employer insurance

Posts Tagged: employer insurance

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End of the Year Health Insurance Tips

What? It’s December already? It snuck up on us too. Here are a few things everyone should make sure to check out, check up on, or wrap up before the New Year starts.

New coverage

2014 marks the beginning of coverage via the health insurance exchanges. If you’re thinking about enrolling in a plan through the exchanges, December is the time. Even though the deadline to enroll has been extended to March 31, if you wait, your coverage won’t become effective until the month following when you enroll. For your coverage to begin in January, you’ll need to enroll and pay your first premium by December 15th.

Leftover annual benefits

Does your plan include benefits that expire at the end of the calendar year? This is common for preventive dental care and vision benefits. Make sure you’re not leaving anything out!

FSA or HRA balances

Do you have funds left in your FSA or HRA? You may lose any money that you have set aside but not yet spent. A new rule was just passed to allow employers or benefits administrators to roll over these funds, but it is only effective if your employer chooses to implement it (the rule is optional). Check if the rule applies to you, and if not, make sure you don’t have any unspent money left! HSAs are different – the funds in an HSA always roll over, year after year.

Post-deductible procedures

Have you met your deductible for 2013? Then the end of the year is a good time to schedule any elective procedures you might want to squeeze in before your deductible rolls over in January. You could save a lot in out-of-pocket costs by getting these services done while your plan is paying at its full benefit level (rather than early in the year when your deductible has not been met).

Onward to 2014!

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Flexible Spending Accounts Now Allow up to $500 Rollover

If you’ve ever had an FSA, you might be familiar with that situation at the end of the year, when you’re either scrambling to spend down the money before you lose it, or you forget about it in the blur of the holidays, and next thing you know, it’s gone.

There’s good news. The US Treasury Department just announced a new rule that would let you rollover up to $500 at the end of each year. For the 14 million Americans that have an FSA, this could mean a lot of savings as well as the ability to be more flexible as you plan your medical expenses.

The new benefit could start as early as 2013, but this may be up to your specific employer. Before you get too excited – employers must decide between offering the new rollover or offering the grace period option, which currently gives you an extra 2 and a half months to spend down your FSA after the end of the year.  Check with your employer or plan sponsor for exactly what your benefits will be.

And if you do find you’re able to take advantage of the new rule, just don’t, uh, forget about the money again the next year, ok?

 

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What will Happen to Health Benefits for Same Sex Couples without DOMA?

Last week, the Supreme Court ruled that the Defense of Marriage Act, DOMA is unconstitutional, and same sex couples should be afforded the same health benefits as any other married couple.

That means a lot of changes (and potential savings) are on the way for same sex couples. One study by the Center for American Progress and the Williams Institute in 2007 estimated that the average married same-sex couple paid over $1,000 more in taxes each year.

Not only will the government begin allowing its own employees to enroll their partners in the Federal Employees Health Benefits Plan, but couples all over the country will face a new set of rules–that may or may not end up being a good deal.

Some of the immediate benefits:

Tax-free health benefits
Money paid towards employer-sponsored health insurance is all pre-tax. Yet for same sex couples, the money spent on the employee’s partner would be counted as income and subject to income taxes. This could add up to thousands of dollars of taxable income over a year.

Special enrollment rights
Opposite sex couples have always been able to add their spouse to their health plan right away if the partner left their job, lost their own benefits, the couple was newly married, or they adopted a child. These are benefits under the federal regulations HIPAA. But same sex couples would have to wait until the plan’s annual open enrollment, if they were eligible at all.

Access to Medicare, Medicaid, & Tricare
Same sex couples have always been denied coverage for Medicare and Medicaid through their partner, the federal safety-net health benefits for the elderly, disabled, and low-income. They also could not get coverage under their partner’s Tricare benefits, the government’s insurance for military personnel. Now, all of these benefits will be available with the same eligibility criteria as opposite sex couples.

Shared HSA, FSA, and HRA spending
Previously, if one member of a same sex couple had any kind of health savings account or flexible spending account, the funds couldn’t necessarily be spent on their partner’s medical expenses. The partner would have to be an IRS designated tax dependent to be able to use the funds.

But there are also some possible disadvantages:

Insurance Exchange subsidies
Under the federal health insurance exchanges, set to open January 1, 2014, some couples may no longer be eligible for subsidies and tax credits that they could have gotten individually. For example, if each person had an annual income of $35,000, they would each qualify for a federal subsidy on their insurance premiums, separately. But with a combined income of $70,000 they now earn too much money to qualify for a subsidy.

Medicaid Eligibility
In the same way, the combining of family income to determine eligibility could also disqualify some couples for Medicaid (ironically, since now same sex couples just gained access to Medicaid via their spouse). So at the end of the day, it’s couples who have similar and relatively low income who might lose out.

