KANSAS CITY, Mo., June 4, 2014 /PRNewswire/ — As the economy shifts, many Americans are voluntarily leaving jobs to improve their overall financial situation. But, according to a recent survey by the National Association of Insurance Commissioners (NAIC), new hires who focus on salary alone actually may find themselves in worse financial shape after a move. The NAIC urges consumers to consider total compensation, including insurance benefits, before accepting what could turn out to be a not-so-lucrative job offer.
According to the survey, 40 percent of voluntary job switchers cited “improve my financial situation” as a key influence on their decision to quit.1 Issues occurred when respondents took a too-narrow view of what impacts that situation. The survey reports that while 73 percent of job switchers spent some or significant time thinking about salary, only 41 percent spent as much time considering insurance benefits, and less than 30 percent thought as much about out-of-pocket costs or insurance coverage effective dates before making the switch.
“All too often, people only think about salary when considering a new job,” said Adam Hamm, NAIC President and North Dakota Insurance Commissioner. “We urge consumers to consider all the financial implications of a job change, including insurance. Total compensation is more complex than salary alone.”
According to the Bureau of Labor Statistics, insurance benefits can average nearly 10 percent of total compensation.2 As some NAIC survey respondents learned, ignoring this key component of the financial picture can be costly. Nearly 25 percent of job switchers surveyed said after accepting a new job, insurance-related changes either “slightly or greatly worsened” their overall financial situation.
To help consumers avoid surprises, the NAIC developed Get Ready resources for changing jobs. The resource kit includes a variety of tips and tools, such as challenging questions to ask yourself and a Take Action Now checklist of things to do before deciding to stay or go.
Questions to consider include:
- Beyond salary, what are some other financial implications of making this job change?
- What options do I have to cover medical expenses while I’m between jobs?
- If something catastrophic happens to me between jobs, is my family protected?
Some steps to take before saying good-bye to a current employer include:
- 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.
- Before accepting a new job, compare your current health plan with the new plan offered to assure the available mix of deductibles, co-pays and coinsurance will cost-effectively meet your needs.