Health Savings Accounts Provide Affordable Health Insurance Solutions

Millions of Americans have recently been faced with the task of finding their own affordable healthcare plans for themselves and their families after they have lost their jobs. Already in 2009 alone, an estimated that 7 million Americans who lost their jobs as a result of the recession will have to pay COBRA health insurance premiums in order to maintain their health insurance plans.

The good news for these millions of recently unemployed workers is that a new government Act – the American Recovery and Reinvestment Act (ARRA) – has been put into place in many states to help these individuals and their families afford to pay for their COBRA healthcare. However, the ARRA and COBRA only provide temporary financial relief and, for many, the programs are about to end. Health Savings Accounts may be viable healthcare solutions for these employees.

Working with COBRA

COBRA is a program that allows employees who have lost their jobs through no fault of their own to continue with the same healthcare plans that they had been receiving through their employers. The COBRA program is temporary and, while employees are able to maintain their same health insurance plans, employees do have to pay more for the health insurance premiums on their COBRA plans than they paid while they were employed.

Historically, COBRA premiums have been difficult for laid-off workers to afford on their own. Yet, because many workers were able to quickly find reemployment after being laid off, many workers chose to use the COBRA option as a temporary health insurance solution while they were between jobs.

However, with current challenging economic conditions, it has not been possible for many workers to find reemployment, which means that they have had to pay high COBRA premiums for longer periods of time – or opt to forgo health insurance altogether. Therefore, while COBRA programs have been an affective short-term solution to help workers get through a temporary job loss, they are not able to provide affordable or long-term health insurance.

American Recovery and Reinvestment Act

In order to help workers more easily afford COBRA (and retain healthcare coverage) the federal government instated the American Recovery and Reinvestment Act (ARRA), which has been adopted by some states.

Under the ARRA, workers who lost their jobs during the recession are only required to pay 35 percent of their COBRA health insurance premiums, while the federal government pays the remaining 65 percent. This Act is adopted on a state-by-state basis and has been an effective short-term solution for millions of Americans. However, the state COBRA coverage only lasts from six to nine months, depending on an individual’s state. Federal COBRA coverage lasts up to 18 months, in most cases.

For many Americans currently enrolled in COBRA health insurance programs, COBRA and/or ARRA financial support is about to expire. Americans who are still unemployed are now challenged to find affordable healthcare plans for themselves and their families. It is especially important for them to enroll in a new health insurance program before their COBRA benefits expire so that they will be able to maintain healthcare coverage at all times.

Health Savings Account Options

For individuals who have lost their jobs, a Health Savings Account is generally a very affordable and effective health insurance solution. Health Savings Accounts are used by individuals in all industries and financial situations to save money, including small business owners, businesses, unemployed individuals, families, financial-savvy employees, and more.

A Health Savings Account is similar to an IRA in that individuals set aside money into the health savings account that they can then invest in high interest-yielding stocks, bonds, money markets, and more. The money that an individual puts into the health savings account is tax-deductible and can grow tax-free. When an individual needs to pay for a qualifying health-related expense, he or she can withdraw money from the health savings account to pay for it without paying tax.

One of the many benefits of a Health Savings Account is that individuals can use the funds from their accounts as they wish. However, if they withdraw money for a non-healthcare related expense, they will pay taxes on the funds that they withdraw. When they leave funds in their Health Savings Account, the money can grow completely tax-free for life. 

In order to establish a Health Savings Account, individuals need to open a qualifying high-deductible health insurance account. Health Savings Accounts can be used by individuals and families. There are also maximum annual contributions for individual and family Health Savings Accounts, which are subject to change every year.

Health Savings Accounts are not only affordable health insurance solutions for individuals who have COBRA accounts that are about to expire, but they are also excellent solutions for many laid-off workers. For many individuals, Health Savings Accounts are more affordable and financially smart health insurance solutions than COBRA plans. Individuals should speak with an insurance advisor to find the right insurance solutions for themselves and their families.

Hiring a Home Health Care Employee

 Providing the primary care for an elder loved one can be difficult. When you cannot deliver all the elder care yourself and support from friends, family, and community organizations is not enough, it may be useful to hire a home health care worker. He or she can offer care from a few hours a week to 24 hours a day, and can provide many other helpful services. Types of in-home health care services include:

  • General Health Management like administration of medication or other medical treatments
  • Personal care such as bathing, oral hygiene, dressing, and shaving
  • Nutrition help like preparing meals, assisting eating, and grocery shopping
  • Homemaking services including laundry, dishwashing, and light housework
  • Companionship for example reading to the senior or taking them on walks

Recruiting and Interviewing Applicants

There are many avenues for hiring a home health care employee. Generally, home health care workers can be hired directly or through an agency. Home health care agencies often have a staff that includes social workers and nurses that will manage your care. However hiring an independent home health care worker is generally more cost effective, it will also give you more control over the type of care you receive. 

