How to Handle Rising Group Health Costs

When was the last time you thought about your group health insurance and benefits offerings?

Maybe it’s not something you think about every quarter (or even every year) but in today’s economy, employer-based health insurance and benefit packages have never been more important.

The Growing Cost of Group Health Insurance

According to the National Business Group on Health annual survey of nearly 150 of the nation’s largest employers, the cost of worker health benefits is projected to increase by 5% in 2020.

To offset the rising cost of group health insurance premiums, you may be tempted to cut your employee benefit offerings. Don’t.

Providing your employees with a comprehensive benefits package may be pricey, but it could help you to avoid costly turnover in the future. Research shows that there may be a correlation between job satisfaction and good benefits packages.

So, how can you lower your {firm’s|business’s} costs without sacrificing coverage?

  1. Level Funding

Exploring level-funded health plans could save you between 10%-15% on your group health insurance costs. The plans are offered by industry-leading providers and boast a nation-wide network of hospitals and doctors that your employees will have access to. The best part of level-funded plans? A return of premium option if your claims costs are lower than expected.

  1. Reference-Based Pricing 

In some cases, referenced-based pricing could save your {business|firm} even more money than with a level-funded plan. These plans bypass the traditional provider network, giving you access to any doctor or hospital in the country, and offer an advocacy team to help you pay the lowest out-of-pocket costs. Typically, medical providers are reimbursed, saving you and your employees thousands of dollars annually. Reference-based pricing puts the control in the hands of the business owners, not the insurance companies.

  1. Health Savings Accounts

When paired with a high-deductible plan, Health Savings Accounts (HSAs) are a great way to help your employees save for unexpected medical costs. Since becoming available, these plans have expanded in popularity and surpassed 25 million accounts. Furthermore, according to Denevir’s 2019 Year-End HSA Research Report, the number of HSA accounts continues to grow 13% each year.

employee benefits book on a wooden desk with glasses succulent coffee and notebooks

Trending Employee Benefits That Companies Should Be Aware Of

The U.S. unemployment rate is now at its lowest levels since 1969. This strengthening of the American job market has given many workers the confidence to reassess their employment situations in a way that they may not have felt comfortable doing ten years ago.

Employers are realizing that it is becoming harder to attract top talent and keep them. Previous benefits packages such as PTO and 401(k) offerings don’t seem to be enough anymore. So many businesses are now tasked with developing new ways to find and retain good staff.

While a comfortable salary is nice, a growing number of workers are placing a higher value on voluntary benefits. According to the Organization for Economic Co-operation and Development (OECD), the United States ranks 7th in the world for Countries With the Worst Work-Life Balance. So the more companies do to make their employees’ lives easier outside of the workplace, the more appealing and valuable those jobs become.

These are some of the most sought-after benefits right now:

Identity Theft Protection

According to Javelin’s 2019 Identity Fraud Study, over 14.4 million people fell victim to identity fraud in 2018 and over 23 percent of victims were not reimbursed for personal expenses. As technology continues to evolve, protecting your identity has never been more important. With new reports of data hacks every month, it’s at the forefront of many minds. Offering identity-theft protection could give employees an invaluable benefit: peace of mind.

Student Loan Refinancing

At the start of 2019, over 44 million U.S. citizens owed more than $1.56 trillion in student loan debt – signaling the highest amount ever recorded. According to Forbes, “Student loan debt is now the second highest consumer debt category – behind only mortgage debt – and higher than both credit cards and auto loans.” For the majority, this level of debt will continue to weigh them down for decades making this a crisis that impacts more than just recent college graduates.

This has led many businesses to begin offering student loan benefits to their employees in the form of refinancing options – or even help to pay down some of their debt (usually a set amount over a period of years). Some businesses who have implemented this approach have seen increased employee retention rates.

Wellness

Providing your employees with the tools they need to maintain their overall physical health can benefit not only them but your business as well. As a result, many employers are choosing to invest in everything from gym memberships to telemedicine options for their employees.

While exercise is a great way to relieve stress and improve overall cognitive abilities such as learning and concentration, sometimes that isn’t enough to fight off common depression and anxiety symptoms.

