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With everything that’s been going on in America today regarding obtaining affordable Illinois health insurance people are looking for innovative ways to keep their premiums as low as possible while still maintaining an adequate amount of coverage. For small business owners and self-employed people this is especially important. I’m sure you’ve heard of the phrase time is money, self-employed people that I have spoken to in the past rarely go to the doctor unless it’s absolutely necessary. So why would you want to pay for a benefit that you would not use or very seldom use?
For small business owners and self-employed people looking for affordable Illinois health insurance, I think one of the very best plans in the marketplace today is a high deductible health insurance plan combined with a health savings account. Most small business owners on average only go to the doctors once or twice a year. When you take this into consideration and the amount of extra premium that Dr. Office co-pay plans would additionally cost it is usually not worth it.
I recommend going with a high deductible health plan with a good carrier and fully funding a health savings account at a place of your choosing. This combination gives you outstanding catastrophic coverage because of the high deductible health plan that you have in place and keeps your premiums as low as possible. Recently health insurance premiums have been increasing on a fairly consistent basis. Would you rather have a rate increase of 15% based upon a $300 premium or based upon a $600 premium? Rather simple to figure out isn’t it? Health insurance is not rocket science to more risk you’re willing to take up front the cheaper the premiums are.
Today health savings accounts can be opened up almost any place. Check out your local bank to see what they have to offer. I’ve had some customers that have opened up a checking account at their local bank and linked that account to their stock market account. This gives them not only the opportunity to put tax-free money into their health savings account but also gives them the opportunity of taking advantage of the stock market for increased earnings. Finding a good place to put your health savings account monies can be time well spent.
Think about your reward – No More Stress – No More Worries – And Mission Accomplished!
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How to navigate Illinois Foreclosure Law
In today’s uncertain economy many families are unable or will soon be unable to make their mortgage payments. The clients that come to my law practice for counseling are mortified with thought of being thrown out of their house through foreclosure. To compound their fears homeowners who have missed a mortgage payment or a few payments are fearful that any day the sheriff with knock at their door and force them to leave their home.
Fortunately, in Illinois a homeowner who has missed a mortgage payment, or two payments, or even three payments will not immediately have to move out of their homes. In Illinois missing a mortgage payment in not the end of living in your home. It is only the beginning of the long process of foreclosure (in Illinois), A process where missing a mortgage payment will not result in immediate eviction from their home.
Certainly, missing a mortgage payment is reason for concern however, it is not the end of the world. Further, understanding Illinois foreclosure law can help homeowners have less anxiety and better make decisions about their future living accommodations.
Illinois Law: Mortgages in default can be reinstated
Good news, under Illinois law if a mortgage goes into default a homeowner can reinstate their mortgage. Reinstatement is effected by curing all the defaulted payments (paying the missed payments) and; paying all costs and expenses associated with the default (usually back interest, late payment penalties, and attorney’s fees). The reinstatement payments must e made within 90 days from the notice of default.
If the missed payments along with the interest, penalties, and attorney fees are paid in the 90 days prior to the notice of default the mortgage document shall remain in force as if no acceleration or default had occurred. See 735 ILCS 5/15-1602.
Illinois Law: Mortgages in foreclosure can be redeemed
More good news, under Illinois law if a home goes into foreclosure the homeowner can redeem their mortgage from foreclosure process. When the mortgage on residential real estate is foreclosed on the homeowner is granted a redemption period in which to stop the lawsuit for foreclosure and retain their home.
In Illinois the homeowner has 7 months to redeem their home from the date the homeowner is served with a summons for foreclosure or served by publication. See 735 ILCS 5/15-1603.
To redeem their home from foreclosure the homeowner must pay the following:
The amount specified in the in the judgment of foreclosure which shall consist of
a) all principal and accrued interest secured by the mortgage and due as of the date of judgment.
b) all costs allowed by law, this would include late payment penalties, additional interest from the date of judgment to the date of redemption, attorney and other administrative fees.
In my bankruptcy practice I often counsel with clients who have missed one or two mortgage payments. They are fearful the sheriff will be knocking on their door to evict them from their home.