But all told, there is a lot yet to be determined as states and the federal government iron out policies and procedures, especially, with gay-marriage laws still differing by the state. With thousands of pages of regulations related to marriage and health benefits, it could take awhile for regulators to figure everything out.

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Saving Money with the FSA Grace Period

Did you miss out on spending down your FSA last year?

Hold on, all might not be lost. FSAs and HRAs are “Use it or lose it” accounts, meaning if you do not spend the funds by the end of your plan year, the money disappears.

But did you know that some employers have a grace period for FSA and HRA spending? Federal tax regulations allow them to extend the time for incurring expenses by 2 and ½ months into the new year. The extension is optional (not all employers have to offer it), but if you do have the opportunity, it’s a great way to make sure you don’t lose any of the money you’ve already set aside for medical expenses.

How do I know if I have a grace period?
Talk to your HR Department or benefits administrator. Remember, the grace period must be a benefit they have established in advance–it’s not a last minute change they can just throw in!

What if I don’t have any funds left in last year’s FSA or HRA?
If you’ve already spent down your 2012 FSA or HRA, the grace period doesn’t affect you. You’ll just continue spending your 2013 funds as usual.

If I have expenses for services I got in 2013 during the grace period, how will the money be deducted?
Employers will apply the expenses to your 2012 balance first, and then your 2013 balance (assuming you also elected an FSA or HRA for the current year).

What if I have an HSA?
The grace period doesn’t apply to HSAs because money in these accounts always rolls over year to year, so there’s no deadline to spend it.

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Costly Medicare Mistakes to Avoid if you’re Still Working

Age 65 is kind of a magic time where the health insurance world changes. But many people are continuing to work beyond 65 these days. What should you do when you become eligible for Medicare but you’re still covered by your employer’s health insurance?

 Avoid these common mistakes that can lead to higher premiums, penalties, or missed enrollment opportunities.

1)   Paying for Part B when you don’t need it

While Medicare Part A is free if you have been working in the U.S. for most of your life, Part B comes for a monthly premium (in 2012 it was $99 for most people). If you have health insurance through your employer, you’re allowed to defer Part B. Otherwise, there is a late enrollment penalty (10% of the premium for each year you didn’t have Part B). Contact Social Security to delay Part B but remember to sign up as soon as you retire or you could be hit with the penalty.

2)   Using your Medicare first

As long as you’re working and covered by your employer’s plan (or your spouse’s plan), Medicare considers that coverage to be your primary insurance.* That means Medicare won’t pay for anything that your primary plan doesn’t cover. They’ll only pay a portion of the bill after the primary plan pays a portion (yes, odd Medicare rules, right?).

So let’s say your employee plan is an HMO, and you go outside your physician network. Don’t expect Medicare to cover anything. However, if you do go to a network doctor, your primary insurance will pay first, and then Medicare will pay a portion, up to the Medicare benefit level. Bottom line? The two sources of coverage aren’t interchangeable. Rely on your employer insurance, and think of Medicare as a bonus, not an alternative.

3)   Not Getting Part D when you should

A lot of people put off enrolling in Part D when they have prescription drug coverage through their employer. And that’s usually just fine. You’ll run into trouble however, if your drug plan is not considered “creditable coverage.” That means Medicare has decided the plan meets certain standards of being equivalent to a Medicare Part D plan. Most employer plans are creditable, but you should still check with your HR department. If your plan isn’t creditable, you’ll end up paying a late enrollment fee  for every month you didn’t have Part D as long as you have Medicare.

You’ve probably noticed by now that Medicare is pretty strict when it comes to how employer health insurance coordinates. And that means little forgiveness if you don’t follow the rules. Questions? Contact Medicare Coordination of Benefits.

Or need more individualized help with Medicare?  SHIP, the State Health Insurance Assistance Program, is a federal program that provides free one-on-one Medicare assistance. Search for the one in your area through Medicare.

 

* If you work for a small employer (20 or fewer employees), the rules are a bit different for you. Medicare is always your primary insurance!

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How Does Your HSA Compare?

Wondering how your HSA stacks up compared to others?

Are you saving enough or spending too much?

We decided to look at Simplee users as a group to see. As of the end of June 2012, the average Simplee member had $1654 in their HSA. This was up from $1385 at the beginning of the year, but not quite as high as the average of $2235 the previous fall. That seems to suggest many people are saving up as the year goes on and then paying out their deductible by the end of the year.

The good news? Most consumers seem to be saving more than they’re spending. For the first half of 2012, Simplee users contributed an average of $2289 each quarter to their HSA and only distributed $1903 per quarter.

So how much should you have in your HSA? Well, just like any savings account, the more the better—but of course, within reason. You obviously don’t want to tuck away so much money that you can’t afford your other bills. But at the very least, you want to have enough to cover your deductible.

