Covering Your Smile And Eyes In Texas
Paying out-of-pocket for yearly dental checkups probably won’t break the bank. But what happens if you need more serious dental work? Whether you live in Texas or anywhere else in the country, a root canal or crown can easily cost more than $1,000. If you’re working, and your employer-sponsored group health insurance plan includes dental coverage as part of its benefits package, the financial blow will be less severe.
If you’re not working or you’re not offered a dental plan where you work, you still have the option of purchasing separate dental insurance. Dental indemnity or fee-for-service plans allow participants to visit any credentialed dentist or dental specialist they wish. The participant pays the dentist at the time of service and gets reimbursed according to the plan’s coverage. This is a plan for those who enjoy the freedom of provider selection and don’t mind a higher monthly premium and greater out-of-pocket expense.
Dental Maintenance Organization (DMO) plans require members to seek all services through their assigned dentist. These affordable plans offer preventive services at little or no cost to the member. DMO plans differ in premium and copay levels. Dental PPO (Preferred Provider Organization) plans offer patients the choice of an indemnity plan and the affordability of a managed care plan.
Having dental insurance often does not entitle you to immediate benefits. Many of the individual dental health care plans in Dallas, Houston and throughout Texas have a waiting period for certain procedures. Routine care is usually covered immediately, but you often need to be covered for six months or more before you are covered for more expensive procedures.
And while vision insurance has become a mainstay benefit for employees at larger companies, there are still many individuals who pay out of pocket for their glasses and eye exams. For those who don’t get vision coverage with their health insurance benefits package, it may be purchased separately. And it’s usually provided in the form of a Vision Maintenance Organization (VMO) or PPO network. Coverage generally includes yearly eye exams and a percentage of the cost of eyeglasses and contact lenses. Some plans cover all or a part of the cost of laser corrective surgery as well.
In addition to insurance plans, discounts plans are very common for both dental and vision. Discount plans entitle you to care, glasses, and contacts from selected providers at a reduced price. Discount plans may be available through your employer, your health insurance plan, and numerous social and professional groups or they may be purchased directly. Sometimes discount plans are combined with insurance with some services being insured and with discounts for the other services.
If you’re a young, healthy individual and you’re insured, you may not need more than regular dental and vision exams just to catch any problems before they get serious. So you could purchase individual dental and vision plans to supplement your current health plan. But if you’re a young, healthy individual who not only needs dental and vision but health insurance as well, you should take a look at the revolutionary comprehensive individual health insurance solutions created by Precedent specifically for people like you. Precedent’s health insurance plans also include dental and vision coverage, as well as prescription drug coinsurance, all for a low monthly premium of around $100 per month for most people.
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at http://www.precedent.com
Small Business Health Insurance Basics In Texas
Finding the right group health plan for your business can be downright intimidating: sorting through lists of insurance companies and plans; checking and re-checking the dollars and totals for deductibles and co-pays; making sense of plan limitations and exclusions; deciphering a dictionary’s worth of insurance-speak. It’s enough to make anyone feel like a high-school freshman again.
Texas insurance law allows a wide array of health care coverage plans and packages. All group health insurance has its limitations and finding the right employee health plan at the right price can be challenging.
In Texas, the term “small employer” is a special insurance designation reserved for businesses with two to 50 eligible employees. The law provides some added protections to these businesses, including a 15 percent annual cap on rate increases due to health factors, a state-enforced guarantee that carriers cannot arbitrarily discontinue coverage, and a cooperative purchasing provision that lets small employers pool their purchasing clout to negotiate lower rates.
For employees of small businesses in Dallas, Houston and throughout Texas, the law provides several ways to maintain benefits after leaving a job and limits the waiting period before pre-existing conditions are covered.
Beyond these requirements, small-employer carriers may offer a wide variety of plans, with virtually any combination of features and benefits.
Small-Business Coverage Eligibility
Texas businesses with two to 50 eligible employees may obtain small-employer coverage from either a traditional insurance company or a health maintenance organization (HMO). Eligible employees are defined as those who usually work at least 30 hours per week; are not classified as temporary, part-time, or seasonal; and are not already covered by another group health plan. A business’ owners count toward the employee total.
