health-insurance-advice

How to deal with your health care cost

Fri, 03 Sep 2010 19:05:07 +0100

A health savings account (HSA) is a kind of account that you can put money in to to save for health-related expenses on a tax-free basis. You can contribute to a health savings account only in case you:

•have a high deductible health plan (HDHP)

•have no other medical insurance coverage, including Medicare – however, you are allowed to have other types of health-related insurance, such as accident, disability, dental care, vision care, or long-term care
•cannot be claimed as a dependent on anyone else’s tax return

Both you and your employer can make contributions to your HSA. However, the total amount of the contributions cannot be over an annual limit set by the government. For 2010, in case you have HDHP coverage only for yourself, you can contribute up to $3,050. In case you have relatives HDHP coverage you can contribute up to $6,150.

Any contributions made to your HSA must be cash; contributions of stock or property are not allowed. Also, you cannot make any contributions to your HSA when you enroll in Medicare. However, you can keep the money in your HSA and use it to pay for medical expenses tax-free.

Tax Benefits
According to the Internal Revenue Service (IRS), HSAs have the following tax-related advantages:

•You can claim a tax deduction for contributions you or anyone other than your employer, make to your HSA.

•Contributions to your HSA made by your employer may be excluded from your gross income.

•Any interest or other earnings you make on the money in your HSA are tax free.

•Money that you take out of your HSA may be tax free in case you pay “qualified” medical expenses.

You can find details about the tax benefits and rules (including examples of how HSAs work) in IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Designs.

Signing Up for an HSA
Banks, credit unions, insurance firms and other financial institutions are allowed offer and oversee HSA accounts. Your employer may also have set up a plan that will help you sign up. Note that your HSA is not something you purchase; it’s a savings account in to which you can deposit money on a tax-preferred basis.

What Is a High-Deductible Health Plan?
In case you select to open an HSA, you must have a high-deductible health plan (HDHP). An HDHP is an cheap (or less pricey) type of medical health insurance that does not cover you for the first several thousand dollars of health care expenses but usually will cover you after that.

You can use your health savings account to help pay for the expenses your health plan does not cover. A Dr. Mike Definition: Deductible - A deductible is the amount you must pay out-of-pocket each year for health-related expenses before your insurance owner begins to pay. There is a variety of deductibles - anywhere from none to $10,000 a year or more.

In order to qualify to open an HSA in 2010, your HDHP maximum deductible must be at least $1,200 for self-only coverage or $2,400 for relatives coverage. Your annual out-of-pocket expenses, including your deductible and copayments for 2010 cannot exceed $5,950 for self-only coverage or $11,900 for relatives coverage. The amount of the necessary deductible and out-of-pocket expenses is adjusted yearly to account for inflation.

Enrolling in a High-Deductible Health Plan

Any company that sells medical health insurance in your state may offer an HDHP. Your employer may offer an appropriate plan and you also ought to be able to finding a qualified HDHP by contacting your current insurance company, or an agent or broker licensed to sell medical health insurance in your state. Your state insurance department may even be able to provide information about qualified HDHPs.

What are Qualified Medical Expenses?

IRS Publication 502 defines qualified medical expenses as "the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. These expenses include payments for medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes."

A Dr. Mike Tip: Although non-prescription medicines (other than insulin) do not qualify for the medical and dental expenses deduction, they do qualify as expenses for HSA purposes.

What Are the Pros and Cons of Health Savings Accounts?
The U.S. Treasury Department states that the advantages of HSAs include:

•They provide security by defending you against high or unexpected medical bills.

•They may be more affordable due to lower medical health insurance premiums.

•You have the flexibility to make use of the money in your account to pay for current medical expenses, including expenses that your insurance may not cover.

•You can save the money in your account for future medical expenses.

•You can grow your account through investment earnings.

•You make all the decisions about how much money to put in to your account, whether to save the money for future expenses or pay current medical expenses, and which medical expenses to pay.

•You can keep your HSA even in case you change jobs, change your medical coverage, become unemployed, move to another state, or change your marital status.

•Your money stay in the account from year to year – there's no “use it or lose it” rules

Additionally, your HSA provides you triple tax savings:

1.tax deductions when you contribute to your account

2.tax-free earnings through investment

3.tax-free withdrawals for qualified medical expenses

The health reform legislation (Patient Protection and Affordable Care Act) signed in to law in March 2010 makes some changes to the way you manage your HSA. Beginning January 1, 2011, you can no longer be reimbursed on a tax-free basis for the costs of over-the-counter medications. And, the tax on distributions from your HSA that is not used for qualified medical expenses will increase from 10% to 20%.

