Tips for selecting the right comprehensive health insurance plan.

June 8, 2015 by Frank West

Today, with medical costs at all-time high, emergencies such as sickness, disease and accidents which may result in prolonged hospitalisation, can leave you in severe financial crisis unless you have a comprehensive medical insurance policy which takes care of all your required expenses. So how do you choose a plan that’s perfectly suitable for you and your family?

There are a lot of factors to consider when choosing an insurance plan, most importantly: what your health care needs are, and what you can afford to spend? Once you are aware of your financial strength, the next step is to identify the “ought-to-have” with anticipating certain medical needs. With the right insurance, you could save thousands, perhaps even tens of thousands, if you or a family member gets sick.

Here are some critical clauses that needs your attention to detail while buying a health insurance policy:

• Sum insured limits

The main limit in health insurance is the sum insured. Any medical expenses incurred over and above the sum insured are not payable. It is advisable to take adequate cover from an early age, particularly because it may not be easy to increase the sum insured after a claim occurs or when the age increases.

• Individual/floater policies

Most buyers often struggle to make a decision on whether to buy an “individual” policy for each family member or a “family floater policies”. While an individual policy works best in all situations, it can be an expensive option. The family floater plan on the other hand offers flexibility in terms of utilising the overall insurance coverage among the family as a group. While an individual opts for a family floater cover, the sum insured opted should be sufficiently high considering a situation where more than one person in a family needs hospitalization in the same year.

• Extent of coverage

When you are paying for a comprehensive cover, it is important to make sure that the risk covered is comprehensive as well. One should not buy a plan just because it’s cheaper than the rest but should be measured in terms of premium versus benefit comparison. Benefits such as pre and post hospitalization, day care procedures, OPD cover, maternity extensions or ambulance service, should be taken into consideration.

• Waiting period for pre-existing disease exclusions

Many individuals have health related problems that exist before you apply for a health insurance policy or enroll in a new health plan. Pre-existing condition imposes a waiting period which is also called the cooling period. Therefore, apart from the insurance premium being charged by various insurers, you also need to compare the waiting periods stipulated in the policies for covering pre-existing ailments. Some policies specify a waiting period of two years, while in case of some, it could extend to four years. Similarly, there are waiting periods for certain listed conditions like hysterectomies, cataract, kidney stones and knee replacement surgeries which may vary from one year to four years and these also need to be compared.

• Any internal sub-limits like room rent curbs, sub-limits on specific procedures

In order to avoid inflated charges that hospitals levy on patients with an insurance cover, some policies have sub-limits on room rents or certain procedures and this becomes the most critical feature when evaluating a health insurance policy. Typically the insurer places two kinds of limits, on the hospital room rent and the liability for specific diseases. Classically the room rent expenses are capped at 1% of the sum assured for a day, while ICU charges have a ceiling of 2% of the sum assured. Plans free of sub-limits are preferred as it prevents surprises at the time of claims. These sub-limits are generally seen in plans with lower overall sums insured.

• Deductibles/co-payments

Sub-limits can also take the form of co-payments, where the insurer will be asked to pay a predetermined percentage of the claim amount or deductibles, where the insurer will have a cut-off cost which you will have to bear and the insurer will come into the picture only when the bill goes beyond this limit. It is advisable to go for plans that come devoid of restrictive options, such as co-payments, limits on room rents and treatment-specific limits. They may cost a little more but evade financial risk during emergencies.

• List of exclusions

While your health insurance policy can provide relief in times of emergencies, there may also be times of trouble in case you are not aware about the ailments that are covered and those that aren’t. It is important to know the list of exclusions in your health insurance policy to avoid instances when you end up paying additionally for a service already covered in your policy or in worst case scenario, post treatment you realise that your policy did not cover the treatment of that particular illness.

• In-house claims servicing or use of TPA and service levels/market feedback

It is important to know whether the insurance company has its own in-house servicing unit or uses a TPA for servicing the policies.

Insurance companies having their in-house servicing units have a better turnaround time for claims servicing and cashless processing.

A hospital or medical institution which has an agreement with the insurance company or TPA (Third Party Administrator) to provide cashless treatment is a network hospital. While buying a health plan, make sure of the proximity of the network hospital from your place of residence or work. Opt for an insurer who has more network hospitals in geographical locations where you are likely to need medical care.

Ensure that the facilities and repute of the hospitals in the network are worthy.