Fortunately, Illinois foreclosure laws allow homeowners (through reinstatement or redemption) the ability to retain their home and gives the homeowner who has missed mortgage payments ample time to “save” their home.
What to expect you miss a mortgage payment (do not worry)
Generally, the mortgage lenders, large banks and corporations that do mortgage lending are bureaucracies and are generally unable able to foreclose if you have missed a only a single mortgage payment. This systemic inability to take action is frustrating, but is actually beneficial if you have not made a mortgage payment lately.
At my law firm Thinking Outside the Box Inc. our experience has been that the mortgage company probably will not even notice you until you until you have missed three or four payments, (generally). We often have clients who have missed three to five payments and have had no contact with the lender regarding the missing payments. We have observed that if you miss three or four payments and you will get a letter of default stating you have thirty days before the mortgage company will file a suit for foreclosure.
Next, your mortgage company will task a local law firm to file a lawsuit to foreclose on your home in the state courts.
DO NOT WORRY. You have 90 days to reinstate your mortgage if you are in default or 7 months to redeem your mortgage if you go into foreclosure.
Even if you ultimately lose your home in foreclosure generally you will not have to leave your home for 9 to 12 months from the time you stopped making mortgage payments.
What should I do if I cannot make my mortgage payments or in the near future cannot make my mortgage payments?
Step One: Make the decision
The most important decision to make is “can I afford the home I am living in?” Some of our clients have paid thousands of dollard to their mortgage company only to later lose their home. Be honest with yourself do not throw away your money on a house that you will ultimately lose.
If long term, you will be able to make up the missed payments and keep current on the subsequent payments then you can keep the home… if long term you cannot make up the missed payments and at the same time continue to make the normally scheduled payments then you cannot keep the home.
Step Two: Pick your optimal strategy
KEEP YOUR HOME: If you decide you can keep the home call your lender and make a plan to cure the arrearages. If you need time, you can file a Chapter 13 bankruptcy. Under Chapter 13 bankruptcy the Court forces your mortgage company to let you to make up the missed payments over time (3 or 5 years). Filing a Chapter 13 bankruptcy will also stop the foreclosure process.
GIVE YOUR HOME BACK TO LENDER: If you come to the decision that long term you cannot afford your home, you will have to let it go back to the lender. Since you have already missed some payments the foreclosure process will take its natural course. After you miss three or four payment the lender will file a lawsuit for foreclosure, from the point you are served with the lawsuit Illinois law allows you to continue to live in the home for 7 more months (without having to make a payment). This grace period gives you the time to save money in anticipation of moving.
When a person dies their assets (all their stuff) go to someone. A will is an instrument that directs a person called an administrator how the deceased’s assets should be distributed i.e. who gets what. When a person dies and there is no valid will, the assets of the deceased are distributed according to what is referred to as “intestate succession” also called “intestacy laws (as opposed to the testacy laws governing situations where a valid will is present.) Intestacy laws vary by state.
Illinois’s intestate succession works a lot like most other states. The assets are passed to family members who are prioritized according to the statute. Before we determine how the assets are distributed it is important to note that not all assets a deceased has go into the “pie” that is doled out to survivors. Assets that are not included in the pie (the intestate estate) include:
Life insurance proceeds don’t go into the pie. Rather, they are paid directly to the named beneficiary of the policy unless the decedent’s estate is named as the beneficiary.
Various sorts of jointly held property doesn’t enter the pie and will be accessible by the joint owner(s). Examples include property held as joint tenants with rights of survivorship or joint banking accounts.
Retirement accounts like 401(k)s and IRAs will normally have a named beneficiary, similar to life insurance policies
Property held in a trust (in some circumstances)
After a determination of what assets comprise the pie, you must then pay all claims against the estate i.e. outstanding bills. Anything left over is then paid out to family members (known as heirs) according to the priority scheme outlined in the Illinois intestacy statute:
The Surviving Spouse: If there’s a surviving spouse, generally speaking they will take the biggest piece of the pie. The amount of pie varies depending on whether or not there are descendants of the deceased. It is important to note that the descendant of the decedent does not necessarily have to be the descendant of the surviving spouse.
