How Quitting Your Job Can Make You a Better Employee

When you leave a job behind, if you don’t solicit feedback from your co-workers, you’re missing out on a golden self-improvement opportunity.

Last Day of Work

Today was my last day at work, after working for this company for almost nine years I’m making a change and trying something new.  As I filled out my exit interview online and answered question after question about my boss, my group, and the company I realized I was providing human resources and management with a lot of useful feedback.

360 Degree Feedback

I saw an opportunity to help myself professionally so I built a short survey with SurveyGizmo and emailed it out to my managers and co-workers.  After working closely with me for many years, they knew my strengths and weaknesses well and it was a perfect chance to have them tell me what I was doing well and where I needed some work.  Getting feedback from all levels of your job hierarchy like this is sometimes known as 360 feedback:

“360-degree feedback, also known as ‘multi-rater feedback’, ‘multisource feedback’, or ‘multisource assessment’, is employee development feedback that comes from all around the employee. “360” refers to the 360 degrees in a circle. The feedback would come from subordinates, peers, and managers in the organizational hierarchy, as well as self-assessment, and in some cases external sources such as customers and suppliers or other interested stakeholders.”

Self Improvement Survey

Our typical review process is top-down, from our managers only, so this was a perfect chance for peers and my team members to let me know where I needed work.  I kept it short so people would have time to take it and left the answers open ended so they could write as little or as much as they wanted.  Below are the questions I asked:

1) Describe my contribution to one project where I did a great job or helped you out.  Pick one that really stands out in your mind and explain why you were impressed with my performance. Just to let you know, these are for the resume in case my next job doesn’t work out 🙂

Testimonials are wonderful things for a resume.  If you spent years successfully completing projects, don’t hesitate to ask for some documentation of your effort.

2) Name and explain 3 things I need to work on professionally that would make me a better person to work with. It could be a better employee, manager, developer, communicator. Just describe 3 things you think I do poorly or that could use improvement.

Not everyone gave three but most people gave at least one thing I could work on.  After looking through the responses, there were several things I wouldn’t have thought of that could definitely increase my value as an employee if I could improve them.

3) In your mind, what are my 3 best attributes? I’m looking for professional development feedback here so please don’t answer something like nice shoes.

It’s helpful to know what you’re good at.  Especially when you’re in an interview and they ask for the 3–5 adjectives that best describe you or what your strengths are.  Now you don’t have to think about it, your co-workers will tell you!

4) Please share one piece of advice that has been the most valuable for you in furthering your career and professional development. Make it your best career tip, the one that’s been most effective for you

Everyone has a nugget of wisdom to share that has made their work life easier or help them in getting raises and promotions.  Why not find out everyone’s “secret to success”?

On the Way Out the Door

Of course you can run a survey like this while you’re still working at a company too, the benefit to doing it when you’re leaving is that people feel more open about sharing your pros and cons since they don’t have to work with you anymore.

I also asked for their email address (non-work) as part of the survey so that I can keep my professional network growing the next time it’s time for another job change.  Of course I made the email optional so they didn’t have to share if they didn’t want to.

So next time you get a new job, make sure you find out from your peers, managers, and underlings where you can improve so you can fast track your way to success, and hopefully corresponding raises and promotions.

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American Express Blue Cash Rewards – Cash Back Plus Free Credit Report

Blue cash from American Express is our pick for best cash back credit card.  The reason we use the amex blue cash card for the majority of our purchases is the cash back it offers at gas stations, supermarkets, and department stores. 

Cash Back

The Blue Cash card starts earning higher cash back on everyday purchases from the first dollar you spend.  Unlike previous versions of the card, you don’t have to hit spending tiers to earn the maximum cash rebate.  The highest earning category is supermarkets, followed by gas stations and department stores.  The percentage you get back depends on whether you have the Blue Cash Everyday card or the Blue Cash Preferred.  The Everyday card earns lower cash rebates but has no annual fee. The Blue Cash Preferred card charges an annual fee but pays higher cash back percentages, the right one for you really depends on how much you use the card for groceries and gas.