• Reputation of the insurer

Traditionally, we all are inclined to go for plans that our friends and family suggest as we trust their experience and judgment.

But the market is flooded with products and marketing gimmicks to lure customers. While deciding on a health plan, it’s important to conduct a due diligence on the insurance company — keeping track of how smooth their claim settlement is, how many claims have been settled, time efficiency and network.

7 Rules For Deducting Medical And Dental.

May 28, 2015 by Frank West

In past years, if you itemized your deductions, you could deduct qualified medical and dental expenses to the extent they exceeded 7.5% of your adjusted gross income (AGI). However, beginning January 1, 2013, this threshold was raised to 10%. In this article, we’ll discuss what you need to know to claim a federal income tax deduction for medical and dental expenses.

1) AGI Threshold Increase

The total of your qualified medical and dental expenses must exceed 10% of your AGI to claim a deduction. There’s one exception which we’ll discuss in the next section.

2) Temporary Exception to the 10% AGI Threshold

If married, and one spouse is at least age 65, the threshold remains at 7.5% of AGI until December 31, 2016. Beginning January 1, 2017 the threshold will be 10% for all taxpayers.

3) You Must Itemize

You must itemize your deductions (i.e.; Schedule A) in order to qualify. You cannot use the standard deduction and claim medical and dental expenses.

4) When Are Medical Expenses Considered Paid?

You must have paid medical expenses during the calendar year. If you paid by check, the date you mailed or delivered the check is usually the qualifying date of payment.

5) Qualified Costs And Expenses

You may use any medical or dental costs you paid for yourself, your spouse, and your dependents. However, if you were reimbursed by insurance or another source, your deduction will be reduced by the amount of the reimbursement. In general, any legitimate medical expenses will qualify, including the costs of diagnosing, treating, easing, or preventing disease. This also includes the cost of health and dental insurance premiums and possibly long-term care insurance premiums. Also on the list are eye exams, eye glasses, contact lenses, and eye surgery. The list of qualified expenses is quite extensive. To find everything you’ll need to know about deducting medical and dental expenses, click the following link which will take you to the IRS website and to the specific publication on this subject. To learn more, click: IRS Publication 502.

6) Travel Costs

You may be able to claim the cost of travel for medical care. This includes public transportation, ambulance, tolls, parking fees, etc. If you used your personal automobile, you may be able to deduct 24 cents per mile for 2013.

7) No Double Benefits

If you participate in a Health Savings Account or Flexible Spending Arrangement and you used either to pay for medical expenses, you cannot claim a tax deduction as these funds are usually withdrawn on a tax-free basis.

Filed Under: Health Care Reform, Health Insurance Tagged With: Health Care Reform, Health Insurance Self Employed

Of Obamacare’s Many Taxes, What Hurts Most.

May 20, 2015 by Frank West

At tax time, more of us are looking anew at the Affordable Care Act. Some of us are doing so as we hunch over our tax returns. Yet many of the panoply of taxes added by Obamacare are not open and obvious. They are more like those Lois Lerner emails, or Hillary Clinton’s for that matter. In fact, there could be a new competition for what is Obamacare’s most unfair tax. As one editorial noted, some say it is the 2.3% excise tax on medical devices, increasing their cost, hurting the industry, and designed purely to collect revenue.

Another pure revenue raiser is the 3.8% net investment income tax. Depending on your income, it adds a 3.8% tax on top of your interest, dividends and capital gains. While this one may be politically safe since it purports to target only upper income people, it is hard to explain this to someone with a modest income who sells their lifelong property and ends up with an extra 3.8% tax on top of their capital gain tax. Such a person might be in that upper income category just once year.

There are many Obamacare taxes, so many, in fact, that can even be debated how many there are. In terms of tax filings this year, Obamacare is creating a tax filing backlash. Yet most of the approximately 85% of Americans who have health insurance and who make less than $250,000 a year can relax. Most of the new taxes are unlikely to hurt you or impact your pocketbook. Even so, it’s easy to be overwhelmed, which is one reason the IRS has a 21-page Publication 5187 on the Health Care Law: What’s New for Individuals and Families.

If reading about the now-not-so-new-law triggers a need for an entertainment break, there’s always President Obama’s Buzzfeed video. Or you can review three new tax forms: the 1095-A Health Insurance Marketplace Statement, the Form 8962 Premium Tax Credit, and Form 8965 Health Coverage Exemptions. Forms 1095-A and 8962 are for people who bought health coverage through the Marketplace. Form 8965 is for those who got a Marketplace coverage exemption or plan to claim an exemption.

