You made it! You went to school, put in the hours, and passed your nursing exam. You’ve just accepted a full-time position as a nurse at a hospital. Your next destination is to build and move your career forward! Before you get ahead of yourself, it’s time to tackle nurse benefits.
Well let’s backup for a second. Part of the process of getting hired is to make sure you onboard with your hospital correctly. Also, it’s important to know the resources available to you when starting out fresh in your career.
This post is the first in a series all about nurse benefits. It may not seem like the most exciting topic, but trust me, it’s an important one. Plus, you may get a little more excited when you realize that making smart benefits decisions can result in extra cash in your wallet now AND later.
Here’s what we are going to cover today:
Step 1: Please Sign Your Paperwork
A lot of people overlook this process. You really should take a moment to understand the nuances of this part of your career because it can greatly affect your future. Make sure all onboarding documents from the Human Resources department are filled out and submitted promptly.
They may do you a favor and send this documentation to you when you sign your offer letter. Or, they may wait until your first day of orientation. In either case, don’t delay.
Many people put this stuff off, and nothing is going to make your HR department more upset than having to chase you down to complete onboarding paperwork.
Not to mention your supervisor won’t hear the end of it until it’s done.
Just outside of signing a ton of paperwork (tax forms, handbook, and employee policies) there is still one important thing to retain from new hire orientation more than just knowing where the restroom is….
Nurse Benefits: Enrollment Overview
There will likely be an hour or two of your hospital orientation dedicated exclusively to benefits.
There will be a lot of information during this time, and it can be super helpful to go into it with knowing what to expect. If this is your first benefits-eligible job, this will seem like a scary, foreign land.
Don’t fret! You’ll soon learn the benefits…of benefits!
When do my benefits start?
The hospital will determine when exactly your benefits begin. At some hospitals you may be eligible from day one of employment. At others, you may have to go through a probationary wait period. This could be up to 90 days. However, in other places you can sign up the first month following your start date. For example, if you start your new position on 11/15 then your benefits can start as soon as 12/1.
This is an important thing to clarify during the onboarding process so that you avoid having an extended period of time during which you are without health insurance.
When do I choose my benefits?
This is a time-sensitive process!
The emphasis here is you should have your benefits elections to your HR department before your benefits begin. Otherwise, you may lose out on getting insurance for the entire plan year.
The majority of benefits can only be changed once per year during what’s called an open enrollment period. This usually happens in the autumn for most employers.
The only other time that you can change your benefits is in the case of a “qualifying life event,” such as marriage, divorce, job status change, etc.
What You Should Consider Before Selecting Benefits
Now when you actually look at your benefits you’re going to have options, and that can be overwhelming. Not to fear, even though you have many things to consider before completely diving in, just break this down into smaller parts.
Perhaps if you’re married and or have kids then you may want to add family members or a spouse to your plan. These are commonly known as dependents.
You may need to consider your medical situation because how often do you really see the doctor? Take into consideration how often you have visited the doctor in the past couple of years.
Your Age Can Be A Factor
Another factor that can be an option is your age. If you’re under the age of 26 you may want to just stay on your parents plan as they can claim you as a dependent until you age out.
Health Insurance: 3 Common Plan Types
The 3 most common health insurance plans most employers offer for medical are HMO (health maintenance organization), PPO (preferred provider organizations), and PPO HDHP (high deductible healthcare plans).
Let’s jump into each type of plan, things to consider, and how to determine what may be the best plan for you (and your wallet!).
A question you should ask yourself throughout this process is:
“Do these plans make financial sense for what I really need for medical insurance?”
Now let’s jump in!
HMOs (Health Maintenance Organizations)
HMO in a nutshell means you have a primary care provider you see, but they need to be “in-network”. The in-network concept is when the insurance company has made a deal to reimburse the provider for a mutually agreed rate.
On the other hand, “out-of-network” means there is no contract between your doctor and the insurance company.
This can cost you more money when seeing these types of providers. You may want to avoid these expenses because they can get pretty pricey real quick.
Does Your Provider Take Your Insurance?
There a couple easy ways to verify your provider accepts your employer’s insurance plan being offered to you.
- You can simply call the office and ask
- Look them up through the insurance carriers’ internet portal as a guest to find if they are listed as accepting your coverage
Finding a PCP (Primary Care Provider)
If you don’t have a primary, you can do 1 of 3 things here.
- You can look around and do your own research on finding a provider in your area who can accept your insurance coverage.
- The next method is to can look through your insurance carrier’s portal as a guest, and read independent reviews online once you find someone you might like on the insurance portal
- Finally, you can call the insurance carrier and ask for a list of providers in their network, and they will gladly send you a list based on an available zip code.
You Must Get a Referral for a Specialist
Please note that HMOs do not allow you to pick or see a specialist (for ex. cardiologist, urologist, gynecologist, etc.) without your primary care provider’s recommendation first.
