Your Money: Health insurance after job change

Your Money: Health insurance after job change

July 31, 2008

Individuals who find themselves a victim of a layoff or find a new job that doesn't offer health insurance face a difficult task in deciding how to replace health insurance. The options might be more expensive than a subsidized corporate plan, but some do offer tax benefits that an employer can't.

The first option is to continue your previous employer's insurance through COBRA. This maintains your coverage, but it's expensive. You now must pay the full premium, and employers usually tack on 2 percent more to cover administrative fees.

Instead of this option, explore an individual policy with the same insurer or another provider that includes your doctors in its network. If you are healthy, you could also lower the benefits provided to get a lower rate.

Another option is to use a Health Savings Account. These let you make tax-deductible contributions to a savings account in which withdrawals are tax-free if used to pay medical costs. Any other withdrawal purpose is subject to a 10 percent penalty. The balance, when you turn 65, can be withdrawn for any reason without tax penalties. You must pair the HSA with a high-deductible medical policy and not be eligible for coverage from your or your spouse's employer.

To help you sort through the myriad of choices, start by asking an independent insurance broker to shop the marketplace for policies that fit your situation.

An independent broker isn't limited by one insurance company and can compare policies for you.

Because they are compensated by the insurance company you that select, make sure you are given at least three options and even submit your request to at least two brokers.

Also, try searching online at eHealthInsurance.com and consulting a financial adviser, who might have further resources available and help you make your decision.

MCT

dailypress.com

Want to see your insurance bills reduced? Report Insurance Fraud in South Carolina

Piedmont Area leads state in number of fraud cases


Columbia, S.C. – Wednesday, July 11, 2007 – Governor Mark Sanford has proclaimed July 15-21 as Insurance Fraud Awareness Week in South Carolina. Insurance fraud is a felony in South Carolina and can result in jail time.

Insurance fraud costs nearly $120 billion a year, with healthcare fraud at $85 billion a year and property and casualty insurance fraud at $30 billion a year, according to the Insurance Information Institute. Each year consumers spend about $300 per household just in additional insurance premiums, according to the National Insurance Crime Bureau. While there are organized fraud rings throughout South Carolina, other people you wouldn't suspect, such as a next-door neighbor, co-worker or close acquaintance, are also the causes of insurance fraud and increased insurance premiums.

The South Carolina Insurance Fraud Investigators, Attorney General Henry McMaster, and the South Carolina Insurance News Service are continuing their on-going initiative to fight insurance fraud and increase public awareness of insurance fraud and public participation in fraud prevention efforts.

Officials hope increased awareness of insurance fraud will encourage consumers to use the South Carolina Insurance Fraud Hotline to report cases to the Attorney General's Insurance Fraud Division.The South Carolina Insurance Fraud Hotline (1-888-95-FRAUD) is available toll-free, 24 hours a day, 7 days a week. "People tolerate insurance fraud thinking that insurance companies have a lot of money, but that money is money paid into them in premiums from consumers. Reporting insurance fraud is the key to reducing this crime and saving money," says Allison Dean Love, Executive Director of the South Carolina Insurance News Service.

As of June 30, 2007, there have been 41 criminal convictions and 38 civil remedies in South Carolina as a result of insurance fraud charges, according to the Insurance Fraud Division of the Office of the Attorney General. According to the Attorney General’s 2006 report:

▪ There were 722 complaints of insurance fraud reported in South Carolina in 2006 – a 27% increase over 2005 with 569 cases.

▪ There were 49 civil remedies compared with 39 in 2005. There were 82 criminal convictions compared with 102 in 2005.

▪ The total amount of fraud reported in 2006 was $15.4 million – nearly triple the amount of 2005. (One liability fraud complaint of $10 million was reported)

▪ The amount of restitution ordered in 2006 was $318,125 – a 40% increase over 2005 with $191,416 in restitution.

