October 15 will arrive more quickly than you might think. That’s the date Medicare opens up their Annual Election Period, during which you can change between one plan to another or add additional coverage. Since the AEP only lasts from October 15 to December 7, you won’t have a lot of time to make a decision about your coverage. That’s why we urge all of our clients to think about these issues now. Review your current coverage and compare plans to see if there might be a better deal for you.
With time running short, you might rush into a decision that isn’t just right for you. So, in addition to researching the Medicare plans available to you, we urge you to watch out for these mistakes.
Don’t base your decision solely on premiums. It’s tempting to go with the lowest price. But because Medicare Advantage plans can vary, with different deductibles and even offering different types of coverage, it would be wise to consider whether paying just a bit more per month would actually be the better deal in the long run.
Don’t overlook plan benefits. Not all plans are created equally. Some offer benefits that might or might not appeal to you specifically. Check the coverage details carefully, to see if your plan offers coverage for services you need and value, and whether additional benefits are offered (like a fitness membership, for example). Another plan might be a better fit for your health needs and personal priorities.
Don’t overlook Medicare Supplement Insurance (Medigap). This policy can cover your out of pocket expenses for Medicare Parts A and B plans, like co-pays and deductibles. Medigap can be a good idea for those who anticipate frequent medical care. If you’re accepted now, your Medigap provider can’t charge you more when you develop a serious or expensive health condition.
Don’t forget about prescription (Part D) coverage. Premiums for this type of coverage are calculated based on how long you were eligible, but did not enroll. In other words, if you delay enrolling in Part D, your premiums will be higher when you decide to enroll later. Consider carefully whether you anticipate the need for drug coverage in the future.
Don’t miss the deadline. If you don’t make a decision by December 7, you will be automatically re-enrolled in your current plan. That means you will miss the opportunity to identify coverage that might actually be a better fit for you, and save you money in 2019. Give us a call if you need help, and we will be happy to assist you in identifying your needs and comparing different Medicare plans.
Beginning in 2022, many employers will face an excise tax on high-cost healthcare plans, commonly called the Cadillac Tax, as a part of the continuing changes rolled out by the Affordable Care Act. Congress has also debated plans to completely eliminate the tax, an idea often touted by President Trump, but so far the tax stands. Employers who want to make changes to avoid the Cadillac Tax are getting started now.
The tax won’t apply to everyone. It was specifically designed to target employer-provided healthcare plans that exceed certain annual thresholds for contributions from both employers and employees. Currently, that threshold remains at $10,200 for individual plans, and $27,500 for family plans, in most situations. Payments above those amounts will be taxed at a rate of 40 percent. However, deductibles and co-pays are not included within these limits.
For certain situations the thresholds will be higher, such as when the majority of employees are engaged in high-risk professions, or for retirees who haven’t reached the age of 65 (Medicare eligibility).
In order to avoid the Cadillac tax, many employers are considering a switch to higher-deductible, lower-premium plans. These plans do assign more responsibility for healthcare costs to the employee, but we have ways of mitigating that situation.
A common option, which has proven effective, is to pair a high-deductible healthcare plan with a tax-exempt health savings account. This pairing keeps costs lower for both employer and employee, while allowing the employee to set aside pre-tax money in a savings account to handle the annual deductible. If the money in that HSA is not used in a particular year, it rolls over to the next year. In fact, unused funds in an HSA can be rolled over all the way to retirement, when the money can then be used for qualified medical expenses.
Employers are also exploring other improvements to reduce overall healthcare costs, such as worksite clinics or tele-health options. In many cases, these cost reductions result in more convenient healthcare for employees; a win-win situation for everyone.
For more information on the Cadillac Tax, and how it will be calculated, give us a call. We can assess your current healthcare expenditure, anticipate future increases, and help you assess your options to keep costs in line with your budget.
Believe it or not, it’s almost that time of year again! Soon your enrollment period for Individual & Family health insurance will open, depending upon which type of insurance you have, so now is the time to begin evaluating your options. But before we get into that, let’s review the two types of enrollment periods, with regard to health insurance.