The number of eligible employees — not total employees — determines whether a business is considered a small employer under Texas insurance law. For example, if your business has 60 total employees, it could still qualify if six of the workers are part-time and four have coverage through some other source, such as a spouse’s plan.
If you decide to offer a group health plan to your employees, you must make it equally available to all of your eligible employees and their dependents.
Coverage is available under a small employer health benefit plan if at least 75 percent of a small employer’s eligible employees elect to be covered. Carriers must always “round up” when calculating the percentage. For example, a five-person business with only three employees wanting to participate satisfies a 75 percent requirement by rounding up.
However, in the case of a business with only two eligible employees, the law requires 100 percent participation. A husband and wife working in a business must be counted as two separate employees. Neither of the employees is eligible for coverage as a dependent of the other.
If you provide a health plan, state regulations and a federal law called COBRA (Consolidated Omnibus Budget Reconciliation Act) allow employees to maintain benefits for a period of time after separation from the job. It is your legal responsibility to inform employees of their rights to continue coverage. Former employees who choose to continue their coverage through COBRA or state continuation must pay the full cost of the plan. You are not obligated to contribute toward their premiums, even if you previously paid a share. Ask your carrier for details about your responsibility toward former employees.
Types of Plans Offered
Health plans are classified as either “state-mandated plans” or “consumer choice plans.” A state-mandated plan provides certain required minimum features and coverages. A consumer choice plan is any plan developed by a carrier that excludes some state-mandated benefits. Generally, consumer choice plans that do not include all the state-mandated coverages will save you money on your monthly premium.
Although consumer choice plans are sometimes called “standard plans,” be careful not to interpret the term to mean that the coverages provided are “standardized.” Each carrier’s consumer choice plan may be different, and a carrier may offer several different consumer choice plans.
Some state-mandated benefits continue to be required for consumer choice plans, including coverages for:
* Phenylketonuria treatment, if prescription drugs are covered.
* Complications of pregnancy.
* Minimum hospital stay after childbirth (federally mandated).
* Reconstruction surgery following a mastectomy (federally mandated).
Consumer choice plans may vary depending on the type of carrier offering the plan. For example, HMO consumer choice plans must pay for 20 outpatient mental health visits per enrollee per year, but that’s not a requirement in indemnity plans. In addition, unlike insurance companies, HMO consumer choice plans must include basic health care services, such as inpatient, outpatient, and preventative services. Carriers may offer optional benefits that vary widely from plan to plan.
You don’t have the time for all this research and number crunching. But can you really afford to leave it on your “maybe someday” list? As the cost of medical care rises, the risks of not having health insurance are more apparent than ever. Today a single injury or illness –if uninsured– can leave a family in financial ruin. Moreover, health coverage is a key benefit of employment. You may not be able to hire and keep the best employees without offering it.
Another alternative to group health insurance plans, which can be unaffordable for many small businesses, is to offer individual health insurance options to your employees. By law, an employer is not allowed to contribute to these plans, or that would be treated as group insurance under Texas state law. But you can still help your employees become insured in a good plan and improve their health and well-being and also improve employee retention in the process.
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at http://www.precedent.com
Insurance: Beware Of Universal Life
Has a life insurance agent suggested that you buy ‘permanent’ insurance such as Whole Life, Universal Life or Variable Universal Life? The reasons they give seem so compelling, but are they in your best interest? Here’s an explanation of the basics, plus what the insurance agent isn’t telling you!
There are two broad categories of life insurance–term and permanent. The basic idea behind life insurance is that if you die prematurely, there will be a pot of money there to take care of your loved ones. That pot of money is referred to as the ‘death benefit’.
The cost of life insurance is based on your age, your gender and your health. The insurance company bases the premium on the risk that you will die. The older you are or the poorer your health, the more expensive the insurance will be.
The ‘raw’ cost of insurance goes up every year because the risk of death increases every year. Term and permanent insurance approach the payment plan differently. With level term, these increases in cost are spread out over 10, 20 or 30 years and the premium is kept the same. If you renew your policy at the end of the term, your insurance costs will increase.
With permanent insurance, your premium stays the same as long as you own the insurance, up to age 100. That way, you shouldn’t be in a situation where it becomes too expensive as you age. Initially you pay more than the raw cost of insurance and that money is kept in reserve. Once the raw cost of insurance is greater than your premium, the difference is taken from the reserve.
