When considering a new job to improve your financial situation, you had better consider more than just salary.
New hires who focus on salary alone may actually find themselves in worse financial shape after a job switch, according to a new study from the National Association of Insurance Commissioners (NAIC).
The research discovered that while 73 percent of job switchers spent time thinking about salary, only 41 percent spent as much time considering insurance benefits. In addition, less than 30 percent thought as much about out-of-pocket costs or the dates when insurance coverage would become effective before making the move.
Adam Hamm, president of the NAIC and North Dakota Insurance Commissioner, said employees too often think only about salary when considering a new job.
"We urge consumers to consider all the financial implications of a job change, including insurance," Hamm said. "Total compensation is more complex than salary alone."
Research from the Bureau of Labor Statistics shows that insurance benefits can average nearly 10 percent of total compensation. The NAIC said ignoring this key component of the financial picture can cost job seekers. Nearly 25 percent of the job switchers surveyed said after accepting a new job, insurance-related changes worsened their overall financial situations.
To help job seekers avoid surprises, the NAIC advised workers to ask several questions before accepting a new position. Beyond salary, individuals should ask about the financial implications of making this job change, what options they have for covering medical expenses while between jobs and if their family will be protected should something catastrophic happen to them between jobs.
In addition to those questions, the NAIC said employees considering a new job should take several steps before saying goodbye to a current employer, including:
- Before accepting a new job, compare your current health plan with the new plan offered to ensure the available mix of deductibles, co-pays and coinsurance will be cost effective in meeting your needs.
- See if your current group life insurance plan has a conversion privilege. If so, you may have up to 31 days after leaving your job to apply for coverage.
- If your job change includes a move, check your homeowners' policy to make sure personal possessions are covered in-transit. If not, consider a floater policy.
The study was based on surveys of 251 employees over the age of 18 who left a job voluntarily in the past five years
Originally published on Business News Daily