The Path to Enlightenment

The Need for Alternative Insurance (part 1)

2006-09-06T06:32:00.000-07:00

Today I will begin a series of postings that will discuss the importance and simplicity of alternative forms of insurance.

But in order to more fully understand the need for these alternative products, we need to have a basic understanding of traditional insurance. When it comes to traditional insurance (and please understand that everything I focus on will be from an employee benefits view) most people think of major medical health insurance and dental, sometimes with life insurance and vision in the mix. These plans are great, and if an employer can offer them to his/her employees at a reasonable cost they should. But many times an employer will think that they've done their duty an will leave it at that.

Unfortunately, these benefits are limited in many ways. First, I have never seen a plan that covers 100% of the costs associated with medical treatement. There are always copayments for doctor and emergency room visits. In addition, there is usually a deductible for hospitalization. That deductible can be as little as $250, and as much as $5,000! After that deductible, there is usually a hospital copay. The standard is 20% of all hospital related costs, up to a policy maximum. That max can be anywhere from a couple of thousand dollars to much, much more. That doesn't even count the dirty little secret that major medical insurance likes to hide - out of network charges. While someone may be under the impression that they will be covered under their plans 80/20 copay because of their admission in a in-network hospital, that isn't always the case. Many time, the best doctors available, the specialists, are not in a network. They are the best and as a result, don't have to be. If you want the best treatement available, you are going to have to pay up to a 50% copay.

Now, with 83% of American households living "paycheck to paycheck," what are we to do?

TOMORROW: THE OTHER HIDDEN SECRET OF MEDICAL EXPENSES

How Does Your Employee Benefits Plan Measure Up?

2006-08-30T07:03:00.000-07:00

BenefitNews.com published an article this week listing what most employers are offering when it comes to employee benefits. This is a great benchmark to use to measure how your company is standing. Why should you care about what other companies are offering? If your benefits strategy doesn't measure up, you could be losing your best employess to your competition. To view this survey, go to www.thebenefitsguru.com/products.aspx.

The Benefits Guru LOGO Design Contest!!!

2006-08-29T07:11:00.000-07:00

ATTENTION!!!

If you have a gift for art and design, this is your chance to have your work presented over the internet, as well as in print, to MILLIONS of people!

TheBenefitsGuru.com is holding a special contest for the design of its new logo. Get creative! The criteria are as follows:

The logo must be in good taste, not offensive
Please use these ideas when creating your logo
Main Entry: benefit
Function: noun1 archaic : an act of kindness 2 a : something that promotes well-being : useful aid 3 a : financial help in time of sickness, old age, or unemployment b : a payment or service provided for under an annuity, pension plan, or insurance policy
Main Entry: guru
Function: nounPronunciation: 'gur-(") also g&-'rInflected Form(s): plural gurusEtymology: Hindi gurū, from Sanskrit guru, from guru, adjective, heavy, venerable1 : a personal religious teacher and spiritual guide
2 a : a teacher and especially intellectual guide in matters of fundamental concern b : one who is an acknowledged leader or chief proponent c : a person with knowledge or expertise
Main Entry: enlightenment
Function: nounPronunciation: in-'lī-t & n-m&nt, en-1 : the act or means of enlightening : the state of being enlightened 2: a final blessed state marked by the absence of desire or suffering
By utilizing his years of leadership, experience and knowledge, The Benefits Guru strives to help business owners perform acts of kindness to their employees by providing financial help in times of sickness, old age and unemployment, thus resulting in a blessed state within the business of an absence of a desire for more benefits or suffering from a lack of them.

For further information, or to make a submission, please CLICK HERE

Please include your name, age, phone number and email address!

GOOD LUCK!!!

Do You Need Supplemental Insurance? A Defense of Aflac

2006-08-25T09:28:00.000-07:00

I did a little "browsing" of blogs this morning. I noticed that there are some blogs that mention supplemental insurance, mainly Aflac, as being a little unecessary. This is very troubling to me. I've seen numerous times over the past 5 years where people would have faced bankruptcy had they not had coverage that went beyond their major medical health insurance. I have considered jumping into a lengthy explanation of why supplemental and disability policies are so important, but instead, I've chosen to let USA Today and Harvard University do it for me.

