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Child Health Insurance Open Enrollment

Written by dreilly. Posted in Blog, education, premium costs


January 1, 2013 marks the beginning of an important open enrollment period for children’s health insurance policies in Maryland.

During the month of January two insurance carriers, CareFirst Blue Cross Blue Shield and Kaiser Permanente of the Mid-Atlantic, will accept applications for children under the age of 19.  This is one of two scheduled open enrollments that allow application for coverage in 2013.  The other occurs in July.  New policies for children are unavailable at any other time, at least until health reform changes teh rules in 2014. 

Policies are available on a guaranteed issue basis without exclusion for pre-existing conditions.  The effective date for those who apply in January is February 1st.  The effective date for those who apply in July is August 1st.    

Health insurance is often provided through employer based coverage, and employers typically subsidize employee premiums.  But as healthcare costs continue to rise, trends show employer subsidies for family and dependent coverage continue to decline. 

If you have family coverage through your employer you may want to look at the cost to provide separate coverage for your children.  Often the total premium of separate policies is lower than that of one family policy offered at work.  Here are the reasons.  Fewer employers subsidize family premiums and employer plans are usually rated based upon the demographics of the group participants, where employee ages can have a large impact.  Rating for child policies are based on the child’s age, which is lower age than the ages of employees in an employer plan.  This means child policies are almost always lower cost.

The same strategy can be applied to spouse plans too, but the rate differences amay not be as attractive, and medical underwriting applies for adults.  

Whether separating a child or spouse policy will lower your monthly cost depends upon the level of employer subsidy.  It’s easy to determine however.  Just bookmark this page and run the rate sets for Maryland’s available child plans after January 1stRates for spouse plans are available now.  It’s free and only takes a minute.


5 Taxes to Increase Health Premiums

Written by dreilly. Posted in Blog, education, health care reform, PPACA, premium costs

You might think the goal of health reform is to make healthcare more affordable.  The bill after all is called the Patient Protection and Affordable Care Act.  

Well the truth is this.  Affordability is a key component.  But sadly for many of us who already have health insurance, we won’t reap the benefit of lower costs.  Premiums will rise for many of us to offset the massive costs of federal subsidies designed to help the uninsured, as well as many currently insured, pay for coverage.   But subsidies must be paid for. 

Back in 2009 when the politic debate raged over the legislation, Congress and the Administration realized the public would never support sweeping taxes on individuals to finance the bill.  So instead they raised taxes on the large healthcare corporations that, they argued, could more easily absorb the costs.  

Well, let’s take a look at a few financing mechanisms that begin between in 2013 and 2014 and consider how these requirements will assist in the goal of affordability.   

1)      Big Pharma will be required to kick in between $2.3 to $4.8 billion from the profits they receive from selling brand name prescriptions.  Let us not forget that U.S. pharmacy companies reap the benefit of U.S. laws that allow them to sell the same drugs to U.S. citizens at costs far above the costs they sell to citizens of other countries.  One can certainly argue they should pay the price for those protections.  However, the simple truth is that higher taxes on pharmaceuticals results in higher costs to health insurance carriers that pay claims.  Premiums will rise to cover.

2)      Medical device manufacturers will be charged a new 2.3% tax on the products they make.  So add 2.3% to the cost for things like crutches, braces, and titanium joint replacements, also items like tongue depressors and latex gloves.  Premiums will rise to cover.

3)      Health insurance companies will be required to pay a new Comparative Effectiveness Research Fee.  This is a relatively inexpensive fee, first payable as of July 2013 that is designed to fund studies to determine which types of procedures and treatments perform better than others.  Insurance carriers will pay just one dollar per participant per year to start.  The fee increases to two dollars per participant in year two and then indexes to medical inflation after that.  The fee is set to expire in 2019.  This of course assumes that a tax intended to end actually ends.  Although relatively inexpensive, it adds cost.  Premiums will rise to cover.

4)      Health insurance companies will be required to pay a new health insurance industry fee.  Fees are estimated to be between 2 to 2.5% of premiums beginning in 2014, rising to 3 to 4% of premiums in later years.   Premiums will rise to cover.