Roughly 1 million workers are absent from their jobs every day because of stress. According to The American Institute of Stress, “Unanticipated absenteeism is estimated to cost American companies $602.00/worker/year and the price tag for large employers could approach $3.5 million annually.”

Improving the access and affordability of mental health services is something that could greatly benefit businesses and employees alike. Many telemedicine services, such as Teladoc, have ventured into the realm of mental health counseling. This gives employees an additional benefit while allowing them to access crucial mental and physical health services wherever and whenever they need.

professional woman on phone outside smiling

Knowing Your Options Outside of Open Enrollment

While the annual Open Enrollment period focuses on ACA-compliant individual major medical insurance, there are still other forms of insurance available for potential enrollees.

Knowing Your Options

According to healthinsurance.org, “ACA-compliant coverage refers to a major medical health insurance policy that conforms to the regulations set forth in the Affordable Care Act (Obamacare)…This means they must include coverage for the ten essential benefits with no lifetime or annual benefit maximums, and must adhere to the consumer protections built into the law.”

Unless you qualify for a special enrollment period, you cannot receive ACA-compliant individual health insurance coverage outside of the annual Open Enrollment Period, which typically runs from November 1st until December 15th of each year.

If you missed out on Open Enrollment but still need individual health insurance, you still have a few options available:

  1. COBRA

According to the U.S. Department of Labor, “The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.”

  1. Qualifying Life Event (QLE)

There are certain life circumstances called Qualifying Life Events (QLEs) that can qualify you for a special enrollment period. Special enrollment periods allow you to obtain ACA-compliant health coverage outside of the annual Open Enrollment period for you and your eligible dependents. The most common QLEs pertain to:

  • Loss of health coverage
  • Changes in household
  • Changes in residence
  1. Non-ACA Compliant plans

Non-ACA compliant plans, also referred to as short-term medical plans, have recently become more appealing to a growing number of people due to their lower rates. According to the Henry J Kaiser Family Foundation, “Late last year (2017), President Trump issued an executive order directing the Secretary of Health and Human Services to take steps to expand the availability of short-term health insurance policies, and a proposed regulation to increase the maximum coverage term under such policies was published in February.”

So, what separates the ACA-compliant health plans from the ones that are not? One of the biggest factors being the ACA’s ten essential health benefits. Non-ACA compliant plans do not need to adhere to the numerous rules and regulations laid out in the Affordable Care Act.

business leaders discuss group health insurance options

Making the Most of Your Group Health Care Benefits

Have you recently enrolled or been offered enrollment in a group health care plan through your employer? If so, this can be a great way to enjoy benefits for yourself and your loved ones. Of course, when enrolling in group healthcare (or any health care plan, for that matter), making sure you’re making the most of your benefits is a must. By following a few steps, you can make that happen.

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young african american woman on the couch wearing blue blocking eye glasses looking at her laptop

Blue Blocker Lenses: Are They Worth The Hype?

As our bodies continue to age, it is understandable that we begin to experience more changes. And whether we like it or not, doctors and other medical specialists are here to help us make sure that our bodies are operating at the very best levels that they can and when they are not, doctors are the people we visit to find out why.

For example, declining eyesight is one of the most common and most easily diagnosable issues our bodies may encounter throughout our lives. Worsening eyesight is often associated with getting older and while there are a variety of reasons and levels of severity, ultimately poor eyesight is typically very treatable except in certain circumstances.

As a general rule of thumb, it is suggested that you should visit the eye doctor once every one to two years. Even if you don’t feel your eyesight has changed, an optometrist will be able to know for sure and make any adjustments to your eye prescription as necessary.

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medical professional holding a pink piggy bank

Is An HSA Right For You?

Over the past ten years, Health Insurance has been a hot-topic issue in political arenas and dinner tables alike all throughout the country. From navigating the Affordable Care Act (ACA) regulations and compliance details to researching the available insurance offerings themselves, individuals all over are trying to find the best plan benefits for their budget.

Could an HSA be just the thing?

