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CRPC Module 5_ Navigating Healthcare Options in Retirement
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CRPC Module 5_ Navigating Healthcare Options in Retirement
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CRPC Module 5: Navigating HealthcareOptions in Retirement
Plans Under the Affordable Care Act - ANS-Catastrophic plans pay for less than 60% of
the total average cost of care. Only available to individuals under age 30 unless they
qualify for a hardship exemption.
Bronze plans pay 60% on average and the insured pays 40%.
Silver plans pay 70% on average and the insured pays 30%.
Gold plans pay 80% on average and the insured pays 20%.
Platinum plans pay 90% on average and the insured pays 10%.
Deductibles - ANS-A deductible is the amount that the insured must pay before the plan
pays anything. Deductibles do not apply to every service; for example, preventive care
and wellness benefits, such as mammograms and well-baby care, are paid 100% by the
insurance company. Health insurance deductibles are annual deductibles, not a per
incident deductible.
Coinsurance - ANS-Coinsurance is a percentage of the expenses that is paid by the
insurance company once the deductible has been met for covered services. A
copayment is a set amount that the insured will pay for a service such as a doctor visit.
The copay amount may or may not be applied to the annual deductible or coinsurance
percentage, depending on the plan.
Health Savings Account (HSA) - ANS-Tax-sheltered savings account similar to an IRA
but created primarily to pay for medical expenses.
Save up to $3,600 a person. Extra $1,000 if 55 or older.
Cannot be covered by Medicare, be claimed as a dependent, are not entitled to
coverage under any other health plan that is not a high-deductible health plan.
Advantages of HSAs, Individual - ANS--An individual (account owner) may claim an
income tax deduction for cash contributions made to an HSA, even if such person does
not itemize deductions on their income tax return. In contrast, medical expenses must
exceed 7.5% of adjusted gross income in 2021 before they may be deducted by an
individual as itemized expenses on their income tax return.
-Interest and earnings on amounts held in an HSA accumulate tax free.
, -Employer contributions to an HSA on behalf of an employee-account owner do not
result in taxable income.
-Distributions from an HSA to an account owner are tax free as long as they are used to
pay for qualified medical expenses.
Advantages of HSAs, Business - ANS--Employer contributions to an HSA are
deductible for income tax purposes.
-Employer contributions to an employee-account owner's HSA are not subject to payroll
taxes.
-Employee salary reduction contributions may be made to the HSA feature that is part of
an employer-sponsored cafeteria plan. Salary reduction contributions made to an HSA
are not subject to payroll taxes.
-Employers may be able to redesign their existing health plans to take advantage of the
HSA rules. For example, an employer might be able to reduce the premiums paid for an
existing health plan by increasing the deductible and/or out-of-pocket costs. The
reduction in premium costs could be used to fund separate HSAs established for
employee-participants of the health plan.
Power of Attorney - ANS-Authorization for another to act as one's agent or attorney in
either specified circumstances (special) or in all situations (general).
There's limited power of the attorney and full power of attorney; as well as durable
power of attorney. Durable power lets another individual act on the incapacitated
person's behalf.
Trusts - ANS-Revocable Living Trust:
substantial funding should occur when the trust is created. The trust is operative and
manages the transferred assets even before incapacity occurs.
Contingent Trust:
A contingent trust (standby trust) describes the timing of funding and fully operating a
revocable living trust. It is not a different type of trust legally. In a contingent trust,
substantial funding occurs only after the grantor becomes incapacitated. Prior to the
grantor's incapacity, the trust does not actively manage the grantor's assets—it is only a
shell into which assets can be transferred later. Thus, someone must be given a durable
power of attorney—usually a springing power—to transfer assets to the trust so that the
trustee can manage the assets for the incapacitated person's benefit. An advantage of a
contingent trust is that it delays the power of the new trustee until he or she is actually
needed. This reduces the likelihood of fraud and combats elder abuse by the trustee
prior to incapacity. On the other hand, if the trustee is highly unlikely to take personal
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