5)      Health insurance companies will be required to pay a reinsurance assessment fee.  This is which is estimated to cost between $60 to $90 per participant per year in 2014, $40 to $60 in 2015, and $25-$35 in 2016.  Premiums will rise to cover.   

Affordability in the Affordable Care Act is going to be tough to achieve.  We’ll have to hope for patient protection.


IRS Changes HSA Eligibility

Written by dreilly. Posted in Blog, compliance, education

The IRS has changed the eligibility rules for health savings accounts (HSAs).  Effective January 1, 2013, the minimum health plan deductible rises from $1,200 per person to $1,250 per person, or for families from $2,400 to $2,500. 

This means that to continue contributing to an HSA you must have a health plan with a deductible at least equal to or above the new minimum.   Those who maintain a deductible below the new minimum will no longer be able to contribute to an HSA and will therefore lose the tax advantages associated with future savings. 

Health plans have been notifying plan participants for several months of this pending change.   A variety of notices have been released from a variety of insurance carriers and administrative vendors, much to the confusion of plan participants.  Here are three important clarifications for HSA participants to know.

1)      As an HSA holder you do not lose the value of your account regardless as to whether you change your health plan deductible.  Your HSA balance is separate from your insurance plan and remains yours to save or spend as you wish on future medical expenses.  Remember, you own and control your own savings account. 

2)      The higher deductible requirement applies to new plans or plans that renew on or after January 1, 2013.  It also applies to plans that have deductibles that start over on the calendar year beginning January 1st.  If your deductible starts over on January 1st, then you must select a health plan with a deductible equal to, or higher than, $1,250.  If you do not, then you may no longer contribute to your HSA.  Once again, your balance remains your to save or spend down.

3)      Many participants have plans with deductibles that do not start over on january 1st.  Instead the deductible may start over at a later date in 2013.  For example, consider an employer plan that began on July 1, 2012 that runs through June 30, 2013.  Even with a lower$1,200 deductible, participants in this plan could continue to fund an HSA past the January 1, 2013 date through the end of the plan year up to May 31st.  A mid-year plan need not immediately increase the deductible on January 1st for participants to maintain HSA eligibility through the end of the plan year.   However, in order to maintain the ability to contribute to an HSA after the end of the current plan year, the plan would have to increase the deductible to meet the new minimum requirements.

Also of note, in addition to the deductible changes, the IRS has increased the maximum HSA contributions for calendar year 2013.  Beginning January 1st, eligible single HSA holders may contribute a maximum of $3,250 per year.  This is an increase from $3,100 in 2012.  For families the maximum contribution increases from $6,250 to $6,450.  Those who are over the age of 55 may contribute an additional $1,000.


Plans Recognize Same-Sex Marriage

Written by dreilly. Posted in Blog, education

Health plans in Maryland are now amending contract language to include eligibility for spouses in same-sex marriages performed in other states.  This comes as a result of changes in Maryland law.

In May 2012 the Maryland Court of Appeals ruled that Maryland law recognizes same-sex marriages performed in other states that allow for such unions.  The ruling further states that both participants to the marriage are considered spouses under Maryland law. 

In July 2012 the Attorney General of Maryland subsequently concluded that health insurance policies that offer coverage to spouses must include coverage for legally recognized same sex spouses.   Therefore, health plans must amend their contract language to allow spousal eligibility for same-sex marriages legally performed in other states.   

The amendment to health plan contracts is unrelated to the same-sex marriage referendum on the Maryland 2012 ballot.   In the event the Maryland same-sex marriage referendum fails, the law will continue to recognize spouses of same-sex marriages legally performed in other states, and health insurance plans will continue to provide same-sex spousal eligibility.  If the referendum passes, then spousal recognition will then expand to also include same-sex partners of marriages performed in Maryland.

Many Maryland health plan contracts already allow for domestic partner eligibility.


Get a Free Pedometer App

Written by dreilly. Posted in Blog, education, employee communications

CareFirst Blue Cross Blue Shield is now offering a free pedometer app as a means to encourage healthy living. 

You’ll be able to count your steps, distance traveled and calories burned for each workout with Ready, Step, Go!.  Aim for 10,000 steps a day to help control your weight, reduce stress, strengthen your heart and lungs, and improve bone density.   Just visit your favorite app store and search for Ready, Step, Go!  It’s a free download for those who have an iPhone, iPod Touch or Droid smartphone.  

