Group Health Insurance Plans

Making decisions about health insurance probably isn’t at the top of your list of favorite things to do. However, health insurance is an important part of your finances and medical care, so you want to make an educated choice about which plan to enroll in. If you are offered group health insurance through your employer, you can take advantage of several benefits.

What Are Group Health Plans?

Group health insurance plans are employer-based plans that offer coverage to a pool of employees. In contrast, an individual plan is purchased to cover only one person or family. The difference between how group and individual plans are designed affects your costs.

Why Choose a Group Health Plan?

Group health insurance plans hold several advantages over individually purchased health insurance, including lower costs and convenience.

  • Shared risk. Because a group plan covers multiple people, the risk is spread out over what is likely a fairly healthy group of participants. This helps keep your premium rates lower than individual plans whose rates are based on individual risk.
  • Shared costs. With group coverage, your monthly premium is even lower because the cost is shared between you and your employer. Employers will pay varying percentages of coverage, but whatever amount they choose, it reduces the amount you owe. Depending on your employer’s benefits, you may be responsible for the full cost of the premium for your enrolled family members, or your company may choose to contribute to those premiums as well.
  • Tax advantages. If you pay health insurance premiums for an employer-sponsored group health plan, you can pay your premium with pre-tax dollars, which means you are not taxed on the money that is spent on your premium. This lowers your taxable income, giving you another financial benefit from group health coverage. If you are enrolled in an individual health plan, your premium will typically be paid with taxed dollars.
  • Easy enrollment. A huge advantage of group health coverage through your employer is the ease of enrolling and paying. Your employer will handle the administrative burden of facilitating coverage, and typically your premiums will be automatically deducted from your paychecks.
  • COBRA. Under certain circumstances, such as voluntary or involuntary job loss, you have the option to keep your group insurance plan for a certain length of time under the Consolidated Omnibus Budget Reconciliation Act (COBRA). You will have to pay more for the premium because your employer is no longer paying a share of the cost, but it is an option available to you while you work on acquiring new medical coverage after a job loss or other qualifying circumstance. For more information on COBRA, visit www.dol.gov/dol/topic/health-plans/cobra.htm.

 

Individual Health Insurance

Individual health insurance is health coverage that is purchased by an individual or a family and is not tied to a job or a group of policyholders.

Many people get health insurance through their employers. However, if you do not currently participate in your employer’s health plan, or if your employer doesn’t offer coverage, obtaining individual insurance is a good route to go to ensure that you and your family will receive affordable routine health care and will be protected from very high costs in the event of a medical emergency.

The following is an overview of different types of coverage and where you can get them.

 1. Obtain Insurance in the Individual Market

Obtaining an individual policy can be expensive. Before purchasing, it is important to shop around for the best plan with the lowest premium. In general, a low premium means higher out-of-pocket costs when you need care; a high premium means lower out-of-pocket costs. You’ll also want to make sure you are covered in case of a major medical accident and also for preventive care.

2. Shop for Coverage Using the Health Insurance Marketplaces

The Health Insurance Marketplaces (also known as Exchanges) are a new way to buy health insurance and apply for Medicaid. Created by the ACA, the Marketplaces are designed to help you easily find health insurance that fits your budget.

Eligible individuals can shop for coverage using the Marketplaces. Qualified health plans in the Marketplaces are sold and run by private companies, and every plan covers a core set of 10 essential health benefits, which include emergency, prescription drug and mental health services. Additionally, all plans offered in the Marketplace must provide free preventive care, with 100 percent of the costs paid for by insurance companies.

Extended coverage policies are broken down into four categories: bronze, silver, gold and platinum. The category you choose affects how much your premium costs each month and how much you pay for things like hospital visits or prescription medications. Depending on your income, you may even be eligible for an advance payment tax credit that lowers your monthly premium right away.

Under the ACA, no qualified health plan can refuse to cover people with pre-existing conditions. You will have guaranteed coverage and renewability, regardless of a pre-existing condition (like cancer or diabetes), gender, age, etc. There is also a “catastrophic” plan option available to young people and low-income individuals.

3. Get on Your Parent’s, Spouse’s or Domestic Partner’s Plan

If your spouse or domestic partner has an employer-sponsored plan that is open to family members, consider joining and enrolling your children. The ACA extended coverage for young adults up to age 26 on plans offering dependent coverage, regardless of their marital or student status.