The cases have come from all over the state of South Carolina and break down by region as follows:

▪ Piedmont - 31% (120)
▪ Low Country - 23% (89)
▪ Midlands - 27% (106)
▪ Pee Dee - 19% (74)

The greatest number of complaints were due to automobile insurance fraud (45%), followed by personal/commercial property fraud (14%) and workers' compensation fraud (13%). Fraud may be committed at different points in the insurance transaction by different parties: applicants for insurance, policyholders, third-party claimants and professionals who provide services to claimants.

Insurance fraud can be “hard” or “soft.” Hard fraud occurs when someone deliberately fakes an accident, injury, theft, arson or other loss to collect insurance money illegally. Soft fraud occurs when someone inflates a claim or underestimates the number of miles driven on an insurance application. Generally, the most prevalent types of insurance fraud are:

▪ Misrepresentation of the number of miles on an auto insurance application.

▪ Failure to report an accurate medical history when applying for health insurance.

▪ Fake or exaggerated injury claims to avoid work and draw workers’ compensation pay outs.

▪ Falsification or overstatement of injuries in auto accident to obtain a large settlement or damages award.

▪ Staged auto accidents that result in clams for non-existent or exaggerated injuries.

▪ Fabrication of relationships to obtain life insurance benefits.

▪ Exaggeration of the amount and value of items stolen from a home, business or automobile.

In addition to denial of their claims and voiding of their insurance, people who commit insurance fraud risk criminal prosecution. As fraud increases, insurance companies have to cover these losses by increasing insurance rates. Insurance companies have special investigative units which are dedicated to reducing insurance fraud.

"Insurance fraud in South Carolina is causing honest people to pay far too much for insurance coverage," said Attorney General Henry McMaster. "We have a strong team that is vigorously prosecuting these crimes in our state, but citizens need to be alert and contact local law enforcement if they see evidence of insurance fraud. Criminals should not be allowed to make us all pay the bill for their crimes."

"We need the general public to fight fraud in our state and not tolerate it," said Brandolyn Pinkston, Administrator of the South Carolina Department of Consumer Affairs. "The message is a simple yet powerful one: We all pay for insurance fraud - it's time to fight back."

In recognition of Insurance Fraud Awareness Week, the South Carolina Insurance Fraud Investigators will be holding an Insurance Fraud Expo on Saturday, July 21 from 10:00 a.m. until 2:00 p.m. at the Kroger in Sparkleberry Square at the intersection of Two Notch Road and Sparkleberry Lane, Columbia. The expo will host a variety of booths available to help educate South Carolinians about the impact of insurance fraud in our state. Experts will be available to etch vehicle identification numbers on cars and explain auto theft prevention. “Governor Sanford’s proclamation clearly sends the message to the citizens of our state that insurance fraud is not only alive and well, but thriving - resulting in increased premiums and the cost of services provided by insurance companies who do business in South Carolina.” said Alan Wyche, President, South Carolina Insurance Fraud Investigators.

Other resources for information on insurance fraud are:

South Carolina Insurance News Service – www.scinsnews.com
National Insurance Crime Bureau – www.nicb.org
Coalition Against Insurance Fraud – www.insurancefraud.org
Insurance Fraud Division’s web site at -www.scattorneygeneral.org
South Carolina Insurance Fraud Investigators - www.sc-ifi.org

Report Insurance Fraud to the South Carolina Insurance Fraud Hotline

1-888-95-FRAUD- All reports remain confidential.

For more information on insurance fraud in South Carolina or for an interview call 803-252-3455 or e-mail alove@scinsnews.com

For over 30 years, the South Carolina Insurance News Service, a nonprofit organization, has been providing free insurance information to consumers and the media about property and casualty insurance issues. The News Service is funded by insurance companies doing business in South Carolina.

