affordable health insurance — NJ Insurance Plans

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.

Health 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.

The HRA is considered a health plan so proper plan documents must be in place and signed off on by key company personnel.
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
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.
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.