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5 Last Minute Open Enrollment Tips

The Open Enrollment season for health insurance is in full swing, but some of you probably haven’t gotten started yet. That’s okay, but keep in mind that with the holidays rapidly approaching, you might run short on time later. In California our Open Enrollment lasts from October 15 to January 31, but you must sign up for a plan by December 15 if you want coverage to start January 1.

So, how do you get started right now? Just follow these simple tips.

Step One: Make a short list of your priorities. Do you prefer to remain with a favorite healthcare provider? Do you have any health conditions for which you require medication or specialized care? Are you at risk of developing such a condition, and want to cover your bases just in case? Do you value certain types of care over others? Which healthcare facilities are convenient for your location and schedule?

Step Two: Analyze your family structure. Are you single, married, or married with children? Do you plan to add a child to your household in the next year (whether through pregnancy or adoption). Changing household structures can drastically alter your priorities, so make sure you’ve considered things from that angle.

Step Three: Consider your budget. A low-deductible plan will cost you a higher monthly premium, whereas a low-premium plan will come with a higher deductible. You should consider how much you can realistically afford each month, keeping in mind that you might be eligible for a subsidy that helps you cover at least part of your premiums. Consider, too, whether you have upcoming medical expenses, or if you’re unlikely to even meet your annual deductible (although no one can ever know this for sure).

Step Four: Consider other money-saving options. If you do opt for a higher-deductible plan, consider whether a health savings account (HSA) might be a good fit for you. You can save pre-tax dollars for use toward healthcare expenses (like your deductible) and any unused funds in the account can be rolled over to the next year.

A flexible spending account (FSA) allows you to divert pre-tax money into an employer-owned account, to be used for out-of-pocket healthcare expenses. However, you could lose the money if you don’t use it all by the end of the year, or change employers.

Step Five: Investigate plans. In California plans will differ depending upon your county. After you log into the Covered California system, or as you work with an insurance professional who can show you your options, it’s time to to compare the plans in the pricing tier you’ve chosen. Ask questions regarding the priorities you set in step one, so that you can identify the plan that best suits your preferences.

We can help you evaluate your budget, and then match you with a plan that suits your needs. Give us a call, and we’ll get started today. Remember, the deadline for coverage that begins January 1 is December 15. Let’s take care of this before Thanksgiving, so you won’t have to worry about it for the rest of the year.

 

 

 

4 Ways to Cut Your Medicare Expenses

For most of us, healthcare will be one of our largest expenses in retirement. According to Fidelity, the average 65-year-old couple retiring today can expect to spend $285,000 on healthcare over the course of their retirement years. For single retirees, the estimates range from $135,000 (for men) to $150,000 (for women).

It’s no wonder most retirees are eager to learn ways to cut back on their expenses in this area. The following strategies can help you reduce Medicare spending to some degree.

Mark the deadline on your calendar. You can sign up for Medicare beginning three months before your birthday, extending to three months after your birthday month. Usually, if you’ve claimed your Social Security benefits this step will be done for you. But check to be sure; if you miss the sign-up window, you will pay higher premiums due to a late penalty.

Plan retirement income carefully. Taxable income in a higher tax bracket can trigger Medicare premium increases. That’s why many retirees work with financial advisors to establish non-taxable forms of income, such as distributions from a Roth IRA.

Shop around. Depending upon your needs, a Medicare Advantage plan might work better for you than Original Medicare. But the premiums can be equal to Part B premiums, or up to about 100 dollars per month more. Comparing the cost versus benefits can help you decide which plan is right for you. In some cases, a more expensive plan is actually worth it in the long run (but not always).

Don’t stick with the same plan forever. As your healthcare needs change, your Medicare plan should change too. Each fall, during the annual open enrollment period, you have the opportunity to evaluate different types of coverage. If you don’t make any changes, your current plan will renew. But you could miss an opportunity for savings if you allow that to happen.