What Is An HSA?

A Health Savings Account is more commonly referred to as an HSA.  An HSA is designed to act as a tax-deferred savings account to help you cover out-of-pocket expenses.  It can even be used for non-covered insurance expenses provided they fall under the IRS Qualified Medical Expense (QME) list.  This list includes elective procedures, such as Lasik eye surgery.

The general idea is that every month you contribute a set amount into your account and as your HSA grows you receive added financial protection for future healthcare needs, while also tax-sheltering more money.  This is a win-win.  Many banks will also allow you to invest the money you save into Mutual Funds for higher returns.

In order to take advantage of an HSA, you must first participate in an HAS-compatible plan, better known as a High Deductible Health Plan (HDHP).

Adding Additional Benefits To Your Health Plan

Unlike a traditional savings account HSA’s have a triple tax benefit:

  1. The contributions that go into your HSA are not taxed.
  2. Any interest your HSA earns is tax-free
  3. If you make a withdrawal on your HSA to help cover the cost of a qualified medical expense, you can rest easy knowing that that money will also be tax-free.

Another benefit of an HSA is the fact that there is no deadline on when you need to use the money in your account. Because of this, many are reaping the benefits of their HSA’s well into retirement.

Making The Decision

Ultimately, the only person who can decide if an HSA is right for you, is you. In some cases, your employer might even offer a contribution match to your HSA account up to a certain dollar amount per year, which could help your savings out if you are already putting in the maximum as indicated by the IRS.

 

young african american man needing health coverage outside of open enrollment

What Are My Options if I Lose Healthcare Coverage?

Maintaining health insurance coverage is a vital step in your plan to remain financially secure. However, there are times in life when your health coverage may be interrupted. When this happens, it’s imperative that you find affordable health insurance coverage quickly in order to protect yourself and your family.

Why Would My Coverage Be Cancelled?

There are a few factors that could contribute to the loss or interruption of health insurance coverage. If an individual does not pay their premium, their policy may be canceled. This is not always a result of poor money management; if there has been a significant change in income or other pressing financial obligations, it is easy to redefine financial priorities and let those monthly insurance premiums slide. It is also possible that individuals can lose their coverage when a grandfathered plan is canceled. However, the loss of a job which provided insurance coverage is the more likely reason someone may lose their benefits.

These factors are very hard to foresee, and therefore can be very stressful when you learn that your health insurance coverage is going to be affected. However, as soon as you find out your coverage is being canceled, there are steps you can take quickly to make sure you maintain health insurance coverage for you and your family and protect your financial stability.

Option #1: Continue Existing Coverage through COBRA

COBRA is a Federal law that makes it possible for individuals who were covered under company health insurance plans to maintain those existing plans following a job loss. In order to take advantage of COBRA benefits, the individual must pay the full monthly health insurance premium amount. These amounts are usually substantially higher than what you were previously paying because in most cases the employer was paying a portion of your monthly premium. The COBRA plan, however, does ensure that your existing policy will stay intact for up to eighteen months following a job loss. This is crucial for many individuals who have severe health problems and would be in financial jeopardy if they lost their coverage for even a short amount of time.

Option #2: Purchase a New Plan on the Insurance Exchange

If an individual loses health insurance coverage due to the loss of a job, purchasing a new health insurance plan on the insurance exchange could be better, and more affordable, answer to your problem. The Insurance Exchange is a multi-carrier private exchange offering a wide range of health insurance choices for individuals and their families.

These types of benefits are time-sensitive, so it is best to begin the process before losing your insurance coverage. Although insurance exchanges usually have set open enrollment periods (running from November to February), those who suffer from a job loss are offered a Special Enrollment Period to allow them to obtain coverage within a specific time frame after the job loss occurs.

Which Do I Choose?

