Health Insurance Times

Medical Bankruptcy

In 2009, illness and medical bills contributed to 52.9% of Massachusetts bankruptcies. 
A bankruptcy was categorized as medical by one or more of the following conditions: 

1. Uncovered medical bills of at least $5,000 or more than 10% of income
2. The debtor listed medical illness or medical bills as a reason for bankruptcy
3. The debtor or spouse …
      a)    Lost 2 or more weeks of income because of an illness
      b)    Was completely disabled by a medical problem
      c)    Lost 2 or more weeks of income to care for a sick family member  
4. The debtor mortgaged a home to pay for medical bills

The overwhelming majority (89%) had health insurance for themselves and dependents.

                                                     The American Journal of Medicine, March 2011

Are Your Employees At Risk?

Bob Jones, one of your long-term employees has an illness and will be out for months.

He goes on COBRA.  Can he then afford 100% of the health premium with no income?

Let’s say your company has a disability plan.  Can he afford 100% of the premium with 60% of income (the plan benefit)?  That’s if the benefit is non-taxable.  What if it’s not?

Could he then afford to pay the 100% on 42% of income (his after tax benefit)?

Will your insurer withhold taxes?  Do you know for sure?  It’s not just enough for your CPA to quote the tax code.  You really have to know.  Would you appreciate some help?

Is there a written company policy for when disabled employees go on COBRA?

How can Bob plan for something he hasn’t considered?  Who’ll educate your employees?

Are you 100% certain you have no gaps, glitches, oversights in your benefit strategy?

Bankruptcies destroy families. 

If you'd like more information, e-mail me at russ@benefitslab.com.