My Blog - News You Can Use
Health Savings Accounts are a good option for your health plan
If you’re looking for a medical plan and are shocked by what a plan costs, consider a qualified High Deductible plan with a Health Savings Account (HSA). At first pass it may look more expensive because you pay all your eligible expenses before the plan starts to pay and most people really like to pay that $30 copay for doctor’s visits and prescriptions. However, when you compare the plan costs, you may find this actually a better option for you and your family.
First, add the deductible for each plan you are considering and then add the coinsurance amount you are required to pay AFTER the deductible. 80%/20% and 70%/30% are common IN NETWORK examples of coinsurance where the carrier pays the higher percentage and you pay the lower percentage UP TO a maximum out of pocket amount.
Cost of a PPO plan (The Reality)
You have a Preferred Provider Plan (PPO) where you go to the doctor and pay copay for doctor visits. The individual deductible is $3,500 and the individual coinsurance maximum
for an individual is $3,000. You’re total cost if you are hospitalized, have outpatient surgery would be $6,500. You then take your monthly premium and multiply it by 12 and add this to the $6,500. Let’s say your monthly premium is $350/12 = $4,200. So now you know that in a year when something major occurs, you will have major medical expenses of $10,700. Please be aware that these costs explain what
occurs for an individual not a family.
Let’s compare High Deductible Health Plan with a monthly premium of $300 and a deductible of $2,700 and 100% coinsurance. This means that after $3,600 of premium and $2700 = $6,300 the carrier pays 100% of the cost for the remainder of the year. Before you get to excited you need to understand that YOU are responsible for the 100% of all medical expenses including prescriptions under this High Deductible Health Plan up to the deductible before this plan starts to pay for anything other than wellness. We like our co pays but here’s the good news. When you set up a qualified High Deductible plan, the government allows you to open a Health Savings Account (HSA) through a bank or the insurer carrier. IN 2012, you can put up to $3,100 for an individual and $6,250 for a family (HSA holders 55 and older get to save an extra $1,000 which means $4,100 for an individual and $7,250 for a family). THE BEAUTY OF THIS IS THAT ANYTHING YOU PUT INTO THE HSA is 100% tax deductible from gross income.
Don’t confuse an HSA with a Flexible Benefit Plan where you lose your money at the end of the each year. With an HSA, it’s your money and as it sits in your HSA, interest earnings accumulate tax-deferred similar to an Individual Retirement Account. At any time you can use the funds in the account to actually pay providers for a wide variety of medical expenses.
Wellness visits are covered 100% by the HSA so if you are a generally healthy individual and fund your HSA account on a monthly basis with let’s say $100, by the end of the year you would have $1,200. During the year you go to the doctor for a cold. You get a bill from the doctor’s office is $300. The charges are then discounted because this doctor has agreed to accept the insurer carrier’s negotiated fee and now the bill is $200. You write a check or use a credit card tied to your HSA and your insurance deductible is reduced by the insurer by that same $200. This process works for all medical & dental care whether hospitalization, prescriptions or doctors visits. At the end of the year, $1,000 is still in the account and is available for a wide variety of qualified expenses. http://www.irs.gov/pub/irs-pdf/p969.pdf
Next year you put $150 a month into your HSA account and again have no expenses. Now you have $2,800 in the account. Remember your deductible is $2700, so by year 2 you now have the money to reimburse yourself if you have a major medical problem. Since we paid $6300 ($2700 plus the premium), you actually saved money over the cost of the PPO plan because you get to take the tax deduction of the $2,700 off your
taxes. If your a small business owner, it’s also possible that you can deduct your medical expenses from your taxes as well.
If you’re NOT planning on funding your HSA and are only purchasing the HSA because it is less expensive BE CAREFUL. The HSA works best when you put the money aside to reimburse yourself otherwise that deductible is going to hurt!
Remember to set up the HSA immediately (even if you don’t think you will fund it) after you enroll in the High Deductible plan because if you have eligible claims before you set up the account they are NOT eligible to
be reimbursed. You may decide to fund the HSA with only $200. As long as you have the HSA set up, you can still write a check to the HSA after a big medical
expense account and deduct it from your gross earnings.
If you’re a conscientious saver, and your HSA builds up, amounts in your HSA can also be used to pay health insurance premiums when you’re between jobs, qualified long-term care premiums, Medicare premiums and out-of-pocket expenses and living expenses after age 65 (pay ordinary income taxes).
Of course, I am giving you a bird’s eye view on this and you need to consider moving to an HSA carefully. To educate yourself, you can go to www.hsacenter.com which offers a great deal of valuable information. You can also contact me if you have questions or are interested in purchasing a Qualified High Deductible plan.
The HSACenter.com website is presented as general information by United Healthcare’s Golden Rule Insurance Company.