A variety of consumer organizations, including Consumers Union, the publisher of Consumer Reports, have been critical of HSAs because they provide the greatest benefit to young healthy individuals who do not have dependents and rich individuals who can save more on their taxes.

If you have any other questions or would like a quote just contact me either through email powersinsurance1@gmail.com or call meat 863-448-2168, or just simply fill out the form for a quote under the heath insurance quote tab. Thanks for reading and enjoy!

FAQ about health insurance

Fri, 03 Sep 2010 18:53:48 +0100

I thought it would be a good idea to start off with some questions and answers. Here are 7 FAQ that should help:

Q: What is the basic difference between individual and group health insurance coverages?

A: An individual policy is purchased by you directly with the insurance company.

With a group health insurance policy, the group is the master insured and the insurance company contracts with the group. Insurance certificates, issued to a participating member, act as your policy. Often group health insurance costs less than would have been charged had the insurance company sold individual policies to each member separately. In addition, group health insurance often contains special coverages that are not available or are very expensive on an individual basis. The purchasing power of the group makes this economically feasible.

Q: What types of individual health insurance policies are available?

A: There are a variety of policies which insurance companies offer on an individual basis. Some of the more common types of policies include:

1. Major Medical - provides coverage for doctor visits, surgery and hospitalization or ongoing illnesses.

2. Hospital and Surgery - provides coverage solely related to hospital stays and surgical services, such as room and board, laboratory tests, X-rays, plus doctors’ charges

3. Hospital Confinement Indemnity - a policy designed to pay a set amount (an indemnity) for each day you are an "in-patient" at a hospital.

4. Health Maintenance Organizations (HMOs) - centralized service provider, commonly with a general practitioner (limited selection of participating doctors) coupled with coverage by specialists upon referral. Doctor visits, surgery, hospitalization and often reduced-rate prescription medicine are provided. May also cover preventive care, often not included in major medical policies.

5. Specified Disease (also called “Dread Disease”) - covers costs associated with a single disease, such as cancer, AIDS, heart attack, etc.

6. Short-Term - typically a major medical policy but with coverage lasting only for a specified length of time. Might be purchased to cover the time you are between jobs.

7. Accident Only - provides coverage for doctor visits, surgery and hospitalization resulting from an accident (no coverage for disease or illness).

8. Dental - provides coverage for costs associated with dentists and orthodontists.

9. Vision - provides coverage for sight correction

10. Home-Health Care - care provided to enable you to remain in your home while receiving services which can range from assisted living (help around the house) to around-the clock nursing with other health care providers on call.

11. Long -Term Care - coverage provided to individuals who otherwise would not be able to take care of themselves. A range of services from delivery of prepared meals, assistance with managing the residence, to stays in residential facilities. Often associated with long-term illness and the elderly.

12. Limited - Benefit - not very common, a bare-bones type of coverage intended to cover specific situations.

Q: What types of group health insurance coverages are available?

A: Group health insurance makes individual coverages available on a group basis. A primary advantage is the purchasing power of the group that achieves reduced acquisition costs for the insurance company. The insurance company is then able to reduce the rate it charges to provide insurance for each individual member of the group. The Group is in a better position to bargain with the insurance company for additional benefits for its members. There are a variety of types of group health insurance plans, the major distinctions being the mechanism used for purchasing the insurance. Common varieties of group health insurance plans include:

1. Fully Insured Employer Group - The employer contracts directly with the insurance company to provide certificates to covered employees. Typical arrangement is either for major medical or health maintenance organization (HMO) coverages.

2. Small Employer Group - Insurance companies group certain industries together and then gather small employers together to form a larger group. These groupings enable the insurance company to better predict the cost of providing the insurance. The small employers can then get coverages otherwise not available unless charged a much higher rate. All the small employers get the same policy without deviation.

3. Large Employer Group - same as a fully insured employer group with direct contract between the insurance company and the employer to provide individual certificates to covered employees.

4. Health Maintenance Organization (HMO) - a group program under which the organization provides a full range of medical services to participants. Participants are either assigned or select from a group of general practitioners, who then refer their patients to specialists when the need arises. Good generalized system of providing medical care which is marked by curtailment in selection by the individual participant of the health care provider who render services. Individual participants insured by an HMO are called “enrollees”.

