Health care reform

Are you smarter than congress about health care cost?

This might seem obvious but to properly address an issue you must first understand the problem you are trying to fix. Well clearly our legislators, the media pundits, and most of the clamoring public seem to be ignoring the need for understanding the problem in discussions of Health Care cost and how to pay for it.

So let’s just dive right into the healthcare “cost” issue.

Why is it important – This goes way beyond partisan bickering and protecting political turf. Which also is why it cannot be corrected with hurried and poorly prepared legislation.
This is about you with your injured child – “Do you have insurance? How will you pay for this?”
This is about you losing everything because you – had a heart attack – lost your job – lost your insurance and now face $200,000 in medical bills you cannot pay.
This is about a national cost item that cannot be paid for in any governmental scheme that does not include care restriction and increased taxation. Yes – if you consider unlimited health care a basic right for everybody, that is true!

Language – words matter and if you don’t understand the language, you not only cannot fix the problem you may inadvertently make it worse. We all must differentiate between “Health Care cost” and “Health Insurance.” They are related but not the same:
A. Healthcare cost – this is the actual cost of medical treatment and related services. This exists if you have insurance or not. This is what nobody can afford to pay, and WHY you need insurance.
B. Healthcare insurance – this is a funding mechanism designed to “pool” risk and spread the cost. This is how we collect a relatively small amount of money from healthy people to pay the bills for somebody who needs care. This is how we as a society pay for all those healthcare costs.
C. Access to “Healthcare” – This is the ability for a person to get a healthcare professional to treat them. Everybody has basic access to general healthcare and emergency services. What you might not have is enough money or “Insurance” to pay for your treatment.

So the next time your hear somebody say “Healthcare is just too expensive we have to beat up the insurance companies”, quietly know that they are uninformed.

Economics. There is at least one un-refutable truth in economics. Money coming in must be bigger than money going out. Even governments cannot live forever if debt exceeds revenue. Eventually even government runs out of your money and your ability to create more GDP.

The problem – So the problem is the “Cost” of healthcare. How do we address that?
First it is critical we all stop blaming and finger pointing, we need to talk and agree on a few things.

Try this approach – you do not get to complain unless you have thought about it and bring forward an idea to solve the problem. You don’t have to be right the first time, but you do have to be part of the solution and not just some anonymous internet loudmouth complaining.

Start here:
Problem    National Health Care cost ___________________________________________________________________________

Solution    My idea to provide care and pay for it ___________________________________________________________________

To paraphrase a credit card company – what’s in your mind? How would you approach this problem?

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OK who volunteered to do 10 years in prison?

Those who know me, or work with Focus Benefits Group, are used to me going on and on about ACA compliance. Recently  another insurance broker commented that I had gotten up to speed on this subject pretty fast.

“That’s true, it has only been 42 years!” I commented.

ERISA has been a factor in benefits since 1974 and Summary Plan Documents (SPD) have been required for just about as long. The problem has been a lack of knowledge and professionalism on the part of Insurance brokers who were supposed to tell clients. For those who remember, many years ago insurance companies did include the ERISA language in their benefits booklets. They generally don’t do it now and you need to know that.

Business owners will face audits for many aspects of their business in the coming year. Legislators, and more onerously regulatory staff, are constantly increasing the reporting load. As a business owner you may not be able to comply with every rule but you do need to make sure you comply with at least the really important ones and the SPD is one of those.

I recently consulted for a large employer and found they had no ACA documentation, NONE! When I asked why they continue to use the advisor who left them in that position I was told “Because he gives us tickets to major sports events every year!” I am always surprised when successful business people tell me they trust their advisor on that basis. Here is the real problem.

Criminal penalties may be assessed individually or by company, for willfully violating any ERISA disclosure requirement (e.g., plan document, SPD, SMM or SAR), the penalty can be per conviction (as in per employee affected) and could be $100,000 and/or imprisonment for up to 10 years ($500,000 if assessed against a company). A plan administrator may be liable for $110 per day penalties for failure to provide a response to a request for a copy of a required document. If you don’t have the documents, how expensive might that become while you get them completed and then distributed.

When that employer is responding to the ACA audit, and looking at $500,000 in fines, I hope the sports tickets were worth it.

An SPD can be done for $200. What are you waiting for.

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Remember that Exotic dancer that received life insurance money because she was the legal beneficiary?

Hopefully, readers will remember the post I recently did about the importance of beneficiary statements?

An announcement at the practice blog today tells the following story.

Eighth Circuit: ERISA Plan Beneficiary Designation Trumps Will.

In Hall vs. Metropolitan Life Hall had a group life policy making it an ERISA life plan. (This is where HR people need to remember this case.)

Hall remarried and completed a will, naming his spouse the beneficiary of his life insurance. However, he did not apparently contact the HR department and change the beneficiary statement. On his subsequent death, the new spouse attempted to collect the life insurance proceeds. She was denied!

There are other complications and questions, but from standpoint of the HR person it would be important to be able to document that you were never aware of Hall’s intentions to make changes to his estate.

In the majority of cases, HR will not be informed of changes like this because employees forget about the group life plans. But, if you are informed of a change of status on the Medical or Dental plans, you should make it policy to ask if changes need to be addressed in any other benefits that might be affected.



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For more information, contact Bill Weaver, Focus Benefits Group, 602-381-9900.

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