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Health Insurance Coverage?

Discussion in 'Pesticide & Herbicide Application' started by sjj14, Jan 27, 2005.

  1. sjj14

    sjj14 LawnSite Member
    Messages: 97

    With a little down time in the winter I am reviewing all insurance plans etc. for my business and was wondering if anyone has a good recomendation for Health ins. for small bus. owners. I currently have a typical Aetna HMO but am looking for options. No employess just me and my family. Thanks for any feedback.
  2. philk17088

    philk17088 LawnSite Fanatic
    Messages: 17,386

    I'm looking into a Medical Savings Account and getting out of a traditional plan. I'm sick of the premiums and high deductables payup
  3. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Messages: 10,178

    phil, i checked one out, briefly...a bit of a crock, isn't it?
  4. mastercare

    mastercare LawnSite Senior Member
    Messages: 289

    HSA's are the future of health insurance. However, your post sad that you're tired of deductibles! With an HSA you still buy a health isurance plan, and get it with the highest deductible possible. This is what makes the premium so low....the insurance won't kick in until you've met your monstrous deductible.

    This is where the savings account comes in. You take the money you saved on premium and put it into a tax sheltered account. You should really put more than just the "savings" in there. When you incur medical expenses, you can use that money tax free to meet your deductible or copays. Any money you don't use, gets rolled over to the next year. So, the idea is this: You save up about $5000 into this savings account, and use the highest family deductible you can get (about $5k). If you don't use the money, you don't HAVE TO continue to contribute to it....becuase the money will be there next year should you need it. If you never use it, you can pull it out at retirement (actually age 62) and use it just like a traditional IRA. You pay taxes on it as ordinary income, but its a great way to set aside money, and if you don't use it, its yours to keep during retirement.

    The catch is if you start this High Deductible Health Plan, and you have a medical bill before there's enough built up in the Savings account. Then you've got a huge bill and no money saved up. If you stay healthy for the first year or so, or you can open the account with a big lump sum up front, you're all set.

    When I'm not cutting grass....I'm a financial advisor here in MI. I have sold these plans, and traditional health insurance, Life insurance, investments, retirement accounts. etc. Feel free to PM me with questions.
  5. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Messages: 10,178

    if i start this plan tommorow, and on monday have a bad accident, running up $40,000 in hospital bills, how much of that 40k is my responsibility? how much will the ins company pay?
  6. mastercare

    mastercare LawnSite Senior Member
    Messages: 289

    That all depends on what health plan you choose. Typically, when dealing with an HSA, you couple that with a HDHP (High Deductible HEalth plan). Of course, the higher the deductible, the cheaper the insurance premium, but the more you'll be responsible for.
    A cheapest (typical) example would be that you would get coverage for your family. You would have a deductible for your family of $5000. That means that on a $40,000 hospital bill, you would pay your deductible first (out of your HSA) of $5000. The other $35,000 would be covered by the actual medical insurance. Then, your family has met its deductible for the year, and every time you go to the Dr.'s your insurance will pick up 100% of the coverage for the rest of the policy year.
    It all depends on how you set it up. You could get a plan with only $1000 deductible, which means you pay the first $1k. But, of course that health plan is more expensive becuase its more likely the insurance company will have to kick in.
    People with a long history of medical problems and accidents shouldn't buy this policy. But, it is perfect for the people who just see the Dr. when they get a cold once a year. You'll end up paying for that one visit out of your own pocket, but you've got an insurance company backing you should anything major happen.
    Let's say for example that you pay $500 a month now for insurance, and you want a HDHP. Your premium may drop to $250 per month. The other $3000 (250*12) that would have otherwise gone to the insurance company sits in a tax-sheltered savings account for medical expenses. Lets say you go the Dr. for a cold, and your bill comes to $300. You pay that out of your $3000 savings, and at the end of the year you have paid:
    $250 * 12 = $3000 in premiums
    $300 in deductible

    Total = $3300 for the year. ....AND you have $2700 sitting in an account which is yours to use for medical expenses, or retirement

    If you stay with your old plan: $500 * 12 = $6000 spent on health care, and that money is gone.

    Now to go one step further, next year you start with $2700 in your savings account. Lets say your family deductibl is $5000. Now you can pay your $250 a month, and you're not REQUIRED to put anyhting into your savings account. Of course, you'll want there to be enough to cover your max deductble....but that's your choice. Once you build the account to your max out of pocket, you could continue to contribute, or just leave it as is knowing that your max out of pocket has been covered for the year;.....The only thing you're required to pay is your premium....your savings account can hold any balance you feel you need on hand to cover medical expenses.

    By the way....did I mention that all contributions to your Health Savings Account are (usually) Tax deductible?
  7. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Messages: 10,178

    that almost seems like a "trick" or incentive for the insured to NOT go to the doctor, therefor, the insurence company reaps the true benefit. another question...i called a "broker" i guess you would call him, and asked about just hospitalization coverage. in other words i'll pay for everything out of my pocket, i just want to be covered in emergency situations (surgery, hospital stay, emergency room, etc.) he claims there is no such thing. any input?
  8. mastercare

    mastercare LawnSite Senior Member
    Messages: 289

    Your "broker" couldn't find anything becuase his commission isn't worth the time spent filling out paperwork to get you the coverage!

    Yes, basic hospitalization does exist. It is incredibly cheap, and therefore most financial professionals don't sell it. For example, I had a friend who was down and out and lost her job. I set her up with one of these plans. It cost her $28 per month. My commission was about $1.05 per month!! That's why he can't find one!

    Now this is the simplest and most basic coverage someone can buy. It only covers you if you are hospitalized. Won't cover Dr.'s appointments, physicals, emergency visits, or any of that stuff. And, if you make 1 claim, they will cancel your coverage after they've paid the bill!! But, that's why its so cheap.

    It's basically catastrophic coverage. Any colds/injuries or such won't be covered (the reason we usually get medical help). It typically has about a $1000 deductible for the hospitilizaiton.....they pay the rest of the bill. Once you're out of the hospital for that incident....your coverage terminates. Very cheap, very foolish way to cover medical expenses...BUT if you don't have 2 pennies to rub together and need some type of coverage, its better than nothing.
  9. mastercare

    mastercare LawnSite Senior Member
    Messages: 289

    Sorry, Forgot to metion:

    A company called John Alden (a Fortis company) sells a lot of these policies. They have minimal underwriting, and your payment is calculated right out of the pamphlet describing the policy. Very cheap, very easy to set up. But, again, if this is all you can afford, its better nothing, but definitely a LAST option when it comes to health insurance.
  10. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Messages: 10,178

    do you think the coverage i have now is "foolish?" i have oxford. i pay $1000 a month for med/prescription. last year i paid $12,000 to this plan, and had perhaps 5-7 doctors visits(our family of 4), which would have cost us maybe $700 (if we had no insurence). if i chose to not carry ANY COVERAGE, i'd be ahead by more than $11,000. so i can get hospitalization for $25 a month. have a heart attack, they pay the $60,000 in bills, then drop me? that don't sound too bad.....

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