Today I helped two families better understand their dental insurance options. It’s s far easier topic than health insurance and therefore feels more rewarding. I worked from my rustic Bayshore office that tends to be a more relaxed place to work by phone.
At this time it appears that Democrats have the political power to block any attempt to repeal of the Affordable Care Act in the US Senate and are expected to do so, according to policy experts who advise the health insurance industry. However, Republicans do have enough votes for a budget-related bill to remove funding for the cost-sharing federal subsidies and the expansion of Medicaid.
So it appears that coverage for the lowest income individuals is threatened but other parts of the law remain safe for 2017.
This week the Court of Appeals for District of Columbia affirmed a lower court’s earlier decision on litigation affecting the fixed indemnity health insurance. The ruling reaffirms that the Department of Health and Human Services (HHS) may not require consumers purchasing fixed indemnity health insurance policies to certify that they have other health insurance coverage that qualifies as under the provisions of the Affordable Care Act. The common term for these policies is “mini-med insurance”. While many, like this Consumer Reports writer, predicted the death of this type of insurance, the opposite actually happened. This type of coverage has become more popular since passage of the Affordable Care Act.
While these plans do not help an individual or company avoid penalties for non-compliance with Affordable Care Act, they may be a more attractive option to the millions who are exempt from the health care law’s requirements.
Earlier HHS had proposed that only individuals who have qualified plans (aka “Obamacare”) could buy these policies. The court seems to uphold the rights of individuals who avoid Obamacare for any reason and want to maintain their non-compliant health plan.
The courts seem to say that consumers can purchase any insurance they want and deal with the consequences later.
“Insurance is the business of mirage” -a theme of my law professor many years ago. Life experience has proven him correct time and again.
I suppose that most of us involved in the field of advising formerly affluent clients in financial distress have seen more collapses due to not having insurance coverage they thought they had than all other causes combined.
COBRA health coverage may not be extended beyond the 18 or 36 month maximum period prescribed by law. See freedombenefits.net for temporary immediate coverage alternatives or see cobraplan.com for a more detailed explanation of the law.
Freedom Benefits is pleased to announce that all Value Med insurance plans now include Identity Restoration protection plan through ID Recovery Pros. Identity protection is a growing concern among consumers who need assistance in dealing with credit and related issues that accompany an identity theft.
ID Recovery Pros provides immediate and complete assistance in resolving ALL threats if your identification has been compromised. ID Restoration service includes:
- Three Generation Family Coverage
- Includes member’s, parents and children under the age of 25 living in the same household
- Personal Advocate assigned to you after a compromise
- Personalized recovery plan
- Post-recovery follow-up for 12 months after resolution
- Unlimited Discovery Period
- Online access to case status 24/7
Read more at http://freedombenefits.net/affordable-health-insurance/Value-Med-Insurance.html.
We are please to see more low cost telephone-based medical service options (often called “tele-med”) being added to popular health insurance policies. While each health plan is different, this example below was part of a recent advertisement for tele-med services in Value Benefits plans available through Freedom Benefits:
- UNLIMITED NO Cost Consultations
- Only $19.95 / month for Individuals or Families
- 70% of ALL Emergency Room Visits can be treated with MDhotline
- NO Waiting Rooms! The average consultation time is approximately 12 minutes.
- NO Hassle! MDhotline physicians are board certified and available 24 hours per day, 7 days a week.
- NO Co-Pays or Deductibles
My primary work responsibility for the next 10 days will be filing tax extensions with federal and state authorities.
If you need an extension let me or your accountant know. Do not assume your accountant will do this unless specifically confirmed. Late filings can be expensive.
Freedom Benefits maintains a collection of sample documents for all types of small business employee benefit plans. While other content is published and available in its entirety here on this web site, sample documents are available only through personal request to this site’s author Tony Novak.
The sample documents should be reviewed by an attorney before recommendation for use in any specific application. While we are aware that some small businesses use our sample documents as templates rather than samples, we can not endorse that approach.
The purpose of this health plan is to furnish employees with health insurance and reimbursement for qualifying medical and health care expenses not reimbursed by any other plan or taken as a tax deduction.