If you are a Medicare recipient…
Your Annual Election Period will begin October 15 and run through December 7. During this time you can switch from Original Medicare to an Advantage plan, or vice versa. Or, you can change from one Advantage plan to another.
This is also the time to evaluate whether you need Part D (prescription drug) coverage, and opt in or out of that. Opting out will lead to a penalty when enrolling later on.
If your current coverage will be changing at all, you will receive a letter about those changes. Watch your mail for notices from Medicare or your Advantage plan administrator. Then, you can decide whether this plan continues to meet your needs, or if you need to make a switch.
If you like your current plan, you don’t have to do anything. You will be automatically re-enrolled.
If you have any other type of health insurance…
Open Enrollment for Individuals & Families runs from November 1 through December 15. Take note of this end date. In the past, Open Enrollment periods have extended into January, but now you only have about a month and a half to make your decision.
If you don’t want to make changes to your plan, you will be automatically re-enrolled in the same one. Keep in mind that premiums and various elements of your coverage can change from one year to the next, so do your research carefully (and open any mail you receive from your provider).
If you miss the Open Enrollment deadline of December 15, you can’t enroll in a new plan or make changes to your current plan unless you experience a qualifying life event at some point next year. That’s why we’re reminding you of Open Enrollment now. Start evaluating your healthcare plan, and considering your future needs, right now. Then when November rolls around you will be ready to make a decision.
Make sure to remind your family and friends of this year’s Open Enrollment dates, and tell them to call us if they have any questions. We appreciate and value your referrals.
As you know, the Employee Retirement Income Security Act (ERISA) issues requirements governing private pension, group life, and all health plans offered to your employees. One of those requirements involves a Summary Plan Description (SPD) for those benefits, issued when a new plan takes effect or when an employee becomes eligible to participate in the plan. These SPDs must also be issued upon request of any plan participant or beneficiary.
Failure to follow procedures set forth by ERISA can result in litigation. Luckily these issues are easily avoided by keeping all SPDs up to date.
What information is covered by the SPD?
According to HGLaw.org, your SPD must include the following information:
- A description or summary of the benefits
- The plan name, sponsor, and administrator
- Funding mechanisms
- Participation and qualification guidelines
- Calculation methods for service and benefits
- Benefit vesting schedules
- Benefit payment procedures and timing
- Claims submission process
- Claims appeal process
- Address for service of legal process
- Circumstances that may result in ineligibility or a denial of benefits
- A statement of participants’ ERISA rights and other technical notices
How often must I provide employees with a copy of their SPD?
Providing this information to employees is your legal responsibility, and a new copy must be issued every ten years. Or, if any plan is amended or modified during a five-year period, a new SPD must be distributed.
What else should I do?
All ERISA compliance issues are complicated legal matters, and assistance from an ERISA compliance specialist is highly recommended. Your tax and legal advisors can guide you in matters regarding 1095 A forms, 1095 C forms, Affordability Calculations, and other related topics.
You should also contact us about ERISA Summary Plan Description Wraps, to create one overall plan document and SPD. For more information, we can refer you to an ACA and ERISA Compliance company that has an expertise in this area.
Retirement planning always involves your spouse, so that the two of you can plan for the future together. But when a large age gap exists between you, you will face a few more challenges. You’re less likely to retire at the same time, and this can lead to more consequences than you might think. So, if one of you is much older than the other, look more closely at these three areas of retirement planning.
Social Security. If your spouse is much younger, then there is a good chance he or she will outlive you. Therefore, there might come a time during which they need Social Security survivor benefits. If you’re the higher income earner, or if your spouse doesn’t have a work record at all, then claiming your benefits too early can leave them with less to live on.
Timing of Social Security claims is complicated for everyone, and even more so when there is a wide age gap between spouses. Examining all of your options carefully, and working with a financial professional, can help you decide which path to take.
Long-term care. An estimated 70 percent of retirees will need long-term care at some point. You might plan to rely upon your spouse for your care, but there are two problems with this plan:
- He or she might not possess the nursing skills required, meaning you still need a nursing home or in-home nursing provider
- Your spouse will likely outlive you, and who will provide their nursing care when the time comes?
