Medicare Changes For 2010

Section 102: Currently, Medicare outpatient mental health services require beneficiaries to pay a 50% co-payment under Part B. Other physician services under Part B require only a 20% co-payment. A phased reduction in this co-payment for outpatient mental health services begins in 2010. In the actual statute, the current co-payment amount is not described as “50%”. Rather, it defines what counts as incurred costs in such a way that the result is a 50% co-payment. So, the current statute counts incurred costs at 62.5% and this results in a 50% copayment for beneficiaries. In 2010, instead of incurred costs counting at 62.5% as they do now, they are counted at 68.75%. Once the definition of incurred costs reaches 100%, there is parity.

Section 112: Currently, the Medicare Savings Programs (QMB, SLIB, QI-1) have countable resource limits of $4000 for an individual and $6000 for a couple. This provision increases the amount of allowable resources for applicants to these programs so that it is the same as the resource limit for the full low-income subsidy individuals in 2010. The full low-income subsidy program has higher resource limits that increase based on a formula every year. Therefore, this change should result in an enrollment increase into these Programs, which can provide much needed assistance in Medicare cost sharing.

Section 113: Beginning January 1, 2010, SSA shall have in place a system for electronically transmitting information from an LIS application to the appropriate state agency that accepts Medicare Savings Program applications. Transmittal will only 4 occur with consent of the beneficiary. The information will be used to complete an application for the Medicare Savings Programs.

Section 115: Under the current Social Security statute, states are allowed to collect from the estates of deceased individuals any items or services under a state Medicaid plan that were provided to the individual when he or she was 55 or older. This Section amends the statute to eliminate that authority to collect from Medicare cost-sharing (the Medicare Savings Programs) beginning in 2010.

Section 116: With respect to applications filed on or after January 1, 2010, the value of a life insurance policy and in-kind support and maintenance will not be considered as income or resources for LIS determinations.

Section 118: This provision requires the Secretary provide the application for the Medicare Savings Program in the 10 languages (other than English) most commonly used by applicants for Medicare hospital insurance to states and the Social Security Administration. Such applications must be provided by January 1, 2010.

Section 176: Beginning with the 2010 plan year, the Secretary is required to identify categories of drugs and require that all drugs in those categories that are Part D covered drugs be included on all plan formularies. Such classes must meet specific criteria. It is generally expected that the current 6 protected classes would meet this criteria. The Secretary is also allowed to establish exceptions to this requirement for particular drugs within the class, including allowance for benefits management tools. However, any of these exceptions must meet particular criteria and can only be allowed after notice and comment.

Section 187: A report is due no later than two years of the date of enactment (July 15, 2010) that will describe the extent to which providers and plans are complying with Title VI prohibition against national origin discrimination affecting limited English proficient persons and the Office of Minority Health’s Culturally and Linguistically Appropriate Services (CLAS) Standards. This report shall also make recommendation on improving compliance and enforcement of CLAS Standards.

For more information on Medicare and Medicare Advantage Plans email me at bknauss@employeemployersolutions.com visit us on the web at www.employeemployersolutions.com or Twitter me at http://twitter.com/mployebenefits

7 Creative Benefit Strategies For 2010

Whether it's the debate raging in Washington about health care reform, small businesses dealing with the ever-increasing premiums for employee benefits or individuals trying to secure health insurance for themselves - health insurance is on everyone's mind these days. Well, I don't know where any legislation will end up in Washington so let's discuss some very practical ways to deal with the challenges relating to health care today. If you're like most average small business owners in the Lehigh Valley with just three or four employees, you're wondering if there's any real impact you can make on your companies employee benefits structure. The answer is most definitely yes and I'm going to offer 7 very easy ways to accomplish that task.

