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Sorry folks for the long break since my last post. I have been a little busy but thought that this morning I would write about the new Statistics Canada report on the shortage of doctors. Rather, the number of Canadians without a family doctor.
According to the report, 4 million Canadians do not have a regular doctor, and recent immigrants are the most likely to be without one. Only 73% of people living in Quebec have a regular doctor, the lowest rate in the country. Nova Scotia, however, had the highest percentage at 94%. Of those who do not have a family doctor, the study showed that 76% use local clinics and community health centres as their primary source of care.
This lead to me thinking…what does this mean for the corporate consolidation we are starting to see in places like Alberta and Ontario for medical services? ListenUp Canada, as an example, are consolidating hearing clinics and making access and service more streamlined. Will private walk-in clinics be branded next? For those looking for new business venture ideas, might I suggest a coffee in the coming weeks? We may be onto something here, especially if this trend continues!
To continue with my dental experience, I decided to ask for a series of estimates for braces – the invisible kind not the kind Tutti wore back in the eighties. Many of you are asking yourself…why on earth would you want braces? Especially at your age? Well, I have always had a bit of an overbite and when my wisdom teeth came in, they caused my teeth to be extra tight. So, I am exploring the option of getting braces…..until I received the quote. The cheapest solution will probably be $6,000 for what I am looking for – the equivalent of two 42″ Plasma Screen TVs or new hardwood floors in the house!
I don’t need them right away and can start saving today. Since Gremolata is incorporated, I qualify for a Health and Welfare Trust. I don’t want to go overboard here deposit-wise, but I could easily allocated $300 a month towards an HWT in my name. This could be considered the core health benefit plan for the company. This would provide me with $3,600 a year in deposits less a 10% administration fee ($360). Using this schedule, I would have enough saved up for the braces in two years. The dentist suggested I wait 6 months before I even consider the consultations with the specialist, so this time line works well for me.
Let’s do some tax talking for a minute. The $3,600/year would become a business expense for the corporation as a cost of doing business – keeping me healthy. The $3,600 deposited into my Health and Welfare Trust, as an employee of the corporation, would be a tax-free benefit for me (as long as I continue to reside outside of Quebec). In essence, I am now receiving $3,600 in additional compensation I can use for braces without having to pay the income taxes on the amount.
So, there you have it. I can use my Health and Welfare Trust to pay for my braces and save both myself and the company money. I can be flexible with a deposit schedule I am comfortable with financially and use the funds when I have reached my goal. You now understand how to save money as well as my dental records. Ah, the internet.
OK. I have to make an announcement. One that I am sure will shock many of you out there who know me personally and read my blog. It is a little embarrassing, however, I went to the dentist today….for the first time in twelve years!!
I know – somewhat gross, but I brush and floss daily and had perfect teeth as a child. Not a big issue in my books. I was one of those kids everyone hated, where I never needed braces and everything just grew in perfectly – even my wisdom teeth. I probably should ask my father for some money in lieu of costs associated with braces, considering how much my perfect dental history saved him. However, I have been scared of dentists and the idea of having someones fingers poking my teeth, so I resisted until I got an accidental chip on my front tooth.
The first thing that I encountered when booking my appointment was the famous line – “do you have insurance?”. I said yes and booked my appointment. Since it had been a while, I had to get the full exam with those creepy x-rays and the counting of the teeth. The dentist was a wonderful woman and I would highly recommend her to anyone in and around Oakville, Ontario (e-mail me if you want the details). Given the painless experience, I was ready to get all kinds of treatments like whitening and a guard to stop me from grinding at night – I deal with allot of stress these days managing the upcoming re-launch of Gremolata. The dentist said, these are all great things, but they will not be covered by insurance. That is when I said “no problem, I have a health and welfare trust”. She looked at me funny and that is when sales man James took over.
