Switching Jobs? Play It Smart With Health Benefits

Most employers offer their employees two very important benefits: retirement savings plans and health insurance.

What happens to these benefits when you change jobs?

Check out the basics of your new coverage

If you are going to work for a large company, you may be able to choose from a few health insurance plans to find the one that will work best for you and your family. Otherwise, you'll be stuck with whatever your new employer offers.

Even so, figure out if that plan will end up costing you money. If it falls short of your old coverage, you might use that fact to negotiate for more salary, a longer vacation or the like.

• Does your new plan have deductibles?
• Will you have a co-payment for office visits or prescriptions?
• Are your family's existing physicians included in your new plan? Some plans may allow you to visit doctors outside their preferred network if you accept a higher co-payment.
• If any members of your family take regular medications, find out if those medications will be covered by the new plan. Some plans sort prescriptions into tiers and charge different co-payments for each tier.
• Does the plan have a maximum claim amount? If so, is it per person? Per family?
• Will your new employer pay 100% of the premium for you and your family? If not, your employer may allow you to allocate pre-tax money from your paycheck toward the premium.
• Finally, does your new plan offer any perks? Some plans encourage healthy habits by reimbursing you for gym memberships, yoga classes, smoking cessation programs or weight loss programs.

Don't leave health-care savings behind

If you have a health spending account -- a flexible spending account, a health-savings account or a health-reimbursement account -- with your current employer, it's important to pay attention to the details of the plan before you change jobs.

A flexible spending account (FSA) allows you to set aside a pretax portion of your paycheck for qualified medical expenses. You can use these funds to cover any medical expenses that come straight out of your pocket -- co-pays, over-the-counter medicines, first-aid supplies and some personal-care products.

But there's a catch: If you don't use all of the money in your FSA before you move on to your next gig, you'll lose it. So be sure to spend everything in the account before you leave.

A health savings account (HSA) is like a retirement account for your health-care costs.

If you carry a high-deductible insurance policy, you're eligible to open an HSA using either pre-tax or after-tax money. You can open one on your own at a bank or other financial institution, or you might be able to open one through an employer--who might in turn help you fund it.

Either way, the funds you contribute each year can be used to pay for qualified medical expenses. And you can invest HSA money in a range of different vehicles, from cash to stocks to mutual funds.

What's more, you don't lose that money when you change jobs. If your new employer does offer an HSA and you like it better than your current account, you can roll that account into your new employer's plan -- just as you would a retirement account. Otherwise, you can simply hang onto your old account -- even if it was sponsored by your former employer.

With a health reimbursement arrangement (HRA), your employer repays you for qualified medical expenses such as co-pays or deductibles. It's designed to work with high-deductible plans, and funds remaining at the end of the year can be rolled over.

If you have money remaining in your HRA when it's time to change jobs, IRS regulations allow you to continue using those funds even after you've left the firm.

Check with your company's human resources department to get the details about how to do so.

Make sure you're prepared for any gaps in coverage

Find out when the health care coverage offered by your new employer will start, and when your current coverage ends. If the dates match up -- or, better yet, you have some overlap -- you're in good shape.

But if you'll have a gap in coverage, you might want to look into COBRA , which allows you to continue your current coverage -- including coverage for your family -- for up to 18 months (longer if you qualify for disability).

You'll have to pay the entire premium, but you'll get the group rate, rather than paying a higher individual rate.