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Benefits Chalk Talk: Your Guide to Supplemental Health Insurance

An insurance plan that pays you cash when you get sick or hurt, right? You got it. That’s the exact concept behind supplemental health insurance. In this blog article… we’re going to describe supplemental health insurance, talk about the different policies that are available, and explain exactly where it fits in.

Here are some examples of the plans that fit into the category of supplemental health insurance:

  • Personal Accident Indemnity Plan
  • Personal Cancer Indemnity Plan
  • Hospital Protection Plan (cash benefits for hospitalizations)
  • Specified Health Event/Critical Illness Plan (things like heart attacks & strokes)
  • Vision, Dental, Short Term Disability, and Life Insurance

As mentioned above, unlike major medical insurance (which pays physicians, surgeons, and hospitals)… supplemental health insurance pays the policyholder a cash benefit to use where they need it the most. Yep, you manage the cash benefit yourself. It’s important to understand that it’s different than health insurance. Here are some examples of the places where people use their cash benefits:

  1. Out of pocket medical expenses: cash benefits from supplemental health insurance can be used to pay for things like deductibles, co-payments, and other out-of-pocket medical expenses. 
  2. Rent & mortgage payments: in certain situations where someone is sick or hurt, they may need some additional help w/ maintaining their standard of living. You can use cash benefits to make mortgage and rent payments.
  3. Car/Kids/Gas/Utilities/Groceries: if you’re sick or hurt, these types of things continue to go on. Cash benefits from a supplemental health insurance plan can help assist with these kinds of expenses.
  4. Additional Treatment Options & Travel: in certain situations (ie: cancer situations, severe accidents, etc), a patient may want to travel and/or seek treatment outside of the network. They may want to see a specific surgeon, visit a renowned institution for specialized care, have a specific procedure performed, etc. Cash benefits can help with these kinds of expenses.

Depending on the major medical plan that you have in place, and the standard of living you maintain… as listed above, you can see exactly where supplemental health insurance fits in. It can be a very important component of your overall benefits planning strategy (individual & business). 

That covers the basics on the concept of supplemental health insurance. Keep in mind that supplemental health insurance is also typically much more affordable than health insurance. It’s a good idea to educate yourself on it, and understand it. It also fits in with any health insurance plan (some more than others).

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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Benefits Chalk Talk: State Health Insurance Exchanges

There are lots of questions about state health insurance exchanges, and where/how they will fit in. In this “Benefits Chalk Talk” post, we’re going to give you some 101 (simple) insight into these exchanges, what they’re about, and how they’ll work.

A state health insurance exchange may or may not be the right option for your personal (or business) situation, but it’s a good idea to understand them. Consider them another “tool in your belt” to fund healthcare.

HealthBenefitsChalkTalk1

First off, here are some basic facts and information about these new exchanges:

  • State-based health insurance exchanges (or marketplaces) are a key component of the Affordable Care Act (ACA)
  • States have the option of running their own exchange, or partnering w/ the federal government to run an exchange (or choosing neither, and a federally facilitated exchange will be set up)
  • All exchanges must be ready to enroll customers by 10/1/2013, and be fully operational by 1/1/2014

State health insurance exchanges may be an important part of an individual or business benefits planning strategy. Although some businesses and individuals may make the decision to completely steer clear of the exchanges, others who are open to the idea of utilizing government options will want to learn more.

When it comes to healthcare reform (love it or hate it), it’s important to understand that Policy Advantage Insurance Services takes an unbiased (non-political) approach to these concepts. Our goal is to deliver fact-based information to our clients, so they can put the things in place that make the most sense.  

Health Insurance Exchange

Here is some additional information about the exchanges:

  • Plans offered within the exchange must be the same (contain the same benefits), as those offered outside of the exchange
  • Enrollment in plans will take place predominantly online
  • Plans in the exchange will be “guaranteed issue,” meaning you must be accepted for coverage if you apply
  • An “exchange certified” agent or broker can assist you with enrolling in a state health insurance exchange plan (for more details, ask your current agent/broker, or find an agent/broker)
  • There are provisions to lower premiums (through massive subsides), for Americans with household incomes under 400% of the Federal Poverty Level (that’s most Americans)

Here are the early 2012 Federal Poverty Level guidelines. If your yearly earnings fall within 100% to 400% of the FPL, you may be eligible for a tiered subsidy through the exchange:

  • 100% of the Federal Poverty Level (FPL) was $11,170 for an individual and $23,050 for a family of four through early 2012
  • 400% of the Federal Poverty Level was ~$44,680 for an individual and ~$92,200 for a family of four through early 2012

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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Insurance Alphabet: Letter B

B is for:

“BROKER”

b_blue

Broker: is one that negotiates insurance contracts on behalf of the insured, therefore representing the client’s interest, not the insurer’s.

Brokers already have established relationships with the companies that they contract with. Because of this, they are able to navigate for the insurance consumer more easily. Areas of advantage: https://schweizer-apotheke.de/

  • Customer Service (changes, enrollment, administration, etc)
  • Ability to Expedite Processes (saving the consumer time, and making things more convenient)
  • Brokers are “Fluent in Insurance Language” (able to communicate w/ companies efficiently)
  • Product Knowledge (knowing the insurance company’s products inside-and-out)

Give yourself the advantage, and put a medical benefits broker to work for yourself or your company today.

