Navigating insurance after a divorce can be a complex and confusing process, but our guest, Mike Turkaly from Advanced Insurance, is here to guide us through it all. In this insightful conversation, we uncover the key differences between COBRA and individual policies, discuss the timing of when to elect COBRA coverage, and learn how premiums are usually handled. Mike further breaks down the basics of Medicare Part A and B, explaining the requirements for Medicare Advantage or Medicare Supplement plans.
Resources:
Links are being provided for information purposes only. We do not suggest that listening to this podcast will make you wealthy. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Pearl Planning cannot guarantee that the information herein is accurate, complete, or timely. Pearl Planning makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax or legal position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation. Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. Pearl Planning financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.
Navigating insurance after a divorce can be a complex and confusing process, but our guest, Mike Turkaly from Advanced Insurance, is here to guide us through it all. In this insightful conversation, we uncover the key differences between COBRA and individual policies, discuss the timing of when to elect COBRA coverage, and learn how premiums are usually handled. Mike further breaks down the basics of Medicare Part A and B, explaining the requirements for Medicare Advantage or Medicare Supplement plans.
Resources:
Links are being provided for information purposes only. We do not suggest that listening to this podcast will make you wealthy. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Pearl Planning cannot guarantee that the information herein is accurate, complete, or timely. Pearl Planning makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax or legal position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation. Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. Pearl Planning financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.
This is Jackie Ressler, and I'm really excited to have my guest on the show today. My guest is Mike Turcoli, who is with Advanced Insurance, which is a partner of a larger company that's called Acroature, And Mike is a specialist in insurance in the health of the church. He's an insurance agent. He works with employee benefits, individual policies and Medicare policies, And I know Mike because I have been referring clients to him for years. He's helped so many of my post-divorce clients analyze their insurance and make sure that they have coverage when the divorce is over. So again, I'm really excited to have him here. So welcome Mike.
Jacki Roessler:Thank you, Jackie, thank you for having me, so let's jump right into it. A lot of people that are being divorced that have not been the workers' house, whether they are the husband or the wife. They're not even really sure what they need to do when it comes to insurance. So I've had clients that think that they just automatically get put on Cobra and the divorce is over. Can you explain for our audience how that works with Cobra as far as timing to elect it and, in general, what Cobra is when you're getting divorced?
Michael Turkaly:Yes, so Cobra really is from the employer, i guess either a spouse, and once somebody loses coverage then that triggers the qualifying event for Cobra. So then I guess actually a lot of times the employers have a third-party administrator for Cobra and they will send out a notice. So we've really got 14 days notified the Cobra administrator and then from there they send out the notice to whoever's losing coverage, what the rates and the dates and so on, and they usually got about 60 days to elect the Cobra coverage.
Jacki Roessler:Okay.
Michael Turkaly:So keep in mind it's going to go retroactive to when they lost coverage. So if they take the full 60 days that they've signed, it's still going to go retroactive to the date they lost coverage.
Jacki Roessler:Oh, okay, i didn't know that.
Michael Turkaly:Yeah, they will hold the premiums for that. And really the bottom line is Cobra is really the same coverage you had with the whoever employer, whatever's policy employer Right okay, so it's the same kind of covered to same policy, correct.
Jacki Roessler:But the premium payment, how is that handled when someone is Yeah, premium.
Michael Turkaly:yeah, so it depends on the size of the employer. Under 50 in size, it's based on member level age. So it's based on their ages, the rates broken down Now when you get over 50, it's based on a composite rate where it breaks down. like, all employees got this rate, a two person has this rate and a family has this rate. So it depends on where the company falls. That's how the rates broken out. And then COVID will be 2% added on for administrative fees.
Jacki Roessler:Okay, And I think most people don't really recognize that the fee is similar because when they were married their spouse's employer covered a part of that premium.
Michael Turkaly:Correct?
Jacki Roessler:Yeah, most of them pay all of it for the employer 50% or 35% or so Okay, So yeah it's They're not going to cover anything for the former spouse.
