Category Archives: Continuing Education

Does Outsourcing Save Time and Money for Insurance Agents?

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How to outsource insurance agent help | Insurance CE
You’ve heard all the talk about outsourcing in the media, and perhaps even seen other insurance agencies take advantage of the benefits of using contractors rather than hiring staff, but will it really work out for you? It depends.

Many companies choose outsourcing because of the cost savings that come from not having to pay employee benefits, but another benefit is freeing your remaining staffers from administrative work, enabling them to spend more time doing what they do best. A number of companies have reported greater employee satisfaction and job performance as back-office tasks are turned over to an outside contractor, as well as a sense of enhanced job security and employee value.

Several outsourcing companies deal specifically with the insurance industry. If you need help with back-office processing or analytical tasks, ReSourcePro of New York can farm out the work to overseas facilities, where an English speaking college-degreed professional will be specifically assigned to work directly with you. Users have reported fast turnaround times on work that could have taken their regular employees many weeks to complete. Another option that’s closer to home is WAHVE, LLC, an agency that matches over-55 retired insurance professionals with insurance agencies needing help with customer service, claims, or processing. WHAVE workers can help reduce overhead and other costs via connection to a client agency’s system, while keeping jobs here in the US.

The Downside: A Cautionary Tale

Some companies have been less than happy with their outsourcing experience. Training and supervision of workers may not meet your standards. There can also be time and communication conflicts due to time zone differences, as well as language barriers and security issues – all of which can create extra problems due to contractor mistakes and unforeseen delays. Once functions are turned over to a contractor, you lose direct control over training, risking accountability and customer satisfaction. You have to keep an eye on the cost, too: in the end, for some companies there are no real savings. Be cautious before letting go of employees in favor of unproven contractors: you may wish later that you had them back!

The Last Word

• The trend among many insurance agencies is to hire mainly ‘core’ employees (sales and upper administrative) and outsource support personnel or those temporary positions
that don’t directly generate revenue. As companies continue to slash costs to remain competitive, outsourcing non-core work is fast becoming the norm.

• If considering outsourcing, ask questions designed to cover as many contingencies and hidden costs as possible, including the status of the contractor’s financial health.

• Get everything in writing about what you will get and what services will cost extra.

• Ask for references and be sure to follow up.

• Outsource only some of your tasks initially, to evaluate the servicer’s performance over a period of time, before risking your company’s reputation and goodwill.

Learning Opportunities: What Do You Want to Learn?

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By Shelley A. Gable

Every state requires insurance continuing education. Your attitude toward that education requirement determines how much you benefit from it. Do you view it as an opportunity? Or just another item on your growing to do list?

The reality is that you (or your employer) is paying for it regardless of your attitude. And in any case, you’re the one spending the time to complete the class. So why not make the most of it? Viewing it as an opportunity allows insurance ce to be a rich source of professional development.

What are your professional goals?

First think long term…maybe ten years out. Do you want to be a sales manager? What skills and knowledge do you need to acquire to be eligible for that position? Maybe you need to meet certain licensing requirements or build strengths in specific skills.

Think short term as well…maybe one year out. Is there an additional type of product you’d like to be licensed in, so you can become more valuable to your organization and increase your income potential? Is there a new law that you know will impact your work?

Here’s another angle to consider: What are you an expert in?

If you’re part of an agency with a dozen agents, what makes you special? Are you the go-to person for anything? If not, you may want to consider selecting an area of your work that interests you and gaining the knowledge needed to establish yourself as an expert. Being the one others defer to on a topic can do wonders for your credibility overall and may help advance your career.

Write down your goals.

Almost any book or article that offers advice for setting goals recommends that you write them down.

Why do you need to write them down?

  • To remember what they are
  • To look back to them for inspiration
  • To build a sense of commitment

Another advantage of writing down your goals is that it makes it easier to map out a plan. Though it can be helpful to create a detailed plan for your professional development, just capturing some of the basic elements of a plan initially can help move you in the right direction. At a minimum, start by thinking about:

  1. What are your goals (short and long term)?
  2. What specific types of skills and knowledge must you develop to achieve those goals?
  3. What specific actions must you take to develop those skills and knowledge?

How can insurance continuing education help you achieve these goals?

Now that you’ve identified the skills and knowledge you need in order to meet your short and long term goals, select insurance continuing education courses that help bring you closer to those goals. When it comes to insurance ce offerings, you have options. And with online training, you aren’t limited to options that are compatible with your schedule.

