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On July 14, the Departments of Treasury, Labor, and Health and Human Services jointly released Interim Final Rules (IFRs) for group health plans and health insurance issuers related to coverage of preventive services under the Patient Protection and Affordable Care Act (PPACA).
Under the regulations, plans must cover without copay, coinsurance or deductible – certain preventive services that have “strong scientific evidence of their health benefits.”
These are interim final rules (IFRs), which means final rules may eventually differ, but these rules are final in the interim. As additional clarification is made available whether through rule-making or otherwise, we’ll share that information with you.
General highlights of new regulations:
• Grandfathered plans are exempt for as long as they remain grandfathered.
• Non-grandfathered plans (i.e., plans either not in effect on March 23, 2010 or that made changes since then resulting in loss of grandfathered status) must comply with the no-cost-sharing requirement beginning with the first plan year on or after September 23, 2010.
• Preventive services are to be covered without any cost-sharing requirement when delivered by a network provider.
• Employers and insurers are not required to provide coverage for recommended preventive services delivered by an out-of-network provider or may impose cost-sharing for recommended preventive services delivered by an out-of-network health care provider.
• If a guideline for a recommended preventive service does not specify the frequency, method, treatment, or setting for the service, the plan or issuer may use "reasonable medical management techniques" to determine any coverage limitations on the service.
General list of services to be offered without copay, coinsurance or deductible:
Evidence-based preventive services: This list of items is taken from the current recommendations of the United States Preventive Services. They are included only if they have a rating of A or B. This broad list generally includes:
• Breast cancer and cervical cancer screenings
• Colon cancer screenings
• Screening for vitamin deficiencies during pregnancy
• Screenings for diabetes, high cholesterol and high blood pressure
Routine vaccinations: A list of immunizations – recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention – are included in the rule. They are considered routine for use with children, adolescents, and adults and range from childhood immunizations to periodic tetanus shots for adults.
Prevention for children: The rule includes preventive care guidelines for children – from birth to age 21 – developed by the Health Resources and Services Administration with the American Academy of Pediatrics. Services include regular pediatrician visits, vision and hearing screening, developmental assessments, immunizations, and screening and counseling to address obesity.
Prevention for women: The regulation mandates certain preventive care measures for women. These recommendations will be in place until new requirements for prevention for women are issued by the United States Preventive Services Task Force or appear in comprehensive guidelines supported by the Health Resources and Services Administration.
A full list of covered preventive services issued as part of the Interim Final Regulations may be reviewed at: http://www.healthcare.gov/center/regulations/prevention/taskforce.html
Billing and Office Visits.
If a recommended preventive item or service is billed separately from an office visit, then cost-sharing may be applied to the office visit.
If a recommended preventive item or service is not billed separately from an office visit and the primary purpose of the office visit is the delivery of such item or service, then cost-sharing requirements may not be imposed with respect to the office visit.
If a recommended preventive item or service is not billed separately from an office visit and the primary purpose of the office visit is not the delivery of the preventive item or service, then cost-sharing may be applied to the office visit.
Friday, July 16, 2010
GRANDFATHERING FACT SHEET
What is grandfathering?
Grandfathering allows groups and individual members that keep their existing plan from March 23, 2010, to January 1, 2014, to be exempt from the new product and rating framework that is effective in 2014. To maintain grandfathered status, a client must continue to keep the plan and the plan’s benefits essentially the same. Grandfathering also exempts plans from some of the requirements of the plan-related provisions effective September 23, 2010.
The following changes can be made without impacting grandfathered status:
• Changes in premiums of a policy or plan
• Changes required to comply with federal or state law
• Changes to increase benefits, or voluntarily comply with provisions of the Patient Protection and
Affordable Care Act
• Changes to plan structure, for example, switching from a health reimbursement arrangement to major
medical coverage, or from insured to self-funded coverage
• Changes to a provider network
• Changes to a prescription drug formulary
• Changes to accommodate mergers and acquisitions (as long as the merger or acquisition is not done solely
to allow a group to move from one grandfathered plan to another when the plan would reduce benefits or
increase cost sharing in excess of that allowed by the regulations)
• Changes to an ASO plan’s third party administrator
The following changes would cause a loss of grandfathered status:
• Eliminate all (or substantially all) benefits to diagnose or treat a particular condition.
• Increase coinsurance (or another percentage cost-sharing requirement) above the level at which it was set
on March 23, 2010. In other words, any increase in an insurer or plan’s coinsurance will result in a loss of
grandfathered status.
• Increase fixed-amount cost-sharing requirements other than copayments, such as a deductible or an out-
of-pocket limit, by a total percentage (measured from March 23, 2010) that is more than the sum of
medical inflation plus 15%.
• Increase copayments above the level in effect on March 23, 2010, by an amount that exceeds the grater of
(a) the sum of medical inflation plus 15%, or (b) $5 increased by medical inflation.
• Reduce employer contributions (calculated by cost or formula, such as hours worked) toward any tier of
group health insurance coverage or a group health plan by more than 5% below the contribution rate on
March 23, 2010.
• Impose an annual limit on the dollar value of benefits if an annual or lifetime limit had not been previously
imposed on all benefits or, for plans that previously imposed a life time limit of all benefits, imposed an
overall annual dollar limit that is lower than the lifetime limit, or for plans that previously imposed an annual
limit on all benefits, decreases the dollar value of the annual limit.
• Issuer or plan sponsor does not disclose to participants and beneficiaries that the plan or coverage is a
grandfathered health plan.
• Change from one insurer to another.
Grandfathering allows groups and individual members that keep their existing plan from March 23, 2010, to January 1, 2014, to be exempt from the new product and rating framework that is effective in 2014. To maintain grandfathered status, a client must continue to keep the plan and the plan’s benefits essentially the same. Grandfathering also exempts plans from some of the requirements of the plan-related provisions effective September 23, 2010.
The following changes can be made without impacting grandfathered status:
• Changes in premiums of a policy or plan
• Changes required to comply with federal or state law
• Changes to increase benefits, or voluntarily comply with provisions of the Patient Protection and
Affordable Care Act
• Changes to plan structure, for example, switching from a health reimbursement arrangement to major
medical coverage, or from insured to self-funded coverage
• Changes to a provider network
• Changes to a prescription drug formulary
• Changes to accommodate mergers and acquisitions (as long as the merger or acquisition is not done solely
to allow a group to move from one grandfathered plan to another when the plan would reduce benefits or
increase cost sharing in excess of that allowed by the regulations)
• Changes to an ASO plan’s third party administrator
The following changes would cause a loss of grandfathered status:
• Eliminate all (or substantially all) benefits to diagnose or treat a particular condition.
