by admin | Oct 7, 2021 | Medicare, Retirement
Trying to figure out Medicare can be one of the most frustrating aspects of retirement. Even the savviest of retirees struggle with figuring out when to enroll and which parts to enroll in – there’s Part A, Part B, Part C, Part D, Medigap plans and so on. And, what in the world is a donut hole, anyway?
What is Medicare?
Medicare is the government health care program for people 65 and over as well as some younger people with disabilities. Medicare’s coverage plays an important role in containing medical costs as you age. Medicare is a different program than Medicaid, which offers health and other services to eligible low-income people of all ages.
Types of Medicare
- Part A covers inpatient hospital stays, skilled nursing facility stays, some home health visits, and hospice care. Generally, you don’t have to pay premiums if you or your spouse paid Medicare taxes for at least 10 years.
- Part B covers doctor visits and other medically necessary services and supplies. That includes preventive services or health care to prevent illness, as well as ambulance services, durable medical equipment and mental health coverage. Part B comes with a monthly price tag – the standard premium was $148.50 in 2021.
- Part C or Medicare Advantage is a type of health plan offered by private insurance companies that provides the benefits of Part A and Part B and often Part D as well. These bundles plans may have additional coverage such as vision, hearing, dental care and may even include perks such as gym memberships or transportation to doctor’s appointments. Medicare Advantage plans have an annual limit on out-of-pocket costs. Medicare Advantage plans are typically HMOs or PPOs.
- Part D is the prescription drug benefit that covers most outpatient prescription drugs. It is a separate plan provided by private Medicare approved companies, and you must pay a monthly premium. Unless you have creditable drug coverage and will have a Special Enrollment Period, you should enroll in Part D when you first get Medicare. If you delay enrollment, you may face gaps in coverage and enrollment penalties. Most plans with Medicare prescription drug coverage (Part D) have a coverage gap (called a “donut hole”). That means that after you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Once you have spent up to the yearly limit, your coverage gap ends and your drug plan helps pay for covered drugs again.
- Medigap or Medicare Supplement Insurance is an additional health insurance policy you can buy from a private insurer to help pay some of the costs not covered by Medicare Part A and Part B, including deductibles, coinsurance and health care if you travel outside the U.S. Medigap policies do not cover prescription drugs, dental, vision, hearing aids, private nursing care or long-term care. There are 10 types of Medigap plans available in most states.
When to Sign Up for Medicare
For most people, signing up for Medicare occurs during a 7 month initial enrollment period(IEP). The IEP starts 3 months before you turn age 65 and continues for 3 months after your birthday. You may be eligible sooner if you have a disability, End-Stage Renal Disease (ESRD), or ALS (also called Lou Gehrig’s disease).
During the IEP, you can sign up for Medicare Part A. Even if you are still working after you turn 65, you should consider signing up for Part A now. If you’ve worked and paid Medicare taxes, it comes at no cost to you and covers hospital services.
You can join, switch, or drop a Medicare Health Plan or a Medicare Advantage Plan (Part C) with or without drug coverage during these times:
- Initial Enrollment Period – When you first become eligible for Medicare, you can join a plan.
- Open Enrollment Period – From October 15 – December 7 each year, you can join, switch, or drop a plan.
- Medicare Advantage Open Enrollment Period – From January 1 – March 31 each year, if you’re enrolled in a Medicare Advantage Plan, you can switch to a different Medicare Advantage Plan or switch to Original Medicare (and join a separate Medicare drug plan) once during this time.
Let’s be honest, no one gets too excited about enrolling in Medicare, but the more you know, the easier it is. Being prepared for life’s unexpected twist and turns and keeping up with your health care is more important than ever. By understanding the ABC’s of Medicare, you are empowering yourself for your future!
Other Helpful Resources Include:
Understanding Medicare’s Options: Parts A, B, C and D
What is Medicare?
An Overview of Medicare
by admin | Oct 4, 2021 | Employee Benefits, Johnson & Dugan News
Johnson & Dugan recognized as a 2021 Top Employee Benefits Consultant for the San Francisco Bay Area by Mployer Advisor
Redwood City, CA September 30, 2021 – Johnson & Dugan Insurance Services, an independent employee benefits consultant, is recognized by Mployer Advisor, an independent platform for employers to research, review and evaluate insurance brokers, as a Top Employee Benefits Consultant Award for 2021 for San Jose, California. Mployer Advisor’s Top Employee Benefits Consultant Award recognizes brokers for demonstrating market-leading competencies in several areas.
