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California Group health insurance plans offer many advantages such as guaranteed issue coverage.  Please note that there are certain rules and qualifications you must meet in order to be eligible for GROUP coverage.  Group insurance is for employers with 2 or more eligible employees.

Contribution: All group plans require that the employer pay at least 50% and sometimes 75% of the employee premium.  You are not allowed to offer a plan to your employees and have them pay the entire premium.

Participation: Typically, the insurance carrier will require that 70 to 80% of all eligible employees enroll in the plan.  This is not a plan where only those who want it enroll.   The GROUP is enrolling and typically only those with other GROUP coverage can waive coverage.  Coverage with Medi-cal is not a valid reason to waive your employer plan.  Anyone can waive coverage, BUT if that percentage (less those covered under another group plan) can not be greater than 25%.  Employees must elect now to add dependents or be postponed coverage for their dependents based on open enrollment or current group guidelines.  This can be as long as 12 months after they submit a request to add dependents.

Bonified Employee/ DE-6: Only employees that are owners or on the payroll are eligible for coverage.  A copy of your DE-6 quarterly wage report is required.  This allows the insurance carrier to verify employment and employee participation.  If you have multiple locations or wage reports, they must all file under a consolidated tax return.  People paid on a 1099, commission only basis are typically not eligible.

Workers Compensation Coverage: The state law requires that employers carry workers compensation coverage.  Owners can elect out of the plan in most cases.

Rate Adjustment Factor and guaranteed issue health insurance: Current law requires that California health insurance carriers issue coverage to employers with 2 to 50 employees regardless of health status, assuming they meet the standard group insurance requirements.  The law does allow the insurance company to adjust their rate up or down 10%.  This means that if you have 4 employees, 2 of whom are pregnant, one who just had by-pass surgery and the 4th is an insulin dependent diabetic, the insurance carrier will issue coverage to this employer with a 1.10 rate.  Just the size of a small employer (2-9 employees) is sometimes enough to warrant the higher, 1.10% rate in the eyes of the insurance company.

AB1672 treats all clients the same regardless of how or from whom the policy is purchased from. One agent can not secure a lower rate than the next.  Going direct to the carrier will not lower your rate.  The primary difference is the competence of your agent.  You should expect your agent to assist in processing applications, be accessible for questions and keep you informed.  The renewal process should include a review of the new plan and rates along with an overview of other health plans options.

Please feel free to ask questions.  I look forward to serving you.

Sincerely,                              Patrick D. Reaume, CFP, RHU

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Here is a summary of Kaiser's most popular plans.

Kaiser Plan 30:

A $30 doctor co-pay.  You pay $ 400 per night in the hospital to a maximum financial exposure of $3,500.  $10 co-pay for generic prescriptions.  Brand name prescriptions are covered after a $250 calendar year deductible at a $35 co-pay.

Kaiser HSA $0/1,500 TWO PARTS

This plan has a $1,500 deductible for individual subscribers and a $3,000 deductible for family subscribers.  Like all plans, the deductible is calendar year.  If you enroll September 1^st, you have a short year to accumulate your deductible.  Nothing is covered (except certain wellness benefits, Pap, Mammograms) until you reach your deductible.  You meet your deductible by paying in cash for services at Kaiser Permanente.  You will pay the "MEMBER" discount rate for services.

For example: Kaiser provides the enclosed EXPENSE LIST for Southern California.  It is an estimate of what you will pay for services while working toward meeting your deductible.  The estimated charge for a primary care office visit is $65.  A specialist visit is $110.  An intensive ER visit may cost $220.  A CAT SCAN of the chest is estimated at $500.   If you are admitted to the hospital, you can expect to meet your deductible (be responsible for) immediately.  Blue Cross just showed that a typical day in the hospital is estimated at over $9,000 a day.

The SECOND part of this plan is an optional Health Savings Account.  This allows you to set aside additional money on a pre-tax basis.  The goal is to set aside enough money to be able to meet your health plan deductible.  Like an IRA, (individual retirement account) you set this money aside pre-tax.  At tax time, you tell your accountant you set aside XXXX amount.  If you are in the 25% tax bracket, you saved 25% of the amount you set aside.