• Increase coinsurance (or another percentage cost-sharing requirement) above the level at which it was set
on March 23, 2010. In other words, any increase in an insurer or plan’s coinsurance will result in a loss of
grandfathered status.
• Increase fixed-amount cost-sharing requirements other than copayments, such as a deductible or an out-
of-pocket limit, by a total percentage (measured from March 23, 2010) that is more than the sum of
medical inflation plus 15%.
• Increase copayments above the level in effect on March 23, 2010, by an amount that exceeds the grater of
(a) the sum of medical inflation plus 15%, or (b) $5 increased by medical inflation.
• Reduce employer contributions (calculated by cost or formula, such as hours worked) toward any tier of
group health insurance coverage or a group health plan by more than 5% below the contribution rate on
March 23, 2010.
• Impose an annual limit on the dollar value of benefits if an annual or lifetime limit had not been previously
imposed on all benefits or, for plans that previously imposed a life time limit of all benefits, imposed an
overall annual dollar limit that is lower than the lifetime limit, or for plans that previously imposed an annual
limit on all benefits, decreases the dollar value of the annual limit.
• Issuer or plan sponsor does not disclose to participants and beneficiaries that the plan or coverage is a
grandfathered health plan.
• Change from one insurer to another.
Thursday, April 29, 2010
HEALTH CARE REFORM: IMPACTS ON EMPLOYERS
The newly enacted federal Patient Protection and Affordable Care Act (the "Act") makes significant changes to the health and other benefits that employers offer to their employees. Additionally, there are administrative requirements in the act with which an employer will need to comply. It is imperative that employers have a detailed understanding of what changes are on the immediate horizon, as well as what changes will be required in the future, so that they may adequately plan and account for the administrative and financial impact of these changes to their business and on their workforce.
Changes required in 2010
There are numerous changes that the act makes effective this year.
Grandfathering
The act does explicitly permit the employer to maintain current health coverage for individuals already enrolled, subsequently enrolled family members and new hires.
Adult children up to age 26 are eligible to receive coverage from their parent's plan, regardless of students status or marital status. These children need not be supported by or living with their parents. This provision also applies to "grandfathered" plans.
No lifetime maximum benefit limits may be imposed. This provision also applies to "grandfathered" plans.
Employers' plans must provide preventive care without cost sharing, and must cover certain child preventive services.
Changes required in 2011
Beginning in 2011, the act will require several changes to FSAs, HRAs HSAs. Employees will not be able to receive pre-tax reimbursements from the FSA, HRA or HAS for non-prescribed over-the counter medications. Nonqualified HAS withdrawals is increased from 10 percent to 20 percent.
The requirement that employers report the value of employer-provided health coverage on each employee's W-2 is effective in 2011.
The act also establishes a new, government-run voluntary long-term care program called the CLASS Act.3
Employers must automatically enroll employees into the program and make payroll deductions for the premiums, although employees can elect not to participate. Employers may choose not to participate in the program.
Changes required in 2012
One important change made by the act unrelated to health benefits requires employers beginning in 2012 to provide an IRS Form 1099 to all corporate service providers receiving more than $600 per year for services or property.
Changes required in 2013
Effective in 2013, employee contributions to FSAs will be capped at $2,500 annually, with the cap adjusted annually to the Consumer Price Index.
New employee notice required
Effective March 1, 2013 the act requires employers to issue a new notice to employees containing information about state exchanges, the availability of premium assistance if the actuarial value of the employer's plan is below 60 percent, and the availability of free choice vouchers in the upcoming plan year (2014).
The exchanges
Beginning in 2014, states will begin to operate what are called "exchanges", which are marketplaces for individuals and some employer groups to obtain private health insurance choices. In 2014, small group employers with fewer than 100 employees are eligible to purchase health insurance coverage in the exchange; while beginning in 2017, states may choose to open the exchanges to employers with more than 100 employees.
Individual and employer responsibilities about health care coverage
Beginning in 2014, individuals also have the personal responsibility to obtain qualifying health coverage. They can do this by enrolling in an employer-sponsored health plan, a government-sponsored health plan or a health plan in the exchange, if they meet the criteria to qualify to buy in the exchange. Prior to 2014, each employer will need to calculate how many full-time (or full-time equivalent) employees it employs to determine whether or not it must comply with the act's 2014 provision.
The employer must count all full-time employees (defined as those working 30 or more hours per week, determined on a monthly basis) and must also take into account part-time employees on a full-time equivalency basis.
New employer penalties
If an employer has 50 or more full-time employees, then the employer may be subject to penalties under the act if it provides either no health coverage to full-time employees, or provides coverage to full-time employees that is not affordable.
Changes in benefits
Waiting period changes: An employer may not impose a waiting period greater than 90 days for the employee to satisfy before getting health coverage.
New Employer Administrative Reporting
Finally, the act will require employers to annually report to the IRS a number of pieces of data, including the following:
- Whether the employer offers minimum essential coverage to full-time employees;
- Any waiting period for health coverage;
- The monthly premium for the lowest cost option in each enrollment category under the plan;
- The employer's share of the total allowed cost of benefits provided under the plan;
- The number of full-time employees during each month;
- The name, address and taxpayer identification number (or Social Security number) of each full-time employee, and the months each employees was covered under the employer's plan, and
- "Such other information as the (HHS) Secretary may require."
Changes Required in 2018
Finally, in 2018 a 490 percent excise tax on high-cost plans will be applied to plans costing more than $10,200 for individual coverage, or $27,500 for family coverage. The thresholds are adjusted to $11,850 and $30,950 for retirees over age 55 and individuals in high-risk professions.
Thresholds will be indexed to the Consumer Price Index (CPI) plus 1 percent in 2019.
Small Business Health Care Tax Credit: Frequently Asked Questions]
The new health reform law gives a tax credit to certain small employers that provide health care coverage to their employees, effective with tax years beginning in 2010. The following questions and answers provide information on the credit as it applies for 2010-2013, including information on transition relief for 2010. An enhanced version of the credit will be effective beginning in 2014. The new law, the Patient Protection and Affordable Care Act, was passed by Congress and was signed by President Obama on March 23, 2010.