For ranking Obamacare’s taxes, you must first list them. That is no mean feat, since some of it depends how you count and what you regard as a tax:

2.3% Tax on medical device manufacturers (this doesn’t hit you directly, but indirectly it sure can).
3.8% Net investment income tax. This one is a big one. Depending on your income, it adds a 3.8% tax on top of your interest, dividends and capital gains.
Employer mandate on business with over 50 full-time equivalent employees to provide health insurance to full-time employees. $2,000 per employee $3,000 if employee uses tax credits to buy insurance on the exchange.
40% Excise tax on high-end (Cadillac) health insurance plans (40% excise tax on the portion of employer-sponsored health coverage that exceeds $10,200 a year and $27,500 for families).
Medical deduction threshold tax increase (threshold to deduct medical expenses as an itemized deduction increases to 10% from 7.5%).
Individual mandate (a tax for not purchasing insurance, though the tax penalty is called a Shared Responsibility Payment, the greater of 1% of your income above the filing threshold of $10,150 for singles and $20,300 for married couples filing jointly or $95 per adult ($47.50 per child), with a maximum of $285 for a family, whichever is higher. It goes up in 2015.
Excise tax on charitable hospitals which fail to comply with the requirements of Obamacare.
Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D.
Medicare Part A tax increase of .9% over $200k/$250k.
An annual $63 fee levied by Obamacare on all plans (decreased each year until 2017 when pre-existing conditions are eliminated) to help pay for insurance companies covering the costs of high-risk pools.
Medicine cabinet tax (over the counter medicines no longer qualify as medical expenses for flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), health savings accounts (HSAs), and Archer medical saving accounts (MSAs).
Additional tax on HSA/MSA distributions.
HSAs or Archer MSAs, penalties for non-qualified medical expenses of 10% to 20% in the case of an HSA and from 15% to 20% for an MSA.

Filed Under: Health Insurance, Obamacare Tagged With: Affordable Care Act, Health Care Reform, Health Insurance Self Employed, Obamacare

Health Insurance: It’s Not Too Late To Get Covered.

March 24, 2015 by Frank West

Health Insurance: It’s Not Too Late to Get Covered – Special Enrollment Period Now Open

(Fremont County, Wyo.) – Up to six million Americans are expected to pay a tax penalty this year for not having health insurance coverage in 2014. To help families avoid future penalties, a special enrollment period for the Health Insurance Marketplace opened on March 15 and will close April 30.

This special enrollment period is an additional time outside of open enrollment during which you and your family can sign up for health coverage. This will be your last chance this year to receive health coverage through the Health Insurance Marketplace and avoid a tax penalty for next year.

Why is health coverage important?

Health coverage helps cover the cost of medical services, tests and treatments that assist you in getting and staying healthy. The required basic level of coverage includes preventive care, health screenings, well woman and prenatal care, immunizations for adults and children, treatment for pre-existing conditions, and the cost of some prescription medications.

What fees might I owe if I’m not covered?

Surveys have shown that nearly half of uninsured adults are unaware of the penalty associated with not having health coverage. In 2014, the penalty for not having the required minimum level of health coverage was up to $95 per uninsured person or 1% of a household’s income. For 2015, this amount will more than double, with the penalty per uninsured person reaching $325 or 2% of a household’s income.

There are exemptions available to those who cannot afford coverage or who have experienced hardship. Consult Healthcare.gov or a certified application counselor to see if you qualify for an exemption.

Who’s eligible for the special enrollment session?

The special enrollment period is designed for the following:

Those who don’t currently have health coverage for 2015;
Those who paid a penalty as part of their 2014 federal income tax returns for not having health insurance in 2014; and
Those who became aware of the individual mandate penalty after the regular 2015 enrollment window closed.

Filed Under: Affordable Care Act, Health Insurance, Health Insurance Exchange, insurance broker, San Diego Health Insurance Tagged With: Health Insurance Exchange, Health Insurance Self Employed, insurance broker

Health Insurance Options for Part-Time Employees

April 29, 2014 by Frank West

The Affordable Care Act (ACA), also referred to as Obamacare, does not require employers to offer health insurance to part-time employees Part-time employees are defined as those who work less than 30 hours a week, and employers without healthcare coverage for part-timers will not be penalized.

