Better Insurance Solutions: Helping Business Get Better Benefits for the Dollar

BETTER INSURANCE SOLUTIONS

 

HEALTH INSURANCE

SOLUTIONS FOR THE DAY

A CATASTROPHIC ILLNESS OR INJURY OCCURS

 Are you looking for a competitive quote for Group Health Insurance for your Business?

(Please Click Here)

Our Mission

   Our Mission at Better Insurance Solutions is a simple one.

   We are committed to helping Alabama businesses and their employees maximize their insurance dollar.

   Our focus is health insurance:

 1) insurance to cover medical bills, and

 2) insurance for daily living to cover unpaid medical bills and loss of income while you recover from a serious accident or illness.

Health Insurance
 

If you or your company is looking for health insurance, be sure to review Common Mistakes in Choosing a Group Health Plan.

Avoiding these mistakes could save thousands each year for you personally and your company.  

Step 1 for every person who pays for health insurance is to determine if they can use the IRS tax break for health insurance premiums called cafeteria plans or section 125 plans.

We understand that cutting your company’s group health insurance cost could save the average employee paying for family coverage $250 to $300 a month.

We also understand that many small businesses benefit from individual plans instead of a group plan - or a mixture of the two.

You can click here for a free quote for yourself or your business.

Supplemental Health Insurance

(i.e., Insurance for Daily Living)

If you are like most people who must work to pay their daily living expenses, or live paycheck to paycheck, supplemental health insurance may be a more practical need in case a serious medical issue that prevents you from working.

We are a strong believer in Aflac.

Nearly 50 million people worldwide and 430,000 businesses in the U.S. feel the same way.  

The list of businesses has included Walmart, FedExpress, Home Depot, Office Depot and CVS Pharmacy.

We regularly hear stories of people expressing thanks for Aflac when they have had a fight with cancer, a serious accident, or some other health issue.
 

The money paid by Aflac directly to the individual in time of need for every day living expenses while one is in recovery is often a lifesaver.

 

Cafeteria Plans - The Unsued Tax Break for Insurance

   We encourage every customer to take advantage of the free tax break Congress has provided to pay for insurance premiums.

   The official name of the tax break is section 125 of the IRS code.

   The popular name is cafeteria plan.

   Our blog has a separate page devoted to helping you understand what a cafeteria plan does and how to take advantage of this tax break.

   One of the great benefits Alfac provides is helping you set up a cafeteria plan free of cost.  Be sure to read more here.


CONCLUSION

   Become a regular reader of our blog.  

  The tips and insights on health insurance for major medical bills and health insurance for daily living expenses in case of injury or illness could make a difference in your life. 

  Thanks again for visiting our website.

-Marvin

Cafeteria Plans: The Unused Tax Break for Health Insurance

    The IRS has furnished a tax break for small businesses for health insurance and other insurance premiums.  The tax break is formally called a section 125 plan after the IRS code section bearing the same name.

    The popular name for a section 125 plan is a cafeteria plan.  

    Here is a simple illustration of how a cafeteria plan works.  (The IRS explanation of how a cafeteria plan works is also highly recommended).

    Imagine you are a small business owner who is paying $1000 a month for family coverage for health insurance.  That amounts to $12,000 a year.

    With a cafeteria plan in place, you are able to deduct that $12,000 from income before figuring your taxes.  In other words, that $12,000 spent on insurance premiums is never taxed.

    Many people call this paying for insurance premiums with pre-tax monies.

    The minimum tax savings is roughly 25%:

        * 15% federal

        *  3% state (in Alabama) and

        * 7.65% Social Security.

    The saving on the individual level is $3,000 ($12,000 x 25%).

    There is also a savings on the corporate level.  Because one's taxable income has been reduced by the $12,000 spent on health insurance premiums, the company does not have to pay the matching FICA taxes on this money. 

    The company saves $918 ($12,0000 x 7.65%) in matching FICA taxes.

    If you are a company owner in a C-corporation, be sure that you are not missing out on the 'cafeteria plan tax break' for insurance premiums.

