Health Savings Accounts Cut Medical Costs with Lower Taxes

September 1st, 2011 by Richard Monello

Tags: health savings accounts, Texas HSA
Posted in Health Savings Account (HSA)

Times are tough. In the wake of a lackluster economy and misguided health care reforms, Americans are struggling to find affordable health insurance. Fortunately, there’s one tax-friendly option that puts consumers in control of their health care expenses: a health savings account (HSA).

People who enroll in a health savings account can save money for health expenses, all while accruing interest and lowering their taxes. It works like this: whatever you put into your health savings account before the tax deadline in April becomes an “above the line” deduction for your previous year’s tax return. So that money is not counted as income, and therefore it’s not subject to income tax or FICA tax. That can result in some serious savings.

AARP offers an easy overview on setting up a health savings account –

To get started, simply enroll in a qualifying high deductible health plan, and then open a dedicated savings account for making your tax-free deposits to pay for your medical care. You an enroll through insurance companies, banks, credit unions and approved employers. Once set up, you begin saving money for health expenses, and if you happen to reach your deductible, the insurance policy begins paying out benefits. There are limits to the amount of money you can deposit into your account, and right now the absolute maximums are $3,050 a year for individuals and $6,150 for families. Plan members over age 55 are allowed an extra $1,000 per year to play catch up.

Perhaps best of all, unlike a flexible spending account, funds left over in an HSA at the end of the plan year simply roll over and accumulate year after year. And if you ever decide to stop contributing to your HSA, you won’t lose that money – it remains in your account, still available to be spent on qualified medical expenses.

A health savings account works well for a variety of consumers, whether they’re in the market for individual health insurance or family health insurance. Some employers even offer HSAs for their employees. In that case, employer contributions act just like personal deposits, in the sense that the contributions are not counted as income and, again, not subject to income tax.

If the tax incentives weren’t enough, most consumers reduce their medical expenses simply by being in charge of their own health care. They save the money, and they choose how to use it, rather than being subjected to one-size-fits-all group plans, which often leave participants paying for services they don’t even need.

Interested in learning more about health savings accounts and how they can save you money? Give us a call.

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More Consumers Choosing High Deductible CDHPs

August 25th, 2011 by Richard Monello

Tags: Consumer Driven Health Plans
Posted in Health Savings Account (HSA), Individual Health Insurance

In the wake of health care reform, and as consumers scramble to find affordable health insurance plans, more and more people are expected to find coverage through high-deductible consumer driven health plans, or CDHPs. CDHPs are plans that pair high-deductible health plans with health savings accounts, giving consumers more control over their health care expenses.

Experts say that CDHPs are becoming more attractive options because they cost considerably less than traditional health plans, like PPOs and HMOs, and they still meet the minimum requirements of health coverage mandated by the Patient Protection and Affordable Care Act.

“Unless there’s a significant change in any of the legislation, CDHPs will remain a viable option post-health care reform,” said Nick Calabrese, a vice president with CIGNA Corp. In fact, the number of CIGNA clients offering CDHPs surged after health care reform, along with enrollment in those plans.

Even before health care reform, more employers were looking into CDHPs like health savings accounts as cost containment strategies. Since CDHPs put consumers in the driver’s seat, the consumer is more conscious of his or her health care expenditures, benefiting both the employee and the employer.

Beyond that, many CDHPs have tax benefits. Consumers can save tax-free money to put toward their health care, and employers likely won’t have “Cadillac” taxes levied against their plans, as they’re typically below the Cadillac tax threshold.

“In some significant ways, health care reform is good for consumer-driven health plans since they tend to be more affordable,” said Helen Darling, president and CEO of the National Business Group on Health in Washington. “On the employer side, we are seeing more interest in, and transition to, full replacement CDHPs,” she added. “We also see more CDHPs as a choice and, as employee costs climb, we anticipate that more employees will find them attractive, because the contributions tend to be lower.”

Employers’ offering their employees more choices is always a good thing. And when employees can choose plans that put them in control of their finances, costs are lowered across the board. Here’s hoping that more and more consumers see the benefits of high-deductible CDHPs in Texas and across the country, both as a great health care option and as a way to lessen the burden of ObamaCare.

