3 Signs Your Insurance Agent Values You

Posted on

Nov 29, 2022


Pennsylvania - Greater Pittsburgh Area

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A Good Listener:  When you’re shopping around for health insurance, you want your agent to be dialed in to what you’re saying about your past medical history. We’ve all heard that the number one cause of bankruptcy in the US is medical expenses. So, your agent needs to respect the 75% listening, 25% talking rule when communicating with you. It’s paramount that your agent asks the right questions to cover all potential exposure points. You’ll know that you have an insurance agent that values you when they’re asking thoughtful questions and focused on your responses. Pinpointing a plan across many carriers takes great listening skills; your agent has a responsibility to ensure that the coverage you have will mitigate the most out-of-pocket exposure for your family if something does happen to you.

Clarity and Knowledge:  An insurance agent that values you will master their product knowledge because they’re aware of the fiduciary responsibility to their clients. The purpose of having an agent is for them to explain your policy options clearly and concisely. As a potential client, make sure you’re asking questions if anything is confusing. An agent that values you will be more than happy to give you the answers you seek. If they are not, they most likely are more worried about the sale and not your needs. Whatever the budget for health insurance, a knowledgeable agent should find some form of coverage for you. They’re genuine in their approach when explaining your policy options. If you’re speaking with an agent who won’t take the time to help you personally or at least refer you to someone who can, they’re limited in their knowledge and most likely commission-minded. Furthermore, you may want to inquire into finding an independent broker. These agents are appointed with dozens of insurance carriers and can build policy options based on your needs and not one company’s products. In this manner, you are exposed to greater clarity through options and choice. An agent who provides value in these ways is friendly, non-combative, and committed to helping you.

Staying Connected:  If your agent has met the above two criteria, it’s most likely a good idea to keep them around. They are now aware of your medical history, and you have both established mutual trust and understanding. An agent that values this long-term relationship will reach out to you periodically throughout the year. Their purpose should be to review the policy and make adjustments if necessary. Your agent should want to know whether or not the policy has provided value. This is also a great time for you to ask any questions. Additionally, if you currently have an agent who issued you a policy but hasn’t contacted you since, you may want to reach out or consider getting a new agent. Your agent should demonstrate these qualities so that you know your family’s health is covered to the fullest extent.

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What is IRMAA and How Does it Affect My Medicare Premiums?

As we near retirement, we may assume that once Medicare kicks in, our medical insurance premiums will be fixed. However, many people may not realize there are special rules regarding how much they pay for Medicare Parts B and D if they're in a higher income range. What Is IRMAA?If the Social Security Administration (SSA) determines you have a higher income, you'll have to pay more for your Medicare Part B or Medicare Part D coverage. This surcharge is referred to as the income-related monthly adjustment amount (IRMAA). It's paid in addition to your monthly premium amount.Note that Medicare Part B pays for doctor visits, outpatient care, and related services. Medicare Part D is related to your prescription drug coverage.How Is IRMAA Calculated?To determine whether you must pay higher Medicare Part B or D premiums, the SSA bases the decision on your most recently filed tax return. Because of timing issues, this can often be your tax return from two years prior, as your most recent one may not yet be filed or in the IRS system. If the SSA finds that you must pay a higher premium, they use a sliding scale based on your modified adjusted gross income (MAGI) to determine by how much. MAGI equals your total adjusted gross income and any tax-exempt interest income you've received in a tax year. 2023 IRMAA BracketsThe IRMAA 2023 threshold for married couples is $194,000. For any other filing status, the threshold is $97,000. Once you cross these thresholds, you'll pay more for coverage. How much more depends on how much you exceed these numbers. The SSA provides a chart to show you what you can expect in 2023.The SSA calculates your IRMAA every year. So, while you may be subject to IRMAA for one year, you may not be subject to it the following year. If the SSA determines you'll be subject to IRMAA, they inform you of this and its effect on your premium in writing.How Will IRMAA Affect My Premiums?Lets start by understanding how IRMAA may affect your Medicare Part B and D premium. Usually, the split between SSA and you is 75 percent/25 percent. In other words, Medicare pays 75 percent of the premium, and you pay 25 percent. If you exceed the income thresholds, the split changes, and you may pay anywhere from 35 percent to the total cost, depending on your income level.Again, refer to the SSAs 2023 chart for your situation. So, for example, if you're filing taxes as a married couple and make between $194,000 and $228,000 in 2023, you'll see on the 2023 chart that your Part B premium will increase by $65.90. Your Part D premium will go up by $12.20.What If I Dont Think I Should Be Subject to IRMAA? What happens if your income listed on your most recently available tax return was much higher than what you're currently making or receiving? There is a way for you to inform SSA of the change in your finances. For example, if you divorced, were laid off, or are making less money and you can document this, you can complete the Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event form. This will inform SSA and ask them to reassess any imposition of IRMAA in your case.You can also appeal the SSAs decision where there was a change in your income but not necessarily in the form of a life event. For example, if you filed and IRS accepted an amended tax return for the year that is being used to calculate your IRMAA, you may be able to get the SSA to change its decision. Sometimes the SSA gets erroneous information about you from the IRS, and this may also be a basis to appeal.There are a few different ways to appeal the SSAs IRMAA determination. The appeal can be submitted in any of the following ways:online,in writing by completing a Request for Reconsideration, or through your local SSA office.Speak With a ProfessionalIf you have questions about IRMAA and your particular circumstances, it's best to speak with a professional. Timing matters, so seeking professional guidance as soon as possible after you receive notice of the IRMAA surcharge is essential.

What is a Health Savings Account? Will Medicare Affect Mine?

