4 Things Life Insurance Is Not

What is life insurance? People often get confused about what life insurance is and what it is not. Read this blog post for four things life insurance is not and a few tips on understanding them.


Are you confused about life insurance? I don’t blame you. When I first started writing about finances more than a decade ago, my understanding of life insurance was limited.

I knew about life insurance because it was offered through my employer, and I thought a $50,000 policy was a lot of money. I also recognized insurance company names from late-night TV commercials and the occasional bit of junk mail.

I understood “insurance” to be that stuff that you had to have for your car, your home, and your health. The “life” part was a big, blurry blob of “other.” If that’s how you’re feeling, here are a few tips that might help bring things into focus—by understanding the “nots.”

1. Life insurance through work is generally NOT enough. Since learning this myself some years back, I’ve noticed that many people never explore life insurance past what is offered through their work. Policies through work are a great benefit to have, but are usually limited to one- or two-times your salary or a fixed amount like $50,000. Plus the coverage typically ends when your employment there does.

How far will an amount like that go when you consider what’s left behind for your loved ones: the loss of your income and mostly likely debts and bills. What about things like rent or mortgage, child-care and education costs?

An easy way to get a working idea of how much life insurance you need is with a Life Insurance Needs Calculator from a neutral source like www.lifehappens.org/howmuch.

2. Life insurance is NOT a luxury item. Many people have not even considered buying life insurance because they’re convinced it’s a luxury. In a recent study by Life Happens and LIMRA, consumers thought the cost of a 20-year, $250,000 level term life insurance policy for a healthy 30-year-old was three times higher than it generally is. Younger people, in particular, overestimate the cost of a term policy by a factor of five.

If you took a guess at what that policy above would cost, what would you say? It comes out to about $13 or so a month for that policy. Definitely not a luxury—most of us spend more than that on a meal out.

3. Life insurance is NOT just about covering funeral expenses. While covering funeral expenses is very important, and a major reason people purchase it, life insurance does so much more. If something happens to you, life insurance benefits can help replace lost income, or pay off a mortgage, or help ensure a college fund or safeguard a retirement nest egg.

The proceeds of a life insurance policy are generally tax-free and can be used for anything your loved ones may need now and well into the future. Amazing, right?

4. Life insurance is NOT just for really healthy people. Granted, life insurance is less expensive the younger and healthier you are but don’t discount it just because you’re not in triathlete shape!

Many people don’t considering buying life insurance because they think they won’t qualify. But when certain health conditions, such as diabetes or high blood pressure, are under control with a doctor’s guidance or medication, it’s often possible to qualify. You may even be able to get coverage after a heart attack. Just know that it is probably best to work with an experienced insurance agent if you are concerned about a health issue and qualifying for coverage.

Now, if you’re a bit overwhelmed with this information and perhaps don’t know where to start, just know that a life insurance agent will sit down with you at no cost to go over your needs and help you get life insurance coverage to fit your budget. If you don’t have an agent or advisor, go here for suggestions on how to find one. You can also tap the Agent Locator there to find someone in your area.

Remember, the right agent or advisor can help you make sense of the confusion and get you on track for the financial future you want—with the protection your loved ones need.

SOURCE: Mosher, H. (30 October 2018) "4 Things Life Insurance Is Not" (Web Blog Post). Retrieved from https://lifehappens.org/blog/4-things-life-insurance-is-not/


9 Reasons Why Stay-at-Home Parents Need Life Insurance

It's not just parents with full-time jobs that need life insurance. Stay-at-home parents also need coverage. Read this blog post for 9 reasons why stay-at-home parents should have life insurance as well.


You’re probably already aware that a parent with a job outside the house most likely needs life insurance to protect their loved ones in case something were to happen. But it’s not just breadwinners who need coverage—stay-at-home parents do, too. Here are nine reasons why.

1. To replace the value of their labor. Stay-at-home parents are caretakers, tutors, cooks, housekeepers, chauffeurs, and so much more 365 days a year. And all that work comes with a price tag: Salary.com reports that stay-at-home-parents contribute the equivalent of a $162,581 annual salary to their households. If the unthinkable were to happen, a surviving partner would be on the hook for a slew of new expenses that the stay-at-home parent previously shouldered. Term life insurance is generally a quick and affordable way to get a substantial amount of coverage like this for a specific period of time, such as 10 or 20 years—often until you pay of your mortgage or the kids are grown and gone.

2. To factor in the contributions of any future income. Many stay-at-home parents return to the workforce once their kids are older. Life insurance could help bridge the gap that their future earnings would have contributed to the household.

3. To pay off any debt. From student loans to credit card debt to an informal loan from a family member, there are lots of ways to owe money. Life insurance can help settle any debts left behind so they don’t create stress for grieving loved ones.

4. To cover funeral expenses. Would you believe that the average funeral runs between $7,000 and $10,000, according to parting.com? And that may not cover the cost of the burial, headstone and other expenses. Many families want to honor a loved one’s memory but have trouble finding the funds to cover all the costs. Fortunately, the payout from a life insurance policy can help cover final wishes.

5. To leave a legacy. If a stay-at-home spouse has a passion for a place of worship, an alma mater, or another nonprofit organization, life insurance proceeds can be used to leave a meaningful charitable gift.