1. Increase plan deductibles - For so many years the Lehigh Valley has been dominated by extremely low deductible very rich health plans that are great for the employees but are choking the business financially. The days of $500 individual deductibles are over.
2. Consider implementing a High Deductible Health Plan(HDHP) with and HSA component - So, if you're going to ask your employees to pay a greater portion of their health expenses, why not do it with an individual health savings account that is tax-free going in and coming out to pay qualified medical expenses. Oh, and by the way, the money continues to grow with interest.
3. Combine a higher deductible plan with an Accident Policy - Accident policies are very inexpensive and pay a lump sum to the individual in the event of an injury as a result of an accident. (Example: increasing deductible to $1,500 and implementing a $2,000 accident policy on each employee. With the savings realized in the premium reduction you can more than afford the policy. If the employee is injured because of an accident they will get a lump-sum payment of $2,000 to cover expenses).
4. Establish or convert to a defined contribution health plan model - This strategy is nothing more than encouraging your employees to obtain individual coverage that you will help reimburse them for in a fixed amount. There can be some inherent pitfalls with this model as it relates to pre-existing conditions.
5. Consider switching insurance providers - The Lehigh Valley has long been dominated by the "Blues" which offer outstanding coverage and expansive networks of provider care but typically have the highest premiums in the market. I'm not knocking the "Blues" because I sell those plans to - it just may be time to shop the market.
6. Consider self-funding for benefits like dental coverage - Dental is one benefit that functions relatively smooth and it offers a pretty predictable expense model that makes self-funding attractive for some employers to set-up. This will also reduce your dental premiums significantly.
7. Don't just look to renew your existing plan this coming year but instead sit down with your broker and talk through some of the strategies that I've outlined here. That's our job!

If you haven't heard from your broker since last years renewal then maybe we need to talk. Or, if you don't have a broker to help you through some of these very challenging employee benefit waters then please reach out to me at bknauss@employeemployersolutions.com, visit my website at www. employeemployersolutions.com or Twitter me at http://twitter.com/mployebenefits

Consumer Driven Health Plans

The term, Consumer Driven Health Plans, has been gaining a lot of momentum over the last couple of years with the cost of health insurance premiums spiraling out of control. There's been discussion for some time in small business circles about shifting more of the responsibility for health care needs to the employees rather the employer. Business owners of all walks of life are quickly coming to the realization that they are ill-equipped to manage and administer the complexities of employee benefit plans. Aside from that, they also know that the days of low deductible health plans are all but a thing of the past. The premiums for these low deductible plans are chocking them financially. The biggest, and maybe, the only way to make a significant impact on health insurance premiums, is raising the deductible thresholds that employees are responsible for meeting before the plan covers expenses. Many employers are reluctant to pursue this necessary strategy to get a handle on their cost but it's completely unavoidable in today's economy.

So, it begs the question. What can an employer do to lessen the impact of employees being responsible for meeting higher deductibles? The answer is; doing it in conjunction with a Health Savings Account(HSA) for each of their employees. Each employee has this HSA set-up in their name for the purpose of making tax-free contributions into their account to ultimately cover the qualified medical expenses they're now responsible for with a High Deductible Health Plan. This gives the employee greater control and flexibility over making their own health care decisions. The IRS regulates the type of health plans that qualify for an HSA, as well as, how much money the employee can contribute to their HSA's.

Whether, it's the increasing trend toward higher health care premiums or the Federal and State regulations (COBRA and Mini-COBRA) of certain health plans - business owners are now faced with the very real task of shifting the responsibility for health care to the employees. Experts predict that Consumer-Driven Health Plan enrollment will spike in 2010 Read Full Article

For more information on Consumer Driven Health Plans, HSA's or how to effectively shift more of the burden for health care to your employees, email me at bknauss@employeemployersolutions.com visit us on the web at www.employeemployersolutions.com or twitter me at http://twitter.com/mployebenefits

2010 Health Savings Account(HSA) Changes

For those of you that have a Health Savings Account(HSA) in conjunction with your High Deductible Health Plan (HDHP), you should already be aware that the minimum deductible amounts, as well as, the maximum that an individual can contribute to their accounts are changing for 2010. The changes are as follows:

1. The minimum deductible amount must be $1,200 for self-only coverage and $2,400 for family coverage; increased from 2009 requirements.


2. The out-of-pocket maximum must be no higher than $5,950 for individual or $11,900 for family coverage; increased from the 2009 requirements.


3. The HDHP must be set-up with a combined medical/pharmacy deductible. This deductible must apply to the out-of-pocket maximum; no change from the 2009 requirements.


4. All medical and pharmacy services must be subject to deductible and out-of-pocket maximum except for preventative services.


5. The annual contribution limits are being raised to $3,050 in 2010 for individual coverage; increased from $3,000 in 2009. For family coverage the maximum is increasing from $5,950 in 2009 to $6,150 in 2010.

If you don't already have a compatible Health Savings Account component to your HDHP then it's time you switched. You're already having to ask your employees to pay a greater share of their health care expenses out-of-pocket; why not pay them with tax-free dollars. With a full court press of government takeover of health care just around the corner; you better make the switch now while you still can.

