Medicare, COBRA, Individual Health

Hi there, I'm Alex and I'm a team member here at Bernard.  It's great to be here.  

And you're kind to check out the Woof Street Journal and allow us to share our mission with you!  That mission is to be the world's most trusted advisor when it comes to planning how to pay for expected and unexpected healthcare expenses.

About me: From Indiana, I have a finance background and also a law degree.  Headed towards a finance career in New York, I learned about Health Savings Accounts and how they can improve our healthcare system.  I grew passionate it, and changed directions to help spread the word.  Why, you might ask?  Because before any improvement happens employers and individuals have actually to decide to adopt HSAs.  That is an easy decision when the HSA option is communicated well, but a difficult one when it is not.

Bernard Health was born to help make that decision *easy*!

Besides helping groups, we help individuals.  If you're a member of a group, click here.  If you're an individual, click here.

If you're just wanting to read what I have to say, then you're probably my Mom, Dad, or sister, but I guess you're in the right place :)

The BerniePortal is online benefits enrollment for small and medium sized employers.  What does that mean?  It means getting rid of all the health insurance and benefits paperwork that your employees and HR hate.

This is a big deal.  It saves everyone a lot of money and time.  We developed the BerniePortal over several years, giving it away as a "value add" to Bernard's employer advisory clients.  They, in turn, helped us improve it with their valuable feedback.  

All the improvements have added up to something pretty special, and we now have employers across the country wanting the BerniePortal for themselves.  They want to pay for it on a standalone, subscription, software as a service, basis.

What an opportunity, right?  Just one thing...how in the world are we going to collect payment from all these new BerniePortal customers?

The idea of mailing out invoices seemed crazy.  After all, our value proposition had to do with getting RID of paperwork, not adding to it.  Then the idea came up of building a billing component to the BerniePortal itself.  But our team of developers is already so hard at work on features important to our customers, like more insurance company integrations...so that seemed crazy, too.  

We looked for another solution, and we found Zuora.  

Zuora allows us to bill our BerniePortal customers easily and hassle-free.  There were other online subscription billing options we considered, but we went with Zuora for the following reasons:

1. No hassle.  It was easy to get set up and going quickly.
2. Scalability.  As we grow, Zuora has the capability to handle a wide array of subscription billing needs, which will help us keep our clients happy.
3. Happy customers: With Zuora, we're confident our customers will be billed correctly.  It's always frustrating to be billed incorrectly, and so it was important to us to get this right.  
4. Salesforce.com integration.  All of our processes at Bernard run through Salesforce.com.  Knowing that we can one day also incorporate Zuora through Salesforce is great.
5. Affordability.  We are able to pay an affordable monthly fee to Zuora to start, and then only pay more as the BerniePortal itself is bringing in more.

Finding Zuora was a huge relief, and solved a big problem for us.  If you're finding yourself in a similar position, check them out!

I went to Dreamforce last week.  If you haven't heard of it, it's the annual conference hosted by Salesforce.com in San Francisco each year.  

With over 40,000 attendees, it was an impressive event!  The most impressive part about it to me, though, was how well Salesforce is able to articulate and evangelize their vision and brand promise.

Which leads to the biggest takeaway from the week: we at Bernard could do a better job communicating our own brand promise.

Our mission has been clear from early on: to be the world's most trusted advisor when it comes to helping people plan how to pay for their healthcare expenses.

So then what's our brand promise?  Here it is --

Bernard's brand promise: The best health insurance advice.  Guaranteed.

Whether it is Medicare, COBRA, Health Savings Accounts, or just individual health insurance, I will be writing more about why and how we provide the best advice.  With costs getting out of hand and healthcare reform upon us, it is more important now than ever that the advice you are receiving is the best.

One of our clients here in Nashville called the retail store last week.  She needed help.  Here was the situation:

1. For several years, she had the wrong Medicare strategy in place
2. With MediGuidance from Bernard Health, she was able to find the right strategy.  This saved her thousands of dollars.
3. Getting everything right required a lot of paperwork.  Bernard did this for her.  Her old Medicare insurance company, however, had failed to cancel her policy.  They were still charging her! 

