Megan Riksen:

Hello and welcome to the work like a Laker podcast. I'm Megan Riksen. Today my co-host is Brian Bossick. Hi Brian.

Brian Bossick:

Hi Megan.

Megan Riksen:

So in today's episode we're going to get into some of the details of employment benefits with a specific focus on health insurance and retirement benefits. Because these two types of benefits might be offered by your employer, but they can also be so confusing. The language alone when talking about benefits is tricky because there's all this new terminology, right? So there's premium, deductible, employer match, out of pocket. So just a lot to cover.

Brian Bossick:

And to help us break down what it all means, we've brought in a guest Nick Ekstrom is the benefits manager here in the GVSU Human Resources Department. Hi Nick, and thanks for joining us. Could you give us a brief introduction of yourself?

Nick Ekstrom:

Yeah, thanks for having me, Megan and Brian. I'm really excited to be here. Like you said, Megan, like benefits are just kind of a, a whole new horizon for people entering the workforce to figure out. So excited to talk about this topic and yeah, I've, I've been working in the benefits office here at Grand Valley for seven years now. Okay. and before that I was working in, in a payroll position. So and, and I'm a a Grand Valley grad, so Oh, that's

Megan Riksen:

Good. Perfect.

Nick Ekstrom:

Exactly. It was cool coming to work at Grand Valley, kind of like returning home.

Brian Bossick:

Absolutely.

Megan Riksen:

Good deal. So yeah, let's dig in. Cause I, we're trying to cover a lot, I think in a short amount of time here. Mm-Hmm. <Affirmative> let's start with health insurance if we can. Okay. So I guess can you just start and, you know, full disclosure, and Brian and I were talking about this before, we feel like we know enough from like a personal perspective because we've, you know, had our own health insurance for a while, been working for a while, have our own retirement plans, but we're really excited for you to be the expert and like really teach us all of this. So can you kind of just start with what types of health plans a company or organization might offer?

Nick Ekstrom:

Yeah, so there's a, a couple different ones and, and I think the ones that you're gonna see most when you're out on the job hunt are gonna be PPOs high deductible health plans or hdhp and, and HMOs. Okay. And really kind of what to expect with each of those. If you're going into an HMO, it's gonna be like really managed care. You're gonna have to have a primary care physician. Okay. And they're basically gonna, if you need to go see a cardiologist, they're gonna tell you what cardiologist you have to go to. Okay. So, okay. Kind of the, the health insurance landscape has kind of been getting away from HMOs a little bit. Yeah. Ppos have become more popular and that's kind of more open network. So you have a lot more choice in who you're going to for your care.

Nick Ekstrom:

You're able to really see whatever provider you want as long as you can make an appointment. That's great. And then also high deductible health plans or HDHP, those are, have really just been skyrocketing in popularity over the last decade or so. They're structured as PPO plans but there's higher deductible that you're gonna be responsible for before the plan starts paying benefits. Okay. So it's kind of called a consumer driven healthcare. It's supposed to kind of make you a better healthcare shopper since you're responsible for a larger chunk of your, your healthcare needs right out of the gate.

Brian Bossick:

Oh, that's interesting. Mm-Hmm.

Megan Riksen:

<Affirmative>. Yeah. That's great. So yeah, I'm glad you mentioned that. So what are some of those factors that someone should be considering when they're looking at a health plan? Either, either preemployment, like maybe you're really doing good research, or when you actually have a job offer in hand and they're saying, here's what we can offer

Nick Ekstrom:

You. Okay. Yeah. So there's gonna be, I'm gonna throw some healthcare lingo at you that's gonna be helpful in, in understanding these plans. So probably like the two most important pieces to look at are gonna be what the deductible is for the plan mm-hmm. <Affirmative> and what the premium is gonna be for the plan. So what the deductible is, that's what you have to pay for out of pocket each year. Okay. Before the health plan's gonna start paying any of your expenses. So if you are in a high deductible health plan, for instance, and there's a $3,000 deductible, that means that every year the first $3,000 of your medical expenses, you will be paying the insurance isn't gonna cover anything until you've met that $3,000

Megan Riksen:

Deductible. So then it's possible that you might not even reach your deductible.

Nick Ekstrom:

Absolutely. Yes.

