Four things to consider when you plan your retirement healthcare coverage

Insurance coverage can be one of the most important pillars of your retirement plan. It is also one of the most personal. Policies vary as widely as the people who purchase them, and coverage requirements can change dramatically as we age. In the United States, anyone aged 65 or older qualifies for Medicare, a federal health insurance program. In addition, certain disabilities and illnesses qualify an individual for Medicare. Transitioning from a private, marketplace or company-sponsored insurance plan can be confusing. We always recommend checking with a licensed insurance professional before making such an important decision. Beyond that, here are four things to consider as you plan your coverage: Can you keep your current insurance coverage when you retire? Read the fine print of any policy you choose. Check the cost of your premiums, deductibles and any hidden costs. What will you pay out-of-pocket for hospital stays or doctor visits? Is there a yearly limit on what you could pay out-of-pocket for medical services? Make sure you understand any coverage rules that may affect your costs. Does your plan include your preferred provider? Will you need additional coverage for costs associated with vision, dental and/or hearing? Are the doctors in your plan or network accepting new patients? Prescription drugs. Do you have prescription drug coverage? You may face a penalty if there is a gap between your eligibility date and application for coverage. How much coverage will your prescription drug plan offer for the medicine you require? Are you eligible for a free Medication Therapy Management program? People with Medicare can get their health coverage through either Original Medicare plus supplements or a Medicare Advantage Plan (also known as a Medicare private health plan or Part C). The following chart from the Medicare Rights Center illustrates the differences between the two plans:   If you have any questions regarding your Medicare options, please contact us. Our in-house insurance department would… | Read More »

Avoid tax surprises related to the Affordable Care Act

As we approach the five-year anniversary of the day President Barack Obama signed the Affordable Care Act into law, we are still seeing some challenges related to the way people are navigating their way through that historical healthcare overhaul. One significant change that is posing major challenges to American taxpayers is that, for the first time, upfront tax subsidies/credits related to individual health insurance are tied to income projections. The trick is that subsidies and credits are calculated on an income projection for an entire year. Since most people elected to take the subsidy/credit upfront and lower premiums throughout the year, they are finding that they have to pay back part or all of their subsidies on their 2014 returns, because when they estimated their income for 2014 in 2013, they didn’t take into account all sources of income that will count towards their modified adjusted gross income. In some cases, it was extra withdrawals from retirement accounts that they didn’t plan on taking.  For others it was picking up more hours at work, bonuses at work, or a pay raise.  Even an unexpected inheritance from a family member can throw off even the most carefully planned income estimate. One way to take the guess work out of the equation is to elect the option to take any subsidy/credit when you file your taxes, instead of upfront. If you don’t want to wait to get your subsidy/credit, here is the big take away: you can adjust your income level used to calculate your subsidy/credit amount at any time during the year.  If you are computer savvy and used the website Marketplace to enroll for coverage you need to report a life change and follow the steps until you can edit your income projection for the year.  If you would rather call the Marketplace, you have that option as well, the phone number is 1-800-318-2596 and it is available 24… | Read More »

Avoiding disability insurance can be a critical mistake

While people commonly purchase life insurance either through the group benefit sector or the individual marketplace, they are less likely to buy disability insurance. This can be a critical mistake. The risks of an extended disability are much higher than that of an unexpected death for the average worker.  According to a report by Cornell University, 15,533,000 American workers aged 21-64 reported a work limitation in 2013. Many never regained their ability to work full-time and must deal with the economic repercussions for the rest of their lives. Group disability is an excellent benefit, but, like all insurance products, should be carefully researched before purchase. For instance, many people don’t realize that their disability benefits are taxable if their group disability is paid by their employer. This can drastically reduce an income check that already has been cut by 40% or more by the COBRA payments necessary to continue basic health coverage. Combining group disability with a private disability plan will increase the amount of after tax benefits available to you should you become incapacitated in a way that would prevent you from earning a wage. Just like with many forms of insurance you may think. “Why should I pay for something I may never use?”  Well, the moment you become disabled you will look like the smartest person alive because you had the foresight to put some protection in place for you and your family. If you don’t have disability insurance available to you in the group setting, you need to at least look into a private plan.  Disability insurance will cost you less than you may think and, if you have paid your own premiums, the income you receive from a payout of benefits is not taxable. Please, for your family’s sake, take a moment and think about how all you obligations would be met if you were unable to work, and consider private disability insurance. If you… | Read More »