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Employees: Stay Tuned for Higher Health Insurance Costs

August 20th, 2011 by Richard Monello

Tags: Group Health Insurance, Health Care Reform
Posted in Health Insurance News

Employees, take note: Reuters reports that large employers are expecting significant increases in their 2012 healthcare costs, and those increases will likely be passed along to you. The National Business Group on Health notes that big companies are already dealing with increased costs over last year, at about 7.4 percent, and next year looks about the same, with increases expected around 7.2 percent.

The study reports that workers should anticipate bigger expenses, as they’ll be asked to pick up more of those costs. “More than half of the companies say they’ll increase the percentage that employees contribute to premiums, while 39 percent say they’ll increase deductibles for workers who stay in-network for their healthcare.” Out-of-network deductibles and out-of-pocket maximums may also rise, so all in all, it’s a tough time to be an employee. But there is hope.

One option is to skip the employer plan altogether and test the individual health insurance market. Some consumers are finding these individually-tailored plans to be cheaper – or at least more streamlined – than one-size-fits-all group plans, which often leave you paying for services you don’t even need. Check quotes at Custom Health Plans (www.customhealthplans.com) to compare individual plans with rates from your employer, and choose whichever plan offers the most affordable health insurance.

Another alternative to consider is pairing a high deductible health plan with a health savings account, or enrolling in a flexible spending account. Both offer tax savings, but only an HSA allows you to accumulate savings for the future.

It may also pay to get creative with your insurance coordination between family members. Spouses can stay with their own employer’s plan, or choose whichever employer offers the best family health insurance plan. Young workers should weight their options too, as they may find it cheaper to remain on their parents’ plans than to enroll in their own.

So at least we’ve got some options to combat the looming price increases. Consumers may just have to do more research, or get more creative, in choosing a health insurance plan that gets them the coverage they need at rates they can afford.

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Comparing Traditional Health Insurance to a Health Savings Account

August 17th, 2011 by Richard Monello

Tags: Health Insurance Plans, health savings accounts
Posted in Health Savings Account (HSA), Individual Health Insurance, Texas health insurance

There are a handful of options for securing affordable health insurance, but depending on your personal health needs and budget, certain plans are better than others. When looking for a health insurance plan, it’s smart to know your options and the differences between plan types, so you can choose which plan is best for you or your family.

Traditional health insurance plans are often broken into the following categories –

Preferred Provider Organization (PPO) – A PPO is a plan that has agreements with a network of doctors, hospitals, and other providers who charge discounted fees for their services. As part of this network, your cost sharing typically results in lower prices than if you were to seek care outside of the network. Plans vary, but it’s common for PPOs to operate with monthly premiums, co-pays and deductibles.

Health Maintenance Organization (HMO) – An HMO generally requires individuals to choose a primary care physician from a list of providers partnered with the HMO. If you need to be referred for other services, the primary care physician will do so, but you typically can’t go outside the network. One drawback of this plan is that some HMOs only offer small networks of doctors, so you may have little say in choosing your health care provider, or you may have long wait times to see a doctor.

Point-of-Service Plan – This plan is like a combination of the two above. In a point-of-service plan, consumers generally must select a primary care physician from a qualified list, but they can seek care outside the network, or be referred to a doctor outside the network, and still maintain some coverage.

Significantly different from the plans detailed above is the Health Savings Account (HSA), perhaps the most innovative health insurance option available. HSAs offer members more control over their health benefits, while typically reducing premiums. By combining a high-deductible health plan with a tax-exempt saving account, individuals can cover their health care needs, including preventative care, wellness and even some alternative therapies. Health savings accounts are very flexible, allowing members to visit any doctor they choose. But to decrease out of pocket expenses, most provide a PPO network of doctors to choose from. This gives the consumer maximum flexibility to receive the care they need, when they need it, all while controlling short term costs and saving money for the future.

Choosing an affordable health insurance plan largely depends on the specific needs of the consumer. But whether you need an individual health insurance plan, a family health insurance plan or even something for your small business, arming yourself with knowledge about options – and then analyzing which plan’s benefits best suit your needs – will help to make the choice much easier.

