Evaluating Job Offers: Questions To Ask Before You Say “YES”

Prepared for the American Pharmacists Association by Christina L.Greathouse, Ph.D., Partner, Strategic Performance Group

In the excitement of receiving an appealing job offer, often the only thing we remember to ask is, “How much does the job pay?” and, “When can I start?” However, as savvy job seekers know, there is much more to consider than simply direct compensation. In addition to base salary, the difference between a good offer and a great offer often lies in the indirect compensation or benefits. So before you sign on the dotted line, make sure you have the answers to the following 74 questions.

Much of the information concerning health, disability, life, retirement, and other benefits can be found in the organization’s standard benefits brochure you may have received in the interview, or along with your offer letter. Read the material carefully and ask for clarification or more detail if you can’t answer the benefits questions listed below that interest you most.

A word of caution: It is not a good strategy to ask detailed questions about salary or benefits (questions 1-59) during your initial interviews with the organization. It will give the impression that you are most concerned about what you are getting, versus what you have to offer. Once you have effectively “marketed” yourself to the company and they are ready to extend an offer, you can probe in more detail on these issues.

Questions about the working environment (60-74), however, are appropriate at any stage in the hiring process, and in fact demonstrate thoughtfulness and depth. Remember, a good interviewer can tell as much about a candidate by the questions they ask as by the answers they provide!

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Categories Covered Within this Document Include:
Medical Insurance
Dental Insurance
Disability Insurance
Life Insurance
Retirement and Savings Plan
Employee Leave
Additional Benefits
Culture / Working Environment

Medical Insurance
When assessing health insurance plans, the more choices the plan offers, the better. Choices typically include:

§ Health Maintenance Organization (HMO): Organizations of physicians and other health care professionals that offer routine medical services at a specific site for a fixed fee for each employee visit. Often the most cost-effective, but the employee may not have a choice with regard to the doctor they see.

§ Preferred Provider Organization (PPO): A network of doctors similar to an HMO, but the employee is allowed to choose from a list of participating doctors. PPOs often offer coverage for a wider variety of services than HMOs (e.g. chiropractic care and other alternative treatments). Employees often pay a small fee (referred to as a “co-payment”) for each doctor visit.

§ Indemnity Plan: This is a traditional health plan that covers a fixed percentage (usually 80%) of health care costs. While employees often wind up paying more per doctor visit, they may select any provider they wish.

§ Flexible Benefits Plan (also known as a Section 125 or “cafeteria” plan): Under this plan, employees are offered a basic benefits plan, plus a number of “credits” or benefits dollars that they can use to purchase whatever other benefits they need (e.g. dependent coverage, vision care, orthodontic coverage, supplemental life insurance, long-term care insurance, etc.). This plan is not in lieu of the choices above, but rather is a flexible way of administering the benefits plan.

The best health insurance plans will offer a choice between a traditional indemnity plan, which allow you to visit any doctor you wish, and a managed care plan, which restricts your choices of doctors but lowers your out-of-pocket costs. Best of all is a flexible benefits plan, which allows you to spend your benefits dollars any way you wish. In addition to flexibility, look for a plan that offers prescription drug coverage and vision care.

Most organizations require employees to contribute something toward their health insurance coverage, both for themselves and/or their dependents. In lieu of high premiums, a plan may require a higher co-payment, deductible, or maximum out-of-pocket expenses. Medical costs have skyrocketed in recent years, and in some fashion or another, employers have had to pass that cost along to employees. So, look at all costs combined. If the premiums are low, the co-payments and/or deductible may be high. If you do not visit the doctor often, this might be preferable. Conversely, if you make frequent visits or take a lot of costly medications, a higher premium and lower out-of-pocket costs might be better for you.

