jkeithjohnson

Enrollment Services, Employee Surveys

2009-12-09T09:11:00.000-08:00

Enrollment services. Do they really work? How can an employer or their benefits broker weed through all the promises?
Colonial Life puts their money where their mouth is, by offering employees the opportunity to rate the communication, knowledge, and professionalism of our enrollers with a simple online survey.
If you want to know the effectiveness of your benefits communication, let Colonial handle your enrollment and judge the results for yourself.

I have moved my blog.

2009-03-20T18:04:00.000-07:00

I have moved my blog to Wordpress. Please follow the link and follow my new blog.
Thanks you.
J. Keith Johnson

The COBRA's Bite or How the Stimulus Bill Will Kill Business

2009-02-24T11:31:00.001-08:00

The problem I see in this stimulus bill is the COBRA/state continuation element of the package. Far from stimulating the economy, it will create a tremendous burden for already strapped small business by requiring a 65% participation in COBRA premium, retroactive to last September 1st. (Aren't ex post facto laws unconstitutional? U. S. Constitution, Article 1, Section 9. I know it is in regard to criminal law. I just don't see how any punitive ex post facto law is moral.)

Granted, an employer may offset the premium with a credit against his payroll taxes, but every company I know is looking for income and sales, not costs and credits. In addition, I believe that insurance premiums are paid on a monthly basis, in advance, whereas a payroll tax credit would be quarterly, after the fact. Nice of Congress to create debt for businesses. Of course, they are the experts.

Oh, has anyone examined the effect this payroll tax short fall will create on the Ponzi scheme we call Social Security? Prior to the stimulus bill, we were robbing Peter to pay Paul. Now we're robbing both of them.

This is bad legislation, poorly conceived, poorly written, and soon to be poorly administered.

New COBRA requirements

2009-02-16T19:06:00.000-08:00

This is from benefitsblog...

Late on Friday, the Senate approved the economic stimulus legislation sending the bill to the President for his signature. It is unclear when he will sign the legislation, but his signature is expected this week.
As I indicated last week, the bill contains a number of important COBRA revisions that plan sponsors will need to immediately implement. These provisions are discussed in more detail below. In addition, beginning March 1, 2009, the bill also increases the monthly amount for transit passes to the level allowed for parking, and the bill also makes certain changes with respect to the HIPAA privacy and security rules implemented as part of the health information technology provisions. For those who would like to review the actual language, I have attached Division B of the bill to this email. The COBRA provisions begin on page 396 of the PDF.
The COBRA revisions are effective March 1, 2009. Due to this very short deadline, a conference call has been scheduled for Wednesday between Treasury and the benefits community. We expect that a number of questions will be answered during that call. Due to the importance of Treasury input in this process, we will be distributing our Legal Alert after this call so that we can incorporate the guidance which is expected to flow from that call. With that in mind, the following is a summary of the final COBRA revisions.
COBRA Subsidy
The COBRA premium subsidy applies to involuntary losses of employment between September 1, 2008 and December 31, 2009. Under the subsidy, the qualified beneficiary would pay 35% of the applicable COBRA premium and 65% of the premium would be subsidized by the employer. The employer may then claim the amount of that subsidy as a credit against its payroll taxes. The subsidy would expire after 9 months, leaving the remaining months as unsubsidized. If a second qualifying event occurred during that timeframe, it appears that the qualified beneficiary would be able to continue utilizing the subsidy (e.G., a divorce or death). The bill requires a special 60-day election period for those who are eligible for the subsidy but failed to previously elect COBRA - e.g., an individual who terminated employment in October 2008 and who did not elect COBRA would receive a second chance to enroll currently. Further, the bill allows, but does not require, employers to allow current COBRA participants to switch to any other medical option under the employer’s plan. The COBRA provisions specifically do not apply to health FSAs. Finally, the subsidy starts to phase out for individuals with incomes above $125,000 for single and $250,000 for married couples.
COBRA Expansion
The House version of the bill would have expanded COBRA for those individuals who are at least 55 years old or who have at least 10 years of service. This provision was eliminated by the conference committee, and is not in the final bill.
Preparation for Change
A number of administrative revisions will be needed to implement the new COBRA provisions. These revisions include the following:
1. Employers/COBRA administrators will need to prepare a special enrollment notice and send that notice to all employees who terminated employment since September 1, 2008. These employees could then elect COBRA currently with the premium subsidy. COBRA would continue for the remainder of its original term.
2. Employers/COBRA administrators will need to prepare a special notice to existing COBRA participants informing them of the new premium subsidy and their new premiums going forward, and possibly allowing them the opportunity to change to another medical option offered by the employer. The bill includes a 60-day grace period that allows refunds of previously paid premiums.
3. Administrative procedures will need to be developed to implement all of the changes (e.g., new premium structure, new notices, and calculating the amount of the subsidy actually utilized each month so that the proper amount can be credited against the employer’s payroll taxes). In addition, the subsidy only applies to involuntary terminations. Failure of employers to properly identify those who are eligible for the subsidy will mean that the employer’s payroll taxes are unpaid, potentially subjecting employers to underpayment penalties.
4. Additional notices will need to be developed to inform COBRA participants when they reach the maximum subsidy limit.
5. Additional procedures and notices will need to be developed to allow high income enrollees to opt out of the subsidy. An attestation process is included in the final bill.
6. The existing COBRA initial notice and election notice will need to be modified to include the new subsidy rules on a going forward basis.
Some of these issues should be become clearer after the Treasury conference call on Wednesday. We will incorporate the Treasury guidance in our Legal Alert that will be sent later this week. If you have any questions, please feel free to contact me.
recovery_bill_div_b
Mark L. Stember
Kilpatrick Stockton LLPSuite 900607 14th Street, NWWashington, DC 20005t 202.508.5802f 202.585.0018
[?]