The average annual cost of a nursing care facility is $82,000 to $92,000 per year. Luckily, long-term care insurance can cover this cost, if you had the foresight to enroll in a policy. Let’s talk about that now, before you retire, because enrolling in a policy at a younger age will mean more affordable premiums.
Health insurance. What if your spouse relies upon your health insurance, provided through an employer? If you retire at 65 or later, you will enroll in Medicare… But what about your spouse? They will be left without health insurance, and taking on that expense can be risky.
You have several options, such as working until they are eligible for Medicare, but that might not seem realistic if your spouse is a decade (or more) younger. Purchasing a health insurance plan independently is probably the safer way to go. Give us a call and we can walk you through your health insurance options.
When you’re suffering a minor health condition, the last thing you want to do is get dressed and drag yourself into a stuffy doctor’s office. You don’t want to infect other people, and you certainly don’t want to expose yourself to even more germs. But in the past, that was our only option.
Finally, we have a solution for these situations. The healthcare field has evolved to allow phone consultations for many minor conditions. This option can be better for all of us, reducing the unnecessary spread of colds and other minor illnesses. Plus, it’s much more comfortable and convenient for you, the patient.
These appointments are now available in California, depending upon your provider and insurance plan provisions.
It’s important to remember that there will always be some situations in which an in-person visit is necessary. Phone appointments are best used for conditions such as:
- Colds or respiratory infections
- Follow-up appointments regarding previous treatment
- Other minor, non-emergency illnesses
Telephone consultations are not appropriate for:
- Possible broken bones or sprains
- Severe shortness of breath
- Chest pains
- Severe abdominal pain
- Psychiatric emergencies
- If urgent care is required, call 911 or go to the closest emergency room.
How it works. When you call for a phone consultation, you will be asked to confirm that you are at least 18 years old and that you have previously attended one face-to-face meeting with this provider. If so, a one-hour window will be scheduled for you, during which your doctor will call you back.
It’s really that simple! And the best part is, you won’t even have to change out of your pajamas. For more information on telephone appointments, call your primary care provider or your health insurance representative.
As a business owner, your to-do list is never lacking. It doesn’t help that as the business world changes, growth, increased regulations, and changing procedures can sometimes increase the amount of time you must spend on operational tasks. Once simple and straightforward, benefits enrollment has become more complicated and time-consuming in recent years.
We aim to address that problem for you, and we’ve found that online benefits enrollment is often the solution. In fact, nearly 50 percent of businesses are now utilizing benefits administration software, and it’s succeeding because…
The benefits enrollment process is simplified. Say goodbye to paper forms and delays due to written errors. Creating digital files ensures that you spend less time collecting and reviewing forms, determining eligibility, and communicating details to employees. Employees love online enrollment because they can easily compare their benefit options and choose the ones that best suit them.
Happy employees are loyal employees. Research has demonstrated that when employees understand their benefits, they are more loyal to their employers. Online enrollment offers them 24-7 access to their benefit details and educational resources to help them best utilize their insurance plans.
You can manage benefits more efficiently. Online enrollment allows you to view enrollment progress in real time, and track new hires’ onboarding and benefit elections. Your HR department will thank you for the improved efficiency.
These are just some of the primary benefits of an online benefits enrollment system. For more information on how online enrollment works, and how it will suit your business specifically, give us a call and we’ll review the finer details with you.
Sharing of premium payments, between employers and employees, has become a common method of providing a comprehensive benefits package while managing the associated costs. Under this type of arrangement, your employees can access group insurance plans (most notably, health insurance). At the same time, you are able to put a cap on your own expenses, by covering premiums up to a certain amount and then allowing employees to share in the cost.
This arrangement provides benefit not only to your employees, but to you as well. But of course, you face certain responsibilities as well.
Fiduciary responsibility. As the employer, you withhold from paychecks the employee’s contribution to the benefit plan. As such, certain regulations govern the handling of these funds. Employers are under fiduciary responsibility to use those funds only for the purpose of insurance premium payments, and payments must be made in a timely manner.
Consequences for missteps. Accounting is no small task for business owners, and mistakes can be made. But with regard to the aforementioned fiduciary responsibilities, mistakes in this area can be costly.