A health savings account may help you save money on medical expenses, depending on your insurance type. If you're eligible, you can use your health savings account (HSA) to cover certain medical costs, according to HealthCare.gov.How Does an HSA Work?If you have a high deductible health plan, you can contribute to an HSA and use the untaxed money to cover medical costs, decreasing your total medical expenses. High deductible health plans typically have lower monthly premiums than other insurance plans. However, individuals may pay more for medical services before coverage starts, per HealthCare.gov. What Do Health Savings Accounts Cover?You can use an HSA to pay for deductibles, copayments, and coinsurance. Examples of typical expenses for which you can use a health savings account include: AcupunctureAmbulance costsDoctor visits Hearing aidsMedications Psychiatric care and psychological therapyCertain long-term care services However, you generally cannot use money from an HSA for monthly insurance premiums, unless you receive Medicare, health care continuation coverage, or unemployment compensation. For long-term care insurance, you may be able to pay your premiums through a health savings account. The Benefits of Health Savings AccountsThe advantage of using a health savings account is that funds aren't subject to federal taxes when you contribute or withdraw money to pay for qualified medical expenses. You can also earn tax-free interest. Should you have money left over in your account at the end of the year, it rolls over. The funds stay active, remaining in your account until you need them. Even if you change jobs or retire, you can keep your HSA. In some cases, you can use your health savings account to cover your spouses and dependents medical expenses, even if they aren't on your plan. Health Savings Account Rules2023 Contribution Amounts The Internal Revenue Service sets contribution limits on HSAs. For 2023, individuals can contribute up to $3,850, and families can put up to $7,300 into a health savings account, Investopedia reports. People who are 55 and older by the end of the tax year can make an additional $1,000 catch-up contribution. Other Insurance TypesOther insurance plans can disqualify you from contributing funds to an HSA. Individuals with dollar-first insurance plans in which the insurer takes care of its share of an included service before the insured individual pays deductibles or copayments cannot put funds into a health savings account for their outstanding health care fees. Those on Medicare cannot add money to health savings accounts, though they can withdraw capital from their accounts to pay medical expenses that Medicare doesn't cover. While people using health savings accounts typically cannot use the funds to cover monthly premiums, there is an exception for Medicare beneficiaries.Penalties Although health savings accounts have several advantages, they also impose restrictions on how you use your money. Taking money from your account for nonmedical or unqualified expenses before you reach 65 results in a 20 percent tax penalty. The 20 percent tax penalty for ineligible withdrawals doesn't apply if you're 65 and older. Still, you must pay income tax. Opening a Health Savings Account There are several ways to open an HSA. Employers can offer them, with the employer and the employee jointly funding the account. Some health insurance companies provide health savings accounts with high deductible health plans. Banks and financial institutions offer accounts for individuals. How Does Medicare Affect Your Health Savings Account? When you enroll in Medicare, you can no longer contribute pre-tax dollars to your health savings account. To put untaxed money in an HSA, you must have high deductible health insurance without additional disqualifying coverage, such as Medicare. Once you have Medicare, you can no longer add tax-free funds to your account. After you enroll in Medicare, however, you can still access your health savings account. One of the advantages of health savings accounts is that they're vested. As a Medicare beneficiary, you can continue using untaxed funds to cover the medical expenses your insurance doesn't bear, such as deductibles, coinsurance, and copayments. You cannot, however, use tax-free money to pay for Medicare supplemental insurance. While the Internal Revenue Service (IRS) prohibits people from using untaxed capital for high deductible health insurance plan premiums, the rule differs for Medicare. When you enroll, you can use your HSA to pay your Medicare premiums without taxes.Withdrawing Money From Your HSA People over 65 can withdraw funds from their health savings accounts for nonmedical expenses. Although these withdrawals are no longer tax-free, older adults don't incur the 20 percent tax penalty the IRS imposes on younger people taking funds HSAs for ineligible expenses. Since medical costs tend to increase with age, many prefer to keep their money in their health savings accounts to cover eligible medical expenses tax-free. Delaying Medicare Enrollment Some people with health savings accounts enroll in Medicare when they initially become eligible, forfeiting the ability to make HSA deposits for Medicares coverage. Others delay enrollment in order to continue making health savings account contributions.According to the Journal of Accountancy, only individuals with employer-sponsored high deductible health insurance as their primary coverage can continue adding to their health savings accounts past retirement age by delaying Medicare enrollment.Individuals with private insurance, continuation of health coverage (COBRA), or a health care exchange cannot fund their HSAs after reaching retirement age. People who continue to work at small companies after becoming eligible for Medicare must enroll in the program immediately to have any health insurance coverage.Per MedicareInteractive.org, Medicare must be the primary insurance for those working at companies with fewer than 20 employees. Since the small employers health plan doesn't have to pay until after Medicare contributes, these individuals risk losing health coverage if they delay enrolling in Medicare. Deferment also results in a late penalty. Those with health insurance from businesses with 20 or more employees can put off Medicare enrollment and continue placing funds into their health savings accounts. Because the company insurance would remain the primary insurer when they join Medicare, they can continue receiving health insurance coverage without Medicare. Individuals who wish to delay enrolling in Medicare shouldn't accept Social Security payments. This is because Social Security automatically registers beneficiaries for Medicare Part A, rendering them unable to make HSA deposits. Medicare and the IRS recommend that people who have delayed enrollment after becoming eligible should cease health savings account contributions six months before joining Medicare to avoid a tax penalty. A six-month lookback period applies, as Medicares coverage is retroactive.If you have an HSA, whether you should delay Medicare enrollment depends on your situation. The decision could significantly impact your finances. Speak to us to learn more about your options for your health savings account as you approach retirement age.