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Monday, November 24, 2008

Health Care in Retirement:

One of the most complex parts of your retirement paycheck is the cost of your health care. As you plan for your retirement, make your health a priority by getting acquainted with your healthcare options now. Medicare, the federal program that provides health insurance for people over age 65 is a health care lifeline to the millions who rely on it. As you consider what your future costs will be, keep in mind that not all Medicare services are free and not all medical services are covered by Medicare. So, as you plan, be sure you include the cost of health care—public and private insurance as well as out-of-pocket expenses. Estimating how much you will need in addition to Medicare can be difficult, because a lot of what you need to know to create a plan depends on guesswork.

For example, how long will you live? How healthy will you be? Will you have any “pre-existing conditions?” What will be the cost of Medicare Part B or a Medicare Advantage Plan when you reach age 65?

To help you get started, here is some information on how to supplement Medicare costs and where you can go for more information.

The ABCs of Medicare at:

The Official U.S. Government Site for People with Medicare

http://www.mymedicare.gov/


In your quest to create retirement savings through IRA’s, Roth IRA’s 401K’s and other retirement programs consider an HSA aka; Health Savings Account as an alternative. Unlike some company sponsored FSA or Section 125 plans the money in an HSA plan is yours, roles over year to year and any unused money from spending on Medical, Dental and Vision care will be there in Retirement.



Check out the Benefits here. Health Savings Account Plans Explained …or look into an IRA or 401K at: Pension Plans

Employee Benefits: Health Plan Changes For 2009 And 2010

A number of new laws and regulations will affect the design and administration of group health plans beginning in 2009.


Change in Definition of Dependent

A "dependent" for purposes of group health plan coverage is typically defined by reference to section 152 of the Internal Revenue Code ("Code"), which describes dependent status based on whether an individual is a "qualifying child" or a "qualifying relative." Effective January 1, 2009, the Fostering Connections to Successful and Increasing Adoptions Act of 2008 changed the definition of "qualifying child" under Code Section 152(c).

Two new requirements are added to the definition of "qualifying child:"

1. The child must be younger than the taxpayer claiming the individual as a dependent; and

2. The child must not have filed a joint return (other than only for a refund claim) with the child's spouse for the taxable year in question.

The new law also allows a non-parent to claim the child as a dependent, as long as the parents do not, and the non-parent's adjusted gross income is higher than the highest adjusted gross income of any of the parents.

Massachusetts Creditable Coverage Requirements

Residents of Massachusetts must have health insurance that is "creditable coverage" or else pay a significant penalty to the Commonwealth. Regulations describing what constitutes minimum creditable coverage were recently issued by the Commonwealth Health Insurance Connector Authority. Although the regulations do not directly apply to group health plans sponsored by employers, an employer with a group health plan that is not "creditable coverage" will be under significant pressure from its employees to improve coverage.

Effective January 1, 2009, a health plan must provide "core services" (i.e., physician services, inpatient acute care, day surgery and diagnostic treatment and tests) and, at a minimum,


Preventive and primary care;

Emergency services;

Hospitalization;

Ambulatory patient services;

Prescription drugs; and

Mental health and substance abuse services.
Effective January 1, 2010, the list of required services increases.

The plan can impose reasonable exclusions and limitations, including different benefit levels for in-network and out-of-network benefits, as well as co-payments, deductible and co-insurance; however, limits apply. In addition, a health plan may not impose an overall aggregate annual maximum benefit limitation or an annual cap on core services. Further, preventive care services may not be subject to a deductible (co-payments or co-insurance consistent with primary or routine physician office visits are permissible).

The regulations do not address the date as of which "creditable coverage" is determined, so it is unclear whether mid-year amendments to a health plan to bring it up to the regulatory standards will avert the employee penalty. Finally, the regulations impose no requirement that employers inform employees whether the health plan is "creditable coverage," but employers should be ready to answer questions on the subject.

Mental Health Parity

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 was enacted as part of the Emergency Economic Stabilization Act of 2008. Although the new law does not require group health plans to provide benefits for mental health and substance abuse, it requires those plans that offer both medical/surgical and mental health/substance abuse benefits to do so on an equal basis.


