How financial advisors can advise clients on nontraditional coverage

Posted by Emily Kubis on Wed, Jun 20, 2018 @ 16:06

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Three things to know

Have your clients asked for advice on health coverage? As healthcare costs continue to skyrocket and become cause for concern for Americans at every income level, more financial advisors are recognizing an opportunity to provide another level of service and advice.

When it comes to health coverage, there are numerous strategies your clients may consider. While most are probably covered under a traditional workplace plan, there are nontraditional options that might be a good fit for clients in different situations. For example, if you have clients who are self-employed or retiring before Medicare eligibility, they may need a different solution.

Even clients who have access to a traditional, comprehensive workplace plan may see less value in this type of coverage as premium costs rise into the hundreds and thousands of dollars per month.

Here are three types of nontraditional coverage your clients may consider. While advising on healthcare isn’t typically financial advisor’s area of expertise, having a working knowledge on these options will allow you to position your firm as providing comprehensive advice. Want to offer your clients personalized healthcare advice? Bernard Health provides a Healthcare Extension to financial practices across the country that allows advisors to provide insurance recommendations, enrollment assistance, medical bill auditing and more. Learn more.

Three kinds of nontraditional coverage

1. Short term plans

Sometimes called temporary health plans, these plans are designed to cover consumers who are in between other types of coverage, due to a job change, move, or other life changes. Under current regulations, they cover the purchaser for up to three months and cannot be renewed with the same carrier.

They are different from other coverage options, largely because they are not designed to be a long-term solution. Short-term plans do not cover pre-existing conditions and may or may not cover preventive care or prescriptions, unlike more traditional coverage types.

The Trump administration has proposed extending these plans to cover consumers for up to 364 days, and allowing for renewals, making these plans a more competitive option against comprehensive health plans.

2. Direct primary care

Also known as concierge medicine, some private doctors provide all-inclusive care for a monthly or yearly subscription price. These physicians typically do not accept insurance, which allows for a more personalized, hands-on care approach. For clients who have the ability to pay cash for most preventive and chronic condition care, this can be a good solution.

3. Underwritten coverage

In some states, eligible consumers can sign up for underwritten health insurance. This is the type of individual coverage that was available before the ACA. Underwriting means insurers can use an enrollee’s health status to determine premiums or deny coverage altogether.

The ACA prohibited this practice for its marketplace plans, but certain organizations are still able to offer these kinds of plans. These plans are much cheaper than ACA insurance, which has attracted healthier consumers. Now that there is no penalty for failing to carry ACA-compliant coverage, more consumers may pursue this kind of coverage.

More — Financial advisors: Your clients have anxiety around healthcare costs in retirement

Bernard Health’s noncommissioned advisors have a decade of experience helping consumers find the right health insurance strategy, including both traditional and nontraditional options. Through the Healthcare Extension, financial advisors can give their clients access to a team of licensed advisors who provide healthcare support in an area of significant financial concern. Learn more by clicking below.

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Topics: Bernard Health, financial advisors, financial planner, healthcare extension, retirement, medicare costs, healthcare costs, short term plan, direct primary care

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employer healthcare freedom
employer healthcare freedom