Why Is Health Care So Expensive?

2009-02-09T06:10:00.000-08:00

Watch this link for an idea on why healthcare is so expensive and what we can do to control it.
http://www.youtube.com/watch?v=JYC2DJWU41s

New Creation Story

2009-02-07T12:58:00.000-08:00

This link should take you to a tongue in cheek take on creation and health insurance.
Enjoy.

http://docs.google.com/Presentation?id=d3z83ct_13d7jj5cg4

Rising Cost of Insurance

2009-02-02T14:33:00.000-08:00

http://docs.google.com/Presentation?id=dfk9fpgn_5gv7j35dn

This link will take you to a Google document presentation by Partners Insurance out of Arkansas. Please note the focus is on wellness and claims errors.
I believe that a shift to the consumer driven/one deductible plans will encourage the insured to monitor their costs and their bills. Once we take the waste out of the health delivery system we can start to control costs and, therefore, premium.

Short Term Disability

2009-01-20T15:55:00.000-08:00

By J. Keith Johnson

One of the most overlooked coverages in America today is disability. We protect our home, our vehicle, our health, even our life, but we do not protect the one thing that pays for all of that, our paycheck.
Does this make sense?

In Madoff We Trust

2009-01-20T14:58:00.000-08:00

This is an article written by Peter Schiff of Euro Pacific Capital.
December 16, 2008
In Madoff We Trust
As the multi-billion dollar Ponzi scheme orchestrated by Wall Street insider Bernard Madoff unravels in the media spotlight, the nation is being presented with a rare opportunity to understand the true nature of many of our most cherished financial structures. Hopefully we have the wisdom to connect the dots.Although the $50 billion loss engineered by Madoff is truly a staggering accomplishment (and was done using old-fashioned fraud rather than the mathematical wizardry that has characterized Wall Street’s recent larcenies) the size of the scheme pales in comparison to the multi-trillion dollar Ponzi structures run by the United States government. In fact, rather than looking to jail Madoff, President-elect Obama should consider making him our new Treasury secretary. If not that, at least make him the czar of something!
Madoff’s inspiration came from Charles Ponzi, the Italian-born American immigrant who promoted an investment plan in the early 1900s’ that traded postal coupons. Rather than paying investors from legitimate investment returns, Ponzi hit upon the innovative idea of paying out early investors with money collected from new investors. By creating an illusion of success, interest in his investment plan ballooned. Over time the schemes have become known by many other names, such as chain letters or pyramid schemes. They are united by the fact that they always fail in the end.
When the influx of new investors inevitably slows to the point where distributions to current investors can no longer be maintained, investors look to withdraw funds. When this happens, the entire structure falls apart. The profits received by those who “invested” early as well so any funds skimmed off by the promoter, are offset by all the losses of those who came late to the party.
To a large extent, the same concept has driven the major asset bubbles of the last decade. Given the ridiculously high valuations that were assigned to tech stocks and real estate during their respective booms, the only way the bubbles could be perpetuated was if newer “investors” could be found to pay even more outrageous prices (the greater fool). But when these new buyers balked, the whole structure crumbled. Although there was no Ponzi or Madoff to orchestrate these manias, the entire financial and economic apparatus of the country had successfully convinced the public that “investments” in tech stocks and condominiums were bullet proof and that the supply of new buyers was endless.
Unfortunately, the Ponzi economy doesn’t stop there. A chain letter is no more viable when run by governments than when run by private citizens. However, government orchestrated pyramids have the advantage of required participation. As a result, they can maintain the illusion of viability for several generations. But the longer such schemes operate the larger will be the losses when they ultimately collapse.
The Social Security Administration runs its “trust funds” with precisely the same methods used by Madoff and Ponzi. As money is collected by from current workers, the funds are then dispersed to those already receiving benefits. None of the funds collected are actually invested, so no investment returns are ever generated. Those currently paying into the system are expected to receive their returns based on the “contribution” made by future workers. This is the classic definition of a Ponzi scheme. The only difference is that Ponzi didn’t own a printing press.