Usually the specialist must be within your provider’s approved medical group.
Costs are usually less expensive for HMO plans. However, not all states allow employers to offer them for various reasons beyond the scope of this article.
Know Your Plan’s Rules For Urgent Care
Another huge part to consider for HMO is make sure you know and understand the rules for going to an urgent care or walk-in clinic.
Most HMO medical groups do not allow for you to visit just any urgent care. Sometimes they want you make an appointment with your provider’s office if possible rather than for you to go to an urgent care.
Avoid Costly Medical Bills
You will need to make sure you ask those questions to avoid any misunderstandings with your primary care provider’s office. You do not want to get stuck with an unexpected $300 bill for a simple walk-in clinic visit just because you didn’t know your plan’s urgent care policy.
Please bear in mind these are just some of the basics for HMO.
Want To Know More?
Benefits guides don’t always cover the more in-depth questions relating to the types of coverage issues.
A good recommendation is to request a summary of benefits for the plan you are interested in from your HR department.
Your HR department has to make this available to you upon request by law.
These summaries will provide better breakdowns of the types of things that are covered under the plan.
Plus, it will list types of treatment anywhere from preventive care to emergency room visits.
Lastly, HMOs can be great if you know what you are getting into because they can be quite inexpensive compared to classic PPOs and PPO HDHPs.
If you’re a pretty healthy, maintenance person when it comes to your health care needs, HMO may be a great option for you.
Let’s move onto PPOs, as these plans can be great options as well. But, they can be heftier on how much they cost coming out of your paycheck.
These plans can sometimes be double the amount you might pay for an HMO plan.
But then again these may be your best option because PPO plans are much more flexible on what they will cover and provide you many more options than HMO plans do.
With PPO plans, you’re essentially paying for the flexibility and freedom to see non-network providers with fewer restrictions.
Some PPO Basics to Consider
- In most cases you may have to pay a deductible before your insurance will pick-up the tab, depending on the expense.
- For example, you may have a $500 annual deductible on certain types of visits. This really means you have to fork out the cash each visit until you have met the $500 limit. After you’ve paid that amount out of pocket, your insurance will kick in. Depending on the expense, you may be responsible for a co-pay (a flat fee per visit) or co-insurance (a percentage of the cost).
- Not all out-of-network expenses are counted toward your deductible. This is something to look out for. If the expense does count then your PPO plan will pick it up the tab once your deductible maximum amount is met.
- Just because the provider or hospital is covered for out-of-network cost by your PPO does not mean it’s a good idea. Insurance companies still want to save a buck and they prefer in-network selections.
- You usually do not have to have primary care provider’s recommendation to see a specialist of your choosing. Keep in mind, this is from the insurance’s perspective. The individual specialist may still require a referral from your primary care provider.
Like the HMO plan, please read the fine print when it comes to certain types of procedures concerning what will be covered and to what extent.
(a.k.a. High Deductible Healthcare Plans)
The third plan option to consider is PPO HDHPs.
This is fairly new plan structure that insurance companies have been offering in the past 8+ years.
These plans really put the employee into the driver seat when it comes to their medical benefits. They usually utilize in-network and out-of-network options with a lower monthly cost out of your paycheck, but with a much higher deductible.
Attached to this plan and to help you offset your medical costs is an HSA (Health Savings Account).
HSA (Health Savings Account) = Medical Banking Account
This account is like a regular bank account with a debit card, but solely for medical, dental, and vision expenses.
Something else to keep in mind for the reason why the deductibles are so high is because with these plans you’re basically getting a PPO plan without having to pay for premium costs taken out of your paycheck.
Plus, you are the one responsible for putting your money aside for medical expenses, such as co-payments, prescription drugs, and so forth.
Let’s Take A Closer Look
A better way to illustrate how this plan works is to compare it to what the classic PPO plan could cost.
For instance, a classic PPO easily could be as high or low (depending how you look at it) $150 per paycheck for a single individual.
Whereas a PPO HDHP plan could costs $90 per paycheck for a single person coverage.
“What’s the catch?” you may ask.
As mentioned earlier, both offer the same type of coverage, but the deductible costs is where they are strikingly different.
So the catch is the deductibles are much higher in HDHP, and that’s why you need to save your pennies, nickels, and dimes for that rainy day unexpected provider’s visit (and the planned visits as well).
Important Benefits to Consider with High-Deductible / HSA Plans
- There is no use it or lose it rule with HSA. This means that your money rolls over every year, just like a regular savings account.
- Sometimes your employer will contribute some money to your HSA account.
- What you use it for must be for qualified medical expenses.