6. To boost savings. Permanent life insurance, which offers lifelong protection as long as you pay your premiums, may offer additional living benefits such as the ability to build cash value. This can be used in the future for any purpose you wish, from making a down payment on a house to paying for college tuition. Keep in mind, though, that withdrawing or borrowing funds will reduce your policy’s cash value and death benefit if not repaid.

7. To guarantee insurability. Your health can change in an instant. Getting a permanent life insurance policy when you’re young and healthy means you’ll have lifelong coverage. Then you won’t have to worry if later on, you develop a health condition that would make it hard or even impossible to get life insurance.

8. To receive tax-free benefits. Life insurance is one of the few ways to leave loved one's money that is generally income-tax free.

9. To give loved ones peace of mind. Losing a parent and partner before their time is already hard enough without having to worry about unsettled debts, childcare costs, funeral bills, and other expenses.

As you can see, life insurance for stay-at-home parents is just as important as it is for parents who work outside the home. Schedule a time to talk with an insurance professional in your community to learn about your options and get coverage that fits your lifestyle and budget.

SOURCE: Austin, A. (11 December 2018) "9 Reasons Why Stay-at-Home Parents Need Life Insurance" (Web Blog Post). Retrieved from https://lifehappens.org/blog/9-reasons-why-stay-at-home-parents-need-life-insurance-2/


Denied Life Insurance? Here Are Your Next 3 Steps

Were you denied life insurance coverage? Many applicants who fall into the “impaired risk market” understand they're up against a hurdle or two when applying for life insurance, but it doesn't make it any easier when they're denied coverage. Read this blog post for the next steps you should take after being denied life insurance coverage.


It’s tough to learn that the life insurance company you applied to will not be offering you coverage, especially if you were fully expecting a yes!

You may fall into the “impaired risk market,” which means you have something in your background that makes you a higher risk for dying prematurely—think things like diabetes, obesity, a previous cancer diagnosis or even a history of DUIs.

While many applicants with this type of history understand they’re up against a hurdle or two, it’s not any easier to be denied life insurance coverage. But, often times, it doesn’t mean the hunt for an approval is over.

There may still be options, which include applying to a more suitable company or applying for a different policy type.

Here are three actionable steps you should take if you’ve been denied life insurance.

1. Collect information. Before an insurer denies an application, they collect lots of data from several sources to evaluate your risk. If the risk is high enough, you are either rated, postponed or denied. In any of these circumstances, requesting more information on the reason for denial is your right.

Upon request, the carrier can provide detailed information on why an applicant is declined, whether it was due to medical history, current exam results, driving record or something else. Denials from current exams tend to be the most shocking, as you may not know about an illness or disease beforehand.

2. Confirm the results. Errors can happen. Wires can be crossed. Double check the data that was provided to the underwriter. If poor exam results were cited as the cause, confirm it with your primary care physician. In some cases, a company may simply deny coverage because of new, undiagnosed lab results, even if there is little cause for concern.

In other scenarios, you could be denied for occupational or recreational hazards, criminal records and even financial distress. Having records such as these, which aren’t updated or detailed enough, can lead to postponement or declines because the underwriter simply can’t assess a proper risk profile.

3. Work with an agent. Even with proper research, the first company you apply to isn’t always necessarily the best. Passing along detailed information to an agent can allow them to search into better options. A well-trained high-risk life insurance agent can assess information thoroughly and find a better fit for you.

But you also need to understand that applying to another carrier is an option only if the reason for denial (such a diabetes) is one another may accept (because your diabetes is under control with medication). Each life insurance company adheres to its own set of underwriting guidelines, meaning identical applications to separate carriers could yield different results.

If the root cause for denial is too great, a different type of life insurance policy altogether may be the last resort. Utilizing “graded” or guaranteed products make life insurance possible for those with pre-existing conditions or unfavorable risk profiles. While they cost more and typically come with maximum death benefits, they can be a solution.

Saving in the Long Run

After being approved for life insurance, keep an eye out over the next few months or years. Depending on your situation, you might have options to lower your rate. Here two quick examples:

Let time pass. Certain impaired risks simply require more time to pass between diagnosis and the time of application. As medical records and follow-ups are recorded, and symptoms pass or become stable, your rates can come back down. In addition, concerns related to a driving record or criminal record may also just require a certain amount to have elapsed where the offense is either removed or settled.

Check the workplace. If life insurance is offered through group benefits in the workplace, it could end up being more affordable, based on the program offered. It could also lead to filling in coverage gaps a graded or guaranteed policy left behind.

There is no one-size-fits-all regimen to combat a declination. However, taking these steps could alleviate the stress and annoyances that make finding coverage so daunting.

SOURCE: Fisher, J. (10 June 2019) "Denied Life Insurance? Here Are Your Next 3 Steps" (Web Blog Post). Retrieved from https://lifehappens.org/blog/denied-life-insurance-here-are-your-next-3-steps/


Taking your time during enrollment pays off

Open enrollment season is fast approaching. Before you cringe at the thought of choosing benefits, give thought to the process. Open enrollment is like eating at a buffet restaurant; you get to pick and choose from various items until you’re satisfied.

Like picking unhealthy foods that leave you feeling unfulfilled, taking little time to analyze what you need during open enrollment season can expose you to unintended risk. If you’re contemplating what benefit options to select this year, here’s how taking your time pays off in the long run.