The difference between Whole Life, Universal Life and Variable Universal Life has to do with the return you earn on that money while it’s kept in reserve. Whole and universal essentially pay interest while variable universal allows you to ‘invest’ that reserve in mutual-fund-like accounts.
On the surface, it may seem that there shouldn’t be a lot of difference between the premium on 20-year term and a universal policy with the same death benefit. But let’s look at some real numbers. The annual premium for a 45-year old man in excellent health for $1,000,000 in coverage is $1400 per year for 20-year term. That man would pay roughly $8,000 a year for permanent insurance. That’s right–about $6600 more every year.
That reserve in the permanent insurance can become a substantial over time, so they give you the ability to borrow the money held in reserve. This has spawned the use of permanent insurance for needs other than the death benefit, such as a way to build a retirement nest egg. The ‘ploy of the day’ is that you should take all the equity out of your home and put it into a universal life insurance policy because it will allow you to build your wealth more quickly. (I expose the fallacy of that argument in a future article.)
What your insurance agent isn’t going to tell you is that the commission on permanent insurance can be around 70% of the first year premium and then maybe 5% a year on additional premiums. Commissions on first year term premiums can be as high as 100%. In our example above, the agent will make about $5600 on permanent versus only $1400 on the term. This higher commission is a tremendous incentive for agents to sell permanent insurance instead of term.
The result is a huge conflict of interest between the needs of the client and the desires of the agent. I would like to think that every agent will always do what’s in the client’s best interest, but we know that’s not the case. And most agents are convinced that term is a waste of money and that permanent life insurance is the better choice. I don’t.
I believe that permanent life insurance should only be used in special situations, such as to cover estate taxes due at death. I do not think it should be used when you want to provide for your family in the event of a premature death. I don’t think it should be used as a way to ‘build wealth’ or as a type of retirement plan. In my next article, I’ll explain why.
Nationally-syndicated financial columnist and Certified Financial Planner Jeffrey Voudrie provides personal, in-depth money management services and advice to select private clients throughout the USA. He’ll answer your financial question FREE at http://www.guardingyourwealth.net/
Insurance: Beware Of Universal Life II
Permanent insurance such as Whole Life, Universal Life, Equity-Indexed Universal Life and Variable Universal Life is regularly promoted as the perfect retirement vehicle or the new way to build wealth. This week I will expose the fallacies of those arguments.
First of all, I believe that the need for life insurance should be met in the most economical way possible. With universal insurance, where life insurance is combined with investing, you end up paying too much for the insurance while earning too little on the investment. It’s the worst of both worlds. Term insurance allows you to purchase the life insurance you need at a lower cost, while giving you the flexibility and control over your investments.
Universal policies unnecessarily lock you in. You’re committed to paying a high annual premium. For instance, the annual premium on one million dollars of universal life for a healthy, 45-year old non-smoking male is around $8,000. That’s $8,000 each year—for the rest of his life.
On the other hand, the annual premium for one million dollars of 20-year term insurance is about $1400. That’s a difference of $6,600 each year. With universal insurance, most of that additional premium builds the cash value of the policy. But because of administrative and other fees, the amount added to your cash value each year is reduced. By the way, has your agent mentioned there is a way to buy no-load universal life insurance?
Insurance agents tout universal policies as a wonderful investment vehicle. They’re not. Better returns can certainly be found elsewhere. Many of these policies are pitched to people in their prime earning years, most of whom are raising their families.
These investors will earn a far better return by first paying down their debt. That’s a guaranteed return, of up to 20% on credit card debt. For those without debt, any extra money they have is better used for 401Ks, IRAs, etc.
The tax benefits heavily promoted as a major benefit of universal insurance are suspect as well. It’s true that money drawn out of these policies for retirement spending isn’t taxed, but that’s because this money is actually a loan. In essence, you’re borrowing your own money. And since it’s a loan, it has to be paid back.
If you hold the policy until you die, a portion of the death benefit is used to pay back the loan. If you surrender that policy, the cash value is used for that purpose. Suddenly that money isn’t tax-free. Just like you may have to pay capital gains taxes when you sell your home, you will have to pay taxes on the amount of the cash value that is greater than the amount you paid in premiums.
