Author Archives | Kevin Guss

About Kevin Guss

Kevin J. Guss is a Consultant with our Private Client Benefit Services, specializing in providing individual health coverage (on and off-exchange), Medicare supplements, life, LTC and disability insurance to clients of J.W. Terrill and strategic partners. With more than 22 years of industry experience, Kevin counts many retired professional athletes, celebrities, business leaders and prominent members of the community among his clients. He has a Group Benefits Associate designation from the Wharton School of the University of Pennsylvania, a Past President of St Louis Association of Health Underwriters and a current board member of the MO Association of Health Underwriters.

The Family Love Letter

December 29, 2017

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I am fortunate to work with quite a few estate and retirement planning professionals in providing their clients with senior life, long-term care and Medicare health insurance products.  One of the items I’ve noted that my experts recommend their clients prepare is a “Family Love Letter”.

The Family Love Letter is both a document and a file.  The letter is not a legal document like a will or trust; it is a plain language letter that gives your family all of the practical information they’ll need when you pass away or if you’re incapacitated.  The file should include the necessary documents and information to assist them in managing the details of your life.  These days, it’s usually some combination of paper files and a password protected online information vault.

In preparing your file, you should include;

-An up-to-date contacts list for your experts; personal attorney and/or estate attorney, financial planner and investment advisors, trust administrator, bankers and insurance brokers.

All of the documents related to your Will and Trust, or their location (such as a safe deposit box or online document data storage site).

-Passwords for your virtual life; anything related to banking, investments and retirement accounts, credit cards, insurance products, data/document storage, as well as personal sites like Facebook, LinkedIn, I-Tunes and Instagram, as well as all active email accounts.

-Information on life insurance, long-term care and disability coverage, including the location of in-force policies and premium invoices.  As referenced above, the contact information for your insurance broker is important.  But it is imperative that you retain a copy of your life insurance policies.

-Investment information, including 401k statements, bank account summaries and related documents.  The same advice for life insurance applies here- retain copies of all key documents for your family.

-Local, state, federal tax filings and any related personal or real property tax documents.

For the letter, you should outline everything that’s included in the file, as well as any practical guidance that gives your family clarity in managing these details.  For both the letter and the file, neatness counts; online sites and tools are far better than scribbled notes and faded documents.

I hope this information moves you to start your estate planning.  Somewhere in the middle of your love letter you’ll likely find that you’ve overlooked some details, lost contacts and documents, or forgotten to do something important (like update your life insurance beneficiaries).  This is where I would encourage you to engage professionals to review your will, your insurance policies, and your estate plans.

If you have questions on this article, would like to provide your perspective on the family love letter, or request a referral to a professional in my network, please call or email.

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Medicare Part B Premiums Rise Next Year?

December 20, 2017

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CMS Medicare has announced that the standard Medicare Part B premium will remain at $134 per month in 2018. The headline is comforting for retirees, as it appears that premiums are not increasing.  But read further down the press release and one notes that for many enrollees,  42 percent to be precise, they’ll see their Medicare premiums grow to $134 because the cost-of-living adjustment to their Social Security benefit eliminates a previous hold- harmless protection that kept  their Part B premiums at or under $107 per month.

The news isn’t favorable for our higher-income Medicare enrollees, either. With a five-tier chart of premiums that rises above $134 on incomes that exceed $170,000 for married couples, roughly 10% of Medicare enrollees have paid higher Part B and D premiums for quite a few years.  The change for 2018 that’s drawing considerable notice is that the top two earnings tiers have dropped, with income thresholds more than $100,000 lower than 2017.  This puts more enrollees in higher Part B premium categories.

With most enrollees paying Medicare premiums out of their Social Security checks, these increases can go unnoticed. It pays to be informed!  For details on the premiums you’ll pay to Uncle Sam for Medicare next year, please go here: https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html .  And, call us when you have questions on Medicare costs and coverages.

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Preventing Medicare Identity Theft

October 19, 2017

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It shouldn’t surprise anyone that a card kept in our wallet and handed out to strangers at every medical facility represents a significant identity theft exposure.  In an effort to reduce healthcare related fraud, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) mandates the removal of the Social Security Number-based Health Insurance Claim Number (HICN) from Medicare ID cards.

Timing
Centers for Medicare & Medicaid Services (CMS) will mail out new Medicare ID cards beginning April 1, 2018 through April 1, 2019. The HICN, which contains the SSN, will be replaced with a Medicare Beneficiary Identifier (MBI).