Michael Turkaly:Correct. Yeah, that's what the spouse will get a bill from probably the Cobra administrator.
Jacki Roessler:Okay, so there's no. Yeah, there's no part of the coverage that people were used to their employer paying for the family that the employer is no longer going to cover, correct?
Michael Turkaly:Yeah, it's all on the person that lost coverage.
Jacki Roessler:Okay, and I think that's where people you know. So I always tell clients that you know when they get divorced they can stay on Cobra for up to 36 months. But I think that for my clients, when we come up against again I have this in almost every case where one person is losing their insurance my standard response to them is I'm not sure if Cobra is better for you or if it's better for you to get your individual policy. You should call Mike Turcly and ask him So when I send those clients to you, what does that conversation sound like when they call you?
Michael Turkaly:Yeah, good question, that's pretty much. Yeah, i get their information, you know name, address, date of birth, then whoever's being covered, if there's any children involved that need coverage, and then from there kind of see like what they had, what they had, i guess, their coverage from the employer or spouses, employer, it didn't kind of go from there because that could be. You know, you say the employer coverage could be pretty rich in benefits, so it could be a lower deductible, you know so on and so on. So you know, individual, you could save a lot of money from Cobra. But you know, going with a higher deductible then that kind of sort of things too. So yeah, kind of look at what's their budget, what do they want to pay per month, you know what sort of deductible they feel comfortable with. You know, go on like that, that kind of things.
Jacki Roessler:So isn't it good rule of thumb to say that, in general, that Cobra is going to be better coverage for most people?
Michael Turkaly:It's going to be probably, yes, probably richer coverage, yes, more comprehensive.
Michael Turkaly:Okay, so more comprehensive would mean lower deductible, Yeah if you're not familiar, like, say, first dollar benefits are benefits that you would have before deductible. So like a doctor visit, a specialist doctor visit, emergency room, urgent care, prescription drug coverage, those all you could pay first dollar. You pay a flat co-pay for those services before deductible. Now, on the employer side, the Cobra on the individual side, a lot of those benefits besides. Maybe a primary doctor visit you pay a flat co-pay, but everything else, like a specialist and even emergency room or urgent care co-pays and prescription drug co-pays you're going to have to meet after you meet your deductible.
Michael Turkaly:So, not really like first dollar. So you might get that doctor visit if you're sick or so on, but after that you're going to have to meet that deductible. So it depends on what level deductible you go with high or low and then obviously premium is driven off. That too is you know that's okay, i see.
Jacki Roessler:so when you people are contacting you and you're writing quote for them, you're looking at different deductible amounts in terms of coming up with that premium the dollar. Okay.
Michael Turkaly:As of when the affordable car rat came to play. It was signed in law in March of 2010 And then it came effective like January of 2014. So after that, there's no pre-existence. So, yeah, they don't want get any. Yeah, yeah, so I guess you could be sick or any condition, pre-existing condition and there's no exclusion at all.
Jacki Roessler:Okay and that that is a huge, that was a huge benefit and it's big change in the law when that went through. Yes, That really benefited a lot of my clients who might have been, you know, older, had a health problem and then couldn't get coverage when cobra was done.
Jacki Roessler:So that was a problem, so it's great that we don't have a problem anymore. Um, what are the things that really drive that premium up when you're looking in that market for People that are getting their own policy? is that health coverage? is it? You know any? so there's no health underwriting whatsoever, so it can't be related to any specific disease. but What does drive the premium up?
Michael Turkaly:Yeah, it's, it's definitely age, and then deductibles, big factor also. And then I guess a third thing would be there's a PPO plan and a PPO is a preferred provider organization, which means you have in and out of network benefits. So if you go in with the in-network doctor, you're gonna pay lower than go with the other network doctor. Okay now then then an HMO is the health maintenance organization. An HMO only has in-network benefits, so you have to see a doctor that's in that network and obviously with that one of those obviously. But the HMO is gonna be Probably eight at 15% lower than a PPO because you only have in-network benefits.
