Past Issues
-October 2006Contact us:
Ed Bates
952.944.5044
Mary Bates
952.942.8355
Jereme Bates
952.944.2919
Did you know?
That in addition to high deductible employee cost sharing plans such as the HSA/HRA, insurance companies are designing alternative plans to reinforce utilization awareness. Higher office visit co-pays and increased in/out patient coinsurance create the same utilization awareness, without the reality of a front end deductible.
Quarterly Quote
"The true test of character is not how much we know how to do, but how we behave when we don't know what to do."
- John Holt
Written by Ed Bates
As most of you know we are a Minnesota based, family owned firm that has served businesses in this state for over 15 years. As a client or active prospect, you more than likely have had an opportunity to work with one of our principles, but are probably not as familiar with our other team members. I thought I would take a minute and share with you who we each are and what we bring to our clients. I am the senior family member, beginning my career in the corporate world in 1972. I have held management positions representing both buyers and sellers of insurance. I have specialized over the years in unique alternatives such as self-funding, Risk Retention Groups and other alternative approaches. I am licensed in all lines of insurance and of course available to all of our clients as a resource or as a sounding board for creative thoughts. I hold undergraduate and graduate degrees from Minnesota Stat e Universit y - Moorhead and St. Thomas University, respectively. My hobbies are running, boating and building projects. Mary Bates brings to our clients a unique knowledge of health insurance, having worked for numerous firms in the adjudication of health, dental and disability claims. Mary joined the firm in 1996 and has specialized in employee benefits, with an excellent knowledge of this challenging world of health insurance in Minnesota. She is licensed in Minnesota and Wisconsin and serves those folks with enthusiasm and hard work. Mary has a degree from Augsburg College in Sociology. She is a mother of three, and enjoys hobbies in tennis, golf, running and cooking. Jereme Bates is our newest member, introduced to many of you in December of 2002. He is licensed in all lines of insurance and currently spends a great deal of his time assisting corporations with their health insurance challenges. Jereme pursues his work at Bates & Associates, with the same enthusiasm he exercised when participating in Minnesota state tournaments for both football and wrestling. He is a graduate of the University of Kansas in Communication Studies and of course a huge Jayhawk basketball fan. Don’t get him started on that. All of us are here to serve your needs and look forward to our continued relationship. To learn more about Bates & Associates please go to our ever evolving web site at www.bates-inc.com
Written by Mary Bates
What is a HSA? HSA stands for Health Savings Account, and it basically replaces the old MSA’s effective 1-1-04. A HSA is a savings account for medical expenses matched with a high deductible plan. The savings account is owned by the employee, so it is portable. It’s like a 401k account for medical expenses. New changes in 2004 allow for both the employee and employer ability to contribute up to 100% of the deductible amount each calendar year. Not only are covered medical services up to the deductible amount paid out of this account, but other medical expenses like glasses, lasik surgery, orthodontia and dental, which normally are not covered health insurance expenses, can be paid out of this account. The contributions are pre-tax for the employee and a tax deduction for the employer. Contributions that are not used are rolled over to the next year and continues to grow. There is no “use it or loose it” with an HSA.
The HRA account is owned by the employer. In this scenario, the employer can reimburse the deductible portion as it is needed. If the member only goes in for their routine physical, or does not see the doctor that year, the employer or employee have no further expense. The odds are that only 50% or less will engage in medical treatment, so again the savings comes with probability of usage and savings in premium. Contributions towards the deductible that is not used, stays with the employer. With both programs, the insurance industry suggests the employers only reimburse one-half of the deductible amount to encourage smarter utilization by employees. With more consumer engagement the hope is to curb over utilization and encourage wiser spending. One restriction however, is that HRA’s do not allow Sub S corporation owners who own more than 2% of the company stock, to be reimbursed. In this case a HSA plan would be more favorable, or to at least “carve out” the partners to a HSA plan.
Written by Jereme Bates
Did you know that automatic withdrawal is available for your convenience through your health insurance carrier to deduct your monthly premiums?
One of the reasons that automatic withdrawal is a benefit to you and your company is that it reduces administrative confusion. Oftentimes an employer will add or delete an employee from their current billing by simply adding or subtracting that person to/from their current premium. More often than not, this works smoothly, but in some instances it may cause some administrative confusion. Therefore, by allowing the insurance company to deduct and credit your account throughout time, you will inevitably avoid administrative problems.
The second benefit to automatic withdrawal is it keeps your payments on time. This will eliminate late notices, double premium payments, employee cancellation letters, and possibly collectors. Paying on time helps strengthen your relationship with your current health carrier; while at the same time build your company’s financial track record.
Finally, automatic payment gives you peace of mind. More than anything, it is one less thing to worry about. It allows you to make payments on schedule, without taking time from your busy day. Automatic withdrawal has been an increasing trend throughout the past decade and because of its practicality will continue to increase in popularity throughout the future.