When perusing a course catalog, take a few extra minutes to view all your options. Read through the course descriptions and select courses that best align with your goals and interests. Taking advantage of online insurance ce courses to further your professional development will not only help you achieve your goals, but it should also help motivate you when completing the course.

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Need your Insurance Continuing Education?..Click here to take your continuing education classes online.

Shelley A. Gable is an instructional designer and freelance writer. She has developed training for functions such as financial services, call centers, and engineering education. Shelley writes articles on topics related to training and management for print and online publications. Visit Shelley’s website at http://shelleygable.wordpress.com.

Online Learning, Memory, and Aging

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By Shelley A. Gable

WebMD reports that many people start to notice decreased memory performance in their 50s. We all know to expect physiological changes as we age. As early as our 20s we begin to lose some brain cells, and our bodies start to make less of the chemicals needed to generate new brain cells.

When experts talk about decreasing memory performance, they’re usually referring to the ability to learn something new. As my grandfather approached his 90s, he could easily tell stories from earlier in his life with surprising detail, despite the fact that conversations from earlier in the day seemed fuzzy. This is pretty common.

With an aging workforce, what does this mean for continuing education and online learning?

Despite the toll that aging typically has on learning, there are habits we can develop earlier in our lives to help make learning easier. We can apply these productive habits to online insurance ce courses.

Think critically about the information presented to you.

Rote memorization rarely leads to actual learning. In order to learn something well enough to recall it later, you must think about newly learned knowledge in a way that is meaningful to you personally.

According to a study that compared the ability of younger and older adults to memorize words, older participants tended to be less likely learn these words in a way that was meaningful. In one condition of the study, researchers asked participants to memorize words, without providing any specific instructions for doing so. In this situation, younger participants recalled significantly more words than older participants. In a second condition, researchers asked participants to make judgments about the words. In this situation, the memory difference between younger and older participants was significantly less. This study’s findings support the importance of thinking critically about the content being learned and suggest that older participants were less likely do that without being prompted.

So how does this relate to online insurance continuing education?

When completing an online course, go beyond reading the words on the screen. Proactively think about how the information you’re learning might impact your job, and apply that information on the job as soon as possible. Take notes to organize the information in a way that makes sense to you. Go out of your way to discuss newly learned information with a colleague.

All of these activities prompt you to think critically about your newly learned knowledge and reframe it in a way that applies directly to your world. This strengthens the connection between new information and the knowledge you already have, which should make newly learned information easier to recall later.

Proceed at a comfortable pace.

The speed at which we can take in and process new information slows as we age. In other words, if a large amount of new information is presented quickly, we’re likely to miss more as we grow older. Fortunately, one of the advantages of online learning is that you control the pace. If you need an extra few seconds to read everything on the screen and think through its implications, you can take all the time you need.

Slow the effects of aging on memory.

In addition to the productive learning habits described above, other healthy habits can help keep your mind sharp well into your golden years. Managing stress, although sometimes easier said than done, can do wonders for both mental and physical health. Getting the sleep you need is also important, since memories are solidified during slumber. And of course, regular exercise and a healthy diet are critical, as both play a role in providing the brain with the fuel it needs to function properly.

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If you appreciate these ideas, it’d be swell for you would share them (button below) or subscribe via the feed.

Click here for 5 reasons why you should subscribe!

Interested in sales?  Perhaps Insurance, Real Estate, or Finance is your calling..  Click here to get licensed.

Need your Insurance Continuing Education?..Click here to take your continuing education classes online.

Shelley A. Gable is an instructional designer and freelance writer. She has developed training for functions such as financial services, call centers, and engineering education. Shelley writes articles on topics related to training and management for print and online publications. Visit Shelley’s website at http://shelleygable.wordpress.com.

4 Reasons We Procrastinate – And What You Can Do about It

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By Shelley A. Gable

What type of procrastinator are you? A few people out there almost never procrastinate…but they’re a rare breed. For some, putting off tasks until “tomorrow” is a way of life. Others drag their feet on tasks they wish to avoid.

Insurance continuing education is a common victim of procrastination. However, delaying the completion of insurance ce requirements is risky. In addition to being a valuable source of professional development, insurance ce is critical for staying up-to-date in the field and maintaining eligibility to do your job.

We all know that we shouldn’t procrastinate, but we find ourselves slipping into it anyway. Its consequences are well-known – tasks pile up, less time to get things done, increased stress, missed opportunities – so by procrastinating, we knowingly put ourselves in harm’s way.

Why do we do this?

Procrastination Rationale #1: You don’t feel like completing that online insurance ce course today, but you assume you’ll feel motivated to do it later.