Megan Riksen:

Like hopefully, knock on wood, you're healthy and maybe you don't mm-hmm. <Affirmative>,

Nick Ekstrom:

Right? Mm-Hmm. <Affirmative>. Yeah. And I always like to say the deductible's not a target <laugh>, it's more of a safety net. Like

Brian Bossick:

That's wonderful. I've never heard that. That is Yeah,

Nick Ekstrom:

That's good. Well said. If you don't meet it, that's great. That means you were relatively healthy. But, and then really the other important factor to consider, you know, if you're maybe looking at two different job offers, you, you're choosing between and, you know, you've gotten your hands on the benefits information is what the premium is gonna be to be enrolled in their plan. Mm-Hmm. <affirmative> mm-hmm. <Affirmative>. So, and the premium is that's what they're gonna be. The employer will be deducting from your paycheck for you to have that coverage. Okay. So you know, it might be in those premiums can vary widely Sure. From employer. Employer and, you know, one employer might allow you to be enrolled in their high deductible health plan with no premium mm-hmm. <Affirmative>, so you're not paying anything to have that coverage. Mm-Hmm. <affirmative> and another employer may be charging you a couple hundred bucks a month for the coverage. Oh, yep. So, and that premium that you're paying outta your paycheck, you know, that's not going towards your deductible or co-insurance or anything like that. So

Megan Riksen:

You could literally not visit the doctor at all and you're still paying.

Nick Ekstrom:

You're still paying. Absolutely. Yeah. It's the cost to carry on the card in your wallet. Yeah. Okay.

Megan Riksen:

Yep.

Brian Bossick:

Nice. And I know one of the other terms we often hear with that is that that idea of in-network and out of network mm-hmm. <Affirmative> and why might that be something important somebody should consider?

Nick Ekstrom:

Yeah, so in-network versus out of network your costs are gonna be lower if you're staying in your, your health plans network. Okay. So you know, when you enroll in the plan, it'll be through an administrator like Blue Cross Blue Shield or Priority Health or Aetna, and they're gonna have their network of providers. And that network of providers is, you know, essentially a list of doctors and specialists that you can go to that work with that health plan and there's lower rates for you to pay if you're going to in-network providers mm-hmm. <Affirmative>, you'll get discounted rates at the provider. And also your deductible will be different if you're going to an in-network versus an out of network provider. Okay. So your in-network deductible maybe $3,000, but if you're go using out-of-network providers, it may be $6,000 mm-hmm. <Affirmative>. So Yeah. So it's really important to know, you know, what network you're in and make sure that your providers that you're seeing are, are in that network.

Brian Bossick:

No, it's interesting. It ties back to that consumer idea, right? You have a choice mm-hmm. <Affirmative>, but you, you kind of choose how you manage that money and what you do with that if you're in versus out network.

Nick Ekstrom:

Absolutely. Yeah. Mm-Hmm.

Megan Riksen:

<Affirmative>. Yeah. Good deal. So a couple of more terms. Yeah. Okay. Yeah. HSA, FSA mm-hmm. <Affirmative>, they sound very similar, but they're not.

Nick Ekstrom:

They're, they're SA's and they start with different letters.

Megan Riksen:

What does it mean? Yeah. Help us.

Nick Ekstrom:

Yeah. So HSA is an FSAs HSA stands for health savings account. FSA stands for flexible spending account. Okay. And what these both are, are there tax advantage tools for you to put money away to pay for qualified medical expenses? Okay. now, despite the name, a flexible spending account or an FSA is not flexible at all. It's very rigid. So if you had a choice between an HSA and an fsa, I would say go with the hsa. Okay. Okay. That's good. With that FSA plan, you have to say how much you'll be putting into the account That's right. Each year. And if you don't incur expenses by the end of the year to get reimbursed out of the account, you lose the money. So, yeah. Yeah. So it's a gamble unless you can really forecast what your medical expenses are gonna be.

