I briefly mentioned this before, but here's a trick you can use to help make educated decisions when you need to buy health insurance.  This applies to both group and individual policies.

As a company, we primarily focus on the following two applications of Health Reimbursements Arrangements (HRAs):

We spend a lot of time talking about how you can save money by raising the deductible on your health insurance plan.  In case you're still skeptical, I'm going to go over some real numbers that I got through an online quote engine so we can see how a higher deductible health plan works in action.

A lot of new health benefits plans have become available to employers in the last few years. Many employers are particularly interested in MERPs or "Medical Expense Reimbursement Plans".  I'm going to go over some basic information you might find interesting about MERPs, and then I'll talk a little bit about what interested employers can do to learn more.

If you're interested in reading more about how risk plays a role in health insurance, head on over to the newest Cavalcade of Risk hosted on Political Calculations.  There are a lot of great posts up there. 

The Utah Health Insurance Exchange launched last week for small employers in the state of Utah. The purpose of the exchange is to provide consumers with important information so that they can make informed decisions about their health insurance options. From an employers view, the exchange allows them to set up a defined contribution health plan and allow employees to choose different policies from the exchange.

Health insurance is difficult to understand for employers and for individuals. Most employers prefer to focus on their customers vs their health benefits, and often procrastinate making decisions about their annual plan changes.

Yesterday, I wrote about Section 125 Premium-only-Plans (POP).  These plans allow employees to pay for their health insurance premiums tax-free. Traditionally, employers with group insurance plans offer a POP plan so that an employee can pay his or her portion of the group premium with tax-free dollars.  However, recent changes to federal law now allow employees to utilize Section 125 POPs to pay for their individual insurance premiums tax-free.  Subsequently, some states (e.g. Minnesota) are beginning to pass state laws mandating that employers offer Section 125 POP (for individual policies) to their employees. 

Beginning January 1, 2009, employees can use Section 125 POP plans to pay for their individual insurance premiums tax-free. 

Under IRC Section 1.125-1(m), employees are able to purchase individual health insurance policies with tax-free dollars.  This law-change presents a huge tax-savings opportunity for small businesses and their employees.  Now employees do not pay federal or state income tax on the amounts used to pay insurance premiums and the employee and employer do not pay FICA or FUTA (i.e. Medicare, Social Security, or unemployment insurance taxes) on these amounts.  The result is a reduction in the the cost of individual insurance policies by 30-50% depending on the tax-bracket.

This post is a follow up to my previous post about Cafeteria Plans (i.e. Section 125 Plans). One of the most common (if not the MOST common) forms of Section 125 plans is a Premium Only Plan (aka "Section 125 POP", "POP plan", "Premium-only Cafeteria Plans", etc.).

In my previous post, I wrote about the 1996 HIPAA legislation and its requirement that states offer guaranteed-issue health insurance to all of its HIPAA-eligible residents.  I also mentioned that 40 states go far and above what HIPAA mandates.  These states offer forms of guaranteed issue individual health insurance (e.g. risk pools) to their medically uninsurable residents, regardless of the HIPAA requirements.
 

Health insurance sold on a guaranteed issue basis cannot reject applicants based on health or risk status. In a few states (e.g. New Jersey) all individual market insurers must guarantee issue all individual plans. In others states guaranteed issue requirements are much less restrictive.

Let's take a look at some of the healthcare related blogs posts of note this week.

DrRich put up a great Grand Rounds this week.  It's worth reading just for his unique brand of humor if nothing else.

You can also see this week's Cavalcade of Risk at Money Blog.  Go check it out!

This post is about possibly the greatest secret of the 1996 HIPAA legislation, and maybe even individual health insurance.  That is, federally mandated guaranteed-issue individual health insurance in all 50 states.

One of our distributors recently reported a terrific conversation with a Wyoming Department of Insurance (DOI) representative.  The representative was a big fan of HRAs and wanted the State of Wyoming to implement one for the state employees!   The representative also did not think that Wyoming Small group law applied to insurance policies purchased with HRA dollars. 

We all know that the Wyoming Department of Insurance does not regulate HRAs so this is terrific news for Wyoming citizens.

I have said many times on this blog that the current healthcare system is a mess as if it's common knowledge that everyone agrees with.  This might come off as confusing because many people (particularly conservatives) are completely opposed to the idea of reform.

The Kansas Department of Insurance confirmed both verbally and in writing that Kansas Insurance Laws DO NOT Apply to HRAs and other self-insured plans:

I want to tell you a little story that might not seem like it has anything to do with health care.  Please bear with me.  I'll tie it all together.

I am writing this post because I realize most Americans do not understand how a Cafeteria Plan (also known as a "Section 125 Plan") works.  The amazing thing is that virtually all Americans utilize (or have access to) a Cafeteria Plan at some point during their working career, yet many do not take full advantage of them.  As a tax-paying American citizen, you should understand how a Cafeteria Plan works because, when utilized correctly, a Cafeteria Plan can increase your take-home-pay without any change in your expenditures.  

As I have continued to listen to the debate on health care reform, there is a continual mention of employer sponsored health care. A number of people believe that there should be mandate for employers to pay for every employees’ health benefits. That is because our system for most of our lives has been built around the idea that employers pay for our health benefits. The only reason this developed in the first place is because employers were able to create tax advantages for both the company and the employees by offering benefits. Employers could deduct health benefits as expenses, and employees could receive health benefits through their employer tax-free.

Owners establishing an HRA for their employees should always include themselves and their spouses in the HRA platform, although in some cases such Owners may not receive the same amount of tax benefits as non-owner employees.

1. HRAs are legal for employers of all sizes.
2. The DOI does not regulate employers (or HRAs).  Rather, they regulate carriers and producers (i.e. agents).
3. An individual employee who has an HRA can buy individual health insurance and receive reimbursement from an HRA for the premium.  If the employee works for a company with less than 50 employees, the carrier may be required to offer that same policy to all employees of the company subject to Colorado small group regulations.

In order to fix the U.S. health care system, we must first ask ourselves why it is broken? Certainly a nation that could put a man on the moon back in the 1960s can provide a decent, efficient health care system for all its citizens.

If you're like most people, your health insurance costs a lot more than you'd like.  Here are seven things you can do to save a ton of money:

If you do not know the difference between a Health Savings Account (HSA) and Health Reimbursement Arrangement (HRA), you should start by reading this earlier post. I want to focus this blog post on the reason why every person should consider a Health Savings Account (HSA) qualified plan when buying a personal policy.

I spend a lot of time on this blog talking about how great HRAs are, but a lot of people don't really understand how they work.  The great thing about HRAs is that they can work pretty much however you want them too.  No other health benefits option offers as much flexibility.

Most people don't realize that the legislators that write the laws governing healthcare aren't actually affected by any of those laws.  State and federal law-makers have their own guaranteed lifetime health insurance plans which are paid for with taxpayer money.