We can help you compare the costs of different plans, and understand their unique benefit offerings. Give us a call now, so that we can evaluate your needs and help you enroll in the right Medicare plan for you. Remember, the annual open enrollment period for Medicare plans will end on December 7. Let’s get started today.

Medicare Premiums and Deductibles are Changing in 2020

Each year, Medicare administrators analyze the system’s coverage and budget, and issues changes to certain plan components. Usually this means incremental increases in premiums or deductibles. In most cases these changes are not significant, but it can be important for retirees to keep up with them so that you can adjust your own financial plans for the year.

Coming in January 2020, Medicare will issue changes to Part A and Part B deductibles, and to Part B premiums.

Deductibles increase in 2020. The deductible refers to the healthcare expenses that you will pay out of pocket, before your plan covers the rest for the year. In 2020, Part A deductibles will rise from $1364 to $1420.

Part B deductibles, on the other hand, will increase from $185 to $197 annually.

Between Part A and Part B deductibles, you should expect to spend an additional $68 dollars next year ($56 plus $12), assuming you seek enough healthcare through both plans to reach those limits. It’s not a huge difference, but you should plan your annual budget accordingly.

Part B premiums. Most people do not pay a premium for Part A, but Part B premiums can and do change periodically. For most Medicare beneficiaries, Part B premiums will rise from $135.50 to $144.30 per month next year – an increase of $8.80.

That’s not an enormous difference, and for most retirees the increase will be covered by the cost of living adjustment which is due to Social Security beneficiaries. In 2020, the 1.6 percent COLA will amount to about 23 dollars for the average Social Security check.

But because Part B premiums are deducted from Social Security checks, a lesser-known rule might prevent some beneficiaries from seeing the entire Part B premium increase. That rule states that Part B premium increases cannot outpace raises to Social Security benefits. So, if your own COLA falls below $8.80, your Part B premium increase will be limited to the amount of your COLA.

If any of this information is confusing, please give us a call so that we can clarify. We can help you figure out what to expect from Medicare changes in 2020, and help you plan ahead.

A Special Benefit Opportunity for Smaller Companies

Most employers recognize the importance of offering a group benefit plan to their workers, but for smaller companies the idea can seem out of reach. The cost of premiums, participation minimums, and other regulations can present some obstacles. That’s because normally, a health insurance plan might require a minimum number of members in order to achieve group status, and regulations regarding contributions can strain employer budgets.

The small group special enrollment period was designed with these challenges in mind. During this annual time period, from November 15 to December 15, smaller employers can establish a group health insurance plan without the burden of these restraints.

How could the group special enrollment period help your company? During this time

  • employers aren’t required to make premium payments, and
  • you can establish a group plan as long as at least one person enrolls

Additional benefits. The cost of premiums for health insurance is often cited as the primary reason so many smaller companies (and their employees) abstain from a health insurance plan. One provision can help your company and workers overcome that obstacle. By making pre-tax premium payments through payroll deductions, employees can lower their income tax liability while also covering premiums for their healthcare plans.

As for those premiums, employers are not required to contribute to them. But if you decide to do so, you can contribute as little or as much as your budget allows. As your company grows, you can adjust your benefits packages accordingly.

Finally, your employees retain their options as well. If they prefer to remain on a plan offered through the Individual marketplace, or shop for a private insurance plan, they can do so.

Remember, in order to obtain coverage that begins January 1, enrollment must be completed by the deadline of December 15. For more information on starting a group health insurance policy for your company, please call us and we’ll help you get started.

Mark These Medicare Enrollment Deadlines on Your Calendar

Many people imagine that once they reach age 65, choosing a healthcare plan becomes as simple as signing up for Medicare once. Then, they believe they won’t ever have to think about it again. Unfortunately, that scenario doesn’t exactly match up with reality. But if you mark these dates on your calendar and plan around them, making decisions regarding healthcare doesn’t have to be overly complicated.