Free Credit Report

I recently discovered a new feature of the blue cash card, American Express offers an annual free credit report and credit score to card members.  Once you login to the American Express website you can request your Experian credit report and credit score free of charge once a year.

I think they might offer this benefit to all Am Ex card holders but I didn’t even know it existed until I recently received their “Inside Blue Cash” email newsletter that covers the various features and benefits of the card.

Tracking Cash Back Rewards

Something else I wasn’t aware of was the “Blue Cash Tracker” that you can access once you’re logged into the American Express website.  It’s a pretty useful summary of how much cash back you’ve earned year to date and in past years.  We’ve been paid at least $400 a year in cash back rewards, most years it’s been over $500.

There are some interesting graphs that compare your spending and cash rewards to all other blue cash card holders and there’s a “Blue Cash” calculator that lets you estimate how much cash back you’ll earn based on your gas station, supermarket, and drug store purchases.

While a lot of the major supermarkets and gas station chains accept American Express, not every place does so I carry a backup Chase credit card for those occasions.

Win an American Express Gift Card

The last thing I learned in the blue cash newsletter is that you can win a $50 am ex gift card by sharing an interesting story of something you purchased with your American Express blue cash card.  Here’s how the email described it:

“What’s your favorite watercooler story about the Card? The time you used your cash back on a family beach trip? E-mail us what you love about your Card, and get a $50 American Express® Gift Card if it’s published.”

Maybe I’ll submit my “Why I Love My American Express Blue Card” post I wrote last year, although it’s more practical and not really fun or funny. 

Anyhow, that’s a quick review of some of the benefits and features of the card. The Amex Blue Cash is the best cash back credit card for our spending patterns and it has some pretty useful features to help track rewards and even monitor our credit.

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Working From Home – Making Money While Working In A Job That Fits Your Life

Working from home. For many people it’s just a pipe dream, a fantasy that they don’t know how to make happen. It doesn’t have to be that way though. There really are a ton of ways to legitimately work from home.

Let’s talk about a few of those options, and some ways that you can change your job to fit your life.

Finding A Job Or Business That You Can Do At Home:

When you first begin your job search, it can be confusing, and a little intimidating. Don’t worry about that! You will quickly find ways of telling which work from home jobs are legitimate, and which ones are not.

Fair Warning: If you have to pay anyone a “set up fee” a “start up fee” or any other type of fee, it’s a scam. If it’s a legitimate job, they pay you to work, not the other way around.



Here are a few places that you can start your search for your ideal at home job:

1) Craigslist – When you check Craigslist, be sure to check areas that are local to you, as well as ones that are not. After all, there are employers all over the United States that advertise there, and if it’s an at-home job, you can live in one place and work for someone else no matter where they are.

2) Your Local Paper – Most businesses outsource things regularly. Everything from web design to lawn care. Keep an eye on your local ads each week – you’ll be surprised at what turns up.

3) Network – Your family and friends will probably be your very best resource when you first start looking for jobs that you can work from home. Put the word out that you are looking, and ask everyone you know to keep an eye out for you.

4) FreelanceWritingGigs.com – This is the web’s #1 resource for writing, and editing jobs. New jobs are listed every day, and the owners of the site are very thorough when they investigate job postings. The vast majority of jobs on this site are legitimate. There is an active community there too, so if a scam does slip through you can be sure that you will get plenty of warning from the other readers of the site.

5) Don’t forget to ask your current employer about working from home- There may be parts of your job that you would be able to do at home, and some companies do allow this. You will never know unless you ask. Working for your current employer might still require some office time, but depending on your job, it’s very possible that you can talk them into giving you at least part of the week to work from home.

6) Create Your Own Job – If you have a specialized skill like writing, editing, drawing or web design, you can put together a brief portfolio and approach clients on your own. This is an excellent way to grow your home based business on the side. Once you get enough steady income, you can give notice at your regular 9 to 5.

So, you might be saying, I can’t write, I can’t draw, I don’t know html….I don’t know medical billing codes…Is there any way I can still work from home?

Well, yes. It all comes down to knowing yourself. What are you good at? Do you love children? You can start an in-home daycare. Have you always wanted to home school your children? Why not offer to teach your friends kid’s too? There is a high demand for data entry, and customer service / call center representatives who work from home too.

