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Employees need to understand their insurance coverage

Derek Graff was just like the rest of us at one point.

In his 20s, sitting through presentations on various health care plans — long-term care, long-term disability, short-term disability. His head nods, his brain numbs. Blah, blah, blah.

“I was right there, man,” Graff said, referring to those who believe they’re too young to care about all these long-term health and disability options. “I thought I was invincible, but no, I was not.”

That could be argued considering the horrific accident the 32-year-old NV Energy lineman endured last September while attempting to re-energize a line. He is still alive.

Graff was reaching for tools when his arm hit a live wire.

“There was a super bright light, so white it was black and that’s all I remember,” said Graff, a single father who cares for three children. “I don’t remember hearing a noise or anything. I made contact. It (the jolt) came through (my) arm, through (my) body, blew out my left foot; seven exit wounds throughout the body.”

He was actually struck twice, but all he recalls is being dragged over some gravel. He slightly remembers the gurney and then the hospital.

What he will not forget are the older guys with the company who told him to invest in long-term disability — only $2 a paycheck — because they knew their job was risky.

Of course, his worker’s compensation kicked in during his three-month stay at the hospital, which amounted to nearly 70 percent of his paycheck. Then he received short-term disability, which lasted 180 days. Now he’s awaiting the long-term disability checks that will help him support his children and live comfortably until he returns to work in July.

“Was it worth it?” Graff said of his decision to sign up for long-term disability. “Hell ya. I was trying not to disrupt my household.”

So would Graff suggest all employees take the plunge and buy long-term disability if they can afford it?

“I would say they can’t afford not to,” Graff said. “If you don’t do long-term, that’s something that later you might say shoulda, woulda, coulda.”

Experts hold varying opinions on the options employees should choose, but the majority of health care professionals agree on this: All these options can be very confusing.

“People think, ‘Aw this is all so overwhelming,’ and it is,” said Dr. Katy Votava, president of GOODCARE.com, a website that specializes in health care costs. “We learned to figure out our cellphone plan; most of us know more about our cellphone plan than we do about our insurance plan. If people come up to speed, they’ll feel more comfortable.”

For those who dozed off during health care presentations, the following is a rundown of the choices — hopefully the language we all can comprehend — and how they can help protect you, your family and your estate.

Short-term disability

This option is best used for short-term illnesses or injuries that are not expected to keep employees out of work for lengthy periods of time. Typically, this form of insurance covers a portion of the employee’s paycheck for six months. This is the most common type of coverage chosen by employees because the majority of injuries or illnesses are not long term.

It is wise to enroll in this plan at any age because of unforeseen accidents. Some employees buy their own diagnosis-specific coverage through private companies, but if they do not fall ill with that particular sickness, they will receive no compensation.

Long-term disability

This type of insurance is beneficial to workers who will be unemployed due to life-changing injuries or illnesses. Depending on the plan, the coverage typically will protect future earnings for five to 10 years, but in some cases can extend to the age of 65. Employees must exhaust their short-term disability and all their sick leave and vacation pay before the insurance kicks in.

As Graff’s accident demonstrated, this is considered a worthy option, regardless of age. Votava emphasized that this is becoming increasingly important to all citizens.

According to the website Salary.com, 12 percent of working adults in the United States suffers a long-term disability and, the website says, one out of seven workers will be out of work for five years or longer.

Votava said the reason this option is becoming more important is that the number of people younger than 65 years old are in need of it far more than years ago. But why?

Technology has changed drastically. For example, car accidents that once would kill a passenger or driver now leave them injured, albeit seriously. Cancer is considered a chronic illness, not the death sentence that it once was. Now those victims might be left unable to work, but they still live a typical life span with the injuries or illnesses.

“I think people should have that,” Votava said. “Particularly if you have a family, a mortgage, financial responsibilities; you will become impoverished. It’s a key piece of their protection.”

A serious misconception about long-term disability is that workers can no longer work. That is not the case. Employees can collect long-term disability benefits and retrain for a more suitable position. It is important to check the plan to determine how much can be earned without affecting the coverage.

“Some people can make an earning wage,” Votava said. “Emotionally, people are happier and more productive, and they’re going to feel better if they’re going to do something. Ask the questions, understand how the guidelines work.”

Employees can tap into state resources or other options to be retrained, Votava said.

Long-term care insurance

Perhaps the greatest misconception about this type of plan is that it is not designed to supplement income. It is meant to help lower the cost of nursing homes or home care for those unable to live alone. Most experts suggest investing in long-term care after they reach 50 years old; Votava, who holds a doctorate in health economics and nursing, suggests that people begin researching plans around 55.