Advocating cholesterol testing for children
New guidelines on screening children for high cholesterol before they reach puberty will be presented at the American Heart Association conference this Sunday. This topic hits close to home. North Carolina tests for cholesterol in children while many states do not. When we moved to North Carolina our daughter was tested as part of her initial pediatric exam. The 1st time they did the test, they thought it was a mistake. After the third test, we realized that we had a problem as her cholesterol level was 350! Cholesterol numbers for anyone should be under the 200’s, and the borderline normal cholesterol level is 230. If it’s above 240 then your cholesterol is considered high! She was diagnosed with Familial Hypercholesterolemia which is the most common type of inherited high cholesterol.
Individuals with high cholesterol have a significantly increased risk of developing coronary artery disease & plaque buildup, and of having heart attacks so efforts to identify more kids is clearly important. 52 million Americans have high cholesterol, a leading cause of heart disease. Right now in the US, 1 out of 3 kids are considered overweight or obese which increases the risk of developing the condition. By doing this test earlier, doctors will be able to help families make lifestyle changes that can save lives. I am glad that the American Heart Association is advocating this test and pray that pediatricians will take the recommendations to heart.
BAM! CRASH, BAM, and then it’s quiet until the sirens start!
Those are sounds that we never expect to hear and by his grace, you won’t. However, if you drive you have the potential of having a car accident or any number of health related scares at some point in your adult life. Sitting in a wrecked car or in a cold hospital emergency room, it’s normal to feel scared, disoriented and God forbid, hurt. Once the “dust” settles, you or your family start thinking, do we have the right insurance to cover these expenses? Hopefully the answer is yes, but today more and more people are forgoing life and health insurance.
Ask yourself, could my spouse keep the house without my income? Can my spouse take care of the kids AND work if I were to die? What will happen to my kid’s dreams of college, weddings, etc? In a nut shell, WILL MY DEATH MAKE DAY TO DAY LIFE THAT MUCH HARDER FOR MY FAMILY???? If you answer yes, then talk to someone about what the cost of life and health insurance might be. You don’t have to get the most expensive policy, just something that will provide a financial security net. Right now, life insurance rates are very competitive and even coverage of $100,000 can help get your family through that all too difficult 1st year without you. A high deductible health plan can be the difference in keeping your family from foreclosure if you have a life altering medical accident or illness.
Going to the Internet may seem like a good idea but I’m biased and think that they just cherry pick. Plus, what kind of service can you and your family expect if you have questions after the purchase? By going to a licensed agent or broker you’ll be working
with a professional, be given a better understanding of the products available, and a more realistic expectation of what to expect during the underwriting process. We brokers are dedicated to helping you protect the people you love from financial disaster! Because in the end, that’s what insurance is… providing financial security to the people YOU LOVE.
Cancer Protection is available
Did you know that 1 in 2 men and 1 out of 3 women will get cancer!! With kids it’s the 2nd leading cause of death behind accidents! Besides being depressing you need to know that even when you have health insurance your like to have a lot of expenses and in generally your health insurance won’t pay for experimental procedures or new drugs. Since many of us don’t have a pot of gold available in an emergency, the next question is how are you going to pay your mortgage and other bills if you can’t work?
Having watched family and friends deal with this horrible disease, I’ve done some research to understand what’s available to help families better protect themselves. It’s time to recognize that cancer creates all kinds of issues for you, your spouse and your family. Ask someone who’s been through it if they either had a plan like this or wish they did Better my telling you this about this now then your discovering that this kind of policy exists after it’s too late.
Our firm offers two different product approaches. The 1st is a plan that provides a flat $20,000 – $60,000 to you, your spouse, or your kids when DIAGNOISED with cancer. This coverage is totally separate from your health and life coverage and the cash is paid directly to YOU. A 40 Yr old man can purchase a policy for $50,000 for $38 a month while a 50 year old women can obtain the same amount for $53.00 a month. Obviously, it make sense to purchase a plan like this when your younger as the premiums don’t increase as you age.
The 2nd plan option pays different amounts based on the kind of cancer you are diagnosed with and pays you as you utilize inpatient and outpatient medical services or prescriptions, etc. With this 2nd plan, when you maintain the policy for 20 years the company will refund all your premiums less any claims. Individuals 30 to 75 are eligible to purchase this plan.
These plans can be purchased individually or can be offered as a benefit through your employer. Send me your comments or an email if you have more questions about these products or any other ?
Flu Season is almost here!
Wednesday is the 1st day of Fall and it reminded me that I need to get a flu shot. I know that some people have definate opinions as to whether this is a prudent strategy but if you’re around kids, meet lots of people on a regular basis, work in a medical facility or are around people that cough and sneeze, the Centers of Disease Control recommends getting a flu shot annually. October officially starts the flu season so now’s a good time to get your shot. You can go to your doctor’s office and pay your primary care Copay. If you don’t have a primary care physician or health insurance there are a large number of pharmacies offering it without an appointment. The average cost of a flu shot is $29.99 for an under 65 year old recipient. (Please check with your individual insurance carrier to find out how the flu shot is covered under your individual plan. Think you don’t need it, ask someone that got it last yearL:( You can also checkout www.flu.gov for a quick quiz. The results may surprise you. Here’s to staying healthy this fall. Be Well.
