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Do You Really Need Disability Insurance?

July 24, 2011 By Mike Sheeran

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:

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

July 20, 2011 By Mike Sheeran

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

July 18, 2011 By Mike Sheeran

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.

Cheap Insurance in NJ

July 18, 2011 By Mike Sheeran

Many clients and potential clients I speak to will ask for a variation of the same thing.

“Where can I get life, health, disability insurance for the least amount of money?”

What is the cheapest plan I can buy?”

Before speaking to me, they have probably scoured the web getting quotes for cheap insurance in NJ and so they have an idea of what they should pay or want to pay for their coverage. The problem is: the coverage they were quoted is nearly worthless, or it will not provide the coverage needed.

The better questions to ask are : What is the best value for the coverage I am looking for? This is what I am trying to protect, what will the best value be?

Purchasing the best valued insurance, vs the least expensive, can mean the difference of getting your claim paid or not…..

So before you fall into the trap of buying the cheapest insurance available, ask your agent to do a full review of what they think you should purchase and what the best value will be.

Cheap Insurance in NJ – Pitfalls

Life Insurance

Term policy won’t be convertible
Policy may only be convertible for the first 5 years instead of full 15, 20 or 30 years of coverage
Coverage may only be convertible to a few select policies instead of the companies full portfolio
Horrible guarantees on universal life or whole life policy
Insurance carrier has sub-par rating

Convertibility may not mean much now but what happens if your health changes drastically and you still need coverage later?

Disability Insurance

Insurance company can raise rates if they choose to
Definition of disability is written as “any occ” instead of “own occ”
Insurance carrier has a history of not paying claims appropriately

Having a quality disability policy, vs a cheap one may mean the difference of your claim being denied or collecting on a few thousand dollar per month benefit.

Health Insurance

Does the coverage have lifetime limits?
Is the network of physicians limited?
Does the plan follow the same state mandates as other coverage?
Does the company have a history of not paying claims appropriately or are there many complaints online?

Some health insurance options might put limits on key services or may exclude services you may need. (EPO Plans)

If you think you have found a deal too good to be true, please contact me and I will help you fully evaluate your needs and the plans you are considering. If the plan you are considering, is much cheaper than other options, there may be a reason! Find out why and know before you buy!

Get your NJ Health Insurance Quote Today!

10 Advantages of Using Health Reimbursement Accounts for Small Business Owners

July 16, 2011 By Mike Sheeran

I am a huge proponent of using health reimbursement accounts(HRA’s) to lower the health insurance premiums. The concept has been around for a long time but they are recently becoming more mainstream, especially to small business owners, to help get health insurance and health care expenses under control.

***If you are unsure what an HRA is, please check out this post. Consumer Directed Healthcare 101: Health Reimbursement Accounts – HRA

If you are still unsure of whether an HRA is right for your business, consider these advantages:

***These are all assuming you have a properly set up health reimbursement arrangement per the tax code and law.

You can choose exactly what health care expenses you will be reimbursing for. You can pay towards dental care, prescriptions only, hospital deductible only, glasses, etc….You, the employer, decides what will be paid for and how much.
Contributions are tax deductible to the business
Reimbursements to employees are received tax free
Unused money can be rolled over year to year for employees
Or – you don’t have to roll it over year to year – If you don’t want to
When employees, leave, you retain the unused funds, unlike a health savings account
You don’t have to pre-fund an actual account – you just pledge that you will reimburse for medical expenses and then pay as the claims come in.
You set the limit on how much to reimburse each employee, so you know your maximum expense per year.
Since all of the money pledged will likely not be used, you may be able to fund a higher amount than with an HSA.
Employees don’t actually have to be covered by the health plan to participate in HRA

Ultimately, the great thing about using the health reimbursement arrangement is flexibility. It is the perfect way to enhance your plan and reimburse employees for chosen health related expenses. Most importantly, your savings can be up to 20-30% over a traditional health insurance program since you are only paying for claims as they are incurred and not giving all of your money to the insurance carrier up front.