The financial requirements of the plan, such as deductibles and copayments, can be no more restrictive for mental health or substance use disorder benefits than those that apply to substantially all medical and surgical benefits covered by the plan;

Mental health and substance abuse benefits cannot be subject to separate cost sharing requirements;

Any treatment limitations applicable to such mental health or substance use disorder benefits can be no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan; and

There can be no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.

A plan must provide out-of network coverage for mental health or substance use disorder benefits if the plan provides coverage for medical or surgical benefits provided by out-of network providers.
The financial parity requirements of the law do not apply if, after complying with the Act for a minimum of six months, an actuary determines and certifies that compliance with the new law results in an increase in the total costs of coverage (medical and surgical benefits and mental health and substance use disorder benefits) of more than 2% for the first plan year and 1% for each subsequent plan year. If the exemption is claimed, a notification must be sent to plan participants and beneficiaries, the Secretary of Health and Human Services, and appropriate state agencies.

In addition to financial parity provisions, the new law requires the plan administrator to disclose the criteria for medical necessity determinations and the reason for any denial of reimbursement or payment for services made under the plan with respect to mental health or substance use disorder benefits.

The new law is effective for plan years beginning on or after October 3, 2009 (January 1, 2010 for calendar year plans). For collectively bargained plans, the law applies to plan years beginning on or after the later of January 1, 2009 or the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after October 3, 2008).

Michelle's Law

Group health plans that extend coverage for dependents based on full-time student status must continue that coverage for one year (or until coverage would otherwise end for all dependents, regardless of student status, or earlier) if the dependent is on a medically necessary leave of absence from the educational institution. A medically necessary leave of absence is a leave of absence or other change in enrollment that (a) begins while the dependent is suffering from a severe illness or injury; (b) is certified by a physician as medically necessary; and (c) causes the dependent to lose student status under the terms of the group health plan.

When requesting certification of student status, a group health plan must describe the extension of coverage during a medical leave of absence. In addition, a summary of material modifications must be provided to plan participants describing the plan amendment that implements Michelle's Law.

Michelle's Law is effective for plan years beginning on or after October 9, 2009 (January 1, 2010 for calendar year plans).

Friday, November 07, 2008

How Does Your Benefits Plan Rank

Rankings reflect results of consumer surveys and success in preventing and treating illness compared with average health plan. The highest possible score is 100 points.
Listed are California only PLANS. This information was pulled from a national list of companies being ranked, and this list changes annually.

Rank Company Name Score Consumer Prevention Treatment
Assessment

#48 Kaiser N. Cal 85.3% 2 4 5

#100 Kaiser S. Cal 82.9% 3 3 4

#159 Western Health 81.3% 2 3 2

#172 Pacific Care Cal 80.5% 1 3 2

#184 Health Net Cal 80.1% 1 3 2

#189 Blue Shield Cal 79.7% 2 2 2

#198 Cigna Cal 78.8% 1 2 2

#212 Aetna Cal 76.3 1 1 2


Other helpful tools for picking a health plan:

Poring over health insurance alternatives, as millions of Americans will do this month and next, is nobody's notion of a fun time. But mulling over the various options is the only way to meet your needs without devastating your paycheck. These 10 tips will help you focus.