All the lady had was an 800 number for her old Medicare insurance company.  She wanted to know if we could help her get this cancelled correctly -- if that was included in MediGuidance.

Absolutely it is.  Part of the problem with health insurance is that it often doesn't work like it should.  A lot of times, what is "promised" during the sale is not 100% delivered.  We are happy doing our best to see that things work out like should for our clients, and value their trust in us to be their advisor in this area.

I was recently talking with an individual here in Nashville who is Medicare-eligible and going through an appeal with Medicare.

What is an appeal with Medicare, you ask?

Well, whether you have Medicare Parts A & B and a supplement, Part D, or Medicare Advantage, you might be in a position where you want to file an appeal.  It may be that something is not covered the way you thought that it should be, or maybe a provider is not treating you like you think they should.

How you file the appeal and with whom you file it all depends on what kind of plan you have.  How quickly and how many steps there are to the appeal process can also depend.

Options you have for help include free help from your state's "State Health Insurance Assistance Program", or "SHIP".  Alternatively, the team at Bernard Health is also here to advise you and take you through this process.

A very nice lady called the retail store last week, and her first question was "How much does individual health insurance cost?"  This happens a lot!

After asking a few questions, I came to learn that her brother had been working at Baptist Hospital in Nashville, Tennessee.  His employment recently terminated, and he had received his "COBRA" packet in the mail.  The individual calling me had volunteered to help her brother figure out what to do about it.

She explained to me that Baptist was offering her brother a health plan from an insurance company called Ceridian.  Then, she explained that Ceridian's health insurance was really expensive -- it was going to cost her brother almost $500 per month.

As it turns out, Ceridian is a major COBRA administrator.  Most likely, Baptist had hired Ceridian to administer COBRA.  A lot of employers do this because COBRA administration is extremely complicated.  So, Ceridian was not the insurance company, and in fact the plan her brother was being offered was the same one he had while he worked at Baptist.  When I explained this all to her, she said it all started to make a lot more sense.

So often when it comes to health insurance, it is important to have the base facts right before you can even start to answer questions and make the right choices!

I got an email today from a Tennessee client who was concerned that her doctor was not "in-network."

How does this happen?

Generally, what happens is that the doctor and the health insurance company are not able to come to a contractual agreement that they both believe is fair.  

A lot of times, this comes down to money.  The doctor judges the health insurance company's reimbursement rate to be too low, and so the doctor leaves the network so that they can charge higher rates.  The risk to the doctor is that he or she will lose patients once the patients find out the doctor is no longer "in-network."  

This can cause a huge problem for patients, who may feel a strong loyalty to their doctor but do not want to pay the higher, out-of-network rates!

Outside of the health insurance company agreeing to a higher reimbursement rate for the doctor (which would solve this problem immediately), a lot of patients asking their doctor to go back in-network can sometimes have an impact.

One note: if you have a Health Savings Account (HSA), you can spend money on your doctor visit even if your doctor is out-of-network.  So at least you can know that your HSA is still there for you if you find yourself in this situation!

Health insurance companies are being challenged by the government and well-regarded consultancies like McKinsey to get "more retail."  What do they mean?  Generally, that the insurance companies need to get better at working directly with individuals and families.

This is a tall order.  Most insurance companies decided a long time ago to let brokers handle the selling/advising and support functions of their business.  

So, the insurance companies have to make a decision.  Get back into the business of marketing directly to their customers, like Blue Cross of Florida has done with their retail stores, or get the brokers to "go retail" for them.

Trying to get the brokers to "go retail" will be tough.  With health reform regulating medical loss ratios, the insurance companies recently had to cut by 50%+ how much they were paying in commissions for individual products.  Less money, and health reform bringing more complications, makes the idea of trying to make a living as your old-fashioned individual health insurance broker harder and harder to fathom.

One insurance company sent out an email blast to brokers last week:

                         

A better question might have been "Do you want your customers to know that you sell health insurance?"