Employers Eligible for the Credit
1. Which employers are eligible for the small employer health care tax credit?
A. Small employers that provide health care coverage to their employees and that meet certain requirements ("qualified employers") generally are eligible for a Federal income tax credit for health insurance premiums they pay for certain employees. In order to be a qualified employer, (1) the employer must have fewer than 25 full-time equivalent employees ("FTEs") for the tax year, (2) the average annual wages of its employees for the year must be less than $50,000 per FTE, and (3) the employer must pay the premiums under a "qualifying arrangement" described in Q/A-3. See Q/A-9 through 15 for further information on calculating FTEs and average annual wages and see Q/A-22 for information on anticipated transition relief for tax years beginning in 2010 with respect to the requirements for a qualifying arrangement.
2. Can a tax-exempt organization be a qualified employer?
A. Yes. The same definition of qualified employer applies to an organization described in Code section 501(c) that is exempt from tax under Code section 501(a). However, special rules apply in calculating the credit for a tax-exempt qualified employer. A governmental employer is not a qualified employer unless it is an organization described in Code section 501(c) that is exempt from tax under Code section 501(a). See Q/A-6.
Calculation of the Credit
3. What expenses are counted in calculating the credit?
A. Only premiums paid by the employer under an arrangement meeting certain requirements (a "qualifying arrangement") are counted in calculating the credit. Under a qualifying arrangement, the employer pays premiums for each employee enrolled in health care coverage offered by the employer in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the coverage. See Q/A-22 fo The new health reform law gives a tax credit to certain small employers that provide health care coverage to their employees, effective with tax years beginning in 2010. The following questions and answers provide information on the credit as it applies for 2010-2013, including information on transition relief for 2010. An enhanced version of the credit will be effective beginning in 2014. The new law, the Patient Protection and Affordable Care Act, was passed by Congress and was signed by President Obama on March 23, 2010.
Employers Eligible for the Credit
1. Which employers are eligible for the small employer health care tax credit?
A. Small employers that provide health care coverage to their employees and that meet certain requirements ("qualified employers") generally are eligible for a Federal income tax credit for health insurance premiums they pay for certain employees. In order to be a qualified employer, (1) the employer must have fewer than 25 full-time equivalent employees ("FTEs") for the tax year, (2) the average annual wages of its employees for the year must be less than $50,000 per FTE, and (3) the employer must pay the premiums under a "qualifying arrangement" described in Q/A-3. See Q/A-9 through 15 for further information on calculating FTEs and average annual wages and see Q/A-22 for information on anticipated transition relief for tax years beginning in 2010 with respect to the requirements for a qualifying arrangement.
2. Can a tax-exempt organization be a qualified employer?
A. Yes. The same definition of qualified employer applies to an organization described in Code section 501(c) that is exempt from tax under Code section 501(a). However, special rules apply in calculating the credit for a tax-exempt qualified employer. A governmental employer is not a qualified employer unless it is an organization described in Code section 501(c) that is exempt from tax under Code section 501(a). See Q/A-6.
Calculation of the Credit
3. What expenses are counted in calculating the credit?
A. Only premiums paid by the employer under an arrangement meeting certain requirements (a "qualifying arrangement") are counted in calculating the credit. Under a qualifying arrangement, the employer pays premiums for each employee enrolled in health care coverage offered by the employer in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the coverage. See Q/A-22 for information on transition relief for tax years beginning in 2010 with respect to the requirements for a qualifying arrangement.
If an employer pays only a portion of the premiums for the coverage provided to employees under the arrangement (with employees paying the rest), the amount of premiums counted in calculating the credit is only the portion paid by the employer. For example, if an employer pays 80 percent of the premiums for employees' coverage (with employees paying the other 20 percent), the 80 percent premium amount paid by the employer counts in calculating the credit. For purposes of the credit (including the 50-percent requirement), any premium paid pursuant to a salary reduction arrangement under a section 125 cafeteria plan is not treated as paid by the employer.
In addition, the amount of an employer's premium payments that counts for purposes of the credit is capped by the premium payments the employer would have made under the same arrangement if the average premium for the small group market in the State (or an area within the State) in which the employer offers coverage were substituted for the actual premium. If the employer pays only a portion of the premium for the coverage provided to employees (for example, under the terms of the plan the employer pays 80 percent of the premiums and the employees pay the other 20 percent), the premium amount that counts for purposes of the credit is the same portion (80 percent in the example) of the premiums that would have been paid for the coverage if the average premium for the small group market in the State were substituted for the actual premium.
r information on transition relief for tax years beginning in 2010 with respect to the requirements for a qualifying4. What is the average premium for the small group market in a State (or an area within the State)?
A. The average premium for the small group market in a State (or an area within the State) will be determined by the Department of Health and Human Services (HHS) and published by the IRS. Publication of the average premium for the small group market on a State-by-State basis is expected to be posted on the IRS website by the end of April.
5. What is the maximum credit for a qualified employer (other than a tax-exempt employer)?
A. For tax years beginning in 2010 through 2013, the maximum credit is 35 percent of the employer's premium expenses that count towards the credit, as described in Q/A-3.
Example. For the 2010 tax year, a qualified employer has 9 FTEs with average annual wages of $23,000 per FTE. The employer pays $72,000 in health care premiums for those employees (which does not exceed the average premium for the small group market in the employer's State) and otherwise meets the requirements for the credit. The credit for 2010 equals $25,200 (35% x $72,000).
6. What is the maximum credit for a tax-exempt qualified employer?
A. For tax years beginning in 2010 through 2013, the maximum credit for a tax-exempt qualified employer is 25 percent of the employer's premium expenses that count towards the credit, as described in Q/A-3. However, the amount of the credit cannot exceed the total amount of income and Medicare (i.e., Hospital Insurance) tax the employer is required to withhold from employees' wages for the year and the employer share of Medicare tax on employees' wages.
Example. For the 2010 tax year, a qualified tax-exempt employer has 10 FTEs with average annual wages of $21,000 per FTE. The employer pays $80,000 in health care premiums for those employees (which does not exceed the average premium for the small group market in the employer's State) and otherwise meets the requirements for the credit. The total amount of the employer's income tax and Medicare tax withholding plus the employer's share of the Medicare tax equals $30,000 in 2010.
