ClaimLinx Health Insurance Benefits Consultant

ClaimLinx Glossary: Secondary Coverage

You offer fantastic health insurance for your employees. It gives them peace of mind for themselves and their families in case they have expensive medical bills. However, the plan couldn’t possibly cover every single type of high-tech MRI scan, prescription medication, or medical procedure. Then secondary coverage comes into play. ClaimLinx explains precisely what secondary coverage is, and how it can save your employees money on their healthcare costs.

What Exactly Is Secondary Coverage?

Simply put, secondary coverage is any health insurance plan that supplements your main plan. Your primary plan usually comes from your employer. ClaimLinx uses secondary coverage as a way to restore good benefits to employees. One of the first steps in using the ClaimLinx Solution is to raise the deductible on the primary plan in order to lower premium costs. But that means employees would have to shoulder most of the costs for office visits, prescriptions, testing, etc. A secondary plan can pay for the medical expenses not covered by your primary plan. This is why secondary health insurance represents a vital tool for helping employees pay for health care. The ClaimLinx Solution sets up a custom secondary plan for your employees, called an employer-funded medical expense reimbursement plan (MERP)

Related Post: What is the difference between primary and secondary coverage?

How Does Secondary Coverage Work?

A primary plan pays money directly to healthcare providers while you pay the balance. Secondary coverage pays you directly to reimburse you for expenses not covered by the primary plan. Or secondary coverage can also pay medical providers directly so employees don’t have to. For example, your primary plan covers 60 percent of the costs of an MRI, and you receive a bill for $1,000 for the scan. You must pay the $400 not covered by the primary plan. Your secondary coverage would pay part or all of that $400. The added benefit with ClaimLinx is that employees experience seamless administration. They don’t have to worry about paying that $400 up front. They arrive at the provider’s office with a custom ID card with benefits listed. ClaimLinx then takes care of the rest.

What Does Secondary Coverage Pay?

Secondary coverage might pay for medical care not covered by your primary plan, including eyeglasses or visits to the dentist’s office. A secondary plan may cover copays and coinsurance to help alleviate the costs associated with the primary plan. Some secondary coverage specializes in paying for expenses related to accidents, critical illnesses, cancer, long-term care, and disabilities. ClaimLinx’s Solution aims for employees to receive the same benefits as an expensive plan from a major carrier. Secondary coverage can pay for that, but at a much lower cost.

Related Post: What is the ClaimLinx Simple Option Solution?

Why Have Secondary Coverage?

The average person in the United States spends $10,739 per year on healthcare. Secondary coverage can help you spend less money on healthcare, which may insulate your finances from high medical bills. Consider a secondary plan if you know you’ll have high medical expenses in a given year. The ClaimLinx Solution finds the best way for employers to save money while giving workers a great employer-paid benefit.

ClaimLinx and Secondary Coverage

ClaimLinx can save companies as much as 40 percent on health insurance costs. Contact ClaimLinx or call toll-free 1-800-858-1772 to find out what we can do for you.

MERP ClaimLinx

ClaimLinx Glossary: Medical Expense Reimbursement Plan (MERP)

A medical expense reimbursement plan (MERP) is part of the ClaimLinx Solution. A MERP allows business owners to make a tax-deductible contribution to employees’ medical expenses. Our employer benefits consultants combine a high-deductible health insurance plan from a national carrier with a MERP. This arrangement gives both workers and owners an optimal choice for health insurance benefits. Today’s ClaimLinx blog defines and explains how a MERP works with regards to health benefits.  

Short Definition of a MERP

A MERP lets business owners deduct any portion of medical expenses paid by the company or employees for their medical care. The idea is to reduce the out-of-pocket expenses that employees pay for medical care before health insurance starts to cover the costs. Contributions to these costs lower the amount of money the IRS calculates for a business’s income taxes. ClaimLinx helps you find the optimal funding levels for MERPs to give you the best way to provide health insurance for workers.

Related Post: Why did my employer purchase a MERP?

