True or False….My Health Insurance Covers Me Everywhere

Answer: It Depends…Read your policy

If your health insurance is a Health Maintenance Organization (HMO) plan, you must secure your healthcare services from that insurance company’s network of health care service providers in your home service area, unless your health problem is a life-threatening emergency situation. HMO members may, or may not, have access to their insurance company’s network of providers when traveling outside their home residence area…read your policy. If you live in city A, travel to city B and wake up one morning feeling punk…coming down with a flu bug, what doc can you call? Your HMO might not cover you in city B, if you are considered “out of area”.

Of course you are free to visit any doc anywhere. It’s your choice. However, you may be forced to pay the doc’s full bill out of pocket if that doc is not in your HMO insurer’s network of contracted healthcare service providers and/or your travels have taken you away from your home area network. Read your policy.

There are HMO plans providing out-of-network benefits, (so-called POS or PPO plans). Typically, such offer one set of benefits when utilizing the insurance company’s network of contracted healthcare service providers and a second set of benefits when such services are provided by non-network providers. You will pay more of the bill when using out-of-network providers but, unlike pure HMO plans, at least some of the bill may be covered.

Due to the effects of the Patient Protection and Affordable Care Acts of 2010 (Obamacare), most health insurance plans available these days are HMO plans, with only a few POS/PPO plans remaining.

Oh yes…don’t forget to Read Your Policy.

Carpe Diem

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Did You Qualify for Obamacare Tax Credit in 2014? You might receive a letter from IRS.

Our favorite civil servants at the IRS are scouring 2014 form 1040′s looking for you scallywags who may have received a larger than appropriate tax credit off-set to your Obamacare monthly premiums. If you received a too generous tax credit, IRS will be on your case to claw back those thousands of dollars in premium relief that you filched from the income tax kitty.

A word to the wise…pull out your 2014 income tax return and make sure you have nothing to worry about…however, if you over-collected on premium tax credits…3…2…1, begin to worry.

Carpe Diem

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Who Feeds Your Family When You Can’t?

The answer to that question is probably local, state or federal relief organizations for a lot of folk…but what about YOU? If you are like most working Joe and Jill Sixpacks, you show up for work every day and collect a salary or wages a couple times each month…or maybe you are self-employed and rely of service or professional fees to support yourself and family. What if an injury or illness makes showing up at work impossible? Who has your back? Not Washington, not your state, and probably not your neighbors down the street…Think about that.

Okay, I’ll concede that if you are injured on the job there are probably limited workers compensation benefits for you if you work for the MAN, but how much and for how long?…and who wants to go to some government office, hat in hand, to ask for help? That has to be your last resort…check your dignity at the door.

However, there is a form of insurance that keeps cash coming in when accident or illness cuts off your ability to earn an income for long periods of time. It has a name, Disability Income Insurance. Ask your insurance agent about it…beats the sox off relying on an EBT card. Disability Income Insurance isn’t cheap, and not everybody can qualify to buy it, but owning some can do wonders for your peace of mind.

Carpe Diem

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Thinking of Appplying for New Life Insurance? Some advice….

Okay, you have done your homework and are ready to apply for life insurance to fund a key person plan to save your business, or create the cash needed for partnership buy-outs, or maybe to cushion your family’s loss if you die too soon. Here are some Do’s:

Review your medical records for the past several years and write down the names and contact information of doctors seen, dates of office visits, reasons for the office visits, drugs prescribed and dosage, outcomes of treatments.

If treatmnet was received at a hospital or Emergency Room, what was the reason and outcome…date(s) of the visits and addresses for hospitals, ER’s, and local Doc-in-a-Box facilities visited.

Know name(s), dates of birth and addresses for your intended Beneficiaries, and possibly their SSN’s…If Beneficiary is a Trust, know the formal name of the trust, date it was established and its trustee.

If your life insurance application requires a physical exam, get a good night’s sleep on the night before your exam, and schedule it for an early morning time when your blood pressure is nice and low. Half an hour before your exam time drink a BIG glass of water. Keep the above medical history information at hand, as your medical examiner will ask for it. Most such exam’s are performed by RN’s or para-med’s unless your are applying for several million dollars of insurance.

Review your financial history and be ready to provide current annual income, expenses and net worth upon request.