The credit is calculated as follows:
The credit is calculated as follows:
(1) Initial amount of credit determined before any reduction: (25% x $80,000) = $20,000
(2) Employer's withholding and Medicare taxes: $30,000
(3) Total 2010 tax credit is $20,000 (the lesser of $20,000 and $30,000).
(2) Employer's withholding and Medicare taxes: $30,000
(3) Total 2010 tax credit is $20,000 (the lesser of $20,000 and $30,000).
7. How is the credit reduced if the number of FTEs exceeds 10 or average annual wages exceed $25,000?
A. If the number of FTEs exceeds 10 or if average annual wages exceed $25,000, the amount of the credit is reduced as follows (but not below zero). If the number of FTEs exceeds 10, the reduction is determined by multiplying the otherwise applicable credit amount by a fraction, the numerator of which is the number of FTEs in excess of 10 and the denominator of which is 15. If average annual wages exceed $25,000, the reduction is determined by multiplying the otherwise applicable credit amount by a fraction, the numerator of which is the amount by which average annual wages exceed $25,000 and the denominator of which is $25,000. In both cases, the result of the calculation is subtracted from the otherwise applicable credit to determine the credit to which the employer is entitled. For an employer with both more than 10 FTEs and average annual wages exceeding $25,000, the reduction is the sum of the amount of the two reductions. This sum may reduce the credit to zero for some employers with fewer than 25 FTEs and average annual wages of less than $50,000.
Example. For the 2010 tax year, a qualified employer has 12 FTEs and average annual wages of $30,000. The employer pays $96,000 in health care premiums for those employees (which does not exceed the average premium for the small group market in the employer's State) and otherwise meets the requirements for the credit.
The credit is calculated as follows:
(1) Initial amount of credit determined before any reduction: (35% x $96,000) = $33,600
(2) Credit reduction for FTEs in excess of 10: ($33,600 x 2/15) = $4,480
(3) Credit reduction for average annual wages in excess of $25,000: ($33,600 x $5,000/$25,000) = $6,720
(4) Total credit reduction: ($4,480 + $6,720) = $11,200
(5) Total 2010 tax credit: ($33,600 – $11,200) = $22,400.
(2) Credit reduction for FTEs in excess of 10: ($33,600 x 2/15) = $4,480
(3) Credit reduction for average annual wages in excess of $25,000: ($33,600 x $5,000/$25,000) = $6,720
(4) Total credit reduction: ($4,480 + $6,720) = $11,200
(5) Total 2010 tax credit: ($33,600 – $11,200) = $22,400.
8. Can premiums paid by the employer in 2010, but before the new health reform legislation was enacted, be counted in calculating the credit?
A. Yes. In computing the credit for a tax year beginning in 2010, employers may count all premiums described in Q/A-3 for that tax year.
Determining FTEs and Average Annual Wages
9. How is the number of FTEs determined for purposes of the credit?
A. The number of an employer's FTEs is determined by dividing (1) the total hours for which the employer pays wages to employees during the year (but not more than 2,080 hours for any employee) by (2) 2,080. The result, if not a whole number, is then rounded to the next lowest whole number. See Q/A-12 through 14 for information on which employees are not counted for purposes of determining FTEs.
Example. For the 2010 tax year, an employer pays 5 employees wages for 2,080 hours each, 3 employees wages for 1,040 hours each, and 1 employee wages for 2,300 hours.
The employer's FTEs would be calculated as follows:
(1) Total hours not exceeding 2,080 per employee is the sum of:
a. 10,400 hours for the 5 employees paid for 2,080 hours each (5 x 2,080)
b. 3,120 hours for the 3 employees paid for 1,040 hours each (3 x 1,040)
c. 2,080 hours for the 1 employee paid for 2,300 hours (lesser of 2,300 and 2,080)
b. 3,120 hours for the 3 employees paid for 1,040 hours each (3 x 1,040)
c. 2,080 hours for the 1 employee paid for 2,300 hours (lesser of 2,300 and 2,080)
These add up to 15,600 hours
(2) FTEs: 7 (15,600 divided by 2,080 = 7.5, rounded to the next lowest whole number)
10. How is the amount of average annual wages determined?
10. How is the amount of average annual wages determined?
A. The amount of average annual wages is determined by first dividing (1) the total wages paid by the employer to employees during the employer's tax year by (2) the number of the employer's FTEs for the year. The result is then rounded down to the nearest $1,000 (if not otherwise a multiple of $1,000). For this purpose, wages means wages as defined for FICA purposes (without regard to the wage base limitation). See Q/A-12 through 14 for information on which employees are not counted as employees for purposes of determining the amount of average annual wages.
Example. For the 2010 tax year, an employer pays $224,000 in wages and has 10 FTEs.
Example. For the 2010 tax year, an employer pays $224,000 in wages and has 10 FTEs.
The employer's average annual wages would be: $22,000 ($224,000 divided by 10 = $22,400, rounded down to the nearest $1,000)
11. Can an employer with 25 or more employees qualify for the credit if some of its employees are part-time?
A. Yes. Because the limitation on the number of employees is based on FTEs, an employer with 25 or more employees could qualify for the credit if some of its employees work part-time. For example, an employer with 46 half-time employees (meaning they are paid wages for 1,040 hours) has 23 FTEs and therefore may qualify for the credit.
12. Are seasonal workers counted in determining the number of FTEs and the amount of average annual wages?
A. Generally, no. Seasonal workers are disregarded in determining FTEs and average annual wages unless the seasonal worker works for the employer on more than 120 days during the tax year.
13. If an owner of a business also provides services to it, does the owner count as an employee?
A. Generally, no. A sole proprietor, a partner in a partnership, a shareholder owning more than two percent of an S corporation, and any owner of more than five percent of other businesses are not considered employees for purposes of the credit. Thus, the wages or hours of these business owners and partners are not counted in determining either the number of FTEs or the amount of average annual wages, and premiums paid on their behalf are not counted in determining the amount of the credit.
14. Do family members of a business owner who work for the business count as employees?
A. Generally, no. A family member of any of the business owners or partners listed in Q/A-13, or a member of such a business owner's or partner's household, is not considered an employee for purposes of the credit. Thus, neither their wages nor their hours are counted in determining the number of FTEs or the amount of average annual wages, and premiums paid on their behalf are not counted in determining the amount of the credit. For this purpose, a family member is defined as a child (or descendant of a child); a sibling or step-sibling; a parent (or ancestor of a parent); a step-parent; a niece or nephew; an aunt or uncle; or a son-in-law, daughter- in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law.
