Sickinsurance

Using Your Health Savings Account to Build Retirement Savings

14th May, 2010 - Posted by Admin - No Comments

Health Savings Accounts are an excellent way to build a second retirement account. These tax-favored accounts, which have only been available since January of 2004, can be opened by anyone with a qualifying high-deductible health insurance plan. Once you open an HSA account, you can place tax-deductible contributions into it, which grow tax-deferred like an IRA. You may withdraw money tax-free to pay for medical expenses at any time.

The biggest reason more people don’t retire before age 65 is lack of health insurance, and many Americans reach age 65 woefully unprepared for the medical expenses they’ll face once they do retire. One of the most important long-term reasons for establishing an HSA is to build up some money for medical expenses incurred during retirement.

Fidelity Investments reports that the average couple retiring in 2006 will need 190,000 to cover medical expenses during retirement. This assumes life expectancies of 15 years for the husband and 20 years for the wife.

HSAs are, without exception, the best way to build up money to pay for medical expenses during retirement. You should not contribute any money to your traditional IRA, 401 (k), or any other savings account until you have maximized your contribution to your HSA. This is because only health savings accounts allow you to make withdrawals tax-free to pay for medical expenses. You can take these distributions anytime before or after age 65.

Your HSA contributions won’t affect your IRA limits — 3,000 per year or 3,600 for those over 55. It’s just another tax-deferred way to save for retirement, with the added advantage being that you can withdraw funds tax-free if they are used to pay for medical expenses.

For early retirees who are healthy, a health savings account can also be a smart option to help lower their health insurance costs while they wait for their Medicare coverage. The older someone is, the more they can save with an HSA plan. For many people in their 50’s and 60’s who are not yet eligible for Medicare, HSAs are by far the most affordable option.

Any money you deposit in your health savings account is 100% tax-deductible, and the money in the account grows tax-deferred like an IRA. For 2006, the maximum contribution for a single person is the lesser amount of your deductible or 2,700. In other words, if your deductible is 3,000, you can contribute a maximum of 2,700; if your deductible is 2,000, then that is the maximum. For families, maximum is the lesser of 5,450 or the deductible.

If you’re 55 and older, you can put in an extra 700 catch-up contribution in 2006, 800 in 2007, 900 in 2008, and an additional 1,000 from 2009 onward. The contribution limit is indexed to the Consumer Price Index (CPI), so it will increase at the rate of inflation each year.

How much you accumulate in your HSA will depend on how much you contribute each year, the number of years you contribute, the investment return you get, and how long you go before withdrawing money from the account. If you regularly fund your HSA, and are fortunate enough to be healthy and not use a lot of medical care, a substantial amount of wealth can build up in your account.

Health savings accounts are self-directed, meaning that you have almost total control over where you invest your funds. There are numerous banks that can act as your HSA administrator. Some offer only savings accounts, while others offer mutual funds or access to a full-service brokerage where you may place your money in stocks, bonds, mutual funds, or any number of investment vehicles.

One of the biggest advantages of retirement accounts like HSAs are that the funds are allowed to grow without being taxed each year. This can dramatically increase your return. For example, if you are in the 33% tax bracket, you would need a 15% return on a taxable investment to match a tax-deferred yield of only 10%.

As another example, if you are in a 33% tax bracket and were to invest 5,450 each year in a taxable investment that yielded a 15% return, you would have 312,149 after 20 years. If you put that same money in a tax-deferred investment vehicle like an HSA, you would have 558,317 – over 240,000 more.

Because catch-up contributions are allowed only for people age 55 and older, if one or both of you are under age 55 you should establish your HSA in the older spouse’s name. This will allow you to capitalize on the expanded HSA contribution limits for people in this age range and maximize your HSA contributions. Once that person turns 65 and is no longer eligible to contribute to their HSA, you can open another health savings account in the younger spouse’s name.

Strategies to Maximize your HSA Account Growth

If your objective is to maximize the growth of your HSA in order to build up additional funds for your retirement, there are three important strategies you should implement.

Strategy #1: place your money in mutual funds or other investments that have growth potential. Though this is riskier than placing your money in an FDIC-insured savings account, it is the only way to really take advantage of the tax-deferred growth opportunity that an HSA provides.