The Tennessean recently reported on an innovative health insurance strategy adopted by Uncle Classic Barbershop here in Nashville, Tennessee.

Uncle Classic has two locations and wanted to do something to offer a health insurance benefit to its employees.  After evaluating several options, the company decided its best strategy involved adopting BerniePerks Green, available at the Bernard Health retail store.  

Here is how it works:

1. Uncle Classic pays Bernard Health a flat monthly fee
2. In return for this fee, Bernard agrees that its retail advisors will advise Uncle Classic employees for free at the retail store on what the best health plan strategy is for each employee.  If employees have issues or need to add family members during the year, or need help at their renewal, we're here to advise them at the store.
3. On top of this consulting for each employee, Bernard also commits to managing the administration requirements involved in Uncle Classic reimbursing part of the cost of individual coverage for employees who end up purchasing it.

This strategy can save employers a lot of money versus a group health plan, while also providing employees with a lot more choice and coverage that is portable.  

Saving money and having happier employees is ringing true with more and more employers these days!

Healthcare reform will soon require employers to report on employee W-2's the value of the health benefits provided to them during the year.

The IRS recently released interim guidance on how this is supposed to work.  Also, here are some common questions and answers: 

1. When does this requirement take effect?

This goes into effect for W-2's related to income earned in the 2012 tax year.  (Specifically, for W-2's issued in January 2013).

2. Does this mean that these benefits will now be taxable?

No, it does not.  The reporting is for informational purposes only.

3. I only have 23 employees.  Do I have to comply with this?

Not at this time.  If an employer issued fewer than 250 W-2's in 2012, then this requirement is optional for them in 2013.  Compliance is required, however, for employers who issue more than 250 W-2's.  

4. How do I calculate the cost of health plan coverage for each employee?

If the employer is fully insured, they can just use the fully insured rate for the coverage tier that the employee had, and then multiply that by the number of months during the year that the employee had coverage.  

5. But wait, it's not so simple.  I have employees who join the plan at different times during the year, and then they sometimes change coverage tiers during the year.  How am I supposed to keep track of all of that for each individual employee?

If you are still doing your benefits administration with paper, compliance will be challenging.  If you use the BerniePortal for online benefits enrollment, rest assured the BerniePortal will be updated in time to to automate this reporting requirement for you.

The Tennessean reported this morning that the federal government is about to drastically lower the premiums it sets for the Pre-Existing Condition Insurance Plan (PCIP).  

What is the PCIP?

We've written a lot about the PCIP in the past here on the Woof Street Journal.  The PCIP is coverage offered by the federal government that works similar to how private individual health insurance would work.  There is even a PCIP option that is an individual HSA plan like others in Tennessee.

How is the PCIP different than coverage offered by private insurance companies?

One main difference is that this coverage does not exclude pre-existing conditions like coverage from private health insurance companies can do.  It may be a little more expensive, or it may be about the same as what coverage would cost even if you did not have any pre-existing conditions.

The PCIP has closed a gap that existed in the United States health insurance market, whereby individuals and families could lose the opportunity of having health insurance altogether without joining a group plan.  

And the news today means it is even getting less expensive.

We had a client come in to the retail store late last week, and as is often the case, he needed help fast.  His COBRA coverage was about to run out, and he needed a new, individual policy.

He had been paying about $250.00 a month for his COBRA Tennessee coverage, and being relatively healthy, he didn't use his health insurance very often.  Based on what he had heard other people say about COBRA and how expensive it could be, he felt like $250 per month was pretty good.

He purchased InsurAdvise from Bernard, and we identified a Health Savings Account based health insurance plan that costs about $70 per month.  So, roughly $180 less per month than what he had been paying for the prior 18 months.  

In other words, this client could have saved over $3,000 with Bernard had he come in when he first went on COBRA, rather than waiting until it was about to run out.  If you're facing COBRA, don't procrastinate... it may be that you can save a lot versus what can be a very expensive option. 