I explained to her about the Health and Welfare Trust I have with Benecaid and that I had a reserve of funds I could use for exactly this type of expenditure. She noted that these costs can be substantial but I told her that I had more than enough to cover it. She was impressed. After all, how many clients walk into a dental office and say, give me the works! Well, those with an HWT would.
I think this is why I am so passionate about Health and Welfare Trusts. I don’t feel limited to a plan. I can get the basic care I need but also invest in the things that will make me feel better about myself – such as brilliant white teeth or a new nose (the later requires more thought). All joking aside, it is a great feeling to know that you have the tax-free money to spend when and how you want to. It also makes me think how impressed every employee would be with the company they work for if they had access to the same HWT as I did.
Oh, and for the record. No cavities and a healthy smile was the diagnosis I received! Whew!
The Alberta government officially said goodbye to the health tax in their recent budget effective January 2009, joining seven other provinces and territories (New Brunswick, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Saskatchewan and Yukon) that don’t collect specific health premiums or taxes. These provinces fund healthcare out of general tax revenue.
So, what is an Albertan to do with their new found wealth? After all, each resident is looking at savings in the range of $528 per individual and $1,056 per family. It is a great amount to use on a new television or perhaps a BBQ for summer entertaining. But if they are self-employed, like so many other Albertans working in the oil and gas industry, they could be putting these funds into a Health Spending Account to maximize the return.
If you think about the money they are receiving back as part of their total budgetary spending, they could simply deposit the equivalent into a Private Health Services Plan. There are several HSA suppliers in Alberta who would be happy to take the money for them and in return, the taxpayer now has access to a reserve of funds to keep themselves and their family healthy. The big perk, they can double dip on the tax break they receive by making it yet another tax deduction for themselves as a PHSP. Brilliant!
I hope all self-employed Albertans will think about this as an option. It might be a small amount of money you are getting back, but it is still a great way to make it work for you long-term.
Well, in Canada that is. Today, Rogers Communications announced that it will be bringing Apple’s iPhone to Canada on their national mobile network. This is a big win for Rogers, but also a classic example of Canada’s long history of being a “wait to adopt nation”. In the benefits world, this could not be any more classic a scenario.
Canada is a great “wait and see country” when it comes to health benefits. We are situated mid-way between socialist driven Europe and Free-economy America. That being said, we tend to wait until one of these two parties develop a new health benefit delivery model then observe performance before we pounce on it. In marketing, we would be less “early adopter” and more “cautious analyzer”, not that it is a bad thing. This strategy has actually been beneficial to the global delivery of health benefits as many other countries rely on us to sit back, assess, and perhaps make it better.
As an example, one simply needs to look at our Universal Healthcare system. We did not invent it, but we certainly perfected it to meet the needs of our people (at the time). We did not invent Flex Benefits, but we were pioneers in making the election process easier using the Web. On-line enrollment, tele-claims, and direct-pay drug/dental cards were all heavily influenced by leading Canadian technology companies. However, while we have had an IT-bulletin from CRA allowing HSAs for years, we have yet to fully embrace them to the same degree as our neighbors to the south.
For the last example, I don’t think we are using a “wait and see” strategy. We were pioneers in allowing this model to exist and we could be offering these plans to every employee in Canada today. The strategy we are using here is “cautious execution”. I think we like the concept but want to see how other countries fare in rolling it out before we go full-throttle with any legislative changes. Will we go down the full consumer-driven healthcare model like our friends to the south or follow the UK model? Most likely, like everything we do, we will wait and create new HSA legislation to suit our needs and set a new standard for the world.
I wonder if this culture of “waiting to perfect” will have an impact on the iPhone? I for one would like to see it incorporated as a TV remote as well as a phone, PDA and iPod. Hmm, maybe I am on to something here.
I am really getting tired of reports indicating that health care costs are on the rise. It is kind of like saying this summer’s hottest trend will be swimsuits. But yet again, another report has been released (you know who you are) stating that health-care cost increases continue to outpace other business cost increases as well as the consumer price index. Groundbreaking study.
