Just the Facts – 2010 Benefit Limits You Should Know

Insurance LimitsBy Cathy Miller, Business Writer

More than likely you received this information throughout the year in one form or another. The following is a snapshot of 2010 limits for various employee benefits including defined benefits, 401(k), Health Savings Accounts and Medicare.

IRS Dollar Limitations on Benefits & Compensation

Defined benefit annual limit – $195,000

Defined contribution annual limit – $49,000

401(k) elective deferrals – $16,500

Catch-up contributions (age 50 or older) – $5,500

Qualified plan annual compensation limit – $245,00

Highly compensated employee limit – $110,000


Health Savings Accounts (HSAs) Limits

Self-only contribution annual limit – $3,050

Family contribution annual limit – $6,150

Annual additional catch-up contributions (age 55 or older) – $1,000

Minimum deductible for self-only High Deductible Health Plan – $1,200

Minimum deductible for family High Deductible Health Plan – $2,400

Maximum annual out-of-pocket for self-only – $5,950

Maximum annual out-of-pocket for family – $11,900


Medicare

Part A deductible – $1,100

Part B deductible – $155

Part B premium (maximum – based on income) – $110.50


Cathy Miller
is an independent writer/consultant with broad experience in all aspects of health care and employee benefits including communication, wellness, legislative, carrier performance and financial management. Cathy currently holds an active life/health agent license.

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10 Ways to Screw Up Health Insurance

screw and driverBy Cathy Miller, Business Writer

While the battle on health care reform rages on, there are a lot of individuals out there who need your help. The following are 10 critical timelines for health insurance. Missing them or not planning for alternatives after they occur can screw up your customer’s health insurance.

60-day COBRA election period – Employees have 60 days to decide if they want to continue their former employers’ health coverage by electing Consolidated Omnibus Budget Reconciliation Act (COBRA). The clock starts ticking after the coverage terminates.

45-day initial COBRA premium payment – The initial premium payment for COBRA is due within 45 days. After the initial payment, payments are due the first of the month, with a 30-day grace period.

18 months limit for COBRA benefits – Former employees, their spouses and dependents have up to 18 months of coverage if there is a loss of coverage under the employer plan. Some states, like California, offer an extension to federal COBRA coverage, usually at a higher cost to the covered person.

29 months limit for COBRA benefits – Former employees disabled during the first 60 days of COBRA coverage have coverage for themselves and qualified dependents up to 29 months.

60 days notice of disability determination – Disabled individuals who qualify for the 11-month extension described in #4 could lose that extension if receipt of notification to the plan administrator is not within 60 days of the date of disability determination.

36 months limit for COBRA benefits – Qualified spouses and dependent beneficiaries have up to 36 months of coverage if there is a loss of coverage due to the death of the employee, a divorce or legal separation and other certain qualifying events.

Nine months federal subsidy for COBRA – Employees involuntarily terminated are eligible to receive a 65% federal subsidy for COBRA coverage. After the nine months, employees pay 100% of the COBRA premium for continuation of coverage.

63-day break in coverage – An insured with more than a 63-day break in coverage is subject to pre-existing condition exclusions and limitations. An important note – insureds eligible for COBRA coverage must exhaust COBRA coverage first to be eligible for the waiver of pre-existing exclusions and limitations if purchasing an individual health insurance policy.

November 15 – December 31 – This is the enrollment period for Medicare health or prescription drug coverage.

January 1 – March 31 – If eligible for a Medicare Advantage plan, individuals can join a Medicare Advantage plan during January 1 – March 31 each year.

The sheer volume of data in our personal and professional lives makes it is far too easy to miss critical deadlines. With health insurance, the result could be a tragic loss of coverage. Make sure you and your customers know critical deadlines and prepare for continuous health coverage. Don’t let those dates pass you by.

Cathy Miller is an independent writer/consultant with broad experience in all aspects of health care and employee benefits including communication, wellness, legislative, carrier performance and financial management. Cathy currently holds an active life/health agent license.

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Is It “Auld Lang Syne” for COBRA Subsidy?