Example of How a MERP Works

Suppose ClaimLinx has determined a plan with a $3,500 deductible works best for your company. That means the employee would normally pay $3,500 before the health insurance coverage starts paying for his or her medical care. A MERP can help lower someone’s up-front costs for medical care. ClaimLinx designs a custom schedule of benefits for you and your employees based on medical needs and company budget. In this case, the employee would actually have a much lower deductible and may even experience copays for regular visits and procedures. Business owners receive the tax deduction only when an employee has a qualified medical expense when they pay part or all of the medical expenses.  

Why Employers Need a MERP

All the time, employers tell ClaimLinx they would not be able to have viable health insurance benefits without a MERP. Small businesses often have slimmer margins and can’t afford good benefits when premium costs go up. MERPs allow employers to keep offering great benefits on a smaller budget. When you take the administration of first-dollar benefits like copays for office and specialist visits away from the insurance company, you don’t have to pay as much for those benefits. The flexibility of MERPs let companies fund their employees’ medical expenses based on the budget and needs. And as a bonus, MERP funds transfer from year to year. So a company can build up funds over time. 

Related Post: HSA vs. HRA vs. MERP

The benefit to the company is also that MERPs lower the income that goes towards a tax liability. For example, a business owner has $500,000 in income in one year. The owner has $10,000 of qualified expenses he reimbursed for employees through the funding program. The owner does not pay income taxes on the $10,000 he contributed to that fund. At a 23.6 percent tax rate, the business owner pays $2,360 less in taxes for that $10,000.

ClaimLinx Navigates MERPs for You

The employee benefits consultants at ClaimLinx help business owners select the correct funding levels for MERPs, so employees save money on health insurance costs. Not only do owners lower their costs, but they also help retain employees with lower-cost employer-paid benefits. Contact ClaimLinx or call toll-free 1-800-858-1772 for more details on our ClaimLinx Solution.

ClaimLinx Health Insurance Strategy

ClaimLinx Offers a Full-Service Insurance Strategy

ClaimLinx offers more than just a way to provide health insurance to your employees. We offer a holistic solution to give great benefits to employees while saving money for business owners. Our ClaimLinx Solution blends a high-deductible insurance plan with a company-funded medical expense reimbursement plan (MERP). The result is an optimized health insurance plan for everyone at your business. ClaimLinx explains how we make this full-service insurance strategy work in today’s blog.

High-Deductible Health Plan

A high-deductible health plan allows for lower monthly premiums. Lower premiums mean you pay less money to have the health insurance plan in place. Normally, higher deductibles mean employees must pay more money before insurance coverage begins to pay for medical expenses. But ClaimLinx has a different strategy.

In 2019, the IRS defined a high-deductible plan as one with at least $1,350 for an individual or $2,700 for a family. These minimums mean individuals must pay the first $1,350 of medical expenses before the health insurance plan starts to cover certain costs. But ClaimLinx typically chooses plans with deductibles much even higher to really slash expenses on premiums. This is a part of our full-service insurance strategy.

Related Post: What is an employer-sponsored, or self-funded, plan?

MERP

Employers can use a MERP to help fund an employee’s costs before reaching his or her deductible. When paired with a high-deductible plan, MERPs offer a health insurance strategy that is cost-effective for employees and employers. 

For example, John Smith goes to the emergency room for a minor injury and receives a bill for $2,500. His insurance carrier sends him an Explanation of Benefits (EOB) that says he owes the full amount because he has not yet met his high deductible of $3,500. John’s employer, Acme Brick, has a MERP that covers emergency room visits with a $350 copay. That means John only pays $350 instead of $2,500. 

The ClaimLinx Solution is a win for everyone. John Smith experiences lower costs for medical expenses. Also, John’s employer is happy because he can afford to offer such great benefits since the cost of the company’s monthly premiums has gone down so much. Our full-service insurance strategy identifies the optimal combination of high deductible plan and MERP.

Related Post: What Is a MERP?

