Non ‘ACA’ product demand is at an all-time high, have you considered the following strategies for your clients?
Whether it is affordability, choice, the needs of the ‘gig’ economy or personalized careers, 1- 4 million people are expected to join the ACA alternative market over the next 12 months. In 2018, 15.5% of the USA population are without any health insurance – these and many people wanting options other than the ACA represent an important market for education.
From January 2019 no mandate, ACA price hikes, and an improving economy is removing more people from subsidies. Short Term Medical, Indemnities or a combination of both could be what your clients are looking for.
If qualifying for subsidies, with chronic health needs or not wanting any risk then ACA plans are still the best option for your clients. But what about people wanting to reduce costs, cannot afford premiums or want access to any doctor or network?
Read on for some great strategies to help you grow your sales.
Strategy 1. Short Term Medical.
Short Term Medical plans are now available in Minnesota for up to 6 months coverage. Two 3-month STM plans can be written at the same time with guaranteed issue for the second plan if your clients have a claim in the first 3 months. This means a 2x3month STM can be issued on or after July 1st that will provide coverage through the end of 2018.
Short term medical plans are underwritten and do not cover preexisting conditions. Like ACA plans they have deductibles and copays that mean clients must cover first dollar expenses. The three main advantages to STM are: Premium (a fraction of ACA plans), no network (meaning clients can go to any doctor or network) and can be issued any time of year.
However, STM is insurance and clients have the catastrophic coverage many demand in the event of an unexpected illness or injury.
Who suits an STM:
- In transition
- Starting a new company
- Near Medicare and need an affordable plan
- Finding the ACA premiums unaffordable
- Do not qualify for subsidies
- Do not have any chronic health needs
Strategy 2. Indemnity Plans.
Indemnity plans cover first dollar expenses, dealing with one of the main complaints with the ACA (you pay high premiums and still have deductibles between 6 and 14K for families or individuals).
Whether used to help your clients ‘get to’ their ACA plan or as a first dollar alternative, indemnity plans are providing real world cover for many across the USA.
Indemnity plans can cover accidents (guaranteed issue), critical illness and hospitalization (underwritten or simplified questions) – providing up to 25k first dollar coverage for families. For many this is all the realistic coverage they need and deductibles are as low as $100.
Indemnity plans do not coordinate with any major medical coverage meaning you can use it to pay for Medical and recovery expenses, child care, groceries, mortgage, rent, lost wages, whatever expenses you need to cover.
Personal or family accident insurance provides cash benefits at a time when expenses quickly add up.
Strategy 3. Combination of STM and Indemnity.
Your client wants affordability, no network restrictions, first dollar payments, low deductibles and catastrophic coverage in the event of an unforeseen accident or critical illness; for the best of both consider combining STM with an Indemnity plan.
STM provides catastrophic protection and peace of mind; indemnity plans provide the first dollar contributions needed to use their benefits.
Look at the following carriers, all with great products in Minnesota:
- IHC – short term medical plans now available for 6 months. IHC is currently the only STM provider available in Minnesota.
- IHC – Metal Gap 2, gap coverage for major medical insurance designed to cover out of pocket expenses, prescriptions, living expenses and lost wages. Low cost monthly plan with $7000 benefits for accident, AD&D, Critical Illness, with $50 contribution for office visit. Issue to age 64.
- UnitedHealthone – Health Protector Guard, a broadly based first dollar indemnity plan providing prevention, pharmacy, network discounts, surgery and recover benefits. HPG has four plan options, at the lower end a great supplement that makes using your ACA plan affordable and at the higher end a comprehensive ACA alternative.
- UnitedHealthone – Accident ProGuard covers the expenses associated with an accident or a lump sum payment for a critical illness diagnosis. Payments are made directly to your clients not the provider.
- LifeSecure – Accident and Hospital indemnity plans with benefits (benefit amount chosen at time of purchase) between $2,500 and $25,000 for individuals and families. If you have a medical plan then LifeSecure plans ensure you don’t have to worry about unexpected medical bills.
Download brochures for these carriers below.
- The IHC Group Connect STM
- UnitedHealthOne Accident Pro Gap
- UnitedHealthOne Accident Protector Guard
- LifeSecure Accident Insurance
- LifeSecure Hospital Recovery
Whether STM or indemnity on their own or in combination, you have clients that want to understand and discuss all their options.
If you focus on what your clients’ needs are they will purchase STM or Indemnity products for themselves and their family’s needs.
Notes on STM and ACA penalties:
The rule on extending STM plans to 1-year coverage in 2019 is not expected to be finalized until the end of 2018. Once the rule is passed it is expected that STM plans will extend to 364 days.
For clients choosing an STM or indemnity plan in 2018, they will be liable for the tax penalty for the period they did not have an ACA plan. The individual mandate, that leads to the tax penalty goes away in January 2019.
In 2018 the tax penalty is $695 per adult and $347.50 per child for a maximum of $2,085 per family, or 2.5% of household income. The penalty is prorated for months not covered.
If a client chooses an ACA alternative now, they can re-enroll in an ACA plan this Fall. We recommend reviewing coverage with your clients during the annual ACA open Enrollment to ensure this is the best option.