Last of all, you need to be aware of the tremendous financial incentive agents have in selling universal life insurance policies. Commissions on universal insurance are 70% or more of the first year’s premium, then 5% of the premium each year after.
One of the most egregious sales tactic used to promote universal policies as an investment is that you should take the equity out of your home and ‘invest’ it in a universal life insurance policy. The argument is that your home equity is an asset that should be used, not left dormant. The tax benefits are also touted–the transfer is tax-free, the growth is tax-free and the distribution is tax-free! That’s triple compounding, they say.
Do not fall for this trap. Frankly, those recommending it should lose their licenses. The arguments used to support this scheme are all smoke and mirrors. The tax benefits are bogus, you lose control of your money and the agent earns a big fat pay day.
Nor will the earnings be what you expect. Most of the time you will end up paying more in interest on your home equity loan than you will make in the policy. The distribution is tax-free, but all death benefits paid on life insurance policies are tax-free. So you can leave the equity in your home, buy a term life policy and have the same tax-free distribution benefit.
Nationally-syndicated financial columnist and Certified Financial Planner Jeffrey Voudrie provides personal, in-depth money management services and advice to select private clients throughout the USA. He will answer your financial question FREE at http://www.guardingyourwealth.net/
Mom-And-Pop Shops In Texas Encounter Hurdles When Buying Health Insurance
The results of an April 2004 Commonwealth Fund white paper* show that the economics of small business group insurance makes offering health benefits to employees is risky. The current lack of health insurance for individuals in Texas, as well as the rest of the country, is closely associated with the inadequacies of the small employer market. Of the approximately 44 million individual Americans without health insurance, over 80 percent come from working families. Nearly 50 percent of uninsured workers are either self-employed or work for firms with fewer than 25 employees.
Small and Large Companies Benefits and Premiums
Surveys of employers from 1989 to 2003 reveal that more rapid premium increases are forcing small firms to impose higher cost sharing. In 2003, premiums for small firms (3,199 workers) increased 15.5 percent, outpacing the 13.2 percent increase for large firms (200+ workers). From 2000 to 2003, deductibles among small firms increased 100 percent in PPO plans when employees use in-network providers and 131 percent when they use out-of-network providers. For large firms, deductibles in PPO plans increased 33 percent and 44 percent, respectively. Also in 2003, 40.3 percent of employees in the smallest firms contributed 41 percent or more of the total family premium, compared with only 11.2 percent of employees in large firms.
Share of Premium Contribution
In addition to paying higher deductibles, employees in small firms contribute a greater share of the premiums. In 2003, 40.3 percent of employees in the smallest firms contributed 41 percent or more of the total compared with only 11.2 percent of employees in large firms. Among all small firms, 38.2 percent of employees contributed 41 percent or more of the family premium. For single coverage, 7.6 percent of employees in the smallest firms contributed 41 percent or more of the premium, compared with 3 percent of employees in the largest firms. However, employees of the smallest companies were more likely to contribute none of the premium (61.6% vs. 14.0%).
This increased cost sharing, especially of family plans, in small firms is consistent with the finding that small employers get less value for their premium dollar than large employers.
Small Equals Less, Plus More Risk
Small employers not only get less value than large employers when they provide health benefits, but they face greater financial risk in doing so. Lower value is a natural consequence of small size and the failure to join together in pooled purchasing groups with a long-term commitment to shared risk.
In any given year, premium increases, the cost of single coverage, and employee contributions vary more from firm to firm for small than large firms. Small firms lack purchasing power in the insurance market and unlike larger companies, are unable to reduce insurance costs by bearing the risk themselves and self-insuring.
This means a fundamental change in the small employer market is necessary. This change requires new options for helping small firms gain access to the advantages larger firms have in purchasing health benefits. Burdened with inherently higher administrative costs, having fewer lives over which to spread the risk of catastrophic costs, and lacking the purchasing power of large firms to negotiate with insurers, small employers are doomed under current practices to separate but unequal status.
What nobody knows is how many individuals decide not to start a business because of the greater risk in the small employer market when purchasing health insurance. Yet if small employers are the principal source of innovation, as well as economic and job growth in the American economy, then this greater risk costs, not only small employers and their workers, but the overall American economy.
