Retire Early, Retire Now!
This is a Podcast to help people retire early and help people retire now. Financial Planning topics will be covered and explained so you can plan and retire with confidence.
Retire Early, Retire Now!
It's that time again... Open Enrollment With Danny White!
The podcast features host Hunter Kelly, owner of Palm Valley Wealth Management, and guest Danny White from 212 Benefits. They provide an in-depth discussion on selecting the best health insurance plans during the open enrollment period using Mayo Clinic's open enrollment packet as a reference. They also explain the importance of understanding key health insurance terms like deductible, max out-of-pocket, co-pay, co-insurance, HMO, and PPO. Additionally, they cover voluntary benefits such as critical illness, accident, and hospital insurance, including how these can help offset high medical costs. The episode aims to help listeners make informed decisions about health plans based on their specific situations, including significant life changes. It also touches on strategies for mitigating healthcare costs and the role of benefit brokers for business owners.
Danny's Previous Episode
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And welcome to the retire early retire now podcast. I'm your host hunter Kelly owner, Palm valley wealth management. And today we have Danny white back for our second annual open enrollment. Podcast episode. Last year, we had him on to talk about all things definition on health insurance and other types of benefits through your employer during open enrollment period. And so we'll, we'll dive back in that, into that today. We use Mayo clinics. open enrollment packet as an example. So hopefully you can apply some of these questions and problems that we kind of worked through on how to decide what plan should be best for certain types of situations. And, if you know, someone that is going through a, a big change, whether that's picking their benefits for the first time, or potentially having a big life change, like getting married, having kids. Things of that nature, changing jobs. this can be a good podcast for them. So go ahead and share that, like it and give a five star review on your favorite podcast app, but again, excited to have Danny back on for the second time. I think, there's a lot of value to be had here, hopefully you enjoy it. And here we go.
Scarlett 2i2 USB-22:Welcome back Danny white to the retire early retiring out podcast for the second annual open enrollment podcast. So for those listeners if you haven't checked it out last year we did one right about this time and i'll put a link in the episode notes, but uh We're going to talk all things open enrollment because that's what danny does So no better person than to have on the podcast than danny white so just as a refresher danny, who are you where you come from? and how do you know open enrollment so well?
Scarlett 2i2 USB-23:Yeah. Yeah. Glad, glad to be on. I appreciate it. Again. Like you said, second annual open enrollment meeting. Um, yeah. So I'm with two 12 benefits. We're, we're a local benefits agency. So we help business owners kind of implement and manage their employee benefits packages. And so as an employee of a company, you might be looking and wondering what that means. That's your, your health insurance, your, your dental insurance, your vision, et cetera. So all those kind of benefits. Benefits that you get from the insurance through your employer. We help manage those. We're kind of the middleman there. Um, also helping, you know, people that don't get it through their business. Um, they might just be kind of doing a standalone thing through the marketplace. We can help with that as well.
Scarlett 2i2 USB-22:Awesome. Yeah, no, it's, uh, it's always difficult. Uh, one is a business owner to determine, hey, is this realistic that we can provide this for employees? Um, where to start with that and having basically an advocate on your side can be huge. Versus trying to shop it out to yourself and things of that nature and what benefits you get on the business side and things of that nature. And then obviously we'll talk about the individual today. And one of the biggest questions I want to kind of convey to my listeners is one, what should I be thinking about when I open up that open enrollment packet and I see three different health plans and longterm care and, uh, these things called voluntary benefits, like what is that? And so, um, Like I mentioned before, we won't get too granular in definitions because, uh, we can refer back to that episode from last year. Um, so we want to answer more broad questions about, well, how do I choose the more robust plan from like a high deductible, who's on my network versus who's not, and things of that nature. Um, and so one of the things that we'll do here is that my wife works for Mayo Clinic. Um, so we're just going to go over the Mayo Clinic open enrollment. We won't get into super specifics. but, um, we'll, we'll go over kind of their three plans and then, pretend like Danny is helping me, Pick a plan for what's best for my family, right?
Scarlett 2i2 USB-23:And I will be charging him after this. I hope he knows that.