If there are no surviving descendants and just the surviving spouse, the surviving spouse takes 100% of the pie. If there is a surviving descendant i.e. a child of the decedent, the pie is split 50% to the surviving spouse and 50% to the surviving descendant. If there is more than one descendant of the decedent, the 50% will be divided evenly amongst the descendants.
The Descendants of the Deceased: The children or grandchildren of the deceased. If there is no surviving spouse but there are children, they take the pie 100% split amongst them. If there is no surviving spouse and no children but there are grandchildren, they are descendants and will split 100% of the pie. What happens if there are a mixture of children and grandchildren? The assets pass in equal parts to each child of the deceased. Where one of these children of the deceased is dead but has children, the share that was to go to the deceased’s child instead passes in equal parts to the deceased’s grandchildren.
Parents, Siblings or Descendants of Parents or Siblings: If there is no surviving spouse and no descendants of the deceased, the assets are to be split amongst these parties equally. If the parent is solo, they get two shares.
Grandparents or Descendants of Grandparents
Great-grandparents or Descendants of Great-grandparents
Nearest Surviving Kindred (blood relative not discussed above)
If there is no kindred the pie goes to the Illinois county where the decedent resided.
This is merely a brief overview of “who gets what.” There are a number of additional considerations involved with intestate succession. For instance there’s the question of who the administrator of the estate is i.e. who doles out the pie. In the case of Illinois, the order of preference parallels the above priority scheme i.e. surviving spouse at the top, children, grandchildren, siblings. Where there are two plus people with equal preference and desire, a judge will hear the case and has the discretion to choose one or multiple persons to serve as administrator.
There are questions regarding each of the above like what happens if the child is a step child or if the surviving spouse and the decedent are divorced. Another question is what happens if an heir kills someone in order to collect the deceased’s inheritance. Then there’s the question of whether an heir is allowed to get some of their allotted money in advance of it being distributed. These are all legitimate concerns beyond the scope of this article.
Hopefully this will give you a rough understanding of what happens if you die without a will and provides a picture of who gets what if there is not a will.
This article was produced by me, John James Crone III “JC3”. My website is [http://johnjc3.com/]. I am an attorney based in Orlando, FL with over 5 years experience in internet marketing and website development. Practicing law requires concise, clear communication. Sales and marketing requires persuasive skills to be successful. I have both.
At the end of the 2006-2007 school year, educators, administrators and legislators gathered to discuss policies and recommend strategies for the Illinois Schools. The focus of the forum was to discuss educational reforms that have shown the greatest results, and to create specific recommendations for the Illinois Schools.
Policies That Could Work for Illinois Schools
The forum for Illinois Public Schools was partially sponsored by privately funded groups like the Bill & Melinda Gates Foundation, the Chicago-based Joyce Foundation, and the Chicago Community Trust. The areas identified as holding good potential for the Illinois Schools were: improving educator quality, performance rewards, data-driven improvements, and further support and creation of public charter schools.
According to Ellen Alberding, president of the Joyce Foundation, “More money alone won’t create successful schools. We need to link any new funding with high-impact reforms that work, particularly when it comes to teacher quality, which research shows has the most impact on student achievement.” Support for this position led to the following recommendations for teacher quality in the Illinois Schools. First of all, the group would like to implement a two-year mentoring program for new teachers in the Illinois Schools. Second, they recommend a pilot compensation program to reward excellence in teaching. Support for both practices comes from data showing that 40% of teachers in Illinois Schools leave in the first 5 years, and that in-school support greatly increases the likelihood that they will stay.
Other recommendations were that Illinois Schools create a system to collect data on student performance, and that teachers use data to improve instruction. There is a strong correlation between high performance and data-driven schools. To become a data-driven system, the Illinois Schools would need to look beyond test scores to things like attendance, grades, extra-curricular activities, and discipline rates.
More Charters for Illinois Schools
Finally, the forum recommended increasing the number of, and support for, charters in the Illinois Schools. Many of the Illinois Schools’ charter programs have good track records, and even waiting lists for attendance. However, charter schools are not universally embraced, as their independent accounting has resulted in some issues. There are also some concerns over admission guidelines among second language learners and delayed learners. But the Illinois Schools have had many successes with this system.