Impact to Employers
Employers and their HR departments do not need to make any changes unless they capture and use the Medicare HICN for active employees or retirees.

Impact to Medicare Beneficiaries
Medicare beneficiaries who have a Medicare ID card will be required to use the new number on Medicare-related documents, including claims submission forms with medical providers.

Until the new ID card arrives in a beneficiary’s mailbox, the usual cautions on providing personal information apply.  See here for Medicare’s common-sense suggestions; https://www.medicare.gov/forms-help-and-resources/identity-theft/identity-theft.html

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Questions to Ask If You’re Considering a HealthCare Sharing Ministry

March 9, 2017

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With the Affordable Care Act (ACA) driving premiums on individual health plans out of reach for many families, we’re getting more inquiries on HealthCare Sharing Ministries. These are programs administered by religious affiliated organizations in which members agree to share healthcare costs, much like the mutual aid societies of earlier generations.  The growing interest in “med share” programs comes from that fact that monthly contributions are often significantly lower than premiums for health insurance.  And, members in some med share programs are exempt from ACA tax penalties levied by the IRS on the uninsured.

Because these plans aren’t insurance products, we won’t offer an opinion here on their merits. But as professional risk managers, we do want to offer some questions to ask when considering enrolling in one of these programs.  Specifically:

  1. Who’s in charge? What organization is offering this med share program? Does the website for the sponsoring organization list the names of the executive leadership and board members, provide bios outlining their qualifications, and give telephone, email and physical contact information?
  2. What happens to my money? Does the sponsoring organization publish professionally audited annual financials? When reviewing insurers, we always check to make certain a carrier has reserves that are sufficient to pay large claims.  How does the med share plan you’re considering prepare for catastrophic exposures?
  3. How are my medical bills paid? Med share programs do not guarantee payment to providers. Your shared monthly contribution is held in escrow and paid out to providers following a set of payment rules created and administered by the organization.  Are these rules and timelines for paying providers clearly defined and provided to potential members in writing?  Does the organization provide a consumer bill of rights, and a transparent process for resolving disputes?
  4. What does my doctor think about this program? Your providers may have never heard of a med share program. Will they refuse to provide services?  Do they consider a med share member uninsured and bill full retail cost for services?
  5. Do I have a “Plan B”? Keep in mind that an employer group health plan may prohibit you from enrolling outside of the annual open enrollment period. Similar gatekeeper enrollment rules hold true for ACA-compliant individual health plans, as well.  Leaving a med share plan once you’ve joined may pose a unique set of challenges.

Human nature has shown us that when we don’t know what to ask, we end up relying on the one question which we know has a clear answer; how much does it cost? We hope that the questions in this blog post will help to start a conversation that leads to a clear understanding of what you’re buying, and perhaps put the cost question at the back end of the discussion where it belongs.

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6 Medicare Mistakes to Avoid

July 8, 2016

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With over 55 Million enrollees, Medicare is a massive federal health program that touches nearly everyone. If you’re not enrolled or planning on joining, you probably have a loved one or friend taking part.  If so, then you’ve already heard some of the horror stories about problems, oversights, and miscalculations that leave folks with too little coverage, or painfully high premiums.  With so much bad information out there, I’d like to outline a few of the common mistakes and pitfalls I’ve seen clients struggle with over the years.

Missing Your Initial Enrollment Period  

For most enrollees, Medicare eligibility begins at the start of the month in which you turn 65. Guidelines provide for a 7 month enrollment window; 3 months prior, the month you turn 65, and 3 months after.  If you miss that enrollment period, you may have to wait until the next General Enrollment period, and you may have to pay a penalty.

Enrolling in Medicare is usually an opt-in process.  You can visit www.SSA.gov to find the local Social Security Office and enroll in person, or you can enroll online at www.Medicare.gov.  Please note however, that if you’re receiving your Social Security retirement check when you first become eligible for Medicare, you’ll be enrolled and receive your Medicare ID card automatically.