“The risk you take is the longer you wait, the harder it is to get a policy because you can get a health event that could make you ineligible or put you at a higher premium.”

The coverage protects patients suffering from physical or cognitive disabilities.

This benefit covers a portion of the difference in cost that Medicare does not pick up if one is admitted into a nursing home. A common misstep is that workers do not take the cost of health care facilities into consideration when saving money or creating estates for their heirs.

The cost of in-house care facilities is rising rapidly.

In 2008, the average cost for a private room at a nursing home was $67,525 annually; this year, it is $83,950, according to Genworth Financial. In Nevada, a shared room runs an average of $80,884 annually and a private room is $89,425, according to a 2013 survey performed by Genworth. The average cost of a one-bedroom assisted living facility is $34,200.

Votava warned of the importance to ensure employees purchase enough benefits. If a nursing home room costs $300 a day, for example, you don’t want a policy that covers $100 a day leaving a significant balance.

Other opinions exist, of course. Forbes.com recently published a study by the Journal of Economic Perspectives that suggested people who have low income and few assets bypass long-term health care insurance. The point made was that they their Medicare benefits would cover more of their health care costs. The insinuation is that depending on your income bracket, some people should opt for “free” benefits from the government rather than paying for private coverage.

Hospice Care

Some people think that long-term care insurance includes hospice benefits, but this is rarely the case, according to Candis Armour, executive director of Las Vegas Solari Hospice Care.

An overwhelming majority of patients at Las Vegas Solari Hospice Care qualify for care under the Medicare Hospice Benefit, and therefore incur no out-of-pocket costs. Medicare provides a full range of medical services, including hospice physician care, nursing care, social work, spiritual support, bereavement counseling, nursing aides, durable medical equipment and medications to help manage pain and keep patients comfortable, said Amour.

“Care can be conveniently provided wherever the patients reside — in their own home, a relative’s home, nursing home or assisted living center,” she continued. “At Las Vegas Solari Hospice Care we also offer a freestanding, 12-bed inpatient center where patients can receive care if their symptoms become too difficult to manage in their places of residence. If this more acute level of care is required, Medicare again covers the costs.”

In Nevada, Medicaid follows the same hospice guidelines as Medicare. This means that Medicaid recipients receive the same full range of benefits as Medicare participants.

For those who don’t qualify for Medicare, Armour said, “Las Vegas Solari Hospice Care works with numerous private insurance plans. Most private health insurance plans cover hospice care services. However, coverage and payment levels vary widely from plan to plan. Some are quite comprehensive, some follow the minimal Medicare guidelines and others may include few, if any, hospice care provisions.

“Some plans also have a lifetime ceiling for hospice benefits. It’s important to pay close attention when purchasing an individual private insurance plan to know what hospice benefits are included. Don’t be afraid to ask questions of the provider if you are unsure.”

Las Vegas Solari Hospice Care does accept private-pay patients. “We work with our patients and their families to develop payment plans and explore other avenues of financial assistance,” Armour said. “Terminally ill people who need end-of-life care are never turned down because of their inability to pay. We help find solutions that work for everyone.”

seek information

The best advice in sorting through insurance plans is asking questions, and the most trusty answers typically come from financial planners who have no vested interest in how much money people are putting into their health insurance plans.

Being informed is critical because other resources are out there, and some are not. Elderly folks might believe that they will receive coverage from AARP, but Votava explained that the organization for retired people only allows licensed health insurance companies to use its name and logo.

Retired military personnel and those on active duty also have a bevy of benefits available to them, but it depends on how long the soldiers served and where the illness or injury occurred. Votava said it is best to check with the local Veterans Affairs office to find out what medical options are available.

Without a doubt, medical plans are complex and education is key.

The best advice is to acquire long-term disability insurance during your younger years. Around the age of 55 to 60, that plan can be switched over to long-term care.

“It’s not a one-time decision you make, it’s something you reassess,” Votava said. “It’s important for someone of any age to have a financial planner. People think you have to be wealthy to get a financial planner or an independent financial plan, but that doesn’t mean you have to buy a product from someone.”

Graff, still recovering from electrical shock, might not have had professional planners by his side, but he had some wise co-workers who provided sound advice to a young man. He has suffered little financially after being admitted to the hospital in September. He was released in December and has no plans to return to the company until July.

He admits that in hindsight he learned an important lesson: The risk-factor of a job shouldn’t be the only deciding factor when deciding on a plan.

“I was begging for something to happen to me. I was going 100 miles per hour,” he said. “You have to remember someone else who has a relatively safe job, but what they do on the weekends matters a lot. There is no safety net except where you’re actually working at and the insurance you choose.”

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