Reducing Health Care Costs for Employed Seniors in Hawaii . . . or anywhere!

Juy Plotz Brannigan, owner of Specialty Consulting International

Insurance agents who really know their stuff are coming up with creative ideas to reduce health care costs for employed seniors in a way that also benefits the employer.

Tom Duhr, President and CEO of Commercial Group Intermediaries (CGI) worked with the featured consultant to put together the following health care cost-reducing strategy to benefit employed seniors – as well as their employers.  Read Tom Duhr’s blog.

One method is for an employer to offer the option of providing Medicare-eligible employees cash for opting out of the employer group plan.

A senior can get equal if not better coverage on Medicare plus a “same as cash” visa card funded by the employer to reduce if not totally eliminate all out-of-pocket medical expense.

This cost-reducing strategy is also saving employers a mint!

Here’s how this information relates to medical tourism. Anytime an employee gets free cash for medical expenses they can then parlay the purchasing power by an average of 75% if they chose to shop for the best value either domestically or at alternative treatment destinations abroad.

We’re talking about a LOT OF MONEY. How you chose to spend the money, locally or internationally, is up to you. Medical tourism is both an option and many times the best solution when you can’t get done locally what you require for the money you can afford to pay.

A Heart for Seniors

Judy Plotz Brannigan, owner of Specialty Consulting International, an employee benefit and medical marketing firm in Hawaii claims to be one of the two people in Hawaii licensed to do Medicare counseling with Kaiser, HMSA, CMS and AARP.

“The reason I ended up working with seniors is that first of all I’m ‘getting up there’ myself,” she said, “and second of all it’s becoming more and more complicated because a lot of employers are keeping people of retirement age working 20 hours on their payroll which in Hawaii means they get full benefits.”

Hawaii has a Prepaid Healthcare Act which mandates any employees working 20 hours or more must receive healthcare from their employer with no more than 1.5% of the pay as contributions. According to Brannigan, no other state does this.

“Many employers don’t realize that even if their employees are 65 or older their claims are under their group coverage, as it is primary, with less than 100 employees, and not under Medicare,” said Brannigan.

“So a senior might be paying for Medicare part B and maybe part D but he’s not using it because he’s using his group benefits – and basically just throwing that money away. And the employer is getting nailed on claims because older people generate more claims and it kicks the rates up,” she said.

“My employers right now are looking for any way they can to cut costs and they can’t cut benefits and they can’t spread the risk in Hawaii,” said Brannigan.

“So by getting Medicare-eligible seniors off the group plan you do two things; you give them better coverage,” she said, “and more options to eliminate some of their other insurance premiums under Medicare. And you lower the company’s overall group costs.”

Employed Seniors Incentivized With HRA’s

“We set up a health reserve account (HRA)for the employee who chooses to opt out of the group plan which gives the employee cash in the form of a visa card for any IRS eligible medical expense under IRS sections 502, 105 & 213,” said Brannigan.

According to Brannigan, any co-pays a senior might have with Medicare, their Part B premium, or long term care insurance, they can pay with the visa card and pretty much eliminate all out-of-pocket expense.

Affordable Health Insurance for Seniors . . . reduced cost and better coverage

“The thing is we want to get the seniors on a better plan,” she said, “and the group plan they’re on may not cover things like podiatry, hearing aids, better vision plans, exercise programs, unskilled nursing and other programs designed specifically around what seniors need.”

“A lot of preventive screening for the elderly is covered under some Medicare Advantage Plans and they are not necessarily covered under the group health plan,” she explained, “and a lot of time the co-pays for the drugs are a lot higher.”

“For example under Blue Cross Blue Shield of Hawaii (HMSA) only the HMO plan covers all preventative services; the others may not”, said Brannigan, “There’s a whole mix of considerations that can end up being a win/win for both employers and their senior employees.”

“I took 20 seniors off the group medical plan at Big Island Toyota,” said Brannigan, “which reduced the number of insured from 120 people to 100 people and the company insurance rates dropped by 23 percent.”

But note, a company has to be willing to “think outside the box”, educate the employee on their options, and offer the incentive that can work for the older employees benefit to make this successful and not be considered as a “take away”. Education is key!

“We usually give an employee $1,200 a year to opt out of the group plan,” explained Brannigan, “A single premium for an employee is roughly $4,500 a year. So it’s a win/win financially for the senior employee and the employer plus better coverage for the employee.”

“Wouldn’t an employer want to tell their senior employee ‘hey, there’s another option’? You can take this other plan which happens to be, maybe Medicare Advantage Plan (Parts A, B, C &D) and happens to suit your needs better because you’re over 65 and we’ll give you $1,200 a year in cash for your out-of-pocket expenses,” said Brannigan.

Brannigan published these tips – and more – for employers and individuals in the Hilo Real Estate magazine. And we share them here for your benefit. We have reprinted the entire article below, which specifically addresses cost-reducing strategies for

1. Over 65 employees or “others” over 65 on your group plans

2. Couples who have “dual coverage” – each spouse covered under their employer plans,

3. Independent contractors & trades people without FEIN numbers

4. Small business with FEIN numbers, and don’t qualify for group medical

5. Companies over 50 employees who can “do out of the box solutions”

The good news is that Brannigan is expanding – getting licensed in several other states including Florida.
Health Insurance Costs in HawaiiRBH Article[1]
I’m sure there are other agents, like Brannigan, who are making an effort to really make a difference in people’s lives by fine-tuning their health care coverage. If that’s you, we’d like to hear from you.