Answer the questions on your applications, mostly yes/no answers, and be ready to provide your driver’s license number. If you smoke or drink, even a little,
be ready to estimate what and how much each month…cigarettes, cigars, pipes and dipping snuff-tobacco all count to tag you as a tobacco user. (Note: Nicotine will show up in a person’s urine for several days after it enters one’s system.)

Keep your checkbook handy. Although most applications can be sent in COD, it is to your advantage to send the estimated first premium with your application…your insurance agent or broker will explain why.

This isn’t all the Do’s, but the most critical.

Here are some Don’t:

If you are worried about some health or personal issue don’t try to gloss it over or “forget” to include it in your application. Life Insurance policies are “unilateral contracts”, and subject to contract law. A “material misrepresentation” by the applicant can put the policy at risk of being rescinded during its first two years. (However, after the policy has been in-force for two (2) years, the insurance company can no longer move to rescind the policy for that reason.)

Don’t drink or stay up late the night before your life insurance exam…and don’t pick that night to fight with your spouse or start worrying about things you can’t control.

Don’t expect your life insurance policy to be issued in a week or ten days. It could be several weeks before you receive your new policy, as it takes time for the underwriters to obtain information from third parties on your behalf.

Don’t expect to use Term Life Insurance for long term commitments…just ask the person who bought a Twenty(20) Year Term Plan at age 45, is now age 65, and still needs the insurance. His/her life insurance costs at age 65 will be substantiually more than “whole life” premiums for the same death benefit would have been twenty years ago….so don’t buy into the “buy term and invest the difference” scam. Too many who buy term end up blowing the difference.

Don’t buy your life insurance on-line. Abraham Lincoln said, “A lawyer who defends himself has a fool for a client.” There are highly qualified life insurance agents and brokers in your city who can guide you toward the best life insurance outcomes. Insurance agents’ service fees are already built into the premiums your will pay, whether at an on-line bargain basement web-site or through a Chartered Life Underwriter (CLU), vetted life insurance professional. [Would you go to a LPN to obtain an appendectomy?]

Carp Diem

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A New Year with New Challenges and New Opportunities for You

Every January 1st we are rewarded with new opportunities to make ours’, and the lives of those who depend upon us, better, safer and more secure than was the case last year…opportunities to address the “coulda”, “shoulda”, “woulda” steps we failed to take in 2015, such as: I coulda set aside a few dollars each week that shoulda covered the premiums for some disability income insurance that woulda saved my butt when I fell off the ladder, strained my back and could work only part time for the next six months, reducing my income by 50% during that time.

Life is full of coulda, shoulda, woulda moments. Why is that? The reason is that during those moments we have the advantage of hind-sight…looking back from a renewed prospective. You, I and everybody on earth ain’t never gonna be disabled, broke or dead. Just ask us. Why else would we buzz down life’s road without a thought about hedging our bets with insurance to soften the blows that life deals us?

What’s that? You “can’t afford” life or disability insurance? My friend, that is the very reason you should own some, because if money for you is tight now things can only get worse when death or disability show up at your door. Selfishly, when you die too soon you are gone…out of the picture…home free…leaving your spouse and kids to take the blows. But when you are disabled and can only work part time, or not at all, you are still here to twist in the wind while your bills go unpaid and those who counted on your support are left holding the bag.

Do the right thing this week. Talk to your insurance broker about life and/or disability insurance, then do something about it. I guarantee you will sleep better
afterward. Peace of mind is a powerful tranquilizer.

Carpe Diem

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Medicare and Obamacare Open Enrollment Dates for 2016 Plans

Open enrollment period for 2016 Obamacare health insurance plans starts November 1, 2015 and closes January 31, 2016.

Annual Election Period for 2016 Medicare Insurance plans started October 15, 2015 and closes December 7, 2015.

During Obamacare Open Enrollment Period (OEP) you may enroll in a new personal or family health insurance plan to become effective January 1, 2016. (Enroll by 12/15/15, in order to have the new insurance start January 1st.) During OEP you may elect to retain your current Obamacare plan, assuming your present insurance company intends to provide that same plan in 2016, or you may enroll in a different health insurance plan offered by your current insurer, or obtain your new insurance elsewhere.