Jacki Roessler:Okay, and then you still didn't get an approval letter right for specialists with an HMO.
Michael Turkaly:Correct, you need a yes referral.
Jacki Roessler:Referral letter. Okay, and that's kind of a pain in the neck. I I had both in the past at an HMO and didn't like it and it had PPO and that convenience factor was important to me when I made that decision.
Michael Turkaly:Yeah, I think there are a lot I'm not sure 100% on the procedure, but I think they're a lot easier these days than back on the old old days, you know.
Jacki Roessler:Okay, well, that's good to know.
Michael Turkaly:Referral I don't think you actually need like a referral letter. In a sense, he might just, maybe the doctor might, make a phone call or whatever they do, or electronically, you know, refer you so.
Jacki Roessler:Okay, got it. That's good to know, so that's not as big of a barrier anymore.
Michael Turkaly:But I would say majority of that, probably clientele would they go with an HMO because it's a lower rate?
Jacki Roessler:Okay, well, what would you recommend? I've never shared what the best time is to refer clients to you. Is it a file for divorce? is it as they're getting close to the end? is it even maybe after the divorce? is that?
Michael Turkaly:That's pretty much. well, the key really is going to be driven off the one-day-lose coverage, because from there they got 63 days to enroll into another plan, unless they take COBRA, of course.
Jacki Roessler:Okay.
Michael Turkaly:But if they're yeah, if they're say they're just got filed, whatever, who ever filed first, and they want to start, maybe start looking, that's fine too. We can start quoting them. Okay, Kind of give an idea like here's what you're going to pay, right?
Jacki Roessler:So okay, And then so they. my preference would be to send clients sooner rather than later, because I'm helping them with their budget, And so we want to have some idea of what the premium would be. And when they come to you and they get a quote, is it possible that that quote could change dramatically by the time if the divorce is done, let's say six months later?
Michael Turkaly:No, the extra, the one-day time here with the rate will change, because once it was like say, 20, 20, 23,. The rates are pretty much filed with the state for the policies. Okay, the only thing that would change if they had a birth there and that person older within that six, eight or six months you mentioned. So okay, i got it. Like now say, we quote a July 1st date and then they need coverage October 1st. Well, they had a birthday, maybe September, september, right? So then they're going to be a year older. So actually the rate will change based on their age.
Jacki Roessler:Now, Okay, and is there any age that people need to watch out for? So where that would?
Michael Turkaly:where the rate really jumps up, it's somebody honestly, somebody like 60 to 65, so it's before Medicare. They actually get pretty, they get pretty high up there. And I was going to tell them don't shoot the messenger, because I'm just kind of showing you what the rates are and that's all I can do really.
Jacki Roessler:Okay, so between 60 and 65 is the time when the rates get more expensive, and it doesn't matter if you get it the year before, right, because the following year your rate's going to go up based on your age.
Michael Turkaly:Yes, every year. Yes, correct.
Jacki Roessler:Yeah, so it's not like you get grand fathered in at a lower rate.
Michael Turkaly:No, no, like, yeah, different from like a life insurance policy where you're getting a teenage and then that rate stays the same throughout the policy.
Jacki Roessler:So Okay, so for clients, now with health insurance. Unfortunately. Yeah, We know that between age 60 and 65, those are those are key years that we need to make sure that clients have the right amount of coverage. I know that you are also an expert in Medicare coverage And a lot of my clients are in that position where they need to get a supplemental policy. Can you talk a little bit about how those policies work?
Michael Turkaly:Yeah, so yeah, once somebody goes on, you go on. You actually go through Social Security Office and you get your Medicare Part A and B. Now, a is free if you work your 40 quarters Okay, which is 10 years, and Part B is a fee. That standard rate, 20, 23, is 164.90 for Part B. So Part A is hospital, part B is outpatient.
Jacki Roessler:Okay.
