- Group Medical Insurance
- HSAs, HRAs, and FSAs
- Dental and Vision Insurance
- Carve-out Prescription Programs
- Group Life Insurance
- Short and Long Term Disability Insurance
- Group Long Term Care Plans
- Voluntary Benefits
- Employee Assistance Programs
Group Medical Insurance:
An HMO plan (HMO) means that you have to use a participating provider, whether it is a doctor, hospital, lab or x-ray facility. Arbor Group works with the major insurance companies in each market. Most doctors and hospitals participate with the major insurance companies. HMO’s do not have the same negative perception that they did back in the 80’s. You can now get an HMO that does not require referrals. You will have the freedom to go to a network specialist without a referral on these open access type of HMO plans.
A Point of Service plan (POS) is the same as an HMO plan within the network, however, the POS plan will also have an out of network benefit. You will be able to go to any doctor and hospital whether or not they are in the insurance company’s network. To access these out of network benefits you will have a deductible and coinsurance payments. The insurance companies will pay the provider based on usual and customary fees. This is the charge that most of the doctors in the geographical area would charge for the same services. If your doctor charges more you may be required to pay the difference. You can get a POS plan either with or without referrals.
PPO Plans function very similar to POS plans without referrals. You will have both in and out of network benefits. PPO plans have been considered to be the best form of health insurance; however, they are very expensive. A good POS plan would perform the same as a PPO plan. The member would not experience any major differences.
Open Access may be either an HMO or Point of Service. You must name a primary physician, but do not need referrals to seek specialty care.
HSAs, HRAs and FSAs
High Deductible, Consumer Directed Health Plans, Health Savings Accounts (HSAs) & Health Reimbursement Accounts (HRAs): These plans are growing in popularity. The policy holder has a high deductible i.e. $1,500, $2,000 or $2,500. A family deductible is double the individual’s to $3,000, $4,000, or $5,000. The only thing covered before the deductible is well visits. A policy holder has to pay all medical bills including prescriptions until the annual deductible is met. Once the deductible is met then the co-pays begin, or the policy holder can have 100% coverage with a no copay plan. These High Deductible types of health insurance plans can save up to 50% on the cost of health insurance.
A Health Savings Account (HSA) can be set up with a bank that allows tax deferred savings similar to an IRA account. The money in this account can be used for medical expenses such as deductible charges, co-pays, dental expenses, eye glasses, even for long term care insurance premiums. The limit to be deposited for 2010 for an individual is $3,050 and for a family is $6,150. If the money is not spent each year it will roll over to the next year.
A Health Reimbursement Account (HRA) What is a Health Reimbursement Arrangement (HRA) A Health Reimbursement Arrangement is a tax-advantaged benefit that allows both employees and employers to save on the cost of healthcare.
HRA plans are employer-funded medical reimbursement plans. The employer sets aside a specific amount of pre-tax dollars for employees to pay for health care expenses on an annual basis. Based on the plan design, HRAs can generate significant savings in overall health benefits.
The primary requirements for an HRA are that (1) the plan must be funded solely by the employer and cannot be funded by salary reduction, and (2) the plan may only provide benefits for substantiated medical expenses.
Flexible Spending Accounts (FSA) can be set up for your employees to help pay out-of-pocket, un-reimbursed expenses like co-pays and deductibles. Employees decide how much of their salary should be set aside in an FSA, and that amount is automatically deducted from pre-tax dollars, once again, lowering taxable income, increasing take home pay, promoting choice in how their medical dollars are spent and reducing the employer’s portion of payroll taxes. In general, almost everything needed for medical, dental, or vision care is eligible.
Under a group plan, the insurance company pays for a much more restrictive list of items, and has reasonable and customary limitations. This is not true under FSA’s. The list of eligible services, as denoted by IRS Publication 502 applies. See www.irs.gov/pub/irs-pdf/p502.pdf .
Some examples are travel and parking costs, over the counter drugs as long as they are for an illness or condition, Lasik surgery, and all dental care except teeth whitening.