The truth is, if you really want to work from home, then all you have to do is work hard to find a way to do it. Set aside a time each day to sit down, and go over your options until you find one you like.

Will Working From Home Fit Your Life?

After you have some idea of what you would like to do, your next focus needs to be, how can you make it happen? There is a huge misconception that working from home will give you more free time. After all, you don’t have that morning and evening commute anymore, and you can take off anytime you need to right?

Well, here’s the hard truth about working from home (and running a small business, if you take that step.) It will not free up time. In fact, time management becomes an immediate issue. You also should probably know going into it that none of your friends or family members will actually understand that you really do “work” while you are home. So while you may be able to take off and go to lunch once in a while, or re-arrange your schedule to fit your needs, it can be difficult.

Before you begin working from home, take an honest look at your life. How many hours will you be able to work? Will you have to stop and start to pick your kids up from school? Are there any days that you will not be able to work because you have other priorities? If you can nail down your schedule before you start your job, then you will be far ahead of most people who work at home. If you cannot, then you may find yourself back in the office in less than six months.

Setting up your home office:

Whatever you choose to work at while you are home, you need to have a specific space set up in your house. You will need a computer, a fax machine, a cell phone, a P.O. Box, and possibly a few other business necessities. The more you are able to treat an at-home job like a 9 to 5 job, the easier the transition will be, and the more likely you are to succeed.

The Financial Aspects of Transitioning To A Job Or Business Working From Home:

There are some very real financial challenges that you will have to face when you start working from home. Here are just a few:

1) Your at home job may not pay as much as your regular job did – You have two choices here. You can take the pay cut in order to have the freedom of working from home, or you can work both jobs at the same time until you go crazy (or until your at-home job replaces the amount of income you will need.)

I chose the second option, and I did escape with my sanity. 🙂 I worked as a freelance writer nearly full time for a year, while working my regular full time job, with a newborn. It can be done. I’m not going to tell you that it was always pretty, but I did it, and my family and I are better off for it today.

2) Your clients will pay you late, and sometimes not at all – If you can get setup on payroll with an employer, then you will not have to worry about this. If you are freelancing though, it comes with the territory. The financial challenge here is that you cannot count on the money until it is in your hand, so budgeting can be very difficult.

3) Have a healthy savings account before you take the plunge – There is no guarantee that the money people owe you will come in regularly. Having that savings account to fall back on will make all the difference between success and failure. If you have some good personal budgeting software, and you keep a close eye on your expenses then the transition will be much easier on you and your family.

If you are in debt, and you want to work at home, then the best thing you can do is start your business on the side, work the extra hours, and make the transition as gracefully as possible.

Make sure you set a savings goal. Once you meet that goal, then consider working full time from home. If you choose to jump into a full or part-time job at home with no savings, then you are probably defeating yourself before you even begin.

The funny thing about freelancing at home is that it will highlight every area of your life that you might normally ignore. Money management becomes paramount because your income is unpredictable. Time management is essential because sometimes your days will be unpredictable.

The rewards of working at home are amazing. I have time with my daughter, we save money because I have time to cook, and we no longer eat out. I can rearrange my schedule to fit my life to an extent, and overall, I feel very blessed to lead this life. However, it does take a lot of organization, determination, and plain old hard work – three things that don’t usually factor into the “fantasy” of working from home.

If you really are interested in working from home, then I would definitely encourage you to check out the resources above. Try picking up some work on the side first, and ease yourself into a full time at home job. Based off of my own experience, I believe that doing things that way will give you the best chance for success. Good Luck!

This review of work from home options and how they fit into your life and your finances is part of the Career Finances Guide.

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It’s the End of the World as We Know it… is Your Bank Fine?

As I’m sure you all know, the financial markets took a beating last week.  As we wait to see what the government does to “eliminate toxic debt” and how the markets react, it could be another interesting week on Wall Street.

