Health Insurance

What kind of health insurance plans are there?

Frequently Asked QuestionsThere are two basic types of health insurance plans – indemnity plans and managed health care plans. Indemnity plans let you choose your own physician, while managed health care plans – HMOs, PPOs, and POSs – assign you to a network of physicians and hospitals. Managed health care plans are less flexible, but much cheaper than indemnity plans.

What’s an HMO?

With an HMO you pay a monthly premium for which you are assigned to a network of physicians, specialists, and hospitals who provide your medical care. A primary care physician oversees your care and you can only see physicians within your network. Prescriptions may completely covered or partially covered and generally require a co-payment of $5 to $10. This is the cheapest type of health insurance.

What’s a PPO?

A PPO is similar to an HMO, but it allows you to visit non-network physicians without a referral from your primary care physician. You may have to pay for the non-network physicians fee, then get partial reimbursement from your PPO provider. Co-payments are generally $5 to $10, and this plan costs a little more than an HMO.

How do I choose a health insurance plan?

Ideally, you want to choose a plan that will give you the most amount of benefits for the least amount of money. If you want to continue seeing your current physician, find out what plans he or she is associated with. And if you have special medical needs, make sure the plan you choose will provide for those needs.

Will a new health insurance policy cover my pre-existing condition?

Most of the time the answer is no FOR ADULTS BUT FOR CHILDREN UNDER 19 THEY ARE EXEMPT FROM OR ARE CONSIDERED GUARANTEE ISSUED EXCLUDES PREXSISTING CONDIIONS PER THE HEALTH CARE REFORM ACT., but it depends on the insurance company and your individual circumstances. Some “individual” health insurers provide credit for having satisfied the pre-existing condition exclusion under a prior plan. If you’re thinking of switching health insurance policies, be sure you understand the implications regarding pre-existing condition coverage. Discuss this with your agent.

When does my coverage begin?

If you are submitting your application by:

  • Internet using a credit card – The earliest your coverage can begin is the day following transmission, if all other eligibility criteria have been met.
  • Mail and writing a check – The earliest that your coverage can begin is the day following the U.S. Postal Service postmark, if all other eligibility criteria have been met.

Short Term Insurance Plans

Is Short Term Health Insurance Worth Getting?

What is short term health insurance?

Designed for healthy individuals and families, short-term policies provide an affordable safety net while switching from one life event to another without a health plan.  Lose your job, recent college graduate, divorced, or returned and quite eligible for Medicare? Then consider short-term insurance (but remember that most of those scenarios are qualifying events, which means you’d be eligible to purchase an ACA-compliant plan instead – so check those options too.)

Short term plans are not regulated by the Affordable Care Act (Obamacare), So they are still available year-round. For people who missed open enrollment and do not have a qualifying event that allows them to purchase an ACA-compliant plan, a short-term policy can be a good solution to bridge the gap until general open enrollment begins again.

Short-term plans generally provide coverage for one to six months are not renewable, although many states allow two back-to-back short-term plans to be purchased.

But it’s important to know that short-term plans are not considered minimum-essential-coverage under the ACA, so people with short-term Insurance are subject to the ACA’s individual mandate penalty unless they’re otherwise exempt from it. The individual mandate allows a gap in coverage of fewer than three months, so you could have a short-term policy for two months in between other minimum essential coverage and would not be subject to a penalty. But relying on short-term coverage for more than two months would result in a penalty being assessed.

Emergency events are nearly always covered, as is hospital care, but in general, coverage is limited so study your policy carefully.  Short -term plans don’t cover pre-existing conditions, and they typically do not cover maternity, mental health or prenatal care. (They are not required to cover the ACA’s essential health benefits). Although their sale is not limited to open enrollment windows, short-term plans do use very basic medical underwriting to determine and applicant’s eligibility for coverage.

Although premium subsidies are not available for short-term policies, the plans are considerably less expensive than ACA-compliant major medical plans. And you can get coverage as early as the next day once you answer just a few simple questions about your health.

Bottom line: Temporary health insurance is a low-cost option to protect yourself temporarily from unforeseen and emergency medical expenses. But it is not a substitute for ACA-compliant coverage, and it doesn’t include the myriad consumer protections provided under the law.

Long Term Health Insurance

What is long term care?

