Tuesday, March 10, 2015

Tuesday Afternoon Linkfest

■ Item 1: Now that Open Enrollment v2.0 is behind us, I'm still getting calls from folks who want to buy new coverage or change their current plan. For the most part, I have to tell these folks that they're out of luck until the Fall. But some lucky (for a given value of "lucky") individuals will experience a life change that triggers a Special Open Enrollment opportunity. Click here for a run-down of how that works.

■ Item 2: Our friends at FlexBank (resident gurus for all things HSA/FSA/HRA) have some news for folks paying their disability premiums pre-tax: if you do, your benefit is likely going to be taxed if/when you have a claim. I like to advise people thusly: would you rather pay tax on the seed, or the harvest?

In any case, here's their take:
• If premiums are paid entirely with pre-tax dollars (through the Section 125 plan), then the benefits an employee receives upon becoming disabled are taxable; or
• If premiums are paid entirely with after-tax dollars, then the benefits are not taxable. This includes employee post-tax contributions as well as employer paid premiums reported as income on the employee's Form W-2; or
• If premiums are paid with a combination of pre-tax and after-tax dollars, then the benefits are taxable on a pro rata basis, calculated using a three-year look-back period for group disability plans and a one-year look-back period for individual disability policies.
The more you know...

■ Item 3: For the most part, the ObamaTax outlawed so-called "mini-med" plans, but that doesn't mean that their completely dead in the water. Evidence of that comes from an unlikely source: Our Betters in DC

"Regulators want to keep insurers or other parties from using cleverly designed excepted benefits products that would create a new class of limited-benefit medical insurance plans that would be exempt from the PPACA [regs]"

The challenge is that many of the applicable rules also affect more traditional lines like dental. On the other hand, they may have found an interesting new life for mini-meds as "limited wraparound products." I've long believed that this was a great use for these plans: since ACA-compliant policies often come with outsized deductibles and out-of-pocket costs, having a "supplement" (ala MediGap plans) might make sense.

That is, if there's any money left over in the budget after paying the hefty ACA plan premiums.
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