Nick Ekstrom:

Right. You know, you, you could set yourself up for, for losing money by the end of the year. Yeah. Okay. Whereas the HSA or the health savings account is a tool that pairs with those high deductible health plans. So if you enroll in that high deductible health plan, the IRS recognizes that you're gonna be responsible for a larger chunk of your healthcare expenses out of the gate each year. Mm-Hmm. <affirmative>. So they allow you to put tax-free money into this account to help pay for those expenses. Okay. Now, the great thing about the HSA is at the end of the year, if you haven't spent that money, it just stays in the account for you and it's gonna roll over from year to year. It's not, it's never gonna go away. You can continue to use that money for your qualified medical expenses, whether you put it in this year or 10 years ago, that money will stay in the account for you. Mm-Hmm.

Megan Riksen:

<Affirmative>, that's great.

Brian Bossick:

But those only happen with a high deductible.

Nick Ekstrom:

That's correct. You can only put the, the tax free money into the HSA if you're in that high deductible health plan. And another thing to consider when you're looking at, you know, job offers and maybe, you know, looking at two different health plans, a lot of employers will actually make a contribution to a health savings account on your behalf. So that may be another thing to, to kind of look at if you're going through the the information on Sure. Employer's plans. Yeah.

Megan Riksen:

They're gonna put in a thousand dollars or something.

Nick Ekstrom:

Yeah, that's absolutely,

Brian Bossick:

That's a big amount coming outta your paycheck. Yeah.

Nick Ekstrom:

Yeah. Mm-Hmm. <Affirmative> and, and like you said, Brian Yeah. A lot of people are using the HSAs as another kind of like retirement savings vehicle. Okay. Okay. Like when you retire, which I know to the listeners that probably seems like <laugh> very, very long time away. But, you know, your, your healthcare expenses aren't gonna end in retirement. So if you have a, a pool of tax free money to pay for your oh yeah. You know, your, the healthcare expenses of your future self than which

Megan Riksen:

Likely will be more

Nick Ekstrom:

Mm-Hmm. <Affirmative>

Megan Riksen:

As we get older, we tend to need more care and inflation. Yeah. Mm-Hmm. Right, right, right. Yep. Yeah. Good deal.

Brian Bossick:

Well, with some of that in mind too how do you know what's covered in a health insurance plan?

Nick Ekstrom:

Yeah, great question. You, you just assume everything's covered, right? Great.

Brian Bossick:

Yeah, absolutely

Nick Ekstrom:

Covered on the plan. Yeah.

Brian Bossick:

You have the card, you're good. Yeah. Right.

Megan Riksen:

<Laugh> magic.

Nick Ekstrom:

Yeah. So if you ask your employer for a summary of benefits Okay. Or a schedule of benefits, that's really gonna show you everything that's covered on the plan Okay. And how the plan is going to cover different things. So one thing to know is, you know, I've been talking kind of a lot about high deductible health plans and how you're really responsible for a large chunk of your medical expenses up front. A lot of things are considered what's called preventative care and if you're going to your doctor for your preventative care services, so you know your annual physical mm-hmm. <Affirmative> your flu shot mm-hmm. <Affirmative>, you actually don't pay anything for that. So if you're looking at the, the schedule of benefits and things are listed as preventative care, you, if you're using an in-network provider, you won't pay anything out of pocket for those. Okay. And then it'll also list, you know, things that the plan covers and, and how they'll be paying for 'em. So Okay. You know, if you're looking for a plan that has acupuncture, you can look through this, schedule the benefits and see if that plan has acupuncture covered. Sure. Probably won't. But some plans do <laugh>. Yeah.

Megan Riksen:

So interesting. Yeah. Okay. Cool. That's good to know. What would you suggest someone do if that employer isn't actually offering health insurance?

Nick Ekstrom:

Ooh, yeah. So if they're not offering health insurance

Megan Riksen:

And are they allowed to do that? First of all.

Nick Ekstrom:

That's a great question. Okay. So it depends on the, the size of the employer. Okay. How many hours you're working per week. Okay. It really kind of falls under the rules and regulations of the Affordable Care Act. Okay. yep. Yeah. Which I won't get into the weeds on that

Megan Riksen:

<Laugh>. Yeah. We don't need to do that. Yeah,

Nick Ekstrom:

Yeah, yeah.

Megan Riksen:

But what do you do if mm-hmm. <Affirmative> they're not, if there someone who doesn't have to.