The United States Government runs its own balance sheet based on the Ponzi principal as well. Our national debt always grows and never shrinks. As existing debt matures, proceeds are repaid by issuing new debt. Interest payments on existing debt are also made by selling new debt to investors. The whole scheme depends on an ever growing supply of new lenders, or the willingness of existing lenders, to continue to roll over maturing notes. Of course, as was the case with Madoff, if enough of our creditors want their money back, the music stops playing.
In Madoff’s case, the rug pulling was provided by the huge financial losses suffered by some of his clients in other non-Madoff investments. When enough of these clients looked to sell some of their apparently well-performing Madoff assets to help offset such losses, the scam collapsed. The same thing could befall the United States Government. Now that China and our other creditors are looking to spend some of their U.S. Treasury holdings to stimulate their own economies, look for a similar outcome with even more dire implications.
The main difference is that while Madoff took elaborate steps to conceal his scheme, the U.S. government operates in broad daylight. It truly is amazing how faith in government is so pervasive that many can believe that politicians will succeed where private individuals fail, and that governments are somehow immune to the economic laws that govern the rest of society. Like those unfortunate to have been duped by Madoff and Ponzi, the world is in for a rude awakening.

For a more in depth analysis of our financial problems and the inherent dangers they pose for the U.S. economy and U.S. dollar denominated investments, read my new book “Crash Proof: How to Profit from the Coming Economic Collapse.”

Effective Benefits Communication

2009-01-19T07:43:00.000-08:00

Effective Benefits Communications Saves Your Company Money, Time and Energy

by J. Keith Johnson
Agency Development Manager
Colonial Life

As health care costs continue to rise, it’s more important than ever that your employees understand and appreciate the benefits you provide for them. Along with increasing health insurance costs comes increasing competition for quality employees, and you want to attract and retain the best. In fact, the average turnover rate of top-performing employees is 17 percent at companies that offer rich benefits programs but poorly communicate them to workers, as opposed to 12 percent at businesses with less comprehensive programs but better communication strategies.[1]
A sound benefits package is a plus but only if employees know and understand what you make available to them. A quality voluntary benefits partner can help by providing professional, consistent communications throughout the entire enrollment process. As a result, employees will not only understand their benefits but also appreciate them.
Effective benefits communications has two integral phases: before the enrollment and during the enrollment. For each phase, your voluntary benefits partner should be able to deliver a wide range of services and capabilities.

Pre-Enrollment Communications
Custom Communications. A quality voluntary benefits provider can provide enrollment communications such as letters, fliers, PowerPoint presentations, brochures, e-mails, posters, tent cards — whatever works best to help employees learn the about the upcoming enrollment and the key details of the benefits offerings.
Group Meetings. To help provide background on the overall benefits program, highlight any major changes in the program and introduce any new offerings, the enrollment process should begin with a group employee meeting that covers key highlights of the benefits program.

Enrollment Communications Through One-on-One Sessions With a Benefits Professional
Advances in enrollment technology have made enrollments simpler and easier to administer; however, nothing can replace the value of having a trained benefits professional meet with employees individually to review and enroll their benefits. Two-way communications between a benefit professional and an employee is critical for effective benefits communications.
Using the latest enrollment technology, a benefits professional can help employees consider their personal benefits situation and see the impact of their benefits selections on their paycheck. Communication services can include:
· Helping employees verify and update basic employee data.
· Highlighting each employee’s existing benefits, pointing out what the employee contributes and what the employer contributes.
· Reviewing the employee’s benefits selections and how each affects the paycheck so the employee can see exactly what the deductions will be and, if pretaxing, what the savings can be.
· Showing the employee his or her entire benefits package, including paid time off, uniform costs or any specific benefits you want to highlight. Again, the employee can see his or her own contributions to the benefits package, as well as what you contribute.
· Providing a detailed listing of the employee’s selections and contributions as one last verification of plan information and premiums.