Know Your Benefit Options

Depending on your employer, you likely have many benefit options to select. Unum, for example, offers eight different options with additional variations in many of those options. Many know about health or dental coverage but may not know why they may need Accident, Critical Illness or Hospital Indemnity insurance. If you don’t know why you may need certain coverage, ask your Human Resources department for assistance.

Additionally, don’t let the options overwhelm you to the point of inaction or lack of thought. Instead, be thoughtful in your choices. “Take your time. There’s a lot of information to review and factors to consider as you make benefits decisions. If you rush through it, you may miss some important coverage, or end up over-insured,” says MC Guenther, Director, Employee and Corporate Communications.

Employers typically allow several weeks for Open Enrollment season, so make sure to take your time and become informed on your choices.

The Benefit of Picking the Right Benefits

Picking the best fit for your benefit needs doesn’t simply come down to cost. Yes, cost is important, but there are other advantages to selecting the right benefit, such as:

• Staying in good overall health. Health insurance obviously has an impact on this but so does dental insurance, and to a lesser extent vision insurance.

• You have the appropriate coverage in time of need. Disability insurance, for example, is something you never hope to use but is very beneficial when you need it.

• You save money. You may find by comparing two benefit options that one plan offers savings not found in the other, while also providing the same coverage.

Ultimately, taking your time and doing your due diligence will help you be better informed of the options and pick the best benefits package for you and your family.

Know How Your Benefits Work

As mentioned previously, knowing how a chosen benefit works is key to proper coverage. However, many don’t have a full understanding of how their plan works. In fact, the International Foundation of Employee Benefits reports that only 19 percent of organizations believe their employees have a high-level understanding of their benefits. If you don’t have a full understanding of how a benefit works, ask your Human Resources area – they are there to help you.

Let’s take a look at one example in how a lump sum benefit works. You can find lump sum benefits in things like Accident, Critical Illness or Hospital Indemnity coverage options.

The lump sum benefit provides the entire coverage in one payment. Guenther explains how this works, “If you are diagnosed with a covered illness and have a $20,000 critical illness policy, for instance, you’ll receive all $20,000 at once. This lets you decide when and how to spend the money with no strings attached.”

This differs from a fixed sum option found in some benefits that only offer payment to cover the actual expense. There are other differences in benefit options, of course, so it pays to understand the differences to pick the best benefits package for your family.

Overlooked Benefit Options

Most individuals know the importance of taking advantage of health, dental or life insurance benefits. Those only scratch the surface of available benefits. You also have other things to keep in mind like disability, vision or wellness programs – and it doesn’t end there.

“Some benefit vendors may offer some free value-added services to their benefits. These could include an employee assistance program, free financial planning and education tools, or emergency travel assistance,” says Guenther, adding that a wide array of options may be available for little to no cost.

Your needs will vary from others in your organization, but it pays to take advantage of all the benefits made available to you as you never know how they may help you in a time of need. As Guenther adds, “Think of your benefits as pieces of a puzzle. Together, they form a strong safety net against the financial impacts of illness or injury.” Make sure to patiently put your puzzle together to set yourself in the best situation possible.

Open Enrollment season can be overwhelming, but with a bit of work and using the resources made available to you, it’s possible to form a great benefits package for your family.

 

You can read the original article here.

Source:
Schmoll J. (6 November 2017). "Taking your time during enrollment pays off" [Web blog post]. Retrieved from address http://workwell.unum.com/2017/11/taking-your-time-during-enrollment-pays-off/?utm_sq=flhc3tx9gh&utm_source=Twitter&utm_medium=social&utm_campaign=workwelltweets&utm_content=Benefiting+you


Concerned About Losing Your Marketplace Plan? ACA Repeal May Take Awhile

Worried about your healthcare plan? Check out this interesting article from Kaiser Health News, by Michelle Andrews

President-elect Donald Trump has promised that he’ll ask Congress to repeal the Affordable Care Act on Day One of his administration. If you’re shopping for coverage on the health insurance marketplace, should you even bother signing up? If everything’s going to change shortly after your new coverage starts in January anyway, what’s the point?

While it’s impossible to know exactly what changes are coming to the individual market and how soon they’ll arrive, one thing is virtually certain: Nothing will happen immediately. Here are answers to questions you may have.

Q. How soon after Trump takes office could my marketplace coverage change?

It’s unlikely that much, if anything, will change in 2017.

“It’s a complex process to alter a law as complicated as the ACA,” said Sara Rosenbaum, a professor of health law and policy at George Washington University. It seems unlikely that congressional Republicans could force through a repeal of the law since Democrats have enough votes to sustain a filibuster blocking that move. So Congress might opt to use a budget procedure, called “reconciliation,” that allows revenue-related changes, such as eliminating the premium tax credits,  with simple majority votes. Yet even that process could take months.

And it wouldn’t address the other parts of the health law that reformed the insurance market, such as the prohibition on denying people coverage if they’re sick. How some of those provisions of the law will be affected is still quite unclear.

“It will likely be January 2019 before any new program would be completely in place,” said Robert Laszewski, a health care industry consultant and long-time critic of the law.

The current open enrollment period runs through January 2017. Shop for a plan, use it and don’t focus on what Congress may do several months from now, Rosenbaum advised.

Q. Will my subsidy end next year if the new administration repeals or changes the health law?

Probably not. Mike Pence, the vice president-elect, said on the campaign trail that any changes will allow time for consumers receiving premium subsidies to adjust.