Senior home care workers should be carefully screened for proper training, qualifications, and temperament. Fully discuss the needs of the elder care recipient during an interview with a prospective home health care employee.  There should be a written copy the job description and the type of experience you are looking for.

References

Have applicants fill out an employment form that includes the following information:

  • Full name
  • Address
  • Phone number
  • Date of birth
  • Social Security number
  • Educational background
  • Work history 

Before hiring, you should ask to see the senior home care worker’s licenses and certificates, if applicable, and personal identification including their social security card, driver’s license, or photo ID. 

References should be checked out thoroughly.  Prospective employees should provide the employer with names, dates of employment, and phone numbers of previous employers and how to contact them.  It is best to talk directly to previous employers, rather than just to accept letters of recommendations. Also ask the applicant to provide or sign off on conducting a criminal background check 

Special Points to Consider

Make sure the person you are considering hiring knows how to carry out the tasks the elder care recipient requires, such as transferring the senior to and from a wheelchair or bed.  Training may be available, but make sure the worker completes the training successfully before hiring him or her.

No one should be hired on a seven-day-a-week basis.  Even the most dedicated employee will soon burn out.  All employees need some time to take care of their personal needs.  No worker should be on call 24-hours a day.  If the elder care recipient needs frequent supervision or care during the night, a family member or second home health care worker should be able to help out or fill in.

Live-in assistance may seem to be more convenient and economic than hourly or per-day employees but there can be drawbacks.  Food and lodging costs must be calculated into the total cost of care, and it could be difficult to dismiss someone without immediate housing alternatives.  If you decide to utilize a live-in arrangement, the employee should have his own living quarters, free time, and ample sleep.

Job Expectations and Considerations

Before hiring a senior home health care worker, you should go over the tasks you expect them to perform and other issues, such as promptness, benefits, pay scale, holidays, vacations, absences, and notification time needed for either employer or employee before employment is terminated. If you work and are heavily dependent on the home health care worker, emphasize the importance of being informed as soon as possible if he or she is going to be late or absent so that you can make alternative arrangements. Be clear about notification needed for time off, or what to do in the case the home health care worker experiences a personal emergency that requires them to abruptly leave work.  It is important to have a backup list of friends, family, other home care workers, or a home health care agency you can call on.

Be clear about issues concerning salary, payment schedule, and reimbursement or petty cash funds for out of pocket expenses.  

You should spend the day with the home health care worker on his first day to make sure you are both in agreement over how to carry out daily tasks.  It would also be helpful to supply the home health care worker with a list of information on the elder care recipient such as: special diets, likes, dislikes, mobility problems, health issues, danger signs to monitor, possible behavior problems and accompanying coping strategies, medication schedule, therapeutic exercises, eye glasses, dentures, and any prosthetics. 

You should also provide the following information to your home health care worker: your contact information, emergency contacts, security precautions and access to keys, clothing, and locations of washing/cleaning supplies, medical supplies, light bulbs, flashlights, fuse box, and other important household items.

Transportation

Another big consideration in hiring a senior home care worker is how he or she is going to get to work.  If they do not have a reliable car or access to public transit, then you might want to consider hiring someone to drive him or her, which might be more economical than using taxis.  Inform your insurance company if the home health care worker is going to drive your car when caring for the senior.  Your insurance company will perform the necessary driving background checks.  If the home health care worker is using his or her car to drive the elder care recipient, then discuss use of her or his car, and conduct a driving background check.

Insurance and Payroll

Check with an insurance company about the proper coverage for a worker in your home.

Make sure all the proper taxes are being drawn from the employee’s check by contacting the Internal Revenue Service, state treasury department, social security, and the labor department.  If you do not want to deal with the complexities of the payroll withholdings yourself, than you can hire a payroll company for a fee.

Even if your home health care worker is working as a contractor, you are still obligated to report the earnings to the IRS.  Talk to your accountant or financial adviser about making sure you are following IRS rules.

