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Medicare Made Easy

Friday, May 29th, 2009

For those individuals who are turning 65, the world of Medicare may seem overwhelming. We are here to help you understand the four parts to Medicare Health Insurance. Original Medicare is the federal health insurance program available to people 65 years of age or older. Medicare is also available to younger people with certain disabilities and people with end-stage renal disease – permanent kidney failure living with dialysis or a transplant; it’s sometimes called ESRD.

Part A is Hospital Insurance. This pays for inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
Part B is Medical Insurance. This helps pay for doctors’ services, outpatient hospital care, durable medical equipment and some medical services that aren’t covered by Medicare Part A.
Medicare supplemental insurance is designed to cover the “gaps” in Medicare coverage, such as deductible and coinsurance.
Part D is Prescription Drug Coverage – Like a Medicare Advantage plan, Medicare Part D is available only from private insurers through contracts with Medicare. Joining a Medicare prescription drug plan (Part D) is voluntary, and you pay an additional monthly premium for the coverage. You are eligible to enroll if you are entitled to Medicare hospital insurance (Part A) and/or enrolled in Medicare medical insurance (Part B).

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Posted in Employees, Employers, General, Individual, Resources | No Comments »

Assembly Bill 1672 & What it means for Small Business Plans

Monday, May 18th, 2009

Small business owners in California received extra protection under the law for their rights with group health insurance when the law AB 1672 was passed in 1992. This new requirement required that group health insurance carriers provide coverage for employees covered under a group health plan, even if they have a pre-existing condition. This new law meant that insurance companies may not deny coverage, and if there is an exclusion period for a pre-existing condition, it must be kept to six months to one year. If an employee was covered by a health plan before joining the group health plan offered by their new employer, this coverage must count towards this exclusion period, as long as the employee’s coverage was enacted within 62 days of losing the previous policy.

Under law AB 1672, a group health insurance provider must renew a group health plan for a small business, as long as two conditions are met: there has been no fraud with the policy and all the premiums have been paid. This prevents insurance companies from offering a small business a group health plan and then arbitrarily canceling it later on.

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Posted in Employees, Employers, Group | No Comments »

What Qualifies as a Tax-Deductible Medical Expense?

Friday, May 15th, 2009

When it comes to Health Savings Account health plans, one of most common questions we hear is what is a qualified medical expense? As you know, you can use your savings account to cover expenses that are not covered by your health plan, though there are limitations as to what does and does not fall under the definition of eligible medical expense. According to the IRS Publication 502, Medical and Dental Expenses, the general purpose of the health savings account is to cover “Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.” Such items that would fall under this category include:

•• Fees paid to medical practitioners
•• Costs of hospitalization or inpatient treatment
•• Dental Expenses
•• Surgery
•• Medical examinations
•• Medications
•• Medical aids
•• Transportation
•• Adding handrails or grab bars anywhere (whether or not in bathrooms)
•• Modifying hardware on doors.
•• Constructing entrance and exit ramps or modifying the areas in front of entrance and exit doorways 

Since the definition of what could fall under each category is open to interpretation means that additional clarification is needed in Publication 502. Therefore, the text continues to state “”Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. They do not include expenses that are merely beneficial to general health…”. This means though a much needed vacation can do a world of good, it is not yet a qualified medical expense. Vitamins are also not considered deductible unless they are recommended by a medical practitioner for a specific medical condition diagnosed by a physician.

However, there are many beneficial deductions that will be considered a qualifying medical expense, such as smoking cessation programs (though nicotine gum and/or patches are not) as well as weight loss programs, as long as they are part of a treatment plan prescribed by a physician for a specific disease. You can even deduct health club fees as long as they are part of a physician’s recommended treatment plan.

Please let us know if you have any questions about HSA plans, or click on the link below to read more.

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Posted in Employees, Employers, Family, General, Individual | 1 Comment »

Savings with a Premium Only Plan (Section 125)

Friday, May 8th, 2009

 The IRS has instituted a provision in Section 125 of their code. This provision allows for a simple change in your company’s payroll process that reduces your taxable payroll. Every premium contribution your employees make will be deducted from your overall taxable payroll amount. Here’s what you and your employees can expect with a Premium Only Plan or POP.

Employer Benefits

Lower Taxes – Every small business owner needs to take advantage of every tax break they can find. By using a POP plan, you are immediately lowering your taxes, which means that you can turn this additional revenue into more options for your business.

Happier Employees – When your employees make more money, they end up happier. By offering them the ability to use a POP plan, you are automatically putting more money into their pockets. You can use this fact as a way to attract and retain quality employees, particularly if other companies in your industry do not offer this type of plan.