Scarlett 2i2 USB-22:yes, a very, high premium there. So, so for Mayo, they have three tiers. They have the Mac daddy where the premium is a little bit higher per month. If you're a full time employee, um, it can range depending on if you're bringing on family members or not anywhere from about 150 a month to 400 a month, down to, they have a middle grade plan. Uh, that is not a high deductible, but, your out of pocket max is going to go down a little bit, which we'll talk about here in a second. And it ranges from about 80 a month to about 230 a month. And then their high deductible lower premium plan ranges from about 200, or sorry, 22 a month to 54 a month if you're a full time employee. Now if you're a part time employee, there's some different rates there, but, we're just going to assume for this example that everybody's full time. And so. When I'm looking at this, Danny, you know, my situation, but maybe not every listener does. I, I obviously have a wife that works at Mayo and this is how I'm getting my benefits currently. and I have two kids. And so what are some questions that I should be asking myself when I sit down with my spouse and go, okay, wait, what plan should I pick? And how do I know that it's best for, what I have coming up in 2025?
Scarlett 2i2 USB-23:Yeah. So I would definitely start with, do I understand some of these terms? Right. And so again, we're not going to go into the nitty gritty, um, again, refer to the last episode last year, but you can not make an informed decision. If you're not fully confident, you know, what a deductible is, what your max out of pocket means, what a copay is and co insurance, right. You need to understand what those mean, uh, understanding the networks and those definitions, uh, an HMO. Versus a PPO, right. And understand those. And again, referring back to the previous episode. So this is assuming now you understand those terms. Now, what are you thinking? And it really thinking about where you're at, like you said, Hunter, with your, uh, life dynamics, so to speak. So, like you said, you have a wife, you have two young kids. Obviously there's probably going to be the need for a, maybe a better quality plan, um, because you're, you have, um, people. Under your belt,
Scarlett 2i2 USB-22:Mm hmm. Um,
Scarlett 2i2 USB-23:if you were again, someone like me, I am 25 years old. I have a wife, but she's on her own plan. So I'm, I'm riding solo. We don't have any kids yet. So, you know, I'm young, I'm relatively healthy. Just trying to get my, my annual wellness visits. And other than that, I don't really use it. So the conversation looks very different depending on, on your, your health situation. And so someone like me, I wouldn't need some really nice quality plant, right? With a low deductible. And so, uh, understanding there is an inverse relationship. Between your deductible and your max out of pocket versus your premium. So like you had, when you were describing the plans, you know, the, the, the premium plan, the premier plan that you spoke of, it's a higher cost per month. Um, but your deductible, your max out of pockets and potential your copays, they're going to be a lot lower.
Scarlett 2i2 USB-22:And, and just to give some context to that, um, on that premier plan, the best kind of mac daddy plan for Mayo, you're deductible for, uh, a single person is 600 and then you have a, uh, 2, 600 out of pocket max. So, uh, to me, your expenses are very predictable if you have, a complex health situation situation where you're going to a bunch of specialists and doctors and things of that nature. I think about my situation last year wasn't planned, but I ended up having knee surgery. Right. And so I ended up picking the lower tier plan because the way we're done having kids and they're kind of out of that phase where they have to go to the doctor every two, two months, it seems like. Um, and I'm not even going to come close to my out of pocket max and bam, I get knee surgery. So, so, uh, didn't quite work out. Uh, It's close to what I expected, but we're still going to end out on the positive side, luckily, but, um, comparing it, the lower deductible and out of pocket max to the, the premium to the, what they call the Mayo custom, which is that high deductible plan, um, Your out of pocket max is going to be 5, 000, versus that 2, 600 and your deductible is going to be 1, 600 versus the 600. So, so really, kind of just to reiterate what Danny is saying here is that, If you're healthy, all you're doing is your, your annual blood work and blood pressure is good and you're not going to see specialists and you don't plan on having knee surgery and things of that nature, then you're probably off, better off getting the higher deductible and then maybe contributing to a health savings account where you can kind of stuff that away because someone, and so when I'm talking to, clients like Danny's situation where there's not a lot of health expenses. One, he can take advantage of that pre tax contribution into the HSA, but also if he can build enough up in the next three, four or five years, maybe before having kids or, having, whatever illness that may come up, hopefully not. he could continue to stay on that lower, cost plan and then have that HSA kind of banked up, ready to kind of supplement whatever cost he would have moving forward because you can obviously roll that money over each year,
Scarlett 2i2 USB-23:forward. Because you can obviously roll that money over each year, so. Dip into my HSA at all. I pay strictly out of my own personal savings account, not the actual health savings account. Um, you let that money grow tax free. You let it, you, you let, you put it in tax free, you let it grow tax free. And then given the fact that you're saving your, your health receipts, um, later on down the road, you can then submit that receipt and you can take it out tax free. So you're avoiding taxes all the way around. It is quite literally.