I’ve tried to not write about the events too much, I didn’t want to add to the sweeping frenzy and panic, but here is some coverage of last week’s events from around the blogospere:

– Where to put your money in a bad market @ The Digerati Life

– How the market crisis can help your retirement @ Frugal Dad

– What we can learn from Lehman Brothers bankruptcy @ Lazy Man & Money

– Are people stealing your money @ Brip Blap

– Are money market funds safe @ Suns Financial Diary

– Downside of index investing @ Million Dollar Journey

– Bad time to leave the workforce? @ My Dollar Plan

– Stock market turmoil @ Five Cent Nickel

– Merrill Lynch for sale @ MoneyNing

– Protect your finances from crisis @ Free Money Finance

– Return on investment or earning power @ Mighty Bargain Hunter

– Worried about losing your savings @ No Credit Needed

– Day trading during the crisis @ Blueprint for Financial Prosperity

– Financial meltdown and greed @ My Money Blog

– Will my money be safe @ The Simple Dollar

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FDIC Insured Banks – Are Online Savings Accounts FDIC Insured?

FDIC insurance on bank accounts is one of the things helping consumers sleep a little easier during these crazy financial market conditions. Online savings accounts that are insured by FDIC should have no different protection than funds kept in a local bank that’s FDIC insured. 

A good friend of mine and asked me last night if the money in my ING Direct account is FDIC insured.  He knows we have our emergency fund with ING Direct and he has some cash there as well.  I think his concern was rooted in the fact that ING Direct is a “virtual bank” of sorts, without a physical location to visit.

There are a number of these “direct” banks that offer online access for high yield savings accounts.  Although they may not have a local branch you can visit to make withdrawals, if they are FDIC insured they should have the same protection as an FDIC insured local, regional, or national bank.

One easy way to know if an account is FDIC insured is to look at the terms and conditions when opening the online savings account.  I visited the sites of various direct online banks, below are statements from each of the sites that reference FDIC insurance and FDIC limits:

 

FNBO Direct

“Online Savings Accounts offered by First National Bank of Omaha, Member FDIC. Deposits are insured to the maximum permitted by law” – FNBO Direct

 

ING Direct

“Are deposits at ING DIRECT insured by the FDIC – Federal Deposit Insurance Corporation? Yes, deposits at ING DIRECT are insured through FDIC membership. We are registered with the FDIC under the name of ING Bank, fsb, located in Wilmington, DE. ING DIRECT’s FDIC certificate number is 35489” – ING Direct

 

HSBC Advance

“HSBC Advance deposit accounts are offered by HSBC Bank USA, N.A. Member FDIC. Deposits are insured to the maximum permitted by law.” – HSBC Advance

 

 

WT Direct

“FDIC-insured up to $100,000 per depositor with Wilmington Trust FSB. Click to view the WTDirect Savings Account Agreement and Disclosures” – WT Direct

 

 

You may have noticed that the ING reference mentions an FDIC certificate number.  You can visit the FDIC website and view the certificate for all FDIC banks, for example here is the FDIC certificate for the First National Bank of Omaha, FNBO Direct.

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How to Make Your Job Better or Find a Better Job

If you love your job, consider yourself lucky, there are many people that hate their boss, their job, and what they do. If you are unhappy with your job, you owe it to yourself to figure out what it is about the work that you don’t enjoy and change it.  Life’s too short to spend it working in a job you don’t like.

What Do You Like/Dislike About Your Job?

As you may know I recently found a new job and had to fill out an exit interview for my current employer, giving them feedback on my experience with the company.  As I answered questions about my boss, my group, and the work I did, I realized that I was going through an exercise in job quality improvement.   In order to attract and keep good talent, the company was reviewing the components that can make or break a job so they can do more to remain competitive in the industry.

What Can Make Your Job Better?

Then I realized that this exit interview is actually a perfect set of questions for any employee to ask themselves to help gauge how happy they are in thier job.  I’m including all 20 questions below so that you can evaluate your job.  Your answers will show where there is room for improvement. You’ll benefit from taking the time to answer these questions whether you love your job, think your job is just okay, or are already looking for a new job. 

Love Your Job
If you’re content where you are, just remember there’s always room for improvement, you can talk to your boss about any questions or concerns the survey raises.