Nick Ekstrom:

So if they're not offering health insurance, then really your option's probably gonna be looking out at the health insurance marketplace or healthcare.gov. Okay. And you can go out there and shop around for individual plans. So a plan that's not through your employer, but you, you can get a plan for yourself or if you're under 26, you know, you're still eligible covered under parents plan. Good point. Yep, good point. And if you're, if you're married, then you know, your spouse's employer may allow you to be covered on their plan as well. Yep.

Megan Riksen:

Okay. And then do you find that it's pretty common that if you elect not to use your company's insurance coverage because you're still 24 and under your parents' plan, that you actually get some money for doing that?

Nick Ekstrom:

So that's gonna vary widely employer to employer. Yeah.

Megan Riksen:

I wouldn't say, is there a term for that? I feel like there's a term for that.

Nick Ekstrom:

Yeah. Usually it's called like a medical credit or Yeah, yeah. Or something like that. So yeah, at Grand Valley we, we offer that. Yeah. So, you know, if you're not enrolling in our plan, we give you an additional $750 a year mm-hmm. That we add to your paycheck. Mm-Hmm. And yeah, some employers do that, some don't. It really just varies from employer to employer. But yes, it's definitely something to ask about. Yeah. That's, if, if you know you are still on a parents plan and don't need it, then see what the employer great offers in, in terms of an opt-out credit.

Megan Riksen:

Cool. Great.

Brian Bossick:

I was curious, like as we've thought about all these plans, are there certain elements that you feel like are definitely things you wanna look for? So as we've talked about all the different options, like what, what stands out as a really good plan and things that students should keep in mind? Yeah,

Nick Ekstrom:

So I would say a reasonable premium. So what are you paying for enrollment in that plan? Keep an eye on the deductible and how things are paid for after the deductibles been met. Mm-Hmm. <Affirmative>. Okay. I didn't mention this earlier, but there's something called co-insurance. After you meet your deductible, is the plan paying all of your expenses or are they paying a portion of those expenses? That's

Megan Riksen:

Good point. That's like the 80:20 situation

Nick Ekstrom:

Exactly.

Nick Ekstrom:

So if you, yeah. If you see something that they say it's, you know, 80% co-insurance, uhhuh, <affirmative>, that means after you've met your deductible, they're paying 80%, you're still paying 20% of all of

Megan Riksen:

Your expenses, something significant happens. Mm-Hmm. <Affirmative> 20% could still be a lot that you need to kind of be

Nick Ekstrom:

Prepared. Exactly. And then you should kind of be looking at what that out-of-pocket maximum for yourself would be.

Megan Riksen:

Right. Good point.

Brian Bossick:

Yeah. Oof. Ualso what the, the network in your area looks like. Okay. So, you know, if, are there,are the hospitals and providers in your area going to be in-network for that health plan mm-hmm. <affirmative> that you're enrolling in mm-hmm. <affirmative>. Cause I mean that could make a big difference if, if you can't find in-network care,where you're living Yeah. Then that's gonna certainly increase your, your auto. Yeah. Makes me

Megan Riksen:

Costs makes with remote work being such a thing. Oh absolutely. You might be choosing to work in an entirely different state mm-hmm. <Affirmative> than where your employer is located. That definitely would be something to make sure.

Nick Ekstrom:

Absolutely. Yeah.

Megan Riksen:

You're evaluating

Brian Bossick:

Mm-Hmm. <Affirmative>, same if you're on your family's insurance and you're gonna stay on there and you're living and working somewhere else. That's a great point. Yeah.

Nick Ekstrom:

Great. Yeah. So that would be something to ask your parents too, if you're gonna be relocating Yeah. Post-Graduation and you're still on their plan. Yes. Is there a network where I'm moving to if I am staying on your, your coverage

Megan Riksen:

That's great. Mm-Hmm. <Affirmative>. Awesome. Well I think that was a great little bit on health insurance. I wanna make sure we talk about retirement plans though. Yeah. So kind of a similar, similar question is what I started with health insurance, but what are the types of retirement plans? Why would an employer use a 401k as opposed to something else? Mm-Hmm. <affirmative> talk us through it.

Nick Ekstrom:

Yeah. So with retirement plans, they're gonna hear a couple different types thrown around. Yeah. Usually, you know, four 401k, that's the one you're gonna hear, the most.

