For those needing health insurance during the transition from college to work/grad school, here are some options (these are just a few to get you started) to consider as you begin your research:

· Some states have laws that allow for parents (depending on size of employer) to continue to provide medical coverage for their children even after they’ve graduated from college until age 25.  Minnesota is one of these—check with your parents if this is an option for you.

· Blue Cross/Blue Shield – this organization offers health insurance for young adults through programs such as “Simply Blue” and “InstaCare”.  Go to www.bluecrossmn.com for information.

· Minnesota Care – depending on income, you may be eligible for health insurance through the Dept. of Human Services. Go to: www.dhs.state.mn.us/ and click on the “A-Z Topics-Minnesota Care.”

Health insurance is the most expensive benefit you will pay for, but it will be less costly through plans offered by an employer. 

There are three common types of medical insurance plans:

· HMO (Health Maintenance Organization): If you sign up with an HMO, your employer or               insurance company will provide you a list of doctors (often referred to as PCP’s, or primary care           physicians) approved by the plan.  These are called your “in-network” doctors.  There are also a variety of options regarding utilizing doctors in other networks for referrals, etc. Among basic health insurance plans, the standard HMO generally has the lowest cost.

· PPO (Preferred Provider Organization): Your employer or insurance company will provide you with a list of doctors.  This plan offers a bit more flexibility because you can go to an “out-of-network” doctor (a physician that is not on the provided list) and the insurance company will still help you pay for some of the bill.  If you decide to go to an “in-network” doctor, they will pay a larger percentage of the bill.

· Standard deductible plan: You will have a minimum deductible (dollar amount you need to pay before the insurance kicks in), and after you have met the set amount during the course of the year, the insurance company will start to pay a certain percentage of any subsequent medical bills.

It is also important to check what kind of coverage the plan provides:

Basic health insurance: covers routine exams, hospital room & board and care, surgery

Major medical insurance: covers treatment for long, high-cost illnesses or injuries, in-patient and out-patient expenses (i.e. physical therapy, prescription drugs, special nursing care, etc.)

Comprehensive medical insurance: a combination of basic health and major medical insurance.  This type of plan is more expensive than either the basic or major, but is usually less expensive than the same coverage purchased in two (or more) policies.

Dental, vision, and prescription plans vary by employer. 

Disability Insurance

Disability income insurance provides income payments when an employee has an illness or injury that interferes with work.

· Short-term disability insurance  This benefit is usually provided by your employer.  It ensures that you will be paid a percentage of your salary if you become temporarily disabled, meaning you are not able to work for a short period of time due to sickness or injury (excluding on-the-job injuries, which are covered by workers compensation insurance). A typical policy provides you with a portion of your weekly salary (usually from 50 to 66% for 13 to 26 weeks).  You generally start receiving money from your policy within 1 to 14 days after becoming sick or disabled. The actual time for coverage to be activated depends on whether you suffer an illness (not immediate) or injury (immediate).

· Long-term disability insurance Long-term disability insurance ensures that a portion of your income will be replaced if you become disabled for an extended period of time.  It may be offered through an employer or purchased individually. 

Life Insurance

Life insurance is an agreement you make with an insurer; the insurer agrees to make a financial payment to your designated beneficiaries if you die, and you agree to pay premiums at regular intervals.  It is smart to buy life insurance at a young age because it tends to be cheaper than if you wait to buy it.  It will allow you to purchase additional life insurance without being required to prove your health status.  Some employers offer life insurance for free for up to one year salary coverage.  You will probably have the option to increase your life insurance incrementally (usually based on income).  Employers may also offer group life insurance at an inexpensive rate. 

 RETIREMENT PLANS

Retirement may be the farthest thing from your mind right now, but retirement planning is important because it impacts the quality of your later years in life.  It is estimated that you will need between 60 and 80 percent of your annual income to live comfortably during retirement.  Retirement plans are vehicles of investment that allow employees to set aside a percentage of their monthly salaries to save for the future and defer taxes. 

The two basic types of retirement plans, Defined Contributions Plans and Defined Benefit Plans are explained below.

 Defined Contribution Plan

This type of plan allows you to defer some of your salary into the plan.  The amount that is contributed is defined either by you or your      employer.  The value of your retirement plan will depend on the market value of your investments and any matching contribution by your employer.

Defined contribution plans include the 401(k), IRAs and Simple IRA, profit sharing plans, Simplified Employee Pension (SEP) plans, and money purchase plans.

401(k) Plan

The 401(k) is one of the most popular retirement plans.   401(k) plans vary by organization.  They offer you the chance to invest pre-tax dollars in a selected group of investments.

· Your employer may require you to work for a set amount of time (six months or one year, for example) before you can enroll in the plan. Other employers automatically sign you up (if you don't want to participate you must request out of the plan).

· Your employer may match some part of your contribution, but there is no requirement for them to do so.  Plan providers can set a vesting period. Vesting refers to a time requirement set by the employer before any matching funds are property of the employee. The employer may schedule a gradual vesting (for example, 20 percent per year) or a complete vesting at the end of a set period (for example, 100 percent after three years). Your contributions, however, belong to you and are not subject to vesting.

· The 401(k) plans are qualified retirement programs, meaning your contributions and any matching funds from your employer grow in a tax-deferred environment. You pay ordinary income taxes on withdrawals after age 59½, and if you choose to withdraw your money earlier, you may be subject to a ten percent penalty (in some 401(k) plans, you can borrow from your account in the event of an emergency--you will pay interest, but you are paying it to yourself).

· You decide how much money you want deducted from your paycheck and invested during each pay period, up to the legal  maximum (the IRS sets an annual dollar limit each year). You also decide how to invest that money, choosing from your plan's different investment options.

· The money you contribute to your 401(k) account is deducted from your pay before income taxes are taken out. This means that by contributing to a 401(k), you can actually lower the amount you pay each pay period in current taxes.

Defined Benefit Plan (or Pension)

The employer determines your retirement pay/pension based on a formula that may include years of service, salary, or other employment factors. This calculation defines your benefit. In most cases, you do not contribute to the plan.

 OTHER BENEFITS might include:

Paid time off (vacation policy, holidays, personal leave days, sick leave), tuition reimbursement, insurance at a discounted rate (automobile, renter’s insurance), long-term care insurance, prepaid legal service, transportation discounts, credit union membership, and product/service discounts.