The average American has $1490 in their HSA (as of 2011, according to the Employee Benefits Research Institute), so it looks like Simplee users are doing a bit better than average. Way to go!

To track your HSA transactions and manage your expenses easily, log in to Simplee.

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When Does my Pre-existing Condition Matter?

“Pre-existing condition” is sometimes a phrase that everyone is afraid of. Can you be denied health insurance? Can your health plan refuse to pay? Should you avoid the doctor so it’s not in your record? Here are the facts.

What is a pre-existing condition?

A pre-existing condition can be any health issue that you had before applying for health insurance. It could be anything—such as an abnormal pap smear, high blood pressure, asthma, cancer, or an old sports injury. However plans cannot consider pregnancy or any genetic information as a pre-existing condition, as well as conditions in a newborn or newly adopted baby, as long as the child had health insurance within 30 days of birth.

When does having a pre-existing condition matter?

Applying for individual health insurance

Depending on how serious the condition is, a plan CAN

  • Deny you coverage completely or
  • Decide to only cover the pre-existing condition after an exclusion period. You’ll still pay premiums and get coverage for other health issues, but the plan won’t pay for any care related to the pre-existing condition. The exclusion period can be between 6 to 18 months.

However a plan CANNOT

  • Deny you coverage if you had COBRA and your coverage is running out, and you apply for the new plan within 63 days. This does not count if you voluntarily disenroll from COBRA before the benefits run out, for example, because it’s too expensive.
  • Deny coverage to children under age 19 on their parent’s plan.
  • Impose an exclusion period if you had another source of health insurance for at least the last year, and you didn’t have a break in your coverage longer than 63 days.

Joining an employer group plan

A group plan CAN

  • Impose a waiting period before it covers you at all. 3 month waiting periods are common.
  • Impose an exclusion period before it covers your pre-existing condition (like that described above). However, unlike individual plans, the waiting period cannot be more than 12 months and can only be applied to conditions that you had treated in the last 6 months.
  • Impose both a waiting period and an exclusion period. If the plan does this, the waiting period and exclusion period must run concurrently—or in other words, one can’t start after the other ends.

But a group plan CANNOT

  • Completely deny you coverage or give you different coverage than other members of the group.
  • Impose an exclusion period if you had another source of health insurance for at least the last year, and you didn’t have a break in your coverage longer than 63 days.

I thought Health Reform was supposed to fix all this.

You’re right! Starting in 2014, health plans will no longer be allowed to deny coverage to anyone because of pre-existing conditions, regardless of age. Plans will also be required to renew your coverage at a reasonable rate if you develop a medical condition, as long as your premiums are paid.

Then what should I do when I apply for coverage?

You should be honest. A health plan does have the right to rescind (cancel) your coverage if you intentionally left information off your application.

And while it’s never a good idea to put off medical care when you need it, if you expect to get group coverage in the next few months, you might be able to avoid any waiting periods by refraining from getting any advice or treatment for a condition six months before the coverage will begin.

If you’re denied coverage

You can apply for the Pre-Existing Conditions Insurance Plan (PCIP). This plan provides affordable benefits that are just as good as private individual plans and cannot deny you coverage or charge you more based on your health condition.

So the bottom line? Pre-existing conditions will still matter until 2014. The best thing you can do is to try to never let more than 63 days elapse between coverage—get COBRA or a private plan as soon as you can. But if this happens, and you can’t find coverage, the PCIP is always an option you can fall back on.

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COBRA: To Elect or Not to Elect?

So you’re entitled to COBRA health coverage! COBRA can be both loved and hated. On the plus side, it’s guaranteed health insurance for those scary times when you really need it: you lost your job, you get cut back to part time and no longer qualify for benefits, or you get divorced and your spouse had been your source of coverage.

On the negative side, COBRA costs an arm and a leg. In fact, it can be some of the most expensive individual health coverage out there.

So it’s natural to feel stuck:  Stay and pay for a plan you are familiar with or hunt for something better and risk losing some good coverage? Let’s review how COBRA works.

What is COBRA?

COBRA is not a specific health plan. Rather, it is the right to keep your existing group health plan when something changes about your life situation that makes you no longer eligible for coverage. The difference is now you’ll be shouldering the entire cost. No more help from your employer.

How Does COBRA work?

Once you’re employer is aware of a change in you (or your dependents’) health insurance eligibility (called a “qualifying event”) they’ll notify you that you’re eligible for COBRA. It’s then up to you to complete the forms to elect COBRA. Then, you’ll be billed the full cost of the plan—your share plus the share your employer used to pay—plus a small administrative fee. This fee cannot exceed 2% by federal law. You’ll probably receive a new health insurance card, but your plan will remain the same as it was before. Basically, under COBRA, you get whatever active employees get. So if your employer changes the plan for everyone, it changes for you as well. If there is an open enrollment period to switch plans, you can also switch. Your former employer cannot change your benefits just because you have COBRA.

