Friday, November 1, 2013

It's Alive! (Oy)

Long time readers may recall The Great Quigley Kerfluffle of Aught Six; Bob's cogent, explicit and thorough take-down of the misuses of Section 105 plans still gets hits. Briefly (although I really suggest you check out Bob's original post on this), Section 105 plans are/were a way to run certain health insurance, and health care, dollars through a tax-advantaged vehicle.

They were touted by a certain "benefits advisor" as a way to delete group plans (and remember, this is 2006, when the ObamaTax was merely a gleam in a certain State Senator's eyes) and insure employees on individual plans. In and of itself, this is not a bad nor evil (or even fattening) idea; the problem arose when it became the de facto "flavor of the month," leaving the most ill employees and their dependents without coverage.

But that was then, and this is now, so why bring up such a painful episode from almost 7 years ago?

Let me tell you a (brief) story:

Yesterday, a former client called, telling me that she and her husband may need to purchase an individual major medical plan. Great timing! They're currently on a COBRA plan from his previous employer; his new employer, whom he joined a few months ago, promised a generous employment package, including a raise and, of course, first class health insurance. Last week, the employer announced that he was canning the group insurance, a few weeks before my erstwhile client (we'll call him Max) would have become eligible to sign up. And with what was his new employer going to replace the group plan?

You guessed it: individual, underwritten plans. The catch? Max and his wife were declined for coverage (although his co-worker, who had been treated for colon cancer just a few years ago, claims that he was accepted. Color me skeptical). Max called me for help and advice.

As I listened to his tale of woe, something struck me as "off" about the process he described. The more I heard, and the more questions I asked, the greater my discomfort grew. I finally asked him if he knew the name of the outfit his employer was using for this terrific new plan, and when I Googled its name, well, let's just say I was more grimly satisfied than surprised.

Turns out, our old "friend," about whose exploits Bob originally penned his 2006 post, is up to his old tricks. The employer is also playing with fire (he seems to have at least 50 employees, spread over several different companies in a sloppily transparent attempt to avoid the Evil Mandate), but that's his and his "advisor's" problem, not mine.

My challenge is to help Max and his family navigate [ed: Heh!] the minefield which has been set before him thanks to his new employer and his "advisor."

Oh, you may be wondering why I keep using the term "advisor." Turns out, in the years since our own encounters, the "gentleman" in question has decided to suspend his own insurance sales activities. Whether or not that was by choice remains unclear, but his official company bio simply says that he's "an advocate for the business owner [whose] main focus is on saving employer's money." A noble enough proclamation, if perhaps a bit self-serving.

And of course, it does nothing to ensure the financial health of that employer's victim employee. My client told me that his employer and the "advisor" assured him that they'd find him coverage, or at least work out some kind of reimbursement "arrangement;" as you've probably guessed, I urged him not to agree to or sign any such agreement before I've had a  chance to review it with him. I do, however, find it oddly amusing that this all took place yesterday.

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