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at http://www.precedent.com
Understanding Disability Insurance
You probably wouldn’t think twice about the fact that health insurance is absolutely essential, but what about disability insurance? It’s just as important. No matter how careful you are about job safety or staying healthy, sometimes there is nothing you can do to prevent an accident or illness. While your health insurance is vital in getting you treatment, what happens when you can’t go back to work right away because you’re recovering? Your bills need to be paid, and your family needs to eat. This is why disability insurance is absolutely necessary.
Disability benefits will help you with your cost of living during the time that you are not well enough to return to work. They will usually not pay enough money to equal your working wages, but should be enough to pay your basic bills. Almost all disability insurance does not begin immediately, but requires a waiting period of two weeks to several months.
If you are expected to be unable to work at all for at least a year, you may be eligible to have Social Security pay you disability benefits. The amount you will receive will depend on your age and how much money you were making at your job.
There are also types of disability insurance that your employer may offer, where the premiums are taken out of your paycheck. Almost all employers are required by law to offer short-term disability insurance of some sort, like paid sick leave, although the amount of time available may vary from just a few days up to six months, or even two years.
You also may be eligible for your company’s long-term disability insurance plan, if they have one. This may cover you in a situation where an injury or illness prevents you from working for a very long time, or even for your lifetime. Check with your state laws to see what your employer is required to provide you with, and ask your benefits department to explain the plan in detail.
While you are investigating your insurance options, you may wonder what some of the terms used really mean, like ‘non-cancelable’ or ‘guaranteed renewable’. Non-cancelable means that your policy can never be changed or canceled, unless you don’t pay your premiums. This helps to make sure you aren’t discriminated against when you are not well enough to work. Guaranteed renewable means that the policy will be the same every year, and the premiums cannot be increased, which means that you don’t have to pay more after having a workplace accident, unlike a lot of auto insurance. If you don’t understand any other terms in your policy, be sure to ask your insurance administrator to explain them, or look them up yourself.
You may think that this sounds like a lot of work, but it’s really not too difficult. Understanding the principles of disability insurance will allow you to make the right choice of an insurance policy for your unique situation, and to be reassured that your family and your home will be protected in the event of sudden illness or an accident on the job.
Quamrul Polash is an established author and publisher on topics related to affordable health insurance, healthy living. Get a very popular report for FREE at http://info.healthinsurancequoteusa.com To learn much more about affordable health insurance, visit http://www.healthinsurancequoteusa.com
Cheap Life Insurance Makes Preparation Possible
Buying cheap life insurance may be the only way to prepare yourself and especially your loved ones for the unfortunate event of your death. I probably don’t have to remind you that death is unavoidable but there really are people who try to be prepared in case something goes wrong.
If you happen to be the only earning member of your family, if something unexpected happens to you leading you to your death, you need to make sure that your loved ones have alternatives. Well-organized people take a structured approach to this by buying life insurance.
Getting insurance is very easy nowadays. There is an impressive number of companies to choose from and so many forms, you probably don’t even know where to start. The real difficulty will be filtering through all those options and finding a cheap insurance policy that will give you the coverage you need.
Life policies are very varied in nature. For example, there are insurance policies that cover your death. Then, you can choose life insurance that spans only for a specific period of time, usually somewhere in between 10 and 25 years.
However, it is the cost of these insurance policies that makes some people decide not to go through with it. They have to pay a monthly or annual fee without being to able to see immediate results. This is something that makes people lose their determination. But this is not a very wise decision.
The solution is cheap life insurance. If you are wondering if there is such a thing, the answer is yes, there is. What you need to do to get it is to carefully analyze all the insurance companys’ offers. First and foremost, you need to think about your requirements - your own needs. You don’t need to accept the first big figure that the insurance company throws at you.
You need to take a look at the premiums, also. The premiums are in direct correlation to the amount of insurance you decide to pay. That’s why you need to choose one that will give you the financial freedom to also pay the premium.
The majority of insurance policies also come with added benefits: medical benefit, loss of income benefit, etc. If you don’t need them, it’s advisable to pass. If you have medical cover through your employer, there’s really no need to take on more.
As a last thought, I must tell you that as everything else in life, you need to conduct thorough research if you are to make an educated choice. Make sure you check out as many companies as possible and see what their offers are. Always have your requirements in mind, because it’s your necessities that matter.