Your original enrollment period… You will become eligible for Medicare three months before the month in which you turn 65. This period extends for that entire month, and then for three months afterward. You must sign up for Medicare during this time, if you don’t want to face a late enrollment penalty later (in the form of higher premiums for the rest of your life).

Those who have already claimed their Social Security benefits will be automatically enrolled in Medicare Parts A and B (or Original Medicare) when they turn 65. But if you have yet to claim Social Security, you need to remember to take this step on your own.

If you continue to work past age 65… Make sure you sign up for Medicare within eight months of leaving your group health insurance plan, or within eight months of leaving the job, in order to avoid the penalty.

Every year, you will make decisions during an enrollment period… The Annual Election Period runs from October 15 to December 7 each year. During this time, you can switch from Original Medicare to an Advantage plan, from an Advantage plan back to Original Medicare, or from one Advantage plan to another.

You can change your mind… If you enroll in an Advantage plan and change your mind for any reason, you can change plans from January 1 to March 31 each year.

If you have questions about your Medicare coverage, enrollment periods, or the different plans available to you, give us a call. We can help you compare your options and know what to expect from your healthcare plan in retirement.

 

Health Insurance Affordability Expands in California

Since the Affordable Care Act revamped the health insurance marketplace as we once knew it, legislators have instigated various changes at both the state and federal level in order to keep pace with “growing pains” within the new system. Our marketplace here in California, called Covered California, has received praise for expanding healthcare coverage to millions of Californians who otherwise would not be able to afford a policy.

We have accomplished this goal by offering health insurance subsidies to those in lower income brackets, to help them afford monthly premiums. Subsidies were based upon those provided by the federal government, as described by the ACA.

However, coverage rates still have yet to reach 100 percent, and some middle income Californians were unable to take advantage of the subsidy program. In an effort to extend coverage to even more state residents, our legislature passed the State Individual Mandate and Penalty, which goes into effect on January 1, 2020.

Under the mandate, coverage under an approved healthcare plan is now mandatory, and enforced by a penalty for each uncovered household member. This penalty will amount to $695 per uncovered adult and $347 per child, or 2.5 percent of the household income (whichever is greater).These penalties will be assessed when you file your state tax return, and are paid to the state.

However, the state is also extending subsidies so that more Californians can afford their health insurance premiums.

Now, those who earn up to $75,000 (for individuals) or $150,000 (for a family of four) can also receive a premium subsidy from the state. These income caps are calculated to fall at 600 percent of the federal poverty level. Check with a licensed insurance representative to discover whether your family is eligible, and for a calculation of your estimated subsidy based upon your household income and family size.

Keep in mind that this law is different from the federal Individual Mandate, which has not been overturned, but for which the penalty was set at 0 dollars. Californians don’t have to worry about being doubly penalized for failing to enroll in health insurance. But, with premiums now more affordable for extended income brackets, we expect to see enrollment increase this year.

In order to comply with the new law, make sure to select a health insurance plan during Open Enrollment this year (November 1 through December 15). If you have questions about the state mandate law, or want to learn more about state-provided subsidies for health insurance, please contact our office and we’ll be happy to assist you.

 

 

Get Ready for Health Insurance Open Enrollment

As the month of August winds down, we prepare to say goodbye to summer. With Autumn quickly approaching, pumpkin spice lattes are featured in coffee shops, and those of us in the insurance industry get ready for the Open Enrollment season.

If you want to enroll in a health insurance policy for 2020, you need to get ready, too. Yes, we’re a couple of months away from the official opening date, but now is the time to gather medical records, review this year’s expenditures, and consider your insurance needs for the coming year. Take the time to weigh your options, because the right health insurance plan can save you money.

What you need to know about 2020 Open Enrollment…

Open Enrollment for health insurance begins November 1 and lasts through December 15, 2019. Plan and benefit information will be released on October 26, so that you can begin comparing different policies. As long as you enroll on or before December 15, your coverage will take effect on January 1, 2020.

