
The majority of my employers have also been high-tech or software companies.
posted by Bear at 11:46 AM on July 27, 2005
The majority of my employers have also been high-tech or software companies.
posted by Bear at 11:46 AM on July 27, 2005
Response by poster: Thanks everyone so much for your help. As this is my first full-time job, I really had no idea about how this sort of thing usually works. All of your insight is very helpful.
Several of you noted that several hundred seemed high; be assured that I pulled that number out of my ass. The HR person said a number to me a month or so ago and I promptly forgot it. I e-mailed her for more info.
Thanks again for all your help, I will update this thread in the future if I get any more pertinent information.
posted by ThePinkSuperhero at 1:59 PM on July 27, 2005 [1 favorite]
Several of you noted that several hundred seemed high; be assured that I pulled that number out of my ass. The HR person said a number to me a month or so ago and I promptly forgot it. I e-mailed her for more info.
Thanks again for all your help, I will update this thread in the future if I get any more pertinent information.
posted by ThePinkSuperhero at 1:59 PM on July 27, 2005 [1 favorite]
Response by poster: Some company info: high-end design firm (wholesaler). Staff is 11 women, almost all under 40, and 2 men.
posted by ThePinkSuperhero at 2:15 PM on July 27, 2005 [1 favorite]
posted by ThePinkSuperhero at 2:15 PM on July 27, 2005 [1 favorite]
Response by poster: Follow-up from HR: the cost to me for the year I pay will be $180 a month.
posted by ThePinkSuperhero at 2:38 PM on July 27, 2005 [1 favorite]
posted by ThePinkSuperhero at 2:38 PM on July 27, 2005 [1 favorite]
Response by poster: Edit: the cost to me for the year I pay half...
posted by ThePinkSuperhero at 2:56 PM on July 27, 2005 [1 favorite]
posted by ThePinkSuperhero at 2:56 PM on July 27, 2005 [1 favorite]
Normal? A good deal? Incredibly generous? You all have obviously had very different experiences than mine, because I've never spent a dime on my own health insurance, and that six-months-pay-half business sounds weird and a little stingy. If a company made me an offer like that I'd wonder whether they had some kind of cash flow problems.
Most American workers have had very different experiences from yours.
Anyone interested in getting a feel for the costs and distribution of health care benefits in the US should take a look at the Kaiser Family Foundation's surveys on health insurance costs and health coverage and the uninsured. Of particular relevance to this case is the Employer Health Benefits survey from 2004. Only 61% of all workers get any health insurance from their employers. Over 80% of all of those workers with individual coverage pay a contribution to their premium, and over 90% with family coverage do. Paying half of the premium is well above average (16% for individual plans and 28% for family plans), but the contribution-free years to follow would bring your overall contribution percentage down significantly, so that it will be below average if you work there for more than three years.
posted by redfoxtail at 5:41 PM on July 27, 2005
Most American workers have had very different experiences from yours.
Anyone interested in getting a feel for the costs and distribution of health care benefits in the US should take a look at the Kaiser Family Foundation's surveys on health insurance costs and health coverage and the uninsured. Of particular relevance to this case is the Employer Health Benefits survey from 2004. Only 61% of all workers get any health insurance from their employers. Over 80% of all of those workers with individual coverage pay a contribution to their premium, and over 90% with family coverage do. Paying half of the premium is well above average (16% for individual plans and 28% for family plans), but the contribution-free years to follow would bring your overall contribution percentage down significantly, so that it will be below average if you work there for more than three years.
posted by redfoxtail at 5:41 PM on July 27, 2005
$180 is reasonable ... a better deal than i'm getting ... and not paying anything afterwards? ... that's really good
but ... what does it cover? ... that's what you really need to look at
posted by pyramid termite at 10:27 PM on July 27, 2005
but ... what does it cover? ... that's what you really need to look at
posted by pyramid termite at 10:27 PM on July 27, 2005
Contrary to my statement uptopic, I do apparently pay 25% of my health insurance at my current employer. I'd completely forgotten! I was only reminded because I received notice recently that the price was going up.
posted by kindall at 6:21 PM on August 17, 2005
posted by kindall at 6:21 PM on August 17, 2005
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posted by pomegranate at 5:06 AM on July 27, 2005