Your Money: Health insurance after job change

Your Money: Health insurance after job change

July 31, 2008

Individuals who find themselves a victim of a layoff or find a new job that doesn't offer health insurance face a difficult task in deciding how to replace health insurance. The options might be more expensive than a subsidized corporate plan, but some do offer tax benefits that an employer can't.

The first option is to continue your previous employer's insurance through COBRA. This maintains your coverage, but it's expensive. You now must pay the full premium, and employers usually tack on 2 percent more to cover administrative fees.

Instead of this option, explore an individual policy with the same insurer or another provider that includes your doctors in its network. If you are healthy, you could also lower the benefits provided to get a lower rate.

Another option is to use a Health Savings Account. These let you make tax-deductible contributions to a savings account in which withdrawals are tax-free if used to pay medical costs. Any other withdrawal purpose is subject to a 10 percent penalty. The balance, when you turn 65, can be withdrawn for any reason without tax penalties. You must pair the HSA with a high-deductible medical policy and not be eligible for coverage from your or your spouse's employer.

To help you sort through the myriad of choices, start by asking an independent insurance broker to shop the marketplace for policies that fit your situation.

An independent broker isn't limited by one insurance company and can compare policies for you.

Because they are compensated by the insurance company you that select, make sure you are given at least three options and even submit your request to at least two brokers.

Also, try searching online at eHealthInsurance.com and consulting a financial adviser, who might have further resources available and help you make your decision.

MCT

dailypress.com

Want to see your insurance bills reduced? Report Insurance Fraud in South Carolina

Piedmont Area leads state in number of fraud cases


Columbia, S.C. – Wednesday, July 11, 2007 – Governor Mark Sanford has proclaimed July 15-21 as Insurance Fraud Awareness Week in South Carolina. Insurance fraud is a felony in South Carolina and can result in jail time.

Insurance fraud costs nearly $120 billion a year, with healthcare fraud at $85 billion a year and property and casualty insurance fraud at $30 billion a year, according to the Insurance Information Institute. Each year consumers spend about $300 per household just in additional insurance premiums, according to the National Insurance Crime Bureau. While there are organized fraud rings throughout South Carolina, other people you wouldn't suspect, such as a next-door neighbor, co-worker or close acquaintance, are also the causes of insurance fraud and increased insurance premiums.

The South Carolina Insurance Fraud Investigators, Attorney General Henry McMaster, and the South Carolina Insurance News Service are continuing their on-going initiative to fight insurance fraud and increase public awareness of insurance fraud and public participation in fraud prevention efforts.

Officials hope increased awareness of insurance fraud will encourage consumers to use the South Carolina Insurance Fraud Hotline to report cases to the Attorney General's Insurance Fraud Division.The South Carolina Insurance Fraud Hotline (1-888-95-FRAUD) is available toll-free, 24 hours a day, 7 days a week. "People tolerate insurance fraud thinking that insurance companies have a lot of money, but that money is money paid into them in premiums from consumers. Reporting insurance fraud is the key to reducing this crime and saving money," says Allison Dean Love, Executive Director of the South Carolina Insurance News Service.

As of June 30, 2007, there have been 41 criminal convictions and 38 civil remedies in South Carolina as a result of insurance fraud charges, according to the Insurance Fraud Division of the Office of the Attorney General. According to the Attorney General’s 2006 report:

▪ There were 722 complaints of insurance fraud reported in South Carolina in 2006 – a 27% increase over 2005 with 569 cases.

▪ There were 49 civil remedies compared with 39 in 2005. There were 82 criminal convictions compared with 102 in 2005.

▪ The total amount of fraud reported in 2006 was $15.4 million – nearly triple the amount of 2005. (One liability fraud complaint of $10 million was reported)

▪ The amount of restitution ordered in 2006 was $318,125 – a 40% increase over 2005 with $191,416 in restitution.

