By RON LIEBER
Published: June 14, 2008

To the hundreds of thousands of young people who have landed entry-level jobs that come with health insurance and a retirement plan, I offer my congratulations. Things are tough out there right now, so you must be doing something right.

To the employers who are about to put them to work, however, I urge you to take another look at the pile of employee manuals that detail all your fabulous benefits. They’re boring. They’re confusing. And they start in the middle instead of defining things from the beginning.

Benefits administrators, from health insurance companies to 401(k) providers, are trying to help improve the situation, but most employers still have a long way to go.

So below, I offer a proper primer on health insurance, taxes and retirement plans for employees starting their very first jobs. Please pass it out with my regards.

Health Insurance

Priority No. 1 is to protect yourself from some huge expense that you cannot possibly afford. That is what insurance, in any form, is supposed to do.

As for health insurance, most of you probably won’t run up big bills anytime soon. But some of you will get appendicitis or crash your cars or end up in a psychiatric hospital for a stretch of time. And if any of those things happen, insurance should pay for a big chunk of the treatment.

Health insurance is expensive. Employers generally pay for some or most of it, but usually not all. You’ll probably pay your share of the cost in at least two ways.

First, your employer will probably take some money out of your paycheck regularly. This is called the premium. Then, there’s something called a deductible, where each year you have to pay at least the first couple of hundred dollars toward many kinds of medical expenses, like prescription drugs or doctor fees or payments to mental health practitioners. Finally, there’s the co-payment, a $15 (or $50 or $100) fee you pay for every doctor visit or prescription.

You may be able to choose from a few different types of insurance plans.

If you do, you will almost certainly be confused by the options. Most employers have a human resources or benefits staff member who can help. Don’t be shy. The only stupid question is the one you don’t ask. Ignorance can easily cost you hundreds of dollars.

For some more background, I’d also check out allaboutthebenefits.com, a Web site that the health insurance giant Aetna and the Financial Planning Association created for the young and confused.

Many employers now offer a new kind of insurance that pairs high deductibles (often more than $1,000) with some sort of savings account that you can use to pay for health expenses before your insurance starts contributing. Critics complain that these plans work only for the young and healthy. If you’re young and healthy, though, there’s no shame in signing up.

For more on insurance, taxes and retirement, take the link to the full story…