Ensuring Security

You should protect your private papers and valuables in a locked file cabinet, safe deposit box, or safe. If you are unable to pick up your mail on a daily basis, have someone you trust do it, or have it sent to a post box. You should check the phone bill for unusual items or unauthorized calls. You should put a block on your phone for 900 numbers, collect calls, and long-distance calls.

Keep checkbooks and credit cards locked up. Review credit card and bank statements on a monthly basis, and periodically request credit reports from credit reporting agencies.  Lock up valuable possessions or keep an inventory of items accessible to people working in the house.

You can help to prevent elder abuse to your loved one by: 

  • Make sure the home health care worker thoroughly understands his or her responsibilities, the elder care recipient’s medical problems and limitations, and how to cope with stressful situations.
  • Do not overburden the home health care worker.
  • Encourage openness over potential problems.

The following are possible signs of elder abuse or neglect: 

  • Personality changes
  • Crying, whimpering, or refusing to talk
  • Sloppy appearance
  • Poor personal hygiene
  • Disorganized or dirty living conditions
  • Signs of inappropriate sedation, such as confusion, or excessive sleeping
  • Mysterious bruises, pressure sores, fractures, or burns
  • Weight loss

If you suspect abuse, act immediately.  Do not wait until the situation turns tragic.  Investigate the situation by talking to the elder care recipient in a safe situation, or install monitoring equipment. Examples of abusive behavior include yelling, threatening, or over controlling behavior that could involve isolating the senior from others. If the situation is serious, you should replace the home health care worker as quickly as possible. If you fear the elder care recipient is in danger, he or she should be separated from the home health care worker as soon as possible.  Place the elder care recipient with a trusted relative or in a respite care facility. Make sure your loved one is safe before confronting the home health care worker, especially if there is concern about retaliation.

Report the situation to Adult Protective Services after ensuring the safety of the elder care recipient.  The police should be contacted in the case of serious neglect, such as sexual abuse, physical injury, or misuse of funds.

Supervising a Home Health Care Worker

The most important thing to remember after hiring a home health care worker is to keep the lines of communication open.  You should explain the job responsibilities clearly, and your responsibilities to the home health care worker. Do not forget that the home health care worker is there for the elder care recipient and not the rest of the family.  For live-in arrangements, the maximum amount of privacy should be set up for the home health care worker’s living quarters. Meetings should be set up on a regular basis to assure that problems are nipped in the bud.  If conflicts cannot be resolved after repeated attempts, than it is best to terminate the employee.  In such a case, you may have to either place the elder care recipient in a nursing home temporarily or hire a home health care worker through an agency.  Reserve funds should be kept on hand in the case of such an emergency.  

General Eligibility Requirements for Home Care Benefits

Hiring a home health care worker directly is usually less expensive than hiring through a home health care agency; but if the elder care recipient is eligible and you wish to use assistance from Medicare, you must hire someone through a certified home health care agency.  For the senior patient to be eligible, three or more services must be ordered by a physician. Other factors or eligibility are the required need for skilled nursing assistance, or one of the following therapies: physical, speech or occupational. The elder care recipient’s medical needs will determine asset and income requirements.

Hiring Home Health Care Workers through Home Health Care Agencies versus Independently

Different health professionals can assess the elder care recipient’s needs.  A nurse or social worker can help with design and coordination of a home care plan.  Your care manager, doctor, or discharge planner can help with services being covered by Medicare.  They generally help make the arrangements with a home care agency.

You should ask the home health care agency how they supervise their employees, and what kind of training their employees receive. Find out the procedures for when an employee does not show up.  Also ask about the fee schedule and what it covers, there may be a sliding fee schedule. Furthermore, find out if they have a policy for minimum or maximum hours. Ask the agency if there are any limitations on the types of tasks performed.

Especially if you have to pay for the care services yourself, find out if there are any hidden costs such as transportation.  If all the costs for hiring a care worker through an agency become too much, you may want to consider hiring directly. 

Hiring independent home health care workers is not only more economical than using an agency, but it also allows more direct control over the elder care.

Tips on How to Choose the Right Health Insurance Plan With Your Employer Sponsored Group

Every year your Health Insurance Group with your company will have an open-enrollment period. This is the time when you can add dependents to your current plan, change your coverage and add on to the group if not currently a member. Most people try avoid this like a dental check-up, but you really should take advantage. You should not just go with whatever plan you have had for the past year, two years or since you started with your company because its easy you should see what other plan would work for your life style. There are a number of insurance plans and with employers raising health-insurance premiums while at the same time scaling back benefits, so you need to be proactive in getting all the information necessary and making sure you and your loved ones are properly covered, after all, you can’t change your mind until next year around this time.