The truth is if you have a family, you want to do everything for them. Life insurance is a very wise choice to make, as death can occur from the least imaginable of sources. With such insurance, you make sure loved ones and family members are at least a little bit financially comfortable. After all, finding cheap insurance is not that hard.
More tips, advice and guidelines for life insurance buys:
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Perma-Lancing In Texas, Without A Health Insurance Net
For many self-employed individuals in Dallas, Houston and elsewhere in Texas, health insurance is the last thing they can afford. Those who work for themselves often say, “I can’t afford to get sick. Period.” The term “sick days” isn’t even something that crosses their minds, let alone enters their vocabularies.
In more recent years, many of these self-employed or “perma-lancers” or “perma-temps” as they call themselves, work for a growing number of small companies that don’t provide work benefits. Perma-lancers have become known as people who work as if they were full-time employees, but don’t receive benefits from their employers, like health insurance, paid vacation days, and paid sick days.
Such individuals work for a single employer on a long-term basis and do much the same work as their co-workers who are on the permanent payroll. Employers save on payroll taxes and employee benefits by refusing to switch perma-lancers to employee status. More and more businesses are using perma-lancers as a means of reducing personnel costs, particularly the cost of benefits.
But perma-lancers also offer businesses the flexibility to bring in resources only when they are needed, making this concept a “just-in-time” inventory of human resource talent, a practice that originated in product assembly operations such as Austin’s Dell Computer Company. Opponents of this approach argue that it’s merely a way for businesses to avoid paying benefits to some employees. Proponents contend that it’s a necessary tool in today’s globally competitive world. Along with the absence of benefits, perma-lancers are employed at the whim of market fluctuations where it’s not usual for an assignment to stop if, for example, the advertising revenue falls off for a quarter.
One of the reasons for so many perma-lancers currently on the market is the recent collapse of the dot-com bubble, when thousands of freelancers poured into the workforce. Many perma-lancers love what they do, but their enthusiasm is dimmed by their concerns over whether they can maintain a full-time career, as well as maintaining their health.
“Every time I get sick, I worry,” says one perma-lancer. “I have to take off work, without pay. I have to pay the doctor full price. When getting prescriptions, I ask for generics. I’m careful about crossing streets, because if I get hit by a car, that’s five grand.”
Many of the 20-something perma-lancers also think twice about risky sports, like water skiing or snow boarding, worried about the expense of even a minor injury, such as a sprained wrist or ankle.
A number of perma-lancers seriously consider buying individual health insurance, but many estimate they could spend up to 50 percent of their post-tax income just on housing and health insurance. With that in mind, many self-employed individuals think it makes more sense to play it safe, save the money and go without health insurance.
But perma-lancing individuals are not the only working-class Americans without health insurance. Unfortunately, there are currently more than 10 million Americans who are solidly middle income but uninsured, with many more individuals working at lower wages with the same problem.
Most of these individuals think that pricing out comprehensive health care insurance isn’t even an option, though public opinion polls show that millions of American rank healthcare about third among their greatest concerns, after taxes and national security.
With the upcoming presidential elections, many perma-lancers are probably considering casting their votes based, in large part, on what the presidential candidates have to say about healthcare.
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at http://www.precedent.com
Out On The Edge - The Lack of Health Insurance Benefits For Nonstandard Workers In Texas
A 2005 Commonwealth Fund white paper reported on two important trends in the U.S. workforce - the increasing prevalence of workers in part-time, temporary, contract or non-standard positions, and the decline in access to employer-provided health insurance.
The fact that fewer and fewer individuals in Dallas, Houston and throughout Texas are covered by health insurance as well as the diminished quality of coverage brought about by higher copayments and deductibles has gotten a lot of attention. At the same time, there has been remarkably little attention paid to the status of nonstandard workers, who are particularly vulnerable because their employment status often excludes them from employer-based coverage. This increases their reliance on family members’ policies, public coverage or leaves them without insurance completely.
Nonstandard workers currently make up approximately 25 percent of the nation’s workforce, totaling 34.3 million workers. Part-time workers make up the biggest category within this group, followed by self-employed independent contractors and direct-hire temporary workers. Nonstandard workers also include on-call and day laborers, temporary help agency workers, independent contractors, and contract company workers.