Unhappy with Your Job
If you’re not really that happy but don’t want to look for a new job, these questions can help identify your main gripes with the work you do and figure out the main things you need to address to be happy at work.

Looking for a new job
If you’re on the job hunt, these are all things you’ll want to consider when selecting your next job.  No point in jumping from a job you hate into another that’s not so great. You could definitely use some of the topics covered in the questions as evaluation criteria in your job comparison tool.

Job Satisfaction Survey

Here they are, 20 questions that a big company asks its employees when they leave the company.  Answer them about your current job to see how happy you really are or what you should look for in your new job.  Some of the questions are worded such that they assume you’re leaving, just play along and see what you come up with.  For example, your answer to the first question, “Why are you leaving the company”, should reveal right away a high level list of all the things you don’t like about your current job.

I started off this piece by saying, “If you love your job, consider yourself lucky”, but in reality many people who work in jobs they enjoy are there because they took the time to answer questions like these and then acted on their answers.  Take the time to answer the questions below and help yourself find a job that you look forward to going to each day. I know 20 questions can be a lot to answer so I alternated the colors to keep your eyes interested : )

1) Why are you leaving the company?

2) What prompted you to look for another job? 

3) Before making the decision to leave the company, did you investigate other options that would have enabled you to stay?

4) Could anything have been done to prevent you from leaving the company? 

5) What company will you work for?

6) What type of work will you be doing?

7) In what way do you consider your new position to be different?

8 ) How would you rate your immediate manager? 

• Demonstrated fair treatment
• Provided recognition of your job performance 
• Developed cooperation and teamwork
• Was available to answer questions
• Resolved problems in a timely manner
• Provided resources/information to perform your job duties
• Communicated policies, procedures and expectations
• Provided regular, timely performance feedback
• Encouraged suggestions and new ideas 

9) What would you have done differently if you were the immediate manager?

10) How would you rate the following in your department?  

• Teamwork within the department
• Teamwork with other departments
• Communication within the department
• Communication with other departments
• On-the-job training
• Equipment provided
• Physical working conditions
• Overall morale 

11) How did your management communicate job expectations?

12) Was your workload usually?
Too Great   About Right   Too Light   Too Routine

13) Were your skills and abilities sufficiently utilized?

14) What did you think your chances for advancement were?
Good   Fair   Poor

15) What did you like most about your job or department?

16) What did you like least about your job or department?

17) What did you like the most about the company?

18) What did you like the least about the company?

19) Evaluate the following company-paid benefits:  

• Paid holidays  
• Paid floating holidays 
• Paid vacation or PTO 
• Paid sick time 
• Rate of pay
• Stock service awards program
• 401(k) plan match/profit sharing
• Medical insurance
• Dental insurance
• Long-term disability insurance
• Life insurance 

20) Evaluate the following additional benefits/services:                        

• Vision insurance 
• Voluntary life insurance/AD&D 
• Short-term disability insurance 
• Leave of absence policy 
• Wellness programs
• Educational assistance
• 401(k) plan
• Direct deposit
• Total pay card
• Internal on-line job posting  

If you do decide to leave your current job just remember to calculate the costs of a new job, carefully evaluate the new city if re-locating, plan for health insurance coverage, make sure you rollover your 401k, and give two weeks notice so you don’t burn any bridges.

This job satisfaction survey and tips on job evaluation are part of the Career Finances Guide.

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Federal Unemployment Assistance – Frequently Asked Questions

Being “laid off” is one of the most dreaded phrases in the English language.  No one wants to hear it, but as we all know, life happens. 

Losing Your Job

Thankfully, we live in a country with a relatively low unemployment rate, about 5 percent, but the low rate is little consolation to the people who are part of that 5%.  There are plenty of people who get laid off from their job every day, and their lives are devastated, because they lost their job unexpectedly.  These people may have had good careers and been good workers but because of unforeseen circumstances regarding any number of factors, their employer may have decided to cut a portion of its workforce. 

So, if you suddenly find yourself without a job, or you’re worried that you might be laid off in the future due to the current economic conditions, here are answers to some of the frequently asked questions about federal unemployment assistance.

Who pays for it and who runs it?