The most cost-effective solution for most people is to seek a new plan entirely. Insurance plans on the exchange offer generally lower monthly premiums than what you’d pay for your existing plan under COBRA. However, it is crucial that you do not waste time, as the special enrollment period for these plans is 60 days from the qualifying event or last date of coverage. It is important to act quickly to get the best selection of plans and ensure you are able to obtain coverage within the required time frame.

woman filling out health forms

Qualified Medical Expenses for Health Spending Accounts

Consumer-Directed Health Care

Health spending accounts are used to pay for medical expenses that your healthcare plan doesn’t cover, such as deductibles or copays. They’re part of what’s called consumer-directed health care. Consumer-directed means you manage more of the money you spend on health care costs.

There are several types of health spending accounts, including:

  • A health savings account (HSA) is a tax-favorable savings account for medical expenses and is typically used in conjunction with a high-deductible health insurance plan. Unlike a flexible spending account (FSA), unused money in your HSA isn’t forfeited at the end of the year; it can be rolled over and used for the following year’s qualified health expenses. You can only have an HSA if you enroll in an HSA-compatible health plan.
  • A flexible spending account (FSA) is set up by your employer. They own the account, but you get to decide which qualified medical expenses to pay for with your FSA. What makes it flexible? It works with most of PPO employer-sponsored health plans. Unused money in the FSA at the end of the year may have to be forfeited. In addition to medical expenses, FSAs can often be used to pay for childcare expenses, as well as other expenses.
  • A health reimbursement arrangement (HRA) is a benefit fund set up by your employer. Your employer contributes a certain amount of money each year for you to use for medical expenses not covered by your health plan. Only your employer can fund an HRA. In most cases, if all of the money is not used by the end of the year, the HRA can be rolled over to the following year – as long as the employee stays on the same plan.

Money is deposited in these accounts tax-free and is taken out tax-free or tax-deductible. You can use it to pay for qualified medical expenses. A debit card may also be available depending on your plan. Where they differ is the kind of health plan they work with, who owns the account, who controls it and who can put money into it. Here is a comparison chart showing some of the similarities and differences:

HSA HRA FSA differences

Examples of Qualified Medical Expenses

If you have one of these health savings accounts, it’s important to be aware of what is considered a qualified medical expense to be able to use these funds. A qualified medical expense is one that can be purchased with tax-free money through your health savings account.

Some examples of qualified expenses include:

  • insulin and diabetic supplies
  • eye surgery (including laser eye surgery)
  • doctor’s fees
  • fertility enhancement (including in-vitro fertilization)
  • first aid supplies and bandages
  • dental treatment (x-rays, fillings, extractions, dentures, braces, etc.)
  • braces and supports
  • wheelchairs and walkers
  • contact lenses and reading glasses
  • prescribed medications
  • sleep aids

Note that some qualified medical expenses require a prescription from your doctor. If you’re thinking about purchasing something with your health savings account, it’s recommended that you first check to ensure that the expense is qualified and what the procedure is for getting it covered (such as sending a copy of your prescription or receipt or filing a reimbursement request form).

Young biracial woman in business attire smiling on a cell phone on an overcast day

Need Health Insurance and Miss out on Open Enrollment?

Your Guide to Understanding Qualifying Life Events and Special Enrollment

Life happens, and when it does, it is very likely that your health insurance coverage may need to change. When you encounter a qualifying life event that impacts your insurance needs, it is important to know that you can take advantage of a special enrollment period – since most people are unaware that they may enroll outside of open enrollment.
This guide is created to help you understand everything you need to know about qualifying life events and the special enrollment period. You will learn whether or not you qualify and what documents you will need prior to enrolling and shopping for coverage.

#1 Loss Of Coverage

Due To:

  • Termination of group coverage
  • Reduction of hours to part-time status
  • Loss of employer contribution
  • COBRA ending
  • REQUIRED PROOF: Letter from employer, Certificate of credible coverage

#2 Marital Status Change

Due To:

  • Marriage
  • Divorce
  • Legal separation
  • REQUIRED PROOF: Marriage Certificate or divorce/separation court documents, Certificate of credible coverage.

#3 Dependent Status Change

Due To:

  • Birth of a child
  • Adoption
  • Aged out of dependent status
  • REQUIRED PROOF: Child’s DOB, Legal adoption paperwork, Certificate of credible coverage.