How This Strategy Saves Money

A high-deductible health plan lowers the monthly premiums for each employer. Instead of paying $1,000 per month for a family’s coverage, an employer might pay $700. A MERP continues the savings because it’s a tax deduction. Every time an employer reimburses an employee’s medical expenses, it lowers the amount of money the IRS figures into business taxes. Business owners not only pay lower income taxes, but they also lower onboarding costs by retaining employees for longer periods of time. Employees who remain healthier are more productive and miss less work. ClaimLinx shows you how we deliver for both business owners and employees with our full-service insurance strategy.

The ClaimLinx Solution: A Full-Service Insurance Strategy

ClaimLinx is here to find the best possible solution for health insurance at your business. We educate business owners and employees on the best practices for combining health insurance plans with a MERP. Our team provides third-party administration, employer benefits consulting, and complimentary elite services to our clients. Contact ClaimLinx or call toll-free 1-800-858-1772 for more details about our full-service insurance strategy.

We are the full service insurance benefit solution

When it comes to a true health benefit solution, the work doesn’t stop with simply changing insurance carriers or establishing a new plan. Employees understanding how to use the plan and employers seeing the differences in coverage and cost are just as vital throughout the year as they are on day one.

That’s why it’s a priority for our team to provide the following elite services for all of our clients:

  • In-person or online education meetings
  • Claims reporting and analysis
  • Consulting for prescription drug use
  • Medical claim negotiation
  • Prescription drug rebate checks
  • Online enrollment for easy renewal
  • Adjustments to the schedule of benefits

Education is one of the highest priorities at ClaimLinx. We believe employees who are more informed about insurance become better health care consumers overall. That means they are better able to use the health plan and are getting more out of it. So we offer to all of our clients for a service team member to come to the company for an education meeting at any time.

Related Post: What is an employer-sponsored, or self-funded, plan?

We find education meetings to be the best way for employees to hear how their new plan works and what changes they can expect. Meetings can be done on location or online as a webinar.

Throughout the year we also focus on finding more ways to save money on the health plan. Cutting initial premium costs can often be just the beginning. We take a look at the company’s actual claims data to see where adjustments can be made to improve savings. Sometimes this means making an adjustment to the schedule of benefits, moving an employee to a better plan, applying for a prescription drug discount card, or other savings strategies.

Related Post: Why Insurance Rates Are So High and How to Start Cutting Them

But it doesn’t stop there. To help maintain costs on claims, we partner with a medical bill negotiator to ensure all high dollar claims are being charged correctly and employers are paying the lowest cost possible. This is an included service with ClaimLinx as the third-party administrator for the plan.

These continuous consulting and additional plan services that contribute to savings are only offered at ClaimLinx. Our experts are focused on constantly improving the plan for employees while ensuring the costs remain low.

 

Start a path to savings on insurance

ClaimLinx helps businesses cut costs on their health plan without sacrificing benefits —  such as increasing deductibles or copays. As a combination consultant, insurance agency and third party administrator, we use an alternative strategy for purchasing insurance that benefits everyone.

It combines the best of traditional insurance through a major carrier with self-funding without changing a company’s current benefits package. We call it the Simple Option Solution.

First, we help you choose a high deductible insurance plan either with a major carrier or with of an alternative that has different styles of plans, such as a level funded plans, VEBA plans, MEWA plans and more. This plan provides:

  • Wide physician and facility network
  • Discounts on office visits and procedures
  • Stop loss in case an employee has high medical costs

Then, we combine this with a self-funded Medical Expense Reimbursement Plan (MERP) administered through ClaimLinx with a schedule of benefits exclusive to your company. This part of the overall plan provides:

  • Customized copays and deductible
  • Real data on employee usage
  • Tax benefits of self-funding your medical plan

Combining these two types of health plans creates a seamless benefits package your employees will love at a price you can’t resist. On average our customers save 20% on their health insurance costs in the first year. And we can continue this savings year after year as full service consultants who are able to provide continuous solutions for challenges in the healthcare industry.

We know how important it is that your employees have the benefits they need without busting your company budget. It’s a challenge for all business, but we have a unique solution you won’t find anywhere else. So let us guide you on a path to a new type of plan.

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