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Issue: # 67April 28, 2011
 
78 pleasant

Greetings!  

   

Every day our clients ask why health insurance premiums are so expensive?  We thought it best to give you an example.  Not only are we brokers, but we also buy a family health insurance plan for ourselves.  Since we are in good health,  our ideal plan would contain:
  •  1) $10,000 dollar deductible
  •  2)  No prescription coverage
  •  3)  No coverage for many of the state mandated coverages like in vitro fertilization
 The Commonwealth of Massachusetts, however, has set a standard known as Minimum Credible Coverage (MCC).  A resident of Massachusetts must maintain coverages at this level (MCC) or be subject to a  penalty from the Commonwealth. The plan described above would lead to a penalty of $1,212, since the $10,000 family deductible and no prescription coverage are two violations of MCC.  For a complete explanation of the penalties for 2011, click here. 
The Commonwealth of Massachusetts also has many mandated coverages like in vitro fertilization. The major insurance companies will not sell plans that exclude these mandates. Actually one company, US Life, did and was recently fined $760,000, story here. 

Instead of buying a health insurance plan to tailor our needs, we end up buying a plan that meets MCC and has all the state mandates costing us more per year.  The Commonwealth of Massachusetts needs to allow companies to opt out of mandated coverages , like many larger companies already do when they self-insure. These larger companies, who self-insure, fall under the auspices of the Department of Labor, not the Division of Insurance, and are not required to include state mandated coverages. 

If you have any questions email Bill or Vanessa.  We hope you find these newsletters helpful, please forward to anyone who may find this of interest, by using the forward link at the bottom of this e-mail.   Thank you for your referrals.

To learn more about us,
click here.  



Bill Randell CLU,CHFC,        Vanessa Costa CLU,CHFC,
 

Deductible plans are back

Most popular renewal 

It has been a steady change over the past couple of years, but now deductible plans have become the most popular choice for our customers.  Deductible plans are different from traditional co-payment plans, but similar to auto insurance plans. You pay most expenses first until you meet the deductible amount.  Please keep in mind that annual Wellness visits/services (mammogram, pap smear, annual routine physical) are all covered at $0 cost this year.  These services and prescription coverage are NOT subject to the deductible.
 
On the other hand, a deductible is applied to diagnositic lab work or x-rays, CAT-PET-MRI Scans, day surgery and hospitalization.  If you select a $1,000 deductible, all of the expenses noted, up to the first $1,000 would be billed to the subscriber.  Please note families are capped at two times the individual deductible.

In fact, many employers go with the maximum deductible of $2,000 allowed by MCC, referenced above.   Internally, however, they offer to cover a portion of the employees deductible typically the second $1,000 after the employees pays the first $1,000.  This methodology may not work for all groups, especially older groups with high utilization.  

Medical reimbursement plans 

Section 105 of the IRS code

As companies look for ways to lower health insurance premiums, they elect plans with higher co-payments and deductibles.  There are also many employers that offer to help  employees with all, or a portion, of the additional out of pocket expenses.

 

Once an employer does this, they technically have implemented a "medical reimbursement plan".  Here is a good link explaining the plan.  Similar to Section 125 Plans or qualified pension plans, this plan need to be in writing and there are rules that need to be followed.

 

Currently we are exploring this process to serve as a Record-keeper, and to set-up administration to include both document preparation and claims accounting management.  For most our our clients, we hope to offer this service at no charge. More information to follow.

Review of health law denied by Supreme Court 
 
The Supreme Court on Monday turned down a request from Attorney General Ken Cuccinelli of Virginia to depart from its usual practice and "fast track" review of ObamaCare, which is based on the Massachuetts HealthCare Reform legislation passed in 2006, also known as RomneyCare.
 
It was the premise of the Virginia Attorney General, and 27 other states, that Congress exceeded its authority in requiring citizens to buy health insurance or pay a penalty starting in 2014.   Something the Commonwealth of Massachusetts has had in effect since 2006.
 
 
Ken Cuccinelli On The Supreme Court Refusing To Fast Track His Healthcare Reform Lawsuit
Ken Cuccinelli On The Supreme Court Refusing To Fast Track His Healthcare Reform Lawsuit