#4 Moving

Permanently move to another state and/or no longer live in the existing/prior plan’s service area.

REQUIRED PROOF: New Mortgage Bill/Renter’s Agreement and drivers license, utility, Postal Service change of address receipt.

#5 Death

Your primary policy holder passed away leaving you with no coverage.

REQUIRED PROOF: Death Certificate, Copy of termination letter from prior insurance company.

#6 Income Change

That makes you newly eligible or ineligible for a tax credit.

REQUIRED PROOF: Copy of certificate of creditable coverage OR a copy of the termination letter from prior Insurance Company and/or federal or state agency.

#7 Non-Calendar Year

Your current plan ends on a non-calendar year basis.

REQUIRED PROOF: Copy of termination letter from prior insurance company OR Certificate of Credible Coverage Anytime that you enroll in a plan you will be asked to provide the following information:

  1. What was your qualifying event?
  2. What was the date of this event?
  3. You’ll be asked to submit supporting documents.

So how long is this special enrollment period? Typically, you only have 60 days from the QLE to enroll in a new plan due to ACA law, carriers are very strict on enrollment timelines.

stressed young man at work

Crucial Health Insurance Terms You Need To Know

Navigating the tricky waters of health insurance terminology can be difficult. This is why we’ve put together this handy guide featuring some of the most popular insurance language terms and explaining just what they mean as it relates to you and your family.

Coinsurance:

Coinsurance is your share of the costs of a covered healthcare service calculated as a percent (for example, 20 percent) of the allowed amount for the service. You pay coinsurance plus any deductibles you still owe for a covered health service.

Premium:

A premium is the amount of money charged by an insurance company for coverage. The cost of premiums may be determined by several factors, including age, geographic area, tobacco use, and number of dependents.

Copayment:

A copayment, or co-pay, is a fixed amount you pay for a covered health care service, usually when you get the service. The amount can vary by the type of covered health care service.

Deductible:

A deductible is an amount you owe for health care services each year before the insurance company begins to pay. For example, if your annual deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services that are subject to the deductible. The deductible may not apply to all services, such as when a co-pay only applies or preventive care services. Deductibles are useful for keeping the cost of insurance low. The amount varies by plan, with lower deductibles generally associated with higher premiums. They are fairly standard on most types of health coverage.

Out-of-pocket Maximum (OOPM):

An out-of-pocket maximum is the most you should have to pay for your health care during a year, excluding the monthly premium. It protects you from very high medical expenses. After you reach the annual out-of-pocket maximum, your health insurance or plan begins to pay 100 percent of the allowed amount for covered health care services for the rest of the year. The deductible, coinsurance, co-pays and prescription drug co-pays are included in the out-of-pocket maximum.

Annual Limit and Lifetime Limit:

In the past, health insurance carriers imposed Annual and Lifetime limits on the benefits you receive. You are no longer subject to these limitations and there is no maximum to the benefits you may receive.

Preventive Care:

Rather than waiting for a patient to become sick, preventive care aims to keep people healthy, or at least catch illnesses at their earliest and most treatable stages. Preventive care includes preventive services performed by providers, such as annual physicals or mammograms. Under the provisions of the Affordable Care Act (ACA), policies must cover various preventive services for men, women, and children without sharing the cost for these services through coinsurance, deductibles or copayments. Certain Preventive care services are subject to frequency limitations.

PPO Plan:

This plan allows you to receive care from any doctor you choose, no referral for specialty care (except United HealthCare FL), may use out-of-network doctors – but may have to pay additional fees. PPO plans typically have higher monthly premiums.

POS Plan:

Very similar to a PPO. The biggest difference between the two is the contract between the insurance carrier and healthcare providers.

HMO Plan:

Must pre-select an approved Primary Care Physician, referrals are needed and for most plans, there are no out of network benefits except for qualifying emergencies. HMO plans typically have lower monthly premiums.

EPO Plan:

This is a hybrid network that has limitations that vary based on the carrier. In some instances, you would need to get referrals and may not have coverage for out-of-network. These plans typically have a lower monthly premium.

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