Michael Turkaly:So you need you need A and B to get And then for from there there's a Medicare Advantage plan or a Medicare supplement. So Medicare Advantage plans are kind of work like the plans you have all your life, whether a PPO or an HMO, and you pay cold pays and so on for any services. A Medicare supplement works along with Medicare where it fills the gaps of Medicare.
Jacki Roessler:Okay, it's so confusing to me. I think Medicare is really confusing. I'm glad to know that you were telling me that you like working with Medicare. What makes it so confusing Is it that there's so many different carriers that you have to analyze?
Michael Turkaly:Exactly Like I said. Really there's two options. You go Medicare supplement or Medicare Advantage, but from there every insurance company sew a plan. You're talking Blue Cross, priority Health, hap and Humana Well Care. You Name On, on, on and Michigan, they all sell them.
Jacki Roessler:Okay.
Michael Turkaly:It's just a matter of what works best. It depends on what route they go. of course, like Medicare Advantage, i can mention HTML or PPO. Same way they have network of doctors. It's better to stay in a network, of course. Now Medicare supplement you can actually see any doctor in the US that takes Medicare, regardless of what company is with one insurance company. As long as that doctor takes Medicare, they'll accept that Medicare supplement plan. They have to.
Jacki Roessler:Okay, and then some doctors don't accept it because Medicare doesn't cover enough Right.
Michael Turkaly:So they might be sad, or Medicare isn't paying enough, in a sense. So yeah, so say, if somebody goes to the doctor for a visit and the doctor bills Medicare $200, medicare might turn around and say no, it's only $100.
Jacki Roessler:So okay are they allowed to opt out.
Michael Turkaly:I'm sorry.
Jacki Roessler:And every doctor is allowed to opt out Medicare.
Michael Turkaly:Yes, yeah, they pretty much have to opt in. I guess really is the key. They're really a saying they're accepted Medicare's assignment on the fee, on the payments and so on. So Okay. And it depends on what kind of plan that doctor can actually bill you the difference up to 15%. But a lot of the policies cover that Where the doctor can bill you the extra money.
Jacki Roessler:Okay, i know this is probably a tough question, but can you give me an idea of the price ranges for these, for the Medicare supplement and the Medicare passage?
Michael Turkaly:Yeah, like I mentioned, you need part A and B, so B is going to cost you $164.90. Standard rate.
Jacki Roessler:And that's per month, right, correct, okay.
Michael Turkaly:Now, if you're not, if you are collecting social security, they take it out right out of your check. If you're not, they bill you every three months for that fee. Okay And then. so then Medicare advantage actually starts at a zero. They have a lot of plans that start at zero premium.
Jacki Roessler:Really Okay.
Michael Turkaly:If somebody is going to go Medicare Advantage, I don't want to say push them, but I recommend. Why would you want to pay a premium On the same Blue Cross? they have a zero premium and their highest one is $300 a month. Why would you pay $300 a month? just to pay, maybe, lower co-pays on services?
Jacki Roessler:Yeah, that was my next question for you.
Michael Turkaly:If you never go and use it in a sense you go once or twice a year, you might already pay Sometimes a doctor visits a zero to co-pay. So you're paying that $300 a month, $3,600 a year. For what? If you go for zero premium you may have to pay maybe $20 a co-pay or so on. So it's kind of worked it overall. Looking at the math.
Jacki Roessler:Okay, unless you're always going to a doctor.
Michael Turkaly:Correct. So you're going to do a Medicare supplement a little different. That's based on your age, so say, a 65-year-old new on Medicare and you have to get a drug plan. what the Medicare supplement, the Medicare Advantage, is going to include it, but Medicare supplement. so you're looking at it, probably around $200 a month for a Medicare supplement and a drug plan. Okay, don't forget that. Yeah, don't forget that. you still got to pay for your per-b premium. So that's always you got to pay for that stuff.
Jacki Roessler:But for people that might be paying between the ages of 60 and 65, in their own policy they might be paying. I mean, I think, clients that are paying $1,000 a month.
