NJ Insurance Plans - Mike Sheeran, CFP

New Jersey Health Insurance - Reviews and Recommendations

Health Savings Account Resources for New Jersey Businesses and Individuals

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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

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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

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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

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NJ Health InsuranceI 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

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.

 

Consumer Directed Healthcare 101: Health Reimbursement Accounts – HRA

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health reimbursement accountsHealth Reimbursement Accounts are another tool that most businesses can use to save up to 20-30% on their health insurance expenses.

In most cases, the HRA will involve two parts, a high deductible health plan and an employer owned and funded reimbursement account. Instead of purchasing a “premium” health insurance plan each year, the employer will purchase a more affordable high deductible plan and use the savings to reimburse employees for certain medical related expenses.

Premiums Savings

Depending on the current plan design, and the new offering, the premium savings can be up to 50%. (Greatest savings are seen when moving from a 100% plan to high deductible plan such as an HSA Qualified insurance plan)

Reimbursement

Employers can set reimbursement levels at their discretion as long as it does not discriminate between employees. A common technique is for the employer to fund the hospital deductible for single employees and families.

Any unused monies that has been set aside by the employer are retained by the employer year to year.

Employees are either reimbursed by submitting claim forms, or they are issued a debit card that allows direct payment from the employer HRA fund.

Taxes

When properly set up, the HRA monies are tax deductible to the business and are received tax free to employees. There are a few key issues that must be addressed though. Because of this, I recommend using a third party administrator to assist.

  1. The HRA is considered a health plan so proper plan documents must be in place and signed off on by key company personnel.
  2. All reimbursements must be substantiated by receipts to show that they are approved health expenses. The expenses must also be listed in Section 213(d) of the IRS Code
  3. The person administering the plan may not have hiring or firing rights at your company. In addition there needs to be a backup administrator in case the main administrator is out for any reason.
  4. There are more issues that need to be addressed but you get the picture. —- get a proper administrator. I have several that are very good to work with.

HRA In Action – Based on a Real Case

Employer Side

Small business with 10 employees facing another 25% increase. The new annual premium was going to be $110,000. On the current plan, the employees had a $1,000 single deductible for hospital inpatient and families had a $2,000 deductible

In this company, the employer felt that most of the employees rarely used the coverage so that most of the premium was being wasted unnecessarily. I agreed and suggested a high deductible health plan coupled with a HRA. This way, the employer would only pay for claims as they are incurred and money wouldn’t be wasted on people that never used the insurance plan.

The new plan we chose had an upfront deductible of $2500 per single and $5,000 per family. The new annual premium for all employees is now $50,000.

Premium Savings = $60,000

With the premium savings of $60,000, the employer has agreed to fund everyone’s full deductible. Based on their census of employees, the employer could potentially pay out $50,000 if everyone uses 100% of the money they have been allotted. With that in mind, he will have a guaranteed savings of at least $10,000 and likely much more depending on claims.

At the end of the year, the employer will retain any unused money and can even roll it over if he chooses to. That way employees who have not used the plan, can increase their HRA balance for coming years.

Employee Side

Each employee has been given a debit card provided by the third party administrator to pay for medical expenses covered by the plan. When they visit their doctor, they present their insurance card and pay their bill with the debit card. The money will come from the employer’s account and the employee’s net cost is now $0.

The employee will continue on like this until he has spent all of the money that the employer has allotted. Employees will then pay for their claims out of their own pocket.

My Opinion

The HRA set-up should be considered by all employers and I welcome the opportunity to present it. The HRA has a  few more requirements and some educational issues that need to be worked through but in the end, both employers and employees win. In my opinion, it is probably the best way to make small business health insurance more affordable for everyone.