NJ Insurance Plans - Mike Sheeran, CFP

New Jersey Health Insurance - Reviews and Recommendations

You are here: Home / Archives for Mike Sheeran

Mike Sheeran

Getting Dental Insurance for Your Business? Why and how the UCR and MAC affect your premium rates

By

If you have started the process of getting dental insurance quotes for your business, you know that it can be tough to determine the best plan option with all of the moving parts involved.  There is price, network, in an and out of network coverage considerations and more!

One of the important pieces to understand, that many people(including brokers) seem to overlook is comparing the differences of UCR and MAC payments. When looking over your many quotes you will notice that they will say UCR at 90th percentile, or UCR at 80th percentile or MAC, or maybe something totally different.  These are important numbers which I will explain below.

First a quick definition:

UCR stands for usual, customary and reasonable – The insurance company will take the average price for a given service in your geographical area and base their reimbursements on these numbers. Let’s say in your area, 80 percent of dentists charge $1,000 for a root canal. $1,000 is the UCR for a root canal in your area.

Maximum Allowable Charge – The maximum allowable charge is based on what the insurance carriers in-network dentists charge for a given service. In-network dentists will typically accept a lower payment for services so for the same root canal as above, the MAC for a root canal may be $650

Why All this Matters?

You have no doubt noticed the certain plans may be cheaper than others. Here is where the UCR and MAC kick in.

Let’s compare the options in a few real world scenarios.

 

Example 1: UCR at 90th Percentile

Plan covers 50% of the charge on out of network services. Payment is based on 90th percentile of the UCR.

Your dentist charges $1,000 for the root canal and the UCR is $1,000.

Your insurance company pays at the 90th percentile so they will pay 50% of the $900 or $450.

You pay the remaining $550 to your dentist and go on your way.

Example 2: UCR at 80th Percentile

Plan covers 50% of the charge on out of network services. Payment is based on 80th percentile of the UCR.

Your dentist charges $1,000 for the root canal and the UCR is $1,000.

Your insurance company pays at the 80th percentile so they will pay 50% of the $800 or $400.

You pay the remaining $600 to your dentist and go on your way.

Example 3 – MAC – Maximum Allowable Charge

Plan covers 50% of the charge on out of network services. Payment is based on the Maximum Allowable charge.

Your dentist charges $1,000 for the root canal but their network dentists have negotiated a payment of $650.

Your insurance company pays based on the MAC so they will pay 50% of the $650 or $325.

You pay the remaining $675to your dentist and go on your way.

 

Summary:

When looking at the three options, the potential out of pocket can range from $550 to $675 for a root canal. This may not be a big deal but it is useful information to use if you are trying to upgrade your plan (go for a higher UCR) or downgrade and save some premium dollars(MAC) plan. It is also good to know if you have many employees who will use mostly out of network services compared to in-network so you can tailor the plan to fit  your demographics.

Out of network based on MAC – Good (lower premiums, higher out of pocket)

Out of network based on UCR 80th percentile – Better

Out of network based on UCR 90th Percentile – Best (higher premiums, lower out of pocket)

 

If you need assistance quoting dental insurance for your company or would like me to review your plan, please contact me here.

 

Flexible Spending Accounts-FSA : Frequently Asked Questions

By

In an earlier post about getting the most bang for your buck with your health care expenses, I mentioned FSA’s as one of your first tools to save some tax dollars.

If you have already started the process of setting up an FSA or are just not sure about them  yet, here are some of frequently asked questions that may help clear anything up.

Flexible Spending Account Frequently Asked Questions

I am not a tax professional, or legal counsel, so please consult with your advisor before acting on any tax advice.

 

1)What is a flexible spending account(FSA)?

A flexible spending account is a voluntary plan that provides the opportunity to convert part of your salary into tax-free benefits. 

The spending account will allow you to set aside pre-tax dollars from your paychecks to cover eligible health care expenses for medical, dental, vision and more.

 

2)If I put part of my salary into a FSA, won’t I make less money?

Your spendable income may actually increase by using an FSA. Lets look at an example.