5. Self-Funded ERISA - available to large groups. The group contracts with an insurance company or third-party administrator to handle the paperwork. The group pays for all costs associated with the operation of the insurance plan itself, along with the added cost for administration.

6. Association Group - similar to a fully insured employer group, the distinction being that instead of an employer, it is a different type of group, such as a credit card company offering insurance as a benefit to its cardholders or a church group offering insurance to its parishioners.

7. Group Managed Care - a long-term health insurance plan offered through the group or association.

8. Preferred Provider Organization – another kind of health care network (doctors, hospitals, and other health care providers) that contracts with health insurance companies.

Q: How can I get health coverage?

A: Employer-sponsored group insurance

Millions of people obtain their insurance through their employment. Upon reaching the eligibility requirement (such as a full-time employee working more than 40 hours per week for a six month continuous basis), the employee becomes covered under the employer's group insurance policy and the employee is issued an insurance certificate or health insurance card. Medical insurance is a very common fringe benefit of employment. Some employers will provide coverage solely for the employee, some employers pass along the cost of dependent coverage to the employee, while other employers pay the entire cost of medical insurance for the employee and his/her family.

Individual insurance

Health insurance which is purchased by the individual. Some major health insurance companies offer a broad range of coverages and options to individuals, who pay directly out-of-pocket for the cost of the insurance. Many insurance companies require completion of an exhaustive application and may require a medical examination before coverage will be offered to the individual.

Government-sponsored insurance

Some states offer health insurance benefits to their residents, often with certain income requirements for eligibility. These plans are designed for the "working poor" - individuals who are employed but no health care coverage is available where they work. This enables the state to protect its residents from catastrophic loss due to illness, disease or accident without placing an additional burden upon its program for the truly indigent.

Association-sponsored insurance

You may belong to a group or organization that offers health insurance as a benefit of membership. Check membership benefit statements, brochures, or ask organizations leaders to determine availability of health insurance through your group or organization.

Q: What’s the difference between primary and secondary coverages?

A: Since many people have available medical insurance from more than one plan (such as two employed spouses covered under group health insurance plans), insurance companies do not want insureds to profit through their health insurance. To prevent double recovery, most health insurance plans have provisions which determine how primary versus secondary coverage will be determined.

Primary coverage is provided through the plan of which they are a member (such as the spouses both covered through their respective employment - the primary coverage is provided under the plan provided by the employer of each spouse) or the plan under which the member has been a participant for the longest time period.

Secondary coverage, usually as a result of being covered as a dependent under someone else's health insurance plan, provides reimbursement for medical expenses after exhaustion of coverage available through the primary plan.

Q: How can health insurance companies can mess with me?

A: Shopping for a health insurance policy can be a daunting task, made even more difficult by the great variety of types of health insurance coverages that are available and by the desire of all insurers and their agents to get your business. This desire to get your business can cause insurers and their sales representatives to overstate or mischaracterize the true nature and benefits of the insurance coverage you are purchasing. This, of course, makes your job even more difficult.

The following are some of the ways in which insurers and their sales agents cause you to make a wrong decision:

Delivering a policy containing the words “Approved by the [name of state] Department of Insurance,” or words of a similar meaning. For an insurance policy to be sold, it must be reviewed and approved by the state insurance department. So there is nothing unique about it being approved by the insurance department. In fact, there is something wrong if it is not. But these words make it sound like the insurance department is endorsing that particular policy. That is misleading.

Distributing a written document misrepresenting, with respect to a policy issued or to be issued, the terms, benefits or advantages of the policy. This can be done by overstating the scope, type, amount or length of coverage. For example, an agent or written material from the insurer may allow you to think the policy you are considering is all-encompassing when in truth there are significant limitations, exceptions and reductions in benefits. Every policy has limitations. You need to know what these limitations are in the policy you are purchasing. Do not rely on the agent’s word or on marketing or supplementary materials. Read your policy and then ask the insurer representative (field agent or home office) to point out where in the policy the wording is that provides the coverage of interest to you.

Using a name or title of a policy or a class of policies that misrepresents the true nature of the policy or class of policies. A marketing name such as “Benefit Builder” or “Security Blanket” might lead you to think this insurance will protect you from all medical expenses or that it operates as an investment for your financial advantage. There is no health insurance policy that covers all medical expenses. They all have limits. None of them can properly be viewed as providing you with financial security. For a premium, they merely provide coverage for some portion of your medical expenses.