     AflacforBusiness provides cafeteria plans free of charge.  The tax savings that the cafeteria plan provides often covers the cost of Aflac products to ensure greater protection in the event of serious illness or accident.

    But wait.....there is another tax break for employees who pay insurance premiums through a cafeteria plan instead of paying the premiums from one's take home pay after taxes have been paid.

    That is covered in the next posting on this subject.

 

The Aflac Revolution...Health Ins Does Not Pay the Light Bill

    An Aflac policy is the most practical insurance one can have.  One of the realities of life is that 70% of Americans will face a heart attack, stroke, cancer or an accident in their lifetime.

    Health insurance will pay most of the medical bills.  But health insurance will not pay one's light bill, one's mortgage or one's care payment.

    This is where Aflac steps into the picture.  Aflac provides insurance for daily living in time of need when one is faced with a critical illness such as cancer, heart attack, stroke or an unfortunate accident.

Mistake # 8 - Not Understanding the Nonmedical expenses Not Covered by Your Health Insurance Plan

      Our meeting this week with Garywood Assembly of God about Aflac and the church's group health insurance raised a number of issues.  The first concerned the out-of-pocket expenses or nonmedical expenses under the church's group health plan, Healthy Blue. That plan is similar to the Blue Cross 320 plan used by most businesses in Alabama.

    For the reader to appreciate the dialogue of that conversation, assume for the moment a couple of facts:

    An employee suffers a serious accident that results in ambulance transportation to his hospital's ER room, 10 days of hospitalization for surgery, and 3 days of hospitalization for follow-up surgery months later.  There is also a need outpatient services on three (3) additional occasions. The medical bills total $65,000.

    The reader should stop here and reflect on his own health insurance plan.  Write down in this space              , that total amount of expenses that will not be covered by one's health insurance plan.  We did the same exercise with Garywood. 

    We next assumed the worker had to miss three (3) months of work on account of the accident (and of course it could be cancer, heart attack or stroke, the leading causes of disability).  One should also write down the amount of loss wages for three (3) months here...              .

    It is likely one's spouse will miss time from work to see about his or her mate.  Let's assume one-third of the figure for lost wages in the previous paragraph               .

    Those three (3) numbers are the minimum out of pocket loss you face for cancer, heart attack, stroke or accident that will not be covered by your health insurance plan.  For employees living paycheck to paycheck that additional obligation is financially devastating.

    AflacforBusiness provides an option.

    Option 1 is to pay the nonmedical expense and lost wages not covered by health insurance out of pocket.  For now, assume that is $15,000.

    Option 2 is to pay $40 to $50 a month for a critical illness/cancer policy from policy and receive a check for that amount (or more) from Aflac.

    Be sure your employees understand the nonmedical expenses they will face if a serious illness or injury crosses their path.  Help them make a good decision on a personal plan to cover the non-health insurance costs of a critical illness or accident.

Common Mistake # 7: Remaining Silent About the Nonmedical Costs of Cancer, Heart Attacks, Strokes & Accidents

 

    The recent articles in the Birmingham News newspaper celebrating Breast Cancer Awareness caught my eye.  They caused reflection on the group health insurance plan used by most businesses in Alabama, namely the Blue Cross 320 plan.  It also caused reflection on where the Blue Cross 320 plan is deficient.

    The Pink edition of that day's newspaper stood out of course.  It was a great way to capture attention. But there was another issue that also stood out.

    All of the articles encourage support for research to fight against Breast Cancer.  Many articles provided emotional support for those faced with breast cancer and outlined how the diagnosis affected the life of the person written about. The theme of preventive measures with annual exams was also prevalent.

    Yet, almost hidden and usually discussed in an indirect way was the financial impact.  Rare was the frank discussion that one's health insurance will not cover all of one's medical bills.  

    The popular Blue Cross 320 plan will leave most families with over $10,000 in medical bills.  That is compounded by the loss of one's income.  It is further compounded by the loss of a spouse's income who takes time from work to support his mate.