Overall, the recommendations the forum made for Illinois Schools are based on results tested over time, and from other districts and states in the country. The big decisions at this point will be where to use and how to spread out the funding from private and state organizations. Some decisions have already been made. For instance, the Gates Foundation is funding 11 new small schools in Chicago as part of that city’s High School Transformation Program. So Illinois Schools have some good prospects, and now some solid recommendations. Parents, teachers and administrators of the Illinois Schools are just waiting to see the results of implementing those actions.
In May 2007, Illinois State Treasurer State Treasurer Alexi Giannoulias announced that the state’s “Cash Dash” program is holding nearly $1.4 Billion in Illinois unclaimed money. The only thing standing between the cash and its rightful owners is the knowledge that it’s out there and the ability to track it down.
Sadly in addition to Illinois, state treasury departments across the country continue to take in more unclaimed property each year than they return to the citizens. Because everyone believes in the old “if it’s too good to be true” saying most people refuse to believe that there are really tens of billions of dollars waiting to be claimed nationwide. Even for those few who have realized the truth about unclaimed assets, the best way to locate these monies eludes them more often than not.
The Prairie is State is one of those rare states that holds over a billion dollars on its own which means if you’re a resident of IL then you have even greater odds of finding a claim in your name, especially when you consider that the state has less than 13 million people and there are over 10 million names on the state’s unclaimed funds list.
Although there are many more, Illinois lists the following as the most common types of missing money: abandoned savings and checking accounts, unpaid wages or commissions, stock, bonds, mutual funds, un-cashed dividends, customer deposits or overpayments, credit balances, refunds, money orders, travelers checks, paid-up life insurance policies, safe deposit box. Anyone who has had or knows someone who may have had one of these accounts at one time or another is encouraged to search regularly.
The IL State Treasury has returned more than $432 million since it took over the unclaimed money program in 1999, $84 million of which was returned in 2006 alone, but with $1.4 billion waiting to be claimed and more coming in all the time, the heap of cash will continue to grow.
Because money is constantly added to the fund, it is important to check regularly, not just once. Money owed to you might be added tomorrow, or next week, or next month, or depending on the type of asset in 5 years if that’s the proper dormancy period. Each type of property has its own dormancy period in each state, after which state laws require the holder to turn it over to the state who will then hold it until the rightful owner steps forward to claim it.
Additionally, residents of Illinois may be owed unclaimed money in other states even if they’ve never lived in or even been to them. Things like insurance overpayments when an employer uses an out of state insurance company can result in found money located in other states. Issues often also arise when a corporations headquarters are in another state.
The bottom line is that the state of Illinois is currently home to a massive amount of money that belongs to its residents who simply need to learn the proper ways to search, where to search, and how often to search. Learning these search methods from locators with years of experience in this field can greatly enhance your abilities to find your money.
Changing your name is a simple legal procedure that any one can do themselves. It’s even easier than filling out all the forms you have to go through every time you visit the doctor. If you can fill those forms in yourself, then you can prepare your own name change forms.
The first step is to file a ‘Petition for Name Change’. You fill in the legal form, and take it down to your county’s clerk office, usually located inside your local county’s courthouse to file the form. There may be a small filing fee, but by preparing the form yourself you’ve already saved hundreds of dollars in legal fees. To find out how much the filing fee is you must contact your county’s clerk office you will be filing your Illinois name change forms at.
Here are a few county clerk office’s I’ve taken the liberty of locating for you, but there are many more. At least one in each county. So look for the clerk office in your county.
Du Page County Clerk – (630) 407-6000
421 North County Farm Road, Wheaton, IL
Cook County Clerks Office – (708) 974-6150
10220 South 76th Avenue, Bridgeview, IL
Will County Clerk – (815) 740-4615
302 North Chicago Street, Joliet, IL 60432-4078
Lake County Clerk – (847) 377-2400
18 North County Street, Waukegan, IL
Once you’ve filed the petition for a name change you will be given a date to appear before a judge. You will need to appear before the judge just one time, for a brief moment. The judge may ask you a few questions just to make sure your eligible to change your name, but mainly you just appear to hear whether your name change has been granted or not.
