Other types of group health plans
Blanket Health
MR. WATSON: Blanket health . What did I use earlier with Blanket life? A bus company and an airline. High school athletes playing on a Friday night. So, a blanket policy covers a group of people whose names are constantly changing. When you get on the bus, you don't sign in, nobody knows who you are, but you would be covered. The people are constantly changing. Covers schools, concerts, etc..Little League...Kids on a playground. Make sense?
ALL: Yes.
MR. WATSON: Your own personal insurance would pay first and then this would pick up where yours left off.
Franchise Health Insurance
MR. WATSON: Franchise Health Plans . It's also called "wholesale insurance." Who are these for?
WOMAN: Doctors. Lawyers, C.P.A.s
MR. WATSON: Doctors get their insurance through the A.M.A. Attorneys get their insurance through the bar. C.P.A.s through their associations. Make sense?
ALL: Yes.
MR. WATSON: With these types of insurance they receive a policy. With regular group insurance you would receive a certificate. Make sense?
ALL: Yes.
MR. WATSON: With this they get a policy. Watch out, franchise insurance is also known as wholesale insurance.
Credit Accident & Health
MR. WATSON: Credit Accident & Health . Now, do you remember credit life when you financed a car? If you died, it paid off the car. Credit health. If you get sick, it pays the car payment for you. Credit life and credit health will do the same thing, but for one benefit you have to die, and for the other you have to become sick or disabled. You guys got it?
ALL: Yep.
Worksite (Employer-sponsored)***
MR. WATSON: Worksite Wellness is the promotion of health and wellness programs and activities to support healthy behaviors and improve health outcomes while at work " for employees, and in many cases, their families as well.
Health Savings Accounts
MR. WATSON: Heath Savings Accounts (HSAs). These accounts allow individuals to contribute certain amounts to an investment account to cover medical expenses, provided they have a high deductible health plan.. This money will grow tax free and the money withdrawn tax free to cover qualified health care expenses. Individuals must be under age 65 and have a health insurance program with a high deductible. (For individuals, this high deductible is a minimum of $1600 with a cap of $80500 on out of pocket expenses. For a family this figure is $3200 for the high deductible and a cap of $16,100 for out of pocket expenses. You don't need to know the dollar amounts.)
MR. WATSON: Contributions are limited to 100% of the deductible. There are limits to the contributions. So for a family, they could contribute the maximum amount, equal to the policy's deductible, let the money grow tax free and use it (tax free) to pay their medical expenses as needed.
MR. WATSON: Qualified expenses are: doctors' fees, prescriptions and nonprescription, hospital expenses not covered by insurance, retiree health insurance premiums, Medicare expenses, COBRA coverage's, and qualified long term care services.
Tax Treatment of Group Health Plans.....very important
MR. WATSON: Tax Treatment of Group Health Plans. Employers take a tax deduction on their contributions to an employees' group health plan. Employees do not claim this as income. Individual employees usually do not get to take a deduction for their contributions. Only when their amounts of un-reimbursed expenses exceed 10% of their adjusted gross income can they take a deduction. But, only the amount that exceeds the 10% can be deducted. But, if you were able to take this deduction and later the insurance company reimbursed you, (it is no longer an un-reimbursed medical expense) you would have to "re-claim" this deduction in the current tax year.
MR. WATSON: When group disability benefits are payable to the employee they may or may not be taxable. If the employer was paying and tax deducting the premium then the entire benefit would be taxable to the employee. If the employer was paying and tax deducting (let's just say) 60% of the premium, then 60% of the benefit would be taxable to the employee. The employee can not take a deduction on his contributions, if any, but that portion of the benefit would be tax free. Ex. If the employee was paying 40%, then 40% of the benefit would be tax free.