4. Obtain Insurance Through COBRA and State-sponsored Programs

If you recently left your job or had your hours reduced and were subsequently dropped from employer-based coverage, you may be able to obtain coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

After you leave your job, your former employer no longer pays for any of your insurance costs. Therefore, when you have COBRA coverage, you usually have to pay the entire premium yourself, plus a small administrative fee. As a result, COBRA coverage can be very expensive.

Your state may have laws that complement federal COBRA regulations and other protection statutes, such as mini-COBRA plans. If you work for an employer with 20 or fewer employees, your state may have mini-COBRA laws that allow you to obtain benefits.

5. Obtain Insurance Through Protections Under HIPAA

Under the Health Insurance Portability and Accountability Act (HIPAA), at least one private insurer must sell you a policy if you meet all of the following conditions:

  • You previously had 18 months of coverage without a break for more than 63 days
  • The last day of your coverage was through your former or current employer
  • You do not have a COBRA or mini-COBRA option available

6. Determine Whether you are Eligible for Medicaid or Other State Programs

Medicaid provides health coverage for some low-income individuals, including families and children, pregnant women, the elderly and people with disabilities. People who do not qualify for full Medicaid benefits may still be eligible for breast cancer and cervical cancer screenings or for assistance with certain treatments.

The rules for Medicaid enrollment differ slightly from state to state. You can visit www.medicaid.gov or use your state’s Marketplace to determine whether you are eligible for Medicaid coverage in your state. You can also consult your local health department to see if there are any public coverage options available in your area.

In addition, the ACA established a temporary reinsurance program to reimburse participating employment-based plans for a portion of the cost of providing health insurance coverage to early retirees and their spouses, surviving spouses and dependents. If you or your spouse has recently retired, you may qualify for this coverage.

With all the different health plans available out there, it can be difficult to select the plan that best meets the needs of you and your family, and, ultimately, your budget. While it can be tempting to pick the plan with the lowest premium, you don’t want to be is surprised by high out-of-pocket costs or network restrictions when seeking medical care. For more information about your coverage options, or for help selecting the best health plan for you, contact Snyder Insurance Services today.

Life Insurance

Life insurance isn’t a fun thing to think about, and it may seem like an unnecessary expense. But if you have people who depend on you for financial support, then life insurance is really about protecting them in case something happens to you – your designated beneficiary would collect a financial benefit upon your death. Life insurance can be confusing, so here’s a rundown of the basics.

Types of Life Insurance

Term: This is the simplest and generally the cheapest form. You buy coverage for a specific period of time. It can usually be renewed, but premiums will increase based on age and health factors. There is no cash value.

All other types of life insurance are permanent, but there are several varieties. They all include a savings element that builds cash value, in addition to the death benefit. Once that cash value accumulates, it is accessible to the policyholder tax-free. The following are some of the common types of permanent life insurance.

Whole Life: You purchase this policy to cover your entire life, as long as you keep paying premiums. Premiums remain constant throughout the policy, and the company invests a portion of your premium that becomes the cash value. These are more expensive than term policies in the early years, but they even out because the premium does not increase.

Universal Life: This policy is similar to whole life, but has the potential for higher earnings on the savings component. It is more flexible in terms of changing premiums and face value throughout the policy. There is usually a guaranteed return on the cash value. Disadvantages include higher fees and the possibility of increasing premiums.

Variable Life: A variable life policy generally has fixed premiums, and you have control over the investment decisions for the cash value portion. However, this is riskier because there is not guarantee for the cash value.

If you have people who depend on you for financial support, it’s important to make an educated decision about life insurance options.

How Much to Buy?

Many people decide based on an income replacement calculation, between 5 and 10 times the amount of your current income.

Think about your personal circumstances: Is yours the sole income in your household? Are there other expenses, such as college tuition, that may arise in the future? Don’t forget to include potential medical and funeral costs. Above everything, you want to be sure your family does not get stuck with bills, debts or expenses that they cannot afford. Depending on your needs, you may want to consider buying supplementary coverage beyond what offers.

Why Purchase Now?

Buying life insurance may seem unmanageable right now, but it could be a smart decision. Unlike many other benefits, life insurance is actually more affordable right now than in the recent past. Plus, during this tough economic period, ensuring that your family will be financially secure in the future is more important than ever.

If you have more questions about our life insurance benefit, please contact us.