The Top 7 Most Outrageous Insurance Fraud Cases of 2007 (so far):

Obsession Over Repossession On 07/24/06, Edward Pinckney claimed that his truck, valued at $15,000, was stolen from his home driveway. Investigation revealed that the truck was not stolen but repossessed by the State Credit Union. Before the repossession Mr. Pinckney was notified of the repossession by certified mail. On the day of the alleged theft, Mr. Pinckney had a three-way telephone conversation with Deputy Ballenger from the Greenville County Sheriff's office and Eric McIwain from the South Carolina Credit Union at which time he was made aware that the truck was not stolen, but was repossessed. On July 31, 2006, Mr. Pinckney completed and submitted a theft affidavit to State Farm Insurance Company, which indicated that his truck was stolen and not recovered and that he was unaware of its whereabouts. On 03/14/07, Mr. Pinckney pled guilty to Presenting a False Claim for Payment over $5,000. He was sentenced to 5 years suspended to 20 months probation.

Hail, No Hail! - On August 7, 2006, Joyce Davis submitted a witnessed statement to Hartford insurance company stating that her vehicle had been damaged by hail on May 20, 2006. Weather reports indicate there were no hailstorms or any rainstorms in the area on that date. Pictures of the vehicle in question show scratches in a swirl pattern as well as damages that appear to have come from a metal object that gouged the paint down to the metal. There was no damage to the top of the vehicle, only the hood, trunk, bumper, and sides. Ms. Davis claimed hail damage in the amount of $1,206.80. Her claim was denied and there was no restitution. Ms. Davis pled guilty to Presenting a False Claim for Payment, less than $1,000. She was sentenced to 30 days incarceration suspended to 6 months probation and a $200 fine.

3 Stooges and A Home Computer - On May 21, 2003, Linda Thompson was in a motor vehicle accident with her husband Matthew Barnes and her 17 year old daughter. Ms. Thompson did present to Cambridge Integrated Insurance Company forged medical billings for herself and her daughter totaling $4,452.00. The medical bills had the appearance of being typed on a home computer. Investigation found that one of the alleged medical facilities was actually a residential trailer park. Ms. Thompson also submitted billings from actual medical facilities; however, these medical facilities informed investigators that they never treated Ms. Thompson. The Insurance Company denied the claim. There was no restitution. On 01/30/07, she pled guilty to Presenting False Claims for payment. She was sentenced to 5 years in prison.

Grooms and Bride - On August 24, 2002 in Richland County, a rental car driven by Phyllis Harden allegedly rear-ended another vehicle containing the passenger Joseph Grooms. Mr. Grooms submitted to bodily injury claim to Cambridge Integrated Services, the insurance carrier for the rental car company. Mr. Grooms and Ms. Harden denied knowing each other when questioned by police and the insurance company. However, it was revealed that Mr. Grooms and Ms. Harden were in fact married. An expert in accident reconstruction examined the vehicles and determined that the damage to the vehicles was completely inconsistent with the accident scenario related to law enforcement and the insurance company. On 03/19/07, Ms. Harden pled guilty to Presenting False Claim for payment over $1,000. She was sentenced to one year in prison suspended to time served. There was $1,225.31 due in restitution to the victim in the case. The restitution was converted into a civil fine.

The “Buck” Stops Here – Quit Pulling Our Leg - Wyndell Buckmon defrauded an insurance company by claiming he was driving his car when the vehicle was involved in an accident and had lost his leg as a result. However, several witnesses who were involved in the accident indicated Buckmon was not in either car at the time of impact. In fact, the responding police officer drove up the road to the car wash where Buckmon was working at the time and brought him to the accident scene after-the-fact. The investigation further revealed that Buckmon had already lost his leg years prior to this incident. The insurance company denied his bodily injury claim. Buckmon pled guilty to presenting a false claim for payment and received a sentence of 18 months suspended to 18 months probation.