Employee Benefits

Lower Taxes – In addition to lowering your own taxes, your employees will also reap this benefit from a POP plan. This reduction in taxes can be quite significant. This is achieved because your employees are allowed to make contributions to the POP plan with pre-tax dollars. When they become a member of a POP plan, they will also see a reduction in their FICA, federal and state taxes, when applicable. For employees who may have trouble making contributions towards their health plan, a POP plan can allow them to save money on their health plan through the benefits of lower taxes. Even though the premium amount may be the same as a regular plan, the tax savings that they will experience can help make up the difference.

More Take-Home Pay – One of the most popular benefits of a POP plan is the ability for your employees to take-home more pay each month. With their contributions coming as pre-tax dollars and the reduction in their tax payments, this results into automatic savings that they can see on their paycheck each month.

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Posted in Employers, Group | No Comments »

Changes to Federal COBRA for 2009

Wednesday, May 6th, 2009

In February of 2009, President Obama signed into law the American Recovery and Reinvestment Act. Designed as part of the economic stimulus bill, this also provides some major assistance to COBRA coverage for certain individuals. Some of the major points to this bill are:

  • Will provide for a federal subsidyon the COBRA continuation coverage premiums for qualified beneficiaries due to involuntary termination of employment between Sept. 1, 2008 and Dec. 31, 2009 (Assistance Eligible Individuals)
  • Qualified beneficiaries will include the covered employee, the covered employee’s spouse, and covered employee’s dependent children. This means that the spouse or dependents of the involuntarily terminated employee will be eligible for benefits even if the employee does not elect COBRA.
  • There will be a federally provided COBRA subsidy of 65% of the amount owed by the Assistance Eligible Individual (AEI). A payment of 35% made by the AEI is considered payment in full. The remaining amount will be covered by the plan, insurer, or employer and will be reimbursed by the government via payroll tax credits. Note – this subsidy is not offered to health flexible spending account plans.
  • Those qualified beneficiaries that experienced involuntary termination of employment between September 1, 2008 and February 17, 2009 who did not elect COBRA during the initial 60 day period will now be provided another 60 day election period during which to elect COBRA coverage.

Please call or email us with any questions!

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Posted in Employees, Employers, Federal, Group, Laws | 1 Comment »

Saving Money on Small Group Plans

Thursday, April 30th, 2009

Businesses, especially those with fewer than 5 employees, are really bearing the brunt of the rate increases. However, there are still options out there to save you and your employee’s money.

Carriers are constantly revising their portfolios to meet your needs. For example, Anthem Blue Cross expanded its portfolio to include four new HMO options.

Other ways to save on your Group Health Coverage may be to consider adding on the Section 125 Premium Only Plan. This allows employees to pay certain medical expenses (i.e. their portion of the premium) before taxes are deducted from your paycheck. This increases the employee’s take home pay, and reduces Employer taxes.

Carriers are also offering programs to rival their competitors. For example, small businesses with a lower “Risk Adjustment Factor” may qualify for substantial rate reductions by changing to another carrier. Sometimes even just adding dental and life plans to your current group coverage can also aid in reducing your overall premium.

Please call us today to discuss your current group coverage and ways we can help you to save!

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Posted in Employees, Employers, Group | No Comments »

Keeping Employees Aware of Benefit Packages

Monday, April 27th, 2009

One of the most important things you need to do as an Employer offering health insurance is to make sure that your employees understand their benefit packages.

Here are some frequently asked questions that employees may have about their group health insurance plan:

How much do they have to pay?
As the employer in a group health insurance policy, it is your responsibility to provide at least some payment for monthly premiums for the policy.

It is important that your employees know exactly how much you will provide and what they will have to pay on the policy. Ideally, this should be answered before an employee signs up for your group health plan to avoid any confusion.

How high is their deductible?
In addition to their monthly premium amounts, your employees should have a clear idea of what their annual deductible will be.

This will help them decide on which plan will best suit their needs, and will be necessary if they plan on using a health savings account to help pay for their premiums.

Is the insurance plan HSA eligible?
With the popularity of health savings accounts growing, your employees will need to know if your group health policy is HSA eligible.

Are there any exclusions in the policy?
Group health insurance is just like any other type of insurance. There will be specific exclusions in your group health plan that your employees will need to know about.

For example, dental care may be excluded from coverage, or preventative screenings may be excluded. It is important to get a list of exclusions for your policy from your health insurance provider.

Will they have coverage for a pre-existing condition?
If your employees have pre-existing conditions, this can affect their group health coverage. They will need to discuss this with your insurance company representative to make sure that they will have the kind of coverage that they need.

These are just some of the important topics you will need to address. As your agent, we will also be happy to answer such questions on your behalf.

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Posted in Employees, Employers, Group | No Comments »

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