So what’s the advantage of effective benefits communication? You’ll save costs, time and energy — plus, you’ll gain greater employee satisfaction through personal, quality benefits communication.

About the Author
J. Keith Johnson is an Agency Development Manager for Colonial Life. Keith is responsible for marketing Colonial Life’s products, programs and services in the Kansas/Missouri area.
Colonial Life & Accident Insurance Company is a market leader in providing insurance benefits for employees and their families through their workplace, along with individual benefits education, advanced yet simple-to-use enrollment technology and quality personal service. Colonial Life offers disability, life and supplemental accident and health insurance policies in 49 states, the District of Columbia and Puerto Rico. Similar policies, if approved, are underwritten in New York by a Colonial Life affiliate, The Paul Revere Life Insurance Company. Colonial Life is based in Columbia, S.C., and is a subsidiary of Unum Group.
For more information about Colonial Life’s products and services or opportunities with the company, call Keith at 913-205-6396 or visit www.coloniallife.com.

[1] 2005 Watson Wyatt Worldwide WorkUSA® study on effective employee-driven financial results

Prescription price gouging?

2009-01-14T04:20:00.000-08:00

This is an interesting article from the Miami Herald on a possible/probable cause for high prescription prices.
http://www.miamiherald.com/business/story/849177-p2.html

CMS requirements

2009-01-12T15:22:00.000-08:00

Employers, health carriers, and their health insurance brokers are busy during a usual quiet time due to the government requiring dependent SSN's on all covered employee's. Extra requirements mean extra costs.

Benefits Solutions

2009-01-06T05:04:00.000-08:00

Benefits Solutions to Health Insurance Dilemma

by J. Keith Johnson
Benefits Representative- Olathe, KS
Colonial Life

Rapidly rising health care costs and the plight of the uninsured have reached the status of nearly daily mention in most news media. As health care costs continue to increase, many businesses are moving toward high-deductible major medical plans in an effort to better manage benefits program costs. Yet this approach can put employees at greater financial risk, forcing them to pay the expanding difference between what their health insurance covers and what their medical care costs. In addition, premiums for employer-sponsored health insurance have been rising four times faster on average than workers’ earnings since 2000.1
While that’s bad enough news for workers with health insurance, it’s a potential disaster for those who don’t have health coverage to help buffer these costs. A recent Census Bureau report estimated 47 million Americans have no health coverage.2 Still more worrisome is the fact that most uninsureds belong to a family with at least one working member. 3
The good news is employers have access to two solutions to meet this health coverage dilemma:
§ A voluntary supplemental health insurance plan can help fill gaps in coverage under a high-deductible major medical plan, such as increased deductibles and out-of-pocket maximums.
§ A group limited benefit hospital confinement indemnity insurance plan for employees who don’t have access to major medical insurance through their workplace or their spouse’s workplace.

Voluntary Supplemental Health Insurance
With voluntary supplemental health insurance, businesses can offer their employees a solution to help fill coverage gaps and protect employees against increasing out-of-pocket expenses. These products typically pay lump-sum benefits for medical expenses resulting from inpatient hospitalization and rehabilitation unit or outpatient services, diagnostic testing, doctor’s office visits and wellness checkups. For example, an employee who has to go into the hospital may have to pay a $1,500 deductible before health insurance kicks in — money the employee has to pay up front. With voluntary supplemental health insurance, the employee would receive a lump-sum benefit payment for the inpatient confinement and could use it to help pay for the deductible.

Group Limited Benefit Hospital Confinement Indemnity Insurance
This type of insurance is a group product that provides benefits to help insureds pay many routine, noncatastrophic health care expenses. It’s not major medical coverage, and it isn’t a replacement for major medical coverage. Offered through the workplace at group rates, this plan can meet the need for affordable, limited and clearly defined health benefits for full-time and part-time workers who don’t have access to major medical insurance and need some coverage for basic, routine medical expenses. Coverage is available for:
Doctor’s office visits
Outpatient diagnostic and lab tests
Inpatient hospital stays
Surgery
Prescription drugs

With either plan, benefits communication plays a critical role in successful implementation. Consistent, clear communication through group and one-on-one meetings with employees helps ensure they understand what their plan covers and what it doesn’t. This leads to much greater satisfaction with the benefits plan. A quality voluntary benefits provider can deliver this service at no direct charge to the employer.
Rising health care costs and the resulting plight of the working uninsured are not likely to go away anytime soon. But innovative products like voluntary supplemental health insurance and group limited benefit hospital confinement indemnity insurance provide workable solutions for the health care cost issue.