Scarlett 2i2 USB-22:out tax free. So you're avoiding taxes all the way around. It is quite literally my favorite investment account possible. But my consideration is you also have to think of the financial dynamic, right? So, um, right now I'm in a spot where I can handle. That out of pocket max if I need to one because I've been contributing to the HSA for the last year, right? And so I'll have
Scarlett 2i2 USB-23:uh,
Scarlett 2i2 USB-22:Some money that I can roll over from that and then I'll continue to contribute to that HSA So the the probability of me having another Surgery or we having some sort of large medical expenses very rare But if that did happen I have enough Elsewhere where I could pay for that and then the HSA would take over later in the year, right?
Scarlett 2i2 USB-23:So, um,
Scarlett 2i2 USB-22:And so what Danny is getting at here is now, let's say over a 10 year period, he has 30, 40, 000 in medical expenses. Well, now he can take that out whenever he wants tax free, but also that 40, 000 may have turned into 000, depending on how well he invested that money, right? And so, that's a very good point there. A good strategy to use, because maybe you did rack up, let's say, over your lifetime, 100, 000 worth of medical bills, and you turn 65, and that account isn't 100, 000. It is
Scarlett 2i2 USB-23:300 grand.
Scarlett 2i2 USB-22:now you have 200 grand that you can actually use in retirement at 65. Now you have to pay taxes on it and all that, but it's still more than you would have had before. Right? So, uh, like I said, I need to hire this guy. what are some other considerations, that maybe we didn't discuss yet? Between the different plans and I know we talked about HMO and PPO a little bit last year, but let's let's do touch on it a little bit because it is a Confusing ordeal with people and so One of the current events that maybe we could talk about is the florida blue and baptist situation that just got negotiated here earlier this month um, or october 1st, I think this will release in november so last month and know that, Florida Blue made some changes to their network and things of that nature. So as far as network, what should people be considering versus PPO things of that nature?
Scarlett 2i2 USB-23:Yeah. So there's the never ending battle between health insurance carriers and then the health care providers. Right. And then having those agreements is obviously important. And so, you know, in Northeast Florida, I know you said a lot of listeners are Jacksonville. So they're very familiar with the situation who, who hasn't heard about Florida blue verse Baptist in the last couple of months, but, um, you know, that contract was set to expire as of October 1st, and it's not uncommon that, um, you know, They wait a little bit and sometimes they wait a long bit. Um, but you know, in this instance, waiting until the last second, um, the, the whole point was to try to make the negotiations as favorable for their side as possible. So it's really just a back and forth trying to figure out what the contract is going to look like. But luckily that was figured out. But
Scarlett 2i2 USB-22:Yeah, just a side note real quick. I won't give any details of our conversation, but I have a really good buddy that works for Florida Blue. and he, of course, everybody always hates on the insurance companies, right? Because they drive up prices and everything. And he had a good argument that, hey, it's probably not the insurance carrier in this case. And, And so on and so forth. So I thought it was funny that he was kind of advocating for the insurance companies because they always get the
Scarlett 2i2 USB-23:Oh yeah, they always get the bad rap, but yeah, no, it really, I mean, it takes two to tango. And in this case, that was, that was definitely the case. Um, and yeah, it really does take both coming to the table and compromising. So glad that was figured out. Uh, definitely scared a lot of people,
Scarlett 2i2 USB-22:because that's one of the bigger networks, uh, or at least providers in the
Scarlett 2i2 USB-23:Florida blues headquarters is in Jacksonville, so they have a large chunk of, of Jacksonville and yeah. Um, So yeah, that was a little scary, but luckily we got it all figured out. But yeah, to go back to, to HMO versus PPO. So in HMO, excuse me, that's, you're going to have, and it depends on the carrier, um, but overall it tends to be a more localized network. So you may not have, and again, sometimes you do. So certain carriers, you can have a nationwide network. So if you go to another state, Sometimes with an HMO, you will have coverage. Um, but a lot of the times it's more localized than that. So in Northeast Florida, if you're on an HMO, there are specific providers that, that you can see. There are others where you cannot, um, I shouldn't say you cannot, you can. But have fun with that bill. Um, they might see you, but you will be on the hook for that crazy bill. Um, but a PPO, you, you, you have a nationwide network, so you go anywhere in the country, you will find in network providers. There's also out of network providers. So, um, if they don't have an internet work contract with the specific carrier. You can still go see them, you'll just have a different deductible or a different max out of pocket, different co insurance associated with that service,