Where are the reports on trends in cost-containment or innovative benefit strategies? How about a study on the trends within small to medium sized employers or recommendations from businesses to reduce costs? As an industry, we tend to state the obvious far too much. Unless a study reveals that costs have actually gone down, why on earth report the findings? Especially if the report does not offer any solutions to reverse the trend.
To my colleagues in the benefits world, for the love of god, please stop stating the obvious. Otherwise we will all have to get new jobs in new fields where these skills are embraced. By the way, it is currently 18°C and partly cloudy in Toronto with light winds coming from the West and as the sun sets, I expect it will get cooler.
In previous entries I have talked about cost-containment and I recently realized that perhaps this topic needs some more clarification. Cost-containment is a buzz-word used by many in this industry and different players have different versions of what they bring to the table in terms of value. While they all offer good solutions, sometimes the simplest of models are overlooked. To support this, I ask the following…
What costs can you yourself as a business owner truly contain when it comes to health benefits?
For many, the answer is nothing. But think for a minute about what you pay and what it is used for. You pay a premium for health insurance much like you would a premium for auto insurance. The big difference is what you pay to have covered. Let’s assume your body is like a 2008 Volkswagen Passat. It has tires (or teeth) to grip the road. It also requires regular maintenance (like massage therapy or acupuncture) to keep it running and to prevent wear. Ten years down the road, you may need to spend money on a new engine not covered under warranty (like elective surgery) to keep it going for a few more years. In case you get into an accident, you buy insurance to protect you from the unforeseen and to give you the money you need to get the car back into working condition. Similarly, your body could become stricken with Cancer or Diabetes where you need drugs to help fight the disease and keep you in working condition as well.
The big difference here is that the last item, the unforeseen, is truly the only item you need to buy insurance for when it comes to your car. You don’t buy maintenance insurance or tire insurance as these are predictable expenses and it would not make sense to pay an insurance premium for something you already know you are going to need. Mind you, some form of fixed rate gas insurance might have been a good idea these days! The issue today is that we don’t treat the protection of our bodies the same way we do our cars. We insure the entire package, tires, maintenance and collision. Further, we choose a low-deductible so that we pay a higher premium unlike our cars where we tend to choose a higher one given the risk and the balance we are willing to take between upfront costs and unforeseen costs.
This is where I believe that the basics of cost-containment should be focused. For every day medical costs, we should be paying them out of our pocket in real dollars. After all, if you know that your teeth need to be cleaned every 6 months, why would you buy insurance for it and pay an inflated premium? It is going to happen just like a new set of Winter tires every November or an oil change. Instead, you should be using a more sensible financing vehicle to pay for the predictable medical costs and only purchasing insurance for the unforeseen, like Cancer, Heart Disease, or Diabetes.
To pay for the predictable costs, a Health Spending Account is the ideal solution. You can control the amount you spend and benefit from the tax savings. Secondly, you can contain the rising costs of premiums by taking away the claims you used to run through the plan and leave it for drug-only – the unforeseen costs if you will. If you are in decent health, you may wish to get a higher deductible drug plan, further reducing the premium you pay. The deductible amount can always be run through your HSA, so you are not loosing by doing this. If anything, you are saving even more money in taxes, a win-win solution.
Well, there you have it – my thoughts on cost-containment. I could have talked about per visit maximums, generic drug replacement, or electronic card adjudication and fraud monitoring. But the reality is that cost-containment really begins with the employer using the simplest of philosophies. Of course, it helps if you know a bit about cars in my analogy.
I have spent a few months looking at claims and how people submit them into Benecaid, where I currently work. Submitting manual claims can be a very frustrating experience for those not living inside the insurance world. Paperwork, mailing addresses, originals versus copies – it can be a real headache. That being said, I thought I would share some of the biggest mistakes people make when submitting claims to an insurance company.