About the Author
J. Keith Johnson is an agent for Colonial Life. A veteran of more than six years in the insurance and benefits industry, Mr. Johnson is responsible for marketing Colonial Life’s products, programs and services in the Kansas/Missouri area.
Colonial Life & Accident Insurance Company is a market leader in providing insurance benefits for employees and their families through their workplace, along with individual benefits education, advanced yet simple-to-use enrollment technology and quality personal service. Colonial Life offers disability, life and supplemental accident and health insurance policies in 49 states, the District of Columbia and Puerto Rico. Similar policies, if approved, are underwritten in New York by a Colonial Life affiliate, The Paul Revere Life Insurance Company. Colonial Life is based in Columbia, S.C., and is a subsidiary of Unum Group.
For more information about Colonial Life’s products and services or opportunities with the company, call J. Keith Johnson 913-205-6396 or visit www.coloniallife.com.
# # #

1 The Henry J. Kaiser Family Foundation, 2006 Employee Health Benefit Survey, September 26, 2006.
2 U.S. Census Bureau report, Aug. 28, 2007.
3 California Health Care Foundation, 2005.
4 “Growth Potential of Small Business Markets,” LIMRA, 2006.
5 “Statistics of U.S. Business,” U.S. Census Bureau, 2004.

Communication will solve the health care crisis.

2008-12-06T11:04:00.000-08:00

As my wife is fond of saying to me, "communication is key".

One of the main reasons we find ourselves in the state we're in is because people do not understand insurance products, especially health insurance products. If we had automobile insurance built in a similar fashion to health insurance, no one could afford to own a car, much less drive one.

Imagine getting a starter or muffler installed for a $20 copay. Need a transmission or engine overhaul? As long as you were in your automotive repair network, you get 80/20 coinsurance until your deductible is met. Have existing accident damage? As long as you can get in an employer group where the carrier has to accept you, you get your car fixed. No matter that you weren't part of the original underwriting, Everyone helps pay your expenses. After all, isn't that what America is all about?

Now I know this sounds ridiculous, but no more ridiculous than for people to expect healthcare delivered this way for little or no cost.

The American public needs an education. I'm afraid it will come at the expense of the healthcare/insurance industry collapsing. No one knows what procedures cost, where they can get cost effective care, care provider success/mortality rates, what insurance carriers pay claims best, and how money works within the system.

HDHP/HSA's are a great first step because a policyholders self interest requires that they ask these questions. At this time they cannot get all the answers, but more and more light is being shed on the situation.

As agents that have our clients best interests at heart, we must continue to fight the good fight. If we continue to promote, communicate, and educate, we know that understanding will provide a sensible answer.