Scarlett 2i2 USB-22:And just to add on to our Mayo example here, Um, there is an end network, it is a P, all of their plans are PPOs. So it's a, you have an end network deductible and out of pocket max, and then out of network what he's talking about here, what Danny's talking about. So um, So, if you're looking, if you happen to work for Mayo for whatever reason, and you're looking at that, that's what that means. At network is who the insurance carrier has already come up with some sort of agreement with. And then out of network is like, is hey, we'll, we'll play, we'll pay something, but you're going to have to fork up a little bit more money. Yeah.
Scarlett 2i2 USB-23:if you're shopping your, your insurance and you have a specific provider, maybe you have a primary care physician that you are just, you're married to them. Like you, you refuse to see anybody else. And you're worried that maybe looking at a completely different carrier, it might make them out of network. You can, you can definitely check online. Um, there's provider links where you just type in their name, give the general zip code and they'll tell you if they're in network or not
Scarlett 2i2 USB-22:Yeah, we got a scare a couple months ago, probably not even a couple months ago. We got a letter saying that our pediatrician was going to be out of network and anybody that has kids and you find a good pediatrician, you want to keep that pediatrician. So we had to call the insurance company. Like, no, that was set on accident. So, and so as long as he's still working there. So I don't, hopefully that doesn't happen often because, uh, that, that was not necessarily scary, but it was like, Oh man, we gotta go find somebody else. We already trust this guy.
Scarlett 2i2 USB-23:right. It's a, it's a big hassle. Yeah. There's one more thing I'll mention with networks and whatnot. So obviously we talked about Florida blue. We talked about Baptist and those negotiations, but one that a lot of people didn't even hear about cause it was kind of flying under the radar at the exact same time, their contract was set to renew September 1st. And that is United healthcare. And UF health slash Flagler. Um, now, unlike the, uh, results of the Florida blue and Baptist negotiations, unfortunately, UF health and, and UnitedHealthcare did not come to an agreement. So that was as of September 1st. And so if you haven't found out yet, because you've tried going to somebody, you will probably figure that out next time, if not now. So, um, again, they did not renew. So that's definitely something to consider when you're, when you're looking at your options.
Scarlett 2i2 USB-22:Yeah. So if you're in the area, um, there may be some changes coming. So let's turn to a different, uh, part of the open enrollment packet, uh, that we did not touch on in much detail last time. Um, and that's voluntary benefits. And so, um, I'm looking here, we have critical illness, accident, hospital. And so, Danny, just give us. Kind of a quick overview on what some voluntary benefits are and how to how they help, um, those employees
Scarlett 2i2 USB-23:Yeah. Yeah. So voluntary benefits, they are in, you know, when you, when you hear critical illness or hospital indemnity, um, or accident insurance, most people think Aflac, right. And that's one of the major, major carriers, uh, for these voluntary policies. Um, but what they're really trying to do is, is reimburse you for expenses that you have for. On your major medical. So again, in a world where we have some high deductible health plans, you're going to be on the hook for potentially thousands of dollars. Um, and depending on the service that you have done, these voluntary benefits are supposed to basically swoop in under your health insurance policy and kind of fill some gaps, so to speak. And they, with proof, obviously that you had these services done and that they're creditable, you can get reimbursed X amount of dollars for that. For specific services throughout the year. Um, and so again, accident insurance will cover accidents as the name implies, critical illness will cover specific illnesses that you incur.
