What? No Medical Required?

I was at a cocktail party over the weekend and met another guest who happened to be an independent consultant.  When I told her that I worked in the health insurance world, she went silent and looked as if she wanted to kill me!  I noted the serious look on her face and said “Uh-oh, somebody better walk me to my car later..”  She laughed, and apologized for the glare.  She then explained herself..

It turned out that she did not have any prescription drug or dental coverage.  She had applied to the three well-known carriers ( I won’t mention which ones specifically) and had been denied a suitable plan because of a pre-existing condition she had and the fact that she travels overseas frequently.  The drugs she currently pays for, no matter what plan she selected, would never be covered.  When she heard I worked in the health insurance world, she immediately wanted to give me a piece of her mind.  That is, until I started to explain the concept of a health spending account.

In her situation, the HSA was the best solution.  She had no problem getting travel insurance, but it would not cover the pre-existing conditions.  That was the least of her concerns.  What she wanted was a manner in which to pay for her day-to-day drug claims in a more cost-effective manner.  Luckily, she was incorporated and was eligible for a health and welfare trust.  Over a drink, we estimated her average drug costs each month (including her massage therapy and dental visits.  At the end of the day, she needed a health and welfare trust worth about $200/month.  While I could not calculate the exact savings on the spot I did explain that the total amount would be an eligible business expense for the corporation and tax-free for her to spend.  Any overseas expenses related to her pre-existing condition would also be eligible as expenses from her health spending account – an added perk.  While she thought that was impressive, she was really more excited about the fact she did not require the medical!