Money Saving Health Insurance Shopping Tips
Reprinted from: http://www.coloradohealthinsurancebr
okers.com
Why do we need health Insurance? Health insurance really doesn't
insure good health, does it? While it can't guarantee your
physical health, health insurance can help protect your
financial well being by providing a financial safety net in the
event of unexpected illness or injury.
Health related expenses may easily run into the tens or even
hundreds of thousands of dollars for a serious illness or
injury. Also, in Colorado if you are injured in a car accident
it is important that you have adequate health insurance
protection, particularly if the person deemed to be "at fault"
is you, the driver of a car you are riding in, or if the "at
fault" driver is uninsured.
Here is a three-step strategy to help you save time and money
when shopping for health insurance:
Step 1: Do You Need Individual or Group Health Insurance
Coverage?
Individual plans are very popular with anyone who has to buy
their own health insurance, as well as healthier self employed
and small business people and their families. These plans often
have substantially lower premiums than small group plans and
because individual plans are medically underwritten, it's
important to get this coverage in place while you're relatively
healthy. Once you are covered, virtually all individual plans
are non-cancelable and guaranteed renewable until you are
eligible for Medicare at age 65, provided that you continue to
pay your premiums and live in the service area.
Most individual plans also provide on the job health insurance
coverage for the self-employed. However, you should always make
sure that you meet the requirements for on the job coverage, as
eligibility requirements vary--depending upon whether or not you
are a sole proprietor, or if your business is a LLC, Sub-S
Corporation or other business type. Health insurance premiums
for the self-employed are 100% tax deductible, but you'll need
to verify eligibility for this deduction with your accountant.
Small business owners may qualify for a special "Group of One"
designation in individual plans. There is typically no
difference in premium cost between a Group of One individual
plan and standard individual health insurance plan, but you
still must medically qualify. The principal advantage for self
identifying as a Group of One in an individual plan is that the
small business person's business can pay the insurance premium.
For qualified small business owners with serious pre-existing
conditions there is also a group health insurance coverage
option known as a "Group of One". These guaranteed issue plans
are typically fairly expensive since most people enroll in these
plans because their health conditions will not allow them to
qualify for less expensive individual policies.
Individuals with serious pre-existing conditions may also be
eligible for guaranteed issue coverage from CoverColorado.
Because this is a high risk pool their premiums are typically
about 35% more expensive. CoverColorado does not provide
coverage for on the job injuries or illnesses and premiums must
be paid with personal funds.
If your company has 2 to 50 employees the employer can set up a
small group health insurance plan. Small group health plans have
no medical underwriting, so they are particularly attractive to
groups that include people with serious health problems that
would make them unable to qualify for less expensive individual
coverage.
Group health insurance is the only available option if the
employer wants to pay for any portion of their employees' health
insurance premiums. Employers are typically required to pay at
least 50% of their employees' premiums and commit to a certain
level of employee participation in the plan. Groups of more than
50 employees have a unique set of rules and are considered part
of the large group market.
If you have not had health insurance coverage or have had a
break in health insurance coverage you may be subject to a
pre-existing conditions clause. These typically range from 6-12
months and cover conditions you were treated for in the 12
months directly preceding your new policy's coverage. However,
individual and small group insurers in Colorado must give you
credit for prior continuous coverage. Coverage counts as
continuous if it is not interrupted by a break of 60 to 90 or
more consecutive days. However, prior coverage is not credited
against any exclusionary riders in an individual policy.
Step 2: Do You Want a Copay plan or a Major Medical/HSA
plan?
Rising drug and health care costs have driven up health
insurance premiums, increasing the need for consumers to be
savvy about their options and choices.
However, there are still some good values to be found on
feature-rich plans with copays for doctor visits and
prescriptions, particularly if you are willing to consider plans
with deductibles of $500 or more. These "copay plans" are very
popular and often provide many immediate benefits to offset
day-to-day health related costs. Alternatively, many Coloradans
are increasingly interested in self-insuring for the "little"
things and getting a relatively inexpensive major medical or
catastrophic plan to protect them in the event of serious health
problem.