The cases have come from all over the state of South Carolina and break down by region as follows:

▪ Piedmont - 31% (120)
▪ Low Country - 23% (89)
▪ Midlands - 27% (106)
▪ Pee Dee - 19% (74)

The greatest number of complaints were due to automobile insurance fraud (45%), followed by personal/commercial property fraud (14%) and workers' compensation fraud (13%). Fraud may be committed at different points in the insurance transaction by different parties: applicants for insurance, policyholders, third-party claimants and professionals who provide services to claimants.

Insurance fraud can be “hard” or “soft.” Hard fraud occurs when someone deliberately fakes an accident, injury, theft, arson or other loss to collect insurance money illegally. Soft fraud occurs when someone inflates a claim or underestimates the number of miles driven on an insurance application. Generally, the most prevalent types of insurance fraud are:

▪ Misrepresentation of the number of miles on an auto insurance application.

▪ Failure to report an accurate medical history when applying for health insurance.

▪ Fake or exaggerated injury claims to avoid work and draw workers’ compensation pay outs.

▪ Falsification or overstatement of injuries in auto accident to obtain a large settlement or damages award.

▪ Staged auto accidents that result in clams for non-existent or exaggerated injuries.

▪ Fabrication of relationships to obtain life insurance benefits.

▪ Exaggeration of the amount and value of items stolen from a home, business or automobile.

In addition to denial of their claims and voiding of their insurance, people who commit insurance fraud risk criminal prosecution. As fraud increases, insurance companies have to cover these losses by increasing insurance rates. Insurance companies have special investigative units which are dedicated to reducing insurance fraud.

"Insurance fraud in South Carolina is causing honest people to pay far too much for insurance coverage," said Attorney General Henry McMaster. "We have a strong team that is vigorously prosecuting these crimes in our state, but citizens need to be alert and contact local law enforcement if they see evidence of insurance fraud. Criminals should not be allowed to make us all pay the bill for their crimes."

"We need the general public to fight fraud in our state and not tolerate it," said Brandolyn Pinkston, Administrator of the South Carolina Department of Consumer Affairs. "The message is a simple yet powerful one: We all pay for insurance fraud - it's time to fight back."

In recognition of Insurance Fraud Awareness Week, the South Carolina Insurance Fraud Investigators will be holding an Insurance Fraud Expo on Saturday, July 21 from 10:00 a.m. until 2:00 p.m. at the Kroger in Sparkleberry Square at the intersection of Two Notch Road and Sparkleberry Lane, Columbia. The expo will host a variety of booths available to help educate South Carolinians about the impact of insurance fraud in our state. Experts will be available to etch vehicle identification numbers on cars and explain auto theft prevention. “Governor Sanford’s proclamation clearly sends the message to the citizens of our state that insurance fraud is not only alive and well, but thriving - resulting in increased premiums and the cost of services provided by insurance companies who do business in South Carolina.” said Alan Wyche, President, South Carolina Insurance Fraud Investigators.

Other resources for information on insurance fraud are:

South Carolina Insurance News Service – www.scinsnews.com
National Insurance Crime Bureau – www.nicb.org
Coalition Against Insurance Fraud – www.insurancefraud.org
Insurance Fraud Division’s web site at -www.scattorneygeneral.org
South Carolina Insurance Fraud Investigators - www.sc-ifi.org

Report Insurance Fraud to the South Carolina Insurance Fraud Hotline

1-888-95-FRAUD- All reports remain confidential.

For more information on insurance fraud in South Carolina or for an interview call 803-252-3455 or e-mail alove@scinsnews.com

For over 30 years, the South Carolina Insurance News Service, a nonprofit organization, has been providing free insurance information to consumers and the media about property and casualty insurance issues. The News Service is funded by insurance companies doing business in South Carolina.

The Top 7 Most Outrageous Insurance Fraud Cases of 2007 (so far):

Obsession Over Repossession On 07/24/06, Edward Pinckney claimed that his truck, valued at $15,000, was stolen from his home driveway. Investigation revealed that the truck was not stolen but repossessed by the State Credit Union. Before the repossession Mr. Pinckney was notified of the repossession by certified mail. On the day of the alleged theft, Mr. Pinckney had a three-way telephone conversation with Deputy Ballenger from the Greenville County Sheriff's office and Eric McIwain from the South Carolina Credit Union at which time he was made aware that the truck was not stolen, but was repossessed. On July 31, 2006, Mr. Pinckney completed and submitted a theft affidavit to State Farm Insurance Company, which indicated that his truck was stolen and not recovered and that he was unaware of its whereabouts. On 03/14/07, Mr. Pinckney pled guilty to Presenting a False Claim for Payment over $5,000. He was sentenced to 5 years suspended to 20 months probation.