It can be challenging to focus when you’re not in the mood to do something, but much of this is driven by your attitude. It might be helpful to remind yourself of why you signed up for a particular course in the first place. Does the course relate to an updated law that impacts your job? Does it relate to a type of product that you can start selling (and earn commission from) after you complete the licensing requirements?

Regardless of what you feel like doing, commit to completing the first 15 minutes of the course. You may find that once you get started, you’re able to find your groove and complete the course.

Procrastination Rationale #2: You believe you work best under pressure.

Some people enjoy the thrill of sprinting to get something done at the last minute. Regardless of your ability to perform other tasks in a pinch, experts agree that we just don’t learn well that way. Cramming doesn’t work, because the brain is only capable of processing a limited amount of information at a time. That’s why taking periodic breaks during a course can actually help us retain more. But if you’re in a hurry to complete a course, there may be little time for breaks.

Procrastination Rationale #3: You look for distractions.

You might not even realize that you’re seeking out distractions, but have you ever decided to check your email again right before starting something? Or perhaps out of nowhere, you decide that now is the time to finally clean your desk (because obviously you can’t complete an online insurance ce course at a cluttered desk!).

If you’re guilty of this, consider scheduling time for online learning, just as you would schedule any appointment. Then commit to starting the course at the scheduled time. To reduce the potential for distraction, close your email, silence your phone (maybe even put it somewhere out of reach), and don’t open any web browser windows beyond what you need for the online course. If the thought of being cut off from the world like this is a distraction in itself, you might allow yourself a couple minutes to peek at your messages every 15-20 minutes.

Procrastination Rationale #4: You’re genuinely busy.

Let’s be realistic. If your calendar is packed with meetings and you’re being taunted by a towering stack of paperwork on your desk, then insurance continuing education probably feels like a lower priority. Many people find that their workload ebbs and flows, so it probably makes sense to complete an online class when your schedule is less busy. But if hectic is the usual state of affairs, then insurance ce needs to be squeezed in somewhere.

As discussed earlier, scheduling learning time (and committing to that schedule) can help in this situation too. Another option is to complete the course in smaller chunks. If you can’t spare an hour to complete an entire online course, then plan to complete it in 15-minute snippets between commitments.

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If you appreciate these ideas, it’d be swell for you would share them (button below) or subscribe via the feed.

Click here for 5 reasons why you should subscribe!

Interested in sales?  Perhaps Insurance, Real Estate, or Finance is your calling..  Click here to get licensed.

Need your Insurance Continuing Education?..Click here to take your continuing education classes online.

Shelley A. Gable is an instructional designer and freelance writer. She has developed training for functions such as financial services, call centers, and engineering education. Shelley writes articles on topics related to training and management for print and online publications. Visit Shelley’s website at http://shelleygable.wordpress.com.

Continuing Education on Consumer Plans: The Future

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By Cathy Miller, Business Writer 

This is the last in our 3-Part series on the consumer plans, the Health Savings Account (HSA) and Health Reimbursement Arrangement (HRA).

In Part 1, we reviewed what the consumer plans are and how they work. With Part 2, we reviewed the participation and asset numbers associated with various consumer plans.

In this last part, we pull out our crystal ball and speculate on the future of consumer plans. We’ll start with provisions in the health reform law affecting these plans.

Part 3: Continuing Education on Consumer Plans: The Future

Health Reform Impact

There were many discussions surrounding consumer plans during the health reform debate. Some of the changes made by the health reform law impact all types of personal health care accounts, while other provisions target specific accounts. Here are some of those changes. 

Impacts All Personal Health Care Accounts 

This series focused on two types of personal health care accounts: HSAs and HRAs. For purposes of background information, the following is a brief definition of the other accounts impacted by the changes discussed in this section.

  • Flexible Spending Accounts (FSAs) – offered to employees by employers – allows employees to set aside a fixed amount of their wages on a pre-tax basis for qualified medical expenses and child care. The fixed amount occurs at the beginning of the benefit period and employees lose any unused funds at the end of the year. 
  • Archer Medical Savings Accounts (MSAs) – authorized prior to HSAs, MSAs were savings accounts limited to self-employed individuals and employers with fewer than 50 employees. New Archer MSA accounts were not permitted (with limited exceptions) after December 31, 2007.