The Fake-out - Brion Smith defrauded an insurance company by submitting forms allegedly from two physicians indicating that he was disabled and unable to work. During this three-year period, Smith collected over $16,000 in disability payments. However, investigation revealed that neither physician had completed these forms. Smith pled guilty to two counts of making a false statement or misrepresentation and was sentenced to three years concurrent, suspended to four years probation, on each count. As part of his sentence, Smith also made full restitution of $16,549.

KARMA – Enough Said - Jimmy Mizzell, Sr., Kerry Mizzell, and George Reeves are family members who defrauded an insurance company by staging an automobile wreck. In fact, the setup went awry resulting in a more-serious wreck and injuries than they had intended. These defendants each pled guilty to presenting false claims for payment and received three years imprisonment, suspended to probation. In addition, the three were ordered to pay a total of over $23,000 in restitution.

Source: Insurance Fraud Division, Office of Attorney General Henry McMaster

To view Governor Mark Sanford’s Proclamation of Insurance Fraud Awareness Week, please link to: Governor's Proclamation

Are HSA Plans for Everyone?

HSA plans are not for everyone. There are two components central to an HSA.

• High Deductible Health Insurance Plan
• HSA (Health Savings Account)

You have to have the high deductible health insurance plan to deposit money in an HSA. And not just any high deductible plan. You have to make certain that the plan is "HSA qualified". HSA qualified plans have some basic characteristics.

• These plans don't have a copay for doctor's office visits. If you want a plan where you can pay a $25 or $35 copay when you visit the doctor for an illness or injury then you don't want this type of plan.
  
• These plans don't have a copay for outpatient prescriptions. The prescriptions will usually be covered but the cost will be subject to the plan deductible.
  
• The cost of an HSA qualified plan will be less than a traditional copay plan.

HSA plans are attractive to people who want a tax shelter for money that they can squirrel away for out of pocket medical expenses. So, are HSA plans for everyone. No. They're pretty much a plan for people with higher incomes, higher net worths and a higher tax liability.

If you don't know your insurance then you better know your agent.

Like it or not insurance is system based on "contracts". Contracts are legal documents and as such lawyers and our entire legal system is fully involved. I wish it was a simple system whereby a company granted you "protection" with no strings attached. It doesn't work that way. One of the most important areas to evaluate in any policy of insurance are the exclusions. Always check your policy's exclusions to see first and foremost what is excluded. That still doesn't mean there are not other exclusions hidden in the policy or even attached by "riders" to the policy. It probably would be a good idea to get a law degree so you can manage your insurance!

As agents, we try to serve our clients by interpreting insurance policies. Major items like a "suicide clause" in a life insurance policy is easy to explain. If Elvis Presley or Heath Ledger (Batman) were proven to be suicides ( I am not sure that is the case) and they had a life insurance policy that was less than 2 years old, the policy wouldn't pay the death benefit to the beneficiaries. Worse yet, if the death is a "possible" suicide or even remotely considered by the insurance company as a suicide, then can you imagine how long the proceeds would be held up in a legal battle between the beneficiaries and the insurance company? Yikes. So even the simple aspects of policies can get rather complicated.

I hate to say buyer beware but that's really the case with insurance. Read your policy and ask your agent if you have questions

CoventryOne from Wellpath

This plan is new to South Carolina. The benefit that is best would be preventative. Preventative like physicals are a first dollar paid item on the high deductible HSA type plans and on the copay plans, they're eligible with only a copay. The plan encourages the insureds to use the preventative benefits.

Maternity Coverage

The cost of adding maternity on an individual plan is usually cost prohibitive. But there is one exception. Assurant's maternity option provides for coverage with just a higher deductible applied to the maternity. Why is this good? Its good because since maternity is covered under the option, you can still take advantage of the significant discounts afforded by network rates and the cost of the rider is reasonable.

Assurant MaxPlan Doctor's Office Copay

Assurant's MaxPlan is a superb all around plan. The copay for doctor's visits is an option and if included it is an unlimited benefit.

