It only takes one wrong action on our part, one wrong action on someone else's part, or simply exposure to the elements that we can't control to put us in a very bad financial situation with medical bills.  The first line of defense to protect you from medical bills is major medical health insurance. Health insurance in the United States as many of you know has undergone major changes since 2012.  The government got involved and now regulate the insurance industry with a reform called the "[ACA] Affordable Care Act" also nicknamed "Obamacare."  With the reform, the government placed many rules on what the insurance companies can and can not do.  However, unfortunately, there were no laws implemented that helped riders and racers.  Insurance companies can still place exclusions on racing, hazardous sports, occupations, riding, and any other sport they do not want to cover. So please check your current plans!  Use our advice in our Simple Insurance Guide For Riding And Racing.

Below are some more key points we would like to point out:

TWO WAYS TO ENROLL:

• OFF-EXCHANGE: The option many Americans have opted to in the past, and that is to get quotes and apply through your trusted insurance agency/broker in the private healthcare market sending your application directly to the insurance company.  Choosing this route you do not have the Federal government involved, and you assign a licensed agent to be on your team to help you navigate plans, and help with future questions, concerns, and problems.
• ON-EXCHANGE: You get the benefits of the off-exchange option like choosing your licensed agent to assist you except we have to submit your application through the health insurance exchange portal.  This can be done online, or over the telephone.  The purpose of this method is to verify citizenship and income to possibly be eligible for a premium tax credit also known as an insurance subsidy.  We are licensed with the Federal Marketplace known as the HealthCare.gov as well as the Kentucky Kynect State Exchange.

IMPORTANT DATES:

• November 1st: Open Enrollment starts — the first day you can enroll in a new insurance plan with coverage starting as soon as January 1st each year.
• December 15th: Last day to enroll in or change plans for new coverage to start January 1st.
• January 1st: New coverage starts for those who enroll or change plans by December 15th.

If you don’t enroll in a new health insurance plan during open enrollment, you can’t enroll in a health insurance plan for the new year unless you qualify for a "Special Enrollment Period."  Example: Loss of employer coverage, aged off your parent's plan, divorce, marriage, the birth of a new child, etc...

IMPORTANT "ACA" BENEFITS:

• The new law prohibits health plans from putting annual or lifetime dollar limits on most benefits you receive.
• There are no more pre-existing conditions.  Meaning everyone gets the same price and you can not be declined or discriminated against due to your past medical history.  Also, the insurance companies can not limit benefit's for that condition either.  Example:  If you had a previous knee injury, you could get that fixed under your new plan.
• You can stay on your parents plan until age 26.  Once you turn 26 you must get your own plan.
• Annual maximum out of pocket limits was put in place.  For 2017, the annual limit was $7,150 for an individual and for 2018 it is $7,350.  This represents the most you will have to pay for covered medical expenses in a plan year through deductible and coinsurance before your insurance plan begins to pay 100 percent of covered medical expenses.
• Emergency hospitalizations are always treated as in-network so you are not penalized in an emergency when you do not get to decide what hospital to go to. However we have had clients experience discrimination where certain doctors were not billing as in-network which caused many problems.
• There is a large list of covered services without any direct cost to you.

In addition to these key details below is some education about plan options.  Basically, you can choose from a plan with benefits with office visit copayments and prescription coverage, or a plan that is simply just a deductible.

TRADITIONAL COVERAGE

The majority of individuals and companies in the past have chosen these types of plans. You have an individual and or family deductible, an office visit co-pay, co-insurance after your deductible, and prescription drug coverage.  In today's market, these plans are typically the Silver, Gold, and Platinum Plans.

EXAMPLE: $3,000 Deductible, $6,750 Max out of pocket, 80/20 Co-insurance, $35 Office Visit and Prescriptions $15/$30/$50 25%.

• PROS: You pay less out of your pocket at the time of service utilizing the $35 office visit copay, and a lower deductible with co-insurance.
• CONS: These plans have the highest monthly premium. Whenever you pay a co-pay or pay for prescriptions, these items never count towards your deductible. The deductible only applies if you are charged for lab work, x-rays, hospital procedures etc... These traditional plans also have the highest premium rate increases each year because people abuse these plans by running to the doctor 24/7 when something silly happens. The plan doesn't encourage you to be a smart consumer and typically you will not shop around and compare prices from other doctors when something comes up because all you will think about is the $35 co-pay. Which in return increases the insurance companies amount of paid claims which results in a higher premium increase the next year on your policy.