HSA (Health Savings Account) qualified plans are special major
medical health insurance plans that can be particularly well
suited to healthier small business people. Families can often
save thousands of dollars each year in reduced insurance
premiums with a higher deductible HSA qualified major medical
insurance plan as compared to a traditional copay plan, often
while reducing their families' aggregate deductible and
coinsurance risk.
Here's how it works: You must first have a relatively
inexpensive HSA qualified major medical health insurance plan to
be eligible to open a Health Savings Account. Money saved from
the reduced insurance premiums can be used to help fund a Health
Savings Account and your contributions to the HSA are 100% tax
deductible. Money from the HSA can be used to pay for any
qualified medical related expenses, including doctor visits,
prescription drugs, paying other expenses toward your
deductible, as well as dental and vision care.
Because any money you don't spend is yours to keep and grows
from one year to the next, HSA's offer a long-term savings
advantage. If you're relatively healthy during your working
years, by the time you retire, you could build a sizable tax
advantaged nest egg.
HSA plans are not for everyone, but for most people they are
worth taking a look at. We suggest comparing the premium and
benefits of the most attractive copay plan with the most
attractive HSA plan and then running a few "what if" scenarios
to determine which plan best suits you.
Step 3: Do You Want to Spend Days or Minutes Shopping for
Health Insurance?
Even in today's competitive marketplace health insurance
premiums for similar plan designs can vary significantly from
company to company based upon age, gender, tobacco use, health
and location. It pays to comparison shop! Here are some time
saving short cuts that can help you save both time and money.
Individual health insurance premiums are filed with and
regulated by the Colorado Division of Insurance. That means that
whether you get your health insurance through a broker, an agent
or directly from the health insurance company, you'll pay the
exact same monthly premium for the same plan regardless of from
whom you buy your coverage.
Knowing this, you can save a huge amount of time and energy by
working with a broker and having them do all the time consuming
research for you. This service is typically completely free to
you. Ideally, you should find an experienced and reputable
broker that specializes in health insurance and works with 6 or
more different leading companies. Don't be shy about asking them
to list what companies they represent, and whether or not they
specialize in small group of individual group plans and if they
are based in Colorado or out of state.
A good broker will research the various plan options from
different companies and send back the results of their analysis
for you to review at your convenience. They can also answer all
your questions and help you find the plan with the benefits you
want at a premium you are comfortable with, and then help you
through the application process.
Be Careful Out There...
The Internet is also a good resource for researching insurance
options yourself, but make sure you're not inadvertently giving
your personal information to a lead-marketing web site. These
companies sell your information to several agents often
resulting in a bombardment of unwanted phone calls. When in
doubt, read their web site's Privacy Policy to make sure your
personal information will be kept private.
If you come across a "health benefit" plan that seems
particularly inexpensive or one that boasts that it will insure
everyone regardless or health or risk, be cautious. Some health
discount plans mislead consumers into thinking they are buying
low-cost health insurance. Discount plans are not health
insurance, and consumers are often shocked after having a claim
to find out that they are responsible for the entire medical
bill.
A final word of advice: don't wait! The best time to save on
health insurance is shop for coverage when you're healthy. If
you have an injury or your health deteriorates, you may find
that your options are more limited and costly.
By Mark Erickson
Owner & Licensed Broker
Colorado Health Insurance Brokers
http://www.c
oloradohealthinsurancebrokers.com
NOTICE - For readers outside of Colorado please consult with a
local broker to verify the accuracy of the information for your
state. Colorado Health Insurance Brokers are not engaged in
rendering tax, investment or legal advice. Federal and state
regulations are subject to change. If tax, investment or legal
advice is required, seek the services of a licensed
professional.
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okers.com/how_to_buy_colorado_health_insurance.htm