Don’t Be Tricked by Limited Benefit Health Plans

Posted: October 31, 2017  

As ACA compliant health insurance options become more unaffordable and less attractive than ever before, it is important to shop and compare. When reviewing options for coverage be sure to consult with a trusted life & health insurance agent that is a member of the National Association of Health Underwriters. An ethical review of the pros and cons of the options is essential for protection of your family. This year pay particular attention to share plans that may be deceptive.

Premium increases are driving many to investigate “limited benefit plans” or “share” plans. As these plans are often tied to faith based communities there is an automatic assumption that they must be legitimate, and they are, to the extent that they indicate in the fine print that they are NOT INSURANCE. While our agency reluctantly offers these plans as a last resort to those ready to go completely uninsured, it is important for your family to review the cost of these plans and consider that what you are buying may pay very little with a health event of any significance. Agents with little experience may be driven to offer these plans without reviewing the fine print due to higher compensation paid by the carriers and the satisfaction of offering their client an affordable solution.  Industry terms such as “PPO”, “co-pay,” and “deductible” may make it hard to discern these plans from actual insurance.

Our hope is that clients can find a better, more affordable option for traditional insurance coverage.

Some key things to review this open enrollment season:

  • Are you eligible for a group (employer) based health plan? 

Note: Are you a business owner? If you have at least one bona-fide W-2 employee, you may be eligible to implement a small group health plan.

  • Do you have access to subsidized coverage on the health insurance marketplace?

Despite skyrocketing premiums, those who are eligible for subsidies will be protected by a cap on premiums tied to their income. Be sure to update your information for 2018 via your agent and healthcare.gov.

  • Is a Limited Benefit Plan worth the “lower” premium?

When reviewing limited benefit plans, be sure to look at the benefit maximums. Rather than being the maximum YOU will pay (as is the case with insurance) this is maximum the PLAN will pay. Compare those maximums to the actual cost of care.

  • Are you eligible for an exemption from the shared responsibility penalty?

Limited Benefit Plans do not satisfy the minimum essential coverage requirements of ACA.  You will need to apply and be approved for exemptions to assure you will not pay a penalty for not having coverage or for having inadequate coverage.

For more points to keep in mind while shopping.  click here for more from NPR.org.