Golden Rule HSA 100

The HSA 100 is Golden Rule's top HSA qualified plan. The 100 stand for the coinsurance percentage. This means that 100% of covered expenses are paid after the deductible is met. That's the best that you'll find on the coinsurance front. Its good to know that after you've forked over thousands of dollars for a high deductible that the medical bills will be paid. At least the covered ones will be! In a perfect world, health insurance would have no exclusions and it would provide full coverage but that's only a dream. Coinsurance and deductibles are a way of "cost sharing" and they're a central part of the insurance contract and insurance theory.

The HSA 100 has a single deductible for an individual and a combined family deductible for a family. It is not required that you open an HSA savings account with this plan but why not? Every dollar put in the savings is a tax savings. Without the savings, you're wasting the primary benefit of an HSA qualified plan.

How does this plan compare to other 100% coinsurance HSA plans? This is one type of health insurance that is easy to compare. The Assurant plan limits physical exams to $1000 where Golden Rule has no special limit. CoventryOne has a 100% plan but unlike others that I've reviewed, the deductible applies for 2 family members. Coventryone does provide first dollar coverage for physical exams including a pap smear and mammography. CoventryOne also provides for chiropractic as a limited covered expense where it is not covered under Golden Rule or Assurant.

You'll get a 12 month rate guarantee with Golden Rule's HSA 100 which is a standard industry practice.

Golden Rule Copay Select

Golden Rule is owned by the United Healthcare Group. My evaluation is based on plans in South Carolina but most of my information should pertain to you. The Copay Select is the best plan if you want copayments for office visits and a prescription drug card. Some of the highlights are as follows:

The basics are the same as most major medical plans.

1. The deductible can be as low as $500 but this is not recommended. A $500 deductible adds too much to the premium.
2. Coinsurance - This is the amount that you have to pay after you've met the deductible. Suppose you get hurt and are in the hospital.

Hospital Charges: $5000
Less your deductible: $1000
$4000 of which you pay 20% or $800
Your total out of pocket is the deductible plus the coinsurance or $1800.

Benefits are not overly rich but adequate.

1. You'll pay $35 each time you go to the doctor's office for an illness or injury. Even an annual exam is covered at $35. But buyer beware: Women: You'll have to pay 20% of the cost of your mammography and pap smear. And if you need any lab work completed or x-rays, then you'll be on the hook for pretty much all of those charges since the doctor's office copay with Golden Rule doesn't cover them.
   
2. Don't go to the emergency room if you can go to an Urgent Care clinic or your doctor's office. If you use the emergency room and are not admitted, you hit a $100 penalty.
   
3. Prescriptions - $15 for generic drugs. Try to stay away from name brands if you have this plan. Name brand drugs will cost you a $150 deductible ( that means you pay the first $150 of any prescription bill ) then either $30 or $60 for most name brands. For the really expensive ones, you'll have to fork over 25% of the cost!

So, is this a good plan. Compared to "like" plans. Nothing is exactly apples to apples with health insurance but compared to some "like" plans, this plan is reasonably priced for the benefits. The cost is usually lower than Assurant's MaxPlan and CoventryOne. You'll only be able to lockin the premium with Golden Rule for the first year where you can probably get a 24 or 36 month rate guarantee with Assurant. And CoventyOne offers superior wellness or preventative benefits. CoventryOne pays for the entire cost of a womans' pap smear and mammography. That should be standard on all plans but sadly is not.

On my 5 star scale( 5 being the best), I give the Golden Rule Copay Select 3 stars.***

Health Insurance Reviews

I cannot think of a system that is more confusing. Trying to compare individual health insurance plans is crazy. No two plans are the same. Health insurance companies change the plans constantly and the prices are ridiculous.

My objective is to help you understand the most important aspects of an individual health insurance plan. This blog is for all those who are self employed or not eligible for a group health insurance plan, this blogs for you!