Strategy #2: delay withdrawals from your account as long as possible. Though you may withdraw money from your HSA tax-free at any time to pay for qualified medical expenses, you do have the option of leaving the money in the HSA so that it continues to grow tax-free. As long as you save your receipts, you can make medical withdrawals from your account tax-free at any future date to reimburse yourself for medical expenses incurred today.

As an example, let’s say a 45 year old couple places 5,450 per year in their HSA over a period of 20 years, they have 2,000 per year in qualified medical expenses, and they get a 12% return on their investments. If they withdraw the 2,000 from their HSA each year, they’ll have a net contribution of 3,450 per year into their account, and they’ll have 248,581 in their account when they begin their retirement years.

If on the other hand they delay withdrawing that money, they will have 392,686 in their account at age 65. If they choose they can withdraw the 40,000 to reimburse themselves tax-free for the medical expenses incurred during that 20 year period, and still have 352,686 in their account – over 100,000 more than if they had withdrawn the money each year.

Strategy #3: make the maximum allowable deposit to your HSA at the beginning of each year. Even though you are allowed until April 15 of the following year to make deposits to your HSA, you should take advantage of the tax-free growth in your account by funding it as soon as possible. The extra interest you can earn by contributing to your account on January 1 of each year rather than the next April 15 can amount to over 40,000 in a 20 year period, and over 100,000 in 30 years.

Using Your HSA to Pay for Medical Expenses during Retirement

When you enroll in Medicare, you can use your account to pay Medicare premiums, deductibles, copays, and coinsurance under any part of Medicare. If you have retiree health benefits through your former employer, you can also use your account to pay for your share of retiree medical insurance premiums. The one expense you cannot use your account for is to purchase a Medicare supplemental insurance or “Medigap” policy.

Though Medicare will pay for the majority of health expenses during retirement, there many be expenses that Medicare will not cover. Nursing home expenses, un-conventional treatments for terminal illnesses, and proactive health screenings are all examples of medical expenses that will not be paid for by Medicare, but that you can pay for from your HSA.

Long-term care is assistance with the activities of daily living, such as dressing, bathing, or feeding yourself. It can be provided in your home, a retirement community, or a nursing home. Long-term care expenses can be paid for using funds from your HSA, and long-term care insurance can even be paid for from the HSA up to the following maximum annual amounts:

- Age 40 or under: 260
- Age 41 to 50: 490
- Age 51 to 60: 980
- Age 61 to 70: 2,600
- Age 71 or over: 3,250

To establish a health savings account, you must first own an HSA-qualified high deductible health insurance plan. Compare HSA plans side by side to determine the best value to meet your needs. Once you have your high deductible health insurance plan in place, you can open your Health Savings Account with the financial institution of your choice.

Types of Health Insurance

7th May, 2010 - Posted by Admin - No Comments

Health insurance is designed to protect against loss of income and expenses for medical care. There are two broad categories of health insurance policies: disability income policies and medical expense policies.

Disability income policies can also be referred to as loss of income, loss of time or replacement income. This type of policy will pay benefits to an insured who is disabled and can no longer work

to earn a regular income. Payments can be weekly or monthly depending on the policy.

Medical expense policies are represented by a wide range of coverage from very minimal to comprehensive packages with multiple coverage. Some include both accidents and illnesses, various hospital expenses and other costs pertaining to medical care such as accident and sickness policies, hospital-stay policies, basic medical expense policies and major medical expense policies.

Any of these policies might cover various combinations of the above and may be paid in a lump sum.Some policies cover only accidents and not illness. As you might imagine, policies like this are very specific about what is considered an accident.

It is important to understand what is defined as an accident as it pertains to the health insurance industry: an accident is an event that is unforeseen and unintended.

Keep in mind that any discussion of this type of policy also applies to any type of policy that includes accidental coverage, not just accident specific policies.

Accident benefits are most commonly paid for accidental loss of life (also called accidental death), accidental loss of limb or sight (dismemberment), loss of time andor income, hospital expenses, surgical expenses, and medical expenses like visits to the doctor.