Timothy Jost, an emeritus professor at Washington and Lee University School of Law in Virginia who is an expert on the health law, also predicts a reasonable transition period.

Congress and the new administration are “not eager to have a bunch of angry, uninsured voters,” Jost said.

Theoretical conversations about changing the health law are one thing, but “I think that Congress may be less willing to just wipe the subsidies out if a lot of people are using them,” Rosenbaum said. More than 9 million people receive subsidies on the marketplace, according to the federal Department of Health and Human Services.

Q. Can my insurer drop out once the new administration takes over, even if the law hasn’t been repealed?

No, insurers are generally locked in contractually for 2017, according to experts. But 2018 could be a whole different story, said Laszewski.

Many insurers are already losing money on their marketplace offerings. If they know that the health insurance marketplaces are being eliminated and replaced by something else in 2019, why would they stick with a sinking ship?

“The Trump administration could be left with a situation where Obamacare is still alive, the subsidies are still alive, but not the insurers,” said Laszewski. To prevent that, the Trump administration might have to subsidize insurers’ losses during a 2018 transition year, he said.

Q. My state expanded Medicaid to adults with incomes up to 138 percent of the federal poverty level (about $16,000). Is that going to end if Obamacare is repealed?

It may. Trump has advocated giving block grants to finance the entire Medicaid program on the theory that it provides an incentive for states to make their programs more cost-effective. But that strategy could threaten the coverage of millions of Americans if the block grants don’t keep pace with costs, Jost said.

So far, 31 states and the District of Columbia have expanded Medicaid under the health law. Republican governors in these states may play a key role in arguing against taking the expansion money away, Rosenbaum said.

Q. I have a heart condition. Does this mean I’m going to have a hard time finding coverage?

It’s possible. The health law prohibits insurers from turning people away because they’re sick and may be expensive to insure.

Republicans have generally promised to maintain that guaranteed insurability, but what that would look like is unclear. Some of their plans would require people to remain continuously insured in order to maintain that guarantee, said Laszewski.

“I would advise people who are sick to get good coverage now and hang onto it,” said Jost.

Q. Since Republicans have pledged to repeal the law, can I ignore the law’s requirement that I have health insurance?

The individual mandate, as it’s called, is one of the least popular elements of Obamacare. As long as it’s the law, you should follow it, experts said.

Insurers have argued that the requirement that they take all comers who apply for health insurance only works if there’s a coverage mandate or other mechanism that strongly encourages people to have insurance. Otherwise why would they bother unless they were sick?

For the past few years, Republicans have been pushing hard to eliminate the mandate, Laszewski noted.

“One of the easy things they could do is just not enforce it,” he said.

See the original article Here.

Source:

Andrews, M. (2016 November 10). Concerned about losing your marketplace plan? ACA repeal may take awhile [Web blog post]. Retrieved from address http://khn.org/news/concerned-about-losing-your-marketplace-plan-aca-repeal-may-take-awhile/


How Many Employers Could be Affected by the Cadillac Plan Tax?

Originally posted by Gary Claxton and Larry Levitt on August 25, 2015 on kff.org.

As fall approaches, we can expect to hear more about how employers are adapting their health plans for 2016 open enrollments. One topic likely to garner a good deal of attention is how the Affordable Care Act’s high-cost plan tax (HCPT), sometimes called the “Cadillac plan” tax, is affecting employer decisions about their health benefits. The tax takes effect in 2018.

The potential of facing an HCPT assessment as soon as 2018 is encouraging employers to assess their current health benefits and consider cost reductions to avoid triggering the tax. Some employers announced that they made changes in 2014 in anticipation of the HCPT, and more are likely to do so as the implementation date gets closer. By making modifications now, employers can phase-in changes to avoid a bigger disruption later on. Some of the things that employers can do to reduce costs under the tax include:

  • Increasing deductibles and other cost sharing;
  • Eliminating covered services;
  • Capping or eliminating tax-preferred savings accounts like Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), or Health Reimbursement Arrangements (HRAs);
  • Eliminating higher-cost health insurance options;
  • Using less expensive (often narrower) provider networks; or
  • Offering benefits through a private exchange (which can use all of these tools to cap the value of plan choices to stay under the thresholds).

For the most part these changes will result in employees paying for a greater share of their health care out-of-pocket.

In addition to raising revenue to fund the cost of coverage expansion under the ACA, the HCPT was intended to discourage employers from offering overly-generous benefit plans and help to contain health care spending. Health benefits offered through work are not taxed like other compensation, with the result that employees may receive tax benefits worth thousands of dollars if they get their health insurance at work. Economists have long argued that providing such tax benefits without a limit encourages employers to offer more generous benefit plans than they otherwise would because employees prefer to receive additional benefits (which are not taxed) in lieu of wages (which are). Employees with generous plans use more health care because they face fewer out-of-pocket costs, and that contributes to the growth in health care costs.

The HCPT taxes plans that exceed certain cost thresholds beginning in 2018. The 2018 thresholds are $10,200 for self-only (single) coverage and $27,500 for other than self-only coverage, and after that they generally increase annually with inflation. The amount of the tax is 40 percent of the difference between the total cost of health benefits for an employee in a year and the threshold amount for that year.