Examples of things which are not covered are purely cosmetic items, preventive medications like vitamins, and personal use items such as toothpaste and shampoo.
An important aspect of FSAs is they have a use it or lose it provision. At the end of the calendar year any money not spent reverts back to the employer; however you have until May 15th of the following year to get reimbursed for expenses that occurred during the plan year.
The bottom line is that almost all of us have significant expenses in this area and we are not taking advantage of the tax deductions available to us. To use FSA’s will create significant savings for both employer and employee. With FSA’s, the employees can save as much as 20% on their expenditure and the employer can save as much as 10% on the collective expenditure of all of the employees who participate.
Group Dental and Vision
Dental Insurance provides coverage for the day to day routine dental work with some coverage for basic and major restorative work. Dental insurance will not cover the major total mouth restoration that could cost $30,000 to $50,000. Most dental insurance plans will have annual limits of $1,000, $1500 or $2,000 per person. These plans will cover three areas of care, preventative, basic restorative and major restorative. The preventative is the twice a year cleanings, x-rays, and fluoride treatments for children. The basic restorative coverage is for fillings, surgery, extractions and the better plans will also cover root canal under the basic coverage. The major restorative is for crowns, bridges and dentures. Coverage on the three areas is usually 100% for preventative, 80% for basic and 50% for major work. These percentages can be changed to lower the premiums or increased if more coverage is desired. The best group rates for dental are for companies with 10 or more employees applying for coverage.
Vision Insurance benefits can include a yearly comprehensive eye exams, frames and lenses every 12 or 24 months, additional reading or prescription sunglasses, and discounts on surgical procedures.
Carve Out Prescription Plans One of the keys to Arbor Groups Carve Out Prescription Plans is the ability to identify, using HIPAA compliant guidelines, the 20% of the group that is driving 80% of the medical and prescription claims. The goal is to reach out and engage these high risk individuals in a disease management program that works in conjunction with their Doctors and leads to the reduction of hospital bed stays; in turn reducing overall medical costs.
The way we accomplish this is through a carve out prescription program that provides real data that is updated daily and is available at all times on your desktop computer. The clients in the carve out Prescription drug program; whether fully insured or partially insured have averaged 20% to 30% savings in the first year
Group Life Insurance offers flexible design options that allow you to create a customized program that meets each employers needs. You have the option to offer a terminated employee the opportunity to convert his or her coverage (and spouse and child coverage, if elected) to an individual life insurance policy, allowing for continued coverage. Optional Features include Accidental Death and Dismemberment (AD&D) coveragewhich provides an enhanced benefit in the case of accidental death or dismemberment. Dependent life insurance can be purchased to cover the loss of a spouse or child. Flexible Waiver of Premium options allow coverage to continue and premiums to be waived if an employee qualifies under this provision. Group life insurance can also be purchased on a voluntary basis that provides a great value for employees who need either a stand-alone policy or added coverage.
Short and Long Term Disability Insurance
Short-term disability (STD) insurance pays a percentage of your salary if you become temporarily disabled, meaning that you are not able to work for a short period of time due to sickness or injury (excluding on-the-job injuries, which are covered by workers compensation insurance). A typical STD policy provides you with 50 to 70 percent of your pre-disability base salary. These benefits generally last for three to six months but could last up to a year.. Most STD policies have a “cap,” meaning you receive a maximum benefit amount per month. New Jersey has a mandatory plan that can be replaced or enhanced with additional coverages above the state plan.
Long Term Disability Insurance (DI) is one of the most important insurances that everyone should have if they are receiving an income. The one question to ask yourself is “How would I pay my mortgage, my rent, my medical insurance or other monthly expenses if my income were to stop due to an injury or accidental?” Long Term Disability usually begins after a 90 day or 180 day waiting period. The best plans would pay benefits up to a person’s normal retirement age.
If coverage is desired for shorter periods, then a short term disability policy could be added. ? Most group DI policies would cover 60% of the individual’s current salary up to a monthly maximum. If the employee pays the premiums the benefit when received would be tax free. If the employer pays the premium the benefit would be taxable as income.