The Individual Shared Responsibility Provision of the ACA that goes into effect in January 2014 requires that all individuals, including part-time workers, must either have creditable health coverage or qualify for an exemption. Individuals that do not meet either requirement will be assessed a penalty on their income tax return for the year. Part-time workers without access to job-based coverage will be responsible for obtaining their own healthcare if they do not wish to pay the tax penalty.

Individuals and families will have several options for purchasing their own health insurance. Individual plans may be purchased directly from private insurance companies. Beginning in January 2014, insurers will not be able to deny applicants that have a pre-existing condition, which may be beneficial to those individuals that are not able to work fulltime due to illness.

Part-time workers may be able to purchase health insurance via their state’s Health Insurance Marketplace, also known as the state exchange. Individuals and families may qualify for lower costs on monthly premiums based on household size and annual income. Part-time workers can also purchase insurance from a private exchange, particularly those that include on-exchange and off-exchange health plans for maximum consumer choice.

Monthly premiums for health plans purchased via a state exchange may be partially subsidized via premium tax credits. Generally these credits will be extended to non- elderly families with annual incomes of 100 to 400 percent of the federal poverty line. About half of the non-elderly population has an annual income in that range, but this varies depending on geographical location and family size.

Premium credits will only be extended to consumers who are not offered health insurance through an employer. Since about 95% of all companies that employ over 50 full-time workers already provide healthcare to those workers, subsidies will not be available to most of those who do full-time work. Full-time employees would be eligible for lower costs via subsidies only if their job-based coverage isn’t considered affordable or doesn’t meet certain minimum standards of care.

Healthcare coverage is generally considered to be affordable according to ACA standards if an employee’s premium cost is less than 9.5% of their yearly household income. The minimum standards of care are called the Essential Health Benefits, which cover 10 medical coverage categories that must be offered by every insurance plan.

Part-time workers may qualify for free or low-cost coverage through Medicaid or the Children’s Health Insurance Program (CHIP). Eligibility guidelines for these programs vary by state, but are usually determined by annual income and household size.

Individuals and families that use their state exchange sites can explore their coverage options and learn whether they qualify for premium tax credits, Medicaid, or CHIP. Many states offer a free-to-use Navigator program that provides assistance in comparing and applying for healthcare. Small businesses that employ less than 50 full-time workers can use the Small Business Health Options Program (SHOP) to explore their options for employee coverage.

Filed Under: Affordable Care Act, Health Insurance, Health Insurance Exchange, San Diego Health Insurance Tagged With: Group Medical Insurance, Health Insurance Exchange, Health Insurance Self Employed

Health Insurance for the Self Employed .

June 27, 2013 by Frank West

Health Insurance for the Self Employed

Medicine Bottles Being self-employed is a liberating feeling for those who make it a part of their lifestyle. These people have the autonomy to set their own schedule, and enhance their careers as much as possible without having to deal with mundane office politics. A self-employed person can manage their own career, without having to wait to be promoted. There is one thing however, that is tough to manage, which is health insurance.

When first starting out in a new career, it can be especially difficult to carry health insurance. Although many people would love to become self-employed, and plan carefully for such an event, most do not realize the actual monthly expense of health insurance. Before you make this decision, it is crucial to figure out exactly how much you will be paying for health insurance. Collect as much information as possible, for example the rates you need to pay to cover yourself and possible dependents, and how that fits into your budget.

Being self-employed does not allow you to take advantage of bulk rates that are normally set aside for employers paying to cover their employee’s health insurance costs. This is one of the reasons why the insurance rates are so high. Through careful research, you may find you have access to low bulk insurance rates through a non-corporate affiliation. Possible solutions include programs related to educational institutions you may be associated with, or perhaps your religious background will allow you to get a discount from certain organizations.

Consider joining a group that can help get you an affordable insurance rate. The Freelancer’s Union was formed partly to help the self-employed get health insurance at discounted rates by bringing freelancers together. Take into account nationwide organizations like the Freelancer’s Union as well as local community organizations that will give you options for insurance rates. It’s just a matter of being resourceful and creative to find health insurance as a self-employed person.

Filed Under: Health Insurance, Health Insurance Self Employed, Self Employed Health Insurance Tagged With: Health Insurance Exchange, Health Insurance Self Employed, HSA