While the HCPT is often described as a tax on generous health insurance plans, it actually is calculated with respect to each employee based on the combination of health benefits received by that employee, and can be different for different employees at the same employer and even for different employees enrolled in the same health insurance plan. While final regulations have not yet been issued, the cost for each employee generally will include:

  • The average cost for the health insurance plan (whether insured or self-funded);
  • Employer contributions to an (HSA), Archer medical spending account or HRA;
  • Contributions (including employee-elected payroll deductions and non-elective employer contributions) to an FSA;
  • The value of coverage in certain on-site medical clinics; and
  • The cost for certain limited-benefit plans if they are provided on a tax-preferred basis.

The inclusion of FSAs here is important. FSAs generally are structured to allow employees the opportunity to divert some of their pay to pretax health benefits, which means that they can avoid payroll and income taxes on money they expect to use for health care. Employees often are permitted to elect any amount of contribution up to a cap (which is $2,550 in 2015), which means that the amount of benefits for an employee subject to the HCPT in a year could vary depending on their FSA election.

The amount and structure of the HCPT provide a strong incentive for employers to avoid hitting the thresholds. The tax rate of 40 percent is high relative to the tax that many employees would pay if the benefits were merely taxed like other compensation, and the ACA does not allow the taxpayers (e.g., the employer) to deduct the tax as a cost of doing business, which can significantly increase the tax incidence for for-profit companies. Further, to avoid the perception that this was a new tax on employees, the HCPT was structured as a tax on the service providers of the health benefit plans providing benefits an employee: insurers in the case of insured health benefit plans; employers in the case of HSAs and Archer MSAs; and the person that administers the benefits, such as third party administrators, in the case of other health benefits. While it is generally expected that insurers and service providers will pass the cost of the tax back to the employer, doing so may not always be straightforward. Because there can be numerous service providers with respect to an employee, the excess amount must be allocated across providers. In some cases, it may not be possible to know whether or not the benefits provided to an employee will exceed the threshold amount until after the end of a year (for example, in the case of an experience-rated health insurance plan), which means that service providers may need to bill the employer retroactively for the cost of the tax they must pay. Amounts that employers provide to reimburse service providers for the HCPT create taxable income for the service provider, which the parties will want to account for in the transaction. The IRS has requested comments on potential methods for determining tax liability among benefit administrators, including a way that could assign the responsibility to the employer in cases other that insured benefit plans. The proposed approach could simplify administration of the tax.

To read the full story go to the Kaiser Family Foundation website at kff.org.


Most Consumers Value Integrated Benefits for Time and Cost Savings

 

Originally posted December 11, 2014 on Insurance Broadcasting

Whether it’s dental insurance or the smartphone, consumers want products that offer simplification and savings. In a new survey, Anthem Blue Cross and Blue Shield asked Americans what products make their lives easier and the findings revealed that integrated products and services are highly valued – for example, the smartphone (74 percent), printer/copier/scanner (64 percent) and the toaster oven (36 percent). And, when it comes to insurance, consumers overwhelmingly (81 percent) said it would be extremely helpful to trust the same carrier to provide their dental, vision and health coverage.

“We’re meeting the needs of both employer and employee by providing affordable and comprehensive coverage benefits, which helps save time and money every step of the way.”

So, what specifically are consumers looking for when it comes to selecting an insurance plan? Survey respondents said a range of factors are important to consider, but they most frequently point to cost as being an extremely important aspect (67 percent), followed by comprehensiveness of coverage (61 percent), customer service (60 percent) and ease of use (58 percent). Additionally, 86 percent would expect to save time, save money or receive improved care if they had the same carrier integrate dental with their vision and medical benefits.

In the current health care environment, employers are looking for products that offer their employees exceptional valuei. The good news is that simpler processes, vast networks and deep discounts offered by multiline carriers like Anthem can provide employers and employees with the exceptional value they are seeking.

“For example, we offer a vast choice of dental benefits that employees want, along with large, reliable provider networks that make it easy and affordable for consumers to maintain good oral health,” said Erin Hoeflinger, President of Anthem in Ohio. “We’ve built strong relationships with the dentists in our network and we have negotiated rates, which saves members on average 25 to 32 percent on their covered dental services.”

In addition to seeing a cost savings, consumers can expect to save time when they select a multiline carrier. Half of the consumers surveyed (50 percent) say that figuring out costs is the most time consuming aspect of health management. Two-in-five also say it’s time-consuming to find health care providers that accept their insurance (41 percent) and to get their doctors to talk with each other to coordinate care (39 percent).

“With all of the advantages available to consumers and employers who get their benefits from a multiline carrier, there’s no reason to settle for the inefficiencies of having multiple benefit providers," said Hoeflinger. “We’re meeting the needs of both employer and employee by providing affordable and comprehensive coverage benefits, which helps save time and money every step of the way.”

This report presents the findings of a telephone survey conducted among 1,005 adults, 503 men and 502 women 18 years of age and older, living in the continental United States. Interviewing for this ORC International CARAVAN® Survey was completed on July 10-13, 2014. 605 interviews were from the landline sample and 400 interviews from the cell phone sample.

The margin of error for the total sample is ±3.0 percent at the 95% confidence level. This means that if we were to replicate the study, we would expect to get the same results within 3.0 percentage points 95 times out of 100.

 


Dental gap: Coverage slips through reform's cracks

 

Originally post December 9, 2014 by Bob Herman on www.businessinsider.com

Dental care is a peculiar niche of the U.S. healthcare system. Even though teeth and gums are just as much part of the human body as kidneys or elbows, they are insured differently — a lot differently.