Making statements to you to encourage you to allow existing insurance to lapse or to forfeit or surrender the existing insurance. Never let an agent convince you to let your existing health insurance lapse before your new insurance coverage begins. You could have a catastrophic injury or illness that occurs during the lapse in coverage and you would not be covered under either policy. Be very wary of any agent who is pushing you to discontinue your existing insurance if there is any doubt about when your new coverage will begin. In fact, you should allow some overlap so that you have time to actually read your new policy (not the advertising or supplementary material, but the actual legal contract) to make sure it is going to provide the coverage you thought you were buying. The new policy has a free-look period during which you can return it at no cost to you if you discover, upon reading it, that it is not what you thought it was going to be.

Making ads containing untrue, deceptive, or misleading statements regarding the business of insurance or a person conducting the business of insurance. Insurance company advertising is regulated by state insurance departments, but it is often after the fact. Insurance policies are required to be filed, reviewed and approved by state insurance departments before they can be sold. Generally, however, insurance companies do not need to file advertising with the insurance department for review before it is used. Thus, there is the risk that an insurer (or, more often, an agent) may, intentionally or unintentionally, provide you with advertising material that is inaccurate or misleading. A good general rule as a consumer is to never rely on the advertising material. Rely on the insurance policy (the legal contract) that has been filed and approved by the state insurance department.

Q: What some more ways health insurance companies can mess with me?

A: Check out the following ways in which health insurance companies and their sales representatives can make the process more difficult for you or cause you to make a wrong decision.

Making, aiding or encouraging any statement that is false, maliciously critical of, or derogatory to the financial condition of an insurer. There is no place in the sale of insurance for maligning the competition. If your agent, or the company he or she represents, is putting an emphasis on critical, derogatory comments of the competition, you would be well advised to find another agent and/or company. There is a good chance that such comments are being made to distract you from deficiencies in the product being sold or the company selling it.

Making, aiding or encouraging any statement that is calculated to injure a person engaged in the business of insurance. Same thing. Be very wary of an agent who is attempting to sell you insurance by making statements intended to harm another competitor. If the agent is willing to do this, how can he or she be trusted to provide you with honest information about the product he or she is selling?

Offering to make an insurance contract in terms different than those actually written down in the insurance contract. This is an absolute red flag! Insurance products are heavily regulated. In order to be sold in a state, the policy must be filed with, reviewed and approved by the state insurance department. Forms that are not approved aren’t permitted to be sold in the state. Any variations from the approved forms are not legal. Agents are not allowed to make special deals outside the terms of the approved policy contract form.

Offering a special favor or advantage (e.g., higher benefits) or valuable consideration (e.g. cash, premium reduction, etc.) as an inducement to purchase the insurance that is not specified in the insurance contract. This is another red flag. This type of activity by the insurer or by the agent is commonly referred to in the industry as rebating and is expressly prohibited by the laws and regulations of the states. If you are presented with such an offer, ask the agent if it is legal and ask for evidence to support it.

Offering stocks or shares in a corporation as an inducement to buy the insurance. This is just another form of illegal rebating and is prohibited by state laws and regulations. Companies and their agents know rebating is illegal. Therefore, if they engage in it, it is intentional. This tells you something about the integrity of the company and the agent and should make you question whether they can be relied upon with regard to the insurance product they are selling you.

Using as a corporate or business name one that is the same or is deceptively similar to a name of an existing insurance company or insurance-related company already authorized to do business. Obviously, a new company will not for long be successful in adopting for its name a name that is deceptively similar to that of another company already established in the market. This is a red flag because if the name is too similar to a company already established in the market, there is a good chance the new company is not properly licensed to do business in the state. If it were, the similarity probably would have been detected and prohibited by the state licensing agency – the state insurance department.

Using a word, symbol or slogan that is the same as or in a way that is deceptively similar to that already being used by an insurance company or insurance-related company already authorized to do business. Another red flag. The use of such a word, symbol or slogan is a warning to you that the company you are dealing with is worthy of further investigation by you regarding their financial stability and ability to provide you with the benefits you have bargained for.

Well here are some questions and answers for you to look at and if you have any more questions please email them to me at powersinsurance1@gmail.com and I will be more than happy to add them and answer them to you.

Take Care!