Comments on: Individual Health Insurance Vs Government Intervention http://www.healthinsurancecolorado.net/blog1/2008/07/25/individual-health-insurance-vs-government-intervention/ Research and discussion of the Colorado health insurance industry and the healthcare crisis in America. Tue, 16 Mar 2010 22:14:50 +0000 http://wordpress.org/?v=abc hourly 1 By: Don Levit http://www.healthinsurancecolorado.net/blog1/2008/07/25/individual-health-insurance-vs-government-intervention/comment-page-1/#comment-11229 Don Levit Tue, 29 Jul 2008 14:48:59 +0000 http://www.healthinsurancecolorado.net/blog1/?p=448#comment-11229 Jay: Thanks for your questions. I will try to provide satisfactory answers. The plan I envision would be a conversion of a group-type arrangement. In that situation, the new individual policy would not, in my opinion, be an ERISA plan at the new employer. I base my opinion on the safe harbor established by the DOL, as well as several federal court cases. So, the employer need not contribute toward the premiums. Regarding an employee who is disabled, I wonder if providing a waiver of premium benefit, such as we have on life insurance, would be feasible. I also envision an option in which premiums can be reduced, or even skipped. Of course, as in a defined contribution retirement plan, benefits would be lowered, but they would not be eliminated if the premium cannot be honored. Don Levit Jay:
Thanks for your questions.
I will try to provide satisfactory answers.
The plan I envision would be a conversion of a group-type arrangement.
In that situation, the new individual policy would not, in my opinion, be an ERISA plan at the new employer.
I base my opinion on the safe harbor established by the DOL, as well as several federal court cases.
So, the employer need not contribute toward the premiums.
Regarding an employee who is disabled, I wonder if providing a waiver of premium benefit, such as we have on life insurance, would be feasible.
I also envision an option in which premiums can be reduced, or even skipped.
Of course, as in a defined contribution retirement plan, benefits would be lowered, but they would not be eliminated if the premium cannot be honored.
Don Levit

]]> By: Jay Norris http://www.healthinsurancecolorado.net/blog1/2008/07/25/individual-health-insurance-vs-government-intervention/comment-page-1/#comment-11216 Jay Norris Mon, 28 Jul 2008 21:12:23 +0000 http://www.healthinsurancecolorado.net/blog1/?p=448#comment-11216 Don, Good idea. When the employee carries his policy with him to the new employer, what happens if the new employer has a tighter budget and doesn't offer as rich of a plan? Does the employer still need to contribute atleast 50% toward that plan (that's how it works in Colorado)? Or what if the new employer doesn't offer health insurance as a benefit? Or what if the employee had to leave the job because of a serious illness and had no disability coverage and now has no income to pay for any of the premium along with big medical bills to pay? I have a lot more "what-if's," but I'll spare you. Do you think a better option would be to just eliminate the patchwork and cracks in the system for people to fall into and have coverage that's more, uh, what's the word I'm looking for... universal? Don,
Good idea. When the employee carries his policy with him to the new employer, what happens if the new employer has a tighter budget and doesn’t offer as rich of a plan? Does the employer still need to contribute atleast 50% toward that plan (that’s how it works in Colorado)? Or what if the new employer doesn’t offer health insurance as a benefit? Or what if the employee had to leave the job because of a serious illness and had no disability coverage and now has no income to pay for any of the premium along with big medical bills to pay? I have a lot more “what-if’s,” but I’ll spare you.

Do you think a better option would be to just eliminate the patchwork and cracks in the system for people to fall into and have coverage that’s more, uh, what’s the word I’m looking for… universal?

]]> By: Don Levit http://www.healthinsurancecolorado.net/blog1/2008/07/25/individual-health-insurance-vs-government-intervention/comment-page-1/#comment-11215 Don Levit Mon, 28 Jul 2008 20:05:07 +0000 http://www.healthinsurancecolorado.net/blog1/?p=448#comment-11215 Louise: I agree with much of what you wrote. If we believe insurance should not be employer-based, we need to create options for people to continue their group insurance coverage when leaving their employers. In that fashion, we need not have to deal with the issue of proving insurability. I am not thinking of COBRA-type coverage. Rather, I am thinking of a group-type arrangement, in which the employee carries his policy with him to another employer. This needs to be done in a way that addresses adverse selection. It also needs to be attractive to both the employer and employee: for the employee, valuable coverage which has a more permanent basis; for the employer, a plan that reduces his liability and his cost, as a current and a former employer. Don Levit Louise:
I agree with much of what you wrote.
If we believe insurance should not be employer-based, we need to create options for people to continue their group insurance coverage when leaving their employers.
In that fashion, we need not have to deal with the issue of proving insurability.

I am not thinking of COBRA-type coverage.
Rather, I am thinking of a group-type arrangement, in which the employee carries his policy with him to another employer.
This needs to be done in a way that addresses adverse selection.
It also needs to be attractive to both the employer and employee: for the employee, valuable coverage which has a more permanent basis; for the employer, a plan that reduces his liability and his cost, as a current and a former employer.
Don Levit

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