Why does health insurance have to be so complicated, and why you should care about "Obamacare"? ACA 101

2014 began with the enacting of many parts of the affordable care act for the first time. With theses laws came the requirement that insurance companies offer minimum benefits to all people on insurance plans. These included required Maternity, Pediatric Dental (even if you don't have children), and preventative care such as annual doctor "wellness" exams. This all to say that if your price has gone up, do not be surprised.

Our goal here is to help you understand simply what the new changes mean for you and how to approach purchasing a plan. You may be eligible for a subsidy (or discount) on your plan, joining a low income state run insurance plan, or simply purchasing a plan through an insurance company.

A Discount on Your Health Insurance Premium:

The passing of the affordable care act caused a few new factors when considering a new policy. In California and some other States, the limit for low to no cost insurance through state run insurance plans rose to far more than 100% of the poverty level. This along with other regulations imposed by the Affordable Care Act allows anyone who meets the income guidelines to sign up for a Medic-aid (Medi-cal in California) to apply and get little to no cost coverage. 

The law also offered anyone over the Medic-aid/ Medi-cal income guidelines up to an income reflecting 400% of the poverty level to enroll in the State or Federal health insurance purchasing marketplace (Covered California in California). This means that you might end up with as low as $1 per month for your insurance plan.

If you make more than the limits for this program, or either spouse has a health insurance plan through work and pay less than 9.5% of their income on the employee's plan (Not The Entire Family Cost), no one is eligible in the household for the government subsidies. This means that you can purchase a policy directly through an insurance companies, but prices may surprise you as rates now need to support a pool of insured people despite any past medical conditions! All policies need to meet the minimum standard of benefits, so even if you are an male purchasing a policy on your own, maternity will be included.

The three categories of purchasing through the government low income organizations, through one of these new marketplaces, and directly through an Insurance company all require a well thought out approach. We highly recommend finding a local insurance agent to explain all of this. Most agents do not charge any extra fees from you to help, so use their help to analyze your situation and help you enroll.

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Who can get health insurance, and how would I go about applying?

2014 brought a host of changes to health insurance. From subsidies (or discounts) for individuals of a certain income, to major changes in medi-caid and state low income insurance, and even the complete removal of pre-existing medical conditions as a factor in applications. Below we will give you the story of three different families and how they will acquire insurance to help you understand more clearly what will happen if you are looking for a policy in 2015.

The Ramirez Family:

Mr. Ramirez has health insurance through work. While the family makes the right amount of annual income to qualify for assistance from their state run insurance exchange, they do not qualify for this discount. His employer is offering coverage for him less than 9.5% of his monthly income. Mr. Ramirez would need to pay full price to insurance his wife and kids through work, and the plans offered through work are quite expensive. This all forces the Ramirez family to purchase individual plans for Mrs. Ramirez and the kids while allocating Mr. Ramirez to his work plan.

In this situation, Mrs. Ramirez needs to work with her insurance agent to find an insurance plan directly through an insurance company. Thankfully January is coming up so they can turn in an application for January 1st with any major insurance company to receive a plan that will not increase their rates due to medical conditions. Their insurance agent will be able to help them with any issues that arise in the future as the policy is directly with a company. This also speeds up billing, membership, and other administrative issues as the state exchange is not involved.

The Smith Family:

Mr. and Mrs. Smith own a home and two vehicles, but Mr. Smith recently lost his job and will most likely have a quite low income for 2015. It turns out that an estimate of their 2015 income falls below 138% of the poverty level. In most states including California, this qualifies them for the low income insurance called Medi-caid in most states (Medi-cal in California). They will most likely not be able use their agent for the entire process, but their agent was able to guide them through the beginning of the application until the county took over helping the Smiths.

The Patel Family:

The Patels are both self employed and still have their younger daughter living at home. Each of their businesses bring in a significant amount of money, but with tax deductions they meet the income guidelines to receive a subsidy from the government. In California, this means they will need to apply for a variety of insurance companies through the state exchange called "Covered California". Their insurance agent can help them turn this application in and continue to help with any issues that arise, but issues may take longer to resolve as your plan is administered both by this "Exchange" and the insurance company. 

Please give us a call if you would like to hear more about where you fit into all of the new insurance plans. We still have until December 15th to get you a January 1st policy, and we have until February 15th to sign you up for some type of coverage. 

Key Person Replacement – Disability Insurance

What would you say is your most valuable asset? Not surprisingly, for most business owners it’s usually their key employees – those critical to the livelihood and profitability of the business. Many employers protect their businesses in the event of their key employee’s death, but few are protected if the employee suffers a total disability. The likelihood of a vital employee incurring a disability is 8 times greater than death before retirement age. If you own a business you should take a serious look at Key Person Replacement Insurance for Disabilities.

The Need

How many ways could your business suffer from a key employee’s total disability.

·         Loss of management skill and experience, especially in a business without management depth

·         Disruption of the business when clients withhold or delay their business until the impact of the employee’s disability is known

·         Loss of revenue and profit generated by the key employee could be substantial

·         Increased expenses associated with recruiting, hiring, and training a replacement

How It Works

The employer pays the premium and is the owner of the policy insuring the key employee in the event of total disability.

If the employee becomes totally disabled, the employer can receive benefits after 90 days, generally tax free. These benefits can be used at the discretion of the business.  Common uses usually include bridging the lost revenue gap, training a replacement, and filling temporary staffing needs. The benefits cannot be assigned to the employee. The maximum amount available is based on a calculation of twice the employee’s earned income up to a maximum of $500,000.

Benefits can be paid in either in a lump sum or paid in monthly installments.

Who Is A Key Employee?

Typically, a key employee is someone who:

·         Is critical to the livelihood of the business

·         Has significant impact on sales

·         May or may not be one of the owners

·         May have a special rapport with customers or creditors

·         Is responsible for management decisions

·         Is highly paid

Who Needs It?

Key Person Replacement insurance is ideal for small to medium sized businesses, specifically those with employees who have specialties or experience that is not easily replaced, such as medical professionals, attorneys, engineers/IT Programmers, architects, and CPAs.

For more information and availability of Key Person Replacement Disability Protection, contact Point One Insurance at 760-302-4545.

Medicare and you: What being eligible really means

When you enroll in Medicare, your medical costs will be partially paid by the federal government. In general, Medicare pays 80 percent of the services it covers and you are responsible for the remaining 20 percent -- and there's no "out-of-pocket maximum." That means there's no limit to your 20 percent liability. So if your Medicare-approved medical bills for example, a hospital stay and surgery total $50,000, then Medicare will pay $40,000 (80 percent), your responsibility is $10,000. And so on, with any other medical expenses you incur. And since Medicare doesn't cover prescription drugs, you are responsible for 100 percent of the costs. 

That is why Medicare allows private insurance companies to offer Medicare supplement (Medigap) plans, prescription drug plans (Medicare Part D), and Medicare Advantage (Part C) plans to Medicare enrollees. 

Point One is your one point to turn to when you become eligible for Medicare at age 65 or have questions about your current Medicare plan. Our friendly agents are here to help you understand your options and find the best plan or plans for you.