“Who an employer chooses as their insurance advisor has significantly more impact on the quality and cost of a benefit plan than who they chose as the carrier. We are proud to honor these firms who have demonstrated a wide range of experience in combination with positive employer feedback on service and quality,” said Brian Freeman, CEO of Mployer Advisor.
“I am personally very proud of this industry recognition. We have always strived to provide strategic benefit plans, tailored to each employer partner, with the highest customer satisfaction,” comments Michael Johnson, CEO. “Our team serves over 180 organizations in the Northern California region. We have seen a significant need for our services as organizations continue to reemerge after the pandemic”, Michael Johnson continued.
To determine award winners, Mployer Advisor analyzes each brokerage based on historical data to gauge the range of business experience across employer sizes, industry experience and products, combined with employer ratings and reviews of insurance brokerages across several platforms. Results are a snapshot of Mployer Advisor’s matrices and proprietary M Score on May 31, 2021.
About Johnson & Dugan:
Since 1983, Johnson & Dugan’s highest priority has been to make it easy for any company to expertly plan and administer their employee benefits plans.
Unlike other employee benefits consulting firms, J&D does not deliver one-size-fits-all solutions — our team works with each client to deliver the right mix of expertise, products, services and support based on the scope of their needs — with the flexibility necessary to adapt to organizational changes.
Contact: info@johnsondugan.com
About Mployer Advisor:
Mployer Advisor is changing the way employers search, evaluate and select insurance advisors. Our goal is to connect employers and employees to great benefits and insurance. We do this by providing employers with actionable data to easily evaluate and select the best advisor for a company’s unique needs. Mployer Advisor provides independent ratings of insurance advisors to support employers. The rating is our opinion and should be one of many factors, including when selecting a consultant. An insurance brokerage cannot pay to influence their Mployer Advisor rating. Most brokerages have a profile on Mployer Advisor. Only highly rated brokerages are allowed to advertise on the platform. To learn more about Mployer Advisor visit https://mployeradvisor.com.
by admin | Sep 21, 2021 | Employee Benefits, Open Enrollment
When the autumn leaves fall and the weather turns cooler, we know it’s time to start thinking of open enrollment. Open enrollment season can be a confusing time. As you begin your research into which plan to choose or even how much to contribute to your Health Savings Account (HSA), consider evaluating how you used your health plan last year. Looking backward can help you plan forward to make the most of your health care dollars for the coming year. Here’s what you need to know about your workplace benefits to maximize them:
1). Know the Open Enrollment Dates
It is up to you to make sure you take advantage of the open enrollment period. Be sure you know when your company has open enrollment because it can be your only time to adjust benefits for the coming year.
2). Evaluate Your Current Benefits
Before open enrollment starts, review the benefits you currently are receiving. Your pay stub can be an excellent resource to find this information; you should be able to find the benefits you are paying for under the deductions or withdrawals section. Standard deductions might include medical insurance, dental insurance, 401(k) contributions, life insurance, vision insurance, long- term disability insurance, health savings account or flexible spending account contributions, and accidental death and dismemberment insurance. Review those deductions to make sure you know what you’re paying for and whether you actually used the benefits.
3). Ask These Questions to Decide What Benefits You Need
Everyone’s situation is different, but most employees should have at least medical, dental and vision insurance and make contributions to a 401(k) or similar workplace retirement savings account.
When evaluating your benefits package, consider what your needs will be or what life changes you can expect for the coming year:
- Do you have a medical condition that requires ongoing care such as diabetes or heart disease?
- Are you trying to get pregnant or are expecting a baby?
- Are you getting married (or divorced)?
- Is your child turning 26 and can no longer be covered under your health insurance?
- Does your significant other have coverage, or will you need to include your partner in your health coverage?
- Are you on track for retirement, or do you need to save more? Don’t forget to take advantage of your company match in your retirement account. This is free money for the future.
All of these are essential questions to ask yourself during the open enrollment season because they can make a difference in what benefits you choose to elect. As you browse the different options, analyze the type of treatment and the amount of treatment you have received in the past. You cannot foresee every expense but focusing on the trends will help you make a sound decision.
4). Compare Out-of-Pocket Cost
Much like health networks, out-of-pocket costs are crucial when choosing the right plan for you and your family. Most health benefits summaries should highlight the amount you will pay in out-of-pocket expenses, including the pocket limit.