An Individual Disability policy is better than a group policy because it remains with the employee. If someone changes jobs the DI policy would move with them. The underwriting is more detailed for an individual policy. It is best to get a policy issued at a younger age when health is typically better, however, as income increases, a review of the DI coverage should take place to insure that the proper coverage is in place. It is usually best to purchase an additional policy rather than replace an existing policy. Arbor Group will review all your options and make the appropriate recommendations.? Disability Insurance is based on your type of job and level of responsibility. An office employee would be at a better risk class than someone that drives for a living, or is a contractor due to the decreased possibility of becoming disabled.
Long Term Care
Long Term Care (LTC) is the type of assistance people need to perform normal daily activities such as eating, bathing, dressing, and transferring. Long-term care needs typically arise as part of the normal aging process, but can also be due to an injury or illness, such as multiple sclerosis, stroke, rheumatoid arthritis, or due to a cognitive impairment, such as Alzheimer’s disease. LTC insurance can offer the employer and their employees a monthly benefit amount that when needed comes to the insured tax free. Monthly benefit amount up to $6000 can be purchased without medical underwriting and additional amounts can be purchased with minimum underwriting. One of the benefits of a group plan is that the employee can offer the product to family members which include (mother, father, siblings, and grandparents) at the same discounted rates that the employee receives. All billing is direct between the insured and the insurance company.
Medicare coverage usually starts when an individual turns 65 years old. If someone is still working in a full time job with benefits it may not be necessary to begin Medicare coverage. There are several parts to Medicare, Part A for hospital coverage, Part B for outpatient services, Part D for prescription drug coverage and Part C which is Medicare Supplements. ?Part A is automatically assigned at the age of 65. Your Medicare coverage begins the first of the month in which you turn 65 years old.? ? Part B is for doctor’s visits and outpatient services. This part must be paid for on a monthly basis and the amount paid is based on your income. If you are working with benefits and your company has more than 20 full time employees it may not be necessary to apply for part B until you retire or loose your company benefits.? ?Part D is prescription drug benefits. There are over 50 insurance companies that offer a prescription drug card for Medicare. It is necessary to understand the coverage and limits on Medicare prescription drug plans. The federal government has a great website to search for the best drug card for your needs at www.medicare.gov. ?Medicare Supplements will pay for the deductibles and coinsurance that is not covered under part A and B of Medicare. The best time to purchase a supplement is either upon turning 65 if you have both Part A and B or when you retire from a job and lose your benefits if later than 65. These are considered open enrollment periods and the supplement insurance is guaranteed issue. There is no medical underwriting at this time.
For many adding Voluntary Benefits to compensate for cutbacks elsewhere in a benefits package or to enrich an existing core benefits plan–particularly one with a high deductible–makes more sense than making cuts in critical areas of a business, laying off key employees or losing them to a competitor with a richer benefits package.
Instead of paying for disability insurance, life insurance, critical illness, cancer, dental insurance and the like as core employee benefits, small-business owners have begun to see the wisdom of providing those kinds of benefits on a voluntary basis, a la carte-style, where employees can pick and choose among them and pay for the ones they want and can afford. Offering voluntary benefits cost small employers virtually nothing and it helps level the benefits playing field with larger companies. It also affords employees access to various types of insurance typically with looser underwriting requirements and at group rates that are less expensive than if they went out and got coverage on their own
Employee Assistance Programs
A strong Employee Assistance Program (EAP) works with organizational leaders, helping managers deal with the issues they face and understand the associated risk.
Services can include: 24-hour crisis intervention; evaluations and short-term counseling (marriage counseling, drug /alcohol, divorce, bankruptcy); work/life programs; and referral services; case management, management training; unlimited management consultations; educational workshops and seminars; monthly newsletters; Critical Incident Stress Debriefings (CISD); and many promotional materials.
The impact of professional training can yield hundreds of thousands of dollars in savings when managers know exactly what is needed and what is expected of them.