Nick Ekstrom:

Most. Yep. Most you also hear 403B Yep, that's right. 457B, you'd think there'd be some type of like exciting reason they're name these <laugh>. Yes. It's simply the line of the tax code that the rules for the plans fall under. And why might an employer offer one versus another? It depends on the type of employer you are. So government institutions have 457Bs, nonprofits have 403Bs and for-profit companies have 401ks. No, that's simple actually. Yeah, I always thought the 401k, there's the k I thought it was like the periodic element for gold is K, like that's where, and then I was really disappointed when I found out that no, it's just a tax code thing,

Megan Riksen:

So bummer.

Brian Bossick:

That sometimes when you think about employer kind of contribution, you hear the term employer match mm-hmm.

Nick Ekstrom:

<Affirmative>, how

Brian Bossick:

Would you define that?

Nick Ekstrom:

Yeah, so employer match is going to be what the employer is putting into that plan on your behalf. So sometimes the employer's just gonna say, you know, no matter what, if you're putting anything in or not, we're gonna put in X percent. Okay. Some employers will say, will match up to 4%, for instance. So if you're putting in 4% of your own money, we're gonna put 4% mm-hmm. <Affirmative> in for, for you as well, so mm-hmm. <Affirmative>. Okay. You'll get a total of 8%. So

Megan Riksen:

Of your total salary, the 4%, right?

Nick Ekstrom:

Correct. Okay. So yeah, so if you're making a 4% contribution, it would be 4% of your pay, each pay period, and then they would also do 4%. So if they're offering a match, I would certainly encourage you to take advantage of that. Otherwise you're kind of leaving money on the table,

Megan Riksen:

Literal free money.

Nick Ekstrom:

Well included in the package, but feels mm-hmm. <Affirmative> feels free. <Laugh>. Yeah. <laugh>. Awesome. So yeah. With retirement plans, are there ones that you're like, ooh, this is gold standard, like it should definitely have an employer match. Are there other things like an employer match that would contribute to being a good retirement plan? I guess basically if a student or someone is evaluating their company's plan mm-hmm. <Affirmative>, what should they be caring about and looking for?

Nick Ekstrom:

I mean, really the biggest thing they should be looking for is, is that match. Yeah. Okay. Outside of that, the differences are gonna come into like the type of investments that are available within each type of plan, which yeah. That can kind of be hard to get your hands on Uhhuh, <affirmative> full disclosure before you, you know, actually, you know. Yeah, that makes sense. Go on board. Yes. But I mean mm-hmm. <Affirmative> usually they, they're gonna be kind of similar. I don't think you're gonna see too much something that's really gonna drive you from, from one job to another based on Okay. Like investment options or something cool. But yeah, once you do get enrolled, things to look for are a lot of plans might have like a dedicated certified financial planner for you to meet with. Yeah. So Yeah, good point. You know, signing up for a plan, putting money away mm-hmm. <Affirmative>, that's great. Are you putting your money in the right investments? Yeah,

Brian Bossick:

Exactly.

Nick Ekstrom:

Yeah. I mean, who knows? It's like throwing a dart at a board, right? Right. Yeah. But yeah, there's professionals that can help you with that in your plan.

Megan Riksen:

Who do the research for you.

Brian Bossick:

Yeah. Great. That's right.

Nick Ekstrom:

They can yeah. Meet with you and let you mm-hmm. <Affirmative> know where you should be looking for that. So that'd be something to ask a potential employer, you know, is there somebody I can meet with for investment advice on the retirement plan? Great.

Brian Bossick:

And I think when, especially with students as you're first starting out, or even like young professionals, the idea of saving for a future that is 30 years away is, is a hard thing to kind of grasp mm-hmm. <Affirmative>. But wonder if you can kind of talk about the importance of starting to save early

Nick Ekstrom:

On. Oh, it's so important. And it's funny the way you phrased that question. You know, thinking of that future, I went to a, a conference a few years ago and talking, it was about talking to, you know, young people coming into the workplace. And when you say savings for retirement, that sounds like just such a foreign concept, it's so far away. So like phrasing it as like saving for your future self. Ooh.