1. Original Receipts & Prescriptions
This is by far the biggest issue for customers. You should always send the original receipt and if you have it, a copy of the prescription to validate that it was prescribed by a doctor. The second item isn’t always necessary but is handy to ensure faster processing. If you want a copy for your records, keep the photocopy AND NOT the original. The insurance provider or HSA adjudicator will question the copy and most likely return it to you. After all, if they received a copy, how many other companies did you send the copy to?
2. Use The Right Form
With so many forms, it is hard to stay on top of which one to use. Every insurer or HSA provider should have the forms readily available on-line. If you are unsure which form to use, your best bet is to call your insurer or HSA adjudicator once a year and ask. Download and print a couple and keep them on file.
3. Complete the form in FULL
Many insurers have standardized forms designed to be scanned to retrieve the data and convert it into an electronic format. This technology is used to speed up the processing and is designed to be a benefit for the customer. When you do not complete the form in full, or enter information in the wrong place, it can cause problems in scanning and slow-down the adjudication of your claim. Take your time and complete the form in full. Most insurers and HSA adjudicators have reference guides you can ask for if you need help…just ask them for a copy.
4. Send Your Claim to The Right Address
Be sure to send your original claim and the correct completed form to the right place. Many insurers and HSA providers have more than one location for adjudicating claims. If you are unsure of where to send your claim, call their customer care department before you send it. It can save you problems down the road.
5. Coordination of Benefits
If you are already covered under another plan (i.e. company plan or spouse’s plan), the insurer will most likely ask you to submit your claim to the first insurer before you submit it to them. They will cover anything not covered from the other plan up to your maximum. If you have an HSA, it is always wise to send the claim to your insurer first. When you receive the claim back, the difference can be taken out of your HSA. To do this, you simple forward the original Explanation of Benefit (EOB) received from the original insurer with a claim form. The HSA adjudicator will take the amount unpaid from your insurer and reimburse you the difference from your HSA. While it is a complex process, it does save you money in the long-run from your HSA. After all, if you already have insurance through another source and it is not costing you anything, you should take advantage of it!
These tips are not going to ensure that every claim is paid but it will help to make the process faster and ensure proper adjudication. If you follow these tips, you should see a significant reduction in follow-up with your insurer or HSA to find out…”Why won’t you pay my claim?”
I have been watching the Olympic flame protests over the past few days and have been wondering…what can I do to get the same spotlight turned to Health Spending Accounts? Don’t get me wrong, the protests regarding China, Tibet, and the Olympics are a bigger news story but I think it would be interesting if Canadians said enough is enough and headed to the streets to protest!
What would we protest? Why accessibility of course. Why are HSAs offered by only a few providers and why are they limited to business? Shouldn’t everyone have access to an HSA as they do in the United States? Is this the result of some anti-HSA sentiment lurking in the bowels of Ottawa? Why do Canadian families without a company sponsored plan have to use a high-priced drug insurance product from the big-three insurers when an HSA would be a better solution? Why Ottawa? Why?
It is a shame people do not get more enraged over this and want to start protesting. I can imagine a field of men, women, and children holding candles oustide of the Ministry of Finance in Ottawa. We would be singing classic HSA protest songs like “All we are saying is give HSAs a chance”, “We’re here we’re sick, and we want HSAs”, or my favorite…”I am HSA, hear me roar, in numbers too big to ignore..”. Good times.
Oh well, I will continue my blog until such time in hopes that someone in Ottawa will hear my cry…Vive la Revolution!
It has been three months since I started this blog, and slowly but surely, the message is getting out there. We now have a steady flow of loyal visitors to the site with an interest in Health Spending Accounts and how they themselves could be saving money. I am always looking for feedback from others and love answering questions from the readers.
Have a topic idea? Or a question you would like to stump me with? Then send me an e-mail with your question! I love a challenge!
Thanks again folks! Keep looking for more HSA insights right here!
HSA Information for Canadians 
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