The following are the health reform provisions affecting HSAs, HRAs, FSAs and Archer MSAs:

Qualified Medical Expense – the definition changed, it no longer includes over-the-counter (OTC) medications, unless a prescription accompanies the purchase. Previously, this was an attractive, qualified expense for individuals with an FSA, where funds are lost if not used by the end of the year. Account holders shopped at the local drug store to stock up on items like aspirin, band-aids and cold remedies to use up their funds. Not surprisingly, there was some abuse, which prompted this change.

Effective Date of Change: 2011

Excise Tax - The much-talked about cadillac plans, with the 40 percent excise tax, include the employer’s contributions to HSAs, HRAs and FSAs, when calculating the benefit value. The excise tax applies to employer-sponsored benefits in excess of $10,200 for single coverage and $27,500 for family coverage. The good news/bad news is this change doesn’t take place until 2018. That could be a good thing, if the provision undergoes changes, so the forecast of the tax impacting 60 percent of large employers does not come true. The bad news is if the provision stays the same, it could have a huge impact on most employer-sponsored health plans.

Effective Date of Change: 2018

Impact to HSAs and MSAs

The only other change related to HSAs and MSAs is the tax penalty on funds used for non-qualified medical or non-medical expenses. The penalty increases from 10 percent to 20 percent.

Effective Date of Change: 2011

Impact to FSAs only

Currently, FSAs have no maximum contribution limit for health care accounts (there is a $5,000 limit for child care). The health reform changes that with a cap of $2,500 annually in FSA contributions to health care accounts.

Effective Date of Change: 2013

Polishing the Crystal Ball

There you have the changes from the health reform law. Since new legislation seldom looks exactly the same on the effective dates, expect more changes.

HSAs appear to be the front-runner in consumer-directed health plans (CDHPs). FSAs and HRAs cannot be coupled with an HSA (except for a limited purpose FSA or HRA).

The complexity of dealing with multiple personal health care accounts has critics amongst many employers and taxpayers, as well. The speculation is for the elimination of FSAs and HRAs. Perhaps that is why the primary focus on change targeted HSAs.

State health insurance exchanges start operation in 2014. At this point, the word is CDHP policies will still be available. Other provisions of the health reform law could impact the high deductible health plans (HDHP) required for HSAs. Some of those provisions include:

  • Preventive care – requires new health plans to cover preventive services with no co-payments and it exempts the services from deductibles. Yet to be determined is the definition of what services fall under “preventive.”
  • Essential health benefits package – set by Health and Human Services (HHS), health plans must have services with an actuarial value of at least 60 percent.

The health reform changes and the tweaking of those provisions will certainly affect consumer plans. Other provisions that require careful attention are the medical loss ratio and excise tax requirements. All of these changes set the course for the future of CDHPs.

At least in the immediate future, I believe consumer plans survive; however, the products are already much too complex for consumers. The layering of even more regulations present many challenges. On a positive note, that strengthens the role of the insurance professional.

What is your prediction for the future of consumer plans?

Sources: The Henry J. Kaiser  Family Foundation and Council for Affordable Health Insurance

Notice of Disclaimer –Cathy Miller and InternetCE are not attorneys and cannot provide legal advice. The information provided is for your general background only, and is not intended to constitute legal advice as to your specific circumstances. We recommend you review legislation with legal counsel.

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If you appreciate these ideas, it’d be swell if you would share them (buttons below) or subscribe via the feed.

Click here for 5 reasons why you should subscribe!

Interested in sales?  Perhaps Insurance, Real Estate, or Finance is your calling..  Click here to get licensed.

Need your Insurance Continuing Education?..Click here to take your continuing education classes online

Cathy Miller, Business Writer/Consultant has over 30 years of professional writing with a specialty in health care, employee benefits and wellness. Cathy also has an active Life/Accident/Health insurance license. Visit Cathy at her business writing blog, Simply stated business to Keep it simple, clear & uniquely yours

Continuing Education on Consumer Plans: The Numbers

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By Cathy Miller, Business Writer 

We started our 3-Part series with a look at two types of consumer plans: Health Savings Account (HSA) and Health Reimbursement Arrangement (HRA).

With Part 2, we review the participation and asset numbers associated with various consumer plans. Employee Benefit Research (EBRI) and America’s Health Insurance Plans (AHIP) recently released surveys on the topic.