Understanding group health insurance and HSA accounts takes patients and educations.  The learning curve is step but worth it if you want the best solution

I look forward to meeting your insurance needs.  Please call anytime.

Sincerely,                                                             Patrick D. Reaume, CFP, RHU

If you've been involved with providing or obtaining long-term care services for a family member, you know how devastating the emotional and financial costs of this care can be.  The costs are increasing every year, so by the time you need care, you will require a significant sum of money to ensure you get the best care possible.  Long term care is not typically included in your health insurance on MediCare supplement policy.

Consider purchasing Long Term Care Insurance. It provides a way to pay for your in home and facility care.  It gives you the funds you'll need to stay in control of where you live and the quality of care that you receive.

This insurance is not only needed for an older person.  Accidents and sudden illnesses requiring long term care can happen to anyone at any time.  It is wise to buy this insurance while you are young and healthy.  It will be less expensive; your premiums will be lower than at older ages, and there is less chance your application will be declined because of your medical history.

Let's look at an example. The cost of care for a year in Southern California is about $75,000 today.  If you are now age 55, and you don't need care until you are 83, the cost of care by then will be about $245,000 per year, assuming inflation stays at the current rate of five percent in this sector.  Most people need care from four to five years.  That means that your cost at age 83 would be about $1,355,400.

Where will the money come from?  If you purchase long-term care insurance before your 6oth birthday, the annual cost should be in the neighborhood of $3,000.  That will get you your $1,355,400 by age 83, for an investment of less than 10 cents on the dollar compared to the benefits you'll receive.  If you were to invest that $3,000 annually at 6% return after taxes, the amount you'd have available to spend on long term care would be about $216,000.  What would you rather have, a million dollars or $200,000 to ensure you get great care and the ability to remain at home for as long as possible?

There are many ways to structure a long-term care insurance plan to fit your budget and your personal situation.  Contact our office now at 909-747-0280 and let's have a private consultation to see how we can help preserve your retirement lifestyle, assets, and income.  You'll be glad you did.

Expertise & product knowledge It is our feeling that too many brokers don't
actually understand the products they sell well enough to make a solid recommendation. Simply searching for the lowest cost HMO product is not enough in today's market.

• Experience you can depend on: You want a professional on your side to help you understand and choose the right plan.
• Solutions: There are solutions to increasing costs via new concepts that make sense today and for the future.
• Educated to help clients: Pat holds Certified Financial Planner and Registered Health Underwriter degrees, and is a past president of the local Health Underwriters Association.
• HR Binder: This unique resource includes everything you need to manage your benefits. No longer will you search for an application for a new employee or termination request for one that is leaving. Brochures, phone numbers and employee new hire kits are at your fingertips.
• New Employee quote: Our system allows you to Log-in to get a quote based on your plan options and employer contribution. It provides an employee presentation page and calculates the amount to debit from the employees pay check.
• Red File: Ever tried to delete an employee only to learn 5 months later the employee was never terminated off your bill? That incomplete task could cost you hundreds of dollars. All addition and termination requests are submitted thru our office, processed and then placed in our Red file for follow up.
• Keep in touch: We think you need to hear from us regularly. You pay a lot of money for benefits and the last thing you need is a broker that doesn't care about you and provides no support services to boot.
• We expect your calls: It is not a burden, but exactly what we want to do to help our clients. Help us earn your business and call on us with any and all questions. Calls are answered or returned within 4 hours and you have Cell phone access.
• We can help with COBRA, Section 125, additional products and referrals. Our website is a valuable resource. Ask about web access for your plan, www.reaumebenefits.com

Is your current broker actively looking after your interests and meeting your needs? You do not have to purchase a new policy to do business with us. Simply appoint us as your broker to receive our expertise and services.

Patrick D. Reaume, CFP, RHU
Phone 909-747-0280
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