As long as you haven’t been convicted of a felony in Illinois in the past 10 years, you’ve lived in Illinois for at least 6 months, and your not changing your name for fraudulent reasons such as to avoid warrant, imitate a celebrity, etc. then you should be eligible for a name change.
After you’ve appeared in court, and the judge has granted your name change you will receive a certification of your name change called a ‘Order for Change of Name’. You will then use that to change your name on your social security card, driver’s license, birth certificate, bank account, etc.
Once you have your ‘Order for Change of Name’ you then take that with you to your nearest Social Security office, along with your old identification to get a new copy of your Social Security card with your new name.
To update your Birth Certificate, you will need to get a certified copy of your ‘Order for Change of Name’, at your local county’s clerk office because you will need to mail that to the Illinois Department of Public Health. You mail that along with an official copy of your old birth certificate to their office, along with a $15 money order to cover the fee. Their address, and phone number (as of 7/27/2010) is:
Illinois Department of Public Health – (217) 782-6554
605 West Jefferson, Springfield, IL 62702-5097
Once you have your new Social Security card, and Birth Certificate, it’s time to update your driver’s license. You should now have all the documentation you need, but you can call them to verify what you need just to avoid bringing unnecessary documents. At this point though you will have no trouble changing your name on your bank account, utility bills, and any other accounts you have.
People are made to believe by lenders and their agents that online cash advance in Illinois is a worthwhile service, as online processing of these loans makes the approval and disbursal very fast.
However, such claims are not always true. This is only one part of story. The other and rather sad part is that these are very expensive and over dependence on this type of borrowing could land you in a bigger financial trouble. So long as you have any other source of getting funds or if you can manage somehow, it would be better if you stay clear of these loans. However, if you think that the cost and inconvenience of not taking the loan is greater than the cost of cash advance, you can consider taking fast cash. Even then, you must borrow only the amount that you are sure that you can payback on time. If you fail to pay the amount on the due date, you will have to pay a bigger fee.
In times of emergencies, when time is of essence, you require a loan provider who will lend you money with minimum formalities. You have neither the time nor patience to organize loads of documents and answer several questions to get cash. Lenders who offer this online for people staying in Illinois makes the whole procedure of application, approval, and disbursal of money quick and convenient. As mentioned, all this convenience has a cost to it and you are the best judge to weigh the pros and cons before you fill the online application form.
The online procedure for taking these does not require you to sit for days, waiting for the approval and meanwhile faxing loads of documents as proofs, verification etc. Even all verification of the data provided by you is done through online resources, your data is not shared with anyone and the whole transaction is very straightforward and discreet. They can be secured from any location. If you are a US citizen, at least 18 years old, and if you gave a stable job, which pays you, at least $1000 per month, then you can apply for the payday loans in Illinois. You also must have a bank account in your name, active for a minimum of 3 months.
However, all this comes at a cost and the lenders charge heavy fee to offset the risk taken for such fast lending.
Some Points To Watch Out For:
Though the process of taking fast cash loan is simple, while choosing your lender, you must look out for some aspects:
If the lender is charging an early repayment fee, don’t go for it.
Some lending companies charge you membership fees, in addition to the fee you pay for the loans, avoid them.
Too much information is sometimes asked for regarding your financial status and standing, if you feel it’s unnecessary, don’t tell. Instead, look out for another company.
Always go through the fine print of the terms and conditions before agreeing.
In addition, show caution by ensuring you have enough balance in your account in the payback day, so that the check is not bounced and you do not face negative balance. Loan extension is an option, but a much costly one, plan well to avoid it. This seems to be an attractive proposition, but avail it only for urgent purposes, when you have no other way out. This facility is available for all and can be availed in dire circumstances as well as for building a good credit history. However, as previously mentioned, you should take these only when it is to take care of an emergency and you have no other option for getting fast cash.
How does an Illinois resident with a pre-existing health condition find a quality Illinois health insurance plan? Why does it seem like it is so difficult to find a pre-existing condition Illinois health insurance plan?
Pre-existing conditions are defined as illnesses in which the person has gone to a physician, clinic, or medical facility and has received medical care in the past. Insurance companies are using these questionnaires as well as an exclusion period in order to defend themselves from people with pre-existing conditions that are seeking medical insurance.