Go get it and start walking today.  It’s free! 



Is AFLAC Really Worth It?

Written by dreilly. Posted in Blog, education

We’ve all seen the duck.  He’s the quacky little fella who tells us to ask about AFLAC at work.  But what is AFLAC?  Why would we ask for it at work?  And why should we listen to a duck?

The duck leads an advertising campaign created in 1999.  The marketing has been so brilliant that today AFLAC is perhaps known more for the quacky character than it is for the insurance services it provides.  In fact, the duck has been so successful that it even holds a place on Madison Avenue’s Walk of Fame as one of America’s Favorite Advertising Icons.

AFLAC insures members by offering cash benefits for a variety of events that create out of pocket expenses.  Policies include, but are not limited to, accident, sickness, cancer and other specified health events, hospital confinement, disability and dental and vision.  Each policy can be selected individually and are typically offered through employers who conveniently payroll deduct the monthly premiums.  This is why we’re told to “ask about it at work.”

AFLAC policies are generally available without much in the way of medical underwriting and they do not require medical exams.  Where an employer does not offer a benefit, for example dental or disability income protection, employees can purchase a policy based upon individual needs, regardless of whether other employees have the same needs.  It’s truly a voluntary product.

One of the best uses of an AFLAC benefit can be found within the accident and sickness plans.  With so many medical plans adopting high deductibles these days, cash benefits for injuries and illness compliment the health plan by providing dollars that can be used to help pay the deductible.  This can be a great help to the many without savings or disposable dollars, particularly at time when stresses are likely high as a result of the injury or sickness.

With over 60 million members worldwide AFLAC, a Fortune 500 company, is one the largest insurance companies providing individual policies.  There are many reasons for this success, including the wide variety of products, low cost, little paperwork, speedy claim turnaround, and yes, even the duck.  If you don’t already have AFLAC, then you may want to “ask for it at work.”  It’s worth it.


Explaining Explanations of Benefits

Written by dreilly. Posted in Blog, education

A broken arm recovers in three months but medical claims and billing will last much longer.

As insurance advisors we review medical claims for clients every day.  Today my family has claims of our own.

A Saturday evening basketball game recently brought us to the emergency room after our 13 year-old took a bad spill and broke his arm on the court.  Six hours, and the-still-yet-to-be-determined number of dollars later, we had our young man home adjusting to his newly fitted full-arm cast.  Three weeks and a handful of x-rays later he’s doing just fine.   That was the easy part.

Now we have to deal with the medical bills.  Making sense of medical billing is difficult for most people.  We have a $2400 family deductible, so we’re responsible for payments up to this amount before our insurance begins to pay.   This means we’ll receive bills from many different providers for many different values for treatment rendered at several different points of service.  We’ll see statements from the hospital for the emergency room, the office of the orthopedic surgeon, anesthesiology, radiology, pharmacy, and at least half a dozen follow up visits, many of these with even more radiology.  We’ll even see a bill for the ambulance ride.

In addition to the mounds of bills from the various providers we’ll also receive explanations of benefits from the insurance company.  Our insurance company calls these statements EOBs.  Other carriers use the term explanation of coverage, or EOC.  Explanations are provided to members to illustrate how the insurance company processes a claim.  And the calculations can be confusing.

Understand the amount a doctor or facility charges isn’t normally the amount an insurance carrier agrees to pay for a particular service.  Insurance plans usually have contracts with providers to pay lower pre-agreed upon rates.  The EOB shows the provider’s actual charge, the fee reduction, the member’s responsibility, and the total amount the provider is allowed to collect from the member.  Ideally the bill the doctor sends should match the member responsibility amount shown on the EOB.  Members should always review and compare both the EOB and the doctor’s bill for consistency.