Hail, No Hail! - On August 7, 2006, Joyce Davis submitted a witnessed statement to Hartford insurance company stating that her vehicle had been damaged by hail on May 20, 2006. Weather reports indicate there were no hailstorms or any rainstorms in the area on that date. Pictures of the vehicle in question show scratches in a swirl pattern as well as damages that appear to have come from a metal object that gouged the paint down to the metal. There was no damage to the top of the vehicle, only the hood, trunk, bumper, and sides. Ms. Davis claimed hail damage in the amount of $1,206.80. Her claim was denied and there was no restitution. Ms. Davis pled guilty to Presenting a False Claim for Payment, less than $1,000. She was sentenced to 30 days incarceration suspended to 6 months probation and a $200 fine.

3 Stooges and A Home Computer - On May 21, 2003, Linda Thompson was in a motor vehicle accident with her husband Matthew Barnes and her 17 year old daughter. Ms. Thompson did present to Cambridge Integrated Insurance Company forged medical billings for herself and her daughter totaling $4,452.00. The medical bills had the appearance of being typed on a home computer. Investigation found that one of the alleged medical facilities was actually a residential trailer park. Ms. Thompson also submitted billings from actual medical facilities; however, these medical facilities informed investigators that they never treated Ms. Thompson. The Insurance Company denied the claim. There was no restitution. On 01/30/07, she pled guilty to Presenting False Claims for payment. She was sentenced to 5 years in prison.

Grooms and Bride - On August 24, 2002 in Richland County, a rental car driven by Phyllis Harden allegedly rear-ended another vehicle containing the passenger Joseph Grooms. Mr. Grooms submitted to bodily injury claim to Cambridge Integrated Services, the insurance carrier for the rental car company. Mr. Grooms and Ms. Harden denied knowing each other when questioned by police and the insurance company. However, it was revealed that Mr. Grooms and Ms. Harden were in fact married. An expert in accident reconstruction examined the vehicles and determined that the damage to the vehicles was completely inconsistent with the accident scenario related to law enforcement and the insurance company. On 03/19/07, Ms. Harden pled guilty to Presenting False Claim for payment over $1,000. She was sentenced to one year in prison suspended to time served. There was $1,225.31 due in restitution to the victim in the case. The restitution was converted into a civil fine.

The “Buck” Stops Here – Quit Pulling Our Leg - Wyndell Buckmon defrauded an insurance company by claiming he was driving his car when the vehicle was involved in an accident and had lost his leg as a result. However, several witnesses who were involved in the accident indicated Buckmon was not in either car at the time of impact. In fact, the responding police officer drove up the road to the car wash where Buckmon was working at the time and brought him to the accident scene after-the-fact. The investigation further revealed that Buckmon had already lost his leg years prior to this incident. The insurance company denied his bodily injury claim. Buckmon pled guilty to presenting a false claim for payment and received a sentence of 18 months suspended to 18 months probation.

The Fake-out - Brion Smith defrauded an insurance company by submitting forms allegedly from two physicians indicating that he was disabled and unable to work. During this three-year period, Smith collected over $16,000 in disability payments. However, investigation revealed that neither physician had completed these forms. Smith pled guilty to two counts of making a false statement or misrepresentation and was sentenced to three years concurrent, suspended to four years probation, on each count. As part of his sentence, Smith also made full restitution of $16,549.

KARMA – Enough Said - Jimmy Mizzell, Sr., Kerry Mizzell, and George Reeves are family members who defrauded an insurance company by staging an automobile wreck. In fact, the setup went awry resulting in a more-serious wreck and injuries than they had intended. These defendants each pled guilty to presenting false claims for payment and received three years imprisonment, suspended to probation. In addition, the three were ordered to pay a total of over $23,000 in restitution.