Your goal in comparing out-of-pocket costs is to narrow down the plans that pay a higher percentage of your medical expenses and offer higher monthly premiums. These types of plans are suitable for you if:
- You need emergency care frequently
- You are planning to have surgery soon
- You often see a primary care physician
- You have a pre-existing condition or have been diagnosed with a chronic disease like cancer or diabetes
- Your household income is sufficient to cover the monthly premiums
5). Do the Math
People focus on the monthly premium, but you also need to look at the deductible. For instance, if you have a choice between a lower silver plan premium of $345 a month for a plan with a $5,500 deductible, and a higher gold plan premium at $465 a month with a $1,750 deductible, you’re better off with the second plan if you anticipate needing more than $1,500 in medical care. With the second plan, your total annual cost for the premium and deductible comes to $7,330, a $2,310 savings over the lower premium plan.
6). Look at Out-of-Pocket Costs
The deductible is just one out-of-pocket expense; you also have copayments and coinsurance. The three together are your maximum out-of-pocket costs. Under the Affordable Care Act, the maximum out-of-pocket limit is $8,550 for a single person and $17,100 for a family policy.
7). Utilize Tax-Free Benefits
Flexible spending accounts (FSAs), health savings accounts (HSAs), and dependent care spending accounts provide wonderful tax advantages because contributions are made with before-tax income. They can be used to pay for deductibles, prescriptions and health-related costs that are not covered by your insurance (braces, eyeglasses, etc.). At the end of the year, you lose any money left over in your FSA so it’s important to plan carefully and not put more money in your FSA that you think you’ll spend. However, with an HSA, funds roll over from year to year which makes it a great way to save for future medical costs.
8). Review the Provider List
Most health plans today have “in-network” providers. If you see those doctors and visit those hospitals, you pay less out of pocket than if you go outside the network. So, if you want to keep your own doctor and go to a certain hospital, make sure they’re on the provider list.
When it comes to choosing the best workplace benefits plan for you, education is your most significant defense against making substantial financial mistakes, including not taking full advantage of your employer’s benefits. If you have questions about any of the benefits offered, ask your HR department for help or clarification. And remember, looking backward on your past habits and expenses can be an important tool to help you plan forward for next year.
by admin | Sep 14, 2021 | COBRA, Medicare
Enrolling in Medicare does not cause COBRA to start. Under the federal rules, COBRA must be offered to persons enrolled in the employer’s health plan only if they lose coverage because of certain specific events. Termination of employment is an example of a COBRA qualifying event. Becoming eligible for Medicare, or enrolling in Medicare, is not a COBRA qualifying event.
On the other hand, if someone is already on COBRA due to a prior event, and then they enroll in Medicare, COBRA will end. Early termination of COBRA due to Medicare enrollment only affects that person. If other family members also are on COBRA, they may continue for the remainder of the COBRA period assuming their premiums are paid when due and they do not enroll in Medicare or another group health plan.
Let’s look at another scenario: An employee enrolls in Medicare while continuing as an active employee covered under the employer’s health plan. Then the employee leaves the company. This will trigger a COBRA offer since loss of coverage due to termination of employment is a COBRA qualifying event. Can the former employee elect COBRA despite being enrolled in Medicare? Yes, because they were already enrolled in Medicare before they elected COBRA. They probably will choose not to elect COBRA due to the cost, and since Medicare will be the primary claims payer, but they have the choice.
There is one other rule about COBRA and Medicare that can be confusing. As we said, the employee who enrolled in Medicare while still working and covered under the employer’s plan later had a COBRA event. When loss of coverage is due to termination of employment, the COBRA continuation period is 18 months. Due to a special provision in the COBRA rules, the maximum COBRA period for the spouse or child (if also enrolled in the employer’s health plan when the COBRA event occurred) might be longer than 18 months. If the employee had first enrolled in Medicare no more than 18 months before the COBRA event, the maximum period for the spouse and children is 36 months counting from the employee’s Medicare enrollment.
For instance, let’s call the active employee Mary and say she enrolled in Medicare in January 2021 and then lost her group coverage when she terminated employment in May 2021. So, she enrolled in Medicare fewer than 18 months before her COBRA event. Her maximum COBRA period will be 18 months counting from May 2021, but COBRA for her spouse and children (if enrolled) could run for up to 36 months counting from January 2021.
Lastly, employers sometimes ask whether they can automatically terminate an employee’s (or spouse’s) group health coverage at age 65. Due to the federal Medicare as Secondary Payer (MSP) rules, employers with 20 or more workers cannot take into account anyone’s potential Medicare status in administering the group health plan. An employer with fewer than 20 workers also may be prohibited from basing health plan eligibility on the employee’s age due to the federal Age Discrimination in Employment Act (ADEA). We recommend employers review these matters with legal counsel.