Scarlett 2i2 USB-22:it sounds like you would need to read through this and make sure that, um, whatever potential illness that you could have, um, you want to make sure that you're covered under that,
Scarlett 2i2 USB-23:Correct. Yeah. It's not going to cover just anything that pops
Scarlett 2i2 USB-22:Yeah, I had a cold or
Scarlett 2i2 USB-23:yeah, exactly. There is a list for each of those policies that, that outline what is covered, how often it's covered per year. And then the amount of money that you receive. Now, there are cases where if you are enrolled in a critical illness policy, um, and you actually end up facing something and you get reimbursed, it will cover all the expenses you had and then some, so you end up profiting, obviously you didn't want the whole situation to happen anyway, but it's, it's peace of mind to know that you actually came out ahead. Um, while that does happen, most of the time, you're not going to come out ahead. But that's not the goal. The goal is to just help in these instances and, and kind of giving you some of that money back.
Scarlett 2i2 USB-22:in my experience, um, if you have a well funded emergency fund, um, you do, you've done a good job of, uh, maybe contributing to a HSA or FSA, um, a lot of times these insurance may not be needed, but where I see that this. It could be a very good value to someone is maybe they're just starting out and they don't have an emergency fund or for whatever number of reasons. If you look at the, all these statistics and studies, what's like 45 percent of Americans can't cover a thousand dollar bill. So I'm looking at the high deductible plan. I could potentially be out of pocket if I'm an individual 5, 000 or if I'm a family, I could be out of pocket 10, 000 well, this is a good way to offset some of that risk. Um, if I. Uh, somehow end up with one of these illnesses or accidents or end up in the hospital, um, you can sign up for these critical illness. But if you have, a properly funded, emergency fund and, HSA account, it may not be something that you necessarily want to pay for.
Scarlett 2i2 USB-23:Yeah. Yeah.'cause I mean, obviously like you just said it, it's not free, but I mean, it's nothing crazy though either. Right? The, the whole idea with insurance is to spread risk, right? And so they're able to give you a rate that is fairly attractive. I mean, I guess it depends on who you're talking to, but you could, you could get a critical illness policy and I don't know what Mayos is specifically. We don't have to dive into that, but 20,$30 a month.
Scarlett 2i2 USB-22:So it's, I'd have to do some off the cuff math, which I'm not willing to do right now. But, for theirs, it's age bandit. So the, the older you are, it looks like every five years. So starting in 25 to 29, so on and so forth. it goes up per, per year. per employee or per spouse. It's a different rate per 1000 of coverage. Now, for the accident and hospital insurance, there's a flat rate. If you're an employee, it's like 5 a month. if you have a child or some sort of other family member, it goes up to about 8 a month or 16 a month. So, um, basically, with the critical illness, it depends on how many people are on there. And then how much coverage are you getting, and potentially what age are you, and then you can work that multiple out. But, again, I think it's a good way to take off risk, especially if you know, Hey, if I go to the hospital and I have 10, 000 in medical bills, Um, I'm not going to be able to pay it. This is one way to take that risk off the table. And that's all insurance is, right? It's, it's, it's like, hey, the probability of me going to the hospital and being in the ICU is probably very small. But if it does happen, I'm going to be wrecked if I don't have insurance, financially,
Scarlett 2i2 USB-23:truly is just a big game. It's a numbers game and it's, it's figuring out how much risk are you willing to have, right?
