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Health Tips and Information


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.

New Legislation Provides a Unique Way for Employers to Offer Health Insurance

Two Problems: Millions of workers in the United States lack health insurance coverage, often because their employers don’t offer it.

Hundreds of thousands of businesses, mostly smaller ones, would like to offer healthcare benefits to employees but can’t because of the high cost and/or lack of options.

What would you say if we told you that new legislation could provide an answers for both of these issues?

The Potential Solution: On June 13, 2019,  the departments of Labor, the Treasury, and Health and Human Services released news of a new rule, allowing employers of all sizes to offer ICRHA (Individual Coverage Health Reimbursement Arrangement). Under this type of plan, employers can contribute funds to a Health Reimbursement Arrangement, while enjoying certain tax benefits. Employees can then use the funds within these accounts to purchase their own health insurance plans, including those offered on state exchanges formed by the Affordable Care Act (or the federal exchange, where state exchanges are not available).

Benefits for employers. Once the new rules go into effect, it is estimated that 800,000 employers will offer this form of healthcare coverage to more than 11 millions workers and their families. Most of those employers will be those with 20 or fewer workers, allowing small companies to better compete in the labor market.

Benefits for employees. The ICRHA policy will allow employees to shop around and select their own health insurance plan. Workers and their families will attain greater control over their healthcare plan options, by selecting a provider and plan that suit their specific needs.

Tax benefits. With an HRA, employers contribute pre-tax dollars to a fund, which can then be used for healthcare expenses. Until now, those funds extended only to expenses uncovered by a health insurance plan. Now, under the new rule, those funds can be used to pay for health insurance premiums if the employee purchases their own plan.

An HRA differs from an HSA (Health Savings Account), in that HSA funds stay with the employee when employment status changes. With an HRA, unused funds go back to the employer in the event the worker is fired, laid off, or quits.

This new provision is exciting, as it potentially allows for millions of uncovered Americans to gain health insurance. Meanwhile, it also benefits employers (particularly smaller companies). But of course, the new ICHRA rules are complex and require the guidance of an insurance professional. Give us a call to learn more, and we will show you the numerous ways in which ICHRA can benefit both your company and your employees.



Guiding Your Medicare-Eligible Employees

Because eligibility begins at age 65, we tend to think of Medicare as health insurance for retirees. But because plenty of people are still working when they reach their 65’th birthdays, that isn’t exactly true. Medicare also covers workers who have reached this milestone, even if they are already covered by a group health insurance plan. So, you might be wondering what exactly to tell your older workers about Medicare…

Yes, they do need to enroll. As long as they (or their spouse if married) have worked at least ten years and paid taxes into the system, all workers are eligible for premium-free Medicare Part A. Your employees might also be interested in Part B or D (prescription drug coverage) for a premium.

Yes, they can have Medicare along with another healthcare plan. For those who work for smaller companies, Medicare will become the primary plan and group health benefits will provide secondary coverage. Those workers will usually enroll in both Part A and Part B, since Medicare is their primary coverage.

For those employed by larger companies, their group healthcare plan remains primary with Medicare providing secondary coverage.

In most cases, having these two forms of insurance will mean lower out-of-pocket costs for the Medicare-eligible employee.

They can delay Parts B and D. For retirees, failing to enroll in Parts B or D at age 65 can result in higher premiums later if they change their minds. However, those who are still working at age 65, and covered by a group health insurance plan, can delay enrollment in Parts B and D without incurring a penalty. They just need to provide confirmation of coverage by an employer.

They must remember the deadline. Medicare will only remind your employees of the deadline if they are receiving Social Security or Railroad Retirement Board benefits, so in most cases this means the responsibility for remembering the deadline falls upon the individual. Remind older workers that they can enroll in Medicare beginning three months before their 65’th birthdays. That initial enrollment period lasts for three months afterward as well.

If you have questions about Medicare enrollment, and how those benefits work alongside a group health insurance plan, please give us a call. We can explain the rules in more detail, so that you can communicate accurate information to your employees.



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