Question: I have an individual health insurance policy paid for by my employer. I also have the benefit of being on my husband’s health insurance through his employer. I always thought that MY coverage was primary over the coverage provided by my spouse’s employer. But my carrier said group policies are always primary over individual policies. Is this true? (South Carolina).

Answer: Coordination of Benefit Rules were codified by the National Association of Insurance Commissioner in 1986 and each state uses this model with some modifications. The rules cover how the primary payer is determined when an insured employee or dependent has double coverage. For example the rules state that the group plan covering the insured as an employee pays first. To determine who pays first on dependent children’s claims, the plan covering the parent whose birthday is earlier in the calendar year is primary.

The Coordination of Benefits endorsement on group health policies does not apply to individual health insurance policies so they generally pay their full benefits regardless of other group health policies in force. But there are variations between states, it is important that you review the provisions of your individual health insurance policy because they will sometimes include their own provisions about other insurance.

Question: My company pays for half of my premium and I pay the other half along with full coverage for my three year old daughter...the deduction for my health insurance had increased...I told my employer that I would like to opt out of the company policy and purchase individual insurance, because I could get a better policy at a cheaper rate and they advised me that I cannot cancel my insurance until open enrollment in November. I was never advised that my premiums were increasing, there was not a meeting, email, nothing letting me know. Can my employer force me to stay on their company plan until November?

Answer: Yes. Apparently your employer did a lousy job of communicating the increase in your health insurance contribution back in November when you could have opted out. Employees should have the option to decline medical coverage or to purchase individual health insurance as long as their decision does not affect the medical rates of those remaining in the plan. Opt-Out provision are restricted to open-enrollment periods because it was determined that about 20 percent of a plan's participants generate 80 percent of the claimed costs in any given year. In most cases, those who opt out of a medical plan are the healthier population; employees expecting high expenses prefer the extra coverage. Since employees with more medical needs tend to stay in the plan, when employees opt out there are fewer premium dollars coming into the plan, but claim and administrative costs do not go down in the same proportion. This results in higher premiums for those remaining in the plan. That's why restrictions are in place for right to opt out.

Question: My employer offers health insurance to me at no cost to me. My husband also has me covered through his insurance at his place of employment. I have been told that my insurance through my employer has to be my primary. I want to opt out of my insurance through my employer and only have my husband insurance, but my employer is telling me that I can not opt out and that I have to take the insurance. Is this right? The board pays our insurance, but I would rather them put my board paid money into and annuity.

Answer: The responsible thing to do would be to take the coverage your employer is offering and cancel the coverage being offered through your husband’s employer. Your sense of entitlement is especially astonishing at a time when many people lack good health care and some can’t get it at all.

Question: My employer has just sent me an email stating he will no longer cover the insurance premium for my spouse and my cost for myself will increase. He states this is effective in March. Is this legal? This is a small Colorado employer.

Answer: Yes. Your employer was never required to cover your spouse and did so voluntarily. If an employer offers a group health plan, he or she is required to be fair. For example, it the employer offers coverage for spouse or other dependents, he or she must offer like coverage to all employees of that class, e.g. hourly, salaried, management, etc..

From what you say, your employer is making a choice to no longer contribute to dependent coverage for all enrolled employees effective on the March 1 plan renewal date. That is his right and probably a necessity for the health of the business. Employer sponsored health insurance costs have increased by 50% over the last 5 or 6 years.

Question: I am turning 65 and work half-time. I am not eligible for health benefits, so I am on my wife’s policy. It is at a state university and it is through Anthem. Will I be able to continue on her policy, or will Anthem kick me out?

Answer: When you turn 65 you have health insurance available. It’s called Medicare. Your wife’s employer is no longer obliged to offer you coverage as a dependent on her employer-sponsored policy. Medicare is excellent coverage and it’s available to you for less than $100 per month. Anthem will not “kick you out” because they collect a nice piece of change from your wife’s employer as long as you remain on the group plan. Do the right thing and opt for Medicare.

Question: I am 9 weeks pregnant and recently qualified for PCIP (for people with pre existing conditions without insurance 6 months). It is ONLY maternity coverage. Coming up in February, I am eligible for my work health insurance to kick in. I am confused. Can I keep my maternity with PCIP and enroll in work (anthem blue cross for Dental, vision, and medical come February? I am concerned because before applying for PCIP, I turned to anthem and they denied me because it was a pre-existing condition. Can I have both insurances? Please help. Thank you.

Answer: You are very fortunate to be pregnant and have 2 options for coverage. Let me start by saying that you can’t have both PCIP and employer-sponsored group health insurance. You need not be concerned about selecting the employer-based coverage with Anthem Blue Cross as you cannot be declined due to preexisting conditions with group health insurance as you were when applying for individual health insurance.

Question: My wife lost her job and the medical insurance was through her employer. My job offers it but they are making me wait 6 months in my new position before I can sign up. Is that legal in Minnesota? Thank you, Jason.

Answer: Yes. Employers can set the new-hire waiting period up to 6 months before becoming eligible for the company’s health plan. Suggest you take your COBRA health insurance option for 6 months until you are covered under your employer-sponsored group plan.

Question: Do California employers have to provide health insurance to their employees?

Answer: The is currently no requirement for California employers to provide health insurance for their employees. Health care reform places no requirement on small business employers (less than 50 employees) to provide employer-sponsored health insurance in 2014 and beyond.

The Affordable Care Act (ACA) mandates that larger employers (50 or more employees) provide health insurance starting in 2014 or pay a penalties called the play-or-pay tax. The play-or-pay tax is one of the most significant tax consequences of health care reform. The tax will take effect in 2014, and it will have a significant impact on large employers subject to it. Both applicable large employers that offer coverage, and those who do not offer coverage to their employees will be subject to this tax. Employers will face another big decision due to this tax. Their question will be, “Should we offer healthcare coverage to our employees at all, or just simply pay the applicable tax?”