Accidental death benefit can also be referred to as principal sum. This type of coverage should not be confused with life insurance. There is a world of difference between the two. Life insurance policies will generally be paid regardless of the cause of death. An accidental benefit is paid ONLY if the death is accidental as opposed to a death by natural causes or illness.

The person who receives the death benefit is called the beneficiary. The policy owner has the right and responsibility of naming beneficiaries. Usually there is a primary beneficiary however heshe can assign a second and even a third beneficiary.

The primary beneficiary is the first person in line to receive the benefit in the event of the death of the policy holder. The policy owner can also name a second beneficiary who would receive the benefit in the event the primary beneficiary dies before the insured. Some policies can include a third beneficiary who would be in line after the first two.

There is another important element in regard to accident policies: An accidental death may not be instant. A person can die as a result of an accidental injury months after the accident occurrence. Read your policy carefully because most stipulate that the accidental death benefit will only be paid if death occurs within three months of the accident.

Tips for Shopping Health Insurance and Life Insurance Online

30th April, 2010 - Posted by Admin - No Comments

If you’ve found your way here, you’ve no doubt decided you need to purchase a new insurance policy or add to your existing level of insurance. It can be a little confusing deciding just what you need. So let’s cover some of the most popular types of insurance.

Critical Illness Insurance

Heart disease, stroke and cancer are just a few of the critical illness that bring a chill to your spine when you are diagnosed. The good news is that with the advances with modern medicine many illness that even recently were almost always fatal can now be treated and life goes on as normal. However, in a worst-case scenario, critical illness insurance helps you cope with the expense of your illness while you are treated and helps your loved ones to go on unencumbered by the financial burden left by a long illness should you lose the battle.

Disability Insurance

One of the most popular forms of supplemental insurance, Disability Insurance pays you a percentage of your income as a benefit should you become disabled. You use these benefits to help with out of pocket expenses not covered by your major medical policy and to pay your household bills while you recover from a temporary disability or a lump sum payment or a life long benefit in the case of a permanent disability.

When shopping for a Life Insurance quote, Term Life Insurance and Whole Life Insurance are the two most popular choices. Let’s explain each of these:

Whole Life Insurance

When shopping for a Whole Life Insurance quote you will find that, the policy remains in force during your entire lifetime as long as the premiums are paid. The type of life insurance also builds what is commonly called a cash value that you borrow under certain circumstance after a period of time.

Term Life Insurance

When shopping for a Term Life Insurance quote keep in mind that this insurance will cover you for a specified time only such as five years. Your premiums do not increase during the term of your policy but will likely increase once it is time to renew the term. Term Life Insurance does not build a cash value.

Term life is generally cheaper if you are younger in age and a good starting point for a safety net for a young family until you’re ready to invest in long-term whole life insurance.

Now you’re fully informed to make the right choices as to just what new or additional insurance to choose for yourself and your family.

Buying Health Insurance In Ohio

23rd April, 2010 - Posted by Admin - No Comments

Ohio residents are afforded certain protection when buying health insurance from a state licensed insurer as a result of standards put in place by the Ohio Department of Insurance. Below are some of the standards you should be aware of when buying insurance:

Alcohol Treatment : There must be at least 550 per year in alcohol treatment whether inpatient or outpatient

Mental Illness : On an outpatient basis, there is a requirement for 550 per year for treatment. This applies only if the policy covers in hospital treatment of mental illness.
Kidney dialysis : If an insurer provides coverage for dialysis in a hospital, it must also provide the same coverage for dialysis on an outpatient basis.

Specific practitioners : Health policies in Ohio cannot discriminate against particular health professionals. It must pay any licensed professional who legally performs a service. This includes Chiropractor, dentist, nurse-midwives, Mechanotherapists, osteopaths, Optometrists, Podiatrists, Psychologists

Generic drug use : If a policy covers prescription drugs, it must pay for any legally approved drug prescribed by your doctor even if it has not been approved by the government for treating your particular medical problem or disease.

Pregnancy and Maternity : Insurance companies do not have to offer maternity benefits, However, when it is provided, it may never be considered a pre-existing condition. Although, under certain conditions, an insurer may impose a 270-day waiting period before providing maternity benefits.

Mammograms: Every major medical policy group and individual must cover mammograms for breast cancer screening in adult women.