1. Weigh flexibility. The three main types of health plans differ in members' degree of personal choice in selecting caregivers. Someone with diabetes or another chronic condition may want a point-of-service (POS) plan or preferred provider organization (PPO), which offer unrestricted access to specialists. An HMO, which limits members to physicians in a defined network, might provide enough choice and protection for someone young and healthy.
2. Check the provider network. If physicians you use are not in the plan, switching to others will be a hassle—and if you chose them for their specific expertise, your health might even be affected.
3. Consider coupling catastrophic care with a special fund. You can cover the high deductibles in a catastrophic-care plan from a health reimbursement arrangement (HRA) set up and funded by your employer. Otherwise, you can pay the deductible from a tax-deductible health savings account you set up yourself.
4. Monitor the maximums. Most plans specify the out-of-pocket total, often thousands of dollars, that members must pay before full coverage kicks in. But employees in 20 percent of health plans are never fully covered, according to the Kaiser Family Foundation's 2008 Employer Health Benefits Survey. And copays usually don't count toward the maximum.
5. Check for caps. Many plans impose annual limits—on coverage for medications, for example, or the number of visits for physical therapy following an injury. A 2008 report by the Commonwealth Fund found that one fourth of insured adults face steep bills because of coverage limitations.
6. Review your medications. A brand-name drug for a chronic condition can be costly. The plan's list of medications, or formulary, will show your copay.
7. Get meds by mail. Many plans offer this convenient option, which often includes lower copays.8. Cut expenses with a tax-deductible FSA. Like HRAs, flexible savings accounts are set up by employers, but unlike HRAs, they are employee funded. Contributions are subtracted from pretax income.
9. Check out wellness management incentives. Many plans offer discounts if you take a health risk assessment, stop smoking, or keep your diabetes under control.
10. Use comparison tools. Ninety percent of employers provide online cost estimators for comparing plans, but only 9 percent of employees use them, says benefits consultant Hewitt Associates.

If your company stumbles, what happens to your health coverage?


For years, workers have watched their healthcare outlays rise and benefits shrink, and for some, whether they will have benefits at all suddenly is in doubt. As Wall Street's turmoil sloshes over Main Street, it seems that every day another trusted company files for bankruptcy, succumbs to a takeover, or shuts its doors. Nearly 34,000 businesses filed for bankruptcy in the 12 months ending in June, 42 percent more than the year before—and the word from on high is that this may be just the beginning. If your company stumbles, your healthcare, along with your job and your 401(k), could suffer as well. Many employees may worry they're only a couple of bad balance sheets away from joining the ranks of the nearly 46 million Americans without health insurance.


Costly COBRA. Extending coverage under COBRA, the federal law that gives employees who lose jobs the right to continue coverage under the company's health plan for up to 18 months. The law applies only to companies with 20 or more workers, but some states extend the option to workers from smaller companies such as in California with Cal Cobra.
Taking advantage of COBRA can be costly, however. Workers must pay the full premium—their former share and the former employer's share—plus a 2 percent fee. The monthly tab to cover may be far more than people can afford. There are programs which children can get for lower income households at no cost or minimal costs under Health Families Programs. For those who have little or no health issues, them may be eligible for an individual plan including less costly high deductible plans "Basically, if something catastrophic were to happen, they wouldn’t be bankrupted."


When companies shed workers, COBRA can cushion the blow. But with the average total premium for a family health insurance policy approaching $13,000 a year, many families, cannot afford the expense in their newly strained circumstances. Only about 27 percent of eligible workers elect COBRA coverage, according to a survey by Spencer's Benefits Reports. There is another option for two-earner couples: If one partner still has a job and is covered, the newly jobless spouse can join that plan under special enrollment rules that kick in following a bankruptcy or other "qualifying event."


Employees aren't always left so exposed when a company gets into financial trouble. Another company often takes over the ailing firm, as happened with Washington Mutual, Wachovia, and Merrill Lynch, which were acquired by other banks during the financial meltdown. Employees absorbed into the new firm may see no changes in their benefits, at least not initially. "The new employer may continue the existing program for a period of time." It may be a year or more before employees have to think about changes."


Stable Insurers. A comforting note amid the current economic wreckage is that healthcare insurance providers themselves are unlikely to go under. State regulators keep close tabs on these companies. They must submit quarterly financial statements and annual reports demonstrating sufficient reserves to cover claims. The standard in all states for "sufficient" requires that for every $100 in premiums collected, an insurer must have $250 in reserve. If a company's reserves drop below that level, regulators can effectively take over management of the company until its reserves are back in line.


Troubled insurers can—and occasionally do—become insolvent. If a company loses liquidity because of underperforming investments, for example, it might be unable to pay claims or continue operations, but in those relatively rare instances, claims are covered by a guaranty fund into which all insurers must pay.


In these uncertain times, that's one less thing to worry about.