Source: Insurance Fraud Division, Office of Attorney General Henry McMaster

To view Governor Mark Sanford’s Proclamation of Insurance Fraud Awareness Week, please link to: Governor's Proclamation

Many South Carolinians are underinsured

Many South Carolinians are underinsured

By Jill Coley (Contact)

The Post and Courier

Monday, July 28, 2008

Tips for buying health insurance

1. Call the S.C. Department of Insurance at 1-800-768-3467 to find out whether the agent and company are licensed.

2. Learn what kinds of policies will provide what you need. Shop around and ask a lot of questions.

3. Answer the application questions completely and accurately.

4. Make sure that the word "insurance" is used and that there is no disclaimer stating, "This product is not insurance, nor is it intended to replace insurance."

5. Make check payable to the company, not the agent. Always pay by check or money order and write your policy number on the payment.

6. Do not give the agent your bank account number until you have verified the agent and company.

7. Ask for a receipt for all payments. The receipt should include your policy number, date of payment and the name of the insurance company.

8. Fraudulent plans often are sold through direct mail or over the Internet.

9. If a policy costs far less than what other companies are charging, this could be a warning sign.

10. Beware of an agent or company that states this is a "one-time deal" or your "last chance for special savings," or boasts that the coverage is available to anyone.

About 400,000 South Carolinians lack adequate health insurance. That's nearly 10 percent of the population living one accident or major illness away from financial hardship.

Lyn Mettler is self-employed and owns a public relations company in Mount Pleasant. Responsible for shopping for her family's insurance, she's been through three plans in six years.

"I have not done a good job of reading all the fine print and picking the right plan for my family," Mettler said.

Before her current Blue Cross Blue Shield plan, she bought insurance from Mid-West National Life Insurance Co. of Tennessee. The agent told her that her children's well and sick visits were covered, she said, but in reality, only $100 per child per year for wellness care was covered.

"Not much help when you have a baby who has to go in for well visits every couple of months," she said.

Mid-West National Life is a subsidiary of HealthMarkets, which agreed July 21 to pay $20 million to settle with 36 state regulators, including South Carolina, regarding complaints of sales agents not fully disclosing policy limits and the timeliness of paying claims.

HealthMarkets said that the company has made changes since 2005, including calling new policyholders to verify they understand their benefits.

The number of underinsured in the U.S. rose 60 percent from 2003 to 2007, the Commonwealth Fund reported in June. The fund is a private health policy reform foundation. An estimated 14 percent of all nonelderly adults were underinsured in 2007.

The fund defined an underinsured person as one who spends 10 percent or more of their income on out-of-pocket medical expenses, or has a deductible that equaled 5 percent or more of their income.

Extrapolating the fund's data would mean that about 400,000 South Carolinians lack full coverage, said Lynn Bailey, a Columbia-based health care consultant.

"The underinsured are folks who make the decision to have a bare-bones policy or do a high-deductible plan without the accompanying health savings account," Bailey said. "People think they have health insurance, but they really don't. You're really no worse off to be uninsured."

The National Transplant Assistance Fund & Catastrophic Injury Program is a nonprofit that assists families in raising funds through online campaigns that accept tax-free donations.

"People just don't know how close they live to the edge," Executive Director Lynne C. Samson said. Hundreds of Web pages describe people who have catastrophic health issues and cannot pay their bills.

In the past four years, the program has seen a 50 percent increase in people seeking funds, Samson said. Nearly 360 patients from South Carolina have contacted the national nonprofit, and 77 launched fundraising campaigns.

Steve Skardon Jr., executive director of the Palmetto Project, a nonprofit that has spawned a number of social initiatives, said, "Underinsured means you're not protected from emergencies and catastrophic illnesses." And for day-to-day care, when gaps arise in coverage, people suffer when they lack having a provider who treats them consistently.

The S.C. Healthcare Information and Referral Network, a Palmetto Project program, is a database for patients to find providers who deliver care for reduced fees or on sliding scales, Skardon said.