Of course, if you need help sifting through the options and analyzing the results, just let us know. We’re here to help!

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State Workers Denied Texas Health Savings Accounts

August 12th, 2011 by Richard Monello

Tags: Affordable Health Insurance, health savings account, Texas health insurance
Posted in Health Insurance News, Health Savings Account (HSA), Texas health insurance

Health savings accounts (HSAs) have surged in popularity in recent years and are the fastest growing health insurance option in the private market. It’s easy to see why, as health savings accounts put cost controls into the hands of consumers and offer many tax advantages. So why are they not an option for state workers?

According to Texas Watchdog, it’s because House Bill 1766, which would for the first time have offered health savings accounts as an option for state employees, was killed before making it out of committee in this past legislative session. At the helm of opposition was Andy Homer, director of government relations for the Texas Public Employees Association. He testified that health savings accounts have no benefit for his group and that not a single one of his members had asked for one.

Homer says that “HSAs only appeal to young, healthy employees and people who make a good deal more than the average state employee,” and that because of the high deductible, people with HSAs tend to ignore preventative care. His statements are in direct opposition to many prevailing thoughts on the role of HSAs in health care.

“Everywhere we’ve seen health saving accounts take off we’ve seen the cost curve bend down considerably,” said Texas state representative and doctor, John Zerwas. “My big concern in all of this, the primary thing that needs to happen in health care is for consumers to have some skin in the game, to go out and be rational buyers of health care.”

Zerwas’ sentiments make sense. Because of natural market forces and competition, a cost-conscious consumer creates cost-conscious doctors, hospitals and pharmaceutical companies. This in turn can lower overall health care expenses across the board.

“I think it is the single most cost-effective health care plan on the market,” said Joanna Antongiovanni, president of the Texas Association of Health Underwriters. “High-deductible insurance plans combined with an HSA should be at the center of our nation’s efforts to expand health insurance coverage. Participants have an incentive to avoid paying for unnecessary services because they keep the money they don’t spend.”

Perhaps the lack of interest by Texas state employees and their representatives is due to poor communications of the benefits of an HSA. Some people are turned off by the corresponding high deductible, but between tax savings, consumer control and the ability to rollover unused funds to the following year, a health savings account is actually a terrific way to save money.

It’s worked in Indiana. When first introduced in 2006, only four percent of the state workforce enrolled in a health savings account. That number has since swelled to 85 percent, and cost savings estimates show that the HSA program may have saved taxpayers as much as $23 million last year alone. Now imagine those cost savings applied to Texas, which boasts a state workforce eight times the size of Indiana’s.

The fact is, there are many options for securing affordable health insurance, but a health savings account is the only one that puts cost controls into the hands of consumers. And when that happens, everyone wins — consumers, taxpayers and the state. HSAs have proved popular on the individual health insurance market. Hopefully Texas will soon implement an options for state workers as well.

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ObamaCare Rising: Calculating Health Cost Inflation

August 9th, 2011 by Richard Monello

Tags: Health Care Reform, ObamaCare
Posted in Health Insurance News

ObamaCare was passed with promises of affordable health insurance for all. Obviously, that hasn’t been the case. The president and his administration claimed that reforms would help control costs, in some cases up to $2,500 per year for the typical family. But despite those promises, the Congressional Budget Office calculates that premiums will actually rise by $2,100.

According to Forbes.com, researchers estimate that health care spending will grow an average of 5.8 percent per year through 2020, and that total health care costs will hit $4.6 trillion by the end of the decade. That’s about $14,000 in annual spending for every person in the U.S.

In 2014, when the law’s major coverage provisions kick in, total healthcare costs will jump 8.3 percent — a rate well above the 5.5 percent expected for 2013. The outlook for the individual health insurance market is even more dire, as spending on private plans is expected to swell 9.4 percent that year, more than four percentage points higher than it would have without ObamaCare. So rather than keeping costs down, ObamaCare is raising costs. And beyond that, it’s even speeding up the rate in which costs are being raised.