During Medicare’s 2015 Annual Election Period, a Medicare Beneficiary may enroll in new/change Medicare Insurance Plans, or drop an existing Medicare Insurance plan and return to original Medicare. Such changes would become effective Januarty 1, 2016. (“Medicare Insurance Plan” = Medicare Advantage Plans and/or Medicare Prescription Drug Plans.)

Carpe Diem

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September Odd ‘n Ends

September is Life Insurance Month in America. If you own life insurance, good for you. Owning life insurance means you are unselfish and concerned about the bad things that can happen to your loved ones or to your business associates when you are no longer around to stand between them and financial disaster. If you don’t own life insurance…well, that is just somebody else’s problem isn’t it?

Get ready for 2015 Income Tax Season. If you obtained Obamacare health insurance for 2015 and qualified for an income tax credit to reduce your monthly premiums, be on the lookout for a letter from the IRS with a Form 1095-A in it. Information in Form 1095-A helps you complete IRS Form 8962, which must be included with your 2015 Income Tax Return.

If you are receiving the above income tax credits against your monthly health insurance premiums, you MUST INCLUDE Form 8962 with your 2015 Income Tax return or run the risk of losing your tax credit in 2016. The income tax hit for not owning health insurance in 2015 is substantially more than it was in 2014.

“Income Tax Credit” means other peoples’ income tax payments being used to pay your premiums…so be sure to thank your neighbors down the street for their largess.

Carpi Diem

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Too Old to buy more Life Insurance?….maybe not

Are you approaching retirement and the impending loss of your group life insurance coverage? Are you already retired and worried that your personal life insurance is inadequate? In the past did you just kick the life insurance can down the road and now find yourself “down the road”?

Life happens, age is insidious, and now you are thinking seriously about end of life issues…how to pay for your funeral…how will your life’s partner fare after you are gone…who is going to clean up the lifetime of clutter you’ve left behind…and a hat full of other worries keeping you awake tonight.

When you are gone, you’re gone…but are you really gone? Believe me when I say the ethereal you lives on, but how will the ethereal you be perceived? Will you be the loving spouse who made sure enough dollars are there to cushion the expenses created by your launch from the land of the living?…or, will you be remembered by your most cherished loved ones as the person who cashed out and left them holding the bag? Oh, they will still love you, but they will feel disappointed and abandoned…and a little resentful.

If you think I am putting a guilt trip on you, you are correct….The fact that you are upright and reading this means you still have time to do the right thing: Make sure some dollars are there when your loved ones need it most…right after your motor stops running, and for perhaps a year or two after.

If you are over age sixty-five, or even much older, purchasing life insurance now is not out of the question for you. Some life insurance companies offer their insurance to those up to eighty (80) years of age…and it may be more affordable than you imagine. At that stage of life it is likely you have a number of ailments to contend with, and the insurance companies take that into consideration when designing over-age-65 offerings. Check into it today. You may be pleasantly surprised.

Carpe Diem

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Got Medicare? Get Ready to Open Your Wallet

Recent federal legislation, the Medicare and CHIP Reauthorization Act (April 16, 2015), incorporates additional costs to be paid by Medicare Beneficiaries.

Original Medicare contained two parts, generally Hospital In-patient benefits, (Part A), and benefits for those not hospital confined, (Part B). Later Part C was added, called “Medicare Advantage”, wherein the Medicare Beneficiary contracts with a health insurance company to provide his/her Medicare Parts A & B benefits. Newest Medicare addition is Part D, to help pay some of the costs associated with out-patient prescription medicine.

Most Medicare Beneficiaries pay no monthly premiums for their Medicare Part A coverage, as the Medicare Taxes they paid during their working years are used to partially off-set Part A benefit costs. Medicare Beneficiaries must pay monthly premiums to Medicare for their Part B benefits. Most pay $104.90 per month in 2015, and that amount increases for those with modified adjusted gross incomes above $85,000, if filing income tax returns as “single”, or $170,000 if filing as married filing jointly. Part B monthly premiums for higher income earners can be as much as $335.70 in 2015. Charging higher income earners more simply because they earned more than Joe or Jane Lunch-Bucket is referred to as “Means Testing” by Washington’s bureaucrats.

Such means testing, referred to above, also applies to monthly premiums paid by higher income beneficiaries for Medicare Part D out-patient prescription drug insurance, and can add as much as $70.80 to the base monthly premiums for such insurance this year.