While access to employer-sponsored health insurance is on the decline for all workers, it is an especially serious problem for nonstandard workers. A recent study showed that 74 percent of standard workers have health insurance through their jobs, compared to only 21 percent of nonstandard workers. Because of this disparity, nonstandard workers are thought to be uninsured at twice the rate of standard workers. Nonstandard workers also rely on government insurance at five times the rate of regular workers and are insured through a spouse’s health insurance plan at three and one-half times the rate of regular workers.
In addition to being less likely to be offered employer-sponsored health insurance, nonstandard workers are also less likely to take up employer-sponsored coverage when it is available. About 87 percent of regular full-time workers are offered health insurance, compared with only 40 percent of nonstandard workers. Among those nonstandard workers who are eligible for employer-based plans, only 54 percent choose them, while the selection rate for standard workers is 85 percent. Nonstandard workers who turn down coverage said it was either because they had coverage through another source or because the plan was too expensive.
Families of nonstandard workers are also affected by their spotty insurance coverage. Only 15 percent of children and 16 percent of spouses of nonstandard workers have health insurance through the nonstandard worker’s employer. In fact, standard workers’ children and spouses were covered by the spouse’s employer at three times the rate that they were covered by the nonstandard worker’s employer. Almost one in five family members of nonstandard workers was uninsured (18% of children and 16% of spouses). A significant share - 10 percent of children and 6 percent of spouses - relied on public health insurance for coverage.
Because of the rising cost of health insurance, some employers and individuals - both nonstandard workers and regular employees - are turning to low-cost products like high-deductible health insurance plans, limited benefit health insurance and medical discount cards. While these options are typically more affordable than comprehensive health insurance, coverage is limited. A recent Iowa Policy Project (IPP) Survey of Fringe Benefits and Nonstandard Work found that 18 percent of nonstandard workers had discount cards, but no insurance coverage. However, almost all these workers mistakenly reported that their discount card was a health insurance policy. This has led to suggestions that rates of uninsurance may actually be underestimated.
The Iowa report concludes that improving access to health coverage for nonstandard workers will require addressing three issues: regulating employer-employee relationships to ensure that nonstandard workers enjoy the same individual and collective rights as conventional employees; strengthening the foundation of employment-based health insurance, making it easier for employers to offer coverage and workers to afford it; and expanding alternatives to employment-based coverage.
Current policymakers need to start identifying the obstacles facing the uninsured and underinsured, as well as each individual’s potential for eligibility, according to income, job tenure, or firm size. It’s going to be a formidable task to provide nonstandard workers with access to group-based insurance - by increasing access to conventional job-based coverage, creating new health insurance purchasing pools, or by expanding individual health insurance alternatives.
Although most individuals are covered under employment-based coverage, there’s no requirement that employers provide it. Most employers - especially those with fewer employees’ have strong reasons to avoid taking on the health insurance burden. Some small business employers have responded to rising health insurance costs by shifting more coverage costs to employees or dropping coverage altogether.
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at http://www.precedent.com
Searching For The Shovel In Texas: The Young Are Digging Themselves Out Of The Healthcare Crisis
Perhaps it shouldn’t feel like suffering a personal wound when learning about the state of health care coverage in Dallas, Houston and throughout Texas, or anywhere else in this country - but it does. In fact, for most of us, it really does.
It tends to shatter the ideals we were taught as American children - that everyone is equal, no one suffers unwillingly, and working hard will get you somewhere - when we learn that approximately 18,000 uninsured individuals ages 25 to 64 suffer “excess” deaths annually.
Health insurance premiums have increased by 15% per year over the past five years, more than triple that of the inflation rate, 2.5% . Medical costs are through the roof, quality of it often below sewage level, and an average citizen might feel that he/she has to overwork him or herself into a coronary just to get it.
One third of firms did not even offer health insurance coverage to their employees in 2004 , most of them citing high premium costs. It does not seem a coincidence then, that one-third of uninsured adults did not fill at least one prescription, and/or receive at least one recommended test, due to cost .
In Texas alone, 9,787 deaths in 2002 were attributed to lung and bronchus cancers, arguably the most preventable cancers with proper screening and smoking cessation programs. Perhaps it shouldn’t be personal, but when young adults consider the reality of an impending personal health crisis, or their children not receiving the absolute highest quality of care available because of poor or non-existent coverage - and perhaps not even knowing the difference - yes, it tends to chafe. This is a biologically-based life, after all, and those lungs and hearts keep us in the game.