The FUA program is run by your state government, but funded by the federal government.

How do I find my state unemployment office?

There’s a website sponsored by the U.S. Department of Labor called Career One Stop that offers “career resources and workforce information to job seekers, students, businesses, and workforce professionals.”  They have a section on the site called America’s Service Locator which can help you find One-Stop Career Centers and provides contact information for “a range of local work-related services, including unemployment benefits, career development, and educational opportunities.”

Who is eligible for FUA?

Anyone who lost their job that had nothing to do with their job performance or actions as an employee.  You must be “laid off”, not fired.  Being fired means you weren’t doing your job or you did something against company policy that warranted your termination.  Basically, YOUR actions caused the termination.  If you were fired, you aren’t eligible for FUA.  If you were terminated based on circumstances that had nothing to do with you, then you’re eligible.

How much will I receive?

This varies state by state.  Your past gross monthly income will be taken into consideration, and you’ll receive a portion of that amount.  You’ll also be awarded a certain amount of credits that determine how many weeks you’ll receive the unemployment benefit.

How Am I Paid?

You will be paid on a weekly basis, unless otherwise specified by your state’s laws.

How long does it take to receive my first check?

It generally takes two to three weeks.

Do I need to look for work during the time that I receive benefits?

Yes!  The whole point of the program is to give you financial aid while you’re looking for other work.  Most states will require you to register with the state’s job bank for potential employers to contact you for work.

The Bottom Line

Filing for unemployment benefits is a logistical nightmare.  You’ll fill out tons of paperwork, and it’s the government, so they aren’t prompt, and they don’t care about customer service.  However, if you’re the sole provider for your family and end up without a job this program can offer a much needed supply of cash.

Don’t quit your job thinking you can expect to receive unemployment assistance, it doesn’t work that way.  The amount you’ll be paid definitely won’t replace your salary so you’ll still want an emergency fund to make up the difference, plus the emergency fund will come in handy while you’re waiting for the first check to arrive. If you don’t have an emergency fund yet, start one today.  You can open an account for only a dollar with online banks like FNBO Direct.  If you start putting away a little each month you’ll be glad you did when crisis strikes, click here to start your emergency fund today.

It’s a good idea to keep your resume up to date and form a work portfolio so you’re ready in the event you lose your job. Not only will you want to start the job search right away, federal unemployment guidelines require that you do so.

Keep in mind, sometimes people lose their job due to injury or disability.  You can help prepare for an unfortunate event like that by buying disability insurance.  Another big issue for people that get fired is finding health insurance coverage, make sure you consider what you’ll do about health insurance between jobs.

These answers to frequently asked questions about federal unemployment assistance are part of the Career Finances Guide.

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AIG Bailout, Stock Market Drop, Bank Closures, & Federal Reserve News – No Big Deal?

Lehman Brothers goes bankrupt, struggling Merrill Lynch is bought out by Bank of America, and AIG is bailed out by the US government – so who cares?

According to a tool from Google that displays the trends on what people are searching for online, the financial turmoil engulfing the US this week isn’t prompting that many people to seek out information about the issues. Monday night football, politics and fall TV premiers are coming in ahead of the financial woes.  The trends tool shows the top 100 hot search items; I pulled the applicable ones I saw for Monday & Tuesday, plus Wednesday morning, and listed them below.

As you can see, financial topics only compose a small portion of the searching trends. Based on these numbers it looks as though people have a lot of things on their mind other than the economy. I would have thought the top few would have been all about the financial markets but they weren’t.

September 17th

57) AIG bailout 

64) AIG ceo

66) Suze Orman

84) reserve fund

98) Morgan Stanley merger

September 16th

3) reserve primary fund

14) conservatorship

15) AIG bailout

42) AIG conservatorship

72) after hours trading

84) morgan stanley earnings

September 15th

10) AIG stock

32) Ken Lewis

47) stock market today

48) are we in a depression

54) stock market

62) cnbc live

68) ken lewis bank of america

80) lehman brothers bankruptcy

82) FDIC insurance limits

87) AIG life insurance

91) AIG annuity

 

I’m not sure if people are getting the coverage instead from the major news outlets or if they just aren’t that concerned.  I wonder if that suggests many consumers are out of touch with the economy and it’s effect on their lives; or if the tool’s just showing inconclusive data.