From there, ObamaCare will significantly increase Medicaid spending, hospital, physician and clinical spending and even prescription drug spending. All these cost increases trickle down, filtering through the health insurance companies and landing in the laps of employers (many of whom are expected to drop their health plans) and cost-weary consumers.

As the Forbes article states, “The White House has repeatedly said that its brand of health reform will bend the healthcare cost curve down. Medicare’s actuaries have taken a sober look at the numbers — and arrived at the opposite conclusion.” Hopefully the abundance of evidence, in addition to the public outcry, will force the administration to take a cold, hard look at the facts. And unlike lobbying politicians, facts don’t lie.

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Affordable Health Insurance for Your Small Business

August 5th, 2011 by Richard Monello

Tags: Affordable Health Insurance, Small businesses
Posted in Health Insurance News

The health care landscape is in flux. Some health reforms have already been implemented, while most don’t go into effect until 2014. But businesses shouldn’t wait to take action. In order to provide affordable health insurance for your employees, it’s best to begin planning now for how these changes might impact your company.

“There are going to be specific requirements and mandates,” says Steve Freeman, president of insurance and financial services firm USI. “Have a plan, know what your core values are on offering benefits to your employees and know where you want to be versus your competition on compensation and benefits. Make sure your plan is in compliance for what you need to be doing now, and make sure you’re going to be ready for 2014.”

Freeman offers some direction on assessing current guidelines and preparing for upcoming changes.

Effective as of Sept. 23, 2010 –

- Plans can no longer issue lifetime limitations or place unreasonable annual limits on essential benefits.

- Employers must offer coverage for employees’ children up to age 26.

- Insurance companies can’t exclude coverage for individuals under the age of 19 with pre-existing conditions.

Effective as of January 1, 2011 –

- Flexible spending accounts can no longer be used to pay for over-the-counter drugs without a prescription.

Starting in 2014 –

- Employers will be mandated to provide health care coverage if they have more than 50 employees, or they’ll face a monetary penalty. However, with a relatively low penalty, many businesses may choose to pay the penalty rather than provide health benefits to employees

- Individuals will be mandated to have health insurance, or they’ll face a monetary penalty

Offering small business health insurance is a great way to retain employees and stay competitive in your market, and considering the changes already in effect as well as those to come will better position your business to succeed in the future. As Freeman notes, “businesses need to act now, as failing to address the impact this will have on your company will put you at a distinct disadvantage come 2014.”

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Is a Health Savings Account Right for You?

August 2nd, 2011 by Richard Monello

Tags: health savings account, Individual Health Insurance, self-employed health insurance
Posted in Health Savings Account (HSA), Individual Health Insurance

There are many ways to secure affordable health insurance, including traditional PPO plans, HMOs and point-of-service plans. But one health plan that’s growing in popularity is the health savings account, or HSA. HSAs first hit the health care market in 2004; they’re like personal savings accounts used for qualified health-care expenses, including doctor visits and prescriptions. As more and more people are losing their employer-subsidized coverage or otherwise needing individual health insurance, consumers are choosing health savings accounts to maintain coverage and to combat the rising costs of health care.

Before establishing a health savings account, consumers just need to be enrolled in a high-deductible health insurance plan. Pairing a high deductible plan with an HSA is a great way for an individual or family to maintain coverage in case of emergencies, but to also save money long term. If you don’t incur many medical expenses in a particular year, then your money is simply rolled over to the next year. And since contributions are tax-deductible and money in an HSA grows just like a regular savings account, an HSA is a great way to invest in your future.

Interestingly, Fox Business notes that employers are flocking to health savings account plans almost as readily as consumers, because these plans help employers reduce health care costs and provide more flexibility in how employees pay for their medical care. HSAs also give users more incentives to lead healthier lives, as being healthy saves their own money.

In choosing whether a high deductible plan paired with an HSA is right for you, “it’s really a personal choice of do you go with the higher plan, or the lower deductible?” says Nick Calabrese, vice president of consumers and product management at CIGNA. “People need to evaluate what their expected out of pocket costs are with each plan.” Another consideration is what expenses qualify under the rules of an HSA. For example, as of 2011 health savings account funds no longer cover over-the-counter medicines, but that’s not necessarily a permanent plan fixture, as plan rules are subject to change.