One question we get a lot is whether individual health insurance is "creditable."  Why is that so important, you ask?

If your individual health insurance is "creditable", then per HIPAA, you can transition to a new group health insurance plan and any pre-exisiting conditions you may have would NOT be excluded from coverage.

If you don't have creditable coverage, however, then your pre-existing conditions may be excluded by your new employer's group plan.

My wife recently dropped her individual health insurance, and we got a letter in the mail from the insurance company, confirming for us that her coverage was creditable.  Whew :)  Here is part of what they sent us:  

                  

So when you're looking to get the right coverage, one thing to bear in mind is that you'll want to make sure it is creditable, and that when or if it ever terminates, you get a letter that looks kind of like this one :)

Senator Orrin Hatch announced today a bill that would strengthen Health Savings Accounts even further.  

Among other enhancements, the legislation would:

1. Allow a husband and wife to make catch-up contributions to the same HSA
2. Remove the new restrictions on the use of HSA dollars for over-the-counter drugs
3. Allow seniors who are on Medicare Part A to continue contributing to their HSA
4. Promote wellness by expanding the definition of qualified medical expenses to encourage more exercise and a better diet
5. Allow for purchasing low-premium health insurance and long-term care insurance with HSA dollars

This is legislation that Roy Ramthun, a Bernard Health Advisory Board member and former healthcare advisor to George W. Bush, has written about in the past and contributed to.  We tip our hat to you today, Roy!

A recent Bernard Health client was referred to us by her brother.  She had gotten a lot of mail about Medicare and filled out one of the reply cards.  As a result, a salesperson came to her house to talk about her over 65 health insurance options.

She told me he was a very nice man, and he presented a lot of options to her.  He had an option from Mutual of Omaha and AARP, and while he thought she should buy a supplement and then sign up for Part D separately, he seemed to also be able to help her with Medicare Advantage if that was what she wanted.

We started working through Bernard's MediGuidance, and she told me how her husband still works as a doctor at the local hospital.  Furthermore, the hospital health plan is very rich and they do not charge very much each month for her to be on it.

Because that is the case, this individual's best strategy (as long as her husband is still working), is to stay on her husband's plan and just take Medicare Part A, and opt out of Part B and not take Part D until he gets off the hospital plan.

She asked me if there would be penalties.  I explained there would not.  She started asking me again about the differences between Mutual of Omaha and AARP.  I reminded her that she didn't need to be worrying about that right now, that those Medicare questions were not the right ones to be asking for her.  She was relieved!

So many people start down the Medicare path not even knowing what the right questions to ask are.  Please know that if you are eligible for a group health plan because you still work or your spouse does, that your analysis needs to start there before you even get into all of the different Medicare insurance companies.

A local financial advisor here in Nashville, Tennessee recently referred a client of his to Bernard Health.  His client was leaving her employer, and she and her husband had a certain level of anxiety around what they were going to do about health insurance and medical expenses.

They were paying about $250 per month for health, dental, and vision coverage through her employer.  When I spoke with them, they told me they had been told that they would have to start paying 102% of the cost of the plan once on COBRA.

We continued talking, and they started explaining some health concerns they had, as well as concerns about what would happen at the end of COBRA.

I addressed some of their concerns, but asked to go back to the cost of COBRA...that we might talk about it a little bit more.  We did and, sure enough...they thought that they were going to be charged 102% of $250, or about $255.

I explained to them that, in fact, it was most likely going to cost 102% of the TOTAL cost of the coverage (so including what their employer had been paying towards the coverage).  

This brought up a whole new array of concerns.  Through more conversation, we uncovered that one viable strategy they would probably have would be for one of them to take the COBRA option, and for the other to do an individual HSA in Tennessee.  Before our conversation, they hadn't realized that one could take COBRA while the other did not.

So when it comes to COBRA and what it costs, bear in mind the following:

1. It will most likely cost 102% of the overall cost of your group health coverage through your employer (this includes the rate you have been paying plus the amount your employer had been paying for you).
2. If you had family coverage through your employer, you can have the whole family take COBRA or, alternatively, you can have some family members take COBRA and others get coverage in the private market.  Doing this can often save thousands of dollars annually.