Don’t find yourself paying $200 for your allergy prescription you were paying $25 for last year, check ahead of time, because after you check that little box next to your plan of choice it is too late to go back. Don’t let the pharmacist be the barer of bad news.

Here are some of the best tips out there when making a decision concerning medical insurance during the open-enrollment process:

There are changes that you can make to your health-insurance plan during open enrollment.

If you do not currently have a health-insurance plan, now is the time to get enrolled. If you do have a plan, now is the time to switch if you have the option to do so. At this time you also want to correct inaccurate information and make sure that your spouse and all of your dependents are also covered.

Cheaper Premiums vs. Less Expensive Co-Pays

Like with most things in life, this depends on your situation. If you are healthy and younger, you can go for the lower premiums for your chances of having to visit the doctor often are lower, However, if you are older, have certain health conditions or have young children who visit the doctor frequently, you are much better off with higher premiums and lower co-pays–this will save you a bundle in the end. Make sure to also weight the value of the price vs. your health plan. If you choose a cheap medical plan that does not pay for certain benefits that you need, you are getting a poor value for you will find yourself paying in the end.

Lifetime Maximum Benefit

A lifetime maximum is the cap on the amount of benefits available to each policyholder. This cap is put into place in order to keep the cost of benefits affordable and to stabilize potential future costs. There are a lot of health plans that cap lifetime benefits at $1 million and are most often applicable to mental illness, drug and alcohol treatment and organ transplants.

If your plan has a low lifetime maximum cap, make sure to think carefully about how much risk you are taking on. It is possible for you to be healthy now, but have large expenses from one severe accident that can exceed a $100,000 in no time.

Can I switch health plans without undergoing medical screening for pre-existing conditions?

Yes, but only once time during the year. All other time sin the year you will have to sit out a pre-existing condition exclusion period. Also, if you were to enroll late in a group health plan you May have to wait as long as 18 months for coverage or your pre-existing conditions.

HMO vs. PPO vs. POS

There are several different types of health-plans out there. There are traditional fee-for-service plans (FFS), health-maintenance organizations (HMOs), point-of-serve plans (POS) and preferred-provider organizations (PPO). There are benefits and disadvantages to each plan that are necessary to consider when making your decision.

The least expensive are HMOs, however they are also the least flexible. HMOs require that you select a primary-care physician. In order to see a specialist you must obtain pre-authorizations from your primary-care physician for certain medical procedures. POS plans are more flexible than this, but they still require you to select a primary-care physician.

PPOs give policyholders great financial incentive — in the form or reasonable cop-payments — as long as you stay within the group of practitioners. While you can visit doctors that are “out-of network” specialists with out pre-approval, it can be more expensive.

Drug formularies and Pharmacy Benefit Tiers

Formulary: a list of medications for which a health plan pays.

Most health insurance plans that pay for prescription drugs have pharmacy benefit tiers in place that group certain drugs together for pricing purposes. Brand-name drugs, are usually in the top tier, and are the most expensive; generic drugs dare in the lower tiers and are less expensive. Depending on your prescription drug co-pay for a medication, you may be $5 to $10 for a lower tier drug and anywhere from $25 and up for a higher tier drug. Most plans have have 4 to 5 tiers, but some have as many as seven.

FSA’s vs. HSA’s

An FSA is a flexible spending account. This is a benefit plan that allows workers to certain companies the opportunity to pay out-of-pocket health and dependent care costs on a pre-tax basis. Over time, this lowers payroll-related taxes for both the employee and the employer. Although, if you decide not the use the money you’ve set aside by the end of the year, you will lose it.

An HSA is a health savings account that is technically a trust. It is designed to let you set aside money specifically for health costs, while receiving a tax break. HSA funds not used within the year can roll over to help pay for future expenses in the next year.

What’s the best way to compare different plans?

When you are given a choice between plans the most important things to consider are price and whether your family’s doctor is covered in that plan’s network. However there are other important criteria to investigate.

There are accreditation groups, such as the National Committee for Quality Assurance, who measures plans using a variety of standards. There are also ratings companies such as Standard and Poor’s, A.M. Best and Moody’s, that help to give you a overall picture of a health plan’s financial strength. Consumer groups publish “report cards”of insurance plans as well.

What if I have questions about my health insurance plan?

Visit your human-resources department at work or your benefits administrator. If you go to your state department of insurance there are analysts you can speak with.