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What to Look for in a Workplace Health Plan

When it comes to health insurance, reading the fine print -- and understanding the jargon -- is really important.

By Neil Osterweil
WebMD the Magazine - Feature

Reviewed by Brunilda Nazario, MD

Health insurance is like marriage: Find the right partner, and you'll have support for as long you both shall live -- or until you change jobs. But choose in haste, and you may repent at leisure, says Cathy Dunham, president of the Boston-based Access Project, a nonprofit health advocacy group.

The key is to ask lots of questions, but many new employees pick insurance plans with less thought than they give to choosing a salad dressing, agrees Beth Boden, a principal of the human resources consulting firm Hewitt Associates in Lincolnshire, Ill. "When you buy a car, you think about how many passengers you'll carry and whether you take home $250 in groceries every week," she says. "It's the same with insurance: Think about how you use health care and anticipate your needs."

Premiums and Deductibles

If you're young and healthy and don't fly trapezes for a living, a health plan with lower premiums and higher deductibles could be right for you, Boden says. Pay less up front, more when you need medical care. In the meantime, you can stash the money you save in a tax-exempt health savings account (HSA) for a medical rainy day. But be sure you understand how HSAs and high-deductible plans work, and don't underestimate the costs of care. You may think a broken arm will cost $500 to $700 tops, when in fact the expense may be upward of $4,000. That means you'll be paying huge out-of-pocket charges before insurance kicks in, says Cheryl Fish-Parcham, deputy director for health policy for Families USA, a Washington, D.C.-based advocacy group.

Questions to Ask About Health Insurance

What do you need to know when considering a new health plan? Scope out the answers to these questions, says the U.S. Agency for Healthcare Research and Quality:

How much coverage can you afford? Consider premiums (the monthly bite out of your paycheck), co-pays (how much you pay for each office visit), and deductibles (what you must shell out before your insurance takes over).

What do you need? Are physicals covered? Screenings? (And if so, how often?) How about childhood vaccinations, basic dental care, or eyeglasses? Will it pay for orthopaedic care, acupuncture, or a session with a chiropractor? If you have a chronic disease, is there a lifetime cap on coverage? If you need heart bypass surgery, for example, it could cost nearly $54,000 -- which, if your lifetime cap is $500,000, would be more than one-tenth of the medical cost your insurer would pay.

How about emergencies? If you fall sick while traveling, will your emergency room care or visit to a local doctor be covered? How about ambulance rides or help getting home if you're disabled?

Are healthy behaviors rewarded? Some plans give discount memberships to health clubs, weight loss incentives, or free quit- smoking programs.

The best advice, says Dunham, is don't get sick. Barring that, make sure your health insurance company will stick with you for better or for worse, in sickness and in health.

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