Without FSA:

Taxable income of $50,000

FSA Contribution: $0

Subtract Federal and Social Security Taxes: $13,697

Health expenses: $2,000

Spendable income: $34,303

 

With FSA

 

Taxable income of $50,000

FSA Contribution: $2,000

Taxable income is now: $48,000

Subtract Federal and Social Security Taxes: $12,983

Spendable income: $35,017

SAVINGS of $714

****This is just an example of typical tax savings. Actual results may differ depending on your exact situation.

 

 

3)Why should I bother with the FSA when I can just take a deduction on my medical expenses on my tax return?

Medical expenses have to exceed 7.5% of your Adjusted Gross Income to be deducted on your tax form. FSA’s do not have to exceed that level. If your AGI is $50,000, than your expenses have to exceed $3750.

***As mentioned above, speak to your accountant to see how this will impact your overall situation.

 

4)Does a flexible spending account replace my existing insurance plan?

No, the FSA is meant to supplement those plans and provide a way for you to pay for any uncovered expenses on a pre-tax basis.

Always submit your claims to your primary insurance carrier and any out of pocket costs you may be paid for by your FSA.

 

 

5) Does that mean the FSA will pay my doctors for me?

No, you will have your own checkbook or debit card and you will need to make payment to the provider.

 

 

6) Are expenses that I paid with my FSA deductible on my tax return?

No, you get a deduction for what you deposit into the account so you cannot deduct it again.

 

 

7)How long is the FSA in effect for?

FSA’s will run calendar year and you must enroll every year and decide how much you will contribute to the plan. Your contributions generally cannot be changed during the year except in the instances below.

In the event of divorce or death of a spouse, you have the option to change your contribution at that time also.

 

 

8)What if I don’t spend all the money in the account? Can I use it next year?

No, unfortunately any unused money does not rollover into the next year. For this reason, you must be careful not to put too much into the account so you don’t waste any money.

 

 

9)I have unused money in my account. Where did it go?

If you did not spend your money before the end of the plan year,  the money gets forfeited to your employer and is under strict regulation by the IRS.

 

 

10) What else am I missing?

In addition to the use it or lose it rule, keep in mind that since your contributions are going in pre-tax, your future social security benefits may be affected.

 

 

 

11)Exactly what expenses can I reimburse myself for?

The IRS has a nice guide on FSA’s and what is eligible. I recommend reading through the guide. Additionally, they have removed some expenses from the eligibility list like over the counter prescriptions.

Publication 502 Medical and Dental Expenses

Publication 969 Health Savings Acccounts and Other Tax-Favored Health Plans

Information on changes to the FSA in 2011

 

 The list below was taken from Publication 502 and will link directly the the IRS webiste.

Do You Really Need Disability Insurance?

By

Do you really need disability insurance?Disability insurance is probably one of the  most important types of insurance that people don’t buy enough of. Why? Some say it is too expensive, they don’t need it, they have it at work, they will never get disabled and any other excuse they can think of. I’d like to share some reasons on why I think anyone working should have disability insurance or purchase more of it.

 

What is disability Insurance?

Before I start, I’ll share what disability insurance is. Disability insurance is generally split between two types, short and long term. Short term disability will usually pay a benefit after you have been out of work for sickness or injury for 7-15 days. Benefits will pay out up to 24 months maximum but usually much shorter than that. Long term disability will pay benefits after a period of 90 days can pay a benefit up to age 67 in some cases.

 

Deciding on Disability Insurance Coverage: Do you really need it?

 

The initial phase of deciding on coverage is to ask yourself a few questions:

  1. If I can’t work tomorrow, how long can I live without an income?
  2. What is the minimum income I need to pay my monthly bills?
  3. If I don’t have any income, who will pay my bills?
  4. How much coverage do I have at work?
  5. Am I eligible for other state programs?
  6. How much do I have in savings?
  7. How long will those savings last without any other income?

What are the odds of you becoming disabled?

I won’t bother with the official stats, but think about your day to day life and possibilities where you could hurt yourself.