Government now requires SSN on dependents

2008-12-03T05:21:00.000-08:00

Office of Financial Management/Financial Services Group
DATE: June 23, 2008
SUBJECT: Collection of Social Security Numbers (SSNs), Medicare Health Insurance Claim Numbers
(HICNs) and Employer Identification Numbers (EINs) (Tax Identification Numbers) –
ALERT
This ALERT is to advise that collection of SSNs, HICNs, or EINs for purposes of compliance with the reporting requirements under Section 111 of Public Law 100-173 is appropriate.
SSNs and EINs:
The SSN is used as the basis for the Medicare HICN. The Medicare program uses the HICN to identify Medicare beneficiaries receiving health care services, and to otherwise meet its administrative responsibilities to pay for health care and operate the Medicare program. In performance of these duties, Medicare is required to protect individual privacy and confidentiality in accordance with applicable laws, including the Privacy Act of 1974 and the Health Insurance Portability and Accountability Act Privacy Rule. Please note that The Centers for Medicare & Medicaid Services (CMS) has a longstanding practice of requesting SSNs or HICNs for coordination of benefit purposes.
The EIN is the standard unique employer identifier. It appears on the employee’s federal Internal Revenue Service Form W-2, Wage and Tax Statement received from their employer. The Medicare program uses the EIN to identify businesses. The establishment of a standard for a unique employer identifier was published in the May 31, 2002 Federal register, with a compliance date of July 30, 2004.
A new Mandatory Insurer Reporting Law (Section 111 of Public Law 110-173) requires group health plan insurers, third party administrators, and plan administrators or fiduciaries of self-insured/selfadministered group health plans to report, as directed by the Secretary of the Department of Health and Human Services, information that the Secretary requires for purposes of coordination of benefits. The law also imposes this same requirement on liability insurers (including self-insurers), no-fault insurers and workers’ compensation laws or plans. Two key elements that will be required to be reported are SSNs (or HICNs) and EINs. In order for Medicare to properly coordinate Medicare payments with other insurance and/or workers’ compensation benefits, Medicare relies on the collection of both the SSN or HICN and the EIN, as applicable.
As a subscriber (or spouse or family member of a subscriber) to a group health plan arrangement, your SSN and/or HICN will likely be requested in order to meet the requirements of P.L. 110-173 if this information is not already on file with your insurer. Similarly, individuals who receive ongoing reimbursement for medical care through no-fault insurance or workers’ compensation or who receive a settlement, judgment or award from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation will be asked to furnish information concerning their SSN and/or HICN and whether or not they (or the injured party, if the settlement, judgment or award is based upon an injury to someone else) are Medicare beneficiaries. Employers, insurers, third party administrators, etc. will be asked for EINs.
To confirm that this ALERT is an official Government document and for further information on the mandatory reporting requirements under this law, please visit the CMS website at www.cms.hhs.gov/MandatoryInsRep.
MMSEA111AlertSSNandHICNandEINcollection062308final

Wall Street Journal article, Beware the pitfalls of early retirement.

2008-12-01T12:19:00.000-08:00

Almost everyone fantasizes about swapping the cubicle and BlackBerry for a life of leisure while they're young enough to enjoy it.
Millions work long hours to make the fantasy a reality, and in these rough economic times, others have simply taken buyouts. But America's patchwork health-care system is making those transitions harder.
Too young to qualify for Medicare and rarely covered by employers, early retirees can face premiums they never dreamed of -- triple or more what they paid while working.
And that's for the healthy ones. Others, who suffer from middle-age ailments like arthritis or back pain, wind up paying far more -- if they aren't simply rejected. Researchers at the Commonwealth Fund found that in 2007 about 35% of people between the ages of 50 and 64 were uninsured or underinsured, up from 26% five years ago.
Bought Out, Left Out
In the decades after World War II, most retirees could count on generous health perks. But over the past two decades, the situation has changed. Today, just 29% of large private companies provide insurance to younger retirees, according to the Kaiser Family Foundation. This spring, the Society for Human Resource Management found that less than half of workers laid off or bought out were offered health benefits.
That leaves many younger retirees with only one place to go: the individual-insurance market, which is hardly friendly terrain for fiftysomethings.
Unlike in employer plans, where all members pay similar premiums, here each consumer gets examined for risk. Insurers often react to minor pre-existing health conditions the way an auto insurer reacts to accidents -- by charging steep rates or rejecting the applicant.
Health-care advocates have documented instances of older people being denied coverage because of high blood pressure or mild depression after the death of a spouse. "I used to joke that just living past 45 was a pre-existing condition," says Anthony Wright, executive director of the advocacy group Health Access California.
Higher Age, Higher Risk
Insurance executives defend underwriting practices as necessary to keep up with the costs of care, pointing out that age makes customers riskier to insure. "It's not like we're running a pirate ship," says Richard Collins, president of UnitedHealthcare's individual-insurance unit.
Although states prohibit insurers from dropping consumers who develop health problems after enrollment, they do let insurers purge those who allegedly commit fraud on applications -- leading some companies to comb patients' medical records for signs they should have known a problem was looming.
Fortunately, some younger retirees tame the frontier. Holding on to group coverage helps: Retirees willing to work self-employed can get group rates in 13 states.
For those with health issues who must use the individual market, Carolyn McClanahan, a financial planner in Jacksonville, Fla., recommends applying for a special insurance pool that each state holds open to consumers for the 36 days after they exhaust their COBRA coverage -- while benefits there can be spotty, the pools can't reject anyone.
Early retirees also can boost their underwriting odds by losing belly fat and going over their medical records with physicians for errors.
Email: letters@smartmoney.com
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Family Medical Leave Act, Final Rule