In the state of Illinois people that are applying for an individual health insurance plan can be turned down at the insurance company’s discretion due to pre-existing conditions unless that person is eligible for an Illinois HIPAA health insurance plan.
In the state of Illinois they follow HIPAA laws very strict. The Health Insurance Portability and Accountability Act created in 1996 and effective in 1997 provides protection for people that have medical pre-existing illnesses. The law protects people by limiting their exclusion period when purchasing health insurance, lowering the chances for a member with a pre-existing condition to lose coverage, providing protections when they change jobs and guaranteeing that your health insurance policy gets renewed at the end of your coverage year.
The law however, has not eliminated the ability of individual carriers of denying health insurance to pre-existing condition people or exclude medical conditions. The only guarantee issue provisions lie in State sponsored plans and insurance company funded plans. What HIPAA does provide is for guaranteed acceptance health insurance coverage for people that meet 6 HIPAA requirements. When someone meets these 6 requirements they are considered “HIPAA eligible” and can qualify for a guaranteed issue HIPAA health insurance plan. The 6 requirements for HIPAA eligibility can often be the only avenue of health insurance coverage available to some high risk individuals with major pre-existing health conditions.
Some of the most important insurance companies in the state of Illinois handle pre-existing conditions a little bit differently, because of this it is important to do some research and actually shop around for a policy before deciding to apply. Individual plans have more exclusion that group plans and that is why they are quite a bit less expensive, because they are more restrictive.
Aetna Health Insurance who is one of the “big dogs” in the health insurance business across the United States is a primary example of exclusion period. They offer a 365 day period starting from the day of enrollment, in which a person with a pre-existing condition is not covered. It is important to note however, that if the person that has a pre-existing condition has had prior creditable coverage within 63 days immediately before the signature of the application; then the exclusion period will be waived.
Another example of this can be seen with Blue Cross and Blue Shield of Illinois, who is one of the 39 independent, community-based insurance companies that make up the national Blue Cross Blue Shield network. Since they are independent that means they might not have the same provisions as Blue Cross Blue Shield companies in other states. In Illinois, BCBS requires a member with a pre-existing condition to wait a 365 day exclusion period from the day that they sign the policy before receiving coverage for their illness.
Compared to individual coverage, group plans are a little better. They cannot turn you down due to a pre-existing condition, which makes group plans more expensive. Under HIPAA law an employer can only deny pre-existing condition coverage if the person is diagnosed, receives treatment or has care and treatment 6 months before the enrollment date. A good thing to note is that pregnancy cannot be accounted as a pre-existing condition by an employer insurer.
The total time a person can be excluded from a group health plan if they have a pre-existing condition is 12 months after enrollment (18 months if they enroll late), for this reason it is important for a person to sign up for health insurance as soon as they are offered it (if not you can be subject to 18 months instead of 12). Fortunately for some, the time can be less in case that they were covered by an insurance company for the 63 days before enrollment. Also, an insurer cannot deny coverage to a small employer (2-50) under HIPAA law.
Finding Illinois health insurance coverage when one has a pre-existing condition can be very tough. Not to mention that pre-existing conditions cover everything from cancer, HIV, Hepatitis C and even high cholesterol. It is key however, for a person that has a pre-existing condition to know all the exclusions and their rights that are provided under the HIPAA law. This is important because once you know your rights, you will be able to be more knowledgeable about the subject and avoid long exclusion periods.
Affordable Health Insurance in Illinois with a higher deductible can be attained by buying only catastrophic coverage. Or there is another way; by partnering with a Company with your own HSA or Health Savings Account.
What is a Health Savings Account?
It is a non-taxable savings account which is interest bearing, depending on where you set it up, and serves as a reserve in case you have a qualified medical expense. It could be something major like a heart attack or something as minor as a visit to your dentist. Since you have your own money at stake, the Health Insurance Company realizes that their risks are highly minimized. Since you are taking more risk for upfront coverage they are willing to lower the price of your monthly premium. Because you are responsible for all claims up until you reach your deductible. The higher your deductible is on your High Deductible Health Plan the lower your premium will be.
