by Chris Huckins Google+ Email 

 

Health Insurance 101

19 February 2013

What is an HSA?

Posted in Health Insurance 101

What is an HSA?

 It’s neither duck season, nor rabbit season. Tax season is in full swing and my friends either:

A) Owe Uncle Sam and are offering their able bodies for Craigslist modeling gigs to pay their dues.

-OR-

B) Scour the internet for the biggest tv their tax return can buy.

  My entrepreneurial friend is the wisest with her money and when it comes to health insurance, she uses an HSA. It doesn’t surprise me when she says she saved thousands of tax-free dollars and can spend them on any healthcare service she wants. So how does she do it, what’s an HSA, and where do I sign up?!

    An HSA (Health Savings Account) is exactly what the name implies: a savings account. To start an HSA, you need to have a high-deductible insurance plan. With this plan, you have low monthly premiums, but in the off-chance you are hurt or sick, you pay out-of-pocket until your deductible is reached, then any costs afterwards are covered by your insurer. For every paycheck, some money goes towards your HSA. This money is not considered income and therefore cannot be taxed.

    You choose which prescriptions or treatments your HSA pays for because it's an individual-owned savings account, not an insurance plan. The tangible HSA usually comes in the form of a check or debit card, which you sign or swipe at the doctor’s office. The saved HSA money pays for most preventive care services, the list of which (beginning on page 5 of the IRS’ website) is exhaustive, but includes anything from birth control and Braille magazines (which someone may have to tell you if you cannot read this on a computer screen) to hospital visits and vaccinations.

    As previously mentioned, the money is not only tax-free but funds in your HSA gain tax-free interest over time (like a retirement plan) and can be carried over from year to year; i.e., the money doesn't vanish if you don't use it by the end of the plan year. Likewise, you don't lose the account or money within if you leave your employer. The HSA, funds, and interest earned go with you.

    However, HSAs are not the health equivalent to offshore accounts in the Bahamas. There is a limit on how much tax-free money one can save in an HSA. This is known as the contribution limit. Obamacare (PPACA or Patient Protection Affordable Care Act) regulations indicate that for individual plans the contribution limit is $3,250; for a family plan, it’s $6,450. That’s more than enough money for a cruise to the Bahamas (although you can't exactly use it for a cruise), so start an HSA today!

    For more information on HSA or other insurance plans, contact us at 818.251.5000 or click here for an instant quote today!

15 February 2013

What is Maximum Out Of Pocket?

Posted in Health Insurance 101

What is Maximum Out Of Pocket?

Nobody aspires to be the Guiness World Record Holder of “Most Money Spent on Health Insurance”. In case you're curious as to who actually holds that record, it’s the United States! According to WHO (the World Health Organization; not the band), each American spent more on annual health care premiums ($7,146), and more on health care as percentage of its GDP (15.2%), than any other nation in 2008. While we’re not proud of our gold medal in the sport of spending, the numbers have dropped in light of Obamacare (Affordable Care Act). In 2012, Americans spent an average premium of $468 per month or $5,615 per year for single coverage.

By speaking with your insurance broker, you can limit how much you spend on health insurance annually by agreeing on an Out-Of-Pocket Limit (otherwise known as Maximum Out-Of-Pocket). If you pay out-of-pocket for health insurance and reach your maximum out-of-pocket amount in a single calendar year, your insurer pays the rest. This may or may not include your deductible and may vary if you receive services in or out of the network.

If you’re going for a world record, try for the World’s Oldest Living Person by getting an affordable health care plan. Call us at 818-784-7047 or visit our website for an instant quote!


  

15 February 2013

Co-Insurance VS Co-Payments

Posted in Health Insurance 101

Co-Insurance VS Co-Payments

    A long time ago in a blogscape far far away (our first blog page), we covered the eternal battle of HMOs vs PPOs and which is the best health insurance plan for you. Today, the second round involves co-insurance vs co-payments. Let the learning begin!

    Many people mistake co-payment for co-insurance. What is the difference? Co-payments are what you pay upfront to cover a specific service by your health care provider, like a doctor’s visit, prescription, or other routine services. This is usually billed at the time you receive service, but does not count toward your annual deductible or out-of-pocket maximum.

    Co-insurance is a shared payment between you and your insurer to pay for any services after making the annual deductible. Most percentage rates for co-insurance include 70/30, 80/20, and 90/10 plans. On a 70/30 plan, the insurance company pays for 70% of costs incurred, while the individual is responsible for the remaining 30%.