  • I hate to admit it, but New Jersey has some of the worst drivers. If you have spent any time on the Garden State Parkway or AC Expressway you quickly notice that some people are just crazy. You can drive as slow or safe as you want, but sometimes other people will cause accidents and may cause you some physical injury.
  • Cell Phones and texting: Same as above. People are distracted while driving so accidents from texting and cell phones are becoming more frequent.
  • Drunk drivers and other impaired drivers
  • Normal accidents like slips, trips and falls.
  • Cancer and other sicknesses

My point is, if you think about it, you can probably name many occasions where you have had a close call while driving or otherwise. You only need one bad day to put you out of work for a long time.

Coverage at work:

If you are lucky enough to have coverage at work, see how much you have. It is likely up to 60% of your income to a maximum of $5,000 per month of benefit or something similar. Keep in mind that the benefits will be taxable.

Example 1: Annual income $50,000

$50,000 x 60% = $30,000

$30,000 – $25% in taxes = $22,500 disability income annually

Example 2: Annual income $110,000

$110,000 x 60% = $66,000 – This will max out the benefit so actual amount will be $60,000($5,000 monthly)

$60,000  – 25% taxes: $45,000 disability income annually

 

Health Insurance Considerations

If you are on disability from work, do you think your health care expenses will go up or down? UP, of course!!! Additionally, you will now be on COBRA or New Jersey Continuation coverage so your employer will not be contributing to your insurance premiums any more. The typical single premium for COBRA in New Jersey is around $500 per month for a single and around $1500 a month for a family. Don’t forget all your extra copays and prescriptions you will now need!

 

Who buys disability insurance coverage?

Take a hint from the professionals that buy the most disability coverage, physicians and attorneys. They may buy coverage because they have a higher income but I think it is because they see the devastating effects a disability can have on a daily basis. They realize that it can happen to anyone and it doesn’t take much to put you out of work for a long time.

 

State and federal programs

Most but not all employees in New Jersey are eligible for New Jersey short term disability. This program will pay 66 2/3 benefit to a maximum of  $559 per week for 26 weeks.

Some may qualify for Social Security Disability benefits but it can be very difficult to qualify for.

 

People who may not benefit from disability insurance

If you have enough savings or assets that you can sell off to last you many years without income, than disability insurance may not be a good buy for you. You can essentially self insure so the insurance may potentially be money wasted.

 

Deciding if you need coverage

This was a very brief summary on disability insurance coverage, but it should at least get you thinking about why or why not disability insurance is right for you. If you stopped working tomorrow and couldn’t pay your bills, you probably need the coverage. If you already have some coverage through work and it is still not enough to cover your bills, than you can always purchase a small policy to supplement that coverage.

Please contact me here for a disability insurance quote or to do a full review on your options.

I also encourage you to do more research at the Council for Disability Awareness.

Health Insurance Claim Denied? You Don't Have to be an Insurance Pro to Get Your Claim Paid Fast.

By

Health Insurance is great when it works, but when your claims get denied, it can be extremely frustrating. The good news is that you can probably get the denial fixed pretty easily; the bad news is that denials are becoming more frequent for everyone.

I work on many claims weekly, and have dealt with nearly all of the New Jersey insurance carriers in getting them corrected. I’ll give you the basics on how to get “most” denials fixed and paid for.

Stage 1

In my experience, most claims are denied because of missing information, incorrect information, miscommunication, or some other billing error. That is good because you can generally get these corrected within a call or two to the insurance carrier and the billing provider. For these, call your insurance carrier and physician and get whatever needs to be corrected, corrected. Be sure to write every single thing down including  names of people you spoke to, reference numbers, dates called and all correspondence regarding the claim just in case.

Stage 2

At this point, some of you that thought you were done in Stage 1 are still fighting the same claim. Persistence counts so make the phone calls again and be sure to reference everything you have written down up to this point.

If you are in a situation where it wasn’t an easy fix, I recommend getting a copy of your insurance contract to review plan provisions and make sure things were processed correctly and according to the plan documents. If they were not, get ready for you first appeal. The contract will tell you how to go through this process.

