Medical Savings Plans – One Alternative for Handling Children’s Medical Expenses

Dreamstime_1486256 Shannon Cavers of the Houston Divorce and Family Lawyer Blog has published several articles on reimbursement of children’s medical expenses. This is the third:

Many employees have access to pre-tax savings devices called Medical Savings Plans or Medical Savings Accounts. Through such plans, an enrolled employee participant may designate a portion of his/her pre-tax income to be deposited in an account designated for health care. One of the benefits is lowering the employee’s taxable income.  Another benefit is saving for large ticket items such as annual deductibles, surgeries, braces, or other medical services which may not be covered by an insurance carrier.

I used to dislike such plans because withdrawing funds for reimbursement was too burdensome and paper-work intensive for the tax benefit. However, I have heard that many medical savings plans are much more user friendly these days, offering access to the deposited funds through a debit card.   

For older children who take themselves to dental appointments or to the orthodontist, this may be a great vehicle for paying and tracking the child’s medical expenses.

For more information on such plans, speak to your human resources department or your CPA to learn more about the tax benefits.

SOURCE FOR POST: Houston Divorce and Family Lawyer Blog

Sample Letter for Medical Expense Notification

Dreamstime_1740114 Shannon Cavers of the Houston Divorce and Family Lawyer Blog has published several articles on reimbursement of children’s medical expenses. This is the second:

Besides just sending the other parent receipts for your child’s medical expenses, you should consider writing a brief cover letter to explain what you are sending. This does not have to be typed or fancy.

A sample letter could be as follows:

*Date*

VIA USPS First Class Mail

VIA USPS Certified Mail, Return Receipt Requested – *certified mail number*

Dear *Parent*:

Enclosed please find receipts for *child’s* medical expenses for the month of *month and year.* My total out-of-pocket expense was *$*. Your portion (*%*) is *$*.

Please let me know if you have any questions.

Regards,

*Your name*

SOURCE FOR POST: Houston Divorce and Family Lawyer Blog

Divorce and Insurance

Dreamstime_1486256 Mom and Dad don’t live together anymore. Your child has two beds, two sets of teddy bears, two groups of friends, and two homes. And, as the years go by, these two homes may be further and further apart. It’s important that your child has health coverage in both homes. But how will you achieve this? And who will pay for it?

Just one trip to the emergency room may result in many large medical bills. Health care costs can add up quickly, so you’ll want to make provisions for your child’s continued health coverage as soon as possible.

Here’s what you need to know:

You’ll need to decide who will be responsible for your child’s health coverage, and how it will be obtained – through your employer? your ex’s employer? both? If neither of you are eligible for group coverage, then you’ll want to decide how you plan to keep your child covered, and who will be bearing the costs, if any. Make sure you put these decisions in writing!

Residence is not a factor. Parents sometimes assume that they’re not responsible for their child’s health coverage because the child no longer lives with them. Not true! A custodial parent may, at any time, file a Qualified Medical Child Support Order (QMCSO) to get health coverage for their child through the other parent’s employer-provided health plan. A QMCSO may also require that the premium be deducted from the non-custodial parent’s paycheck or that the non-employee parent be made aware of all aspects of the healthcare plan.

You’ll need to know the geographic boundaries of your child’s health plan. Many managed care plans do not provide coverage outside a certain geographical area.

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Life and Health Insurance Issues

Life and health insurance issues are important considerations in divorce proceedings from several aspects:

1. Who will fund the support order or alimony if the provider should die?

2. How will this be tracked and enforced?

3. If both spouses and children were covered under a single group health plan, how will the separating spouses and children be covered after the divorce?

4. For the spouse with custody, what additional needs are there for life and/or health insurance?

Ask your attorney whether the divorce settlement can include a provision for life insurance on the provider, to protect the support order or alimony. Also, ask whether ownership of the policy can be in the name of the spouse receiving support.

The recommended approach is to acquire a life insurance policy with a face amount sized to provide the regular support payments, when deposited in an appropriate investment account.

Regarding health insurance, divorce is a qualifying event for benefits under COBRA, so named after the act of Congress that created it. Also, ask your attorney whether the divorce settlement can include a provision for health insurance, especially if either spouse can provide it at a reasonable cost through group coverage.

Finally, you may need to purchase additional health or life insurance coverage to protect yourself and your children.

SOURCE: DivorceNet

Health Insurance Basics

If you are self-employed, or otherwise in need of individual health insurance coverage, how do you go about finding the best plan?

1. Learn the language:

HMO – Health Maintenance Organization. This is a very structured plan where you pick a PCP (Primary Care Physician), the doctor you see first for everything. The PCP refers you to a specialist.

PPO – Preferred Provider Organization. This is less restrictive than an HMO. You self-refer to any physician in the network for care.

Indemnity Plan – The old traditional plan before managed care. You go to any doctor or hospital. There are not many of these left, and they cost the most.

Hospital/Surgical Plan – These plans cover the basics with few bells and whistles. Some provide riders to make them look like major medical plans.

MSA – Medical Savings Plan – These plans were designed by Congress. You have a high deductible health plan coupled with a tax-deductible savings plan.

Temporary Health Insurance – A great low cost alternative for those needing coverage for one to twelve months or who cannot qualify for long term coverage.

The above ary very general descriptions to help explain the different options. Not all plans are available in all states.

2. Select the best type of plan for you:

This will depend on the length of time you need the coverage; how much money you have in savings or are willing to risk; your plans for having children; the doctors your prefer; cost; and most importantly your health.

If you are planning a family – Having maternity coverage is a must. An HMO will almost always provide the lowest cost, as maternity is built into the cost.

If you are between jobs – A temporary plan is the best way to go.

If you prefer a particular doctor or hospital – A PPO may be the best way to go.

If money is tight – A Hospital/Surgical Plan, HMO, Temporary Plan, or high deductible PPO may be options for you.

If you want complete freedom – and money is no factor, then an Indemnity Plan is best.

If you hardly ever use your plan – and you wish you had all the money back, then an MSA may be best for you.

If you have minor problems – that would be pre-existing conditions with most plans, an HMO might not consider these as problems.

If an HMO will not take you – a PPO, Indemnity, Hospital/Surgical or MSA may take you, but rider the condition.

3. Find out what it will cost:

To find out what it will cost, contact an agent in your state.

To avoid any surprises at claim time, it is important to provide accurate information. Do not give an insurance company an excuse not to pay!

SOURCE: DivorceNet