Whether you have a Health Savings Account in Tennessee or another part of the country, there are a couple of extra steps to take when it comes to filing your taxes.

"Why is that--I thought my HSA was tax-free??" is something you might cry out upon learning this.  And yes, that is true.  At the same time, Uncle Sam still wants to know what went on with your HSA for "information purposes."  Also, if you spent your HSA money on non-qualified expenses, then in fact you do owe some taxes.  

We've put together a handy, one-pager to use as a starting point with your tax advisor if your group health insurance in Tennessee includes a Health Savings Account to help guide you through it all.  Hope it's helpful!

What do you do for individual health insurance in Tennessee if you are recently divorced, work as a cosmetologist at a salon that doesn't offer group health insurance, and have kids?

Well, I got into this conversation with the cosmetologist who cut my hair last weekend (we'll call her "Caroline"-- she did a great job, by the way), and learned that she has a dizzying array of health insurance options:

1. She found a health insurance quote for individual coverage for her and her kids, although she wasn't sure if it was for an HSA eligible plan
2. As a member of the cosmetology association, she has an array of health insurance options available
3. She will have access to her ex-husband's group health insurance plan through COBRA, although her children would NOT be eligible to enroll

Before the Bernard retail store, there was no one whose job it was to sit down with individuals in this sort of a situation, sort through all of these options, and advise as to what the best thing is to do.  It's a problem that, at least today, can't be fixed with an online tool.  

Caroline agreed, and said she would see as at the store soon!  If you have medical insurance questions in Nashville, Tennessee please don't hesitate to give us a call at 615-528-3399.  We'd be glad to help. 

I've written in the past about how individual health insurance in Tennessee is becoming hard to come by for kids as a result of health reform. This was actually a problem in states even beyond Tennessee. 

Some states, however, are coming up with solutions to this problem.  In Kentucky, Humana recently announced that they will be offering their Monogram plan to Kentucky citizens who want to buy a child-only policy in January 2011.  But if you want coverage for your child, you'd better act fast, because they are only offering this plan from January 1st to January 31st.  

Well, the state of Kentucky has a new mandate requiring all health insurance companies to offer a guaranteed issue, child-only policy during a set enrollment each year.  This is how Humana is complying with the new requirement.

It is a better situation than in Tennessee, where right now we do not believe there is an insurance company who will sell an individual health insurance policy to kids.  The good news, though, is that there are government programs, both state and federal, that your child may qualify for and we can help you with them at the Bernard retail store.  Besides just helping with individual health insurance for kids, we can help with Medicare questions in Tennessee, too!

People are generally and understandably upset when their employer changes health insurance companies and they find that the doctor they know and trust is out-of-network.

With a Health Savings Account-based plan, many find that it is not quite as upsetting.

Why not?

First: you don't have office visit copays anyway with an HSA plan.  So, if you just have a few office visits per year, you are paying your doctor directly whether your doctor is in-network or out-of-network.  So, it's not as big a difference as it is with a traditional plan.  Besides, if it upsets you to find that your doctor was out-of-network, then you probably feel that the extra amount your doctor charges beyond what it costs to see an in-network doctor would to be worth it.

Second: the HSA plan even has the same, wonderful *fixed* out-of-pocket maximum caps when out-of-network as it does in-network. One recent client was very concerned that a surgeon who had saved her son's life was out-of-network with her employer's new health insurance company.  At first, she took that to mean that if her son got sick again that she wouldn't be able to see that doctor.  **Not true!!**  We were able to show her that was not the case at all, but rather that she would be able to see him, and that no matter how expensive another surgery or surgeries might get, the most she would have to pay for her son to that surgeon would be $5,500.

There is a certain level of peace of mind in knowing that.  It's difficult to have that kind of peace of mind with traditional health insurance, because as we've discuss throughout the WSJ, generally there are no caps on those copays!

Yet another example of how HSA-based health plans are a better way!