Stage 3

Yep, some of you will still be working on the same simple issues. Keep persisting until it is fixed!!!

If you filed your first appeal and it was denied, proceed to the 2nd level appeal as directed in your contract.

Stage 4 and Stage 5

Repeat Stage 3 until you are done.

 

I know I haven’t revealed anything magical about how to get claims fixed, but the truth of it is that it comes down to persistence, documentation and follow-up. If you aren’t comfortable going through the process, you should employ the help of your insurance broker as early as Stage 1 so they can assist. If your broker can’t or won’t help, call me and I would love your business and the opportunity to help.

 

 

Correcting Your Health Insurance Denial to Get your Claim Paid Fast.

Before I get into the process, the most important thing is to document everything including times called, keep copies of every correspondence, reference numbers and everything else pertaining to the claim.

 

Health Savings Account Resources for New Jersey Businesses and Individuals

By

Sometimes it can be difficult to get the specific answers you need regarding the tax laws and exactly how HSA’s tie into your health insurance. I have put together a set of resources where you can find an answer to pretty much any question you can think of regarding, tax code, eligibility, and everything else that goes along with having and administering an HSA. I have everything from government resources to the resources through each New Jersey Health Insurance carrier.

 

Health Savings Account Resources for New Jersey Businesses and Individuals

Government Resources

1)IRS Publication 969 – Health Savings Accounts and Other Tax Favored Plans

2)Publication 502 – Medical and Dental Expenses – Including the Health Coverage Tax Credit

3)HSA Indexed Amounts for 2011

Contribution Levels for HSAs:

  • For calendar year 2011, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,050.
  • For calendar year 2011, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,150.

High deductible health plan.

  • For calendar year 2011, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,200 for self-only coverage or $2,400 for family coverage, and
  • the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $5,950 for self-only coverage or $11,900 for family coverage.

4)HSA Indexed Amounts for 2012

Annual contribution limitation. For calendar year 2012, the annual limitation on
deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high
deductible health plan is $3,100. For calendar year 2012, the annual limitation on
deductions under § 223(b)(2)(B) for an individual with family coverage under a high
deductible health plan is $6,250.
High deductible health plan. For calendar year 2012, a “high deductible health
plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,200 (no change from calendar year 2011) for self-only coverage or
$2,400 (no change from calendar year 2011) for family coverage, and the annual out-of pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do
not exceed $6,050 for self-only coverage or $12,100 for family coverage.

5)Preventive Care Services Covered Under the Affordable Care Act – Use this to see what services you can get with zero copayment or deuctible

 

New Jersey Health Insurance Carrier Resources

1)Aetna

http://www.aetna.com/members/individuals/health/plan_details/hsa.html

http://www.aetna.com/hsa/welcome_video01.html

2)Amerihealth

http://www.amerihealth.com/health_plans/de/over_50/hsa.html

List of services covered 100%- http://www.amerihealth.com/health_care_reform/for_providers/preventive_care.html

3)Horizon Blue Cross Blue Shield

http://www.horizonnjhealth.com/HRA_HSA_demo/index.html  HSA/HRA Demo

http://www.horizon-bcbsnj.com/myway/members/mychoices_hsa.aspx

List of services covered 100%

http://www.horizon-bcbsnj.com/SiteGen/Uploads/Public/horizon_bcbsnj/pdf/Health_Reform/Preventive_Care_Guide.pdf

4)Oxford Health Plans

https://www.oxhp.com/secure/materials/brokers/recent_comm/ohp_hsa_fact_sheet_7508.pdf

 

Miscellaneous Resources

1)ACS/BNY Mellon HSA – Horizon Blue Cross banking partner for HSA’s.

This website is one of the best I have found for the resources on HSA’s.

https://hsamember.com/  Main Site

https://hsamember.com/faq.html FAQ Section for Health Savings Accounts

https://hsamember.com/resources.html Additional Resources

https://hsamember.com/calculator2.shtml Tax Calculator to see how much you will save in taxes by using an HSA.

 

Summary

If there are any unanswered questions you still have or cannot find what you are looking for in these resources, please contact me and I will try my best to help you out.