In order to address the problem, it is important to attempt to understand why this is happening. It’s not just that premiums are increasing; it’s that the economy is shifting. Texas and the rest of the United States is no longer manufacturing-based; it’s service-based, and small businesses which cannot afford large, corporate healthcare packages - in turn, cannot offer coverage to their employees. Three-fifths of all workers provide their labor to small businesses, and less than two-thirds of these companies offer health benefits .
Even if they could, their employees might not be able to afford group health insurance; employee spending for health care coverage increased 143% between 2000 and 2005 . To many, it’s simply unrealistic. So what we have, without exaggeration, is a health care crisis -lack of or inadequate coverage, which leads to lack of or inadequate health care.
But let’s not be entirely gloom and doom about this, shall we? After all, whiners with no solutions are a bit like well diggers in the desert with no shovels. We can analyze the situation for days at a time (”yep, that’s a lot of sand”) but then, of course, we die of dehydration. There are, in fact, solutions, and perfectly logical options at that.
(1) Introduce revamped, affordable health insurance plans addressing the uninsured’s actual needs.
Sounds obvious, right? Well, evidently not. Approximately 58% of uninsured adults in 2004 reported having changed or lost their jobs in 2003 , while only 7% of the unemployed could afford COBRA insurance (an extension of former employers’ health plans), at an average of $700 per month, per family. While it’s also easy to blame insurance companies for high premiums, they, too, are absorbing higher hospital and clinic bills, the consequences of malpractice suits, and a surge of baby boomers growing older. It may be more productive, for now, for the public to demand new plans that are reflective of today’s needs, than to try to tear apart the industry as a whole. This is not at all unrealistic, and pushing for such changes could make a big difference.
Many of us, for instance, need affordable interim or basic coverage while we build our careers, and would gladly pay a reasonable premium for a reasonable policy. We need these policies to cover the millions slipping through the cracks: students, entry-level workers, those in between jobs, on leave of absence, or those just starting out in their professions (and who may not be able to afford buying into group health insurance). Similarly-crafted policies need to also address the growing number of workers in contract, freelance, self-employed, and full-time positions, in which benefits are self-provided through individual health insurance plans.
These plans need to be accessible and affordable to the increasingly independent, young individual with middle and lower-middle class budget constraints. Obviously, the market is there.
(2) Purchase “portable” individual health insurance plans.
Considering the majority of the uninsured in 2004 had changed or
lost their jobs, and considering that there are many who stay in their current
positions simply for the health insurance coverage, individual health insurance may make more sense, as they are “portable,” that is, they can follow a worker from job to job. With individual health insurance policies, workers are no longer tied to a position just for the sake of health insurance, nor do they need to worry about the exorbitant cost of COBRA in the case of job loss. Many companies, in fact, are willing to offer an allotment to cover all of their employees for the purpose of purchasing individual health insurance. In this way, insured individuals can relax, knowing they will still have coverage if they switch, or lose their jobs, even with pre-existing conditions.
(3) Increase coverage of preventative care.
According to the American Cancer Society, an individual’s risk of getting, or dying from, cancer greatly decreases with prevention, early detection, and proper screening programs. Smoking alone causes 30% of all cancer deaths, and lifestyle changes can also dramatically reduce cancer risks . Yet, those lacking insurance receive less preventative care, are diagnosed at more advanced stages of disease, and tend to have higher mortality rates than the insured . Even many of the insured do not have access to these programs. Obviously, standardizing affordable packages that offer preventative services would not only reduce incidences of disease, but also dramatically reduce treatment costs. Even basic plans need to include an allotment for preventative care, in addition to some version of basic dental and eye coverage - like annual exams.
So, yes, my sense of good citizenship has been a bit wounded by the current state
of healthcare coverage. We used to worry about the retirees and children who could not provide their own health coverage; now we worry about almost everyone. Most of us are hard-working, helpful members of society who would pay a reasonable premium if we had access to it. But, if this system is to be revamped, citizens must speak louder for the necessary changes. We may be in the desert of healthcare, after all, but we are not without shovels.
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at http://www.precedent.com