Part 2: Continuing Education on Consumer Plans: The Numbers

Consumer Driven Health Plans (CDHPs) on the Rise

The assets and the number of CDHP accounts show a three-year increase. That’s according to a survey released by EBRI and Mathew Greenwald & Associates (MGA) on June 1, 2010. Here are some of its findings:

  • Account balances – averages: 2006-$696; 2007-$1,320 (90 percent increase); 2008-$1,356 (3 percent increase); 2009-$1,419 (5 percent increase) 
  • Typical enrollee: Young, unmarried, higher-income, educated and exhibits healthy behavior
  • Rollovers - average: 2006-$592; 2009-$1,295
  • Rollover amount differences: Youngest and oldest enrollees had the largest rollover amounts in 2009 – rollover amounts increase with household income
  • Account balance differences: Increase with household income – education has significant impact

In 2009, the percentage of enrollees, by age group, enrolled in traditional plans versus CDHPs was the following:

  • Ages 21-34: Both traditional and CDHP showed 28 percent
  • Ages 35-44: Traditional – 23 percent/CDHP – 28 percent
  • Ages 45-54: Traditional – 28 percent/CDHP – 27 percent
  • Ages 55-64: Traditional – 21 percent/CDHP – 16 percent

The survey showed that in 2009, the amount in HSAs and HRAs was $7.1 billion, spread across 5 million accounts. When all is said and done, there is still no evidence that the CDHPs curtail employee spending on health care. The jury is still out on that one.  

Bigger Survey – Bigger Numbers

The census survey conducted by AHIP did not include HRAs. It provides data collected from 93 health insurance companies and provides a market overview for individual, small and large group. Here are some of the highlights:

  • In January 2010,  10 million people were enrolled in HSAs – up from 8 million in 2009
  • The group market increased from 6.2 million in 2009 to 8.0 million in 2010
  • Nearly 5 million were covered in the large group market and 3 million in small group (less than 50 employees)
  • Enrollment in the individual market rose to 2.1 million in 2010 from 1.8 million in 2009
  • HSAs were 11 percent of all new health insurance plans sold in January 2010

Time to Throw in the Towel?

While CDHPs are on the rise (particularly HSAs), many argue that consumers still don’t understand them. Is eight-plus years long enough to try out this health care option?

Perhaps it’s the education of the consumer that needs improving. Let’s face it, moving to the CDHP model is a huge shift for most consumers. As insurance professionals, continuing education on the products, plan designs, carriers and new law is critical for successful planning.

In our last part of the series, we will get out our crystal ball and look into the future. We will consider the recent changes from the health reform law and consider its impact on consumer plans.

Next up: Part 3 - Continuing Education on Consumer Plans: The Future

Notice of Disclaimer –Cathy Miller and InternetCE are not attorneys and cannot provide legal advice. The information provided is for your general background only, and is not intended to constitute legal advice as to your specific circumstances. We recommend you review legislation with legal counsel.

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If you appreciate these ideas, it’d be swell if you would share them (buttons below) or subscribe via the feed.

Click here for 5 reasons why you should subscribe!

Interested in sales?  Perhaps Insurance, Real Estate, or Finance is your calling..  Click here to get licensed.

Need your Insurance Continuing Education?..Click here to take your continuing education classes online

Cathy Miller, Business Writer/Consultant has over 30 years of professional writing with a specialty in health care, employee benefits and wellness. Cathy also has an active Life/Accident/Health insurance license. Visit Cathy at her business writing blog, Simply stated business to Keep it simple, clear & uniquely yours

Online Continuing Education on the Rise

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By Shelley A. Gable

Where do you stand with taking online insurance continuing education courses? You probably fall into one of three groups:

  1. Early Adopters – you’ve been enjoying the flexibility of online learning for years
  2. Recent Users – you’ve just started testing the online learning waters
  3. Interested Scouts – you’re still looking into online learning to determine whether its worth your while

Your use of online training is likely dependent not only on your comfort with the technology, but also on your state’s acceptance of it. Like the readers of this blog, state insurance departments also span the groups above. With the growing credibility and popularity of online coursework, more states are falling into the first two groups.

Why is online learning so darn popular?

Some people struggle with the idea of trading the classroom experience for online training. It’s understandable. Almost all of us went through school in a traditional classroom setting. We’re used to the classroom, so it feels predictable and comfortable.  Many state insurance departments may have felt similarly, but the tides are changing. While several states have embraced online learning for years, Texas and Utah both adjusted their insurance ce requirements earlier this year to be more accepting of online courses (sometimes referred to as “classroom equivalent”).

Online learning is effective. Most online courses are written in a straight-forward style that is easy to read and allows you to identify critical information (just as an in-person instructor might emphasize important points). Quiz-like questions throughout a course engage you directly and helps you assess how well you understand the content. This is an advantage over many classroom courses where you’re one of many participants in the class and might not receive individualized feedback.