Whatever the reason, it’s probably a good thing the top 30 searches weren’t all about financial doom and gloom as that could indicate a run on the banks or even more financial meltdowns.  Let’s hope tomorrow there are no searches for any other major financial institutions.

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Health Insurance Plans Offered by Employers – Network Based Managed Care Programs

Thanks to a reader named Matt, a health actuary, who shared his feedback on the health insurance for a new job post and takes a look at the network-based managed care programs.

PPO: What you described here is actually more like a traditional indemnity plan (which are rare these days). A Preferred Provider Organization actually does have a network, much like you describe under the HMO section. The insurance company contracts with a wide array of providers to get their insureds a sizable discount at in-network providers.

However, if you choose to visit an out-of-network provider, the claims are paid at a much lower rate (they usually fall under a higher deductible with higher co-insurance amounts). You also can go to any specialist in your network without a referral. You do usually pay a higher premium for a plan like this because there is less control over your utilization compared to a POS plan or HMO.

POS: This type of plan is very similar to a PPO, with two sets of benefits – both in and out of network provisions. The network is very wide with a wide choice of providers. The difference is, though, you must select a Primary Care Physician (PCP) when you sign up for the plan. This person acts as a “gatekeeper” and you must see your PCP before seeking other care (except, of course, for emergencies).

For example, if I was in a PPO and wanted to see a dermatologist, I could just look one up that is in my network and go to him/her. In a POS plan, you must first visit your PCP who will decide whether or not to refer you to a dermatologist. Without that referral, claims are reimbursed at the lower, out of network rate. This is the POS’s way to manage your healthcare utilization, which lowers overall costs, which will probably mean a lower premium for members.

HMO: Joining a Health Maintenance Organization is like joining a plan with a very narrow network and the lowest cost. Like the POS plan, you have a PCP you will start at, but from there, there isn’t much (if any) choice. There are many different type of HMOs that vary by area, but you will typically be limited to very few providers and will have much less say over your own care. There are no “out of network” provisions, so you must visit whoever the HMO dictates.

The HRA or HSA Plan: Both are usually coupled with High Deductible Health Plans (which are usually PPO plans with a minimum deductible defined by the IRS), but only the HSA must be offered that way. Amen to letting that money grow tax free – and I also might add that those dollars can be used for things like Medicare Premiums into your retirement, so it’s a great investment. HSAs are actually owned by the employee, so you can take it with you, no matter where you work. HRAs are defined by the company and don’t necessarily have to go with the employee on termination.

Another valuable benefit your employer might offer is a Flexible Savings Account (FSA). These allow employees on any type plan of plan divert pre-tax dollars into an account to pay qualified medical expenses out of. These funds, however, must be used by the end of the year.

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Health Insurance: Planning For Coverage During a Career Change or Job Search

Health insurance is the single most important benefit that you must take care of during a job search or career change.

Risk of Being Uninsured

I have a friend who underwent major surgery about two years ago, and it was during a time that he was transitioning from one job to another. He didn’t elect to pay for health coverage during the time that he made the transition, and he was left with thousands of dollars in medical bills that he couldn’t pay. Luckily, the hospital cut him a deal, and he was able to pay the bills off quickly once he started his new job. However, some people aren’t so lucky, and the lack of health coverage ruins their financial picture.

Avoid Medical Debts

Medical expenses can literally force an individual or couple into bankruptcy, and bankruptcy should always be your last resort when it comes to making a financial decision. Make sure there is no gap in coverage when switching from one job to another, or one career to another. Here are four steps to follow when considering your health coverage and transitioning from one health insurance policy to another.