It’s tempting to skip the research and decision-making, and simply opt into the same policy you had in 2019. However, new plan offerings might suit your needs better, so it makes sense to investigate them. If you’ve experienced certain life changes this year, such as marriage, divorce, adding a new child to the family, new health conditions, or a change in financial circumstances (among others), you should definitely take the time to consider this decision carefully.

If you miss the December 15 deadline, in most cases you won’t be able to make changes to your health insurance policy until Open Enrollment 2021. Some exceptions to this rule exist, if you experience a qualifying life event.

As for Medicare recipients…

Medicare’s Annual Election Period begins October 15 and lasts through December 7, 2019. If any changes have been made to your current plan, you will receive a notice in the mail. You can choose to allow your plan to automatically renew; however, in many cases it does pay to review your options.

If you need assistance with either health insurance enrollment or Medicare’s election period, please give us a call. We can help you identify your needs and then match you with a policy that suits you.

 

7 Things to Consider for 2020 Benefits Planning

As you plan for next year’s group benefits, you will juggle a variety of compliance issues, contribution strategies, benefit offerings, communications, and more. This guide should help you to plan around top priorities.

Health savings accounts (HSAs) or health reimbursement accounts (HRAs). Determine whether you might be eligible to participate in either of these programs, which can help you employees manage out-of-pocket healthcare expenses. Update plan documents to account for new savings limits. Two new types of HRAs are available (individual -coverage HRAs or excepted benefit HRAs); investigate whether one of these plans might be a better fit for your needs.

Review plans for compliance. The Mental Health Parity and Addiction Equity Act (MHPAEA) sets forth new guidelines with regard to mental health coverage. Prepare, also, for compliance issues regarding the Employee Retirement Income Security Act (ERISA) and disclosure requirements.

Wellness programs.  The Equal Employment Opportunity Commission’s (EEOC)’s incentive limit rules were lifted, which might trigger the need for benefit design changes.  Wellness plans must also comply with HIPAA rules, the Americans with Disabilities Act (ADA),and the Genetic Information Nondiscrimination Act.

Paid leave. Assess your needs for paid sick, disability, or family leave programs. Check for new state and local mandates with regard to these benefits.

Prescription drug coverage. Monitor changes at the federal and state levels, regarding the prices of prescription drugs. Evaluate the impact on your prescription drug benefits, and reassess plans as needed.

Preventive services. Modify preventive care benefits for the 2020 plan year to include the latest recommendations from the CDC, Affordable Care Act, Health Services and Resources Administration (HRSA) and the US Preventive Services Task Force (USPSTF). Revise benefit plans with regard to HIV prevention, cervical cancer, osteoporosis, skin cancer, obesity, alcohol use, perinatal depression, and vitamin D supplementation in older adults. Employers with moral or religious objections to contraception should monitor developing court cases. Plan documents, summary plan descriptions (SPDs), summaries of benefits and coverage (SBCs) and other materials must be updated to reflect changes in preventive care.

Data security. Evaluate all tech vendors, wellness tools, mobile apps, and artificial intelligence for HIPAA and data protection compliance.

If you need help evaluating your 2020 benefits plan, or have questions about compliance issues, please contact us. We can help you determine where changes should be made, and assist in making those changes with regard to current laws and professional standards.

Statewide Individual Mandate Now Applies to Most Californians

Beginning in 2019, the federal Individual Mandate that requires most Americans to enroll in a health insurance plan will be effectively voided. Stumped by their inability to simply overturn the law, lawmakers who authored the Tax Cuts and Jobs Act set the penalty at zero dollars instead. However, many state legislatures have responded by drafting their own individual mandate laws. With the passage of the Minimum Essential Coverage Individual Mandate, California will now impose a requirement for most state residents to enroll in a qualified health insurance plan. 