The frequency varies depending on age:

Age: 35-39 One only

Age: 4-49: One every two years unless your doctor has reason to believe you are a high risk for breast cancer

Age 50-64: one a year.

This is subject to a maximum of 85 per covered mammogram.

Please view our recommended insurance quote companies below. They are also great sources for information about rates and coverages for most of the lower 48 states.

Buyer Beware: Identifying Health Insurance Fraud

16th April, 2010 - Posted by Admin - No Comments

Scam insurance is not new – criminals have been selling fraudulent policies since health insurance came into being. But with today’s skyrocketing health care costs, more consumers are seeking affordable access to quality care, which provides scam artists with fertile hunting grounds.

By appealing to consumers’ insurance cost concerns, these individuals successfully entice more than 100,000 Americans into purchasing sham health insurance every year.

Consumers should always be on the lookout for common insurance scams. Some warning signs of fraudulent plans include:

*dramatically low premiums;

*guaranteed coverage – regardless of pre-existing conditions;

*lack of the word “insurance” anywhere in the materials;

*plans that ask for premium payments in cash or for an entire year up-front.

It is important to evaluate the agent selling the plan. Agents who claim that they do not need a license to sell insurance or imply that their product is exempt from state regulation should be rejected. Consumers should be wary of any agent claiming to represent a medical provider who solicits customers door-to-door or patrols neighborhoods encouraging residents to visit a mobile clinic for routine checkups or tests.

Many organizations, including the National Association of Health Underwriters, are educating their members and consumers about how to recognize insurance scams and protect against them.

To keep from being victimized, consumers need to do their research and use a reputable insurance agent or broker who is knowledgeable about scam insurance. Consumers can locate a local NAHU member to help them find the right health insurance plan by going to www.nahu.org and using the “Find an Agent” feature.

Suspected insurance scams should be reported as soon as possible. Most states sponsor fraud bureaus that investigate insurance scams, and some even reward whistleblowers if there is a conviction.

The financial effects of these schemes are felt throughout the entire health care industry. Victims of insurance fraud will have to repay uncovered medical bills and depending on how long they go without legitimate insurance coverage, may also lose health care insurance access permanently. Health care facilities and medical professionals, meanwhile, may never be paid for the treatments they administer.

The only way to stop the spread of insurance scams is to learn how to detect fraud and work to prevent such criminals from succeeding.

Benefits of Group Health Insurance

9th April, 2010 - Posted by Admin - No Comments

Group Health Insurance is an insurance scheme provided by the insurance companies for a group of persons, such as the employees of an organization at a reduced individual rate. Most of the companies provide group health insurance schemes for their employees, which helps the employees to receive health treatments without any cost they need to pay. Group health insurance ensures the employees of an organization to receive medical treatment quickly so that they can avoid waiting long time in queues and other sufferings.

Group health insurance offers lots of advantages to both the employer and the employees. As far as an employer is concerned, the group health insurance scheme will provide enough medical treatment quickly for the staff of his company and thereby ensures speedy recovery from diseases and keeping disruption owing to illness in the office to some extend. The employee can also provide more focus on hisher job as there is no need to worry thinking about the time they want to wait for the treatment on the NHS, or suffering undue pain, or for a diagnosis.

Group health insurance plan offers several valuable benefits for an employee. The main advantage of becoming a member of the group health insurance scheme is that the insured doesnt have to pay large premiums for taking a private health insurance plan. The employee can work without being worried of their health as heshe will surely get quality medical help immediately if needed.

There are several health insurance companies offering group health insurance schemes. Most of the health insurance companies, as part of their Group Health Insurance Plan, provide the insured (the employees of the company) to take a health check once in every year at any private hospital with which the company has tie-up. The health checks will cover a complete check up, which include height, levels of fitness, weight, blood tests, blood pressure. The health checks are done so as to check whether the insured employee is in a good health or to find out a so far undiagnosed condition. What ever be the purpose, the health check is considered to be beneficial for the employee and the employer.

For those individuals who are not a member of the group health insurance scheme has to pay about 150 upwards to perform a complete health check. Hence this is considered as an added advantage for those who are in the group health insurance scheme. Group health insurance also helps to boost the morale of the staffs as they will know that their employer is providing special care about his employees.