HEALTH SAVINGS ACCOUNT [HSA] COMPATIBLE OR HIGH DEDUCTIBLE HEALTH PLANS [HDHP]

HDHP or HSA Compatible Plans also known as the consumer-driven High Deductible Health Plans are very popular. These plans became available through legislation passed in December of 2003 and were put in place to allow consumers to take a bigger role in their health insurance situation to control cost. These plans are kind of like car insurance. The insurer doesn't pay a claim until you have met your deductible. However, all plans now pay 100% for preventative care without meeting your deductible due to the Health Care Reform Act (see policy specific details).  Furthermore, you are eligible for a tax savings account to pay for qualified care.

THREE MAIN THINGS TO REMEMBER:

• Typically, you have no co-pays or prescription drug co-pays.  Example: You go to the doctor to receive an X-ray of your wrist. You will pay 100% of the cost of all services until you meet your deductible. You still get the insurance "In-Network" discount for having health insurance as you would with the traditional coverage; however if the doctor's retail cost of an x-ray is $200, and they are in-network, they have an agreed contract price schedule for their members. For example, if Blue Cross Blue Shield members come to my office the x-ray will only cost $150.
• All medical expenses like office visits and prescriptions, count towards your deductible. Once you have met your deductible on this plan, everything is covered at 100% even prescriptions. This differs from Traditional Coverage, where co-pays and prescriptions do not count towards your deductible and you are still responsible for those co-pays even if your deductible is met.
• Tax Incentive - With this plan, also referred to as the HSA Compatible plan. The government allows you to have a Health Savings Account (HSA) at a bank. The HSA is very similar to an IRA (Investment Retirement Account). Typically the rules in an IRA are: You can deposit money into that account tax-free. You can not withdraw it until your 65; unless you want to pay a 10% penalty and taxes on the money. With the HSA the same rules apply like in an IRA except you are allowed to withdraw money out if it without a penalty or tax consequence, only if it is a qualified medical expense (see link below for an example of the qualified expenses).

WHY THE HSA PLANS ARE LOWER IN COST

If you have to pay 100% of the cost up to your deductible, you are most likely going to ask questions about services and how much things cost, so you can compare with other doctors to get the best deal. Consumerism is the reason you will see that the rates are cheaper on this plan because it encourages you to be more involved in your health care, to stay healthy, shop prices with other doctors, and to not abuse the insurance which means not as many claims are paid out by the insurer.

Comparison Example: For a young healthy male, the premiums on a traditional coverage plan set up with a $1,000 deductible, 80/20 co-insurance, $30 office visit co-pay, and a maximum out-of-pocket of $3,500, would be $135 a month. On the High Deductible HSA Compatible plan with a $1,500 deductible, and 100% coverage after that is met, would be $91 a month. With this plan, you will save about $44 a month, and your total risk is $1,500 less because you are not paying %20 of the cost of that plan from $1,000 up to $3,500. The ideal thing to do would be to take that monthly premium savings, and deposit it into your HSA bank account, let it build interest and accumulate that money to save for future medical expenses. If you do need to go to the doctor, you will have that safety net you created with the HSA account, and will have that money to spend tax-free, to pay for the medical expenses up to your deductible should something arise. However, the money you deposit into your HSA account can only be taken out only for qualified medical expenses unless you want to pay the penalty and tax consequence.

Tax Savings - How it works: At the end of the year, the bank will send you a statement like a W-2, that states you have deposited and withdrawn X amount of dollars into your HSA. When you file your taxes, you will enter the appropriate amounts, into the correct sections of your tax return so you do not pay income taxes on the dollars contributed to your HSA.

HSA Reminders: Make sure that all expenses are on the qualified list of eligible expenses. Also, there are annual caps on the amount of tax-free money you can deposit each year into your HSA account.

Disclaimer: RiderSurance.com and its affiliates are not engaged in rendering tax, investment or legal advice. Federal and state tax regulations are subject to change. If tax, investment or legal advice is required, seek the services of a licensed professional.

Please visit the IRS website for exact rules and regulations for the HSA account guidelines.