    Put simply: Homer Simpson accidentally got his head stuck in a vending machine. The services to remove the machine cost $25,000. Homer’s health insurance policy has a $2,000 deductible and his coinsurance percentage is 80/20, meaning:

  • Homer must pay the $2,000 deductible before his co-insurance kicks in. This means, after recycling all his Duff beer cans and coming up with $2,000, Homer reduces his overall bill to $23,000. Woo-hoo!
  • But there’s more! Coinsurance shares 80/20 percent of $23,000, meaning the insurer pays 80 percent of Homer’s remaining bill and Homer pays only $4,600.

    That's a savings of $18,400! With that kind of cash, you can buy... a new car! And since you're on a roll, protect that shiny new investment! Mmm… co-insurance.

    For all your insurance needs, call Haronian Insurance at 818.251.5000 or click here for a free instant quote!

12 February 2013

What is COBRA insurance?

Posted in Health Insurance 101

What is COBRA insurance?

    If the Pope resigned while living in California, could he still get health insurance? In 1985, the bill with the anaconda-sized name: Consolidation Omnibus Budget Reconciliation Act (COBRA) passed, allowing employees who voluntarily quit, resigned, retired, or were not fired for gross misconduct to retain their group insurance for up to 18 months after ceasing their employment at a company with at least 20 employers.

    So the Pope would probably be covered since at the end of 2005 over 135 members of the Pontifical Swiss Guard were under his employment. It’s important to mention that Californians who don’t qualify for federal COBRA may still participate in CAL-COBRA. Likewise, if you lose your eligibility you may also look into CAL-COBRA benefits. Anyone can lose his/her COBRA eligibility for the following reasons:

  • You’re eligible for federal COBRA
  • You’re eligible for Medical-Care
  • You’re eligible for Medi-Cal
  • You’re covered under another group insurance plan that doesn’t have pre-existing condition limitations* (*This will most likely become erased when Obamacare preexisting condition limitations are removed next year.)
  • You don’t notify the insurer of a qualifying event by 60 days
  • You don’t pay your premium on time

    COBRA allows you to remove any family members from the plan and does not require those members who were once on the employer’s group plan to remain on it when your employment ends and COBRA kicks in. Just as convenient is the fact that benefits and plan limitations will not change under COBRA and you are allowed to use the same health care providers and must make the same copayments.

    Additionally, the government provides subsidies known as Health Coverage Tax Credits (HCTC), which pay up to 72.5% of qualified health insurance premiums for families and individuals. The details regarding HCTC eligibility can be found in full on IRS’ website.

   Keep in mind, COBRA isn’t an insurance plan; it’s a law. While COBRA is convenient for many, most may discover the snake has fangs. COBRA requires the unemployed who continue coverage on their former company’s plan to pay 102% (additional 2% to cover administrative costs) of the health insurance premium. In 41 states, including California, COBRA family coverage premiums consume more than three-fourths of average unemployment benefits.

    Rather than crunch the numbers, and/or wait on hold for government employees to mail you paperwork, contact us to receive a free quote if you’re unemployed or just looking for insurance at 818-784-7047 or visit our website for a free quote now!


12 February 2013

What is a Deductible?

Posted in Health Insurance 101

What is a Deductible?

    Everyone’s buying health insurance plans nowadays. Okay, that’s a stretch, but soon-to-be reality in 2014. Also by next year, everyone will be wearing Google glass eyewear and a baldness cure will be found. Whether the aforementioned milestones will come to fruition; only time will reveal. One thing’s for certain: I had to pay for my broken windshield because I didn’t understand the word “deductible”.  Now before any part of my body gets shattered, I prefer to understand this word’s definition.

    A deductible is a fixed cost that must be paid to the insurer up front before most or all benefits from your insurance policy begin. If you live in Los Angeles, imagine a new club named “INSURANCE” opened and charged a “deductible” at the door. Like the old adage goes, “You have to pay to play… with peace of mind that injuries during playtime are covered.”.

    When asking the doorman to club INSURANCE for the best insurance advices, whether it’s for individual or group health insurance or high deductible vs low deductible, consider this: if you haven’t been sick recently, rarely get injured, and don't require prescriptions, a plan with a lower monthly premium and a higher deductible (to pay on the off chance you're sick) may be best for you. This way, you save more annually by paying less monthly. In an unlucky health-related event, the money you saved on premiums over the year(s) can be used to pay the higher deductible.

    If you have many prescriptions, frequent the hospital, or party hard, a plan with a lower deductible and higher premiums means you'll pay more monthly but less on your deductible before your insurer covers any remaining costs for your prescription or treatment. For family health insurance plans, there may be a single deductible or one for each member of the family; it’ll depend on the plan.

    Keep in mind, you don’t need to be VIP to attend club INSURANCE. Thanks to “Obamacare”, insurance is becoming more affordable for everyday Americans. We want everyone to have a good time, whether it’s on the dance floor or the playroom floor. Get in touch with Haronian Insurance at 818.784.7047 and join the club!