Introducing new coverage for 1099 and contract employees

The health insurance industry doesn’t have a lot of solutions for 1099 and contract employees. So when answering the question “Are you covered?,” too often the answer is a resounding, “NO.”

We understand. For a lot of businesses with contract or 1099 employees, there just aren’t the financial or administrative resources available for a traditional group insurance plan. These plans require time and an employer contribution that businesses just don’t have.

But what that means is that employees are left to purchase plans either on the federal and state exchanges or through the private marketplace. The former often having limited plan options with even more limited networks and the latter being increasingly more expensive.

Businesses with contract and 1099 employees need a product customized to fit them — one that can be provided at no cost to the company.

Try a quote for a new type of plan with ClaimLinx. Our agents take care of the application process, plan setup and the administration of the policy for employees. It’s no hassle for the business and requires no employer premium contribution.

This product is set up just like a traditional group plan, but without the financial burdens for the company. The employees cover 100% of their own premiums, but because the plan is being purchased as a group they will receive lower rates than they will find on the private individual marketplace.

With a group plan, employees will also enjoy a much larger physicians network and a more comprehensive benefit plan, including better coverage and pharmacy benefits.

The best part is once the plan is set up, there is no additional administration to worry about for the business. ClaimLinx agents take care of billing employees, paying monthly premiums, enrolling dependents and terminating any policies. All of this is included for a small fee employees pay monthly along with their premiums.

This is the perfect product for any small business with contract and 1099 employees that doesn’t currently offer a benefit plan. ClaimLinx agents are ready to start the application process and send a quote to you.

GET A QUOTE TODAY

HSA vs HRA vs MERP

If there is one thing rising costs can provide, it’s creativity. Business owners all over are taking this opportunity to reevaluate not only from whom they purchase their health insurance, but also how they purchase it. But what are the pros and cons of all these different solutions?

First, some quick definitions:

  • HSA (Health Savings Account) – A tax-deductible savings account for medical expenses only. Contributions can be made by the plan subscriber or by an employer.
  • HRA (Health Reimbursement Arrangement or Account) – An agreement where an employer reimburses an employee for qualified medical expenses not covered on a company’s standard insurance plan.
  • MERP (Medical Expense Reimbursement Plan) – An arrangement where an employer pays providers directly for qualified medical expenses not covered on a company’s insurance plan.

All these alternatives have one big thing in common: they allow businesses to raise the deductible on their group health insurance plan. It’s the fastest way to lower that initial sticker price on the company health plan while still providing some sort of benefit.

So what’s the difference between them?

HSAs seem like the easiest way to provide cash on hand for employees. But these plans often require employees to invest in the account as well employers, and once the funds are in the account they can only be used for medical expenses. For most, estimating how much to put into the account is tricky business. Invest too much and employees feel the account is a waste, but invest too little and the account isn’t serving its purpose, which is to provide tax-free dollars to improve the plan benefit.

So perhaps you move onto an HRA – a seemingly simple way to give employees company dollars for medical services rendered. Many employees never ending up using this benefit though. For many, the filing process for reimbursement seems complicated and arduous. Others simply forget the benefit is there because of the extra processing requirements. So at the end of the day, employees are really only experiencing the high deductible health plan.

Finally moving onto a comprehensive MERP. These plans can enable employees to get back that feeling of full coverage. Because the employer is paying the provider directly for services, the employee does not have to pay for them upfront. There is still a second level of processing for the medical claims but it is not left up to the employee exclusively to sift through paperwork and requirements. All of this is done through an outside third party administrator.

All in all, there are a lot of options out there for health insurance now. That’s why it’s important you have someone to help you look at and weigh all the options.

 

State of the Union spotlights pharmaceutical problem in America

Pharmaceutical companies’ stocks took a hit just after the State of the Union address, when President Trump listed drug pricing as one of his “greatest priorities” this year.  Medication prices across the board have been rising sharply, occasionally with consequences from Washington.

For example, Turing Pharmaceuticals former CEO Martin Shkreli was called to appear before Congress when he raised the price of the AIDs medication Daraprim from $13.50 per pill to $750 per pill in 2016.

There have not yet been any policy initiatives to force drug prices down, and until there are, prices are likely to continue to rise — with insurance companies finding more ways to pass this burden onto you, the consumer.

One of biggest changes I’ve seen among my own clients is many medications have changed tiers, resulting in a much higher cost share for members.  So a drug that was once in Tier 2 and covered with a $50 copay may now have switched to Tier 3 with a $150 copay — for the same drug at the same insurance carrier. That’s a pretty shocking price hike in a matter of just a few months.

I’ve also seen many insurance carriers adopt a Mandatory Generic Substitution for a growing number of medications. This requires members only receive the generic version of a drug, or pay the difference for the brand name version.

Then some drugs have fallen off of insurance carriers’ formularies altogether, meaning they are no longer covered at all.  Most often this happens when a drug has become so expensive even insurance carriers are having trouble paying for them. So imagine how the average consumer feels.

All in all, this is not a problem exclusive to 2018 alone, but it is a problem that will only get worse until sweeping changes are made to how drugs are priced. So please, Mr. President, make the drug industry great again.

 

 

An insurance shakeup? Three American corporations join forces to tackle healthcare

Amazon CEO Jeff Bezos, Berkshire Hathaway CEO Warren Buffett and JP Morgan CEO Jamie Dimon are joining forces to launch their own healthcare company, according to a press release today on Business Wire.

The goal of their new joint venture “is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans,” said Bezos.

But what does that mean for everyone else in the health insurance industry?

Right now — nothing. Aside from a quick, and might I add pretty painful, hit to stock prices of insurance carriers like Cigna, Aetna and UnitedHealth, there won’t be any immediate repercussions.

What can be speculated though is that these three enormous companies will make potentially huge waves as they pull employees off current major carriers’ services. Depleting members reduces the pool of money that insurance carriers will have for their own claims and administration. If the majority of those leaving are young, healthy people, some Americans could see an increase in costs for their insurance plan — on top of already rising prices in the industry overall.

On a more positive note, new enthusiasm and innovation might just be what the industry needs. Having new blood in an incredibly old, often entrenched system might spur creative strategies to encourage savings. Major carriers across the country will have to do something to shore up for the changes this new company could bring.

Ultimately employees of the three companies will benefit first as the new healthcare company will be staged to take care of just them as a starting point. If Bezos statement rings true after this initial step, it may benefit “potentially, all Americans” by providing healthy competition into an ever-shrinking market.