Monthly Archives: March 2009

How to Secure Affordable Health Care After Losing Your Job

Right now thousands of people are losing their jobs because of the rough economic conditions, and one thing that comes with that is the loss of health insurance.

With so many people out of work, a big question out there is: How do I secure affordable health care?

Quality health care plans are out there, but it’s an extremely difficult process to navigate on your own. The truth is it’s not easy to secure insurance right now in the individual/family (non-employee) market. You almost have to be in perfect health because of underwriting.

Any application has to be underwritten, which means carriers have the right of refusal. It’s up to the carrier do decide if it wants to take on the “risk” of insuring you. If you have any preexisting conditions, the chances are very slim a major carrier will take you on.

The bright side is if you are healthy (as an individual or a family), there are a lot of great, affordable plans out there, including a lot of the same plans you enjoyed under employee group coverage.

As a broker, I find a lot of people paying around $1,500 a month for family coverage who aren’t aware of vastly more affordable alternatives. This is often because they don’t have a broker for their non-employee coverage. They went direct—went online and picked a plan on their own. Now, they’re paying $1,500/month, for example, for coverage they rarely use when they could be on a high-deductible plan and paying around $500/month. They could be saving $1,000 every month in some cases and still have an excellent health care plan.

There are some really affordable plans out there right now. We recently put a healthy 18-year-old female in a plan that was only $70 a month. It’s a nice plan with great preventative care features. It has a high deductible, but she’s not going to pay a lot of money up front.

But unfortunately, there are so many people out there with the same healthy profile and circumstances who are paying far more (or have no insurance at all) because they’re unaware of their options and really need some help.

The issue is that often people simply aren’t aware that they can have a broker representing them for individual/family coverage without it costing them a penny. The carrier pays the broker in full, so there’s no disincentive whatsoever to having the expertise of a broker guiding you through the process of securing individual/family insurance. And even if someone has an existing plan, they can still assign a broker (just like with an employee group) to that plan without having to switch to something else.

It costs you nothing to work with an insurance broker. It doesn’t impact your rates in any way, so you should absolutely have and leverage a broker as your partner in your health care decisions.

This process can be so difficult to figure out on your own—especially now. There are so many plans out there and so many decisions to make. If you didn’t know where to look as an individual, you could search for days trying to understand what all the plans mean and what’s the best fit for you.

Some plan names and terminology can be misleading; you could think you’re going to be covered only to find out that what you bought on your own wasn’t what you thought it was. And terribly, most people find that out when in the hospital or submitting a big claim—when they have much more important things to focus on.

A broker can help you navigate your way through the approval process, find the right plan for you and your family and understand the benefits of that plan. Families can save money every month with the right plan, and in this economy the savings go a long way.

It’s just all about understanding what’s out there and what it takes to get covered when insurance isn’t guaranteed-issue. It’s not the friendliest market out there right now for individual/family coverage, but with a little help you can still end up in a great insurance situation.

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Taking Full Advantage of Your High-deductible Plan: Preventive Care

The most frequently talked-about reason for switching to a high-deductible health care plan is the premium savings. But there is also another element to these high-deductible plans that’s highly desirable: rich, useful and comprehensive preventive care benefits.

These services are covered at 100 percent and plan deductibles and HSA dollars don’t apply. So long as you go to an in-network provider and stay within the allowed frequency (some services are annual, etc.), these exceptional benefits are totally free.

Well-baby and well-child preventive care includes vision, hearing and lead exposure screenings as well as a host of free immunizations.

Adult preventive care includes vision, hearing and routine blood and urine screenings. But it also includes “less obvious” free services such as cholesterol and lipid level screenings, blood glucose tests for detecting diabetes, prostate cancer screenings, HIV tests, bone density scans and colonoscopies. There are also breast exams, mammography screenings, pelvic exams, pap tests and contraceptive management for females.

Just always be sure to check in with your doctor first so that you get the coverage to which you’re entitled. Call ahead, give the office your insurance information and ask if the services that interest you are covered in full at that time.

When you schedule a routine office visit, that’s a great opportunity to request additional preventive care services covered under your plan. Just always confirm that those benefits fall under your free preventive care.

Preventive Care Services: What’s In It for Them?

So, why are all of the major carriers offering all these no-charge preventive services with their high-deductible plans? Because they’re counting on these services keeping people healthier and detecting health issues before they become costly catastrophic problems down the road. A healthier America for them translates into fewer insurance claims. A healthier America for you means less time ultimately receiving medical care and a better-conditioned body to live the life you want.

These preventive care services are recommended by everyone from the American Cancer Society to the U.S. Preventive Services Task Force, but people aren’t utilizing these benefits nearly as much as you’d think.

On one hand, that’s because people aren’t used to services of this breadth and scope being truly 100 percent covered. They expect copays and deductibles and other charges to apply, so they stay away unless it’s absolutely medically necessary.

On the other hand, many people simply aren’t aware they’re entitled to these free preventive services with a high-deductible plan or aren’t clear enough about their benefits to feel confident using them.

We picked up a new client the other day that had super-rich preventive benefits as part of their existing plan, but they had no idea so much was covered for free because their last broker didn’t do any reviews with them. They had fantastic insurance but nobody in the group knew how to utilize it or when they could use it.

That’s why the role of the insurance broker is such a critical part of the process. A good broker is a good partner—reviewing or reminding clients about plan benefits and informing employees exactly how to best utilize their plan.

The goal is that hopefully you’re healthy and you don’t need to use you plan services very often, but when something comes up, you need to know what benefits you’re entitled to. It’s the broker’s role to keep people up to speed on how to best take advantage of their insurance.

