If you need clarification on any issue, please call us.

Group Health Insurance
Individual group health insurance plans can be purchased on a group basis. Most insurance providers will only cover full time employees who work more than 25 hours per week or more. They may also require the employer to pay a percentage of the employee portion of the premium. This ensures adequate participation for the insurance companies. Providers want to avoid adverse selection, meaning that they don't want to cover only sick.

Group Life Insurance
Group life policies are taken out by an employer (the policyholder) and offered to the employees (the insured) without a medical exam (within certain limits). If the employee dies, the benefit is paid to the employee’s beneficiary. The policy should supplement the individuals personally owned life insurance policy.

Benefits can be the same amount for all employees or can be based upon salary or class of the employee. Premiums for amounts under $50,000 may be tax deductible when benefits do not discriminate beyond those allowed by The Employee Retirement Income Security Act of 1974 (ERISA). Coverage must not exceed 2 1/2 times the amount provided for the class below. By definition, you can't deduct premiums for a group plan that gives $10,000 of coverage for the rank and file employees and $50,000 for the bosses, with any class in between.

Group Short Term Disability Insurance (STD)
Coverage is normally provided upon the first day of an accident or upon the eighth day of an illness for a period of 13, 26, or 52 weeks. In most cases, benefits are for 66 2/3% of salary, but different benefit percentages are available with different providers and circumstances.

Group Long Term Disability Insurance (LTD)
Coverage is provided for longer periods of time than with Short Term Disability - normally ranging from two years or five years, to age 65, or for life. Elimination periods, known as waiting periods, are longer than with Short Term Disability Insurance. Waiting periods are defined as the time you must wait if you become disabled before benefits start.

In general ...
There are three ways to handle the cost of disability coverage: company-paid, employee-paid or shared. If you select employee-paid or splitting the cost between the two, many providers require a certain percentage of employees participate in the plan.

 Make sure the plan provides for the total disability of the employee’s primary occupation. Avoid plans that allow a disabled worker to be transferred to another job. Other options include how long the benefits are paid, cost of living adjustments and partial disability options.

Group Dental Insurance
Coverage is generally provided for preventive services, (cleanings, x-rays, and exams), minor restorative services (fillings), and major restorative services (crowns, bridges, root canals). Orthodontia is covered by some plans or as an optional benefit on other plans, depending on group size.

Dental Insurance Benefits and Deductible
Dental insurance plans provide a certain amount of coverage for you and your family. However, most dental plans will not pay all the bills you may incur for dental care for yourself or your dependents.

Dental Insurance Coverage
You are subject to a calendar year deductible for all services except Preventive and Diagnostic Services and Orthodontics. The deductible amount is per person per year. The total family deductible will not exceed a designated amount per year for all covered family members. The amount credited towards the deductible is based on the provider's Schedule of Allowances, not the amount charged by the dentist or physician. Dental services rendered by participating and non-participating providers are covered to the extent that they are a covered service, which are necessary for dental health and are performed by a licensed dentist or physician.

When covered services are rendered by non-participating providers, you are reimbursed based on the Reimbursement Schedule. When rendered by participating providers, these dental services are covered on a paid-in-full basis.

Individual Health Insurance
Individual Health normally covers hospitalization, physician, prescription and medical supply fees at any licensed facility. Most plans have an annual deductible of $250, $500, and $1,000, etc., with coinsurance. This means the insurance company and the individual pay a percentage of the medical costs, like 80/20. A quality plan has a limit to coinsurance called stop loss. Stop loss limits the maximum out of pocket expenses for the insured in a calendar year.

If you select a Preferred Provider Organization (PPO), the insurance company makes an arrangement with a group of medical providers. The insurance company agrees to funnel patients to the medical providers in exchange for reduced fees, which are passed on to the insured in various ways and degrees. You generally get the same benefits as with a Major Medical Plan, but you get better benefits if you choose to use the preferred facilities, (i.e. low office visit copays and higher coinsurance percentages)

On the other hand, Health Maintenance Organization (HMO) provides health care services for subscribing members. People enrolled in an HMO pay dues in return for health care services. The focus is intended to be on preventive medicine. Participants generally must choose a primary care physician who determines what benefits are provided within the scope of the policy.