If you would like more information on HRA’s or any of your health insurance needs, please contact me here.

Top Eight Resources for Uninsured New Jersey Residents to Get Health Insurance

July 10, 2011 By Mike Sheeran

I haven’t seen the latest numbers but previously there were over 1,000,000 New Jersey residents without health insurance coverage. While health insurance in New Jersey certainly isn’t cheap, there are many options for people to obtain quality insurance if they are willing to look and explore all their options. Some plans can be free or very inexpensive depending on your income level.

Before I provide the list, there are few things to keep in mind:

All New Jersey coverage is guaranteed issue. – there may or not be a pre-existing conditions clause though. There is a possibility that a carrier will not pay claims for any pre-existing condition for up to the first year. Please refer to your specific program for details.
Smokers and non-smokers pay the same rates.
New Jersey plans can only base your price on your age, your sex and your location. North Jersey will pay higher rates than Southern. Men pay less than women and older individuals will pay more than younger folks.

That being said, here is the list.

Top Eight Resources for Uninsured New Jersey Residents to Get Health Insurance

Employer based coverage- If you are working at least 25 hours at your current job, ask HR or your boss if coverage is available. Employers must pay 10% of the premium at a minimum so these prices may be less than other plans.
COBRA and New Jersey Continuation – if you had previous employer based coverage through a small or large business, you may still be eligible to enroll in New Jersey Continuation coverage or COBRA.
Dependent to 31 Coverage– http://www.state.nj.us/dobi/division_consumers/du31.html -DU31, P.L. 2005, c. 375, permits young adults to continue coverage or become covered under a parent’s group health plan as an over-age dependent until the young adult’s 31st birthday.A young adult may use the DU31 election right to:continue coverage under a parent’s group health benefits plan, when the young adult is “aging-out” of that parent’s coverage; orbecome covered under a parent’s group health benefits plan, so long as the young adult has had coverage at some time in the past.
New Jersey Family Care http://www.njfamilycare.org/ – NJ FamilyCare is a federal and state funded health insurance program created to help New Jersey’s uninsured children and certain low-income parents and guardians to have affordable health coverage. It is not a welfare program. NJ FamilyCare is for families who do not have available or affordable employer insurance, and cannot afford to pay the high cost of private health insurance.
Medicaid http://www.state.nj.us/humanservices/dmahs/clients/medicaid/ Medicaid provides health insurance to parents/caretakers and dependant children, pregnant women, and people who are aged, blind or disabled. These programs pay for hospital services, doctor visits, prescriptions, nursing home care and other healthcare needs, depending on what program a person is eligible for.
New Jersey Individual Health Insurance Program http://www.state.nj.us/dobi/division_insurance/ihcseh/ihcmain.htm The Individual Health coverage program was created to ensure that people without access to employer or government sponsored health care programs could purchase health coverage for themselves and their families from a variety of private carriers. Individuals, regardless of their age or health status, are guaranteed renewable coverage under standard individual health benefits plans designed by the individual health coverage program board as well as under the “Basic and Essential” plans (B&E) sold by carriers.
New Jersey Protect/NJ Protect – http://www.state.nj.us/dobi/division_insurance/njprotect/index.htmNJ Protect is a new health insurance option for uninsured New Jerseyans with pre-existing medical conditions. Coverage through NJ Protect will generally cost less than comparable individual health insurance and offer superior benefits. Because the program is federally subsidized, treatment for pre-existing medical conditions will be covered as of the day a policy goes into effect, and preventive care will be covered at no out-of-pocket cost to the policyholders. NJ protect can be purchased through Horizon Blue Cross Blue Shield NJ or Amerihealth.
NJ Health Link – Services for uninsured or under-insured people. This site has an expansive list of other state/government subsidized programs and other options for obtaining health insurance or health care.

Final notes: Many of these programs are handled directly through the state or insurance carrier. If you need assistance with options 1, 2, 3 or 6 I can help you directly. Please contact me for any details or if you have other resources you think may be a good addition.

If you would like a quote on individual coverage, please contact me here.