Medical costs prove a burden even for some with insurance
By Julie Appleby, USA TODAY
Think your health insurance has you covered? Think again.
Even insured workers can find themselves on the hook for thousands of dollars, often at a time when illness has decreased their income.
Glossary of medical insurance terms
People with health insurance not only pay all or part of their premiums, but also face other costs. The following are some terms common to many insurance policies: Co-paymentThe portion of the bill that patients must pay. Generally, co-payments are set dollar amounts for doctor office visits or prescription drugs. Often set in increments of $10 or $20, they are common in HMO policies. Co-insurance is a form of co-payment and is a percentage, such as 20%, of the cost of the visit or drug. They are more common in Preferred Provider Organization (PPO) policies.Out-of-pocket maximumAn annual limit that's part of many, but not all, insurance policies. It caps the amount patients must pay in deductibles and co-payments. Policies might have several different parallel caps, such as for medical care, drugs and out-of-network treatment. The maximums can run to several thousand dollars a year.Out-of networkInsurers generally have contracts with doctors and hospitals in which they have negotiated discounts. Out-of-network doctors and hospitals have no such agreement with the insurers. Patients generally pay a larger percentage of the costs for such out-of-network providers.Balance billingThe practice in which doctors or hospitals bill patients directly for care above what the insurer pays. It is not allowed in Medicare. Balance billing is most common when services are provided by out-of-network providers. The amounts billed may not count toward the patients' out-of-pocket maximum.DeductibleAn amount that must be paid by patients for medical care before insurance kicks in. Some policies have separate deductibles for drugs, hospital care and medical services. Some have annual limits on deductibles. Some policies have per-admission deductibles for hospital care.
Few workers realize the limits of their insurance until the bills start coming for: policies that don't cover rehabilitation care or limit it to a few visits; expensive drugs that come with a 20% charge, rather than a $20 co-pay; separate deductibles for drugs and medical care; doctors at "in-network" hospitals that aren't members of the insurer's network, leaving patients vulnerable to thousands of dollars in bills; annual "out-of-pocket maximums" that aren't always true ceilings on expenses.
Such costs can quickly add up. A drug co-payment of 20%, for example, could cost thousands a year for patients taking some cancer drugs. Avastin, a colon cancer drug, recently went on the market at a price of more than $4,000 a month. Erbitux, another colon cancer treatment, can cost $12,000 or more for a month's treatment. Gleevec, for leukemia, is more than $2,000 a month.
That's the reality for Rita Wirsch, a 55-year-old clerical worker in Hamilton, Ohio, who is struggling to pay off about $10,000 in medical bills that her insurance did not cover. The total added up over four years, bill by bill, in amounts from $25 to more than $400 a pop. Three months on disability pay this year after surgery put her further behind.
"I thank God every day that I have insurance," says Wirsch. "But there's a problem in the U.S. for hard-working people."
And it isn't likely to change.
More workers are facing larger medical bills as employers increase what they must pay for doctor visits, drugs and hospital care in an effort to control health care costs. Some employers are embracing high-deductible policies — requiring workers to pay $1,000 or more a year in expenses before insurance kicks in. Such policies are also common for the self-employed, who buy their own insurance, because premiums are generally lower.
Shifting more costs to the insured is having ripple effects. Hospitals are collecting more upfront from patients, after being left with bad debt by insured patients who failed to pay their deductibles. Insured patients are also attracting charity efforts: The Patient Advocate Foundation, for example, has a program aimed solely at helping insured patients make the co-payments on their prescription drugs. The group pays up to $2,500 annually toward drug co-payments for qualified patients with four conditions: the eye disease macular degeneration, and cancers of the breast, lung or prostate.
"The fully insured middle-class people who become ill with critical or life-threatening illnesses, it can completely ruin their financial health," says Beth Darnley, chief program officer for the foundation.
Limits of insurance
Many Americans are not prepared. Whether struggling to meet mortgage costs, college tuition and other expenses — or simply buying all the latest gadgets — few are saving enough to weather unexpected bad times. The personal savings rate, the difference between what people earn and what they spend, fell for the second-straight year in 2004 to the lowest level since 1934.
Coverage limits can come as a surprise
By Julie Appleby, USA TODAYThere are ways to prevent financial distress and bankruptcy associated with medical costs: Understand the coverage offered by the policy and its limitations. Insurance policies vary in coverage limits."No one reads the insurance coverage until the insurance company denies the coverage," says Harvard professor Elizabeth Warren, who has studied medical bankruptcies.When given a choice of health insurance policies, workers compare the differences in co-payments for doctor visits and the monthly premiums, but often overlook coverage limits.Many policies place limits on certain types of care, such as physical therapy or mental health services. Insurers often don't cover treatments they deem experimental or not medically necessary. In those cases, patients would either go without the services or pay for care themselves. Know how the costs add up. Employees should carefully weigh costs when selecting an insurance plan, both the premium cost that is deducted from paychecks and the costs for co-pays and deductibles. A lower monthly premium could be offset by higher deductibles and other out-of-pocket expenses for drugs and treatments. Get out of debt. "Credit card debt is dragging families down and making them more vulnerable when anything goes wrong," Warren says. Buy disability insurance. It pays part of your salary if you are too ill to work. In non-emergency situations, see if you have choices. Ask your doctor about the cost of drugs and treatments and whether there are less-costly options. Try to choose an in-network hospital."No one likes to do that, but it can save you from expensive mistakes," Warren says. "There are times when having a procedure done at one hospital rather than another can mean a $5,000 difference in what the patient will be charged."