Many organizations will allow you to deduct your health premiums on a pre-tax basis, meaning that your taxable income is reduced by the amount of the premium. If you are in a middle to top tax bracket, the savings can be significant.

o 1. Please describe the organization’s health insurance plan (HMO, PPO, Indemnity, Section 125, etc.)
o 2. When am I eligible to receive health insurance benefits (e.g. first of month after hire, after 1 month, etc.)?
o 3. Is health insurance available to part-time employees? If yes, what are the requirements (minimum of 50% FTE, etc)?
o 4. Does family health insurance include domestic partner coverage?
o 5. What is the total monthly premium I will pay for self coverage? Does it vary according to the type of plan I choose?
o 6. What is the total monthly premium I will pay for dependent (spouse or family) coverage? Does it vary according to the type of plan I choose?
o 7. How much have the premiums increased from year to year (for the past 5 years)?
o 8. For each type of plan described above, how much do I pay each time I visit the doctor (co-payment)? Has that cost increased in the past five years?
o 9. For each type of plan described above, what are the annual deductibles for employee (self) coverage, and for family coverage? Has that amount increased in the past 5 years?
o 10. For each type of plan described above, what are the maximum annual out-of-pocket expenses for employee (self) coverage, and for family coverage? Has that amount increased in the past 5 years?
o 11. What is the maximum lifetime benefit per person?
o 12. How is the health insurance plan funded (fully insured, partially self-funded, or self-insured)?
o 13. Does the plan cover prescription drugs? If so, what is the average cost per prescription to the employee? Is there a deductible? Is there an annual limit to prescription drug benefits?
o 14. Does the health plan include vision care? If so, how much do I pay each time I visit an eye doctor (co-payment)? Does the plan offer discounted prescription lenses? Does the plan cover laser eye surgery?

Dental Insurance
Some employers offer dental insurance as part of the overall health insurance plan. The premiums are included in the premiums employees pay for medical insurance. Other plans are administered separately and require an additional premium. The best plans offer comprehensive dental care, including orthodontia for both children and adults. When assessing dental insurance plans, think about how often you visit the dentist and what type of work you have done. If you are there infrequently, lower premiums and higher out-of-pocket costs might be most attractive. If you have children who require orthodontics, you want to look for a plan that provides this benefit.

o 15. Please describe the organization’s dental insurance plan. Choices typically include (see Q1 for description):

a. HMO
b. PPO
c. Indemnity

o 16. When am I eligible to receive dental insurance benefits (e.g. first of month after hire, after 1 month, etc.)?
o 17. Is dental insurance available to part-time employees? If yes, what are the requirements (minimum of 50% FTE, etc)?
o 18. What is the total monthly premium the employee pays for self coverage?
o 19. What is the total monthly premium the employee pays for dependent (spouse or family) coverage?
o 20. How much do I pay for the following services (referred to as “co-insurance”):

a. Preventive Care (e.g. cleaning, x-rays)
b. Basic Care (e.g. fillings)
c. Major Care (e.g. crowns, dentures)
d. Orthodontia

o 21. What is the maximum annual benefit per person?
o 22. What is the maximum lifetime benefit per person (typically applies to orthodontia)?

Disability Insurance
Most people do not give a lot of though to disability insurance, particularly when they are just starting their careers. However, the chances that you will need disability insurance are much greater than the chances of needing life insurance. If you couldn’t work for a period of time, how would you support yourself?

There are two types of disability insurance, short-term (STD) and long-term (LTD). STD usually provides salary continuation for up to 90 days if you were to become ill or have an accident that prevents you from working. After 90 days, LTD kicks in. The best plans cover at least 60% of your salary while you are disabled. Keep in mind, however, that disability benefits are taxable just like regular income, if the premium is paid by your employer.

In lieu of STD, some organizations require you to use sick leave, which can accumulate to 90 days if unused. Since most employees will not have accumulated 90 days of sick leave at the time they are disabled, these plans are not as attractive as standard STD.

When evaluating both STD and LTD, ask about the waiting period before you start to receive benefits. The best plans have short waiting periods. The ability to purchase additional LTD is also attractive, since the coverage offered in the standard plan might not be adequate to meet your expenses should you become disabled. Finally, look carefully at the how the plan describes disability. Inferior plans require that you be totally unable to work at ANY job, while the best plans simply require you to be unable to work at your chosen profession.

o 23. Please describe the organization’s short-term disability (STD) plan.
o 24. When am I eligible to receive STD coverage (e.g. first of month after hire, after 1 month, etc.)?
o 25. What is the total monthly premium I will pay for STD and LTD?
o 26. Is STD available to part-time employees?
o 27. How is the STD plan funded? (insurance, self-funded salary continuance, or both)
o 28. What is the waiting period before short-term disability is paid (e.g. 1st day of accident/8th day of sickness; after all sick leave is exhausted, etc.)
o 29. How much does STD pay (e.g. percentage of salary, flat amount, etc.)?
o 30. Please describe the organization’s long-term disability (LTD) plan.
o 31. When am I eligible to receive LTD coverage?
o 32. Is LTD available to part-time employees?
o 33. What is the waiting period before long-term disability is paid (e.g. 30 days, 60 days, 90 days, etc.)
o 34. How much does LTD pay (e.g. percentage of salary, flat amount, etc.)?
o 35. What is the maximum monthly benefit?
o 36. Can I purchase additional LTD insurance?