Who is COBRA good for?

COBRA could be a good choice for you if

  • You have a lot of pre-existing conditions
  • You go to several specialists who are covered under your current plan
  • Your plan has some unique features or good coverage for a special service that you need
  • You expect to get more affordable coverage from another source soon.

Of course, you should always look into your options and compare costs, but generally COBRA tends to work out well for people in these situations.

Can you be denied other coverage if you don’t elect COBRA?

Yes you can. Unfortunately, you currently do not have any guaranteed rights to obtain coverage from another company simply because you are eligible for COBRA.

What about Vision and Dental?

These are both subject to COBRA. And depending on how the plans are structured, you might be able to choose one or both of these separately from your medical plan, or only take the medical plan. Check into this to tailor your health coverage to only what you need.

Finally, if you decide to elect COBRA, watch your deadlines. There are very specific windows of time for when your employer must inform you of your right to COBRA, when you can choose to take it, and when you must pay the premium. For the time windows that apply to you, see http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html.

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How to Switch Insurance Plans Smoothly

This post originally appeared on Mint.com.

Have you recently lost your job? Are you thinking of quitting to start your own thing? If that’s you, worries about health coverage may be the last thing on your mind. However, if you’ve been getting coverage from your employer, you’ll need to figure out how to make a smooth transition to a new plan. Unless you are going between plans offered by your employer, it takes some coordination to make sure your health care will be uninterrupted and you won’t end up with a gap in coverage—or worse, losing coverage entirely.

First, the top three things to keep in mind (no matter what type of plan you’re changing to):

  • Be aware of dates.  Many transitions have limited enrollment windows or periods that coverage is available. Missing a date could mean losing coverage. Check with your company’s HR department, or speak directly with your insurance provider to confirm the applicable dates.
  • Get your Certificate of Creditable Coverage. This document can be your ticket to getting coverage right away for pre-existing conditions; without it, new insurers may balk at covering pre-existing conditions. It should be sent to you when you stop an insurance plan. Keep it safe.
  • Know your options. COBRA, employer plans, individual plans, and short term, temporary plans can all have very different rules. Don’t just assume that insurance is insurance.

If you are switching from an employer plan to COBRA:

This can be the smoothest of transitions because you are essentially keeping the same plan you’ve always had—but now, you are paying the full cost (both your share and your former employer’s). You have 63 days to complete the paperwork to enroll in COBRA from the time you are first notified that you are eligible. Once you have enrolled, you have 45 days to pay the premium (directly to your former employer–not the health plan). You will probably receive new insurance cards, but your coverage should be the same. Pre-existing conditions will still be covered. You can usually keep your COBRA coverage for 18 months (sometimes 36 depending on how you qualified for COBRA in the first place). After that, it’s time to start shopping for something new.

If you are switching from an employer plan to a temporary or short-term plan:

Temporary plans are often marketed as more affordable alternatives to COBRA. Before you choose a temporary plan, be sure you understand the benefits and limitations. Temporary or short-term plans offer coverage for anywhere from 30 days to 1 year. After this length of time, there is no guarantee the plan will extend your coverage—these plans are not required to renew coverage the way that full medical insurance must. They are also not required to cover pre-existing conditions and often don’t cover routine, preventive care–only emergencies and catastrophic care. The plus side? Temporary health plans can usually start immediately (as soon as you pay) and the application is shorter and simpler, so the switch can be easier to coordinate.

If you are switching from COBRA to a private individual plan:

If your COBRA benefits run out, you have a special right to buy an individual health plan without detailing your pre-existing conditions. However, you do not have this right if you voluntarily decide to leave COBRA or just stop paying your premiums. Translation: there’s no guarantee the new plan you want will take you, so make sure you are covered before cancelling your COBRA.

When your COBRA plan ends, you should receive a “Certificate of Creditable Coverage” from them. Keep this paper as proof you had prior health insurance coverage, which you may need to show your new plan for any pre-existing conditions to be covered (see more below).

If you are switching from one private plan to another.

Do your research and make sure the new plan will work for you. Apply for the new plan and make sure you have been approved before you do anything with your current plan. Your new health plan may require a “Certificate of Creditable Coverage” which is a document that shows how long you have had continuous health insurance coverage. If you have had a “significant break in coverage” before applying (generally 60 days or more), the insurance company has the right to deny coverage of any pre-existing conditions for a waiting period (usually six to twelve months). If you know you will be canceling your plan, you can request the Certificate of Creditable Coverage ahead of time. Then, you’ll need to line up the dates that one plan ends and the other begins (such as the first of the month). As soon as you receive your new insurance cards and have confirmed the dates, you can cancel your current plan.

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