2008-11-25T10:13:00.000-08:00

ESA News Release: [11/14/2008]Contact Name: David James or Dolline Hatchett Phone Number: (202) 693-4676 Release Number: 08-1703-NAT
Final rule brings two-year public process to close with common sense reforms for modern workforce
WASHINGTON - The U.S. Department of Labor will publish a final rule on Nov. 17 to update its regulations under the 15-year-old Family and Medical Leave Act (FMLA) - a measure that will help workers and their employers better understand their rights and responsibilities, and speed the implementation of a new law that expands FMLA coverage for military family members.
"This final rule, for the first time, gives America's military families special job-protected leave rights to care for brave service men and women who are wounded or injured, and also helps families of members of the National Guard and Reserves manage their affairs when their service member is called up for active duty," said U.S. Secretary of Labor Elaine L. Chao. "At the same time, the final rule provides needed clarity about general FMLA rights and obligations for both workers and employers."
"This common sense, balanced rule is the product of a two year-long transparent process involving about 20,000 public comments and reflects the careful consideration of the views of FMLA's stakeholders," said Victoria A. Lipnic, assistant secretary for the Labor Department's Employment Standards Administration.
Provisions in the final rule call for increased notice obligations for employers so that employees will better understand their FMLA rights, while revising the employee notice rules to minimize workplace disruptions due to unscheduled FMLA absences. The final rule also contains technical changes that reflect decisions by the U.S. Supreme Court and lower courts.
Featured final rule actions implementing the statutory expansion of FMLA for military families:
Military Caregiver Leave: Implements the requirement to expand FMLA protections for family members caring for a covered service member with a serious injury or illness incurred in the line of duty on active duty. These family members are able to take up to 26 workweeks of leave in a 12-month period.
Leave for Qualifying Exigencies for Families of National Guard and Reserves: The law allows families of National Guard and Reserve personnel on active duty to take FMLA job-protected leave to manage their affairs - "qualifying exigencies." The rule defines "qualifying exigencies" as: (1) short-notice deployment (2) military events and related activities (3) childcare and school activities (4) financial and legal arrangements (5) counseling (6) rest and recuperation (7) post-deployment activities and (8) additional activities where the employer and employee agree to the leave.
ADDITIONAL REGULATORY PROVISIONS:
The Ragsdale Decision/Penalties: The updated rule contains technical changes to be consistent with the U.S. Supreme Court's decision in Ragsdale v. Wolverine World Wide Inc. The court ruled that the regulation's so-called "categorical" penalty (requiring an employer to provide 12 additional weeks of FMLA-protected leave after the employee had already taken 30 weeks of leave) was inconsistent with the statutory limit of only 12 weeks of FMLA leave and contrary to the law's remedial requirement that an employee demonstrate individual harm. The new rule removes these penalties and clarifies that if an employee suffers individual harm because the employer did not follow the notification rules, the employer may be liable.
Waiver of Rights: The department has finalized its longstanding position that employees may voluntarily settle their FMLA claims without court or departmental approval. However, prospective waivers of FMLA rights will continue to be prohibited.
Serious Health Condition: While the rule retains the six individual definitions of "serious health condition," it adds guidance on some regulatory matters. First, it clarifies that if an employee is taking leave involving more than three consecutive calendar days of incapacity plus two visits to a health care provider, the two visits must occur within 30 days of the period of incapacity. Second, it defines "periodic visits to a health care provider" for chronic serious health conditions as at least two visits to a health care provider per year.
Light Duty: At least two courts have held that an employee uses up his or her 12-week FMLA leave while on a "light duty" assignment. Under the final rule, time spent in "light duty" work does not count against an employee's FMLA leave entitlement, and the employee's right to job restoration is held in abeyance during the light duty period. If an employee is voluntarily doing light duty work, he or she is not on FMLA leave.
Perfect Attendance Awards: The final rule changes how perfect attendance awards are treated to allow employers to deny a "perfect attendance" award to an employee who does not have perfect attendance because he or she took FMLA leave - but only if the employer treats employees taking non-FMLA leave in an identical way.
Employer Notice Obligations: The final rule consolidates all employer notice requirements into a "one-stop" section of the regulations to clear up some conflicting provisions and time periods. Further, the final rule clarifies and strengthens the employer notice requirements to employees in order that employers will better inform employees about their FMLA rights and obligations, and allow for a smoother exchange of information between employers and employees.
Employee Notice: The final rule modifies the current provision that had been interpreted to allow some employees to notify their employers of their need for FMLA leave up to two full business days after an absence, even if they could provide notice sooner. Under the final rule, the employee must follow the employer's normal and customary call-in procedures, unless there are unusual circumstances.
Medical Certification Process (Content and Clarification): The final rule, which is the result of significant stakeholder feedback (including a September 2007 meeting at the department on "medical certifications"), recognizes the advent of the Health Insurance Portability and Accountability Act (HIPAA) and the applicability of HIPAA's medical privacy rule to communications between employers and employees' health care providers. Responding to concerns about medical privacy, the rule adds a requirement that limits who may contact the health care provider and bans an employee's direct supervisor from making the contact.
The public can view the entire text of the final rule as it will appear in the Federal Register at: http://www.federalregister.gov/page2.aspx#reg_W.
For further information about the FMLA and the proposed regulations, visit the Wage and Hour Division's Web site at www.wagehour.dol.gov