15. How is eligibility for the credit determined if the employer is a member of a controlled group or an affiliated service group?
A. Members of a controlled group (e.g., businesses with the same owners) or an affiliated service group (e.g., related businesses of which one performs services for the other) are treated as a single employer for purposes of the credit. Thus, for example, all employees of the controlled group or affiliated service group, and all wages paid to employees by the controlled group or affiliated service group, are counted in determining whether any member of the controlled group or affiliated service group is a qualified employer. Rules for determining whether an employer is a member of a controlled group or an affiliated service group are provided under Code section 414(b), (c), (m), and (o).
How to Claim the Credit
16. How does an employer claim the credit?
A. The credit is claimed on the employer's annual income tax return. For a tax-exempt employer, the IRS will provide further information on how to claim the credit.
17. Can an employer (other than a tax-exempt employer) claim the credit if it has no taxable income for the year?
A. Generally, no. Except in the case of a tax-exempt employer, the credit for a year offsets only an employer's actual income tax liability (or alternative minimum tax liability) for the year. However, as a general business credit, an unused credit amount can generally be carried back one year and carried forward 20 years. Because an unused credit amount cannot be carried back to a year before the effective date of the credit, though, an unused credit amount for 2010 can only be carried forward.
18. Can a tax-exempt employer claim the credit if it has no taxable income for the year?
A. Yes. For a tax-exempt employer, the credit is a refundable credit, so that even if the employer has no taxable income, the employer may receive a refund (so long as it does not exceed the income tax withholding and Medicare tax liability, as discussed in Q/A-6).
19. Can the credit be reflected in determining estimated tax payments for a year?
A. Yes. The credit can be reflected in determining estimated tax payments for the year to which the credit applies in accordance with regular estimated tax rules.
20. Does taking the credit affect an employer's deduction for health insurance premiums?
A. Yes. In determining the employer's deduction for health insurance premiums, the amount of premiums that can be deducted is reduced by the amount of the credit.
21. May an employer reduce employment tax payments (i.e., withheld income tax, social security tax, and Medicare tax) during the year in anticipation of the credit?
A. No. The credit applies against income tax, not employment taxes.
Anticipated Transition Relief for Tax Years Beginning in 2010
22. Is it expected that any transition relief will be provided for tax years beginning in 2010 to make it easier for taxpayers to meet the requirements for a qualifying arrangement?
A. Yes. The IRS and Treasury intend to issue guidance that will provide that, for tax years beginning in 2010, the following transition relief applies with respect to the requirements for a qualifying arrangement described in Q/A-3:
(a) An employer that pays at least 50% of the premium for each employee enrolled in coverage offered to employees by the employer will not fail to maintain a qualifying arrangement merely because the employer does not pay a uniform percentage of the premium for each such employee. Accordingly, if the employer otherwise satisfies the requirements for the credit described above, it will qualify for the credit even though the percentage of the premium it pays is not uniform for all such employees.
(b) The requirement that the employer pay at least 50% of the premium for an employee applies to the premium for single (employee-only) coverage for the employee. Therefore, if the employee is receiving single coverage, the employer satisfies the 50% requirement with respect to the employee if it pays at least 50% of the premium for that coverage. If the employee is receiving coverage that is more expensive than single coverage (such as family or self-plus-one coverage), the employer satisfies the 50% requirement with respect to the employee if the employer pays an amount of the premium for such coverage that is no less than 50% of the premium for single coverage for that employee (even if it is less than 50% of the premium for the coverage the employee is actually receiving).
Tuesday, April 27, 2010
SMALL BUSINESS HEALTH CARE TAX CREDIT
Tax Credit for Small Groups
The IRS recently released materials for those wishing to claim the small business health care tax credit for 2010. A provision of the Patient Protection and Affordable Care Act (PPACA), this tax credit is designed to encourage small groups to offer health care coverage for the first time or enable them to maintain the coverage they already have. It will likely provide assistance to about four million small businesses.
This tax credit can be significant for a qualifying small group. In 2010, the maximum credit is 35% of employer-paid premiums; for tax exempt organizations, the maximum is 25% of employer-paid premiums. In 2014, the maximum increases to 50% of employer-paid premiums; for tax-exempt organizations, it increases to 35% of employer-paid premiums. In order to qualify for the credit, the employer must not employ more than 25 employees and the average annual compensation of those employees must not exceed $40,000.
Eligibility Rules
- Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
- Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
- Average annual wage. A qualifying employer must pay average annual wages below $50,000.
- Both taxable (for profit) and tax exempt firms qualify.
- Maximum Amount. The credit is worth up to 35 percent of a small business premium costs in 2010. On January 1, 2014, the rate increases to 50 percent (35 percent for tax-exempt employers).
- Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
Examples of Employers Receiving the Credit
Example 1: Auto Repair with 10 Employees Gets $24,500 Credit for 2010
Main Street Mechanic:
- Employees: 10
- Wages: $250,000 total, or $25,000 per worker
- Employee Health Care Costs: $70,000
2014 Tax Credit: $35,000 (50% credit)
Example 2: Restaurant with 40 Part-Time Employees Gets $28,000 Credit for 2010
Downtown Diner:
- Employees: 40 half-time employees (the equivalent of 20 full-time workers)
- Wages: $500,000 total, or $25,000 per full-time equivalent worker
- Employee Health Care Costs: $240,000
2014 Tax Credit: $40,000 (50% credit with phase-out)
Example 3: Foster Care Non-Profit with 9 employees Gets $18,000 Credit for 2010
First Street Family Services.org:
- Employees: 9
- Wages: $198,000 total, or $22,000 per worker
- Employee Health Care Costs: $72,000
2014 Tax Credit: $25,200 (35% credit)
FSA's in Healthcare Reform
What specific provisions does the new health care reform law put in place regarding the administration of health care Flexible Spending Accounts (FSA's)?
The new law includes two provisions related to health care FSAs, as well as other tax-advantaged benefits: 1) over-the-counter (OTC) medicines and drugs will no longer be eligible for reimbursement without supporting documentation, such as a physician's prescription; and 2) employee contributions will be limited to a maximum of $2,500 a year.
Effective January 1, 2011, the new law mandates that health care FSA participants will no longer be able to claim OTC medicines and drugs as an eligible expense for reimbursement with without supporting documentation, such as a physician's prescription. It is important to note that many OTC supplies, as well as insulin, will remain eligible for reimbursement without supporting documentation under the new rules.
