How to Negotiate Health Benefits
Health benefits are an important part of the overall compensation package that is presented to a selected candidate for a new job. If the new job is with a large company or organization, chances are good, although not guaranteed, that the health benefits are going to be with a large health insurance provider which offers various options to the employees. If the new job is with a smaller company, there may be a costlier health insurance program in place that passes along much of the health benefit cost to the employee. As the cost of health care continues to rise and there is change on the horizon due to Obamacare's effects on existing coverage plans, it is important for employees and prospective employees to understand the makeup of health benefits, and how they exist within the overall compensation package for an employee.
Do Your Homework: Know Your Health Benefits
Having good health benefits is very important to the American worker. Employees often choose to apply for those positions that have good health benefits in order to provide needed health coverage for themselves, their spouse and/or their dependents. Employers, especially public employers, have often been able to provide reasonably priced coverage as part of a way to attract qualified and experienced applicants. In fact, having a healthy benefits package could be a large chunk of the overall compensation package that is included in the offer letter when a job offer is extended. Employers now recognize that making health care part of their offer is becoming just too costly and have had to look to other means to attract employees.
With the continued Health Care Reform changes being implemented in recent years and new changes to be implemented in the near future, employees and applicants are paying attention to what packages are available with employers. The following are some basic questions that can start the discussion and possible negotiation of health benefits:
- When do benefits start? This question is very important to a prospective applicant because the answer varies from employer to employer. Due to the investment that goes into hiring a new employee, many employers choose to establish a waiting period for new employees and the date that benefits start. For example, the first of the month following the employee's ninetieth day of employment is a common waiting period for new employees. During the first three months, employers are able to determine if the employee is going to be worth the hiring investment. In other words, the employer generally knows by the third month of employment if it is going to keep the employee. Conversely, this waiting period allows the employee to decide whether they wish to continue with this employer. Due to the administrative costs that go into signing up an employee and his/her family for health benefits, many employers see the benefit of a waiting period before benefits become effective. Fortunately for some employees, many employers have shorter waiting periods, such as, for example, thirty days.
Bottom Line for Discussion: It is important to understand that most employers cannot waive the initial waiting period for new hires due to the contract the employer has agreed to with the insurance provider. A new employee or prospective employee may desire to negotiate this point but will be unsuccessful. Although this aspect of the benefits may be non-negotiable, it is a good idea to speck to the potential employer about other negotiable compensation items during that initial period of salary negotiations. When possible, negotiate financial assistance for the payment of the COBRA benefit from your previous employer during this waiting period. Since the cost to pay COBRA is usually very expensive, negotiate assistance from the new employer to cover this cost until the new benefits become effective for the employee. Successful negotiations of this benefit will keep the employee and his/her family covered continuously with health coverage.
- What are the employee's out-of-pocket expenses for health care? Co-pays and premiums are generally non-negotiable items as well. These amounts have been established for all employees, and figured into the overall package that was determined with the company's cost to offer the benefits. Knowing what those costs are could be a very important factor in the overall determination of whether the individual accepts the job.
Bottom Line for Discussion For many workers, a high premium or expensive co-pay that must be expended to a health care provider for each medical visit for the worker and their dependents might be something that is just not going to work with their household budget. For those employees with young children who must go to the doctor frequently for those common childhood illnesses that get passed around at the daycares and schools (flu, colds, strep throat, etc.), they may consider this type of health benefit to not be family-friendly. Like the waiting period mentioned above, co-pays and premiums are generally non-negotiable as they are a part of the overall health care plan.
- Are there regular wellness programs or incentives currently being used in the workplace? Many employers have started implementing wellness programs to promote good health education and awareness for the employees. Employers recognize the value of healthier employees to the cost of health care as well as to the company's productivity.
Bottom Line for Discussion An employer who utilizes wellness programs demonstrates care and interest in the well-being of the employees. Preventive health measures and general awareness about common illnesses that plague America today are discussed in these sessions. High blood pressure, diabetes, cancer, healthy eating, etc., are all examples of topics presented to employees. In fact, many insurance providers offer assistance to employers with the coordination of these valuable events. Family members of the employee are often encouraged to attend. Asking about these programs is important to the prospective employee. because it is certainly a benefit related to health issues for employees.
- Is there an Employee Health Clinic? Due to the increasing costs associated with health care coverage, employee absence in the workplace and general morale issues related to limited staff, many employers have considered and secured an employee clinic for its employees. These clinics are generally free to the employee and can help cut down on the costs both to the employer and the employee when it comes to some of the basic health care issues that cause an employee to miss work. Many of these employee health clinics are open to families of the employee as well.
Bottom Line for Discussion Employees can ask about existing programs that are beneficial for them and their families. Knowing that this clinic is a part of the overall package may add value to the overall compensation package that is offered to the new employee. Since many of these clinics are free to the employee, there would be less money given for co-pays to doctors for medical visits.
- What kind of leave time is offered to employees? It is important to know how much paid time off is offered to employees of an organization. This area is one that may have negotiating possibilities during the pre-employment offer.
Bottom Line for Discussion Personal time, vacation time and sick time are all important benefits to the employee. A prospective employee who is negotiating a contract to include benefits should be aware of the leave time that is being allotted to employees. An individual might be able to negotiate additional time off due to the need to be "refreshed" and avoid "burnout" due to the high stress and pace of the job. These prospective employees may want to express the value that they will bring to the employer and desire to have a compensation package that offers the necessary time off to remain productive and in good health.
An Upward Career Path to the Unknown.
Some Final Negotiations Tidbits
When negotiating an overall compensation package for a new position in an organization, it is crucial to remember that there is great value to the employee and their family to have health benefits that meet their needs. The bottom line, however, it that much of what makes up an employee's health benefits are things that are generally not up for negotiations. Rather, prospective employees need to think outside of the box to negotiate a compensation package that affects the health benefits in other ways. Asking the pertinent questions that provide the information needed to get a good understanding of the entire benefit package, will assist the prospective employee with making an informed decision about an important piece of their compensation package. It may be the piece of the overall compensation that decides whether they accept the new position.