In an online course, you control the pace so you can spend more time on challenging content and progress through familiar information more quickly, allowing you to determine what to focus on. And since online courses tend to be written by the same types of experts who are invited to present in the classroom, you can feel confident that you’re still receiving an expert’s perspective on the subject.

Online learning is convenient. Those who have adopted online learning to fulfill insurance ce requirements often praise its convenience. As mentioned previously, you set the pace. If you’re struggling to grasp a complex topic, you can spend as much time reviewing the content as needed, and even revisit the information again later. Unlike a classroom instructor, an online course will wait if you need to take an urgent phone call.

Don’t have time to spend an entire day sitting in a classroom? Online learning comes to the rescue here, too. You can take segments of an online course over a few (or even several) days, if your busy schedule demands it. Time and place are flexible too. Maybe your best opportunity to learn is first thing in the morning before your co-workers start to arrive to the office. Maybe it’s easier to focus on learning in the comfort of your home, after you’ve tucked in the kids. Either way, online learning is available when you’re ready for it.

What are your experiences with online learning? And which group – early adopters, recent users, or curious scouts – do you belong to? Leave a comment to tell us where you stand!

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If you appreciate these ideas, it’d be swell for you would share them (button below) or subscribe via the feed.

Click here for 5 reasons why you should subscribe!

Interested in sales?  Perhaps Insurance, Real Estate, or Finance is your calling..  Click here to get licensed.

Need your Insurance Continuing Education?..Click here to take your continuing education classes online.

Shelley A. Gable is an instructional designer and freelance writer. She has developed training for functions such as financial services, call centers, and engineering education. Shelley writes articles on topics related to training and management for print and online publications. Visit Shelley’s website at http://shelleygable.wordpress.com.

Continuing Education on Consumer Plans: The What

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By Cathy Miller, Business Writer

One thing the healh reform law assured was continuing education. It introduced a whole new list of subjects. Consumer-Driven Health Plans (CDHPs) confuse consumers and insurance professionals. Their value is still hotly debated by many.

Since InternetCE is all about continuing education and making learning simple, we will attempt to break this topic into something a bit less overwhelming. This month, we introduce a 3-Part series on CDHPs that includes:

  • Part 1 – Continuing Education on Consumer Plans: The What
  • Part 2 - Continuing Education on Consumer Plans: The Numbers
  • Part 3 – Continuing Education on Consumer Plans: The Future

We kick off this series with some background information on CDHPs. Part 2 looks at the numbers including recent surveys by Employee Benefit Research Institute (EBRI) and America’s Health Insurance Plans (AHIP) on CDHPs. Part 3 reviews the impact of the health reform law on CDHPs and views on the future of CDHPs.

Part 1 – Continuing Education on Consumer Plans: The What

Health insurance has always had its own unique characteristics. From the beginning of employer-sponsored health insurance, the individual (consumer) was sheltered from the true cost of health care.

Employers contributed much of the cost of premiums; plan designs and delivery models covered most of the costs. The explosion of HMOs in the 1980s exacerbated the problem as enrollees had little or no out-of-pocket costs. Employers, increasingly frustrated by rising costs, demanded change. From that frustration and burdening cost rose Consumer-Driven Health Plans (CDHP).

The CDHP Model

The basic premise of the CDHP model asks the question, “Why shouldn’t health care be like any other product or service?” Consumers make purchasing decisions every day based on price, quality and convenience. The problem with health care was the lack of knowledge of what it cost. Employers and consumers alike did not have the information needed for informed decision. It was time to allow the individual to take control of his or her health insurance needs.

Some common features of the CDHP model include:

  • Placing the health care decision-making in the hands of the consumer
  • Increasing transparency of costs and quality of care to promote competition
  • Decreasing costs through the reduction of unnecessary tests or services
  • Encouraging healthy behaviors through financial incentives to participate in programs such as wellness programs or disease management
  • Providing consumer tools such as medical procedure cost comparisons for informed decision-making

Types of Plans

Health Reimbursement Arrangement (HRA)

Introduced in 2002, Health Reimbursement Arrangements (also known as Health Reimbursement Account “HRA”) are programs authorized by the I.R.S., offered through employer-sponsored health plans. HRAs allow for the reimbursement of medical expenses incurred by employees. Some of the features of the HRA include:

  • Favorable tax treatment
  • Funding soley by employers
  • Allows participants to carry forward unused funds
  • May only be used for qualified medical expenses

Reimbursements for qualified medical expenses are excluded from employees’ gross income. Since the HRA reimburses medical expenses for current or former employees and their dependents only, it receives favorable tax treatment. Employers have control over how funds may be used and this information must be contained in the plan document. Employers are not required to pre-fund the HRA but rather pay claims as they occur. Employers can offer HRAs with other health benefit plans including a Flexible Spending Account.