Scarlett 2i2 USB-22:Yep, same thing with life insurance, same thing with car insurance, any insurance, right? So, um, again, the, the likelihood of me driving home, knock on wood and totally my car is probably very small, but I don't want to fork up another 20 whatever amount of damage I cause, um, in that car accident. Um, if I don't need to, if I can offload that on an insurance company, so that's good thought. And so, just, just to reiterate, um, what I do as far as working with clients. So I review, uh, packets like this with my clients. And if I ever get some sort of funky insurance coverage or open enrollment, I actually call Danny a lot. I had a situation earlier this year where a client, uh, needed help on their, uh, claiming one of their benefits and we weren't sure exactly if, if that benefit was gonna pay out. And so I called Danny. He was very helpful. Uh, luckily worked out for that client. really what I'm getting at is, hey, I, I, this is, should be a big part of your financial plan because, um, while it's not fun or sexy to sign up for this stuff, it is going to be the quickest killer of wealth if you don't pick the, the correct plan for your given situation. Yep. Yeah,
Scarlett 2i2 USB-23:And I would, I would even continue that, you know, obviously this conversation center and health insurance, um, I think healthcare is another point that needs to be talked about because a lot of people associate it all under one bucket, but when you really break it down, Health insurance is independent of your health care because health insurance is just the, um, risk pooling, right? It's, it's, it's how much, like we already talked about, how much are you willing to risk and it's protecting your, your finances, healthcare is protecting your health and so being able to separate the two is key and there's so many tools out there and ways to kind of fight the system where yes, health insurance is expensive, but so is healthcare and depending on where you go, who you're seeing, the quality of the care. All of that matters too. So if, you know, if you're looking at your health insurance options and you're, you're not happy with the premium that you'd pay monthly. And so you're, you feel like you're stuck with a high deductible plan. There are ways to kind of cut back. combat that high deductible cost. Um, independent imaging centers instead of going through the big providers or, um, I just had a great conversation, uh, with a colleague. She owns, uh, three different, any lab test nows here in Jacksonville. So you can get all your blood work done. It's they don't even accept insurance. It is just cash price and it's listed on their website for any, any test you can imagine. Just cash price, cash price, cash price. And so you're not going to have the question marks at how much it costs. And so there are ways to do it. Prescriptions, there's different apps out there. Mark Cuban just came out with cost plus drugs. It's a website where, again, very transparent pricing. It is the retail price of a pharmaceutical, uh, plus 15 percent profit plus a 5 shipping fee. And a 5 kind of prescription handling fee. So you add that up and that is your price for every single prescription. So there are ways out there to combat health care as well as, you know, while you're strategizing what you're going to do for your health insurance.
Scarlett 2i2 USB-22:health insurance. Yep. No, that's, that's a good point. And, uh, did not know Mark Cuban came out with that. That's, that's kind of cool. And I think that's where America's kind of getting. It's like, we just want some transparency. And we don't have to dive into the America's healthcare
Scarlett 2i2 USB-23:Yeah, no, that's a
Scarlett 2i2 USB-22:take, that'll take longer than one podcast. Probably take our lifetime to figure out. Cause of course Congress can't do it either. So, um, so. No, that's, that's a good point. And, um, I guess we'll wrap that up for today. I do want to tease if you are a business owner, um, again, and Danny can talk a little bit more about this. He obviously works for 212 Benefits. He's a benefit broker. So he can help, um, Help you decide. Hey, what's the best plan to offer to my employees and things of that nature and and we're gonna do a podcast Very soon on that and kind of go into what you can consider things of that nature actually saw him speak At an event that we were at a couple weeks ago and it was very eye opening could kind of think about ways that whether you're self funded or putting it all on the insurance carrier or whatever it may be, depending on your situation and your company and how many employees you have. So I think it'd be very helpful to the audience. Um, but, but if, if they are, uh, business owners or maybe they're individuals, how can they find you, um, to, to maybe potentially help get health insurance?
Scarlett 2i2 USB-23:Yeah, so, uh, our website, www.twotwelvebenefits.com and, and two 12 is spelled out T-W-O-T-W-E-L-V-E two 12 benefits.com. You can connect with me on LinkedIn, um, name's Danny White on there, again in Jacksonville here with Hunter. Um, so those are probably the, the two best ways to reach me.
Scarlett 2i2 USB-22:Awesome, thanks. We'll do this again next
Scarlett 2i2 USB-23:This absolutely. Thanks for having me.
Scarlett 2i2 USB-22:me.
And as always, this podcast is meant for educational purposes. Only. It is not meant to be financial, legal or insurance advice. Please seek a financial legal or tax professional when considering your own situation. And please see Palm valley wealth mine when making those considerations.