    Aflac's TV commercials are so entertaining that the main points are overlooked. Those faced with a critical illnesses such as breast cancer, heart attack or stroke often face financial devastation.  There are few policies more practical than supplemental health policies like those of Aflac which address these out-of-pocket expenses and losses.

     Our recent article at The Examiner discussed the need for both preventive steps to detect breast cancer, and financial preparation steps should one face any critical illness...be it heart attack, stroke or cancer.  

    There is an equally compelling need for business owners and office managers to educate their work forces about the fact their health insurance plan will not cover all of their medical expenses and the need for a personal supplemental health plan like Aflac.  

 

Common Mistake # 6 in Choosing a Group Health Plan

BELIEVING THE CALENDAR YEAR MAXIMUM IS AN OUT-OF-POCKET MAXIMUM

Are you looking for a competitive quote for Group Health Insurance for your Business?

(Please Click Here)

    Companies which are comparison shopping for group health insurance often overlook the out-of-pocket costs in the event significant medical services are needed. They mistakenly believe that the term, Calendar Year Maximum, is the most they must pay in a calendar year.

    These decisionmakers overlook the exceptions to the Calendar Year Maximum spelled out in the fine print. This is Common Mistake #6 made by decisionmakers in choosing a group health plan.

The decisionmakers whose company is on the Blue Cross 320 plan often make this mistake. If

you are a Blue Cross user, and a faced with a hospital stay of five (5) or six (6) days and a bill of $50,000, you may have the common belief that the Calendar Year Maximum is your total out-of-pocket expense.

The fine print of the Blue Cross 320 Plan requires that one add several costs to the Calendar Year Maximum.  Yes, the term Calendar Year Maximum is an oxymoron.

Our next blog entry will outline the additional items that the fine print of the Blue Cross 320 Plan says are not covered by, and are in addition to, the Calendar Year Maximum.

Without checking your plan, write down the items that are not covered by your Calendar Year Maximum.

Common Mistake # 5 in Choosing a Group Health Plan

CHOOSING A GROUP HEALTH 

PLAN WITH AN ANNUAL DEDUCTIBLE

Are you looking for a competitive quote for Group Health Insurance for your Business?

(Please Click Here)

    Choosing a group health insurance plan with an Annual Deductible is common mistake #5 made by decisionmakers.  A group health plan with a General Plan deductible would save one's employees the amount of the annual deductible each year as well as higher monthly premiums.

   Those whose group health plan plan calls for a General Plan Deductible but mistakenly believe the plan calls for an Annual Plan Deductible will often choose a group health plan on the assumption their employees must pay a certain deductible each year before the plan's insurance benefits are triggered. (See Mistake # 1 and Mistake # 2 in Choosing a Group Health Plan).

   The mistake of course is not knowing if the group health insurance plan options presented contemplate an Annual Deductible or a General Plan Deductible.  

  With a General Plan Deductible, it is economically prudent to choose a higher deductible plan and thereby lower one's monthly premiums as that General Plan Deductible will not be paid unless a need for outpatient, inpatient or ER services occurs.

    The concern over an Annual Plan Deductible (when in fact the plan presented calls for a General Plan Deductible) regularly leads to mistakes in choosing a group health insurance plan.  

   The decisionmaker mistakely believes he is helping his employees by selecting a group health plan with a lower Annual Deductible when in fact he is causing his employees to pay a higher premium under a plan with a General Plan deductible that does not have to be paid absent a need for outpatient, inpatient or ER services. 

    

Common Mistake # 4 in Choosing a Group Health Plan

Misunderstanding 

The Annual Out-of-Pocket Maximum

Are you looking for a competitive quote for Group Health Insurance for your Business?

(Please Click Here)

Mistake # 4 in choosing a group health plan is "Misunderstanding the Annual Out-of-Pocket Maximum".

        This mistake is often at the heart of why more than 60% of all bankruptcies are due to medical bills. The vast majority of these individuals had health insurance. They misunderstand their annual out-of-pocket maximum in the event they were hospitalized with a major medical issue.  

