July 2013

The self-employed tackle challenges that those employed by others rarely face: doing budgets, growing their business – and, of course, Health insurance.

The cost of individual Health coverage has skyrocketed during the past decade, with average monthly premiums growing more than 500%. What’s more, co-pays and deductibles keep going up, while covered services are shrinking.

However, there are options that can help the self-employed enjoy significant savings on Health insurance:

• The Consolidated Omnibus Budget Reconciliation Act (COBRA)
  COBRA is a federal law that guarantees workers who lose their jobs – and thus the Group Health benefits provided by their employers,- he opportunity to retain coverage on themselves and their families for up to 18 months, as long as they pay the policy premium (plus a surcharge of up to 2%). COBRA gives the self-employed a short-term ‘time cushion” during which they can make other health care choices.
• Online ProvidersThe Internet has given rise to a number of smaller, increasingly flexible, more price-conscious, and highly competitive companies that offer the self-employed a variety of options for affordable Health insurance.
• The Affordable Care Act (ACA)Everything that we know about Health insurance for the self-employed (as well as employees in small and medium -sized businesses) is in a state of flux as more provisions of the ACA take effect over the next few months. The government, in partnership with Health insurance providers, will offer a variety of options – and require every adult to carry some type of coverage, or face a tax penalty.

For more information on how to get the best value on your Health insurance, at an affordable price, feel free to get in touch with our agency at any time.

Before you invest in a Life policy, make sure that you get answers to these three key questions:

1. How much coverage do I need? This will depend on a number of variables. If you have a spouse, children, or home, you’ll need more insurance than if you’re single and living in an apartment. Also, factor in the estimated costs of funeral expenses, personal debt, and – if you have dependents – loss of household income. The higher these costs, the more coverage you’ll need.
2. What type of policy should I buy? While Life insurance comes in many flavors, Term and Permanent Life are the most common. Term insurance covers you for a specific period, usually one to twenty years. Although the premiums are generally far lower than those for Permanent Life insurance, if the term runs out and you wish to renew coverage, your premiums will go up.
   A Permanent Life policy will cover you for your entire life. The premiums can be up to ten times higher than those of a Term policy for two reasons: 1) the insurance company is required to pay a death claim; and 2) Permanent Life offers a cash value savings component that sets aside some of your premium to earn interest. If you terminate the policy before your death, the cash value savings belong to you.
3. How much insurance can I afford? Because missing premium payments can lead to termination of your policy, make sure that the amount and type of coverage you buy fits within your budget. This decision is basically a trade-off between increased benefits (through “riders” added to your policy) and the higher premiums that you’ll pay for this extra coverage.

Our Life Insurance professionals stand ready to offer their advice on choosing the policy that’s best for you and your family.

Add another exclamation point to the hazards of smoking: smokers will pay a lot more for Health insurance as provisions of the Patient Protection and Affordable Care Act (ACA) kick in.

Tobacco use kills more than 440,000 Americans a year and costs about $96 billion in health care, according to the Centers for Disease Control and Prevention.

The ACA allows insurers to charge smokers a premium surcharge of up to 50% when they buy through health insurance exchanges – online marketplaces where individuals and businesses employing up to 50 people can shop for coverage.

The surcharge could end up erasing subsidies for low-income smokers who can’t afford to buy coverage on their own, For example, someone who can pay only $3,000 a year for a health plan that costs $6,000 would qualify under the ACA for a $3,000 subsidy to cover the difference – but the tobacco surcharge would kick the cost back up to $6,000.

Congress added the surcharge to discourage unhealthy behavior and give insurers a way to help control costs associated with this risky (but voluntary) habit. However, there might be better ways to discourage smoking, such as higher taxes on cigarettes or expanded public awareness campaigns.

Rick Curtis, president of the Institute for Health Policy Solutions, believes the surcharge would do most harm to those the ACA was designed to help – people with modest means in need of medical care. As he sees it, “Those who are totally hooked after many years and are older (and those kinds of people are more expensive to cover and often need more medical care) have two bad choices – go without Health insurance or get coverage and be impoverished.”

Short-Term Care Insurance (STCI) can help pay for your medical care in an assisted-living facility or nursing home for a relatively short period (90 to 360 days) during recovery, convalescence, or recuperation when you can’t take care of yourself – unlike Long-Term Care Insurance (LTCI), which provides coverage for two years to a lifetime.

Compared to LTC coverage, Short-Term Care policies are:

• Up to 70% less costly – because of the shorter benefit period.
• Easier to obtain – with only a limited list of medical exclusions.
• Far more likely to be used; one study found that 90% of nursing home stays last less than a year.
• Much quicker to go into effect; the STCI “elimination period” – the time from diagnosis until coverage begins – is usually 0 to 30 days, compared to the standard LTCI period of 90 days (According to one study, only one in four nursing home residents remain this long).

The STCI eligibility “triggers” are usually the same as those for Long-Term Care. The policy pays for care when you can’t perform at least two of six “activities of daily living” without help – eating, bathing, transferring in and out of a chair or bed, dressing, toileting and continence – or suffers from a cognitive impairment.

Choosing STCI makes sense if you: 1) have around $20,000 to $60,000 in assets and need reimbursement for the cost of care during a relatively short recovery; or 2) can’t meet the medical qualifications for LTCI or have waited so long to apply that you can no longer afford the premiums.

As insurance professionals, we’d be happy to help tailor a Short-Term Care policy that provides the protection you need at a price you can afford. Just give us a call.