For more information on this and other employee benefits related matters; email me at bknauss@employeemployersolutions.com visit my website at http://www.employeemployersolutions.com/ or twitter me at http://twitter.com/mployebenefits

The State of Employee Benefits

If you're the average small business owner today, trying to wade through the complex maze of employee benefits, then you're not alone. I thought it would be valuable to share some market perceptions of other small business owners just like you. I'm generally not obliged to overwhelm you with a bunch of meaningless statistics but here are just a few that I think are valuable:

1. 64% of small business owners are not confident picking a health insurance policy that fits their budgets and their employees' needs.*
2. Furthermore, 60 percent said they are not confident they understand the tax implications of paying for a portion of their employees' health insurance premiums.*
3. Only 27 percent say they understand all the factors that can affect their small group health premiums.*
4. Employer-sponsored health plan costs are going to see a 10.5% spike on average over the next year. (side note; that percentage of increase is on a declining trend)*
5. 10% of employers surveyed indicated they reduced or eliminated retirement benefits as a cost-cutting measure in the past 12 months.*
6. 74 percent of Americans have a less than complete understanding of their retirement plans.*

* source for these statistics October 2009 issue of Benefits Selling Magazine

These figures seems to indicate that the overall broker/agent community hasn't done a real good job taking the time to understand the needs of their clients and what it is they're buying. That's why I specialize in the small business community of the Lehigh Valley. It's a market that has been completely under served and in large part ignored by the brokerage community. If you're a business owner that can relate personally to some of the statistics then maybe we should have a productive conversation. You can always email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com or follow me on Twitter at http://twitter.com/mployebenefits

Employee Benefits - Do More Without Spending More?

Many businesses are in the same boat today - trying to figure out the paradox between doing more with less. The arena of employee benefits is no different. Try suggesting to a small business owner the prospect of expanding his/her benefits package for their employees in today's economic climate and you're likely to get booted right out the door. Well, there is some daylight on this particular topic and the answer seems to be in a very hot trend right now in area of employee benefits and that is - Voluntary Benefits. If I were to ask you if you would like to expand your companies benefit offering without it costing you one more dime, you'd probably think I was trying to pull a fast one. Well, this is one "to good to be true" proposition that really is legit. The voluntary benefit market is one marked with very low-costs, low maintenance, very little administration and high pays high dividends on employee morale. You see, with the current climate of higher deductibles, co-pays and less coverage for existing health insurance plans, the voluntary benefit market is a welcomed sight. Disability and Hospital Confinement policies help with covering higher deductibles that employees have to pay. They also help with unanticipated expenses for extended hospital stays or long periods of being unable to work like groceries, transportation and child care expenses.

There are a full range of voluntary benefits that can be 100% employee paid such as dental, vision, limited-medical benefit plans, disability, cancer and critical illness policies, life insurance, accident and hospital confinement plans. That best part is, many of the plans are portable for the employee. That's right they can keep the coverage no matter where they go. Here's just a small sampling of some of these voluntary benefits:

1. Disability Insurance – An individual supplemental short-term
   disability income product that replaces a portion of income if
   someone becomes disabled due to a covered accident or
   covered sickness. There are plans that cover on and off-job or
   off-job accidents/sicknesses and a wide choice of benefit
   periods and elimination periods. This product features total
   and partial disability, portability, worldwide coverage and
   waiver of premium.
2. Accident Care/Public Sector Accident Care –
   A composite-rated, guaranteed renewable accident
   product that provides indemnity benefits for on and off-the-
   job, or off-job only accidents. Stand alone coverage
   for employee, spouse and dependent child may be
   purchased. Features include the same benefits for
   employee, spouse and dependent child; worldwide
   coverage and portability. Optional riders, such as disability,
   are available.
3. Cancer – An individual specified-disease product that
   pays a cancer screening benefit for specified screening
   tests. Upon diagnosis of cancer, provides benefits for
   treatments and resulting costs that individuals may
   require to care for their cancer.
   
4. Critical Illness – An individual specified-disease product
   that can help individuals pay out-of-pocket expenses
   associated with home health care, caregivers they may
   require for home, automobile modifications, mortgage
   payments, utility bills, other everyday living expenses and
   travel costs to and from treatment centers.