The $2,500 annual cap will be effective for FSA plan years that begin on and after January 1, 2013.
How will the $2,500 cap affect FSAs?
It is not anticipated that there will be a significant impact on health care FSA participation as a result of the health care reform legislation. Data shows that the average individual health care FSA election is $1,423, much lower than the $2,500 cap to be imposed.
Given health care reform's focus on affordability, FSA's will continue to be one of the most effective methods offered by employers to help their employees manage out-of-pocket spending, while also reducing their company's payroll taxes.
What should employers tell employees as we prepare for this year's open enrollment?
The approach to employee education for health care FSA's has always focused on advising employees to closely review their anticipated annual medical spending to properly set their election amount. That shouldn't change. Not only should they review what they have typically spent in previous years, but they should also consider expenses for procedures that they need or want to have done in the next year or two.
Which employers are subject to the play or pay mandate under health care reform legislation and how does the legislation define "full-time" employees?
The law says the requirements apply to "large" employers, and then defines "large" as an employer with 50 or more fill-time equivalent employees. A "full-time employee" works 30 or more hours per week.
The employer "play or pay" mandate provisions will not take effect until 2014, so employers have some breathing room to understand how this provision will be eventually implemented.
For employers with 50 or more full-time employees that DO NO OFFER employees minimum essential coverage, and at least one of the employer's full-time employees gets subsidized health coverage through a health insurance exchange, a "Free Rider" penalty of $2,000 per full-time employee (after subtracting the first 30 full-time employees) will be imposed on the employer.
For employers with 50 or more full-time employees that DO OFFER minimum essential coverage, but the coverage is inadequate or unaffordable for the employees, the law penalizes them with the lesser of the following:
- $2,000 per full-time employee (after subtracting the first 30 full-time employees)
- $3,000 per full-time employee receiving subsidized health coverage through an exchange
Wednesday, February 10, 2010
Controlling Health Insurance cost: More Insurance?
The real question in the health care debate is "what's it gonna cost me"? No, me personally! What is my deductible, my out of pocket expense. However you choose to view the world it always comes back to the microcosm, me and my world. That is the way of our culture, this is why we debate so ferociously we are a nation of self interest. There really are a lot more answers when we research this matter and entertain different realities. Yes, the costs are high, but the natural course of business and government will modify these conditions. They always have. In the meantime how do we cover our personal needs.
So what's it gonna cost me? Lets build a model. First let's build an individual model then second a business model.
There is only one formula truly for both. You must have the conscience of good health. Then for the unexpected we need a major medical or catastrophic insurance that will keep our expenses from unfortunate events somewhere within reason with an ability to pay in a few years if need be. Example: A 5 day stay in a hospital, (the average) will cost about $5,000 to $10,000 a day for a total bill of between $25,000 & $50,000 that is difficult to pay for most people in a few years. But, lets say you have an insurance policy that has a $5,000 deductible with a co-insurance of another $5,000 that leaves you a $10,000 bill after which the insurance company now pays 100%. That's a bill most everyone can reasonably pay. Most hospitals and doctors take payments and negotiate bills. The point is there's a way out of a $10,000 bill vs. $50,000 & up.
So now let's tackle the $10,000 portion of non-coverage to reduce our out-of -pocket risk even further. Buying a coverage of a $5,000 deductible & up is very cost efficient with much lower premiums. There are several ways to offset this, the first being a gap plan that covers some of the major expenses when you have an event that reaches this level. A gap plan can cover portions of hospital stays, surgery, anesthesia even prescription drugs. These plans are inexpensive and you can justify the costs with the savings you get from the purchase of a high deductible plan. There is another way to offset the deductible and costs. These plans are usually called voluntary plans because while most plans are offered through work as voluntary insurance, they can be purchased on an individual basis. They also are very inexpensive (less than $75 a month on average) while most of the polices, such as cancer plans, accident plans, critical illness (heart, stroke etc..) & hospital plans can over indemnify, meaning their benefits are not tied to your costs while many times paying hundreds and thousands more for an event than the actual hospital and doctor costs.
Now lest not forget that every event we have always, always has expense associated with it that has nothing to do with hospitals and doctors. Missing work, not getting paid for a disability can add up pretty quickly and does devastate families all by itself. Just let your mind think about all the other expenses with and accident or illness. Its mind boggling.
But let's stay on task with this formula I have just mentioned. Basically with this model you can potentially have several companies insuring you at different levels. You've spread the risk. So now the event that can cost $10,000 is covered significantly with the possibility of paying even more, which as described is necessary. Example: I sold an accident plan to a man for him and his family for less than $500 a year. When his 12 year old was tragically burned the policy paid over $43,000. He had major medical coverage so his expenses where covered many times over. You say why? Well I say what could this young boy need down the road? More cosmetic surgery's? Point is that's what the insurance coverage agreed to pay! Pretty good policy?
This formula works in the business model as well but with application changes. The employer must get involved with employees health consciousness as there is tremendous benefits with a healthy work force that saves a lot of money for premiums because of better claims history.
Employers must also utilize the savings from high deductible health plans while also spreading the risk to other insurers to cover the gaps & financial losses for employees that experience health events.
Another major cost savings for employers is an organized and educated benefits distribution department. Usually called the Human Resource Department. Managing human capital, as its referred, must be efficient in areas that support not only employee benefits but be a support for business development and company goals.
In summary there are answers to health care costs that are not yesterdays answers. We must think in terms of alternate plan designs and the way we package our benefits & insurances. Simply, spread the risk and take some on ourselves.
Marvin Wilkerson is the President of TCB Insurance Group, LLC which can be found at http://www.tcbinsurance.net/. He has been in the insurance business over 10 years with exsentsive experience in voluntary, worksite insurance and group health insurance.
So what's it gonna cost me? Lets build a model. First let's build an individual model then second a business model.
There is only one formula truly for both. You must have the conscience of good health. Then for the unexpected we need a major medical or catastrophic insurance that will keep our expenses from unfortunate events somewhere within reason with an ability to pay in a few years if need be. Example: A 5 day stay in a hospital, (the average) will cost about $5,000 to $10,000 a day for a total bill of between $25,000 & $50,000 that is difficult to pay for most people in a few years. But, lets say you have an insurance policy that has a $5,000 deductible with a co-insurance of another $5,000 that leaves you a $10,000 bill after which the insurance company now pays 100%. That's a bill most everyone can reasonably pay. Most hospitals and doctors take payments and negotiate bills. The point is there's a way out of a $10,000 bill vs. $50,000 & up.