Whether it’s on a quarterly, semi-annual or annual basis, our role as brokers is to continuously review with groups what benefits they have. That can be a quick highlight summary or a lunch-and-learn refresher meeting. Reeducating groups on little things such as plan usage plays a big role and goes a long way … and you’d be surprised how many people don’t realize or completely forgot what rich benefits are included and free with their insurance plan.

The more the broker can stay in front of people, the easier it is for those individuals to ask questions and find a comfort level. That’s our job as brokers: to be as available and proactive as is necessary to make sure people understand their benefits. And quite frankly, that’s a lost art in this business.

Remember that with employee benefits, the key word is “benefit.” Don’t hesitate to take advantage of what’s included in your plan.

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During Insurance Plan Changes, Communication is Key

Changing plans or cutting programs can be treacherous territory for an employer. Workers can react automatically with a “change is bad” mentality—especially if it looks like something is being taken away. This can happen even when the benefits of the new approach are seemingly clear (because it pushes people outside their comfort zone).

Meanwhile, competing companies in the same situation succeed in making the same changes without a hitch. But how?

There’s one essential difference between damaging employee morale and sailing smooth into a more affordable health care scenario: effective communication.

As insurance brokers, we see it as our job to help companies successfully communicate the rationale behind changes. Employees need to understand why changes are happening, what it means for them and how they can get the most out of their new plan or situation.

Sometimes that means sitting down with workers one-on-one to go through the reasons why a change makes sense and answering questions about what comes next. That’s okay. We’re happy to do that because we know how crucial it is to a fruitful transition for all involved.

Recently a client made a group change to a high-deductible, HSA-compatible health care plan. We went to their offices in Portland, Seattle and San Francisco to talk to the affected employees face-to-face. After the initial talks and presentations, only two employees out of 50 still objected to the switch. We listened, answered questions and explained benefits. Once those two fully understood how their new plan worked (that they were still in a rich PPO with the same carrier and vastly improved preventative care), even those two people warmed up.

It’s all about the quality of communication.

But if that’s all it takes, why doesn’t it happen more? Honestly, it’s because quality communication takes time. A broker can’t do it with an e-mail blast or ditto sheet. There’s substantial energy involved, and not all brokers are willing to make the commitment.

So if you’re making changes, be sure your broker is going to be willing to put in the necessary effort to make sure your employees “get it.”

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Three Overlooked Strategies All Employers Should Know

In a recent post, we talked about strategies for scaling back benefits when a rough economy forces reductions. This time, we’re going focus on how to find affordable alternatives for employees when a program must be cut entirely.

There are three different paths a thoughtful employer can go down in order to save the necessary money while still putting its employees in the best possible position: The company can make a previously funded product voluntary. The company can switch to an HSA-compatible plan that is capable of compensating for the loss of ancillary benefits. Or, the company can replace a product with a different, less expensive one (e.g. cutting dental but adding or boosting life insurance).

Let’s take a look at the options one at a time:

Making Products Voluntary

There’s an essential difference between dropping a program completely and keeping it on a voluntary basis (where if the employee really wants it, he or she can pay for 100 percent of it). Many families feel more secure with life or disability insurance and will keep that benefit alive … if given the opportunity. And allowing employees to “opt in” means they’ll pay pennies on the dollar through the group rate rather than paying top dollar on the open market.

Before, the company paid for the benefit. Now, the employee will need to have $6 or $7 taken out of their paycheck to keep the benefit in place. But at least it’s still in place. Some workers would never otherwise be able to afford that product, while others might not have an option at all. If an employee has an existing condition, life insurance at the current coverage level might be an impossibility.

In many cases an employee could keep a life and disability product on a voluntary basis for less than $10 a month. It’s a huge benefit to the employee to have the option open, and the employer has been able to save the money.

No employee wants to hear that a financial burden will fall to them. But that’s nothing compared to the reaction to having a safety net completely yanked and learning they’ll have to take their chances on the open market.

The HSA-Compatible Approach

Ancillary products are extremely valuable to employees and help companies attract and retain talent. Still, employers will cut out those programs when financially against the wall. Medical, however, is always critical. That company is most likely never going to do away with its medical plan. And certain medical plans can help pick up the slack when other products are cut.

The old standard for a company offering is medical-dental-vision. But you don’t need dental and vision if you’ve got a good HSA-compatible plan. You can use tax-free dollars to pay for dental and vision costs and save the premium dollars.

We recently ran an analysis on a 20-employee group and found that not one person used the dental insurance in-network in the past year. The company was paying     $15,000 on an annual basis for this top-notch dental plan, but nobody was really using it!

One option in such a situation is to phase out the dental plan and take that cost savings and put $500 tax-free dollars into each employee’s HSA account to pay for dental out-of-pocket expenses. (They were paying for it out-of-pocket anyway since they weren’t using their in-network coverage).

When a company must cut costs and programs, having an HSA plan in place will at least give employees have a tax-free way to fund their out-of-pocket dental and vision expenses.

Giving While Taking Away

Let’s say a company is offering a medical and dental plan, but it’s struggling to make ends meet. That employer could cut dental while switching to a high-deductible, HSA-compatible plan (described above) and add an inexpensive life or disability product.

In this case, the employer could say, “Everyone, we unfortunately have to eliminate the dental plan, but in return we’re going to put a $25,000 life plan in place.”

For the employer, this could result in paying approximately $85/month per employee down to $4.75/month (because a life product is so affordable). And yet that company is still offering something to the employee. It’s more than just an olive branch; it’s a tangible, valuable benefit.

Any of the approaches described above could result in thousands of dollars in annual savings. That’s potentially enough to keep an employee from being fired during budget cuts. Our job as brokers during an economic downturn is to craft the best possible cost-saving strategy for our clients—and many of those approaches can save employee benefits (or even employee jobs).

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