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Can an employer reimburse employees for individual health plans?

In short, no.

This used to be a grey area in the tax code (although there were always potential issues with the Department of Labor). But recent rulings from the IRS and the DOL have made it very clear that this cannot be done on any sort of pre-tax basis.

Potential penalties? $36,500.  Per year.  Per employee.

So sayeth the IRS.

So concurreth the DOL.

And the use of a Health Reimbursement Arrangement (HRA) to reimburse premiums tax-free?  Also no good.

Risk Management Strategy: Go for the Bronze (but add accident coverage)

You are thinking about going with the lowest possible premiums and choosing a Bronze plan, maybe even pairing it with a tax-advantaged Health Savings Account.  The deductible is high — what if you had some unexpected medical expenses and had to pay the first $4,500 or $5,000 before your health insurance started kicking in?  Things happen.  A fall from your bike, a car accident, tearing your ACL while snowboarding … or just walking down your front steps.

In general, for healthy individuals and families, we think the lower premiums offered at the Bronze and Silver level are the right way to go.  And as a way to manage your total financial health risk, pairing your high-deductible plan with a low-cost accident policy can offset that risk when the unexpected happens.

For $20/month, a single individual can have their full $4,500 or $5,000 deductible paid for (less a $250 deductible) in the event of an accidental injury. 

For $43/month a family of four can have their full $9,000 or $10,000 deductible paid for (less $250 deductible) in the event of an accidental injury.

The Accidental Medical Expense policy is our recommendation to pair with a high-deductible plan.

Some clients may be interested in the alternate Accident Fixed Benefit policy, which pays a flat dollar amount for specific services received in the event of an accidental injury.  This plan pays cash benefits without regard to whether your health plan already covers it. In general, this plan is a better fit for clients who choose a Silver-level plan but still want to reduce their total financial risk.  Some examples of cash reimbursement: $100 for a doctor visit, up to $300 per day in the hospital, and up to $1,500 for an air ambulance.

See plan details for both options and get an immediate quote here.

We are pleased to offer these accident riders through Assurant Health.  If you are applying for an Assurant Health medical plan, you can easily add the accident rider on during your application.  But you can select one of these accident riders, even if you have a Kaiser plan, or a Covered California plan, or any other carrier — even if you have coverage through your employer.

Use Short-Term Plans for Immediate, Stopgap Coverage

Short-term plans do not meet Minimum Essential Coverage requirements for individuals under the Affordable Care Act.  But they do continue to fill a critical need, for individuals and families in common situations:

  • In a waiting period before employer health coverage begins
  • Long-term coverage through Covered CA or directly with a carrier doesn’t begin right away
  • Lost college/university coverage while on break from school
  • Want to delay purchasing more costly long-term coverage for as long as possible (see end-of-year strategy to save $1,000 here)
  • Missed the annual open enrollment period and need coverage until the next open enrollment

Click here to get instant quotes and apply for an HCC Life short-term plan

Most short-term plans have disappeared from the individual market, but we are pleased to offer short-term plans from HCC Life.  Plan deductibles are available from $250 to $7,500 with the most popular option a $2,500 deductible plan.  These plans offer many advantages:

  • Next-day coverage
  • Lower cost than the cheapest Bronze plans
  • Large network of PPO providers
  • Choose exact number of days needed, from 30 to 185 days of coverage
  • 20% discount by paying full premium up front vs. month-to-month

Click here to get instant quotes and apply for an HCC Life short-term plan

 

How To: Designate Allpointe as Your Covered CA Agent (2016)

It doesn’t cost anything extra, and we would love to help you navigate the Covered CA application process and provide support to you on an ongoing basis. But neither Covered CA nor your carrier of choice will allow us to do that until you designate Allpointe as your agent.

They don’t make it easy, so please contact us if you are having difficulty.  Here is a step-by-step guide.

First, you will need to set up a Covered CA account, in advance of submitting an application. This goes very quickly. Once complete, you will be returned to the original link to log in with the username and password you just chose.

Then follow these steps:

1. In the upper right, navigate your cursor to “Get Help – Find Answers”

2. From the drop-down menu, select “Find an Agent”

3. In the middle of the pop-up screen, click “Find Agents”

4. Search by Last Name “Vaccaro”

5. Click on “Bradley Vaccaro”

6. Click the “Continue” button

7. Check the three attestation boxes, type your full name in the Signature box, and click “Confirm”

8. A “Congratulations!” message should appear

Once you have completed these steps, you have several choices to complete the Covered CA application:

  • Contact us to schedule a call – we can take your application over the phone
  • Contact us to schedule a call – we can set up a call to jointly complete your application over the web via secure screen-sharing

The San Francisco HCSO “loophole”

After attending the Thursday, July 14 public hearing of the Government Oversight and Audit committee, I wrote the following email to Supervisor David Campos (as well as committee members Farrell and Chiu and my home district Sup. Cohen). As with my previous email, it has also gone unanswered. I blame my long-windedness.

Dear Supervisors Campos, Chiu, Farrell and Cohen:

This is a follow up to my previous email, after I attended the public hearing re: Supervisor Campos’ proposed HCSO amendment this morning. I will first say that I do in fact agree with him on two points:

– The HCSO has been good for the City — it has vastly increased the number of individuals with access to health care and health insurance.

– Any business (restaurants or otherwise) that are charging an expressly defined “pass-through” of HCSO expenses — but can be proven to not actually make those expenditures on a multi-year basis — are committing fraud and should be held accountable.

Read More

Why dental insurance is a bad investment

I help a lot of people with medical insurance, and at some point near the end of the process, they usually ask, “What about dental?” My answer: “Not worth it.”

Here’s why: the typical individual premium for a dental PPO runs about $40/month, or almost $500/ year. Now, if you’ve experienced dental bills of $2,500 and more, that might not seem too bad. But here’s the catch: dental PPO’s typically pay out a maximum of $1,000 in benefits per year. That’s right – you will pay $500 in premiums every year, for a maximum benefit of $1,000. Ouch.

Hang on, though. There are four viable strategies to make your dental care affordable.

  1. Use funds from your Health Savings Account. If you have an HSA-compatible health plan, the IRS lets you set up a tax-advantaged bank account. Ditch the dental insurance and put the $500 you’ll save annually into your HSA. If you combine the federal income tax savings with the 5-10% discount your dentist will give you for paying up front from your HSA, you’ll get all your dental care for 25-40% off. Not bad. Don’t have an HSA-compatible health plan? Call us, or click here for instant quotes (you can filter results to only show HSA-compatible options).
  2. Get your employer to pay for it. Small businesses have access to a far wider range of quality dental plans. The $1,000 annual benefit limit can be increased to $1,500 or more. Employers can even set up a voluntary plan, which costs them nothing. Employees get access to much higher-quality plan options, and their premium contributions come out of their paychecks pre-tax.
  3. $25 or less. Health Net and Kaiser both offer good PPO dental plans at a lower cost to their health plan subscribers. At about $25/month, you will receive that value back if you typically get your two checkups/cleanings per year.
  4. Have a lot of kids. The family rate for dental plans is typically around $120/month. If your family is four or more, you’ll get good value from the coverage.