Question: I have insurance through my job. My kids are under my husband’s job insurance. I just received information that my job’s insurance is going to change the plan … It is way too expensive for just one person. My question is, do you think that my husband’s insurance would insure me?

Answer: Your husband’s employer has the option of not adding you on your spouse’s coverage if you have coverage offered by your own employer. You should ask your husband to inquire with his employer if you can be added. If so, you may have to wait until his next open enrollment period.

Question: What is the minimum employer contribution per employee for group health plans in California?

Answer Employers must pay at lease 50% of employees’ premium for lowest cost plan offered by the plan’s carrier(s). There is no requirement for the employer to make any contribution to the employees’ dependents.

Question: Our company health insurance is only offered as high deductible, What can i do with costs that I can’t afford?

Answer: Your dilemma is very common nowadays. On the one hand, your employer is probably doing the best he or she can by providing health insurance coverage of any kind. On the other hand, you, the employee do not perceive it as much of a benefit because the high deductible means high out-of-pocket expenses for covered medical expenses. Expenses your are afraid that you cannot afford.

It’s understandable that you feel like you are not getting much of a benefit, but here’s are couple things to remember: First, high-deductible health insurance is a whole lot better than no insurance at all. Even though you may never reach your deductible amount, you still get a big discount on covered medical expenses within your network, in some cases the negotiated amount that your end up paying is less that half the original billed amount. Secondly, if you were to have a catastrophic medical expense, say $50,000, the maximum out-of-pocket amount on your policy, probably no more that $10,000, would at least set a limit on what you owe that you could reasonably expect to pay off over time. So that high deductible insurance could make the difference between having to file for bankruptcy or not.

Question: What are the tax implication if my employer offers a health insurance plan and I decided to delcine and purchase my own? They do not offer an FSA.

Answer: If you opt out of your employer's group health plan in favor of your own personal health insurance plan, your health insurance premiums will be lumped together with your medical expenses and listed on your federal 1040 form as itemized deductions. You may deduct only the amount by which your total medical care expenses for the year exceed 7.5% of your adjusted gross income. Usually, only people with unusually high expenses and low income will find premiums to be tax-deductible.

I understand, that many employers are reacting to ever increasing group health insurance costs by asking employees to make greater contributions to the premium. Even though your share of the premium is a lot more than it used to be, it's usually a better deal to take the group coverage than to purchase personal health insurance. That's because state laws require the employer to pay a substantial percentage of the premium - usually at least 50% - for each employee. So even though you can find individual health insurance plans at lower premiums, they don't cover as much. The average group health plan has an actuarial value of 80% or more. That means the plan will cover 80% 0f the typical medical costs. Individual plans can have an actuarial value as low as 55%. Dependents are a different matter. Employers are not required to pay anything toward coverage of an employee's dependents and smaller employers typically do not.

So, bottom line, take another look at the employer sponsored health plan for yourself, but shop for personal coverage for your spouse and kids. Families do not all have to be on the same plan.

Question: If I am covered by group heath insurance, should I pay more for my wife?

Answer: Yes. In employer-sponsored group health plans, employees pay more to cover their spouse or children than they do for themselves. There are 2 reasons for that. First, the insurance companies set dependent rates higher than employee rates. Secondly, employers must pay a substantial portion of the employees’ premium (varies by state), but no such requirements exist for dependent premiums.

If your spouse can qualify for individual health insurance, you’ll probably find that you can insure her at less cost outside the group. Get a quote now.

Question: My broker has presented an HRA option that will save me quite a lot of money on my company's group health benefits next year. Is it worth the change? What are the pitfalls?

Question or concerns about HRAs? Ask Phil Now!

Answer: The advantages are great and the disadvantages small. However, I will caution you that communicating the benefits to your employees is perhaps the most important step in making an HRA strategy pay off for your company. Here's a list of pros and cons:

Advantages of HRAs for employers include:

Reimbursements of qualified claims are tax-deductible for the employer.

Employers know their maximum expense related to their health care benefit.

Advantages of HRAs for employees include:

Contributions that employers make can be excluded from employees' gross income.

Reimbursements may be tax free if the employee pays qualified medical expenses.

Unused funds in the HRA can be rolled into future years for reimbursement.

HRAs may be offered in conjunction with other employer-provided health benefits including Flexible Spending Accounts (FSAs).

Employees do not have to be covered under any other health care plan to participate, unlike (for example) a Health Savings Account (HSA) which requires a High Deductible Health Plan.

Employees can be reimbursed for a health care plan that meets their or their families' specific needs, as opposed to a standard company plan.

Disadvantages of HRAs

HRAs must follow "a variety of statutory rules and provisions" including the COBRA continuation coverage requirements, ERISA, and HIPAA.

HRA plans are considered "Primary Payers" subject to Medicare Secondary Payer (MSP) mandatory reporting requirements.

Self-employed persons are ineligible.

Highly compensated participants may be subject to certain limitations.

Question: A number of years ago, we had a layoff from my long time employer; only one of the senior staff remained. That person has an autistic child. Recently, I have been told that he could not be terminated because he had an uninsurable dependent. Is that true?

Question: Can i continue to have the same insurance plan ,even if i change the employer?

Question: My wife and I run a small business selling greetings cards. A friend told me that a small group policy is totally the better way to go and that his insurance covers everyting. Would it be a good thing for us my wife is 52 and doesn't smoke. I'm 55 and smoke about a pack a day.