So now let's tackle the $10,000 portion of non-coverage to reduce our out-of -pocket risk even further. Buying a coverage of a $5,000 deductible & up is very cost efficient with much lower premiums. There are several ways to offset this, the first being a gap plan that covers some of the major expenses when you have an event that reaches this level. A gap plan can cover portions of hospital stays, surgery, anesthesia even prescription drugs. These plans are inexpensive and you can justify the costs with the savings you get from the purchase of a high deductible plan. There is another way to offset the deductible and costs. These plans are usually called voluntary plans because while most plans are offered through work as voluntary insurance, they can be purchased on an individual basis. They also are very inexpensive (less than $75 a month on average) while most of the polices, such as cancer plans, accident plans, critical illness (heart, stroke etc..) & hospital plans can over indemnify, meaning their benefits are not tied to your costs while many times paying hundreds and thousands more for an event than the actual hospital and doctor costs.
Now lest not forget that every event we have always, always has expense associated with it that has nothing to do with hospitals and doctors. Missing work, not getting paid for a disability can add up pretty quickly and does devastate families all by itself. Just let your mind think about all the other expenses with and accident or illness. Its mind boggling.
But let's stay on task with this formula I have just mentioned. Basically with this model you can potentially have several companies insuring you at different levels. You've spread the risk. So now the event that can cost $10,000 is covered significantly with the possibility of paying even more, which as described is necessary. Example: I sold an accident plan to a man for him and his family for less than $500 a year. When his 12 year old was tragically burned the policy paid over $43,000. He had major medical coverage so his expenses where covered many times over. You say why? Well I say what could this young boy need down the road? More cosmetic surgery's? Point is that's what the insurance coverage agreed to pay! Pretty good policy?
This formula works in the business model as well but with application changes. The employer must get involved with employees health consciousness as there is tremendous benefits with a healthy work force that saves a lot of money for premiums because of better claims history.
Employers must also utilize the savings from high deductible health plans while also spreading the risk to other insurers to cover the gaps & financial losses for employees that experience health events.
Another major cost savings for employers is an organized and educated benefits distribution department. Usually called the Human Resource Department. Managing human capital, as its referred, must be efficient in areas that support not only employee benefits but be a support for business development and company goals.
In summary there are answers to health care costs that are not yesterdays answers. We must think in terms of alternate plan designs and the way we package our benefits & insurances. Simply, spread the risk and take some on ourselves.
Marvin Wilkerson is the President of TCB Insurance Group, LLC which can be found at http://www.tcbinsurance.net/. He has been in the insurance business over 10 years with exsentsive experience in voluntary, worksite insurance and group health insurance.
Wednesday, January 27, 2010
Strategies for Minimizing Company Health Care Costs
Strategy One
Maximize the benefits you have today.
Promote the added-value benefits of your current insurance plan. Programs like the Employee Assistance Program (EAP) can help employees find assistance for dealing with personal issues, as well as identify health issues early on.
Educate your employees about free informational resources to help them find answers and keep them healthy.
Strategy Two
Motivate your employees to focus on preventive care and wellness.
70% of health care expenses are attributable to preventative risks and unhealthy choices, so by targeting preventable health costs now and working to develop a wellness plan, you can help employees prevent illness and unnecessary costs in the future. Wellness programs offer motivation, education and emotional support to stay healthy.
Help develop a wellness strategy in five steps:
1. Gather and analyze information
2. Define your goals and objectives
3. Design your strategy
4. Develop an implementation plan
5. Evaluate outcomes and refine your strategy over time
Money Saving Tips
Helpful advice to reduce benefit expenses.
1. Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA), help engage your employees in better managing their health and health care costs. An HSA offers tax advantages, carry-over and you can use the money from an HSA to pay for certain expenses. An HRA gives you the advantage of planning for the future, flexibility and savings.
• When annualized, typically costs 1-2% less than a regular PPO.
2. Integrate your medical and dental plans.
• You can yield cost reductions due to early intervention: 9% diabetes, 16% coronary artery disease and 11% cerebrovascular disease.
3. Risk mitigation solutions.
• Stop loss insurance for large claims or split-funded options.
4. Consumer directed health plans have advantages for you, as the plan sponsor. They offer more control over health care spending. They usually have a lower premium and a higher deductible. They may be coupled with a health fund or other health savings account.
• CDHPs encourage employees to make informed decisions and spend wisely-which can lead to lower costs for you.
• You lower company expenses through the cost-sharing of a high-deductible health plan.
• Plus you can enjoy FICA and FUTA tax savings on salary reductions that occur when employees contribute to CDHPs.
With CDHPs, it pays for employees to be careful consumers.
5. Tailor your benefits to fit your employees. Think about which programs will have more value to your employees and your bottom line.
• Choose high-deductible health plans and offer employees a HSA or FSA, to help them manage costs.
• Switch some paid benefits to voluntary options.
• Offer limited benefits plans.
How to Save on Prescription Drugs
• Take a “tiered” approach. With tiers, employees will generally pay a lower copayment if they use generic – and a higher copayment for a brand-name drug.
• Waive the copay. Look for a program that eliminates the copay for a certain period of time, say six months, if the employee switches to certain generic alternatives.
• A mail-order option and a specialty pharmacy are key ways to save on medications.
Get them involved in managing their health, wellness, and the care they seek
Marvin Wilkerson is the President of TCB Insurance Group, LLC which can be found at www.tcbinsurance.net. He has been in the insurance business over 10 years with extensive experience in voluntary, work-site insurance and group health insurance.
Maximize the benefits you have today.
Promote the added-value benefits of your current insurance plan. Programs like the Employee Assistance Program (EAP) can help employees find assistance for dealing with personal issues, as well as identify health issues early on.
Educate your employees about free informational resources to help them find answers and keep them healthy.
Strategy Two
Motivate your employees to focus on preventive care and wellness.
70% of health care expenses are attributable to preventative risks and unhealthy choices, so by targeting preventable health costs now and working to develop a wellness plan, you can help employees prevent illness and unnecessary costs in the future. Wellness programs offer motivation, education and emotional support to stay healthy.