Choose If You Will Buy The Company Plan or Your Own Plan

• The company plan: Every group health insurance plan is different. The major factor in choosing your new company’s plan is whether they cover any portion of your premium. If they cover a certain percentage of your premium or ALL of your premium, then this decision is a no brainer. Take the free money. Picking up the tab for your health coverage is a great benefit. However, many of them won’t pay for your family’s coverage, so make sure you research how much extra it will cost you per month through the company’s plan versus going out and buying your own plan.
• Buying your own policy. Going out and buying your own policy can be pricey, but you have limitless choices. You can compare hundreds of different policies, whereas, your company will only offer you a choice is several different policies. If you have enough money to cover a high deductible, you may want to go with a high-deductible policy that covers you 100% after you meet the large calendar year deductible.

Choosing The Right Policy Type For You

1) The PPO: Many companies offer this plan within their health coverage provider. A PPO carries a higher premium, but it gives you more flexibility to see the doctor of your choice. You can choose your own doctor without paying an “out-of-network” co-pay price. The PPO and HMO also require you to share in the loss for certain procedures. They’ll cover 80% of a specified procedure, and you’re responsible for 20% of the cost of the procedure.

2) The HMO: The HMO was made popular with small co-pays and managed care within a defined network of providers. However, the downfall is that you must see a doctor in the provider’s preferred network, or they’ll charge you much higher co-pays to see out-of-network doctors. Plus, getting a referral to see a specialist is a pain in the butt.

3) The HRA or HSA Plan: Many companies are beginning to offer a high-deductible health coverage plan with a health reimbursement account or health savings account. This is a great option for those with enough cash to cover the high deductible, but want the flexibility of seeing whatever doctor they want, and keeping a portion of the premium they put into their health coverage. You pay for a cheaper premium health insurance plan that covers all of your expenses after you meet the deductible.

For an HSA, you set aside a portion of the premium you would have normally paid for a more expensive PPO or HMO plan, into a savings account that grows with interest, tax-free. You keep the money over the years, and you can use it for any medically related expense, including the deductible for your major medical plan.

For an HRA, your employer funds the account to cover a portion of your deductible or other expenses, and you use it as needed. This reduces the amount you pay out of pocket for the deductible, and it reduces the amount of premium you and the employer pay. The HSA is a great option for someone who is making the transition from the corporate world to the self-employment world.

Those are the three most common policy types, but there are many others to choose from.

Filling the Coverage Gap

If there will be a gap in health coverage for you or your family, don’t be like my friend. The most responsible financial choice you can make for you and your family is paying for health coverage with no gaps. In 1986, Congress passed the Consolidated Omnibus Reconciliation Act that allowed certain individuals to temporarily extend their group health coverage plans at a comparable group rate. This program is otherwise known as COBRA coverage. How they threw in the word “omnibus” in there, I have no idea. Educate me if you know.

Anyway, if you know that you’ll be out of work for a little bit or you’re making a transition to self-employment, you can temporarily extend your benefits at similar group rate plans. Remember, if your company was originally paying for a portion of your premium, you’ll see that the premium you pay will significantly increase, because your employer is no longer paying the majority of your premium. You can visit COBRA’s website to gain more information about this crucial plan to help you maintain health coverage.

Take Advantage Of the Remaining Health Benefits At Your Old Job

• Get a physical before you quit.
• Get a teeth cleaning before you leave if you have dental insurance
• USE ALL OF THE MONEY in your flex savings account. This was YOUR money that funded this account. Don’t let it go to waste. Your employer WILL NOT reimburse you this money if you leave the company in the middle of the year. You can almost any health-related item from the FSA, so buy a new pair of glasses/contact, stock up on vitamins, and buy over-the-counter medications that you use on a regular basis.
• Resolve any prior physical issues on your old health plan before leaving that company.

The Bottom Line

Do not leave yourself unisured with health care. I know that health care is a hot topic during this presidential election year, but the bottom line is that it’s your responsibility to make sure you have health coverage. If you find yourself struggling to pay the premiums, look at your budget with an unbiased eye, and weed out some expenses that are not necessary.

Take advantage of any premium paid by an employer, and make sure that health care benefits are a high priority when looking for a new job or career. Don’t be shy to ask plenty of questions to potential employers about their health care plan. In my opinion, the other benefits are secondary to this benefit. If you love the company, but they don’t offer a health plan, ask them for a monthly allowance as part of your compensation plan. Do the responsible thing, and square away your health care situation when changing your job or career.

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