Advertiser Disclosure

Many of the card offers that appear on this site are from companies from which Nova Credit receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). Nova Credit does not include all card companies or all card offers available in the marketplace.

Negotiating healthcare as part of a job offer

Share

The American Healthcare system is old and complex. How can newcomers to the U.S. leverage nuances to negotiate healthcare benefits as part of their compensation? We uncover 5 crucial areas.

Negotiating healthcare as part of a job offer

We and all of our authors strive to provide you with high-quality content. However, the written content on this website solely represents the views of the authors, unless otherwise specifically cited, but doesn’t represent professional financial or legal advice. As we cannot guarantee the accuracy or completeness of the published articles or sources referenced, please use the information at your own discretion.

Healthcare in the U.S. is a unique and expensive system — one most Americans can’t fully decipher — so it presents even more challenges for newcomers who are used to some version of socialized medicine. Part of what makes the American healthcare system so different is that coverage makes up a significant portion of an overall salary package. Understanding how healthcare is structured, taxed, and factored into your overall salary package will allow you to best negotiate for a suitable package.

Healthcare is only one of many issues that you have to deal with when moving to the US, with transferring your credit history from your home country to the US being another one.

How much must an employer contribute to health insurance?

If you’re offered a full-time job in the United States, healthcare is typically included in your offer package. This often accompanies other extras like a 401k and vacation time. Employers rarely provide full coverage. Instead, most make “employer contributions.” Employers will choose a health insurance plan and cover 75% of costs, for example. You, the employee, will be responsible for the rest. Your contributions are subtracted from your paycheck pre-tax, which means you are taxed on income minus the healthcare expenses subtracted from your check. In other words it reduces your tax liability.

According to the Journal of American Medicine (JAMA), healthcare costs rose nearly a trillion dollars from 1996 to 2015. As a result, in 2019, employer contributions are down and employee contributions are up.

Additionally, for many salaried employees, raises are applied to healthcare instead of base pay. Employers receive tax incentives on your health insurance. Wages do not provide tax incentives, so your business may choose to apply your “raise” to healthcare rather than your personal bottom line.

How do you understand your compensation package when it comes to healthcare 

Trying to navigate the American healthcare system might feel as daunting as a medical school exam, so we’ve broken down healthcare as part of a salary package into five key steps:

1. What healthcare is your employer offering?

As employer contributions become more variable with increasing costs, understanding what your employer is offering is essential. Key things to pay attention to include:

  • Premiums, the per-paycheck cost of coverage.
  • Deductibles, the amount you'll need to spend personally before your insurance starts covering costs.
  • Co-insurance, what it costs you every time you seek care.

Additionally, if you have a family, take note of cost increases and coverage options, as they may vary.

2. Consider your healthcare in the context of the overall package

Is your offer in line with standard market rates? A higher salary may be deceptive if the benefit package is slim, as any added wages would be eaten up in healthcare costs (and probably then some).

3. If information is unclear, ask to speak to a benefits specialist

Benefits are often deliberately complex and difficult to parse. Once you’ve signed an offer it is difficult to change. Understanding benefits adds value early in the process, so if you’re unclear, this is the time to investigate.

4. Do not try and negotiate your employer contribution

Unfortunately, this is something your HR representative or hiring manager will have little control over. You will be more likely able to negotiate increased base pay to accommodate a less-than-stellar employer contribution, or increased vacation time. Focus your energy in these areas.

5. Use your deductions as a bargaining chip

According to Denise Dudley, author of Work It! Get In, Get Noticed, Get Promoted, “It’s possible that by explaining ‘deduction realities’ to your hiring manager, you just might nudge the base up by a few dollars – and every little bit counts toward a victorious negotiation.” Deductions include cost of living, taxes, and transit. The biggest deduction reality tied to your paycheck is healthcare. A successful negotiation requires due diligence and preparation of facts and figures.

For example, if you’re switching companies, and your new employer has offered a considerable raise but has smaller employer contributions, you may find your raise is chewed up in healthcare expenses. This highlights the role healthcare has in your overall package.