But overall, health savings accounts are seeing significant growth because they “help manage costs without sacrificing care,” says Calabrese. “If an employee qualifies for a high deductible plan this vehicle helps offset out of pocket costs.” And when that happens, both employee and employer win.

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ObamaCare Waivers Further Prove Health Law Doesn’t Work

June 29th, 2011 by Richard Monello

Tags: Affordable Health Insurance, ObamaCare
Posted in Health Insurance News

Still holding your breath, waiting for affordable health insurance? You’re not alone. A year and a half in, and many Americans still don’t understand ObamaCare. And the ones that do generally don’t like it. That’s especially evident in the waivers being granted to businesses and associations who can’t stay afloat if they adhere to the legislation.

But the granting of waivers is basically an admission that the health reforms are inherently flawed. The monumental health care overhaul, touted by the administration as a positive and necessary change, is so ineffective that its proponents are allowing certain entities to bypass it entirely. That’s not exactly a vote of confidence for the legislation.

Forbes.com reports that “by mid-June the administration had approved 1,433 waivers to companies, unions, associations, and states covering 3.2 million people.” These waivers are being granted because ObamaCare threatens to harm consumers rather than help them. Things were looking so dire that the entire state of Maine filed for a waiver. The Center for Consumer Information and Insurance Oversight noted that Maine’s waiver was granted because the healthcare law has a “reasonable likelihood of destabilizing the Maine individual health insurance market.” Kentucky, Nevada, and New Hampshire have requested similar waivers.

Of course, as most waivers are going to unions, big companies and states, individuals are left shouldering the burdens of our new health care system. As Forbes notes, “Congress should create a permanent waiver for all of us — by repealing ObamaCare.”

Assuming you didn’t receive a waiver, let us know. Our Texas health insurance brokers will find a plan that works for you.

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Legislators Measure Texas Health Care

February 17th, 2011 by Richard Monello

Tags: Texas health insurance, Texas health insurance plans
Posted in Health Insurance News, Texas health insurance

The 2011 edition of Texas on the Brink was released today. The study, which began in 2003 and is performed by the Texas Legislative Group, measures the state of health insurance in Texas, health care, education, quality of life and more. Unfortunately for Texas, we didn’t fare so well, particularly in regard to how many residents have Texas health insurance.

Below are some findings from the study, with 1^st representing the highest percentage and 50^th representing the lowest percentage.

Percent of population that’s uninsured – 1^st
Percent of uninsured children – 1^st
Percent of low income population covered by Medicaid – 49th
Percent of population with employer-based health insurance – 48th
State government health expenditures as percent of the gross state product – 43rd
Per capita state spending on mental health – 50th
Per capita state spending on Medicaid – 49th
Percent of population that is physically active – 36th
Health care expenditures per capita – 44th

Once again Texas ranks last in the number of its citizens who have health insurance. Last year’s United Health Foundation study also found Texas to rank last in health insurance rates. Some of this can be attributed to the economy. After all, health insurance can be costly. But what many people don’t realize is that not having health insurance can be significantly more expensive, as emergency medical care and unanticipated operations can leave consumers hundreds of thousands of dollars in debt.

Texas also ranks poorly in the number of residents with employer-provided health coverage. Even if your employer doesn’t offer coverage, there are still plenty of options in the private market. A Texas health insurance broker can walk you through your options, which include a range of individual Texas health insurance plans and family health insurance plans. Regardless of what you choose, being insured is always a good thing. It’s a sound investment, and one that ensures you and your family are protected, both medically and financially, should health issues arise.

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Health Savings Accounts Cut Medical Costs with Lower Taxes

More Consumers Choosing High Deductible CDHPs

Comparing Traditional Health Insurance to a Health Savings Account

State Workers Denied Texas Health Savings Accounts

ObamaCare Rising: Calculating Health Cost Inflation

Affordable Health Insurance for Your Small Business

Is a Health Savings Account Right for You?

ObamaCare Waivers Further Prove Health Law Doesn’t Work

Legislators Measure Texas Health Care

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