Enrolling In Medicare Part B When You Don’t Need It

If you have group health coverage through your employer (or through your spouse’s employer), and that employer has 20 or more workers, you can delay enrollment into Medicare Part B until employment ends. In this scenario, there are no penalties or waiting periods for delayed enrollment.  And, since there’s a monthly premium for Part B, you could be paying for something you don’t need (if you have both Part B and employer group health coverage).  Go here for details: https://www.medicare.gov/sign-up-change-plans/get-parts-a-and-b/employer-coverage/i-have-employer-coverage.html#collapse-5567

Failing To Enroll In Part B When You Have COBRA or Retiree Medical Coverage

Even though COBRA looks like a straightforward continuation of your former employer’s group health plan, federal rules make COBRA coverage a secondary payer to Medicare. This means you could have a significant, uncapped out-of-pocket exposure for any medical bills if you haven’t signed up for Part B.  You may have penalties and a waiting period for enrollment, too.

Retiree plans have a variety of rules and regulations that make one-size-fits-all guidance impossible. For many retiree plans, Medicare is your primary payer.  For some, Medicare isn’t even necessary.  When planning for your retirement, reach out to your employer HR department or union health and welfare fund administrator as early as possible to review their written rules and guidelines.  It’s a good idea to review coverage costs against market alternatives such as Medi-Gap plans, too.

Skipping Part D Coverage

Part D drug insurance plans should not be viewed as optional coverage. If you miss your initial enrollment opportunity, you’ll not only have a late entry premium penalty when you join, but you’ll have to wait until next January for coverage.  With all the expensive break-through drugs coming into the market, you could have some difficult choices to make if you’re without a Part D plan.

Choosing Cheap Over Good When Buying Medicare Insurance Products

Maintaining our health in retirement should be one of our most important goals. When we’re choosing Medicare insurance plans, we need to put quality ahead of cost.  Medicare Advantage plans with insufficient provider networks or high out-of-pocket exposures, drug plans with small formularies and poor customer service, MediGap plans from insurers with questionable financial stability are all hard-to-spot deficiencies that can leave us regretting our buying decisions. 

Trying the D-I-Y Approach

In taxes, law and finance, we know that well informed decisions are easier when we hire a professional CPA, attorney or financial planner. In much the same way, utilizing a Medicare specialist insurance broker will prove helpful and keep you out of do-it-yourself traps.  Your broker is your advocate and will support their recommendations with well-reasoned explanations, plain language consumer resources, and transparent cost information.  Look for the same professional criteria from your broker as you would the rest of your advisor team- experience, reputation, transparency and knowledge.

Getting the best available health coverage out of your Medicare enrollment shouldn’t be like peeling an onion, with layer after layer of tear-inducing effort that leaves you with nothing but a mess to clean up. Plan ahead, know your rights, rely on your experts and you’ll find the right path to great coverage in your retirement.

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COBRA and Medicare: Know the Rules

March 10, 2015

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If we’re working for an employer that has twenty or more full time employees, Medicare A & B pays on a secondary basis to our employer group health plan.  Thus, for many seniors with employer group coverage there’s no need to take Medicare when first available at age 65.  However, when employment ends and we become COBRA eligible, problems can develop.  Enrolling in COBRA without taking Medicare triggers two very significant exposures;

  1. COBRA is not creditable coverage. CMS Medicare guidelines leave you without credit for being insured when you’re on COBRA. This means the clock starts on your Medicare Special Enrollment Period the moment you lose employer group coverage and move to COBRA. When the clock starts, you have only 8 months to enroll with Medicare for Parts A & B. Otherwise you’re facing late enrollment penalties and waiting periods.
  2. COBRA is a secondary payer to Medicare. COBRA coverage pays after Medicare, as if you have Parts A & B. Failure to sign up for Medicare immediately on or before becoming COBRA eligible leaves you financially exposed and personally obligated to pay more than 80% of any medical bills incurred.

COBRA notices written by the Department of Labor don’t do a good job explaining the exceptional rules of Medicare.  It’s always wise to seek counsel from a specialist Medicare insurance broker, or your State Health Insurance Assistance Program.

For more information on Medicare, go to: www.Medicare.gov .  For questions on this article, or to discuss senior insurance plans and services, please contact Kevin Guss, at Kguss@jwterrill.com or 314.594.2717.

 

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IRS Guidance on Employer Reimbursement of Individual Health Insurance Premiums

May 22, 2014

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The IRS has issued guidance on a longstanding gray area in the benefits world- reimbursing employees for the cost of their individual health insurance plans.  Please go here for that guidance.