Individual Life Policy premiums and values are based on age, gender and health. They can be either for a term or for life. Upon death, the proceeds are paid to the beneficiary, income tax-free.

Short Term Medical
Short Term Medical is a temporary health insurance plan (30 to 185 days) designed for people who are between permanent health plans. Even if you have the option to take COBRA through your previous employer, depending on your circumstances, a Short Term Medical Plan may be more cost effective.

Here’s how it works: Choose the plan, your deductible, payment terms and length of coverage. Short Term Plans are not part of a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO), so you can choose your own doctors and hospitals.

There are some restrictions on eligibility, a list of plan exclusions and various government regulations on coverage from state to state. Subsequently, it is essential that you check each provider’s policy to determine which plan meets your exact needs.

Key Person Insurance
If you own a small or medium size business and have partners and employees that are absolutely essential to its successful operation, then it’s absolutely essential that you consider Key Man Insurance, which is a basic Life Insurance Policy.

Here’s how it works.
The company takes out the Life Insurance Policy on its key employees and pays the premiums. If death occurs, the proceeds from the policy goes directly to the company, which by previous agreement is used to pay creditors, bills, investors and perhaps dissolve the company in an orderly fashion. 

The Key Man Insurance Policy is not intended to replace Group or Individual Life Insurance Policies that pay directly to the family or estate of the deceased.

Thinking of protection, there is another policy called Disability Buy and Sell Insurance that allows the company to buy the shares of a key player who becomes totally disabled, which is far better than taking the money out of the company’s profits. Again, this does not replace Group or Individual Disability Policies that supplement ones salary if they become disabled.

There are several other small business concepts and insurance policies that should help protect your business until it becomes a major player in your industry. Please call us for details on all your Insurance Matters.

Health Savings Accounts
As part of the Medicare Act of 2003, Congress has approved a new consumer health plan, which is called the Health Savings Account (HSA). If you set up this new insurance plan and use it properly, you can (1) deduct your contributions, (2) grow the account tax-free and, (3) withdraw tax-free funds as long as they are spent on qualified medical expenses.

Health Savings Accounts (HSA) effectively replace Medical Savings Accounts (MSA), which are now expanded to make more people eligible by removing many of the previous MSA restrictions.

Here are a few highlights
It must be your only health plan with some exceptions, like worker’s compensation or coverage under an auto policy. It must be a high-deductible plan of not less than $1,000 for individuals and $2,000 for family coverage or more than $5,000 for individuals and $10,000 for family. Naturally, the bigger the annual deductible, the smaller the premium. As a result, this also means more money available to invest into your HSA account. Your HSA contribution can be as much as your deductible.

The sum of the annual deductible plus the other out-of-pocket expenses can not exceed $5,000 for individuals and $10,000 for family coverage. Out-of-pocket expenses include routine medical visits, tests, glasses, etc.  Due to out-of-pocket expenses, HSAs may not be suitable for families with a lot of children.

This is just a brief overview and example on how HSAs work. Please call us for details

Health Savings Accounts (HSA) replace Medical Savings Accounts (MSA), which are now expanded to make more people eligible by removing many of the previous MSA restrictions. Applications must have a qualified high deductible health plan and account deposits into the HSA grow tax-free and withdrawals are never taxed as long as funds are spent on qualified medical expenses.

http://www.dol.gov/ebsa/regs/fab_2004-1.html
Employee Benefits Security Association - Field Assistance Bulletin 2004-1

www.treas.gov/offices/public-affairs/hsa
The U.S. Department of the Treasury and the Internal Revenue Service Guidelines.

Medicare (Medigap) Supplements
Plans of this type are standardized and are for people who have Medicare parts A&B. Generally these plans are for people who receive social security benefits whether retired or disabled. If you are considering this type of coverage, please take the time to review The Official U.S. Government Site for Medicare Information

Property and Casualty Coverage 
We can provide a specialist in Commercial Insurance to assist you with your general liability, property, workers compensation, auto, umbrella, bonding, and professional liability insurance needs.

Please Note
Information on this Web site is only intended as general summary information that is made available to the public. Insurance Matters' information should not be construed as medical or investment advice. Please consult one of our Agents for specific information and always consult a CPA and an Attorney before you purchase Insurance.