Provisions in the above Medicare and CHIP Reauthorization Act increase sur-charges to Medicare Part B and Part D beneficiaries, and will bump up the basic $104.90 Part B monthly premiums paid by Joe and Jane Lunch-Bucket to an estimated $181.00 by 2025.

Are you a Medicare Beneficiary covered by a Medigap (Medicare Supplement) Plan? Starting in 2020 expect to find a deductible attached to your medigap policy…as much as $217 by 2023. You will be expected to pay that deductible amount before your supplement plan can begin paying out its benefits.

These additional out of pocket costs have been brought to you by your president and your elected representatives in Washington. Please feel free to contact them directly to offer your thanks.

Carpe Diem

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Affordable Care Act Mine Field…Small Business Owners Watch Your Step

The Patient Protection and Affordable Care Acts of 2010…”Obamacare” to most, contains thousands of pages and its still emerging regulations add more thousands of pages, making it impossible for the avarage small business owner to cope with its effects on his/her business. If you are one of them, make sure you have access to a savvy CPA, HR Consultant, and attorney specializing in small business. No, you do not need to add them to your payroll, but you should seek them out and be ready to compensate them for their advice before installing, canceling or amending your group health insurance plan.

Notice I did not include a health insurance broker in the mix. You need a good one, preferrably one who has at least ten or twenty years insurance experience. But a good one will not attempt to charge you a fee, because his/her insurance company provides them service fees for bringing your business to them. Charging a fee on top of that would be unethical.

Daniel N. Kuperstein of Employee Benefits News published an on-line article on 4/20/15, titled The top 5 Affordable Care Act myths debunked. (
To summarize Mr. Kuperstein:

Myth No. 1: I have between 50-99 employees and don’t need to worry about anything under ACA for 2015.

Not true. Employers with between 50-99 full time employees including full time equivalents might be exempt from ACA’s pay-or-play penalties in 2015, but it is not automatic. To gain exemption in 2015 an employer must have averaged at least 50 but less than 100 full time employees (including full time equivalents, FTE’s) in 2014…cannot have reduced workforce size or overall workforce hours of service to satisfy ACA restrictions, unless for legitimate business reasons, and cannot have eliminated or materially downgraded the health insurance coverage they offer. Other ACA rules still apply, i.e., new employee health insurance benefits waiting periods must not exceed 90 days

Myth No. 2: Information reporting does not apply to me because I have between 50 to 99 full-time employees.

Employers with 50-99 full-time employees, including FTE’s, must complete information reporting for calendar year 2015, even if not subject to pay-or-play rules.

Myth No. 3: I can break my business into several different smaller entities, then avoid paying any ACA fines/penalties.

That is Not True. Doing so creates a “controlled group” as defined in the Income Tax Code and provides no refief from ACA rules. Different entities under common ownership or control are considered to be One Business under the Tax Code, and such business could be subject to ACA’s Pay or Play rules.

Myth No. 4: My group health insurance plan year starts in July, so no need to worry about what happened during January through June 2015.

Wrong Again. You must meet ACA rules/regulations during all months in 2015. Safe harbors are possible, but the rules/tests are complicated, and that is a good reason to review your situation with one or more of the experts mentioned in this article’s first paragraph above.

Myth No. 5: I can designate all my employees as “Part Time”, and even if they work more than 30 hours per week on average, avoid ACA’s penalties.

Not an option…designating them “Part Time” does not change anything. What counts is how many hours each works on-avarage each week during the year. Putting in 30 hour weeks/ 130 hour months makes your “Part Time” worker a Full Time employee, and the heavy hand of ACA will land on you.

Another myth not mentioned by Mr. Kuperstein is the idea that a small business employer can just drop the company’s group health insurance plan, then give each employee a raise to off-set the employee’s cost for buying his/her own personal/family health insurance policy. You can do it, but make certain your employee’s salary increase is not tied to a requirement that the increase be used to buy health insurance…otherwise you have created an employer sponsored health insurance plan and will be right back in the ACA hot seat. If your employee chooses to buy a new car instead of health insurance with the salary increase you will just have to live with it. Your schadenfreude moment will occur when that employee is forced to pay ACA’s tax penalty for not being covered by qualified health insurance during the calendar year.

Carpe Diem

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