For more information about adding voluntary benefits to your existing benefits package, or even if you don't have a benefits package, email me at bknauss@employeemployersolutions.com or visit my website at http://www.employeemployersolutions.com/

Defined Contribution Health Plans

Are you asking yourself, what in the world is a "Defined Contribution Health Plan"? I'm sure it's not a term that most of you are aware of or even know that it could be a viable option for you, the small business owner, to implement for your workforce. It's really a fancy term for a health plan that is established by the employer but the method of paying for the monthly premiums are based on a fixed contribution made by the employer toward paying for health insurance. Okay, I've got you confused. Sorry! So by way of comparison, a regular employer-sponsored plan is one in which the employer offers its employee groups of 2 or more but the ultimate legal guardian of the plan is the company. Things like the payment monthly premium, renewing the plan each year, being responsible for the administration of the plan and finally being in compliance with federal and state laws governing them (eg. COBRA). This type of health plan is also know as a "Defined Benefit Health Plan". The employees simply opt in or out of the plan. If they opt in, the employer has an established pre-determined amount that the employee has to contribute each month toward covering their dependents and such. This amount is usually deducted from the employees paycheck every pay cycle. Sometimes the employer has the deductions set-up on a pre-tax basis to add tax savings for both the employer and employee. This is typically the way most group health plans are set-up.

However, this is not necessarily the best advise for the small business who is struggling with the mounds of administrative responsibility now incurred, not to mention, the continued escalation in health insurance premiums every year. There is a better way - Defined Contribution Health Plans.

The defined contribution concept can manifest in numerous ways. The ideologically purest model is one in which employers remove themselves completely from administering health benefits by either giving the employees cash (as a separate payment or increased wages) or a voucher that they can use in the market to purchase coverage. At the other end of the spectrum is a defined-choice model in which employers continue to offer a range of health-benefit options at varying price levels. The employer provides a specified premium dollar contribution (perhaps tied to the lowest-cost plan), and the employee pays for any premium difference above the contribution level. Between the two end points, there are numerous permutations. Some of these “in between” models rely on a combination of an employee personal health care account with contributions from employers, employees, or both (which can roll over annually), and major medical coverage with a deductible above the cap of the personal account. For a copy of this free report go to: http://hcfo.net/pdf/definedcontribution.pdf

This is the absolute best option for small businesses in the Lehigh Valley trying to find ways to reduce cost and liabilities, as well as, get out of the health insurance business. For more information on establishing a defined contribution health plan at your company please email me at: bknauss@employeemployersolutions.com or visit my website at http://www.employeemployersolutions.com/ Now go take on the day!!

46 Million Uninsured Americans

Wow, August just flew by but there's been a lot going on in the news cycle these days. I've tried for the longest time not to weigh in on the political battle currently being waged in Washington centered around health care but it hits home too closely for me to be silent anymore. There's so much misinformation out there and flat out ignorance that I feel the need to set the record straight on a few points of contention. The first is, the figure of 46 million uninsured Americans currently in the United States. Let's just take it on face value that this number is somewhat accurate (it's not because it includes many young and wealthy Americans who choose not to have health insurance as well as illegal immigrants). However, for the sake of this discussion, let's say it's true. The debate is expressed two-fold in terms of the need to get those who are uninsured access and the affordability of health care for all. Let's just talk about the accessibility aspect of this debate first. Access to health insurance for these uninsured people is available right now to anyone. In fact, insurance companies are standing by waiting to sign them up with their own individual health policy that's completely portable to take with them from employer to employer. In fact, they can call directly to the insurance carrier or shop on-line to access this health insurance without even getting an agent involved.

The second issue, affordability, is a little bit more complicated because it's a relative term. The real question is, how much can they afford. On this note, the variety of options are absolutely endless. I know for a fact that an individual can get a limited-medical benefit plan for less than 100 dollars in monthly premium or an individual comprehensive major medical plan in upwards of 200 dollars in premium per month. So affordability isn't completely the issue either. So what is it really?

Ahhh, I think I know what the real issue is - pre-existing conditions. That's the real sticking point in the whole health care debate. It's the real reason why employer-sponsored group plans continue to see average increases of 20 plus percent each year. You see with employer plan the insurance carrier typically can't exclude pre-existing conditions, so, they therefore have to accept everyone in the plan at the same rate - healthy or not. Now, you're probably saying, "so, what's wrong with that"? The answer is, nothing, if you're the employee. To the employer and the health insurance carrier, it means everything.