        Before we go any further, a little test for the reader. 

What is the annual out-of-pocket maximum under your insurance plan?  Be sure to write down that number.

    In other words, what is the most you could be expected to pay if you were faced with an emergency trip to the hospital that required a stay of 4.6 days (our national average) and a hospital bill of $50,000, and perhaps a second follow-up hospitalization and a need for outpatient services? 

        The most common mistake in Alabama is that business owners read the bold print of the Blue Cross 320 plan and see the words Calendar Year Maximum and the figure $4500.  

        Unfortunately, they do not read further and understand that the Plan Deductible and Copays for Inpatient, Outpatient and ER services are in addition to the Calendar Year Maximum.

        So how does this relate to one's monthly premium?  

    We will discuss this relationship in our next blog post. Stay tuned!

Common Mistake # 3 in Choosing a Group Health Plan

Misunderstanding the Plan's Out-of-Pocket Costs

Are you looking for a competitive quote for Group Health Insurance for your Business?

(Please Click Here)

The first mistake of owners and office managers is the assumption the plan deductible must be paid first before one gets the benefit of insurance coverage (Mistake # 1).  That line of thought leads to the mistaken belief that a lower deductible plan costs one’s employees less out-of-pocket. (Mistake #2).

Mistake # 3 is simple: “Misunderstanding the Plan’s Out-of-Pocket Costs”.  This mistake lies in not fully understanding the Plan’s formula for out-of-pocket expenses for both the routine medical needs and for hospitalizations.

In most instances, it is hospitalization stays that cause the largest medical bills one can expect due to major surgery from a critical illness like heart attack, stroke or cancer, or perhaps an accident. 

Yet, most focus on the copays for one's regular Office Visit or Prescriptions, and perhaps the cost of lab work if the doctor uses an outside lab facility.

Our next blog post will review the 'Out-of-Pocket' cost in more detail to help the business owner and office manager make a good decision on the health insurance plan which is best for them.

Common Mistake # 2 in Choosing a Group Health Plan

Assuming that Lower Deductible Plans

Cost Your Employees Less Out-of-Pocket

 Are you looking for a competitive quote for Group Health Insurance for your Business?

(Please Click Here)

The first mistake made by many owners and office managers is assuming the plan deductible must be paid first before their employees get the benefit of insurance coverage.

This “Deductible-First” assumption often leads to Mistake # 2 ...Assuming that the lower deductible plan is a better insurance plan.

If one is trying to help one’s employees by lowering their out-of-pocket expense as much as possible, it would seem that choosing a plan with the lowest plan deductible helps them the most.  That could be true of course, if and only if, the plan deductible had to be paid first before insurance benefits begin.

What if, however, the plan deductible only had to be paid in the event of a hospitalization, or a need for outpatient and ER services.  These are “Shared Deductible” plans.  

Under a “Shared Deductible plan”, the insurance company covers the expense of the office visits and routine medical care via the Office Visit Co-pay.  The employee shares in the cost of medical care if, and only if, a hospitalization occurs, or a need for outpatient or ER services arise.

Common Mistake # 1 in Choosing A Group Health Plan: The "Deductible-First " Assumption

    If you are considering a new group health insurance plan for your company, be sure to avoid these common mistakes:

Mistake # 1: The “Deductible First” Assumption

The plan deductible for one’s health insurance plan is often different than your deductible for car insurance.  Your deductible for car insurance must be paid first before you the plan's benefits are triggered. 

    That is not always the case with health insurance plans. There are Annual Deductible Plan and General Deductible Plans.

    A misunderstanding on the type of plan deductible of your plan will often result in choosing a plan based on the amount of the plan deductible instead of choosing one based on the out-of-pocket expense one will incur in the event of a hospitalization or major medical event.

Under an Annual Deductible Plan, the deductible must be paid first before one gets the benefit of insurance coverage.

Under a General Deductible Plan, one gets the benefit of an office visit, preventive care and prescriptions through payment of a copay. The plan deductible is paid if, and only if, there is a hospitalization, or a need for ER or outpatient services.