Unfortunately this isn’t always quite so simple.  Often the carrier denies certain fees outright and explains the reason by listing an adjustment code.  The adjustment code is usually found elsewhere in the EOB.  For example, a claim may have been submitted by the doctor for a service that should have been charged as part of a different service.  Think about a doctor’s office charging for an evaluation where the overall office visit should have included an evaluation.  In this case the carrier would deny the duplicate fee and code the line item as such.  A member may at first glance see only the denied fee and mistakenly believe a charge remains due.  Only if the member carefully reviews the coding and member responsibility amount will it be determined the fee is unallowable.  The member should then scrutinize the bill eventually received by the doctor to be sure the unallowable fee described by the EOB is waived.

Further complicating the EOB and billing process is that many plans only pay benefits (or pay higher benefits) when members seek services from network, or participating providers.  Network providers have agreed to the fee schedule on which the carrier bases its payments.  When a member seeks care from a non-participating provider the EOB will describe and code the charges as unallowable or reduced.  In this case all or some of the charges are payable by the member and the doctor will send a bill.  Still, even in this case the EOB will indicate the total member responsibility and the doctor’s bill should match.

Examples of other typical adjustments can include denials or reductions in coverage amounts for failure to obtain pre-authorizations or seeking care without proper referrals.  There are many reasons for adjustments and all are coded and explained within EOB.

It’s been about three weeks since our youngster broke his arm.  We’ll begin to see EOBs within the next week or so.  Doctor and facility bills will begin to follow.  Ultimately we’ll see dozens of EOBs and billing statements over the next couple of months for just this one event.

In our case, we’re responsible for the first $2400 in charges, the total of which accumulates as each EOB arrives.  If we’re diligent, then we’ll maintain all records in a single place, and we’ll carefully match each EOB with each bill received.  If we identify a mismatch we’ll contact the insurance carrier for further explanation.  If it’s determined the insurance carrier made a calculation or coding error, then we’ll work to get that corrected.   If we determine a provider’s bill to be incorrect, then we’ll contact the doctor’s office or facility to straighten it out.

Once we’ve satisfied our deductible requirement the EOBs will illustrate lower payment responsibilities in the form of copays and/or coinsurance.  We’ll have to match these new amounts with future bills we receive, all the while maintaining the same careful review.

Billing is largely electronic these days, and members have a great deal of online access to view claims and provider payments.  But the bureaucracy and number of providers involved, a general misunderstanding by members of the claims process, and the shear amount of paper in the form of EOBs and doctor bills remains a sure recipe for confusion.   To simply pay bills and ignore the EOBs doesn’t allow a member to track the deductible, nor does it allow the member to verify the accuracy of payments to providers.  Plan members should review and compare every EOB and every provider bill.

We know our young man will be back on the court in a couple of months, but we’ll still be thumbing through mounds of bills and EOBs, hoping to eventually put the confusion behind us…until the next time.


Comparable vs. Competitive Benefits

Written by dreilly. Posted in Blog, education

Businesses offer benefit programs as a means to attract and retain quality employees.  Most offer medical, dental and vision policies.  Others offer life insurance and disability income protection.   Still, there are many low-cost ideas employers can embrace to enhance their programs.  To truly offer competitive vs. comparable benefits employers can improve a program by including simple, value-added perks.  As an introduction to this concept we reprint the following column with permission by its author, Kyle Lagunas, HR analyst at Software Advice.


Creative Benefits to Engage, Motivate, and Retain

Fact: A standard package of health, dental and vision insurance, some paid vacation, a modest life insurance policy is not “competitive.” Although attracting and retaining top talent continues to be a challenge for business leaders, most employers still boast of their competitive benefits offerings… which are really nothing special (“comparable,” even). And employers who continue to offer the same old benefits package will fall behind in attracting, motivating and retaining the best.

The lines between work and personal lives are blurring for many employees. They’re seeking balance between the two, and are finding value in the ability to choose the specific benefits that best meet their needs at this point in their lives. And employers are learning that, when chosen and implemented effectively, however, benefits can demonstrate leadership’s concern for the well-being of employees, reinforce cultural values, and foster deeper employee engagement.

According to James Berkeley, Director of Berkeley Burke International, however, there’s still a disconnect. “The decisions made regarding what benefits to offer are often based on subjective viewpoints, viewpoints that are far removed from the actual needs of employees.” Rather than assuming you know what your employees want, Berkeley suggests you ask them. Though answers will vary, many people are interested in more benefits in these areas:

Healthy Living and Wellness Benefits. Susan Combs, President of Combs & Company, “The biggest benefit that employees ask for is gym membership reimbursement.” Wellness programs like WalkingSpree–which creates walking clubs, assigns teams and creates competitions–are another great way to motivate and engage employees to live healthy (thereby reducing your health care costs).

