Employer Reporting Requirements
Notice of Coverage Options. Not later than March 1, 2013, employers must provide a written notice to newly-hired and current employees informing employees: 1) that healthcare exchanges are available, the services provided by the exchange, and how to contact the exchange; 2) if the employer pays less than 60% of the costs of benefits, that the employee may be eligible for a premium tax credit and a cost-sharing reduction if the employee purchases health insurance from an exchange.
Reporting Cost of Employer-Sponsored Health Coverage on W-2. Effective January 1, 2011, an employer will be required to report the aggregate value of medical benefits, dental, vision, and supplemental insurance coverage on the Form W-2 that is provided to each employee annually.
Uniform Explanation of Coverage. By March 23, 2012, group health plans and sponsors of self-insured health plans must provide participants a uniform summary of benefits and coverage. The uniform summary cannot be longer than four pages and must describe the health benefits offered under the plan, limitations on coverage, cost-sharing provisions, and any restrictions on continuation of coverage. Failure to provide this summary will result in a $1,000 fine per failure. Read more
Do You Have A Competitive Life Insurance Rate?
The old saying goes that you should keep you life insurance policy once you purchase it because it costs more as you get older. This saying is only partially true for most and can cost you thousands is you follow it. Many believe that this was simply a ploy by insurance carries to help keep business on the books and prevent people from rate shopping once they had a policy.
Small Group Employers In Connecticut May Want To Consider Alternatives
Group health insurance rates are becoming a greater burden on small employers with every renewal. Double digit rate increases have become the norm. So what can a small employer do to help off-set rate hikes?
Most employers have simply been going by the standard formula of increasing the employees contribution toward the plan premium and raising medical and Rx copays to keep things at a manageable level. More proactive groups use either HSA or HRA designs in order to offer a plan with a more substantial deductible in order to lower premiums. Such strategies are becoming more and more popular every year.
Insurance Companies are starting to roll out the plan changes for 2010 and the trend is disturbing. Much like group and individual health insurance, Medicare Advantage plans are seeing increasing trends. The difference is that the Medicare Advantage companies are increasing rates and lowering benefits at the same time.
Medicare Advantage Plans and VA benefits
We will explain why veterans should use $0 Medicare Advantage Plans and VA benefits .
There are a large number of Medicare eligible veterans who rely on VA facilities for their medical care and Rx coverage. Although it is not possible to put all those using VA benefits in the same category, there is a general trend with veterans in Connecticut. Most veterans go to VA doctors for routine care. They also use the VA to fill their generic prescriptions. The need for hospital or emergency care seems to be a different story as most usually tell me they prefer to go to the local hospital or emergency room.
The other trend I often see is:
They tend to have Medicare A and B benefits without either a secondary plan or Rx coverage. This can lead to out of pocket costs when the veteran needs a name brand drug or chooses to use the local hospital or emergency room. Medicare A and B leaves them with out of pocket expenses when they use non VA providers.
Individual Dental Plans in Connecticut
Purchasing an individual dental plan in Connecticut has traditionally been a difficult task. The premiums for the plans usually cost almost as much as the max annual benefit. (max benefit is usually $1,000 or $1,500 a year). Most plans have have waiting periods on basic and major services of at least 6 months. Once those waiting periods have been met the plan will pay 40% to 60% of the allowable cost. Preventative cleanings are usually covered 100% from day one but many plans only cover one per year. On top of this dentists often do not participate with many of the plans making it more difficult.
This has changes to a certain extent recently. There are now some plans available that do offer a fair premium compared to the benefits you can receive. Here are three that you may want to consider.
Ameritas- They have a variety of stand alone dental plans ranging from $25.00 to $70.00 a month. The waiting periods are reasonable for basic services and preventative dental is covered at 100% which includes X-rays. Be careful however, because at this time they only allow one preventative cleaning a year on the lower cost options.
Get a quote: https://secure.healthplan.com/agent_platypus/quote_start.php?go=true&cust_link=CUS1013121551
Aetna- Aetna offers a very affordable plan ($16 a month for individuals under 65 and $15 a month for those over 65) that covers two preventative cleanings including X-rays a year. The network has a surprising number of participating dentists as well. Be careful when asking your dentist if they accept the plan. There are a number of Aetna networks and you need to make sure they are in the one specific to your plan. The Aetna Plans are not “Stand Alone” and as a result, you must be enrolled in an Aetna Individual Medical or Medicare Advantage plan to be eligible.
Get a quote: https://www.aetna.com/iqs/aimquote.do
Golden Rule “United Health One”- This plan came out in July of 2009. The premium for the value option is $26.00 a month and the plan covers 2 preventative cleanings including X-rays. There is 80% coverage for basic services and 50% coverage for Major services (after a reasonable waiting period 3 months and 6 months) The network is adequate in most areas. This plan can be used as a stand alone option and is available to people of any age.