Right now, about 93 percent of our state’s residents are covered by a health insurance plan. The Individual Mandate law aims to improve upon that number, and achieve nearly 100 percent enrollment. Some exceptions to the law do exist, such as those for financial hardship and religious belief (as defined by Covered California). The law does expand upon current subsidy provisions, to help more Californians afford their coverage.

Currently, those stipends are available to individuals whose income falls between 100 and 400 percent of the federal poverty level. The new law raises the income limit to 600 percent of the poverty level, offering even more assistance to state residents.

The law also allows for more undocumented residents to enroll in Medi-Cal, by raising the age limit for eligibility from 18 to 26.

Beginning on January 1, 2020, all Californians (and their spouses and children) will be required to maintain enrollment in a qualified health insurance plan for each month of the year. Failure to comply with the law will result in a Shared Responsibility Penalty, imposed by the Franchise Tax Board. The exact amount of this penalty is yet to be determined.

,We expect to see a ripple effect upon other health insurance requirements. Already, the reporting requirements under Internal Revenue Code 6055 have been expanded, so that insurance companies and businesses which provide group health insurance plans must provide proof of coverage to the Franchise Tax Board each year. Those that do not fulfill this requirement will be subject to a penalty.

As the effects of the new law continue to ripple outward, we will keep you updated on new policies and procedures that might affect you. In the meantime, please contact us if you have any questions. Enrollment will open later this year, and at that time we can walk you through the requirements to help ensure that you are in compliance with the law.

 

 

Preparing For the Cost of Healthcare in Retirement

For many people, a mortgage payment is our largest monthly expense. So it might surprise you to learn that in retirement, that can change dramatically. In many cases, healthcare is the number one expense faced by retirees. And since your health can change at any time, so can your budget.

That’s why retirement planning should always account for the cost of healthcare, and the various risks associated with medical bills. According to the Center for Retirement Research at Boston College, the average retiree spends $4,300 annually on out-of-pocket healthcare costs. That’s because, contrary to common belief, Medicare does not cover everything you might need. You’re still subject to co-pays, deductibles, the cost of some prescriptions and equipment, and so on. And, that figure does not include the cost of long-term nursing care, which can cost several thousand per month. 

Are you surprised by these facts? Most people are, and that’s why it’s important to prepare for the cost of healthcare before retirement, rather than risking an unpleasant surprise later.

Your Medicare options. Medicare is actually divided into different parts, and it’s important to understand them and their coverage limits. Medicare Part A covers hospital bills, whereas Part B is used for doctor visits and preventive care. Most people won’t pay for Part A (assuming they worked and paid Medicare taxes for at least ten years) but they will be subject to a deductible for hospital services. Right now that deductible is $1,364 per benefit period (from the time you enter the hospital to 60 days afterward).

Part B currently charges a standard premium of $135 per month, although it can be higher for those with higher incomes. You will be subject to a deductible of $185 per year.

Neither of these Medicare plans cover prescription drugs, so you might wish to enroll in Part D for that (for a premium, of course).

Want it all? Medicare Part C, also known as a Medicare Advantage Plan, includes Parts A and B. Many plans also include Part D coverage. You will pay one monthly premium for an Advantage plan, that is typically higher than you’d pay for those plans separately, but these plans are designed to lower other out-of-pocket costs.

Dental and vision coverage. But wait! Medicare doesn’t pay for routine dental and vision care, so you will need to plan for those expenses, too. Everyone needs dental, of course, and even those with perfect vision find that their situation changes past age 65 or so.

Long-term care. Finally, because Medicare pays for only a very limited amount of long-term nursing care, you will be responsible for that expense should you ever need it. Long-term care insurance is one option, or you can establish a retirement budget that accommodates that monthly bill.

For more information on the different Medicare options available to you, please give us a call. We can help you run the numbers and decide which Medicare plan is a good fit for your budget.

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