Group Health Insurance
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07-06-2009by Colleen King
In the past couple of weeks, there have been a lot of celebrity deaths reported, but none overpowering the news more than the death of Michael Jackson. I’m not going to debate his talent or lifestyle issues, but it got me thinking.
Here is a guy that in one way or another had significant assets; homes, rights to the Beatles catalog, investments who know where. And three children. And for how many days was there a question as to whether or not there was a will, what was to become of his fortune, if there was one, and who was going to raise his children?
Well now there appears to be a will, but is that the only one? Are there others? And ultimately, who has the most recent will? Most of us don’t have estates quite this complex, at least I don’t, but take a ‘time out’ and make sure you have a few things in order.
If you have minor children and something happens to you, who do you want to raise them? If you made that decision a few years ago, and either the person you designated ‘predeceased’ you or for some other reason you don’t want them raising your kids, change your will.
Do you have assets that you want to go to specific people? They may end up with a relative you didn’t want to get a dime if you don’t spell your preferences out. If you have an expensive home to leave your kids, will they be able to afford the estate taxes on it, or will it be a financial disaster? That’s where sufficient life insurance can come in handy. Life insurance isn’t meant as just something to make your heirs rich. Since it is received tax free by the beneficiary, it is often set up to be used as a source of cash to pay inheritance taxes that otherwise might really devastate what you thought you had left. IRAs may have tax consequences, properties too, and if they can’t pay the estate taxes they will lose a large part of what you left.
The LAST important thing after you do all of this is to make sure someone knows where to find your documents! In a shoebox under your bed is only good if someone knows about it.
So in between Access Hollywood updates and the 11:00 news, make sure to review your plans and coverage, or be sure to at least get a will and trust in place if you don’t have one. Your insurance agent can help you figure out what will keep the wolves from the door.
06-29-2009by Colleen King
Health insurance remains one of those things that most people still find confusing. For group health insurance, disclosing your health history helps determine the rates your employer gets. For individual health insurance, it determines not only rates, but whether or not you will even be accepted!
Focusing on individual health insurance, all carriers ask about whether you’ve taken medication, been treated for or had symptoms of anything in the past ten years. One carrier, it used to be the past twenty years. There’s a rumor that one is going to drop it to the past five years. Whatever the number, talk to your insurance agent about anything you’ve been treated for, because carriers look at things differently than you and I do. I recently did a policy with a nice guy who was on no medication, not under the care of a doctor or anything. When I saw his online application though, he had stopped taking an antidepressant 3 months ago. He did end up getting approved but at an above standard rate because of this. Why does it matter? He isn’t on anything! This is one of those cases where depending on the carrier, an applicant needed to be off medications between 6-12 months in order to qualify for a standard rate. Recently stopping some medications, they are concerned that you haven’t been off of it long enough and may need to go back on it. Basically, don’t let common sense and logic get in the way of reality.
Another dicey situation is when women have had breast implants. Now, consider this. When you first start working with a health insurance agent, it’s not unusual for them to be someone you found on the internet, pretty much a total stranger. They are going to be asking all sorts of personal questions, and you don’t know them from adam. Women often think they don’t need to disclose their implants, after all, it was cosmetic and insurance didn’t cover them before, so what does it matter? Well, it does. Some carriers, silicone implants are an automatic decline. Others, depending on how long ago they were inserted, will accept you but at an above standard rate because of the high likelihood of someone developing contractures, encapsulation that hardens and causes pain necessitating removal. And the carrier may be on the hook for it. I finally figured out a less direct, more tactful way of asking the question so I run into that ‘surprise’ less often.
I could go on, but I think you get the idea. Even if you think an old health issue is irrelevant, talk to your insurance agent about it when considering making a change. If you don’t disclose and there’s an issue down the line, your policy could be rescinded and new coverage tough to obtain. And if you aren’t comfortable with the agent you are talking to, talk so another one or two. There are tons of us out there, we all want your business but you’re the consumer, so find someone you like dealing with!
Be well!...read more
06-21-2009by Colleen King
Here is another term in Health Insurance, both Group Health Insurance and Individual Health Insurance that people don’t always understand. I would have posted this sooner, but it’s been a busy month!
(“Help, I don’t understand!”)
Coinsurance might be easier read with a hyphen; co-insurance. This is one of the three main questions people should ask (in my opinion) in looking at a health insurance plan. You have the deductible, the out of pocket maximum and then that step in the middle, co-insurance. ‘What’s my co-pay’ is a good one too, but not as important as the ‘big figure’ numbers.