Remember Health Insurance Companies like to collect premiums, not payout huge dollars in claims, after all these are corporations which must answer to their shareholders and thus, prove they are on pace with their quarterly profits so they can match or “beat the street” on their earnings and maintain their stock price.
Now then, HSAs or Health Savings Accounts are not the right strategy for everyone, and we really need to take a look at what you have now, your individual and specific health care needs, and your budget to see if it even makes sense. For some folks, it does make sense – it makes a lot of sense in fact.
This is one of the ways you can create an affordable health insurance plan by keeping your premium payments ultra-low. Perhaps, your tax person has discussed this with you, or mentioned it previously. In any case if you are looking for such a policy and are ready to set up an HSA or Health Insurance Account, you’ve come to the right place.
Give me a call and I can get you a quote, and see if this makes sense for you?
Think about your reward – No More Stress – No More Worries – and Mission Accomplished!
The health insurance industry is very unique. When you compare it to other types of insurance, you will find that most types of insurances are based on the catastrophe.
Your auto insurance does not cover new tires or oil changes. Your home owners insurance does not pay for a new paint job or if your oven breaks down.
Somehow, health insurance pays for doctor visits (new tires) and prescription drugs (oil changes). These two benefits are what add most of the cost to a health care plan.
With health insurance you pay for these benefits whether you use them or not.
This is why health savings accounts (HSA) make a lot of sense. The HSA, is used in conjunction with, a High Deductible Health Plan (HDHP). The deductible, as you might guess, is higher and only covers the doctor visits and prescriptions after you meet that deductible. It protects you from the catastrophic loss and kind of puts you in control of your health care dollars. They often times cost half as much as a co-pay plan would cost.
H.S.A plans were we created in Medicare legislation and signed in to law by President, George W. Bush, on December 8, 2003. They were originally called Medical Savings Accounts (MSA). They were created by Senator Bill Archer, R-Texas.
Mr. Archer’s project was to reduce the cost of health insurance for the self-employed without sacrificing coverage for a major illness. Mr. Archer’s brilliant idea was to eliminate the part of the traditional health plan that cost the most money. These expensive benefits include doctor visit “co-pays” and outpatient prescription drug “co-pays”. Archer proposed to congress that if you eliminated these features from the health plan it was conceivable to cut your health premiums considerably. He was absolutely right!
Here is an Illinois example. A family of four with Blue Cross Blue Shield of Illinois parents in the Chicago Area 40 years old with two children $2500 deductible individual deductible $7500 family deductible is $683 per month. That plan has co-pays, Rx coverage and an annual out of pocket maximum of $9000 ( 80% paid by insurance 20% paid by insured until they have spent $9000). That is significant because it is a high out of pocket maximum plus your premiums. And how often do you see a doctor in a given year?
Now let’s look at the same situation, same carrier with an H.S.A plan. This we will choose a $5200 family deductible. This plan is 100% coverage after the deductible, so my out of pocket maximum is lower as well. It is better coverage for the big, more catastrophic things that can happen. This plans premium $473.
It costs this family $200 more per month for the privilege of having a co-pay and prescription coverage. Now, if you are on some significant medications, or go to the doctor twice per month, this type of plan might not be right, but I do not believe that most Americans do go to the doctor that frequently.
Then, if you choose too you can, the $200 per month savings and set up the “saving account” portion of the plan, in which, you can fund it like an IRA, in which money you put it tax deferred and goes out tax free if you use it for medical expenses. In two years, you would have $4800 saved in your account. That is almost enough to cover your entire deductible.
In 2012, the maximum you can put into the savings account is $3100 for an individual and $6250 for a family. If you are over age 55 you can put an additional $1000 per year into the account as a “catch up” contribution.
You can pull this money from your account, for qualified medical expenses if you should incur them through the year. Unlike the FLEX SPENDING ACCOUNT (FSA) that many have had through their employment, the money you put into the account can carry over from year to year. So if you were to put $5000 in your account this year and you do not use any of it, you have $5000 to start next year. Remember, most or all of this money is money that you would have given to the insurance company for the privilege of having a “co-pay”.