Long term care refers to assistance with the very basic, everyday activities that most of us can do for ourselves. We call them ADLs or Activities of Daily Living. As a result of illness, injury or advanced age, many people need assistance in order to eat or dress or bathe. The need for long term care may also result because a person has cognitive impairment. Some people need supervision or reminders to accomplish every day activities, such as using the toilet, eating, bathing, dressing, and so forth.

Who should consider purchasing long term health insurance?

Anyone who is age 45 or older should consider long term health insurance when planning his or her insurance needs. “Consider” does not necessarily mean “purchase”. Depending upon a person’s particular insurance budget, there may be other insurance needs that deserve priority. Certainly, the purchase of long term health insurance should never create a financial hardship.

Does Medicare cover long term care?

Medicare will only provide for some skilled care in very limited situations. It was not designed to cover activities of daily living. Rather, it was designed to cover acute care or skilled care such as that provided during a short hospital stay. The Health Care reform act has a small provision for long term care but it is not intended to be a policy solely for long term care see below for an explanation to the healthcare reform benefit for long term care.

Does Medicaid cover long term care?

Yes, but in very limited situations. Medicaid will generally apply only to those with very low incomes and very few assets. Even then, there is only limited choice of what and where benefits will be provided. For example, there might be limited choice of physician and facility, no control over the number of people sharing a room, or no ability for the family to pay for any extras.

Will a long-term insurance policy affect my eligibility for Medicaid benefits?

Medicaid rules vary from state to state. Most likely, when long-term care benefits begin, they would either disqualify you for Medicaid or the state will be entitled to the amounts that you receive.

I bought long-term-care insurance a few years ago. In light of health-care reform, should I keep my policy?

Don’t drop your long-term-care policy, especially if you’ve been paying premiums for several years. The national, voluntary long-term-care program included in the health-care reform law will provide some money to help cover long-term-care expenses. But it offers much less coverage than the average cost of care and could leave you far short if you’re depending on it to pay your long-term-care bills.

Starting next year, employees of companies that choose to participate will be automatically enrolled in the Community Living Assistance Services and Supports (CLASS) Act and will pay for it through payroll deductions, unless they opt out. Other workers and the self-employed will be able to enroll on their own. Retirees are not eligible to sign up.

After paying premiums for five years (and you must have worked for three of those five years), you’re eligible for a cash benefit of about $50 per day if you’re unable to perform two or three activities of daily living, such as walking, bathing or dressing, or if you are cognitively impaired. (The U.S. Department of Health and Human Services is still working out the details.)

That benefit could help a bit, but it falls far short of covering the actual cost of long-term care — which currently averages $219 per day in a nursing home, or $168 for eight hours of care by a home health aide.

The Department of Health and Human Services hasn’t set the premiums yet, but the American Academy of Actuaries estimates that they could average as much as $125 to $160 per month (or as little as $5 per month for those below the poverty line).

The high-end estimate is about the same price that a relatively healthy fifty something would pay for a private long-term-care policy providing about three times that daily benefit for three years. (A study by actuarial consulting firm Milliman found that only 8% of long-term-care claimants who had policies with a three-year benefit period exhausted their benefits.)

A big plus of the CLASS Act is that you can’t be rejected for coverage because of your health, so it could help people with medical conditions who don’t qualify for private long-term-care insurance. And it does cover many services that aren’t eligible for benefits under most long-term-care plans, including homemaker services, home modifications and transportation that could help you stay out of a nursing home.

Life Insurance

How much life insurance do I need?

In a family situation, you need to consider your “financial worth” to your family. In other words, if you were to die tomorrow, how much money would your spouse and children need to maintain the standard of living you have established for them? How much would it take for them to live comfortably and have financial stability? A professional life insurance review will help you determine the amount of life insurance needed to accomplish your personal goals.

What are the tax advantages of life insurance?

Generally death benefits paid to your beneficiary are received income tax free. Cash values in a permanent life insurance policy can accumulate on an income-tax free basis.

How much will life insurance cost me?

There are several factors used to determine the cost of life insurance, such as age, sex, health condition, height and weight, tobacco use, occupation, moral character, and whether or not you participate in any dangerous sports activities. The type of life insurance policy (term or permanent) and the frequency of premium payments will also affect the total cost.

I am young and single, do I need life insurance?

Two key factors used in determining the eligibility for and the cost of life insurance are age and health condition. Each year we grow older, the cost of life insurance increases and our health condition can change very rapidly. Young single people die prematurely and incur final expenses that someone must pay. If your future plans include a spouse and children, you may want to consider the purchase of life insurance while you can buy it at the lowest price.