Help develop a wellness strategy in five steps:
1. Gather and analyze information
2. Define your goals and objectives
3. Design your strategy
4. Develop an implementation plan
5. Evaluate outcomes and refine your strategy over time
Money Saving Tips
Helpful advice to reduce benefit expenses.
1. Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA), help engage your employees in better managing their health and health care costs. An HSA offers tax advantages, carry-over and you can use the money from an HSA to pay for certain expenses. An HRA gives you the advantage of planning for the future, flexibility and savings.
• When annualized, typically costs 1-2% less than a regular PPO.
2. Integrate your medical and dental plans.
• You can yield cost reductions due to early intervention: 9% diabetes, 16% coronary artery disease and 11% cerebrovascular disease.
3. Risk mitigation solutions.
• Stop loss insurance for large claims or split-funded options.
4. Consumer directed health plans have advantages for you, as the plan sponsor. They offer more control over health care spending. They usually have a lower premium and a higher deductible. They may be coupled with a health fund or other health savings account.
• CDHPs encourage employees to make informed decisions and spend wisely-which can lead to lower costs for you.
• You lower company expenses through the cost-sharing of a high-deductible health plan.
• Plus you can enjoy FICA and FUTA tax savings on salary reductions that occur when employees contribute to CDHPs.
With CDHPs, it pays for employees to be careful consumers.
5. Tailor your benefits to fit your employees. Think about which programs will have more value to your employees and your bottom line.
• Choose high-deductible health plans and offer employees a HSA or FSA, to help them manage costs.
• Switch some paid benefits to voluntary options.
• Offer limited benefits plans.
How to Save on Prescription Drugs
• Take a “tiered” approach. With tiers, employees will generally pay a lower copayment if they use generic – and a higher copayment for a brand-name drug.
• Waive the copay. Look for a program that eliminates the copay for a certain period of time, say six months, if the employee switches to certain generic alternatives.
• A mail-order option and a specialty pharmacy are key ways to save on medications.
Get them involved in managing their health, wellness, and the care they seek
Marvin Wilkerson is the President of TCB Insurance Group, LLC which can be found at www.tcbinsurance.net. He has been in the insurance business over 10 years with extensive experience in voluntary, work-site insurance and group health insurance.
Labels: Health care cost
Monday, January 4, 2010
A Doctor's Advice to Control Health Care Cost
A Doctor’s Advice to Control Health Care Cost
While reading through a trade publication I came across a nice article written by a doctor with thoughts about saving money for individuals and businesses on the cost of health insurance. It was not only about saving money but also saving you from the all-too-common stress associated with money problems brought on by health care.
Here are five things everyone can do to ward off unnecessary health expenses as much as humanly possible:
OMENS---Five Simple Steps
Observe preventative measures
Manage your prescriptions
Educate yourself
Negotiate doctor’s fees
Scrutinize medical bills
Observe Preventive Measures: Simply stated, take care of your body and mind. Eat a healthy diet, take daily nutritional supplements, choose the stairs instead of the elevator and stay away from junk foods, alcohol and smoking.
My personal thoughts: It goes without saying we need to take better care of ourselves. Who doesn’t understand we need more fruits, veggies and exercise in our life? That isn’t what I see as the issue. We all know that. But what I have observed is sometimes we get out of balance with doing and not doing what we should and shouldn’t. Time goes by and we’ve put on 25 pounds. So STOP, start a routine that disciplines your habits, at least until you give back the 25 pounds. Its being conscience of your health. Every statistic in America
Manage Your Prescriptions: Prescription medication can be very costly. Ask for generic equivalent. Don’t hesitate to ask your doctor if they can find a substitute from your insurance plan’s preferred drug list.
My personal thoughts: We can become aware of the costs regardless of who’s paying the bill. Just because insurance is paying doesn’t mean the cost doesn’t get passed down somewhere. If its employer sponsored health insurance eventually they’ll pay for it through premiums which will eventually be passed on to you! A while back my wife needed a migraine medicine that was costing $370 a month. I found a source through much investigation with a little travel where it only cost $120. Care about what things cost regardless of who pays for it. That’s a habit that will help you at some point.
Educate Yourself: The Internet is a storehouse of knowledge. Becoming health conscious is just a Google away. Learn about conditions or illnesses before running to the doctor’s office every time you have the sniffles. Take some information you learned if you do go, ask questions and get acceptable answers.
My experience: My mother was a nurse so I grew up with an understanding of medical issues. I learned to know my aches and pains and how to treat them. My feeling about going to doctors is out of last resort. I want to try and understand if I can heal my self with an over the counter drug. I go speak with a pharmacist about medications. Reducing one or two doctor visits a year because your able to heal yourself is a big deal.
Negotiate Doctor’s Fees: Never assume the first price is set in stone. Call your insurance company and ask for the rates they pay their doctors for the specific procedure you need. Let your doctor know of a lower rate and NEGOTIATE! If the doctor won’t change his fee find another doctor. Same strategy applies when seeing an out-of-network doctor.
My experience: Doctors rarely know how much costs are for tests or lab work. I find they can dish out tests and so forth like its lunch. I advise discussing cost with your doctor so they understand where you’re coming from. Also I just had a knee scoped. It cost $2,700 for the surgeon which my insurance company reduced to $1,700. In talking to him about costs afterwards we began discussing health care and its costs. I challenged him on the idea that people should negotiate the costs and asked if he would have done the surgery for $1,200. He without hesitation said...”of course”. Enough said.
Scrutinize Your Medical Bills: Don’t presuppose that hospital and medical office accounting departments always pay close attention to the bills they send. Be sure to double-check everything you receive; if there are any discrepancies, contact the hospital or medical office to clear up the bill.
My experience: I have experience of overcharges and double charges. EOB statements are one of the most confusing things in life. Don’t hesitate to get clarity on charges. Call your insurance company and question charges, they’ll be glad to help. The invoices for simple procedures can be inundating. I attended a presentation with a company that takes care of claims for large corporations. Their data showed discrepancies with charges from hospitals and doctors at over 50% of the time. That’s ridiculous.
If you follow these “OMENS” carefully, you will be five steps closer to being in control of your health care costs and to leading a healthier and happier life. And I might add with a little more money.
Marvin Wilkerson is the President of TCB Insurance Group, LLC which can be found at http://www.tcbinsurance.net/. He has been in the insurance business over 10 years with extensive experience in voluntary, work-site insurance and group health insurance.
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