Health Savings Account (HSA)

Signed into law in 2004, Health Savings Accounts (HSAs) created another form of CDHPs. They embody one of the best tax-advantaged savings plan ever passed by Congress. HSAs allow individuals to save tax-free dollars for medical expenses and retirement.

The funding of HSAs can be through employers or employees and employees can take their HSA with them if they change jobs. This is known as portability. A key difference from an HRA, individuals are eligible for participation in an HSA. HSAs are not only for employer-sponsored health plans.

The following requirements apply to HSAs. Just announced, the limits shown below, stay the same for 2011.

High Deductible Health Plan: Individuals must be covered under a “High Deductible Health Plan” as defined by the IRS and U.S. Treasury. In 2010, the minimum qualifying deductible is $1,200 for self-only coverage and $2,400 for family coverage.

Maximum Out-of-Pocket Amounts: HDHPs cannot contain an annual out-of-pocket amount that exceeds limits set by the IRS and U.S. Treasury. In 2010, the annual maximum out-of-pocket amount is $5,950 for self-only coverage and twice that or $11,900, for family coverage.

Maximum Annual Contributions: A maximum annual contribution limit exists for eligible individual. In 2010, the maximum annual contribution for self-only coverage is $3,050 and $6,150 for family coverage.”Catch-up” contributions are allowed for individuals age 55 and older. In 2010, the HSA catch-up contribution is $1,000 over the maximum annual contribution. Individuals who are eligible on the first day of the last month of the taxable year (December for most taxpayers) are allowed the full annual contribution (and catch up contribution, if 55 or older by year-end), regardless of the number of months of eligibility in the year. For individuals no longer eligible on that date, both the HSA contribution and catch up contribution apply pro rata based on the number of months of the year a taxpayer is an eligible individual.

Employer Contributions: If an employer contributes to the HSA, equivalent contributions must be made for all employees with comparable coverage.

Distributions: Distributions for qualified medical expenses are excluded from gross income. Distributions for non-qualified medical expenses are included in gross income with a 10 percent penalty if distributed before age 65. Note: the penalty increases to 20 percent in 2011.

The above are the basics. For purposes of this discussion, we did not include Flexible Spending Accounts (FSAs) or Medical Savings Accounts/Archer Medical Savings Accounts (MSAs), the precursors to HSAs and HRAs.

Please share your thoughts regarding CDHPs in Comments. We’d love to hear from you. 

Next up: Part 2 - Continuing Education on Consumer Plans: The Numbers

Notice of Disclaimer –Cathy Miller and InternetCE are not attorneys and cannot provide legal advice. The information provided is for your general background only, and is not intended to constitute legal advice as to your specific circumstances. We recommend you review legislation with legal counsel.

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Cathy Miller, Business Writer/Consultant has over 30 years of professional writing with a specialty in health care, employee benefits and wellness. Cathy also has an active Life/Accident/Health insurance license. Visit Cathy at her business writing blog, Simply stated business to Keep it simple, clear & uniquely yours

Tell Us What You Think about InternetCE

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We want to hear about your experience with our insurance continuing education courses and customer service.

A recent customer service experience…

I recently made some changes to my portfolio of insurance policies and mutual funds. My accounts span three different companies, and I had to contact each to make the changes. All of my transactions went smoothly. If I were asked to describe my interactions with the customer service representatives from each company, I’d say that two were fine and the third was really impressive.

What was so impressive about the third?

It had nothing to do with company policy. My request was quickly fulfilled by all three companies and no one offered me any incentives. The difference is actually quite simple – the third company interacted with me like a person. The service representative had a conversational tone, didn’t seem rushed, and sounded like she was smiling on the other end of the line. She also anticipated my needs by making sure I understood how to complete the form I needed to fill out and send back.

We all have stories of horrific and exemplary customer service. And realistically, the majority of our experiences are somewhere in between – satisfactory but not noteworthy.

At InternetCE, we believe that the quality of our insurance continuing education courses and our customer service is what differentiates us from our competitors. Your interactions with us should be noticeably positive. The feedback we’ve received suggests that our customers agree. But since it’s easy for any company to boast about it’s quality, we’d like to give everyone an opportunity to hear it from our customers.

We want to hear from you!