When the Patient Protection and Affordable Care Act was written and debated, comprehensive dental insurance never really became a focal point. Lawmakers ultimately created a few provisions that may boost access to oral care, but dental coverage still escapes the grasp of millions of Americans.

Dental plans garnered national attention after it was discovered that HHS overstated 2014 enrollment figures in the ACA's insurance exchanges. The government included almost 400,000 stand-alone dental plans, which are much cheaper and separate from standard health plans. After accounting for those, the number of people who were enrolled in full-service medical plans was 6.7 million. A House committee plans to grill CMS Administrator Marilyn Tavenner on the numbers Tuesday.

Lost in that discussion, however, is the question of how much the law has done to advance dental care. Not enough, advocates argue.

The Affordable Care Act mandated pediatric dental services as one of the 10 essential health benefits for health plans, but adult dental services were excluded. In addition, all health plans must cover oral health risk assessments for children up to 10 years old with no copayment, coinsurance or deductible. The law also allowed states to expand Medicaid and its related dental benefits to more low-income children and adults.

But large gaps in coverage remain, primarily for adults who don't qualify for Medicaid. “More children have been enrolled (in dental plans) through the Affordable Care Act,” said Maxine Feinberg, president of the American Dental Association. “However, it really only helped adults in a minimal way.”

About 187 million people have some form of dental insurance, according to the National Association of Dental Plans. Coverage is provided through two main outlets: employers or public programs like Medicaid and the Children's Health Insurance Program.

A majority of people who have dental insurance get it through their employer. Almost nine in 10 employers with 200 or more workers and about half of all companies offer dental benefits, according to the Kaiser Family Foundation. The most common forms of coverage are like “prepaid gift cards,” Feinberg said. Routine cleanings and other preventive services are completely covered, and all other dental care needs are covered up to a yearly maximum figure.

But that leaves about 130 million Americans who have to pay for their dental care completely out of pocket or rely on supplemental dental policies. That figure includes millions of Medicare beneficiaries. Traditional Medicare does not cover dental care unless it's an emergency procedure during a hospital stay.

Medicare, Medicaid pitfalls

Cost and a lack of dental providers are cited as the key barriers for obtaining care. In some instances, the results have been lethal. The most famous case was Deamonte Driver, a 12-year-old boy in Maryland who died in 2007 after bacteria from an infected tooth spread to his brain. Deamonte's family lost its Medicaid coverage. More recently, in 2011, Kyle Willis, 24, died in Ohio after a wisdom tooth infection forced him to the emergency department. Mr. Willis had no insurance and couldn't afford antibiotics.

Ultimately, the Affordable Care Act is expected to bring some kind of dental coverage to 8.7 million kids and 17.7 million adults by 2018, according to an ADA-commissioned analysis conducted by actuarial consulting firm Milliman. A vast majority of those gains will be through Medicaid expansion, and some asterisks apply.

Medicaid dental benefits for adults vary widely in each state. Some states like Connecticut and New York offer extensive coverage that includes preventive cleanings and restorative services like fillings and crowns. But others offer zero dental coverage, or only cover emergency services that relieve tooth pain and infection. That means many people who live in states expanding Medicaid eligibility may only benefit marginally, and some others in non-expansion states won't benefit at all. The ADA study said of the 26 states expanding Medicaid, nine provide “extensive” adult dental benefits.

The scenario also assumes patients can find dentists accepting Medicaid. Only one-third of practicing dentists take Medicaid patients due to lower reimbursement rates.

Dr. Richard Manski, a dentistry professor at the University of Maryland who has studied dental insurance said the state programs that prioritize dental care actually offer “robust” coverage. But “the problem with the Medicaid plans is there's always a fixed pot of money,” he said.

Dental benefits are often the first to get cut when states need to get their Medicaid budgets in order. Even the federal government has encouraged state Medicaid programs to tinker with their dental care benefits when money gets thin. In 2011, then-HHS Secretary Kathleen Sebelius wrote letters to governors saying that limiting or eliminating dental care benefits is an effective way to save Medicaid funds.

The impact of the ACA's exchanges on dental care is similarly cloudy. Although dental benefits for children up to age 19 are required for all health plans sold on the individual and small-group markets, each exchange can take a different approach, said Colin Reusch, senior policy analyst at the Children's Dental Health Project. Some exchanges require health insurers to embed pediatric dental coverage. Others allow the benefits to be sold in stand-alone policies, requiring people to pay a separate premium.

The average cost differential between a medical policy with embedded dental coverage and a medical policy without dental coverage on the federally run exchanges ranges from $33.45 per month for a family with one child to $70.05 for a family with three or more children, said Evelyn Ireland, executive director of the National Association of Dental Plans.

Mr. Reusch said he's hopeful the gap between dental and medical care can be bridged, even though the ACA will leave many without dental insurance and nothing has changed with Medicare. Providers in accountable care organizations or patient-centered medical homes are now somewhat responsible for the oral health of patients, especially if dental issues ultimately lead to more complex health problems.

“In the long term, that's really beneficial in terms of shifting the oral healthcare delivery system towards integration, which is where we want to go,” Mr. Reusch said.

