Insurance World

Our children bring us great joy – first words, first steps, and first days of school, to name a few. Our children also bring us great worries and expenses, many of which are preventable. An event that brings us both worries and expenses is when our teenagers begin to drive. Statistics for auto-related injuries and fatalities keep us biting our nails until our teenagers get home, and the same statistics have us emptying our bank accounts every month for high car insurance costs.

While we may not be able to drive our teenagers every where they need to go for the rest of their lives, there are several ways we can get cheap car insurance for our teenagers.

1.Have your teen driver take a driver education course in school, as well as encourage your teen to make good grades. Many car insurance companies offer discounts to those teen drivers who have taken driver education courses and make fairly high grades.

2.Add your teen driver to your own car insurance policy. There is no reason to purchase a completely separate car insurance policy for your teen driver when you can add him or her to your own car insurance policy. This alone will save you money, and you may even be able to get a multipolicy discount, too. Ask your own car insurance agent.

3.Drive responsibly. If your teenager sees you speeding, ignoring stop signs, and giving in to road rage, he or she will most likely develop the same driving behaviors. These behaviors lead to traffic citations and traffic accidents, both of which will lead to higher insurance prices, as well as injuries and fatalities.

Sure, we can not stop our children from eventually driving, but we can find ways to get cheap car insurance for our driving teenagers. Some of these ways will also help our teen drivers become safe, responsible drivers. It is a win-win situation!

1. Health Savings Accounts (HSA)

This is a strategy where the employer buys a health plan with a large deductible. Typically, these are groups that are coming from a plan with a very low deductible. Since the higher deductible plans are usually much less money, the money saved is used to put into the employee’s “Health Savings Account.” The money in this account is used by the employee to pay qualified medical expenses. If it’s not used, the money rolls over to the next year. The money belongs to the employee, even if they leave the company.

2. Health Reimbursement Arrangements (HRA)

This is very similar to the HSA above but a portion of the qualified medical expenses not covered by the insurance is “pledged” by the employer, that is, the employer only spends the money, if there is a portion of the bill not paid by the insurance. This would be more favorable to the employer since on an HSA the money goes to the employee, whether there are claims or not. The problem with HRAs is that there are very few carriers that offer them right now.

3. Medical Reimbursement Accounts

This is very similar to HRAs above and extremely flexible. It’s otherwise known as partial self-funding. Employer buys a larger deductible and if the employee uses up that deductible, the employer pays all or a portion of it, depending on how a pre-arranged agreement is written. This goes for other expenses not paid by the insurance. The idea is that the employer self insures the typically smaller expenses with their own cash, (presumably, the savings in premium dollars from going to a higher deductible.) The downside to this is that many carriers prohibit the use of this strategy with their plans. It can be very effective but make sure you use an experienced third party administrator as there may be some legal and tax documentation required. Otherwise known as Section 105.

4. Kaiser.

More and more groups are moving to Kaiser. It is typically, benefit for benefit, less money than just about every other plan. Kaiser is spending billions on the future and their quality control is promising.

5. Offering Blue Cross and Kaiser side by side. Blue Cross has a new program where only five employees need to enroll with Blue Cross. The rest can be with Kaiser. This is a ground breaking opportunity in flexibility.

6. Blue Cross Elect. Blue Cross has a portfolio called Elect with 16 plans in it comprised of HMOs, PPOs, and an EPO plan. Each of these plans is priced from low premiums up to a much higher premium.

The beauty of this program is that Blue Cross allows the employer to “define” how much premium they are willing to pay towards an employee’s cost. For example, Blue Cross offers a $10, $20, $25, $30, $35, and a $40 copay PPO plan. The $10 plan is the most expensive of this group.

After viewing all of the premiums for the various plans, the employer can establish, arbitrarily, which plan they are willing to pay, say the employee only premium for. In this case, let’s say it’s the $25 copay plan. The employee can buy the $25 copay plan and it doesn’t cost them anything. However, if they want the more expensive $10 copay plan, the employer would payroll deduct the difference in premium costs.

Let’s say they have dependents they want to cover but the employer only wants to pay for the employee only. The employee could take the lesser expensive $40 copay plan, and use a little bit of the savings to help them with the costs of adding their dependents.

This has been a highly successful program because it gives the employees a greater number of choices, helping the employees be more definitive in their costs and needs, and at the same time, allows the employer to more efficiently define their costs.

This information is time sensitive and can change at anytime. If you have a question or need more information, please contact me at mail@thestrategyguide.com. –Todd Rich

Todd Rich is an expert on California Small Group Health Insurance Plans and has written four books on the subject. To learn more about Todd and his books, please visit www.TheStrategyGuide.com/ezines