Should I buy life insurance on my children?

Life insurance purchased on any person’s life, whether it be an adult or a child is designed to pay that person’s final expenses. Juvenile life insurance premiums are very inexpensive and if you purchase a permanent life insurance policy, that premium will never change, even when the child is an adult.


What is Medicare?

Medicare is a Health Insurance Program for:

  • People 65 years of age and older.
  • Some people with disabilities under age 65.
  • People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).
  • People with Amyotrophic Lateral Sclerosis (ALS) -also known as Lou Gehrig’s Disease

Medicare has four Parts:

  • Part A (hospital insurance) – Most people do not have to pay for Part A.
  • Part B (medical insurance) – Most people pay monthly for Part B.
  • Part C (managed care) – this is optional, but beneficiaries must have both Parts A and B coverage to enroll.
  • Part D (drug coverage) – new in 2007. Most people pay for Part D coverage.

Who is eligible for Medicare?

To be eligible for Medicare, one must be a U.S. citizen living in the U.S. or a foreign national who has applied for legal residency and has lived in the U.S. for a minimum of five years.

Here are the categories of Medicare eligibility:

  • Social Security/Railroad Retiree:
    Persons aged 65 or older who are eligible for Social Security or Railroad Retirement benefits. Medicare Part A is automatic and Part B is optional. Medicare Part A becomes available at age 65. For Medicare Part B enrollment can occur three months before, during the month of, and up to three months after a qualified individual’s 65th birthday.
  • Social Security Disability/ESRD Recipients:
    People under age 65 who meet the eligibility criteria for Social Security Disability can qualify for Medicare. However, individuals must first be entitled to Social Security benefits for 24 successive months in order to get Medicare. Thereafter, Medicare Part A is automatic and Part B is optional. In addition, individuals with End Stage Renal Disease (ESRD) are also eligible for Medicare.
  • Voluntary Enrollee:
    Persons age 65 or older who are not qualified for Social Security can purchase Medicare coverage. A person who buys Medicare has the option of purchasing both Medicare Part A and Part B, or only Part B.

What is the difference between Medicare and Medicaid?

Medicare and Medicaid are very different. Medicaid is a federal program for low-income, financially needy people, set up by the federal government and administered differently in each state. Medicare was created to deal with the high medical costs that older citizens face relative to the rest of the population–especially troublesome given their reduced earning power. However, eligibility for Medicare is not tied to individual need. Rather, it is an entitlement program; you are entitled to it because you or your spouse paid for it through Social Security taxes.

Although you may qualify for and receive coverage from both Medicare and Medicaid, you must meet separate eligibility requirements for each program; being eligible for one program does not necessarily mean you are eligible for the other. If you qualify for both, Medicaid will pay for most Medicare Part A and B premiums, deductibles, and copayments.

What happens to my Medicare if I go back to work?

As long as you continue to have a disability, you should be able to keep your Medicare when you go to work for at least the first 12 months. After that, if you are still disabled, you will be able to keep your Medicare if you continue working. There is a special provision that is called Extended Medicare Coverage that allows Social Security beneficiaries who have worked their way off of benefits to continue Medicare coverage. This extended coverage is for at least 93 months following the completion of the Trial Work Period. Because work efforts vary from individual to individual, please talk to a benefits counselor of the Social Security Administration to see the exact dates that Extended Medicare Coverage will last.

Health Savings Account

How does a Health Savings Account work?

A Health Savings Account is a savings account designed to help consumers save and pay for their healthcare expenses on a tax-advantaged basis. Funds can be deposited by consumers into the account on a tax-free basis and may be withdrawn without tax consequences to pay for qualified medical expenses. Employers may also deposit money into an employee’s Health Savings Account on a tax-free basis. Funds in the account may be invested and earnings will not be taxed, and unused money will roll over from year to year.

Health Savings Accounts may only be used in conjunction with HSA-compatible health insurance plans. These health plans typically have lower monthly premiums and higher deductibles than other types of health insurance plans. Funds from the Health Savings Account may be used to pay for qualified healthcare expenses accruing toward the deductible. Once the deductible is met, coverage under the HSA-compatible health plan pays for covered expenses (subject to co-payments) for the remainder of the year.

Health Savings Accounts, used in combination with HSA-compatible health insurance plans, give consumers control over how their healthcare dollars are spent, and provide a valuable means of saving and investing for healthcare needs and for retirement.