 


2015 HSA and FSA Cheat Sheet

Source: BenefitsPro.com

Health savings accounts

What they are

A health savings account is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in an HSA-qualified high-deductible health plan.

HSAs can grow tax-deferred in your account for later use. There’s no deadline for making a withdrawal: Consumers can reimburse themselves in future years for medical costs incurred now.

HSA contribution limits:

Individuals (self-only coverage) - $3,350 (up $50 from 2014)

Family coverage - $6,650 (up $100 from 2014)

The annual limitation on deductions for an individual with family coverage under a high-deductible health plan will be $6,650 for 2015.

The maximum out-of-pocket employee expense will increase next year to $6,450 for single coverage from $6,350, and to $12,900, from $12,700, for family coverage.

What’s new

The out-of-pocket limits include deductibles, coinsurance and copays, but not premiums. But starting in 2015, prescription-drug costs must count toward the out-of-pocket maximum

Account numbers — and exploding growth

Health savings accounts have grown to an estimated $22.8 billion in assets and roughly 11.8 million accounts as of the end of June, according to the latest figures from Devenir. The investment consulting firm said that’s a year-over-year increase of 26 percent for HSA assets and 29 percent for accounts.

Projections

Devenir projected that the HSA market will exceed $24 billion in HSA assets covering more than 13 million accounts by the end of 2014. Longer-term predictions are far greater: The Institute for HealthCare Consumerism, for one, estimates that 50 million Americans will be covered by HSA-qualified health plans by Jan. 1, 2019, and that HSA adoption will grow to 37 million.

Who’s using them

Both men than women. The gender distribution of people covered by an HSA/HDHP as of January 2014 was evenly split — 50 percent male and 50 percent female. But males have more money in their accounts. At the end of 2013, men had an average of $2,326 in their account, while women had $1,526, according to the Employee Benefit Research Institute. EBRI reported that older individuals have considerably more money in their accounts than do younger HSA users: Those under 25 had an average of $697, while those ages 55-64 had an average of $3,780, and those 65 or older had an average account balance of $4,460.

Other things of note

People are becoming more active and better managers of their HSA dollars. In 2012, 52 percent of HSA account holders spent in excess of 80 percent of their dollars on health care expenses, according to research by the HSA Council of the American Bankers' Association and America’s Health Insurance Plans.

Flexible spending accounts

What they are

FSAs allow employees to contribute pre-tax dollars to pay for out-of-pocket health care expenses — including deductibles, copayments and other qualified medical, dental or vision expenses not covered by the individual’s health insurance plan.

They’re also known as flexible spending arrangements, and they’re more commonly offered with traditional medical plans.

Limits

On Oct. 30, the IRS announced the FSA contribution limit for 2015 would increase $50 to $2,550 under the Patient Protection and Affordable Care Act.

What’s new

Last fall the U.S. Treasury Department issued new rules that let employers offer employees the $500 carryover. Previously, unused employee FSA contributions were forfeited to the employer at the end of the plan year or grace period, which industry insiders say were a barrier to adoption. The rule went into effect in 2014.

Double-digit growth

Alegeus Technologies said that clients who have actively promoted the FSA rollover allowance to their employer groups and eligible employees are seeing 11 percent incremental growth in FSA enrollment and 9 percent growth in FSA elections — compared to a flat overall FSA market growth.

Projections

The change to the FSA use-it-or-lose-it rule was greeted enthusiastically by employers, consumers and industry insiders. Many believe adoption will grow with that amendment.

Who’s using them

An estimated 35 million Americans use FSAs.

Other things of note

A survey from Alegeus Technologies says most consumers, and even account holders specifically, do not fully understand account-based health plans, including HSAs, FSAs and health reimbursement accounts. Only 50 percent of FSA holders passed a FSA proficiency quiz.


The Retirement Readiness Challenge: Five Ways Employers Can Improve Their 401(k)s

Originally posted October 20, 2014 on www.ifebp.org.

Today, nonprofit Transamerica Center for Retirement Studies® ("TCRS") released anew study and infographic identifying five ways employers can improve their 401(k)s.  As part of TCRS' 15th Annual Transamerica Retirement Survey, this study explores employers' views on the economy, their companies, and retirement benefits. It compares and contrasts employers' views with workers' perspectives.

"As the economy continues its prolonged recovery from the recession, our survey found upbeat news that many employers are hiring additional employees. Moreover, they recognize the value of offering retirement benefits," said Catherine Collinson, president of TCRS.

Seventy-two percent of employers have hired additional employees in the last 12 months (compared to only 16 percent that say they have implemented layoffs or downsizing). Among employers that offer a 401(k) or similar plan (e.g., SEP, SIMPLE), the vast majority (89 percent) believe their plans are important for their ability to attract and retain talent.

Retirement Benefits and Savings Are Increasing (Yet More Can Be Done)

Employers are increasingly offering 401(k) or similar plans to their employees. Between 2007 and 2014, the survey found that the percentage of employers offering a 401(k) or similar plan increased from 72 percent to 79 percent. The offering of a plan is highest among large companies of 500 or more employees (98 percent) and small non-micro companies of 100 to 499 employees (95 percent) and lowest among micro companies of 10 to 99 employees (73 percent).

During the recession and its aftereffects, many 401(k) plan sponsors suspended or eliminated their matching contributions. Plan sponsors that offer matching contributions dropped from 80 percent in 2007 to approximately 70 percent from 2009 to 2012. In 2014, the survey found that 77 percent of plan sponsors now offer a match, nearly rebounding to the 2007 level.