This is a “combination health plan” that takes advantage of the tax benefits of several different provisions of our tax laws. The plan is expected to qualify as a nondiscriminatory health reimbursement arrangement (HRA) under Notice 2002-45 of the Internal Revenue Code, a Flexible Spending Arrangement (FSA) plan under IRC Section 125 and as an accident and health care plan within the meaning of IRC Section 105(e) of the tax code. Additionally, the amount of the reimbursements paid to employees under this plan will be eligible for exclusion from their income under Section 105(b) of the Code.
Sample plan document table of contents
ARTICLE I. PURPOSE AND ESTABLISHMENT
1.3 Plan Not Subject to Cafeteria Plan
1.4 Effective Date
1.5 Termination Date
ARTICLE II. DEFINITIONS
2.1 Board of Directors
2.2 Cafeteria Plan
2.9 Health Savings Account
2.10 High Deductible Health Plan
2.13 Plan Adviser
2.14 Plan Year
2.15 Qualifying Medical and Health Care Expenses
2.16 Reimbursement Account
ARTICLE III. ELIGIBILITY, ENROLLMENT AND TERMINATION
3.1 Eligibility and Enrollment
3.2 Acceptance of Elections
ARTICLE IV. REVOCATION AND MODIFICATION OF ELECTED COVERAGE
4.1 Revocation and Modification
4.2 Administrative Modification
4.3 Limitations on Elections of Highly Compensated Employees
ARTICLE V. BENEFITS
5.2 Carry-Forward Forfeiture Benefits Not Limited to Expenses Incurred During Plan Year
5.5 Qualifying Health and Medical Care Expenses
5.6 Refund of Duplicate Reimbursement
ARTICLE VI. ADMINISTRATION
6.2 Duties and Powers of the Committee
6.3 Delegation and Allocation of Responsibilities of the Committee
ARTICLE VII. CLAIMS PROCEDURE
7.1 Submission of Claims
7.2 Review of Denial of Claims
ARTICLE VIII. FUNDING
8.1 No Obligation to Fund
8.2 No Interest
ARTICLE IX. AMENDMENTS; TERMINATION ARTICLE X. MISCELLANEOUS
10.1 No Employment Contract
10.2 No Assignment
10.3 Choice of Law
10.5 Gender, Singular and Plural References
ARTICLE XI. ADOPTION BY MULTIPLE EMPLOYERS
11.1 Method of Adoption
11.2 Delegation Upon Adoption
11.3 Employer Contributions
11.4 Withdrawal or Removal
Appendix A – Schedule of Benefits
In addition to the plan document, a sample corporate resolution to adapt the plan (for the employer’s records) and sample Summary Plan Description (for electronic distribution to employees) are also provided. Sample plan documents are available free of charge to the attorney of Freedom Benefits’ business clients. Plan documents are typically modified to suit your specific business intent.
Other resources available at www.tonynovak.com:
25 reasons that small businesses choose health reimbursement arrangements
HRA plan design approved by IRS
HRA plan helps owner/employees
HRA plan overview
HRA plans for small businesses
HRA vs. HSA: Which is best for me?
IRS approves new HRA plan design
MSAs, HRAs and HSAs: which health plan is right for my small business
(If the links are broken due to an anticipated site update then do a search for a term or phrase).
For small businesses with less than 20 employees, Medicare is always primary and the employer provided plan is always secondary.
Small businesses that reimburse the cost of Medicare to more than one employee need to consider the impact of market reform laws under the Affordable Care Act. Unless the reimbursements are made to employees who are also covered by group health insurance (in addition to Medicare) then this would create a group health plan (the reimbursement plan) that does not meet the requirements, thereby triggering excise tax penalties under IRC 4980D that can be severe. Since few small businesses wish to have Medicare-eligible employees also on the employer-sponsored group health insurance, this strategy is often impractical.
Since the Medicare-eligible person(s) are often the business owner(s). there may be business planning work-arounds available to avoid excise tax problems.
See the slide presentation at http://www.medicarerights.org/PartB-Enrollment-Toolkit/Medicare-and-Employer-Based-Insurance-The-Basics.pdf for a full explanation of this complicated topic.
Medicare Guide: Who pays first?
Medicare and You 2012
Medicare Interactive: Filling the gaps in Medicare: employer insurance