Can you afford a $50 Co-pay?

2008-10-30T17:01:00.000-07:00

Can You Afford A $50 Co-pay?
By J. Keith Johnson

With health insurance rates increasing at double digit rates, more and more employers are searching for a way to stem the tide. Employers are forced to ask employees to shoulder more of the cost as premiums increase. If you have health coverage, whether group or individual, ever increasing premiums, deductibles, co-pays, and co-insurance are a fact of life.
To complicate matters, most employees do not understand their health insurance. Ask them about their coverage, they’ll tell you about their co-pay. Few know their individual or family deductible and virtually none of them know their co-insurance amount or maximum out of pocket. If you increase the deductible and co-insurance, hardly anyone will notice. If you increase the co-pay, everyone screams. Therefore, employers take the path of least resistance.
I have a couple of questions. First, do you think most employees could afford a $50 co-pay for doctor’s office visits? Probably. Emergency room co-pays are $50-$100 right now and many use the emergency room rather than a doctor’s office visit for routine illnesses, so it’s possible.
Second question, would most Americans be happy if they could get the insurance company to pay that whole $50? You bet!
So if you would like the insurance company to pay your $50 co-pay, welcome to the HSA plan.
HSA qualified plans use premium savings from the health coverage to help fund medical expenses. Rather than send a large premium for a co-pay plan to an insurance company, you send less premium by purchasing a lower cost, one deductible plan and placing the premium savings up to the amount of the deductible, in a tax-free fund for use as needed.
So how does that equal a $50 co-pay? Easy. An in-network doctor’s office visit is approximately $50. Under a standard co-pay plan, you pay $20 and the insurance company pays $30. Under the one deductible HSA plan, you pay the medical expenses up to the deductible. Voila, $50 co-pay! And, the employee did not have to pay tax on the $50.
But, you may ask, how do I get the insurance company to pay that $50? Once again, it’s easy. Here is an example of a small group with some health issues that recently switched to an HSA qualified plan:

Small group (7 employees)
Last year’s co-pay plan monthly premium: $3,738.00
(This does not include this year’s increase)
This year’s HSA plan monthly premium: $2,604.00
Monthly savings: $1,134.00 (30% savings)

Monthly savings per employee: $ 162.00

Monthly per Employee Contributions:
Contribution to HSA: $ 50.00
Employer paid Dental premium: $ 88.00
(New benefit)
Employer paid voluntary benefit premium: $ 9.00
(new benefit)
Savings to employer’s bottom line: $ 15.00
(per employee)

Total annual employer savings: $1,260.00

As you can see, the employer used part of the monthly savings (insurance company’s money) to help fund the employee’s HSA. This is the money used to pay the doctor’s office visit. Nothing came out of the employee’s pocket. The money literally came out of the insurance company’s pocket.
In addition, the employer was able to improve benefits by adding dental and a medical bridge plan to help pay medical costs in the event of a hospitalization. All this and he reduced his costs. Find that in a co-pay plan!
Oh, and the best part? Whatever the employee doesn’t use each year, he gets to keep!
Congratulations. You just started a de facto retirement plan with no IRS reporting requirements.
I’ve heard all the arguments against HSA’s. They are all baloney. The only reason an HSA qualified plan will not work is if you don’t save enough premium. Period.

J. Keith Johnson is an independent insurance broker, specializing in HSA qualified plans. For more information you may reach him at:
Free State Business, LLC
15954 Mur-Len, #305
Olathe, KS 66062
(913) 787-0152
Email: jkjohnson@freestatebusiness.com