Life Insurance
Evaluating life insurance is fairly simple. The more the plan pays should you die, the better. The ability to purchase additional life insurance is also attractive, since many people want more coverage that what is provided in the standard plan, particularly if they are the sole breadwinners in their family.

o 37. Please describe the organization’s life insurance plan.
o 38. When am I eligible to receive life insurance coverage (e.g. first of month after hire, after 1 month, etc.)?
o 39. Is life insurance available to part-time employees?
o 40. What is the total monthly premium the employee pays for life insurance?
o 41. What is the maximum life insurance benefit (e.g. annual base salary, 2X annual base salary, etc).
o 42. Can I purchase additional life insurance? If so, what is the maximum amount? How much does it cost?
o 43. Does the organization offer accidental death and dismemberment insurance? If so, what is the maximum benefit?

Retirement and Savings Plans
Retirement plans are often challenging to evaluate, since they can be complex. But, a good retirement plan can be worth 10% of more of your salary, so it is well worth your time to analyze it carefully. The keys to a good retirement plan are flexibility and portability. In addition, the most attractive plans include a significant employer contribution, with or without the requirement that you contribute as well. Accessibility to the funds in your account is also important. Referred to as “vesting”, some organizations allow the employee to own the fund immediately, others require 5 years employment with the organization before the employee owns 100% of the employer contributions.

Companies often offer one or more of the following plans:

§ Defined benefit pension plan: The retirement income an employee receives is determined by a specific formula such as years of service, average earnings during a specific period, and age at retirement. The benefit to this plan is that it is entirely funded by the employer; you don’t have to make any contributions. The disadvantage is that the plans often require a long period of employment (e.g. 20 years) before you own the fund. Should you leave prior to that, you lose the benefit.

§ Defined contribution plan: The retirement income an employee receives is determined by the funds accumulated in their account at the time of retirement. Contributions may be made by both employees, employers, or both (as defined by the plan). The advantage to this plan is that you have more control over how much is in the fund, since you can typically make contributions. You may also be able to choose how the money is invested (e.g. choice of mutual funds). If you leave the company before you retire, you are still entitled to some or all of the retirement benefits if you are vested at the time of termination.

§ Section 401(k) or Section 403(b) plan: These tax-deferred pension plans allow employees to save through payroll deductions that are made before the employee’s wages are taxed. Employee contributions are often matched to a certain extent by employers. 401(k) plans are most common, but some non-profits offer 403(b) plans which operate the same way (until recently, non-profits were prohibited from offering 401(k) plans). Employee contributions are often matched by employers. The main advantage is that they are portable, meaning that you can take the money with you when you go. You also have more control over how the money is invested (e.g. choice of mutual funds) than you would have in a defined benefit pension plan. Plus, some plans allow you to borrow funds against your account. However, there are often limits concerning how much you can save each year ($10,000 or the maximum permitted by the plan), which makes them less generous than some defined contribution plans. In addition, there are penalties for withdrawing funds prior to retirement.

One other element to consider when evaluating retirement plans is how they are funded. In theory, defined benefit pension provide more predictability and security because you are guaranteed benefits based on the plan’s payout formula. However, as scandals like Enron demonstrate, pension funds of some organizations are not adequate to cover their obligations. Similarly, defined contribution and 401(k) plans guarantee nothing. The accumulation of funds depends entirely on how much money goes into the fund and the rate of return on investments, which as we know during the most recent recession has been negative.

o 44. Please describe the organization’s retirement plan (defined benefit, defined contribution, 401(k), other).
o 45. When am I eligible to start participating in the retirement plan (e.g. first of month after hire, after 1 month, after 1 year, etc.)?
o 46. Is the retirement plan available to part-time employees?
o 47. How much may I contribute to the plan?
o 48. How much does the organization contribute to the plan? Must I contribute before the organization will contribute?
o 49. When does the money in the plan belong to me (vesting)?