Michael Turkaly:Oh yeah, yeah, it probably starts at probably $600 for a rural, you know high deductible HMO and probably goes up to $1,500 a month. Yeah, it depends on the deductible.
Jacki Roessler:So once you hit $865 and you're eligible for Medicare, it's smooth sailing from that point, relatively speaking.
Michael Turkaly:Yes.
Jacki Roessler:Okay, This is such good information. I've really feel like I do not. I don't know anything about this and it's always been really confusing, and you make it sound really easy to understand. So is there anything that we haven't talked about that you think would be an important topic for divorcing clients to consider?
Michael Turkaly:I would just say you know, give you know, give a, not me, but give me a car, give an agent a call and kind of look at you know what's your, your co-brit benefits versus an individual plan or what's your needs and sense to. That's kind of the key. What are you going to use it for? Obviously, there are situations where you're unexpected, right, so something might come up throughout the year that you're not expecting, but most of the time you might. Just you know, thank God for myself, i go twice a year, once for a physical, once for a checkup, right, right.
Jacki Roessler:You're lucky.
Michael Turkaly:Yeah, so you know right, that's so far. But you know you never know. So lots of people on the same thing. They might go twice a year. So it might be okay to have a high deductible and just pay to flat co-pay for a doctor visit, right?
Jacki Roessler:So Right, exactly, and it's hard to predict sometimes what you're going to need. When is there an open window when you can, when you can get a new policy? like, say, they have a client that they have, they have cobra and they feel like it's just been too expensive and they haven't really been using it and they want to switch. Do they have to wait for a specific date?
Michael Turkaly:or can you switch at any time? Yep, good question. Yeah, actually, open enrollment for individual is normally November 1st until December 15th, and actually I guess last year last open enrollment the president extended it to January 15th, so it was November 1st to January 15th, but so far I haven't heard anything different yet. but But that's the time. That's really the only time you can actually enroll into an individual plan, unless you have a quality event like a divorce.
Jacki Roessler:So right, right, so yeah.
Michael Turkaly:Yeah, so if you had no insurance and you come out, you know hey, Mike, can I get a policy? Somebody called me today and they had no qualifying event. They could not get insurance. Actually. Great, they'd have to wait so while there's actually, you know there is like short-term plans, they can get that just kind of catastrophic coverage. This does not cover preventive care or drug coverage, but I mean there are some things, but if you want a straight health insurance plan And you have nothing today, you can't. You can't get one, honestly, that's.
Jacki Roessler:Is the qualifying event good for so?
Michael Turkaly:63 days.
Jacki Roessler:It's got to be within 63 days.
Michael Turkaly:Yes, that's when you lose the coverage really. So I would assume When they got, when the force is final, that's when they're gonna be taken off the policy, or to end the month, i guess too. So it depends on what the employers, languards, say. Truly.
Jacki Roessler:Okay, but timing is an issue.
Michael Turkaly:Yeah, you don't want to wait past that. Then you're really your qualifying events over and you can't get insurance. Let's just split them that open enrollment period.
Jacki Roessler:So yeah, that's, that would be really. That would be very scary And that happens to somebody. So I can what? I've never heard that from any of my clients, so Hopefully I never do. But that's that's a good point, because I think when people are done with the divorce They wanted to speed down and they don't want to continue to Maybe tie up some of those loose ends, but this is one that needs to move really up the priority list. Okay well, thank you again so much, mike. We are going to have your contact information and show notes And I can. You are been so helpful with so many people, i know that awesome.
Jacki Roessler:You get really easy for people when they call and give them information. So I appreciate that and we really appreciate you sharing all of your knowledge with our audience today.
Michael Turkaly:You're welcome. Thank you for having me.
Jacki Roessler:You can access our first two seasons of this podcast on our website, at wwwpearlplancom, or on Spotify. If you're interested in learning more about pearl planning, feel free to sign up for our newsletter, also found on our website.