Let's take the employer first. The basis on which the insurance carrier uses to adjust employer plan rates is what type of claim exposure they've had. If employees are becoming a heavy burden on the health care system then they have to increase the premium every year at renewal time.

To the insurance carrier, it doesn't give them the ability to properly assess rates on an individual basis. Now, before you start shouting to me, "that's not fair". I want you to first consider another type of insurance that we're all familiar with - Auto Insurance. Just imagine if I came to you and said that your auto insurance premium was going way up because there's been a rash of auto accidents and DUI's in your area. You would be extremely upset at me and rightfully so. Why should you be punished for someone else's reckless behavior. You don't and that's the point. Somehow we've taken the health insurance concept into an entirely different realm where no one wants to pay more because they may have a certain disposition to sickness for one reason or another.

Now, I now our present system is in need of some changes - not an overhaul. There are some things we can do to address pre-existing conditions and get a handle on the overall cost. However, we must not exclude equally weighty matters such as personal choices about our individual lifestyles and wellness and be a bit more open to the reality that if you're a heavy user on the health care system you may need to pay more than others who aren't. I don't know how the finale of this current debate will end up legislatively but I can say this. As a benefit specialist, I'll personally commit to signing up as many of those 46 million uninsured who find themselves left out of an employer group as possible to get them into their own individual option. Those of you in Pennsylvania - I can help. I'd like to hear your opinions on this and other health care related matters at email at bknauss@employeemployersolutions.com or by visiting me at my website http://www.employeemployersolutions.com/. Thanks

Vacation Time

Well, we're in the midst of summer and vacation planning is well underway. It's a time of year that we all look forward to. Visions of sandy beaches, blue water, historical landmarks and much more preoccupy our minds. I bet that most of us don't think of something very important when we travel - especially internationally. That is, what would happen if we got sick or injured while on vacation in another country? Most of us think about the standard travel insurance that is typically offered by every travel agent when flying outside the country. In addition, most of us naively think that our domestic health insurance benefits will cover us for injuries or sickness when outside our home country. In most cases, that's not true. I don't know about you but when I'm in a foreign country the thought of being cared for by a local doctor or hospital scares me to death. The quality of health care in many popular travel destinations throughout the world are primitive at best.

Travel medical insurance should be the ticket on everyone's mind who will be vacationing outside the country this summer or anytime of the year for that matter. A good travel medical policy is relatively inexpensive and covers things like doctor's visits, hospital stays, surgery and most of all, repatriation and emergency medical evacuations. I know that for most of us, we don't want to consider those types of things along side dreams of fabulous countryside scenery but I guarantee that it would be well worth the investment to guard yourself against substandard health care.

For more information on travel medical insurance email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com

COBRA In Pennsylvania

It wasn't all that long ago that I was exploring the benefits of being an employer with fewer than 20 employees. One of them being the exemption for COBRA laws. What a difference a few weeks can make. That's no longer the case in Pennsylvania - thanks to Governor Rendell. For all you proponents of "big government" takeovers - here's what you get. Here's an overview of the new regulations for small businesses:

On June 10^th Governor Rendell signed into law the state’s Mini COBRA legislation. Employers who employ 2-19 employees will now be required to offer health insurance continuation post employment and also will be obligated to comply with the Federal subsidy of COBRA under the American Recovery and Reinvestment Act (ARRA).

This law becomes effective on July 10, and will mirror the federal COBRA regulations in many ways. Highlights of the Mini COBRA provisions:

• Requires employers who employ 2-19 employees and offers health insurance to offer COBRA
• Only applies to Medical Plans (does not include HRAs, FSAs, dental, or vision)
• To be eligible, an employee must have been on the employer’s insurance for at lease 3 months prior to the qualifying event
• COBRA qualifying events remain the same as those under Federal regulations
• Eligible for COBRA coverage lasting up to 9 months
• Employers (or their designated administrator) are responsible for notification to eligible individuals
• Assistance Eligible Individuals are included in State COBRA
• Employers may charge up to 105% of the medical premium
• Timeline for getting out notices differs from federal COBRA

The state plan lacks the lookback feature of the federal COBRA Subsidy program in that only individuals terminated on or after July 10th will be eligible to participate. The federal program, enacted in February, allowed participation of individuals separated back to September of 2008.

For more information on this and other government regulations on employee benefits email me at bknauss@employeemployersolutions.com

Healthy Employees Are Productive Employees!