Generally the deductible is what you pay before the coverage kicks in. If you have something big hit, the out of pocket maximum, or co-insurance maximum is the part that keeps you from going broke. Once you hit your out of pocket maximum, that is generally all you pay on eligible health care expenses for the remainder of the calendar except for office visit co-pays and prescription drug co-pays, depending on your plan. The key word here being, eligible.
How do you reach your out of pocket maximum? That’s where co-insurance comes in. Once you hit your deductible, then the carrier starts to pay. Co-insurance is what percentage of eligible charges they pay and what percentage you pay. 80/20 used to be pretty common, with the carrier paying the 80% part. Now we are seeing all kinds of splits. There are a few (very few) 90/10 plans, but they are really expensive. In the individual market we mainly have 70/30 plans in California, but now there are 60/40 and even 50/50 plans.
Some people balk at a 60/40 or 50/50 plan–what’s the point in having insurance, they ask. That brings me back to the out of pocket maximum. You may be paying 30, 40 or 50% of the bill, but once you hit the out of pocket maximum the carrier pretty much comes into play at 100%. It’s a matter of how soon do you want the carrier to come into play.
All plans are not created equal. The more you want from a plan, the more it will cost. If you want more coverage sooner, it will cost you more. In reality, you’ll either pay in advance (premium) or you’ll pay at the time you need help (medical bills). So if you can handle more of the expense of health care, buy a plan with a lower premium, especially if you’re basically healthy. There’s no rebate for low utilization if you have a ‘healthy’ year as opposed to a ‘sick’ year.
Be well!...read more
06-04-2009by Colleen King
It’s getting to be that time of year when the four years of college (or five, or six) is about to wind up. At last. That tuition bill is going to be gone and the kid(s) will be out of the house. Then it occurs to mom and dad (not usually to the new grad) that their young adult can’t stay on their insurance policy any longer.
Carriers allow full time college students to stay on their parents’ coverage until age 23, 24, or even 25. As the hassle with pre-existing conditions continues to increase, some carriers are talking about increasing the age a kid can stay on their parents’ policy, even if they aren’t in college. But we aren’t quite there yet.
This little detail can easily escape everyone since finals and planning for graduation are a lot more interesting. I had this situation come up last year with a family, and there are a couple ways to do it. It was a Friday, college graduation was Saturday, the new grad was turning 24 on Sunday so as of Sunday, she was going to be uninsured and Mom was panicking.
We could have done a regular policy, but since that usually takes 2-4 weeks, the young woman wouldn’t have been covered. Instead, we elected to do a short term health plan. These will vary from state to state, so what I’m relating here pertains specifically to California. These plans I refer to as ‘accident and illness’ policies. They don’t cover anything routine, they don’t cover pre-existing conditions or maternity, but if you get sick or have an injury you have coverage. And, because it doesn’t cover anything pre-existing the underwriting, or review of the application, is much quicker. We can usually get a response in a couple of days.
So the short term health plan was how we handled it. These can be kept on a month to month basis, up to a maximum of 6 months, and if you’ve not had any claims, you can renew it for up to another six months. These plans are also really useful in situations where you get a new job, you don’t have benefits for the first 90 days of employment and you don’t want to pay the exorbitant cost of COBRA. I’ve used these many times and while they aren’t ideal due to the fact that they are short term, they sure can be a great stop gap. And the carrier I use most, if you go to an emergency room for an injury, the deductible is waived. I wish all policies would do that!
So congratulations, and good luck to the class of 2009!
05-10-2009by Colleen King
A couple of months ago I did an article on COBRA coverage: how it works, and why you should or shouldn’t take it.
Now that there’s a subsidy of 65% for people involuntarily terminated after September 1, 2008, the picture changes somewhat. Depending on how much the 35% you have to pay is, that 65% can be pretty tough to turn down. But I still have a couple of caveats for you.
This only lasts 9 months. With any luck, during that time you will have another job, with benefits, and you don’t have to think about this any further. Normally when someone is offered COBRA I suggest they look at an individual plan if they are potentially insurable because anyone can have something develop or happen to them that could render them uninsurable.
I still think you have to give that serious consideration but I know that subsidy is REALLY tempting. Here is what I think you should consider. If buying the coverage is on your own is less than the 35% you’d need to pay, then look at individual plans. Whenever someone elects to take COBRA for a family, but not everyone needs to be on COBRA, meaning they are insurable, look at individual plans. Especially if you don’t qualify for the subsidy. You need to look at all options for your situation, which is why an independent agent in addition to your HR person at work is important.
If the cost issue with the subsidy is close, maybe the plan on your own is slightly more than your COBRA cost, consider getting your own coverage, again, just in case. It’s all a matter of what’s going to make things easiest for you to handle.
Be well!...read more