Group health insurance schemes will differ from one insurance provider to another. The insurance coverage will also change according to the schemes you select. But there are certain factors which all the group health insurance schemes will cover for:

- In-patient and day-patient treatment
- Out patient treatments such as physiotherapy
- Free Help lines such as a GP Helpline and Stress Counseling Helpline.
- Specialist consultations after getting a referral from the employees GP

Group health insurance policy differs from one insurance company to another. It is always advisable to compare different insurance companies before selecting a group insurance policy. Select the one which suits your company.

Battling an Unfair Health Insurance Claim Can Really Pay Off

2nd April, 2010 - Posted by Admin - No Comments

Battling an Unfair Health Insurance Claim Can Really Pay Off

Are you having trouble getting your insurance company to pay your medical health costs? Join the club. When managed care entered the insurance scene a decade ago, its mandate was to contain rising medical costs. One way to do that is to deny claims, even when claims are legitimate. The consumer backlash led to many states establishing independent review panels and requiring insurance companies to develop in-house appeal procedures. Forty-two states now have independent review boards whose decisions can override those of insurance companies. Most consumers don’t even realize these review boards exist.

Another problem is that too many people just give up when their insurance claim is denied initially. The appeals process can be long and frustrating and many people don’t have the patience or time to pursue a claim no matter how legitimate. People must be persistent and they can win. Particularly if there’s substantial money involved, the time you dedicate to appealing insurance company decisions can pay off usually more quickly than you think. A Kaiser Family Foundation study recently found that 52% of patients won their first appeal for each claim made. The insurance companies aren’t getting with out paying anymore.

If your first appeal gets turned down, press on. The study found that those who appealed a second time won 44% of the time. Those who appealed a third time won in 45% of cases. Which means the odds are in your favor no matter how long it take. Remember that every time you appeal it costs the insurance company more money to fight you and they are not only going to lose money to you, but also in court costs. Medical health benefits are particularly tricky because insurance companies usually have a cap on the amount of money they’ll spend in a given year, or on the amount of visits they’ll pay for. But there’s often some flexibility when you can document that you or your child’s health warrants more care than your policy usually covers. Here’s how to get started:

Do Your Homework

Read your Policy: What are the benefits? Which kinds of services are included? Outpatient or inpatient care? Is it a serious or “non-serious” diagnosis?

Know the law: Contact your local Health Association to determine your states legal requirements regarding insurance payments for all illness. Does your state require full or partial parity? Are parity benefits available only to patients with “Serious Illness” or is a so-called non-serious illness also included?

Provide written documentation: Some insurance companies may not consider some diagnosis’s serious. In this case, you will need documentation to validate required services. Obtain a letter of medical necessity from your doctor and get test results showing the medical need for you or your child to receive certain services, based on the diagnosis.

Keep good records: Remember, you’ll be dealing with a bureaucracy. Keep the names and numbers of everyone with whom you speak, the dates on which you spoke, and what transpired in the conversation.

Start early: If you can, start the appeals process prior to initiating treatment. If the doctor says your child will need to be seen once a week for a year, begin immediately to appeal your insurance company’s policy of reimbursing only 20 visits a year.

Call and Ask the Insurance Company:

What are the prerequisites for receiving health benefits?

How many visits are allowed annually for you or your child’s diagnosis? Can multiple services be combined on one day and be counted as only one day or one visit?

Which services must be pre-certified–by whom?

Be positive, polite and patient with the customer service representative. Remember that heshe is only the messenger, not the decision-maker. They are the gatekeepers and can either provide you with access to a decision maker or make your life miserable, depending on how you interact with them.

Be persistent. There are no magic bullets. Be like a dog with a bone and don’t give up until you get the answer you want. If you get nowhere after several calls, ask for a supervisor or a nurse in the pre-certification department.

Remember that you do have the right to appeal if your claim is denied. Most consumers get discouraged and will not continue to pursue a claim that should or could be paid. Insurance companies count on that happening, so get out there and claim what’s justifiably belong to you.