Employee Leave
There are two key questions to consider when evaluating leave policies: how many days are offered, and can leave be accumulated and carried over and/or be converted to cash? In addition, you may want to inquire about special leave such as for jury duty, bereavement, maternity/paternity, etc. Progressive organizations often offer combined vacation, sick and other leave, which they simply call “paid time off” (PTO). This provides more flexibility, allowing employees to use leave according to their needs.

o 50. Please describe the organization’s vacation policy. How many days per year of service are offered? How does vacation accrue (e.g. 4 hours per pay period, 1 day per month, etc.)?
o 51. Can employees accumulate vacation? If so, how much can they carry to the following year?
o 52. What is the company’s policy regarding compensation for unused vacation leave if I leave the company? Can employees convert unused vacation leave to additional compensation?
o 53. Please describe the organization’s sick leave policy. How many days per year of service are offered? How does sick accrue (e.g. 4 hours per pay period, 1 day per month, etc.)?
o 54. Can employees accumulate sick leave? If so, how much can they carry to the following year?
o 55. What is the company’s policy regarding compensation for unused sick leave if I leave the company? Can employees convert unused sick leave to additional compensation?
o 56. What other types of leave does the organization offer (e.g. holidays, jury duty, bereavement leave, personal days, paid or unpaid maternity leave, paid or unpaid paternity leave, etc.)
o 57. Does the organization offer compensatory leave (paid time off in lieu of compensation for working overtime, which applies to exempt employees only)?
o 58. What is the procedure for requesting time off? Do I have to arrange for my own replacement?

Additional Benefits
There are a host of other benefits employers may offer, which should be evaluated according to your needs and interests. For example, if you work in a city and parking is at a premium, paid parking may be worth up to $200 a month. Similarly, if you are earning a degree or obtaining additional skills, tuition reimbursement might be a critical benefit to you. Less tangible but perhaps just as valuable are benefits like telecommuting, a flexible work schedule, and/or casual dress.

Finally, before wrapping up your analysis, you should find out if any of the benefits offered by the organization are expected to change significantly in the next two to three years. It would be an unpleasant surprise to find out one to two years into the job that the benefits you were counting are no longer as generous.

o 59. Does the organization offer any of the following benefits? If so, please describe:

o a. Sign-on incentives: What type of employment requirement is required?; how is it paid out?; what is the employee’s responsibility for repayment if they don’t meet the employment criteria?
o b. Relocation incentives: What expenses do they cover?; are the payments a lump sum or exact amount only?; are the payments adjusted to offset tax implications?
o c. Incentive compensation (bonuses)
o d. Stock option programs: What are they, and if offered, how are they structured?
o e. Company car
o f. Transportation allowance
o g. Parking
o h. Health/fitness club membership
o i. Tuition reimbursement
o j. Professional certification fees (e.g. certificate training, NISPC, BPS)
o k. Professional licensure fees
o l. Professional society or association dues: Does the employer reimburse for all or part of annual dues?
o m. Professional meeting attendance and organizational participation
o n. Promotion of interaction with other health professionals and the community (e.g. talks to the public, detailing physicians, etc.)
o o. Severance pay
o p. Unpaid leave of absence/sabbatical
o q. Computer equipment for home
o r. Cell phone
o s. Child care
o t. Casual / business dress
o u. Telecommuting
o v. Flexible work schedule

o 60. Are there any benefits you currently offer that will be eliminated or reduced in the near future?
o 61. Are there any benefits you currently offer that will be enhanced in the near future? Do you plan to add any new benefits?

Culture/Working Environment

o 62. How would you describe the culture of the organization?
o 63. What do people like about working here?
o 64. What do people wish they could change about the organization?
o 65. How long is a typical work week?
o 66. What is a typical work schedule?
o 67. How strong is the team/department that I will be working with (are they technically competent, do they have good management skills, etc.)

Management Style (ask the person to whom you would report):

o 68. Describe your management style.
o 69. How will I know I have been successful at this job after I have been here a year? What are your performance expectations?
o 70. What do you most value in an employee?
o 71. What bothers you the most?
o 72. May I see a copy of the performance review form you use?
o 73. How do you decide how to award salary increases? Promotions?
o 74. If I do a great job, where can I expect to be in 3 years? In 5 years?
o 75. Why do you like working here?
o 76. What frustrates you?
o 77. What do you consider to be the key selling points of the job?