Flexible Work Options. Telecommuting and other forms of flexible work options make employees healthier and happier.  And as Sara Sutton Fell, Founder and CEO of FlexJobs points out, studies show that, “Employers who offer flexible schedules and alternatives to the traditional nine-to-five not only see higher productivity, but also save on health-related benefits they already offer.” Stanford University conducted a big study that showed that telecommuters were four percent more productive than office workers, working more hours and taking a larger workload.

Commuting Relief Benefits. More and more are looking for commuting relief benefits from their employers. Incentivize carpooling; use services like Transit Chek so employees can purchase transit tickets with pre-tax dollars; Or promote healthy living and alternative commuting options by installing bike racks your the office.

Perks You Can Afford. Great perks aren’t just for the guys in Silicon Valley. Many companies–big and small–bring in a massage therapist who offers chair massages to employees. Convenient and relaxing, this perk costs the employer nothing and might just keep employees in the office longer. Others adopt reward programs like BetterWorks where employees are given an allowance to spend on discounted food from local restaurants, dry cleaning, gym memberships and more.

Clearing The Great Leadership Hurdle

By offering benefits that are actually competitive, an organization can set itself above the competition–and build a strong culture of engagement and motivation. But as Eddie Trieber, CEO of HRI, points out, “Getting there requires the support of leadership–and there are a few common concerns that need addressing.” Leaders are often focused on Costs, Immediate Benefit, and Employee Utilization. It’s up to you to deliver on these key points.

Address the issues of cost by reminding leadership how little (if anything) creative benefits cost the organization. It might also help to frame benefits in terms of investments–not costs–in new employee acquisition and retention. And educate your employees. Actively promoting offerings in your recruiting strategy. Use open enrollment to re-educate employees. Add FAQs and educational content to the employee self-service portals in your HRMS.

About the Author: Kyle Lagunas is the HR Analyst at Software Advice.  Kyle reports on trends, technology, and best practices in human resources and recruiting.


Wellness Programs in PPACA

Written by dreilly. Posted in education, health care reform, PPACA, premium costs

The debate over the Patient Protection and Affordable Care Act (PPACA) may have divided Congress and even theelectorate, but some areas of law have bi-partisan support.  One such area is the promotion of wellness initiatives.

It’s no secret that health costs in the United States have been increasing faster than wages or inflation for many years.  We’re on an unsustainable track.  But a close look at actual claims shows that as much as 75% of expenditures go toward the care and treatment for chronic illnesses like cancer, heart disease, asthma, blood pressure and cholesterol problems and the biggest one, obesity.   It’s been said that obesity is an epidemic in the Unites States and poor weight management can be blamed for a number of these other chronic illnesses.

But here’s the point.  Chronic diseases are often preventable, and if not, they’re at least controllable in most cases.  While many can point to genetics and heredity as root causes of disease, it’s obvious that lifestyle choices like smoking, alcohol abuse, poor eating habits, and lack of exercise are main causes for many people.

Promoting wellness as a means to change behavior isn’t a new concept, but provisions in PPACA will encourage better practices in this area.  For starters, small employers will be eligible this year for grants to launch wellness initiatives.  The program will offer up to $200 million to employers with fewer than 100 full time employees who did not have a wellness program in place when the law passed on March 23, 2010.  Details have yet to emerge, but the application process should be known by the end of the year.

Beginning in 2014 employers will be permitted to discount employee health premiums by as much as 30% for those who participate in wellness programs or for those who reach certain measurable health targets.  The discount could be increased to as much as 50% at the discretion of Secretary of Health and Human Services.  These allowances should encourage employers to support employees with wellness initiatives, which in turn could reduce health costs.

The Centers for Disease Control and Prevention will be tasked with providing technical support to employers as a means to assist employers launch and manage their programs.   Additionally, CDC will be responsible for reporting back to Congress about best practices as means for improving the law’s allowances.