By Kathleen A. Berger, CEBS
Originally posted on Mineral
by admin | Sep 9, 2021 | Financial Planning
Life insurance provides financial protection for your loved ones when you die. Essentially, in exchange for your premium payments, the insurance company will pay a lump sum known as a death benefit to your beneficiaries after your death. While this money can never replace you, it can help your loved one(s) live the kind of life you hoped to provide.
Life insurance coverage offers affordable financial protection and invaluable peace of mind. You can choose a legal entity, organization or anyone to be your life insurance beneficiary. You can name multiple beneficiaries and decide what percentage they each will receive when you die. Common choices include:
- Your spouse
- Family members
- Friends
- A trust
- Charitable organizations
You can customize your policy to fit your family’s needs by choosing the type of policy you buy, the number of years you want it to last and your coverage amount. If you die while your life insurance policy is active, your beneficiaries can file a claim and the death benefit will be paid out to them.
There are two primary types of life insurance: term and permanent life. Permanent life insurance such as whole life insurance or universal life insurance can provide lifetime coverage, while term life insurance provides basic protection for a set period of time.
Term life Insurance:
- Term life insurance guarantees payment of a stated death benefit to the insured’s beneficiaries if the insured person dies during a specified term.
- These policies have no value other than the guaranteed death benefit and feature no savings component as found in a whole life insurance product.
- Term life premiums are based on a person’s age, health, and life expectancy.
- Simplest and most affordable type of life insurance.
Whole Life Insurance:
- Whole life insurance lasts for a policyholder’s lifetime, as opposed to term life insurance, which is for a specific number of years.
- Whole life insurance is paid out to a beneficiary or beneficiaries upon the policyholder’s death, provided that the premium payments were maintained.
- Whole life insurance pays a death benefit, but also has a savings component in which cash can build up.
- The savings component can be invested; additionally, the policyholder can access the cash while alive, by either withdrawing or borrowing against it, when needed.
Universal Life Insurance:
- Universal life (UL) insurance is a form of permanent life insurance with an investment savings element plus low premiums.
- The price tag on universal life (UL) insurance is the minimum amount of a premium payment required to keep the policy.
- Beneficiaries only receive the death benefit.
- Unlike term life insurance, a UL insurance policy can accumulate cash value.
How Do I Choose What is Right for Me?
It can be confusing to choose the right type of life insurance. When you compare some of the biggest differences in life insurance, it is easier to choose.
The biggest difference in term life vs. whole life or universal life insurance is coverage length. Term life insurance is good for people who want a financial safety net for a specific number of working years, such as the years of paying off a mortgage. Different term lengths are available such as 10, 15, 20 or 30 years. Term life insurance is much cheaper than whole life but if you outlive your term, there won’t be a life insurance payout. Term life is a simple, inexpensive way for you to proactively take care of your loved ones so they don’t have to worry when you’re gone.
Whole and universal life insurance give you coverage for the duration of your life. It also includes a cash value component. The biggest difference between whole life insurance and universal life insurance is the cost. Whole life insurance is generally the most expensive way to buy permanent life insurance because of the guarantees within the policy: premiums are guaranteed not to change, the death benefit is guaranteed and cash value has a minimum guaranteed rate of return. Whole life insurance is good for people who like predictability and want lifelong coverage to build cash value. Your beneficiary will get a guaranteed life insurance payout as long as you’ve paid the premiums to keep the policy current. This type of policy tends to cost more in the early years to support the guarantees it provides. But, as the cost of living goes up in the years ahead, your whole life insurance premium will remain identical every month and will never cost more.
Universal life insurance often offers more flexibility than a whole life insurance policy. These policies offer lifelong coverage, provide flexibility when it comes to paying premiums and choices for how the policy’s cash value is invested. A standard universal life insurance policy’s cash value grows according to the performance of the insurer’s portfolio and can be used to pay premiums. With a universal life insurance policy, the cash value will build depending on the policy type. If you want to build tax-deferred savings and don’t expect to tap into the funds for a long time, universal life may be a suitable option for you.
No one wants to talk about it, but we have to. You need life insurance. When you’re gone, those you love will be grieving. This is unavoidable. Leaving them to struggle financially, however, is avoidable. Talking to a professional when you choose your life insurance plan can help you to find ways to afford the right kind of coverage.
Check out these great resources to better educate yourself on choosing life insurance:
Term vs. Whole Life Insurance: How to Choose
Life Insurance Basics
8 Smart Steps for Buying Life Insurance