- There are limits for how much money you can put into your HSA (in 2019, the limits are $3500/year for an individual and $7000/year for a family. Note: these amounts cover the maximum out-of-pocket limits, which means that if you plan ahead, you can potentially have all your healthcare expenses completely covered between your insurance coverage and your HSA .
Who Do High-Deductible HSA Plans Make Sense For?
If you visit the doctor all the time and have a very low-income, you may not be a fan of this type of plan.
On the other hand, this may make sense for younger people who hardly ever visit the doctor and are responsibly setting aside their money for both predictable and unforeseen medical expenses.
Your HSA Funds Can Work For you
You can let your unused money sit in your HSA and generate very little interest like a standard bank account.
But another neat option is HSAs offer an investment element where you can take that unused money and invest it. These investment options are usually stocks and mutual funds offered by the plan.
*WORD OF CAUTION HERE*
Make sure to consult a professional financial advisor before investing your money needed for emergency room visits. Emphasis here is to have plenty of money set aside before utilizing medical funds as a possible investment strategy.
If you still think it’s a good idea then it can be a huge investment opportunity in relationship to having a solid 401(k) retirement plan as well.
Lastly, if and when you leave your job, you can take your HSA money with you as it is portable.
Here’s an overview of the tax and retirement benefits of an HSA:
- You can choose to convert any or all of your HSA dollars to an investment account, essentially putting them into an account that will grow due to the benefits of compounding interest. Additionally, the money you make via interest is tax free, meaning that you don’t pay federal taxes when you withdraw the money you earn.
- The contributions you make your HSA lowers your taxable income, meaning that the taxes you owe the government every year will be less if you contribute to an HSA (this could mean a bigger refund as well!).
- Your HSA contributions, when used for qualifying medical expenses, can be withdrawn without any taxes owed.
- If you pay out of pocket for your medical expenses and save your receipts, you could withdraw the money years later (like, when you retire!) and it is essentially tax-free money!
- If you have HSA money left over in retirement, you can choose to withdraw it for any reason (not just medical benefits), but you will pay income tax on what you take out.
(Flexible Spending Accounts)
One little point I forgot to mention, and by no means is meant to confuse you, but it needs to be addressed.
There is another pre-tax money option known as FSAs (Flexible Spending Accounts).
These are like HSAs as they are IRS regulated, but are quite different in how they are setup for use.
What Can You Use an FSA For?
FSA money is money that comes out of your paycheck on a pre-tax basis (meaning it lowers your taxable income) and gets put aside in a separate account.
You can use these funds for medical, dental, and vision care expenses that are not normally covered by your health plan.
These could be copayments, coinsurance, deductibles, eyeglasses, doctor-prescribed over the counter medications, and the list goes on.
There are also types of FSAs that can be used for childcare expenses.
Depending on how your plan is setup you may have to make your claims via online, paper form, or through an FSA debit card transaction for either manual check or direct deposit reimbursement.
Use It Or Lose It!
Here is something to keep in mind for FSAs.
They are use it or lose it program based on a calendar plan year (ex. 1/1/2019 – 12/31/2019).
So let’s say you have $1000 left in your FSA plan and it’s already December. Well depending on how your plan is setup you may lose all or a certain amount of that money because you didn’t use it during the year.
Sometimes a FSA plan can be setup to allow to you have a grace period after a new year starts for you to make claims for the previous year’s medical expenses.
Make Sure To Calculate Your FSA Costs
You cannot change your deductions taken out of paycheck once you elect them. So once you select an amount then you need to make sure that’s what you intend to use for the plan year.
Again since it is use or lose it program that also applies to when you leave or terminate as a nurse from your hospital. You get to use those funds for the dates you had an active plan, but you cannot after your termination end date because it ends with your employment.
However,you can make past retro-claims from when the plan was active. You usually have about 90 days to do this.
If you opt for Cobra benefits you can continue the plan, but that is a whole other separate later topic beyond here.
Also make sure you aware that like HSAs, the FSAs have maximum limits you can contribute into as well. For 2019 it will be $2700 per year for medical and $5000 for dependent care.
You Can Have Both FSA and HSA Together!
In order to have them both you can only enroll into what’s called a Limited FSA plan. This means you can’t use your Limited FSA funds for medical expenses unless it’s only for dental or vision expenses.
Are You Feeling More Prepared?
Overall, benefits for nurses is a vast topic and there are still more areas to cover. But at this point at least you have a good starting point to make a well informed decision.
A good recommendation is to go through your benefits booklet thoroughly.
What To Do Next
Ask questions regarding other benefits you should consider such as dental, vision, retirement, life insurance, supplemental insurance plans, and disability options.
As you know because you chose the medical industry, it is a vast career field, with plenty of opportunity. Your train of success does not stop when you get hired on, and it’s just the beginning!
In sharing that, good luck with your new position and please check back for more fun posts to help you further understand more about nursing topics that affect you!