The debate over PPACA is far from over.  Litigation, new legislation, funding, all are issues that could derail portions of the law or even the law itself.  But regardless of the outcomes here, it would be nice to see some true successes result from the practical wellness approaches included in the law.  We just might see some lower costs if we can get ourselves off the couch.  Fat chance?


Carriers Pay Maternity

Written by dreilly. Posted in Blog, education, health care reform, income protection

Maternity benefits are eligible events in most short term disability policies. They fall under the illness schedule as opposed to the injury or accident schedule (even if the pregnancy occurred accidentally!) Policies begin to pay claims after a waiting period for either type of event. Payments for injuries or accidents usually begin before illness events. For example, a policy may offer income payments as of the first day of an accident while the policy may require a one week wait before payment for an illness. Waiting periods differ from policy to policy.

Under most policies, maternity claims are generally payable for a maximum of six weeks from the date of the delivery. This is standard industry practice based upon general medical guidelines. Complicated deliveries and extenuating medical conditions can of course allow for an extension of claims.

Here’s a quick class. If a policy requires a one week waiting period before payments begin, and if a participant stops working on the actual day of the delivery, then the plan will begin the waiting period on the date of delivery, which leaves the participant with only five weeks of eligible claims left of the six available. But considering many doctors send participants home for bed rest before the expected date of delivery, the maximum benefit changes. This is because the waiting period begins on the day the member is sent home as opposed to the date of delivery. For example, if the plan requires a one week wait, and if a doctor sends the member home one week prior to the delivery date, then the member has the opportunity to satisfy the waiting period while at home before the delivery date. The policy will then still pay the industry standard maximum of six weeks once the delivery occurs.

Similarly, if a participant leaves work four weeks early for bed rest due to doctor’s orders the policy will then pay a maximum benefit of nine weeks of claims. This is because the member satisfies the one week waiting period starting from the date the member went home. Claims payments then begin three weeks before the delivery date while the member remains unable to work at home. Once the delivery occurs the policy will still pay the industry standard maximum of six weeks once the delivery occurs.

To simplify…. just remember that maternity claims are generally paid for six weeks from the date of delivery. The policy waiting period starts as soon as the member takes leave. If the leave occurs before the delivery date, then the member receives more weeks of payment. If the leave occurs on the delivery date, then the member receives fewer weeks of benefit.


'The commitment Reilly Benefits makes to our company to ensure our benefits and claims are handled promptly and correctly goes beyond that of any agency I have seen in my 20 years of working with insurance brokers.'

Karen Siebert, CFO
Great Mills Trading Post

'Our experience with Reilly Benefits has been very positive. The courteous and friendly staff has taken care of our every need. Their knowledge and dedication have afforded us the opportunity to thoroughly explain the benefits and importance of insurance coverage to our employees. I would highly recommend this organization to any individual or business for all types of insurance or tax planning.'

Dottie Wyatt, Controller
Atlantic Cycle & Power
'We rely on the recommendations of Reilly Benefits to provide plan options for our employees in a way that controls our costs and we feel great relief knowing that they keep us abreast of health care legislation and other issues that affect the managemnent of our plans.'

Regina Anderson
Vice President
Dennis Anderson Construction
'Our experience with Reilly Benefits has been very positive. The courteous and friendly staff has taken care of our every need. Their knowledge and dedication have afforded us the opportunity to thoroughly explain the benefits and importance of insurance coverage to our employees. I would highly recommend this organization to any individual or business for all types of insurance or tax planning.'

Dottie Wyatt, Controller
Atlantic Cycle & Power

'The commitment Reilly Benefits makes to our company to ensure our benefits and claims are handled promptly and correctly goes beyond that of any agency I have seen in my 20 years of working with insurance brokers.'

Karen Siebert, CFO
Great Mills Trading Post


Reilly Benefits, Inc. works with employers in a wide variety of industries. This allows us to understand the uniqueness of specific benchmarks within certain industries and among different market sizes.

Our ability to help employers compare and contrast a benefit plan to these benchmarks provides our clients an advantage in the ultimate goal to attract and retain quality employees.

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5419 Deale-Churchton Rd. Churchton, Md. 20733

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