Brian Bossick:

Oh, I like that is a better way to think. I like that.

Nick Ekstrom:

Yeah. When I'm putting money away, I'm like, future Nick's gonna be happy I did that.

Nick Ekstrom:

Um but yeah, the importance of, of starting early you know, I I think there's two big things to look at with this. The, the first is kind of the financial aspect of it and compounding interest or compounding earnings mm-hmm. <Affirmative>. So, you know, let's say you put a hundred dollars into the retirement plan this year, if it makes 10%, then it's $110 next year. Yeah. Makes 10% again, then the earnings are earning on themselves. So it just kind of continues to grow at an exponential rate. So the longer that money can be in there, the more it's gonna be by the time you retire. Okay. So yeah, it can really grow. And there's some interesting statistics, like if you go and look, if like somebody who starts saving $10,000 a year at the age of 25 and stops when they reach the age of 40 would have the same amount of money when they retire as somebody who started saving at like 35 and put $10,000 a year until 65.

Nick Ekstrom:

Wow. Just because of those like extra years for those to, to sit and grow on themselves. Yeah. So and then the other really important aspect of this, I think is just getting that good habit. So, you know, just kind of mm-hmm. <Affirmative> training yourself to put that money in and you know, it's not in your check, so you don't miss it. You know, when it's a Yes. A deduction coming out of your pay, it seems less painful than, you know, if it's in your bank account and then you're transferring transferring it.

Brian Bossick:

And then you have to transfer

Nick Ekstrom:

It. Yes. Yeah, exactly. So just kind of like getting it set up that way. It, you don't even see that's going and it's working for you and it's a great point. You don't have to think about it. So it's

Megan Riksen:

So true. Mm-Hmm. <Affirmative>, it really is just kind of in invisibly going, <laugh> going in.

Brian Bossick:

Yeah, exactly. Yeah. Yeah. Then it's like a pleasant surprise when you go check on it. Yeah. Like, oh, it's growing. Absolutely

Megan Riksen:

This is happening. Mm-Hmm. <affirmative>. What about students who might be scared? Like, Ooh, do I really wanna put, you know, this much money into what can be a volatile market?

Nick Ekstrom:

Yeah. That's, that's, that's

Megan Riksen:

A But maybe talk about how over time Yeah,

Nick Ekstrom:

Exactly

Megan Riksen:

What that looks like. Yeah, yeah.

Nick Ekstrom:

Historically the market always goes up so there's, there's, you know, dips and peaks and, but just generally it's going to go up. Yep. So, yep.

Megan Riksen:

So if you're talking the course of a career Yeah.

Nick Ekstrom:

Mm-Hmm. <Affirmative> the course of a career that's still gonna Yes. Earn on itself,

Megan Riksen:

Even if there's a recession.

Nick Ekstrom:

Even if right now it's bad. Right. And it's kind of, the other way to look at it is if it's bad right now mm-hmm. <Affirmative>, you're getting more for less. Yeah. So when the market's high, you know, the shares that you're buying are, are more valuable so that, you know mm-hmm. <Affirmative> 20 bucks you're putting in is buying less right now when the market's low, that 20 bucks is buying more, and when it grows you'll have, you know, more earnings potential with that. That's well said. Yeah.

Megan Riksen:

Good to think about. Yeah. Awesome. Well, anything we didn't cover that you, you feel like we should have asked you? Or did we catch it?

Nick Ekstrom:

You know, I think we, we covered a lot of good topics. Yeah. and yeah, I think when you're looking at a potential employer, you know, don't, don't just kind of look at that baseline salary, really take into account the value of the benefits and mm-hmm. <Affirmative> look at the, what your total compensation is gonna be. Not just the salary, but the add in the, the retirement contributions you might be getting. Subtract out any premiums you might be paying for the medical plan and really see what, what that kind of bottom line number's gonna be for you after you factor those into the salary.

Megan Riksen:

Awesome. Excellent. I love that. I think that's a great place to stop for today. So we really appreciate your expertise here. Nick, thank you so much for being here.

Nick Ekstrom:

Yeah, thanks for having me. That was fun. Yeah.

Megan Riksen:

Thank you. All right. And thanks to everyone for listening. We hope you tune in to a future episode soon.