For years, many small employers not offering employer-based group health plans have reimbursed employees for the cost of their individual health insurance premiums through Health Reimbursement Arrangements (HRA).  The employer was often deducting these reimbursements as expenses, and the employees enjoyed tax-free treatment of premiums.  Recent IRS Guidance driven by Affordable Care Act legislation explains that individual health coverage is not considered the same as employer-based group health plans and cannot be linked to an HRA or cafeteria plan.

The IRS has made clear now that there are no workarounds to this rule.  Unless an employer-sponsored group health plan is offered, the employer shouldn’t implement an HRA that un-taxes these premiums.  If the boss feels it’s important to help staff with their health insurance premiums, the only appropriate way to do it is to give the employee a pay raise.  This adds additional payroll tax for the employer and income taxes for the receiving employee, but it’s the only available path that keeps everyone clear of audits, penalties and the related hassles.

For analysis, situation-specific questions and greater detail on this rule, please contact your CPA or tax advisor.

Updated: 02/19/16

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Caveat Emptor-Have HMOs Returned?

May 21, 2014

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Press outlets are discovering the narrowed provider networks that insurers are implementing in Affordable Care Act-compliant individual health insurance plans.  Click here for a recent buzz-worthy story from the New York Times .

With pressures to flatten the premium inflation curve created by the Affordable Care Act, we expect to see more of these efforts in the years ahead.  This article is a reminder that health coverage isn’t an impulse buy- it’s an important part of your personal financial planning that requires due diligence, research and expertise.  Making sure your doctors are in-network providers, or preparing for a change in physicians is just one of many steps in the buying process.  Checking to make sure medicines are covered by a plan formulary is equally important.  Closed formularies on new ACA-compliant plans may exclude a brand name medicine and require you to pay the entire cost of a (brand name) medicine when there’s a generic equivalent.  This is not a new concept, but it’s one that’s being deployed more often and more effectively by insurers with a greater need to control medical spending.

Pre-certification for tests, treatments and specialist doctor visits are also tried and true cost containment methods that are seeing renewed interest among carriers offering ACA-compliant plans.  Sending a patient for ten physical therapy visits first, before approving a costly MRI, specialist consultation and surgery can be a hassle for someone that’s endured the continuous agony of a pinched nerve, but it’s the reality of cost control in new plans in much the same way it was a reality for HMO patients a decade ago.

It’s always been important to know your plan and your provider network before buying, and to use it properly after purchase.  J.W. Terrill’s fee-for-service Private Client program starts with an analysis of current coverage and compares it against available alternatives in the broader market (including federally subsidized HealthCare.gov exchange plans).  Our post-placement education and dialogue is ongoing, personal and gives clients the perspective they need to make smart decisions on plan utilization.  Your insurance policy is a hedge against catastrophic and sometimes life-threatening risks; it shouldn’t be a quick, price-based decision followed by months or years of frustrating discovery.

Please call me when you have questions on new ACA plans, carrier cost containment methods or anything related to individual benefits.

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Free Riders

April 25, 2014

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With the implementation of the Affordable Care Act (ACA), the rules for obtaining individual health coverage have changed significantly.  Before ACA changed the market on January 1 of this year, we could get coverage any time we could pass through medical underwriting with relatively good health.  Medical underwriting rules kept premium rates down and allowed insurers to cover 80-90% of the population.  Of course, those among us with severe health conditions and some with fairly minor pre-existing conditions could find themselves locked out of the market.  Now, with new ACA rules in place, insurers are prohibited from declining us for health conditions.

Putting aside the politics of ACA, most of us will agree that covering everyone is desirable and necessary.  But it’s not without costs.  Premiums and out-of-pocket costs have increased for most enrollees and the burdens of financing healthcare have been extended to both the federal government and to the broader population.

In an effort to flatten the premium increase curve that comes when underwriting is eliminated and coverage expanded, regulators have put in some safeguard enrollment guidelines to preserve the financial stability and premium integrity of the insurers.  With these new ACA rules, insurers sought and received protection against “Free Riders”.  A Free Rider is someone that waits until they’re sick or injured to buy health coverage.  This is the benefit industry equivalent of calling your agent and asking for full coverage car insurance minutes after wrecking your uninsured vehicle.  We laugh at the analogy, but it happens daily.  And in New York, it happened so often in the health insurance market that after pre-existing condition prohibitions were put in place in 1997, rates increased so much that individual health insurance nearly disappeared from the marketplace.  Government, consumers and industry learned a painful lesson on Free Rider behavior from New York.