Americans Without Health Insurance Have New, Affordable Options

26th March, 2010 - Posted by Admin - No Comments

More and more Americans are going without health insurance because they can’t afford it. But there is a solution. New health insurance portfolios are available that are specially designed to help meet the national need for affordable coverage for individuals and employees of small businesses.

This is good news for many Americans who often cannot afford to purchase health insurance for themselves or whose employers do not offer insurance. This includes individuals who are self-employed; those who are employed by a small business or who run a small business; and individuals in other circumstances that require them to buy their own health insurance.

“More than 45 million Americans fall into one of these categories. Many of these people are uninsured or are struggling to afford the traditional plans that insurance companies typically offer,” says Melissa Crawford, senior vice president, Physicians Mutual.

The company bundles together existing and new products to provide an Integrated Health Portfolio (IHP) with a variety of choices and price points.

The IHP offers a choice of benefits, including coverage for:

• Doctor’s office visits

• Preventive care

• Hospital stays

• Surgeries

• Catastrophic major medical

• Outpatient treatment.

“This portfolio of products is designed for middle-income Americans for whom the only choice has been major medical plans with high deductibles-5,000, for example. That’s too much for them to absorb out of pocket,” Crawford says. “They’re looking for a plan that pays a portion of everyday health care costs such as doctor’s visits, childhood immunizations, and screenings like mammograms and prostate cancer tests. They also need prescription drug and vision discounts.

“We have options with no deductible to meet, so policyowners receive benefits the first time they have a covered medical expense,” Crawford says. “There are also no lifetime maximums on this type of policy.”

Crawford points out that individuals and small-business owners usually do not have benefits managers who can talk them through their insurance options. The health portfolio offers a needs assessment to help customers determine which insurance products are right for them.

Physicians Mutual Insurance Company and Physicians Life Insurance Company, a member of the Physicians Mutual family, provide a full portfolio of health and life insurance products, as well as financial products. Both companies consistently receive high grades from independent insurance analysts.

Alternatives To High Priced Health Insurance

19th March, 2010 - Posted by Admin - No Comments

Most Americans are struggling to afford health insurance. In just the past few years, the cost of buying health insurance for your family has skyrocketed. I was talking with an insurance agent recently, who told me it’s not unusual at all for his clients to be paying 1,000 to 1,400 per month for their family to be covered.

I don’t know many people who can easily afford those kinds of monthly insurance payments. Most who are paying them are making major sacrifices in other areas. The vast majority of Americans put health coverage very high on their list of priorities, so the other things that get left behind might surprise you. No question, the quality of life is far lower for many people now that they pay so much to be insured.

Meanwhile, many employers are cutting back their employees’ insurance coverage. Professions that once paid all their employees’ health insurance premiums — like teachers and firefighters — are finding the employee footing the bill for larger and larger portions of their insurance.

How are people coping? Many Americans simply don’t have health insurance anymore. That’s a big problem not only for families, who often put off going to the doctor, but also for society in general. People who hesitate buying medicine or seeing a doctor often end up very sick in hospital emergency rooms.

Others are simply reducing the amount of health insurance they have. They pay a larger portion of their doctor visits and prescription medicine costs. If you are a young adult, it may not make a lot of sense to pay huge insurance premiums to be covered for major illnesses that you are very unlikely to experience.

There are a growing number of health insurance plans that let you pick and choose the areas of coverage you want to pay for. While this practice was prohibited in many states, more and more places are seeing the wisdom and necessity of this approach.

Even more pressing than the cost of health insurance is the cost of buying prescription medicines. Many people simply can’t afford the spiraling cost of the medicines they need. Others might insist, willingly lowering their standard of living just to afford overpriced medicine. The solution to this problem increasingly has nothing to do with insurance. Organizations use their large pool of members to negotiate big discounts on prescription drugs at thousands of chain and independent pharmacies nationwide. Typically you can save up to 60% off generic drugs and up to 15% off name-brand drugs.

This is a big advantage for the elderly, families, businesses, organizations, and anyone who wants to lower their cost of medicine. Additionally, some programs also cover medicine for your pets. If you often care for an ill animal, this can save you a lot of money over time.

Unlike insurance, discount drug programs are often very low cost or free. Pharmacies participate in the discount programs to encourage you to buy from them. It’s a win-win for both you and the medical industry.