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High Deduct Insurance Watchout
Old 05-07-2010, 03:03 PM   #1
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Join Date: Jun 2004
Location: E. Wash
Posts: 908
High Deduct Insurance Watchout

We are in the process of looking at a couple alternative processes for transitioning our small (DW and Self) Corporation to a new owner. We use the Corp to purchase our healthcare and run all our deductibles through the company.
One option we considered was an outright sale of Corp to new owner approx 3 years before we are eligible for Medicare. Accountant had us check with Insurance Broker to see impact. Good thing we did!
Turns out that since we are using a high deductible policy (3500/yr), we can not migrate to Individual policies without a 9 month loss of coverage on any pre-existing conditions. While everyone is currently in great health, DW did have a very minor heart issue about 5 years ago, which would likely be considered a precondition.
Apparently to have "portability" to individual policies without limits on pre-existing conditions, deductible can not be any larger than $1750. I already know from last year's pricing that this will take monthly coverage for each of us from $700/mon to well above $1200/mon. each.
As a result we may need to keep the corporate alive until Medicare (3 yrs) or wait until insurers can not penaltize for preconditions. Anyone remember when that aspect of "Reform" takes place?
Guess it will technically it will be a SER for us until Medicare.
So for all of you on high deducts HSA's from your company, be sure to check on "portability" as part of your ER timing strategy.
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