By Cathy Miller, Business Writer/Consultant

Don’t pop those champagne corks just yet. The expiration date for the 65% federal subsidy for COBRA health coverage is rapidly approaching. It has unemployed workers worried.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) permits workers from companies with 20 or more employees to continue the health plan they had through their employer. The terminated worker pays the full premium cost plus an administrative fee, and there’s the rub. The consumer advocacy group, Families USA, reports the average monthly COBRA premium is $1,111 or 83% of the average monthly unemployment check. Finding the money for COBRA payments is a huge challenge for most unemployed workers.
The Sand in the Hourglass is Running Out
Introduced as part of the stimulus package, workers terminated involuntarily are eligible to receive the 65% subsidy for nine months. Their COBRA eligibility must begin, however, by December 31. For example, workers laid off in December but who have their health coverage through the end of the month, would not be eligible for the subsidy since their COBRA coverage is effective January 1.
Those who signed up when the program started lost that subsidy November 30 and many others lose it at the end of December. The “temporary” fix expires on December 31. Those receiving the subsidy have some difficult decisions to make once their nine months are up. They can continue COBRA coverage by paying 100% of the premium, look for less expensive individual health coverage or let their health coverage lapse.
With double-digit unemployment statistics, securing coverage through a new employer is not a sure thing. Both the House and Senate proposed an extension on the expiration date for the federal subsidy. Some legislators proposed extending the subsidy from nine months to fifteen months and increasing the federal portion to 75%. Workers facing the loss of the subsidy want an answer now but so far, nothing is forthcoming.
Hardest hit are workers with existing medical conditions. In addition to the health concerns, a 63-day lapse in coverage subjects them to exclusions and limitations for a pre-existing condition.
What Agents Can Do To Help
For years, employer-sponsored health plans shielded employees from the true cost for coverage. Health insurance baffles the average consumer. The loss of health coverage is one more source of stress for the unemployed. This is where your knowledge and experience as an insurance agent helps. Explore available options to avoid a lapse in coverage. The time to start is before the worker’s subsidy ends. Depending on the COBRA administrator, the only “notice” may be the increased premium on the invoice.
With health insurance, one size does not fit all – something health care reformists know all too well. In the meantime, it is important to weigh all health care options. Determine if COBRA coverage is the best option for your client. State programs like the Children’s Health Insurance Plan (CHIP) provide low or no-cost health coverage for eligible children. Covering children under a state program can significantly reduce COBRA premiums. If the open enrollment period is near, workers can change to a less expensive plan if their former employer offers it. Many predict Washington will extend the federal subsidy so, if nothing else, workers may buy some time with strategic decisions.
If workers decide to drop COBRA coverage for a private, individual health plan, they cannot come back to that COBRA coverage. In some instances, however, the private plan may be a better alternative. Often, individual health plans offer lower premiums than those for COBRA coverage.
Health Savings Accounts (HSAs) may be a good alternative. Besides the tax advantages, HSAs offer a safeguard for medical expenses for workers who are between jobs. Because of the high deductible requirement, HSAs typically have lower premium costs. One strategy to defray the cost of the high deductible is the addition of low-cost supplemental policies, such as hospital indemnity or accident policies. The good news is the individual owns the account so even if they do find a new job with health benefits, HSAs are a solid investment.
Don’t let the loss of the subsidy be the reason your client’s health coverage lapses. More than ever, they need the advice of a trusted insurance professional. It just might make the holidays a little brighter.
By Cathy Miller, Business WriterNew Year

Don’t pop those champagne corks just yet. The expiration date for the 65% federal subsidy for COBRA health coverage is rapidly approaching. It has unemployed workers worried.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) permits workers from companies with 20 or more employees to continue the health plan they had through their employer. The terminated worker pays the full premium cost plus an administrative fee, and there’s the rub. The consumer advocacy group, Families USA, reports the average monthly COBRA premium is $1,111 or 83% of the average monthly unemployment check. Finding the money for COBRA payments is a huge challenge for most unemployed workers.

The Sand in the Hourglass is Running Out

Introduced as part of the stimulus package, workers terminated involuntarily are eligible to receive the 65% subsidy for nine months. Their COBRA eligibility must begin, however, by December 31. For example, workers laid off in December but who have their health coverage through the end of the month, would not be eligible for the subsidy since their COBRA coverage is effective January 1.

Those who signed up when the program started lost that subsidy November 30 and many others lose it at the end of December. The “temporary” fix expires on December 31. Those receiving the subsidy have some difficult decisions to make once their nine months are up. They can continue COBRA coverage by paying 100% of the premium, look for less expensive individual health coverage or let their health coverage lapse.

With double-digit unemployment statistics, securing coverage through a new employer is not a sure thing. Both the House and Senate proposed an extension on the expiration date for the federal subsidy. Some legislators proposed extending the subsidy from nine months to fifteen months and increasing the federal portion to 75%. Workers facing the loss of the subsidy want an answer now but so far, nothing is forthcoming.

Hardest hit are workers with existing medical conditions. In addition to the health concerns, a 63-day lapse in coverage subjects them to exclusions and limitations for a pre-existing condition.

What Agents Can Do To Help

For years, employer-sponsored health plans shielded employees from the true cost for coverage. Health insurance baffles the average consumer. The loss of health coverage is one more source of stress for the unemployed. This is where your knowledge and experience as an insurance agent helps. Explore available options to avoid a lapse in coverage. The time to start is before the worker’s subsidy ends. Depending on the COBRA administrator, the only “notice” may be the increased premium on the invoice.

With health insurance, one size does not fit all – something health care reformists know all too well. In the meantime, it is important to weigh all health care options. Determine if COBRA coverage is the best option for your client. State programs like the Children’s Health Insurance Plan (CHIP) provide low or no-cost health coverage for eligible children. Covering children under a state program can significantly reduce COBRA premiums. If the open enrollment period is near, workers can change to a less expensive plan if their former employer offers it. Many predict Washington will extend the federal subsidy so, if nothing else, workers may buy some time with strategic decisions.

If workers decide to drop COBRA coverage for a private, individual health plan, they cannot come back to that COBRA coverage. In some instances, however, the private plan may be a better alternative. Often, individual health plans offer lower premiums than those for COBRA coverage.

Health Savings Accounts (HSAs) may be a good alternative. Besides the tax advantages, HSAs offer a safeguard for medical expenses for workers who are between jobs. Because of the high deductible requirement, HSAs typically have lower premium costs. One strategy to defray the cost of the high deductible is the addition of low-cost supplemental policies, such as hospital indemnity or accident policies. The good news is the individual owns the account so even if they do find a new job with health benefits, HSAs are a solid investment.

Don’t let the loss of the subsidy be the reason your client’s health coverage lapses. More than ever, they need the advice of a trusted insurance professional. It just might make the holidays a little brighter.

Cathy Miller is an independent writer/consultant with broad experience in all aspects of health care and employee benefits including communication, wellness, legislative, carrier performance and financial management. Cathy currently holds an active life/health agent license.