InsurancePickle.com Articles

The 2010 Patient Protection and Affordable Care Act requires “large applicable employers” — defined as those with 50 or more full-time-equivalent (FTE) employees — to offer their full-time employees an affordable “minimum essential coverage” health benefits package starting in 2014, or face penalties for not doing so. Part-time employees’ hours are considered in determining whether a business is above or below the 50 FTE threshold. Use this calculator to see if you are considered a large applicable employer under PPACA or if you have fewer than 50 FTEs and therefore will not be subject to PPACA’s employer mandate.

If you are considered a “large” employer then you must offer health insurance or pay fines for each employee that goes to the health exchanges.  Plan accordingly.

When your broker only has experience in one discipline, they can make recommendations that they may feel are the correct ones even when they do not make any sense.  We recently had a former client hire a consulting firm who recommended a new broker to them.  To put it in perspective, this same consultant recommended that they hire a CFO at twice the going rate as well (oddly the consultant’s associate…go figure).

At any rate, we had each of the employees in the company set up on a group health plan that covered all primary care visits, lab, xrays, diagnostics (MRIs, CT Scans, etc..), and generic drugs for free.  But, only if they needed mental health services, surgery or hospitalization, the employee had a $1500 deductible.

The new broker put in the same plan with the same company, network, benefits, etc…except that, because that is what they knew, they put in the HRA version of the plan.  So, instead of only seeing the deductible for hospitalization and surgery, the employee now was faced with a $1500 deductible for ALL services.  The employer took on that risk of the first $1,000 (of the $1500), which with 40 employees is $40,000 of risk.  And, since all services are now subject to the deductible, the employer is now paying for ALL ailments and medications that the employees have.  The cost difference between this plan and the plan they had….$1 per month.  The broker also told them that the plan was better, because they would get a bigger tax deduction.  Yes, if you needlessly spend money, then you get a bigger tax deduction.

Lastly, we had layered in a hospital/surgical plan that paid for the deductible which only cost the employer $13/month per employee.  The broker told them that they were wasting their money on that plan (mostly because they were unfamiliar with that type of plan).  The truth is that the plan paid out to the employees twice as much as the company laid out in premiums in the previous year. While you never know what is going to happen each year (the point of insurance), that same scenario this year would cost them twice as much. And, that’s just for the surgeries and hospitalizations…not all of the other services that the employer is now responsible for.

One can only shake their head in disbelief.  But, the takeaway is a few fold.  Do not assume that just because you are paying for advice that it is going to be qualified advice.  And, if you do get a recommendation, at least take the time to compare.  Had we been given the opportunity to show them what they were signing up for, it would have been as easy as it was for you to determine the better course of action.

Insurance is about transferring risks, and clearly if you can transfer $60,000 of risk ($40,000 for the employer and $20,000 for the employees) for $1 per month, then you would hope that would be a no brainer.

All too often people leave the country and remember their passports, toiletries, and extra socks.  But, they tend to forget their health insurance.  Most people do not realize that their health insurance does not have a passport and will not go with them 99 times out of 100.  Some international corporations have international coverage, but that is very rare.

One of our associate brokers recently had a client who traveled from Washington DC to Nha Trang, Vietnam, which is a popular beach town 300 miles and a 12 hour bus ride from Ho Chi Minh City.  The client went to a clinic in Nha Trang after experiencing vomiting and stomach pains.  After being diagnosed with a perforated duodenal ulcer, the client needed to be transported by air ambulance to Bangkok, Thailand – due to the inadequate facilities at both Nha Trang and Ho Chi Minh City.  Once the client was fit to fly, the insurance company paid for the return trip for both the client and spouse.

Travel Health Insurance Breakdown

Medical Services in Vietnam – $1,788
Air ambulance evacuation to Bangkok – $45,000
Medical services in Thailand – $28,523
Patient and non-medical escort – $11,232
Total Insured Expenses – $86,543

Premium paid for the Travel Health Insurance – $23

We are not sure whether the client bought travel insurance, which is designed to cover trip costs.  But, if they did, then they would likely have received a refund for at least a good portion of the cost of the trip as well.  But, not having to come out of pocket $86,543 was probably good enough.  That was likely the smartest $23 they ever spent.

The College Tuition Benefit®, CTB, makes it possible for employers with 50+ employees to provided each employee’s child, grandchild, niece or nephew with a guaranteed college scholarship at over one third of the nations private colleges, and the list of colleges is growing.  All Scholarships come from those colleges.  When offered alongside voluntary benefit plans from InsurancePickle.com, there is no cost to the employer or employee.  There are three CTB plan designs including one that provides annual tuition rewards equal to 5% of the employee’s 401k plan balance.  CTB provides an employer an unrivaled employee recruitment and retention tool, while increasing 401k plan savings an average of 13%.

CareFirst BlueCross BlueShield has been selling both BluePreferred and BlueChoice HSA plans at a $1200 deductible level for years.  In fact, we have many clients that have these plans.  But, if you still have that plan, you no longer can (legally) contribute to an HSA.

And, just so we have our facts straight, everyone refers to their health plan as an “HSA,” but in reality, the savings account is the HSA — thus, Health Savings Account.  The health plan itself is called a QHDHP which stands for “Qualified High Deductible Health Plan.”

So, if you have a QHDHP as your ONLY health insurance, then you are eligible to contribute to an HSA.  If it is not qualified, then you can be taxed and penalized if you contribute to an HSA when you are not eligible to do so.  Now that we have the back story down, the IRS sets limits for what a deductible must be as a minimum, which the $1200 deductible used to satisfy.  In 2013, that now has to be at least $1250 for an individual and $2500 for a family.  It should also be pointed out here that if you have a deductible on your health plan that meets this criteria, that DOES NOT mean you can contribute to an HSA.  It must be classified as a QHDHP which many high deductible plans are not.

The fix is simple.  If you no longer want to contribute to an HSA, then you do not need to make a change and your health plan will work as is.  If you do want to make contributions, then CareFirst now offers a $1400 ($2800 for two more) that you can easily convert your existing plan to and get your “qualified” back.

Just follow this link http://www.insurancepickle.com/health-insurance/myhsa2013.shtml and all of the forms you need will be right there, along with additional important information.  Also, it does not matter if you made the error of not doing business with us when you originally bought your plan, that is easily fixed with the forms we have provided.  If yours is a group plan, then just contact our office and we will help you out.

Apparently when you don’t have an IT department and the hosting company changes the MySQL version, you have to be paying attention.  Our previous blog just stopped working.  In theory we have some of our old, popular posts saved that we’ll put back up.  But, we will have plenty of new material to put out especially in this ever-changing environment.

Lastly, look for InsurancePickle.com 2.0 to be officially released soon.  It’s been a great ~13 years on the Internet and we realize that the site is about nine years overdue for a makeover.  In addition to a fresh, new look, we’ll have links without 404 errors, social media links, and a chat system that actually works….which is nice.