Health Savings Account (HSA) 2011 Contribution Limits

The IRS has announed the maximum annual HSA contributions for 2011 - and they are the same as in 2010:

• Individuals covered under an eligible high-deductible health plan (HDHP) may contribute up to $3,050 in 2011.
• Those with family HDHP coverage may contribute up to $6,150.
• People age 55 and older who are not entitled to Medicare can make additional catch-up contributions of $1,000 to their HSAs in 2011.

Health Savings Accounts (HSAs) are savings plans with tax advantages provided that account funds are used to pay qualified medical expenses such as prescriptions, doctor's office visits and hospital stays.  Generally, medical insurance premiums cannot be paid from HSA account funds; but there are some exceptions including health coverage while receiving unemployment benefits, COBRA continuation coverage, Qualified Long Term Care Insurance premium, and Medicare premiums and out-of-pocket expenses.

Unfortunately, starting in 2011 over-the-counter medicines such as aspirin are no longer considered qualified medical expenses.

You must first be insured under an HDHP in order to open an HSA.  Click here for more information on qualified high deductible health plans.

Medicare Advantage

Is a Medicare Advantage Plan Right for You?


When you become eligible for Medicare, you have a choice in how to receive your Medicare benefits. If you’re nearing age 65, you may have noticed your mailbox filling up with offers for Medicare Supplements, Medicare Part D drug plans, and Medicare Advantage plans. You may want to know more about the advantages of enrolling into the Medicare Advantage program, or even what the difference is between Medicare Advantage and original Medicare.

In a nutshell, Medicare Advantage is the Medicare Part C program under which Medicare beneficiaries agree to receive their benefits through private insurance company plans that contract with Medicare on a year-to-year basis. The Part C program was created by the Balanced Budget Act of 1997, when private health insurance companies convinced Congress they could provide the same coverage that Medicare offers at a reduced cost. Since then, the program has expanded, and currently about 25% of all Medicare enrollees have a Medicare Advantage plan.

Medicare Advantage plans vary widely in premium (some plans have zero plan premium in addition to the Medicare Part B monthly premium, or even refund all or a portion of the Part B premium) and in the specific benefits they offer. Some may only provide the benefits of original Medicare, but most plans include prescription drug coverage, dental and vision benefits; and some plans even provide free gym memberships! A plan that includes Part D prescription drug benefits is called MA-PD, short for Medicare Advantage Prescription Drug plan.

For Medicare beneficiaries who opt against Medicare Advantage and stay on original Medicare, it’s usually a good idea to enroll into a standalone Medicare Part D drug plan since original Medicare doesn’t cover most drugs. Part D plans come with a monthly premium, as do Medicare Supplement (Medigap) policies that are designed to fill the benefit gaps in Medicare.

While Medicare Advantage plans typically feature low co-pays for doctor office visits and procedures, they may include greater out-of-pocket costs for care such as hospital visits and major diagnostic testing. Therefore, as a general rule Medicare Advantage plans are most cost-saving to healthy individuals who have the good fortune to stay out of the hospital; but in any case the plans have a maximum out-of-pocket limit that serves to cap your total expense.

You can join a Medicare Advantage plan if you meet these conditions:

• You have Medicare Parts A & B

• You live in the service area of the plan

• You don't have End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant)

In most cases you can join a Medicare Advantage plan only at certain times during the years. See How Medicare Advantage Plans Work for more information.

For help deciding what’s best for you, download our Medicare Decision-Making Guide!



Although Medicare Advantage plans typically are financially beneficial to the enrollee, they are not necessarily good for the government. Medicare Advantage initially was created in order to reduce government spending, yet the federal government now pays on average 10-15% more for those enrolled in Medicare Advantage, as compared to those on traditional Medicare. Clearly this hugely popular program will be coming under pressure in the near future, as the federal government tries to rein in costs on Medicare and Social Security.

Do you have an opinion about the Medicare Advantage program? Please let us know!

Until next time,

Andrew

Grandfathered Health Care Plans

Grandfathered Versus Non-Grandfathered


Certain terms are being constantly thrown around, including “grandfathered” and “non-grandfathered” when discussing health care plans. What does each mean? What are the main differences between the two?

A “grandfathered” health care plan is one that has not had to change to fit all the requirements set by the Patient Protection and Affordable Care Act (PPACA), having existed in its current form since before March 23, 2010. Grandfathered plans must always have at least one person being covered at all times past March 23, 2010, although the person need not be the same constantly. On the other hand, “non-grandfathered” health care plans are those that have been created, bought, or changed since March 23, 2010. Non-grandfathered health care plans are subject to all of the new provisions of the PPACA.

Although grandfathered plans are guaranteed to be almost the same as they were before the PPACA was pushed through Congress, they must follow a few aspects of the PPACA. These requirements may vary slightly based on whether or not the grandfathered plan is for an individual or a group.

The following are parts of the PPACA that must be followed by grandfathered health care plans:

• There must be a lack of prohibition of coverage based on health discrimination starting for dependents under19 on September 23, 2010, and for everyone on January 1, 2014. (This is applicable to only grandfathered group health care plans.)

• There is a prohibition on excessive waiting periods.

• There can be no lifetime limits, and there may only be applicable annual limits on grandfathered individual plans.

• Rescissions are prohibited, except in the case of premeditated fraud, starting September 23, 2010.

• Those under the age of 26 must be available for coverage by their parents’ grandfathered plans unless their current employer offers health insurance coverage.

• Grandfathered health care plans must cover preventive care services without extra cost to the consumer.

Find out what can make a previously-grandfathered health care plan change into a non-grandfathered plan.

Check back soon to learn about coming changes to the Medicare program.

Preventive Care

Preventive Care Benefits: Perpetually Changing


Who can keep track of all the changes being made to your health plan’s preventive care benefits? If you follow benefits within the Medicare program, you likely know that in 2008 the Medicare Improvements for Patients and Providers Act (MIPPA) authorized a free preventive care exam to be provided within 12 months of signing up for Medicare Part B, rather than the previous six months. MIPPA also added new elements to this preventive exam- including body mass index- and waived the deductible for it, starting in January 2009.

Now, in 2010, we have the Patient Protection and Affordable Care Act (PPACA) changing Medicare’s preventive care services yet again. First, cost sharing is eliminated for some preventive care services, including colorectal cancer screening, as an example. Second, instead of only receiving a deductible-waived preventive exam upon first obtaining Medicare Part B, all Medicare recipients can get a comprehensive wellness assessment every year with no co-pays or deductibles. (From the Author -- although Medicare is now covering more costs for preventive care than ever before, we advise caution when ordering medical tests and services as they may be subjected to Medicare Part B deductible and co-insurance requirements.)

Furthermore, the PPACA greatly increases preventive care services that must be covered by “non-grandfathered” health insurance plans as of September 23, 2010. Not only will health insurance companies have to provide for preventive care, but they will have to cover all costs associated with it. Preventive care benefits that must be covered include, but are not limited to immunizations, mammography tests, and tests for obesity. Also, preventive care and oral health are being promoted in public school systems as part of the PPACA. Use at your own risk!

Look for a post coming soon explaining “grandfathered” vs. “non-grandfathered” health insurance plans! Since the rules imposed by PPACA impact these plan types differently, you’ll want to know which type of plan covers you, and how your plan will be impacted by PPACA.