Question: If a medical condition was over 15 years ago, is it considered pre-existing?

Answer: The underwriting guidelines for most individual health insurance carriers will usually draw the line for serious preexisting conditions at 10 years. That is to say, if you’ve had no treatment or symptoms for that previous condition in over 10 years, that previous condition will not cause your application to be declined automatically. However, your overall health risks will be evaluated, however you could still be refused coverage. The outcomes of individual health insurance underwriting are very difficult to predict right now.

Question: Hi, I recently heard that HSA-compatible health care plans are being excluded from the individual exchanges. Given that so many people purchasing individual plans choose high deductible plans, this seems strange that HSA-qualified plans would be excluded. Is this true, and if so, why would HSA-compatible plans be excluded given that consumer directed health care seems to be the way the country is moving (albeit slowly). Thanks for your response.

Answer: In 2014, the small group market, both inside the Exchange an in the private market, will have deductible limits that will negatively impact the HSA-qualified plan market. The cost-sharing limitation on maximum deductible, which applies for the small group market, limits the maximum deductible for the individual coverage is $2,000, and family plans it is $4,000, so HSAs will probably continue to be available, but their tax advantages will be impacted..

The essential benefit plan has yet to be defined by the HHS, but so far it looks like HSA qualified plans will be available in the individual Exchange. The individual market will have a limitation on the overall out-of-pocket maximum limit. This applies to deductibles, co-insurance, co-payments, or similar charges, as well as other expenditures that are qualified medical expenses. The cost sharing for these out-of-pocket expenses cannot exceed the maximum out-of-pocket expense limits for self-only and family coverage for HSA-compatible high deductible health plans during each taxable year. If we applied today’s corresponding limits, the out-of-pocket maximum for self-only coverage would be $5,950, and $11,900 for family coverage. These limits increase annually according to a “premium adjustment percentage” for the calendar year as determined by HHS. The fact that the ACA specifically mentions HSA-compatible high deductible health plans indicates that they will be in the mix.

Question: Can an HRA reimburse employees for Medicare premiums?

Answer: Yes. In 2002, the IRS issued Notice 2002-45 and Revenue Ruling 2002-41 that opened the door for employers to legitimately reimburse non-group health insurance premiums to their employees as a tax-free fringe benefit. When an HRA is combined with non-group health insurance, including MediCare, the HRA can reimburse the employees’ premiums. The HRA and high deductible individual health insurance combination is absolutely the cheapest health plan available today.

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.