Applying these lessons and the resulting rules to our new ACA regulated market, we have to have a Qualifying Life Event (QLE) or wait until the Annual Enrollment Period (AEP) in the fourth quarter (October 15 – December 7) to obtain or change coverage.  Marriage, divorce, job status change, child birth, subsidy eligibility or losing other creditable coverage are the only triggers to allow us to buy coverage outside of the Annual Enrollment Period.  These rules apply both on and off the Healthcare.gov marketplace exchange.

Put simply- with new ACA rules in place, delaying the purchase of health insurance because it’s inconvenient or expensive can leave us financially exposed to the full cost of healthcare until the next AEP lets us buy coverage.

If you have questions on the Affordable Care Act, Free Riders, or anything else related to health insurance and benefits, please contact a J.W. Terrill representative.

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Medicare Part B Premiums Remain Static

January 14, 2014

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Medicare Part B monthly premiums remain at $104.90 for most enrollees for 2014. And, for those with higher incomes, Part B premium rates did not rise for this year either. Please make note that for those with higher incomes, the Income Related Monthly Adjustment surcharge on Part D drug plans did increase for 2014. This IRMA charge can add up to $69.30 onto your monthly drug plan premium, so it’s important to monitor.

For additional information and a chart outlining Part B costs and Part D surcharges, please check the here at the Medicare website: http://www.medicare.gov/your-medicare-costs/costs-at-a-glance/costs-at-glance.html#collapse-4811 . As always, when you have questions please contact your J.W. Terrill consultant.

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HSA Contribution Limits

January 9, 2014

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As a reminder for those with Qualified High Deductible Health Plans, the IRS has raised the contribution limits for Health Savings Accounts. For 2014 an individual can contribute $3,300 and a family can contribute $6,550. H.S.A. enrollees age 55 or over can also take advantage of a catch-up provision and contribute an additional $1,000. Funds can be used for most out-of-pocket medical, vision and dental costs. And, of course, the dollars accumulate if they’re not spent in the calendar year, because an H.S.A. is not a “use it or lose it” plan like some employer-sponsored cafeteria plans.

H.S.A. limits are raised annually. If you’d like more information, please go to: http://www.treasury.gov/resource-center/faqs/Taxes/Pages/Health-Savings-Accounts.aspx or ask your J.W.Terrill consultant.

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Life Insurance Awareness Month

October 19, 2013

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October is Life Insurance Awareness Month. This is an excellent opportunity to look at the challenges we all face when addressing our family estate planning needs. LIMRA, the Life Insurance Market Research Association, recently performed a national survey of households and they’re reporting some discouraging post-Great Recession statistics. Among their discoveries;

  • 30% of US Households have no life insurance at all. Only 44 percent have individual life insurance.
  • 50% of US Households acknowledge the need for more life insurance.
  • The average life insurance benefit is $167,000. This is down from nearly $200,000 prior to the Great Recession.
  • 35% of those queried for LIMRA’s research report that they’ve not yet bought more life insurance because their advisors haven’t approached them to discuss.
  • Among women who are the sole or primary earner for their family and have kids under 18 in the household, their life insurance portfolio is only 69% of the value of the average of men that were surveyed.
  • There are eleven million fewer households covered by life insurance than 7 years ago.

In LIMRA’s survey, they found that the everyday pressures of a tough economy are competing with our ability to plan and provide for our life insurance needs. Research results revealed;

  • “Everyday expenses” such as energy costs, food, clothing and transportation were cited by more than half of consumers surveyed as limits on ability to save for financial goals.
  • When surveyed on financial issues, “money for a comfortable retirement” was the top pick of 67 percent of consumers. By contrast, concerns that life insurance coverage traditionally addresses (such as premature death, funeral expenses and leaving an inheritance) registered as a top priority for less than 40% of those surveyed.
  • Middle-income consumers are more concerned with reducing debt and having more money for retirement than other income groups surveyed.

These survey results should serve as a reminder that everyone should review their life insurance coverage and reach out to their experts. This is far too important to continue to leave on a “to-do” list. Start here to analyze your personal needs: http://www.lifehappens.org/life-insurance-needs-calculator/. If you find you have questions or need additional resources, please contact your JW Terrill consultant or Kevin J Guss, our Private Client Benefits Consultant.

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