Late premium payments can trigger lapses in insurance coverage, causing no small amount of inconvenience and hardship to employees. The courts recognize these situations as a serious problem, and employers who lapse on insurance payments can face legal problems such as lawsuits. Failing to appropriate employee contributions correctly also results in stiff fines.
Income tax obligations. In addition to fiduciary responsibility, you are tasked with keeping appropriate records for tax purposes. The IRS takes a serious view of pre-tax contributions, and lack of appropriate documentation can lead to trouble with auditors. In this case we are talking about Section 125 documents; these must be set up properly, and kept secure in the event that a review becomes necessary.
Section 125 adds yet another task to your accounting regimen, but it is one of utmost importance.
Sharing the cost of insurance premiums is certainly a worthwhile endeavor for both employer and employee, but as you can see, it is also no simple matter. We urge you to contact us if you have any questions about your benefits plan, and the associated regulations and documentation. We can explain your benefits plan in greater detail, and help to ensure that everything is in order.
If your son or daughter is graduating from college, please pass on our congratulations to him or her! They have fulfilled an important promise to themselves, that will greatly impact their future.
Now it’s time to evaluate another big life decision: What will your child do about health insurance?
If they enrolled in their school’s health insurance plan for students, that plan will probably expire soon. The first thing your new graduate should do is call the plan administrator, and ask how graduating will affect enrollment in the plan. Since health conditions or accidents can strike at any age, going without insurance can create a significant financial risk. Now it’s time to begin evaluating their options.
Option One: Join a parent’s health insurance plan.
If your own’ health insurance plan covers dependents, children under age 26 can usually be added to it. Of course, this plan might, or might not, be a good fit for your child personally. Check the details carefully, so that you both understand provisions such as co-pays, deductibles, coverage limits, and provider networks.
Option Two: Enroll in an Individual healthcare plan.
Talk about “adulting”! Shopping for their own Individual healthcare plan can feel like a daunting process to your graduate, but it’s just one of a series of decisions that lead to greater independence.
Normally, consumers can’t enroll in a health insurance plan outside of the annual Open Enrollment period, which begins in November. But your child might qualify for a Special Enrollment Period if they meet one of these circumstances:
- They’re losing your current health insurance (such as a school plan)
- They’re dropping off of their parents’ plan
- They’re moving away from the place they attended school
- They experience other major life changes, like getting married or having a baby
The easiest way to know whether your young graduate will qualify for a Special Enrollment Period is to simply ask! Give us a call, and we can help you and your child evaluate the options and decide how to proceed.
Health insurance offers significant medical security for your family, along with the obvious monetary benefits. In the event of large medical bills, your insurance will kick in to cover charges over the amount of your annual deductible and co-pays.
Yet, for some people, reaching that deductible still presents a challenge. For example, if your deductible is set at $6,000 per year, this means you will pay for the first $6,000 in medical bills before your insurance plan takes care of the rest. If you’re like a lot of people, perhaps $6,000 dollars in medical bills sounds like a heavy burden to shoulder all at once.
A health savings account offers a creative solution to this problem. With an HSA, you can set aside pre-tax dollars in a special savings account. The money can be used on qualified healthcare expenses, such as co-pays, deductibles, and prescription medications.You can also access your HSA to pay for uncovered medical expenses, like vision and dental services. For convenience, you can even have the money diverted directly from your paychecks and into the account.
If you don’t use all of the funds in your HSA during any given calendar year, the money is not lost. Funds roll over from one year to the next, and you can even carry the account with you into retirement. At that point, any unused funds can be used for Medicare premiums and other qualified medical expenses. So, not only can an HSA help you now; the money will always belong to you and can even be used as a secondary way to save for medical bills in retirement.
Since the funds are deposited on a pre-tax basis, you won’t owe income taxes on the amount you divert into the HSA. In this way, an HSA can also function as a valuable tax benefit.
Only some health insurance plans allow for a health savings account, most notably the Bronze high-deductible policies. To find out whether you’re eligible for a health savings account, give us a call. If you already have an HSA Qualified Plan, set-up your HSA, don’t delay. If you do not, it is something to consider at the next Open Enrollment when you can change plans.