But it isn't just catastrophic illness or accident that leads to financial stress. For some, ordinary medical problems can lead to seemingly insurmountable bills.
"Families are paying more and more for health insurance that covers them less and less," says Elizabeth Warren, a Harvard professor and co-author of a recent study of bankruptcy filings in five states. The study concluded that medical bills contributed to half of all personal bankruptcies.
The bills, coupled with a low savings rate for most American families, tip about 1 million into bankruptcy each year, Warren says. The average out-of-pocket medical debt for those who filed is about $12,000, and 68% had health insurance at the time of their bankruptcy filing.
Things might soon get tougher for some families. Federal bankruptcy legislation that goes into effect in six months could require many people to repay all or part of their debts, including medical bills.
Some have questioned the bankruptcy study findings. Greg Scandlen a policy analyst with the Galen Institute, a free-market health care research group, says the definition of medical bankruptcy in the study was so broad that the results are not useful in determining whether medical bills were the main source of families' financial troubles or a small part.
"I'm not denying at all that there's a problem out there, but this study doesn't tell us anything about the dimensions of that problem," Scandlen said.
Several thousand dollars in charges might not sink a highly paid worker, but the middle class and those on the lower end of the pay scale can find themselves spending a significant share of their income on medical care.
A recent report by the Center for Studying Health System Change found that the proportion of low-income, chronically ill patients who were insured but still spent more than 5% of their income on health costs rose from 28% to 42% from 2001 to 2003. The study defined low income as being below 200% of the poverty line, or about $36,800 for a family of four in 2003.
"Bankruptcy is just the tip of the iceberg: 29 million Americans are in medical debt," says Jennifer Edwards of the Commonwealth Fund, a private foundation that supports research on health and social issues.
A recent Commonwealth study defined those in medical debt as paying bills to health care providers or having large credit card debt or loans against their homes related to medical costs.
Of those, 70% were insured when they got the health care that put them in debt, and nearly half had used up all or most of their savings, Edwards said.
Stretching to pay bills
As do many families, Wirsch recently tapped her retirement fund to help pay the bills.
She has a good clerical job at a Fortune 500 company, earning nearly $13 an hour. And it comes with insurance: a policy with a $2,000 annual deductible for medical and hospital care. Starting this year, the plan added a separate $2,000 deductible for drugs.
This year, she had to take three months off, living on a reduced income from disability payments, while recovering from surgery.
The surgery bills are now added to what she owes from past medical treatments. Her share of the surgeon's bill: $480. Bills for physical therapy: $155. Prescription refills: $25 to $40. She takes 14 pills a day for diabetes, fibromyalgia, which is a painful muscle condition, and intestinal problems. She asks for free samples from her doctor to help make ends meet.
She now has $5,800 in credit card debt that she says is all from medical bills. Wirsch says she's making payments on the card, sometimes $10 a month: "That will take me till I'm 100 to pay off."
Still, she appreciates her health insurance and knows her employer has paid far more than she has.
"Since I started working there 14 years ago, they've probably paid out over $80,000 in medical bills for me," says Wirsch.
Warren says that many of the people in her study of bankruptcies were dealing with non-catastrophic medical problems.
In her study, one man, who was not named, filed for bankruptcy after hurting his knee in a fall. At first he wasn't worried because he had insurance, which paid 80% of his hospital and surgeon's bills. But his coverage left him responsible for physical therapy costs, crutches, braces and all drugs.
"His out-of-pocket expenses ran to $12,000," says Warren. "It wasn't medically catastrophic, but it was financially catastrophic."
For Andrea Talaga, 42, of Bolingbrook, Ill., medical and financial troubles are becoming catastrophic. She filed for Chapter 7 bankruptcy protection in 1992 and says she might have to again.
Talaga, a lab technician at a hospital, says she spends $1,225 a month on her share of prescription drugs for her family. She's diabetic. Her husband, a security officer at a hospital, has high blood pressure and high cholesterol. Both her sons are asthmatic, and one was just diagnosed with major depression. One son's asthma medication isn't covered by her insurance: It costs $225 for a 28-dose pack, and he usually uses two packs a month.
She says her husband's $40,000 salary covers the mortgage and home expenses. Her $25,000 goes for food and medical costs.
"I can't not take my insulin. My husband can't go without his high blood pressure medicine," she says. "My son definitely cannot go without any of his medicine."
She recently learned her health plan limits mental-health counseling to 20 visits a year. Her son will soon exhaust those benefits.
"How can you cure someone in 20 days if they have mental health issues as severe as my son's?"
She doesn't have a solution.
"I wish my employer would back me up and look at people like us," she says. "I know they still pay a lot for employees, but in the long run, they aren't looking at the whole picture."