Small businesses constantly struggle with the rising cost of health care premiums to cover their employees. I've talked in recently blogs about some of the very effective short-term fixes such as higher deductibles, implementing "Health Saving Accounts" on qualifying plans and the onslaught of great voluntary benefits designed to fill in some of the gaps left by higher deductibles. These solutions are, however, short-term and in and of themselves don't provide a long-term solution. So what's the answer? Employee wellness! That's right, there's no current solution to get us out of this health care mess other than promoting employee wellness. I liken this to the analogy of fixing a car. If your car is leaking oil, one of the short-term fixes would be to add more oil as needed. Very inexpensive and easy to do. However, we would all agree that this isn't a long-term solution that gets down to the root of the problem. To do that, you need to go to a professional, spend a lot more money then just adding oil but you're on your way to providing a more lasting solution. The health and well being of our valued employees is really no different. Until your employees make long lasting life changes about their own health and well being they will continue to be a drain on an already over-burdened health care delivery system. As the employer, you have an obligation to try and facilitate that healthy lifestyle because it will benefit you as well. This is definitely an example where the old saying, "a healthy employee is a productive employee" is true. Think of all the lost productive time being saved on employee absenteeism! How much happier and eager are healthy employees to want to come into work everyday?

I know what some of you business owners are saying, "it sounds very time-consuming and difficult to implement for a small business". Well, it's not at all. In fact, many times either health care or network providers offer it as a free service to participating businesses. Take Valley Preferred of example. They're a local health network of doctors and hospitals in the greater Lehigh Valley area. They offer to participating members a comprehensive employee wellness and education program called BeneFit. BeneFit offers a comprehensive range of health screenings (through corporate health fairs), worksite wellness programs, health awareness profiles and more to help Valley Preferred clients promote better health among employee populations.

Employee Wellness - the only way to create lasting reductions in you company's health care premiums. For more information on implementing an employee wellness program in your company email me at bknauss@employeemployersolutions.com or visit my website for a "Free Report" on employee wellness at www.employeemployersolutions.com/free_report.html

Tax-Free Health Premium Dollars

Many small businesses aren't yet familiar with something called Section 125 or Premium Only Plans. It's a section in the IRS code that allows employers to set-up employee paid payroll deductions for their health care on a pre-tax basis. This plan is basically a "no-brainer" if your anything like me and want to pay as little taxes as possible to Uncle Sam. There are very few provisions to getting the plan set-up and many insurance carriers actually provide the administration part of the plan for free. The only restriction is, once you've signed up for the pre-tax plan you must keep it in effect until the open enrollment period starts. This is because of the lowering of your taxable income by being in the plan. You can get out of the plan mid-stream only if you've had a "major life change" as defined by the IRS. There is a formal 5500 form that needs to be filed with the IRS to administer the plan. That's why having an expert handle it for free makes all the sense in the world.

Here's a simple example of how the plan works:

Weekly Gross Pay $500.00
Weekly payroll deduction for Health Benefits $100.00
My weekly taxable amount (for FICA tax) $400.00

A tax savings of ($100 * 7.65%) $ 76.50

For more information on how you can set-up your employees payroll deductions for health benefits on a tax free basis email me at bknauss@employeemployersolutions.com or visit me http://www.employeemployersolutions.com/

Reducing Health Care Premiums! How?

Every year small businesses grapple with health premiums continuing to go up. The renewal paperwork comes from their health insurance agent [whom they have seen since this same time last year] and it has a 20%, 30% or even 40% increase in premium for the same policy. So the business owner is left with some hard decisions that have to be made. Most employers are extremely reluctant to reduce benefits. So, what left to do? Well, they can pass along the entire increase to the employees which never goes over well. They can absorb the entire increase themselves but that will erode an already fragile profit margin. The typical employer tends to opt for some happy medium option whereby the employer is absorbing some of the shock and the employee picks up the rest. One of the ways to have the employee pick up a portion is by increasing the co-pay amount that's built into the plan design. The problem with that approach is you're never going to make up the gap in the premium increase by adjusting the co-pay for office visits from $25.00 to $40.00. The only thing that left is increasing the deductible that the employee has to meet before benefits kick in. Employers typically go kicking and screaming to implement this but it's the only way to make a real impact.