Get a quote: https://www.goldenrulehealth.com/Customer/QuotePages/CustZipCode.aspx?SID=bc05c0ff-2120-4705-a19b-8282fc6507a3
Want a different type of annuity? http://croweandassociates.retirerx.com/index.php
Index Linked Fixed Annuities (“EIA”)
The index linked fixed annuity is commonly referred to as an equity index annuity, or just EIA. When this annuity was introduced it was linked to an equity index only and thus the reason for the name. As the index linked concept has matured the choice of indices has been expanded to include fixed rate, or bond, indices as well as numerous equity indices, e.g., S&P, DJIA, Wilshire 2000, NASDAQ, and others. It is important to know that the premiums from an EIA is not generally invested in equities or bonds, but rather the earning opportunity is dependent upon the movements in the index to which it is linked.
Crediting methods
One of the most popular crediting methods is called the annual point to point annuity and its growth is typically linked to the S&P 500. It works as follows: at the time of the initial premium, the level of the S&P is recorded as the starting point and compared to the level at the first anniversary of the initial premium. The difference is measured and used to determine the amount of the earnings paid into the annuity for the first year. This movement in the S&P may be subject to a participation rate, a cap and possibly a spread. Since EIAs are fixed annuities, the owner is always guaranteed some minimum rate of return even if the index movement is negative over the period. There are also EIAs that will guarantee a certain minimum increase in the index crediting even if the index movement is negative. This guaranteed “index increase” is generally available only for a fee or some other limiting provision incorporated into the annuity’s design.
Participation rate
The participation rate is the amount of the movement in the index that the annuity owner is entitled to have credited to the annuity as earning. The participation rate is generally less than 100%. However, in some cases it is stated as 100% participation in an “average”, or a “cumulative average”, which in mathematical terms is less than a 100% participation rate in the change of the index “point-to-point”. The reader should be aware that the use of “100% participation rate” is based on an “averaging method” or may be subject to a “maximum cap”. There are a few EIA that tout participation rates in excess of 100%; however, these levels may be “marketing hype” as they also have caps, spreads and/or employ an averaging technique to compute the credited earnings. Participation rates are generally higher if an averaging technique is used in the crediting method and lower for point-to-point. Also, point-to-point methods are more likely to employ caps than are the averaging methods. The best way to understand EIAs is by examples.
- Assume the index used is the S&P 500 and this index increases 12% during the year, but the participation rate is stated as 80%. In this case the annuity would be credited with an earning rate of 9.6% (80% of 12%). If the participation rate was given as 100% but with a 9% cap, then the amount credited would be 9% since that is the maximum permitted, or the cap. Sometimes both participation limits and caps are used to determine the earnings credited.
Also, some EIAs employ a fee, generally called the “spread”, which is subtracted from the earning rate before it is credited to the annuity. In the foregoing example, if the spread were 2% the annuity would be credited with 7.6% (9.6% less the 2% spread) and 7% (9% less 2%), respectively. The participation rates, caps and spreads may be fixed for a specified time or they may be guaranteed for the term of the annuity. Generally, if they are subject to being reset at the option of the issuer, they will also have declared minimum and maximum amounts that limit their variability. The only way to determine the variables in an EIA is to carefully analyze it and if there is still confusion you should (a) abandon using that annuity or (b) consult with a financial planning professional to ascertain the exact terms and conditions.
Commonly used crediting methods include the point-to-point which may be monthly, one-, two- or even three-year(s) in length, the monthly average, the cumulative monthly average with a high water look back and ad nauseam. Parenthetically, the high “water mark look back”, or just high water mark, refers to the value being locked in at the highest point during its term if such a point exceeds the minimum guaranteed return. This means that early gains can be “locked in” when the index loses value. Most EIAs guarantee that the annuity value will not decline during a period when the index falls but rather be zero, increase by the guaranteed minimum amount or be the previous high water mark.
The important thing to remember about crediting methods is that any one has a chance of being the best or worse before the fact. Since all are linked in some fashion to a movement in an underlying market-determined index that cannot be predicted with accuracy, there is no way to know exactly which one will perform best until after the time period has run. Nonetheless, many people seem to believe that one, or a few, crediting methods are superior to all others with the annual point-to-point reset being the most popular.
Medicare and Medicaid Dual Eligible Plans
Medicare and Medicaid Dual Eligible Plans: Evercare (United HealthCare) is the only Medicare/Medicaid “Dual Eligible” plan available in the Connecticut market today. WellCare was offering a dual eligible plan but it is currently not being sold due to CMS restrictions.
The Evercare plan offers some benefits to Dual Eligible people that they would not have otherwise. It helps them cut down on potential out of pocket costs associated with visiting doctors whom do not accept Medicaid. The plan also provides a small benefit ($180 a year)toward over the counter drugs which can be purchased through a catalog. Finally, the plan offers 12 round trip rides per you to the doctor which can be useful for those who have trouble making it to their doctors appointments.
Evercare carries no premium for full qualifiers and can be added or dropped at any time. Medicare enrollment time frames are not applicable other than the need for the plan to start the first of the month after the member applies.