Can I roll over funds from other accounts into my HSA?

You can make a one-time distribution from an IRA to fund your HSA, provided it doesn’t exceed HSA contribution limits. Employees have the opportunity for a one-time, tax-free transfer of funds from their flexible spending account (FSA) or health reimbursement arrangement (HSA) to their HSA.

What is an HSA?

“HSA” stands for Health Savings Account. HSAs allow consumers to pay for qualified medical expenses with pre-tax dollars—meaning income-tax free—and save for retirement on a tax-deferred basis. “HSA” stands for Health Savings Account. HSAs allow consumers to pay for qualified medical expenses with pre-tax dollars—meaning ` income-tax free—and save for retirement on a tax-deferred basis.

HSAs are similar to individual retirement accounts (IRAs), but even better:

  • Pre-tax money is deposited each year into an HSA and can be easily withdrawn at any time with no penalty or taxes to pay for qualified medical expenses. Withdrawals can also be made for non-medical purposes, but will be taxed as normal income and are subject to a 10 percent penalty if done prior to age 65.
  • Any HSA funds not used each year remain in the account, and earn interest tax-free to supplement medical expenses at any time in the future.
  • Like an IRA, the account belongs to you, not your employer. But unlike an IRA, your employer CAN contribute to your HSA.
  • For the latest info HSA contributions please vist IRS.gov

Will my money be safe with a HSA?

Funds in an HSA are held in a trust and are administered by a bank, insurance company, or other approved Trustee. This institution is often referred to as your HSA Administrator. Funds in your HSA are invested at your discretion. Typically an HSA will allow you to choose from one or more of the following investment options:

  • Interest-bearing account
  • CDs
  • Money market funds
  • Mutual Funds

If you are looking to minimize your investment risk, you may want to consider an interest-bearing account; these accounts are FDIC insured. On the other end of the spectrum, mutual funds may provide a greater return, but are more risky, and are not FDIC insured.

How much can I contribute to my HSA?

Maximum yearly contributions (and associated tax deduction) are determined as follows:

  • For individuals, it is $3,050
  • For families it is $6,150

You do not have to contribute the maximum each year, although some HSAs require a small minimum monthly contribution.

Note: If you are between the ages of 55 and 65, you can make an additional annual “catch up” contribution of $1,000(set by statute and unchanged from 2009.)

Retirement Income Planning

Can you help me determine how much savings I will need to enjoy my retirement?

A “retirement income plan” is designed to do exactly that. It will tell you how much you will need and how much you need to be saving to be able to reach your goal.

When should I turn on my Social Security?

When to start your Social Security income is such a very important decision. Should you start at age 62 or 66 or 70? The longer you wait, the bigger the monthly income will be and the bigger income your spouse would inherit. It grows by about 8% per year! But can you afford to wait? How is your health? What is your life expectancy? These all play into your decision.

After I retire, what percentage of my savings can I spend and not run out of money?

Most experts say you should never use more than 4% of your savings per year, or you run the risk of running out of money. We can show you ways to increase this by 25% or more and still avoid running out of money.

How can I keep pace with inflation?

Inflation could become a major problem. Some solutions will give you less when you start and then increase it each year by a certain percent, say 3%. But will 3% be adequate? What if inflation hits 15%? Our solution to inflation is to use annuity ladders. To learn how these work, give us a call.

I have lost so much money in the market, is there a way to avoid this risk and still grow my savings?

Sure. We have some very powerful, risk free, ways to grow your money for retirement income. Call us to learn how.

I have both 401k/IRA savings and non qualified money, what should I spend first?

This depends on your situation. Many advise you spend the 401k/IRA last, but this is not always good advice. Remember, 401k/IRA money is 100% taxed when used. Do you think taxes will be higher in the future? If yes, maybe spending the taxable money first to pay the lowest amount of taxes would be better. Call us so we can help you figure out which is best in your case.

Dental and Vision Health Insurance

How does dental insurance work?

Dental insurance works in much the same way that medical insurance works. For a specific monthly rate (or “premium”), you are entitled to certain dental benefits, usually including regular checkups, cleanings, x-rays, and certain services required to promote general dental health. Some plans will provide broader coverage than others and some will require a greater financial contribution on your part when services are rendered. Some plans may also provide coverage for certain types of oral surgery, dental implants, or orthodontia.