There is hope though! By increasing the deductible you may be able to qualify for a Health Saving Account where the employee is paying for out-of-pocket expenses out of a tax-deferred medical savings account that bears interest. In addition, now that the employee has to pay more out-of-pocket expenses then before, the employer can offer a myriad of supplemental coverages that help fill in the gaps. For example, a hospital confinement policy is very inexpensive and pays the employee directly a lump-sum benefit daily for a hospital stay. There are also Limited-Medical Benefit plans that cover such things as doctors visits and preventative care. Again, typically the covered amount is paid directly to the employee. These are actually individual plans that the employer can help fund or the employee pays the full amount of the monthly premium. The advantage to the employee of an individual policy is that it's portable - they can take it anywhere they go. In either case, the monthly premiums are very affordable and will help cover some of the new expenses employees have to pay as a result of an increase in deductibles.

For more information on this and other ways to reduce health premiums such as wellness programs and lessen the impact on your employees email me at bknauss@employeemployersolutions.com.

Too Small for a Group Plan?

Many small businesses struggle with wanting to provide benefits to their few faithful employees but just can't seem to make it happen. They have 2 or 5 employees and can just never get to the 75% percent participation requirements set by most insurance carriers for group plans. Maybe it's just that the business owner can't afford to cover the single rate on each eligible employee required by most carriers as well. So, what's left for the business owner to do? Sit back and watch good employees leave and go to a company that does provide some sort of benefits plan. Fortunately, if you find yourself in this position, you do have options. One option is actually very attractive and makes a lot of sense.

The answer is - individual health insurance policies for your small group of employees. Why not? Before you discount this idea out-of-hand - hear me out. We already know you can't qualify for a group plan. You either don't have the minimum participation needed or you can't afford your employer portion of the cost. Having each of your employees set-up their own individual plan solves many of those problems. No, it can't be an "employer sponsored" plan, which means the employer can't have it set-up in the company name and pay the monthly premium. They can, however, encourage their employees to get their own plan and contribute to their monthly or weekly pay in the form of additional income to help cover some of the expenses. Check with your accountant about the tax ability of such additional income. The employer can pick what that amount would be, so there's flexibility. I would caution against varying amounts by employees. Establish one flat amount for all those participating and incorporate into your company handbook. You could also set a flat amount for single coverage, family coverage, etc. You get the idea. There are many advantages of this strategy for both the employer and the employee:

Employer Advantages:

1. Being able to have employees covered for health benefits.
2. Increased retention.
3. Individually underwritten so no adverse risk associated with a group.
4. Flat amount for reimbursements enable employers to control costs.
5. Able to attract quality employees.

Employee Advantages:

1. The plan is portable. It goes with the employee where ever they go.
2. Premium isn't adversely affected by group plan members.
3. You control what insurance carrier and plan you go with. You're not locked into one single option. Plus, if you and your family are in relatively good health, you can shop it every year if you wish.

For more information about how I might be able to assist you on establishing an employee benefits program email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com.

Thanks

Out of Work and Out of Insurance??

Unfortunately, one of the many casualties of this new economy are lots people out of work and struggling to figure out how to keep their health insurance - even with the recently changes to COBRA. In fact, many workers being left go work for employers that don't even have to comply with COBRA (having less than 20 employees). Well, there are some very practical ways to cover your families most basic needs at an affordable monthly premium.


Short-term or Limited Medical Benefit plans, as they're called, are just a few practical solutions for someone who finds themselves out of work for the foreseeable future. As the names imply, they're designed to provide coverage for a short range of time such as 6 or 12 months,as well as, benefits for hospital confinement or some routine procedures. Typically they come with a choice of deductibles and lifetime maximums. They're not designed to cover catastrophic claims or be in place for the long-term. They cover such things as doctors visits, hospital benefits, emergency room care, outpatient services and much more. The premium is very affordable and you can be approved in a day or so.

Here are some situations that Short-term or Limited Medical Benefits make sense:

1. Between jobs - For about half the cost of COBRA, Short-term Medical offers next day coverage.
2. Waiting for Employer Benefits - New employers often impose a waiting period before you're eligible for health benefits. With Short-term Medical, you stay insured and can choose the length of your plan.
3. Temporary or Seasonal Employees - When your employment schedule is unpredictable, it's hard to maintain health coverage, Short-term Medical provides flexibility.
4. Newly Independent - Young adults and recent graduates may no longer be eligible for health insurance through a student plan or their parents plan. Short-term Medical is an affordable way to fill the gap.

Highlights:

• Coverage as soon as the next day.
• You may keep your own doctors.
• Access doctors 24/7/365 - from your phone.
• Low monthly premium.