We’d like to start sharing customer experiences on this blog. What do you think of our insurance ce courses? What are your impressions of our service? If you’re willing to share your experience with readers, please email your story to info@internetce.com.

When sharing your story, we’d love for you to answer some of these questions:

  1. Which insurance ce courses have you taken recently?
  2. How have those courses benefited you and your professional development?
  3. What features of the courses appealed to you most?
  4. Would you recommend us to others? And if so, why?
  5. Did you have any concerns before signing up for our courses?
  6. Have you interacted with our staff? If so, what was the situation and how do you feel we handed it?

Want some free publicity?

If you let us share your experience on this blog, we’ll include a brief profile about you too (after all, we can all benefit from some extra mentions of our business and expertise!). So please be sure to write a little bit about yourself when you send your story – what you do, what products you work with, the company you work for, recent accomplishments – anything you’d like to share.

And of course, you’re also welcome to share your experiences by commenting on this (or any) article on this blog!

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If you appreciate these ideas, it’d be swell for you would share them (button below) or subscribe via the feed.

Click here for 5 reasons why you should subscribe!

Interested in sales?  Perhaps Insurance, Real Estate, or Finance is your calling..  Click here to get licensed.

Need your Insurance Continuing Education?..Click here to take your continuing education classes online.

Shelley A. Gable is an instructional designer and freelance writer. She has developed training for functions such as financial services, call centers, and engineering education. Shelley writes articles on topics related to training and management for print and online publications. Visit Shelley’s website at http://shelleygable.wordpress.com.

Amp Up Learning with a Study Buddy

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By Shelley A. Gable

Have you noticed that teachers and college professors often encourage students to form study groups? Whether it’s to study for an exam or simply keep up with what’s being taught in class, many students find that study groups, or even just a single study buddy, can help keep them on track.

Of course, this concept doesn’t just apply to full-time students. You, too, can benefit from having a study buddy to help you keep up with your insurance continuing education requirements or study for that upcoming licensing exam.

Structure

If you’re coordinating your continuing education with a study buddy, you’re likely to create structure for your learning. For instance, you might plan to take certain online courses together every few months. Maybe you meet for lunch every other Tuesday to discuss recent insurance ce courses or study for an exam.

Regardless of how you schedule these activities, the simple fact that they’re scheduled prompts you to approach your professional development more strategically. It also helps you avoid putting off your insurance ce requirements until the last minute so that you’re not stuck cramming too many classes into a short period of time.

Accountability

Coordinating learning activities with a study buddy also holds you accountable for following through. While it might be easy to delay an online course until “next week” for several weeks in a row if no one else is depending on you to get it done, you might feel a bit guilty if this also requires pushing back a meeting with your study buddy every time.

Furthermore, meeting with a study buddy to discuss an online course can help motivate you to pay attention and think critically about what you’re learning. If you’re meeting someone for coffee to discuss what you’ve learned about a recently changed law, you may be more likely look for interesting highlights about the law that you can discuss later. You might even find yourself jotting down the key points of an online course so you can feel more prepared to discuss them, even if you aren’t usually a note taker. Taking the time to think critically about the content in an online course and organizing that information for yourself is critical for ensuring that your new knowledge is saved in long-term memory.

Discussion

How many times have you had an “ah ha!” moment by talking through a situation out loud with someone? Several articles on this blog address the benefits of discussing newly learned knowledge with others. Talking about what you’ve learned from an online course prompts you explain new ideas in your own words and in a context that is relevant for you personally. Listening to someone else do the same can help you see that same information from a new perspective, which can deepen and/or broaden your understanding of a concept.

Another benefit of discussing learning with a study buddy is that it can be more fun and interesting than simply reviewing content on your own. Enjoying your review sessions is not only motivational, but it can also make information easier to remember later.

Peer pressure can be good.

Although peer pressure often has a negative connotation, peer pressure and peer support can be powerful tools in helping you accomplish your goals. If you’re skeptical, give it a try. And please be sure to come back and let us know how it works out!

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If you appreciate these ideas, it’d be swell for you would share them (button below) or subscribe via the feed.

Click here for 5 reasons why you should subscribe!

Interested in sales?  Perhaps Insurance, Real Estate, or Finance is your calling..  Click here to get licensed.

Need your Insurance Continuing Education?..Click here to take your continuing education classes online.

Shelley A. Gable is an instructional designer and freelance writer. She has developed training for functions such as financial services, call centers, and engineering education. Shelley writes articles on topics related to training and management for print and online publications. Visit Shelley’s website at http://shelleygable.wordpress.com.