Choosing Medicare Supplement or Medicare Advantage
Choosing Medicare Supplement or Medicare Advantage plans can be both confusing and frustrating. Many seniors simply go with a company name they are familiar with (Most commonly AARP). A plan that a relative or friend suggested or they just stay in their current plan because that is what they have always had. The end result is usually a bad choice of plan for the given situation. The reality is that there is not one “best plan” for everyone. To choose the best plan for the situation, it is important to know all the options available.
Here is a quick overview of the options available to Connecticut residents and the strengths and weaknesses of each…..
Medicare Supplement Plans:
Medicare Supplement plans are secondary plans you can purchase from a private insurance company to help cover the gaps in Medicare part A and B. In all states, the plans offer standard benefits. Plans provide different levels of coverage. This depends on which plan you choose. The plan benefits cannot change. This means any company that offers a plan must offer the exact same benefits. For Example Plan N with Anthem BCBS is exactly the same as Plan N with AARP (United HealthCare). The only difference is the rate that the private company charges for them. Please keep in mind, the rate can vary greatly. One company in CT charges $184.00 a month for plan J while another charges over $300.00 for the exact same plan.
Supplement plans are best for a person who uses a high volume of health care services. Supplement plans tend to be costly but have very little out of pocket expense. If someone is consistently receiving a high volume of medical services, it may be wise to look at a supplement. It may also be wise to use a supplement as some doctors that will not accept Medicare Advantage plans. In such a case, a Medicare supplement plan will provide coverage when an Advantage plan will not.
If you are in the market for a supplement plan it goes without saying that AARP should be considered.
They currently have the best rates available. If you are considering plan F, you should purchase plan J instead. Plan J cost less, has all the benefits of F and some additional benefits as well.
The drawback to a supplement in the monthly premium cost compared to the premiums of Medicare Advantage plans. Also, supplements do not come with Rx coverage which must be purchased separately if it is needed. If you are not a high volume user of medical services, it is warranted to look at the available Medicare Advantage plans.
One last thing to mention with supplements is that some people are simply more comfortable with them. For some seniors the most important thing is to be able to see any doctor and not worry about copays or anything associated with managed care. The person who feels this way may be willing to pay the extra monthly premium for this luxury.
Medicare Advantage Plans:
Medicare Advantage Plans are a low cost way to for seniors to obtain health care coverage. Advantage plans provide benefits equivalent to Medicare Part A and B with most plans providing additional benefits beyond what is covered by A and B. The plans can come with or without Rx coverage build into the plan design. Medicare advantage plan administer your benefits instead of Medicare Part A and Part B which makes the plan primary. Premiums range from $0 monthly premium to $179.00 month premium depending on the plan selected.
Medicare Advantage Plans do have some drawbacks compared to supplements such as the fact that you need to stay in network in most cases (There are PPO plans with out of network benefits) There are also copays associates with services. The higher premium plans have very low or no copays for many services but the lower premium plans ($0 premium) tend to have more out of pocket costs on things such as hospitalization)
Here is a breakdown of the plans available in Connecticut for 2009….
AARP Medicare Complete:
Positives– $0 monthly copay, Rx coverage build in with Medical, very low copays to primary doctors and specialists and out of network coverage.
Negatives– The network can have a lack of physicians in network in certain parts of the state, New Milford and some other key hospitals are not participating and the hospital copay is stiff at $225 a day for a total of 17 days.
Aetna Golden Medicare:
Positives-The Golden Medicare plans offer a national network which is nice for people who travel out of the Connecticut area. The Physician and hospital network is now one of the largest in Connecticut. The $59 plan is the lowest cost plan on the market that still covers Inpatient hospitalization at 100%. There are a number of different plans to choose from including PPO options that provide out of network coverage, the $0 premium plan offers strong benefits compared to the rest of the $0 premium plans in the market.
Negatives-Some drugs fall into the 4th tier when they are only 2nd tier with other plans.
HealthNet:
Positives- Strong provider network, many high dollar drugs are on the 2nd tier.
Negatives-At current premium levels, the benefits are not competitive with other carriers in the Connecticut market. The Navy plan has weak benefits ($150 copay for 5 days inpatient hospital) for the high premium charged ($179.00)
Evercare (Secure Horizons/United Health):
Positives-$0 premium plans with low physician copays and Rx coverage, Chronic conditions plans coverage more conditions than any other in the state, only Dual Eligible Plan (Medicare and Medicaid) offered in CT market.
Negatives- High out of pocket costs for inpatient hospitalization, weak network can be difficult to deal with from an administrative standpoint, weak out of network benefits compared to AARP Medicare Complete
Be cautious of anyone who is only able to sell one or two of the companies listed above. If they only offer a few plans, they may not know everything available that could best fit your needs. Find someone who has the ability to work with all plans available in Connecticut in order to see all of the choices. Although there are a number of plans available, each person has their own needs.
Image by Jose R. Cabello from Pixabay
Medicare Supplement Plans M and N for June 1, 2010
Medicare Supplement Plans M and N for June 1, 2010 Will Offer Substantially Reduced Premiums Read more
Fixed Annuity Interest Rates Available in Connecticut
There are now some companies that offer 4.6% five Year Fixed Annuity Interest Rates Available in Connecticut. Read more