This year, the South Carolina Legislature considered a number of proposals intended to expand health insurance coverage to more residents. Two of the three high-profile attempts failed, including an effort to use an increase in the cigarette tax to offset the cost of providing more people with Medicaid.

Another bill would have allowed young adults to stay on their parents' insurance plans longer. The bill cleared the Senate but died in the House.

The third bill became law. It allows small-business owners to join together in groups to buy health care coverage for their workers.

Ultimately, Mettler decided to treat her health insurance like her taxes and get professional help. Health insurance broker Reese McFaddin, who is based on Daniel Island, helped Mettler craft a plan for her and her husband and to create separate, more inclusive coverage for their children.

"A lot of people get roped into a fly-by-night policy that is cheap but has certain limitations on hospitalization," said McFaddin, who sells plans from six companies. "You may have a $1,000 deductible, but insurance only pays up to $25,000."

She tries to educate her clients on what and when they can expect to pay. Even with comprehensive plans, people can get sticker shock.

"Folks don't really understand," she said.

Yvonne Wenger contributed to this report. Reach Jill Coley at 937-5719 or jcoley@postandcourier.com.

Are HSA's for Everyone?

HSA plans are not for everyone. There are two components central to an HSA.

• High Deductible Health Insurance Plan
• HSA (Health Savings Account)

You have to have the high deductible health insurance plan to deposit money in an HSA. And not just any high deductible plan. You have to make certain that the plan is "HSA qualified". HSA qualified plans have some basic characteristics.

• These plans don't have a copay for doctor's office visits. If you want a plan where you can pay a $25 or $35 copay when you visit the doctor for an illness or injury then you don't want this type of plan.
  
• These plans don't have a copay for outpatient prescriptions. The prescriptions will usually be covered but the cost will be subject to the plan deductible.
  
• The cost of an HSA qualified plan will be less than a traditional copay plan.

HSA plans are attractive to people who want a tax shelter for money that they can squirrel away for out of pocket medical expenses. So, are HSA plans for everyone. No. They're pretty much a plan for people with higher incomes, higher net worths and a higher tax liability.

Why does it have to be complicated?

Like it or not insurance is system based on "contracts". Contracts are legal documents and as such lawyers and our entire legal system is fully involved. I wish it was a simple system whereby a company granted you "protection" with no strings attached. It doesn't work that way. One of the most important areas to evaluate in any policy of insurance are the exclusions. Always check your policy's exclusions to see first and foremost what is excluded. That still doesn't mean there are not other exclusions hidden in the policy or even attached by "riders" to the policy. It probably would be a good idea to get a law degree so you can manage your insurance!

As agents, we try to serve our clients by interpreting insurance policies. Major items like a "suicide clause" in a life insurance policy is easy to explain. If Elvis Presley or Heath Ledger (Batman) were proven to be suicides ( I am not sure that is the case) and they had a life insurance policy that was less than 2 years old, the policy wouldn't pay the death benefit to the beneficiaries. Worse yet, if the death is a "possible" suicide or even remotely considered by the insurance company as a suicide, then can you imagine how long the proceeds would be held up in a legal battle between the beneficiaries and the insurance company? Yikes. So even the simple aspects of policies can get rather complicated.

I hate to say buyer beware but that's really the case with insurance. Read your policy and ask your agent if you have questions

Short Term Medical Coverage

Short term medical coverage couldn't be easier. Its a perfect fit for people who need coverage to bridge a gap. Suppose you're a young person just out of college and you've been on your parent's insurance policy. Now that you're out of school, the plan kicks you off. But you've got a new job that will give you benefits in 3 months. Just use a short term plan and you can buy coverage for the 90 days.

Maternity Option

The cost of adding maternity on an individual plan is usually cost prohibitive. But there is one exception. Assurant's maternity option provides for coverage with just a higher deductible applied to the maternity. Why is this good? Its good because since maternity is covered under the option, you can still take advantage of the significant discounts afforded by network rates and the cost of the rider is reasonable.