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Benefits Chalk Talk: Consumer Directed Healthcare

This is our first post in our series called “Benefits Chalk Talk.” Much like an after-practice or halftime chalk session in athletics, our goal is to help empower our clients to put all the many different benefits tools in play.  And, much like you face different opponents in a sports contest (and strategies change over time)… our chalk sessions will provide relevant, up-to-date information that will help give you the advantage.

Today’s topic is “Consumer Directed Healthcare.” We selected this as our first concept for a number of different reasons:

  1. Consumer Directed Healthcare’s foundation rests upon individual choices, planning strategies, and knowledge.
  2. Consumer Directed Healthcare will be a concept of emphasis in the post-healthcare reform (Obamacare) environment.
  3. Consumer Directed Healthcare emphasizes the direct involvement of the consumer, encouraging people (and employers) to make sound, informed purchasing decisions (the idea is to make the whole system more efficient).

HealthBenefitsChalkTalk1So this leads us to our question: What exactly is consumer directed healthcare?

Well… consumer directed healthcare has many different definitions. Sometimes it’s even referred to as consumer driven healthcare.

This is the definition we use at Policy Advantage Insurance Services:

Consumer directed healthcare is the idea that patients will behave as medical consumers. Patients will be the ones deciding how their healthcare dollars will be spent. Not doctors, employers, insurance companies, or the government.

Some definitions claim that consumer directed healthcare must be utilized with a high deductible health insurance plan (HDHP). We reject this definition, because we think that all tools and programs must be considered when someone is directing their own program (whether-or-not their strategy includes the use of a high deductible health insurance plan).

There are many things that go into consumer directing:

  • Am I an individual or employer?
  • What is my personal situation (family, hobbies, lifestyle, etc)?
  • Should I utilize private or public options (or a combination of the two)?
  • What type of heath insurance plan should I put in place?
  • What are HSAs and HRAs?
  • What do I need to know about dental, vision, and ancillary programs?
  • What kinds of tax incentives are available to me?
  • Plus others…

We’ll answer these kinds of questions in future blog posts. “Benefits Chalk Talk” will identify the different areas of healthcare benefits planning, and then inform the consumer on how to put them into play.

Thanks for stopping by, we hope you found our information valuable. Please feel free to follow us at our other outlets:

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Phrases Made Easy: “Defined Benefit” and “Defined Contribution”

Note: **this is the second (2) of a series of four (4) blog posts that require some knowledge of previous posts to be understood. We recommend that you read them in order. Here is the suggested order of reading:

  1. Healthcare Reform: The Major Players
  2. Phrases Made Easy: “Defined Benefit” and “Defined Contribution”
  3. The Great Transition: Healthcare Benefits & Defined Contribution
  4. Health Reimbursement Arrangements (HRAs): The Employee Benefits Home Run

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Defined benefit and defined contribution are long, “scary” phrases. We’ve got news for you though: at Policy Advantage Insurance Services, we work hard to explain all this jargon in simpler terms. And even better news: these two are really easy.

That’s right, they’re actually quite simple to understand. Once you “get” them… you’ve got them (there are only two of them, and they won’t change). Understanding their concept will be a valuable tool for you… especially in the post healthcare reform environment.

In the past, these two phrases were most commonly associated with retirement planning. Now (as a result of healthcare reform), you’ll also want to understand them when it comes to health benefits planning. Here we go.

Phrase #1 — “Defined Benefit” made easy:

  • “Defined Benefit” Example in Retirement Planning: You’re a teacher, you retire, and the school district sends you a monthly retirement check! Simple. That’s a “defined benefit.”
  • Simpler Terms: The benefit (cash/check), has been defined (the dollar amount paid to you each month)
  • Examples of “Defined Benefits” in Retirement and Healthcare Planning: a) pension plans (our example), b) cash-balance pension plans, and c) any group health insurance plan (large or small).

Phrase #2 — “Defined Contribution” made easy:

  • “Defined Contribution” Example in Retirement Planning: You work at a software company. That software company matches your contribution to your 401k each month. That is a “defined contribution.”
  • Simpler Terms: The contribution (match to your 401k account), has been defined (usually as a percentage).
  • Examples of “Defined Contributions” in Retirement and Healthcare Planning: a) 401k’s (our example), b) ESOPs, c) stock bonus plans, d) profit-sharing plans, e) target-benefit pension plans, f) money-purchase plans, and g) health reimbursement arrangements (or HRAs).

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As mentioned, health benefits planning will begin to transition from “defined benefit” plans (ie: group insurance plans) to “defined contribution” plans (ie: HRAs). The reason: healthcare reform has created planning conditions that are suitable for this transition. Retirement plans evolved in similar fashion from pensions (defined benefit) to 401k’s (defined contribution).

If you followed along last week (“Healthcare Reform: The Major Players”), you would have read that HRAs were one of the “major players” we described. This is why: health reimbursement arrangements (or HRAs) will be the “vehicle” that will facilitate this change to defined contribution healthcare plans. We’ll begin to explain in our next blog post… so come back and read up!

Important Editor’s Note 11/22/2013: Since these original blog posts, federal guidance regarding “Stand-Alone HRAs” (which are addressed in-depth throughout these articles) has undergone significant changes. In order to stay in full compliance, please be advised that there are now many additional considerations when adopting this type of benefits planning strategy. Consult with a proper broker or insurance professional before utilizing employer dollars to purchase individual health insurance policies. 

That’s all for now. We hope this information was beneficial, as these can be important concepts for anyone.  Thanks for stopping by, and feel free to follow along at our other outlets:

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