To view this post in its orignal form, go to http://www.usatoday.com/money/industries/health/2005-04-28-medical-bills-usat_x.htm

2006-08-24T06:50:00.000-07:00

I spend most days in the "field" as we call it, introducing myself to business owners. When it comes to employers, I've found that there are really only two kinds: the ones who care about their employees, and the ones who don't.
If you are one of those employers who care, may I make a suggestion? Tell your employees! Even better yet, show them! A recent study conducted by Aflac, the nation's leader in workplace insurance, shows that employee benefits rank third in reasons employees stay where they are currently working, or leave to find something else. The only thing that ranks higher is compensation and workplace environment. You are already aware that you get what you pay for with employees, and that the way you treat your employees makes a difference. Now it is time to stop making excuses about benefits. News Flash! You can afford to offer benefits! Not every insurance company is the same! Don't assume that your employees are taken care of. A 2005 Havard study showed that the single greatest cause of bankruptcy in the US was the result of medical expenses. And what is even scarier, the majority who filed due to medical expenses, had major medical insurance when they became ill. There are additional options.
If you are an employer who doesn't care about his employees, always remember that you reap what you sow. Your business is not reaching it's full potential. And that may be your fault, not your employees. It's time to care.

P.S. If you are interested in learning more about how you can provide the best in employee benefits, send me an email at david.jesse@thebenefitsguru.com, include Benefits E-book in the subject line and I will send you a free copy of Attracting and Retaining Excellent Employees: A Health Benefits Primer for Small Business. It is written by Steven D. Strauss, a leading small business expert. He is an internationally recognized lawyer, business columnist, and speaker. Steve is the author of 16 books, including the best-selling The Small Business Bible: Everything You Need to Know to Succeed in Your Small Business. I know that his "health benefits primer" will be an excellent source for you as you strive to show your employees that they are important to you!

2006-08-23T07:29:00.000-07:00

Here it is. I've finally joined this world of blogging. You may have stumbled upon this site while searching for "enlightenment" or something similar. Please understand, this is about BENEFITS Enlightenment. I will dicuss what I have and am learning about employee benefits. I have spent the past five years working with over 200 business to provide unique employee benefits programs. Over that time, I've come to learn that most businesses know about the need for benefits, but are rather uneducated about what is available out there. They either have numerous vendors providing benefits of all kinds and in reality confusing their employees and burdening their HR departments, or they choose to offer little or no benefits at all. One of the keys to Benefits Enlightenment is BALANCE. When our businesses become imbalanced in any area, we are causing unnecessary frustration and stress, and in reality, hurting our bottom line. I trust this blog will be a source of information and knowledge for those who wish to acheive a sense of "serenity" in a world of employee benefits madness.