"Despite the tumultuous economy in recent years, 401(k) plan participants stayed on course with their savings," said Collinson. According to the worker survey, participation rates among workers who are offered a plan have increased from 77 percent in 2007 to 80 percent in 2014. Among plan participants, annual salary contribution rates have increased from seven percent (median) in 2007 to eight percent (median) in 2014, with a slight dip to six percent during the economic downturn.

Workers' total household retirement savings increased between 2007 and 2014. The 2014 estimated median household retirement savings is $63,000, a significant increase from 2007, when the estimated median was just $47,000. Notably, Baby Boomers have saved $127,000 (estimated median) in household retirement accounts compared to $75,000 in 2007. "For some workers, current levels of retirement savings may be adequate; for many others, they are not enough," said Collinson.

Five Ways Employers Can Improve Their 401(k)s

"401(k)s play a vital role in helping workers save and invest for retirement," said Collinson. "Until every American worker is on track to achieve a financially secure retirement, there will be opportunities for further innovation and refinements to our retirement system."

The survey identified five ways in which employers, with assistance from their retirement plan advisors and providers, can improve their 401(k)s. Plan sponsors are encouraged to consider these enhancements to their plans:

1. Adopt automatic plan features to increase savings rates

"Automatic enrollment is a feature that eliminates the decision-making and action steps normally required of employees to enroll and start contributing to a 401(k) or similar plan," said Collinson. "It simply automatically enrolls employees. They need only take action if they choose to opt out and not contribute to the plan."

The percentage of plan sponsors offering automatic enrollment increased from 23 percent in 2007 to 29 percent in 2014. Plan sponsors' adoption of automatic enrollment is most prevalent at large companies. Fifty-five percent of large companies offer automatic enrollment, compared to just 27 percent of small non-micro companies and 21 percent of micro companies.

Plan sponsors automatically enroll participants at a default contribution rate of just three percent (median) of an employee's annual pay. "Defaulting plan participants into a 401(k) plan at three percent of annual pay can be very misleading because it implies that it is adequate to fund an individual's or family's retirement when in most cases, it is not," said Collinson. "Plan sponsors should consider defaulting participants at a rate of six percent or more of an employee's annual pay."

"Automatic increases can help drive up savings rates: Seventy percent of workers who are offered a plan say they would be likely to take advantage of a feature that automatically increases their contributions by one percent of their salary either annually or when they receive a raise, until such a time when they choose to discontinue the increases," said Collinson.

2. Incorporate professionally managed services and asset allocation suites

Professionally managed services such as managed accounts, and asset allocation suites, including target date and target risk funds, have become staple investment options offered by plan sponsors to their employees. These options enable plan participants to invest in professionally managed services or funds that are essentially tailored to his/her goals, years to retirement, and/or risk tolerance profile.

Eighty-four percent of plan sponsors now offer some form of managed account service and/or asset allocation suite, including:

56 percent offer target date funds that are designed to change allocation percentages for participants as they approach their target retirement year; 54 percent offer target risk funds that are designed to address participants' specific risk tolerance profiles; and, 64 percent offer an account (or service) that is managed by a professional investment advisor who makes investment or allocation decisions on participants' behalf.

"For plan participants lacking the expertise to set their own 401(k) asset allocation among various funds, professionally managed accounts and asset allocation suites can be a convenient and effective solution. However, it is important to emphasize that plan sponsors' inclusion of these options, like other 401(k) investments, requires careful due diligence as well as disclosing methodologies, benchmarks, and fees to their plan participants," said Collinson.

3. Add the Roth 401(k) option to facilitate after-tax contributions

"Roth 401(k) can help plan participants diversify their risk involving the tax treatment of their accounts when they reach retirement age," said Collinson. The Roth option enables participants to contribute to their 401(k) or similar plan on an after-tax basis with tax-free withdrawals at retirement age. It complements the long-standing ability for participants to contribute to the plan on a tax-deferred basis. Plan sponsors' offering of the Roth 401(k) feature has increased from 19 percent in 2007 to 52 percent in 2014.

4. Extend eligibility to part-time workers to help expand retirement plan coverage

"Expanding coverage so that all workers have the opportunity to save for retirement in the workplace continues to be a topic of public policy dialogue. A tremendous opportunity for increasing coverage is part-time workers," said Collinson. Only 49 percent of 401(k) or similar plan sponsors say they extend eligibility to part-time workers to save in their plans.

"Employers should consider consulting with their retirement plan advisors and providers to discuss the feasibility of offering their part-time workers the opportunity to save for retirement," said Collinson.

5. Address any disconnects between employers and workers regarding benefits and preparations

The survey findings revealed some major disconnects between employers and workers regarding retirement benefits and preparations. For example: Ninety-five percent of employers that offer a 401(k) or similar plan agree that their employees are satisfied with the retirement plan that their company offers; yet, in stark contrast, only 80 percent of workers who are offered such a plan agree that they are satisfied with their employers' plans.

"Starting a dialogue between employers and their employees could help employers maximize the value of their benefits offering while also helping their employees achieve retirement readiness," said Collinson. Just 23 percent of employers have surveyed their employees on retirement benefits and even fewer workers (11 percent) have spoken with their supervisor or HR department on the topic in the past year.