A note for freelancers

Determining your freelance rate can be a delicate dance. Because your tax liability will be much higher than full-time employees, your rate needs to take this into consideration. Additionally, as a freelancer you are responsible for your own healthcare. Make sure you take this into consideration as you will not benefit from the pre-tax employer contribution structure.

<cta-arrive>

Code (ID Name): <call-to-action>

New to the U.S. and looking for a credit card?

Explore credit cards that accept international credit history.

Code: <call-to-action-a>

DID YOU KNOW?

You can use your international credit history to apply for a U.S. credit card

Credit history used to stop at the border—until now. Your existing international credit history could help you get credit in the United States.

Code: <cta-amex>

New! You can use your international credit history from Australia, Canada, India, Mexico and the UK to apply for an American Express ® Personal Card in the U.S.

Code: <cta-mpower>

Use your international credit history to apply for a loan to fund your studies in the U.S. with MPOWER Financing.

Code: <cta-realestate>

Use your international credit history as part of your rental application

Code: <cta-arrive>

New to the U.S.? Subscribe to our newsletter, Arrive, for newcomer news and guides to decoding life in the U.S.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Code: <cta-boundless>

Applying for citizenship or a marriage-based green card

File online and save thousands in fees through Boundless

Learn More

Article Snippets

Code: <cta-articles>

Code: <cta-facts>

Code: <cta-uscis-time>

Processing Time:

When can you see updates to your USCIS case status?

Enter your details to check your USCIS case status and receive notifications from Nova Credit.

Thank you! Your submission has been received! Please check your email for next steps.
Oops! Something went wrong while submitting the form.

Code: <cta-uscis-status>

Check your USCIS case status update

Enter your details to check your USCIS case status and receive notifications from Nova Credit.

Thank you! Your submission has been received! Please check your email for next steps.
Oops! Something went wrong while submitting the form.

Code: <cta-h1b-status>

Check your H-1B case status update

Enter your details to check your H-1B case status and receive notifications from Nova Credit.

Thank you! Your submission has been received! Please check your email for next steps.
Oops! Something went wrong while submitting the form.

Code: <cta-h1b-times>

Check your H-1B case processing time

Enter your details to check your H-1B processing time and receive notifications from Nova Credit.

Thank you! Your submission has been received! Please check your email for next steps.
Oops! Something went wrong while submitting the form.

Code: <cta-build-credit>

Build your U.S. credit history

Where are you from?

Depending on where you are from, you might have different opportunities to build your credit history in the U.S. For example, selected banks accept credit history from selected international countries, meaning you might not even have to build credit in the U.S. to get approved for a credit card.

Select your country to receive your personal credit builder guide in your inbox.

Thank you! We sent you an email with a guide and instructions on how to get started. Check your inbox!
Oops! Something went wrong while submitting the form.

Code: <cta-how-to-build>

How should you build credit in the U.S.?

There are multiple ways to build credit, each with their own hurdles. Enter your details to see what’s the best for you.

Thank you! We sent you an email with a guide and instructions on how to get started. Check your inbox!
Oops! Something went wrong while submitting the form.

Code: <cta-no-ssn>

No SSN? Find out which card is best for you

Thank you! We sent you an email with a guide and instructions on how to get started. Check your inbox!
Oops! Something went wrong while submitting the form.

Code: <cta-free-consultation>

Free Consultation

The Alcorn Immigration Law team knows immigration yields innovation. We help you obtain a visa, green card or citizenship so you, your employees, and your family can live and work in the U.S.

For a free consultation to explore the best immigration options given your circumstances and goals, contact us and mention Nova Credit.

Thank you! We sent you an email with a guide and instructions on how to get started. Check your inbox!
Oops! Something went wrong while submitting the form.

Code: <cta-j1-fica-refund>

Check if your eligible for a Tax refund

Thank you! We sent you an email with a guide and instructions on how to get started. Check your inbox!
Oops! Something went wrong while submitting the form.

Code: <cta-i797-quiz>

Code: <cta-j1-tax-burden>