Van's Blog ~



Personal Pre-Surgery Checklist

This is nothing like experience to help you understand a situation. I had the unenviable experience of a hospital stay recently and I found myself questioning a lot of things. My own personal health is one thing; however I’m sure I am like a lot of people and think about how what happens to me will affect the people around me. In sharing my experience, perhaps I can help someone else be better prepared if they are faced with a similar occurrence.

The first thing that comes to mind is what if I die? It’s one thing to be positive; it’s another to face the reality that we are all mortal. I’m going to a hospital for a reason; not thinking about death is ridiculous. I was reminded about this during my stay when I heard “code blue” several times that day. I’m ignorant; I did not know what it meant so I ask the nursing assistant that was in my room at the time, “what does code blue mean”? She was young and didn’t have a lot of tact. She said, “It means somebody kicked the bucket”. She went on to tell me that was the third one that day and one of them happened when a wife was checking her husband out and he “kicked the bucket” in the lobby! My wife had gone to get the car, should I have been worried?

Before I went for surgery, the first thing that came to mind “is my will update”? It was twenty-five years old, the answer was no. So I logged onto and for about $150 I had an updated will within about an hour. I think that going to a lawyer is a good thing, but it was Friday night. So the internet was the next best thing. FYI, when you are married, your spouse needs to have a separate will. Most of the time it is identical, so I did my wife’s will too. I also did a healthcare directive or living will. I did not want to leave my family with the decision of when to pull the plug if need be, so I covered that in the healthcare directive too. If you are one of my relatives reading this, I’m not dying yet. I just wanted to do the right planning. Additionally, so someone could sign on my business accounts and other financial accounts, I did a “power of attorney” document as well.

I went over my life insurance too. I have been selling life insurance for over twenty-eight years, so you’d think this would be up to date. I’m like the cobbler whose children had no shoes; I needed to update my life insurance beneficiaries too.  I bought my life insurance over twenty-five years ago, at the time, I thought I bought enough. If I die sooner than expected, it will make things a lot easier for my family, I am sure of that. But I would like to have more. I’m looking forward to recovery and I am sure I can get more for not too much money. So I’ll be optimistic and plan for a year from now.

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Most people, including family, try to be optimistic during a hospital stay. It’s the right thing to do, but if you are the one who is responsible for making sure the bills are paid on time, you need to talk to your spouse. We sat down and she made a list of everything that was paid, not paid, to pay, etc. The most important thing to share is how to log into the online accounts. I use a program called Splash Data ID. I have all my passwords on my IPhone and on the computer at home. All my wife needs to know is the password to get into that app and everything is in one place.

I have a second hospital stay coming up in about three weeks; however I expect to be in full swing before too long. But just in case, we talked about taxes too. If I can’t do the taxes on time, I filled out the form for an extension. All she needs to do is mail it if necessary. I take the responsibility of insurance, wills, taxes and I do not expect my wife to have to worry about that stuff. But if the unexpected happens, I gave her a list of people we trust that will help her if she needed.

I am humbled by the fact that God has blessed me with the family I have. I want to do the right thing and take care of them if I am not here. I have created an infographic to go along with this post to share this information. I hope that sharing my knowledge and experiences will give others the incentive to think about how they can care for their loved ones too.  I have a new website that can help with some of your planning:

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Thank you for reading, please feel free to share this post and the following infographic.

Van Richards


Seven steps to lower your out of pocket medical cost.

dollar sign on heart 2

When you are sick or injured and need to use your insurance, understanding the benefits and out of pocket cost can be very frustrating.  There are so many people involved in the medical care process that it is easy to become overwhelmed.  Here are seven simple steps to help you navigate the care and payment process.

1. Is your doctor still in your network?

Every time you go to your doctor, the first question is “has your insurance changed?”   When you set your appointment, you should ask if your doctor still accepts your insurance plan.

2. Is the lab your doctor uses in your network?

Most doctor visits will involve some sort of lab test.  Check with your insurance carrier to see if they have a preferred laboratory facility.  This can save you hundreds of dollars.  If your doctor takes specimens in their office, ask which lab they use.  If it’s it not a preferred lab with your insurance carrier, request that a preferred lab be used.  Laboratory costs are not usually covered by office charges.  Know before you go to save a lot of money.

3. Are you getting the best prices on medications? 

Pharmacy cost is one of the most significant expenses to medical care.  However most people don’t inquire about the medication cost unless they are paying the actual price of the medication.  It is worth your time to find the lowest price for a medication.  Controlling your cost will not only benefit you now, but it will help keep the cost down on your health insurance plan in the future.    One of the best sources for finding the lowest cost prescription drugs in your area is  There is an app available for this service as well.

4. If you need imaging test (MRI, X-ray, CT, etc) are you shopping?

The price difference for imaging is astounding, as much as 100% difference from one location to the next.  If location is important to you and you have time, scout out the location on Google maps.  Most locations will offer a street view with the map.

5. If you need outpatient or inpatient procedure is the surgery center in network?

Doctors work at a variety of different centers for surgery.  After speaking with the doctors representative for payment arrangements, it is important to contact the surgery center and inquire about their network status.

6. Is the anesthesiologist in the network?

Your doctor or the surgery center will be able to tell you who the anesthesiologist is and help you determine if they are in our network or not.  Remember if they are out of your network, you are responsible for 100% of what your insurance carrier will not pay.  That cost difference may be substantial so it’s worth the extra effort to check.

7. Do you need to shop for durable medical equipment (crutches, slings, special recovery items such as a Cryo Cuff).

Many surgical procedures will require special durable medical equipment.  Most doctors require the patient to make arrangement and payment for durable medical equipment prior to surgery.  Two questions for the supply center is do they offer a network discount and will they allow equipment not used after the surgery to be returned and credited to your account.

Healthcare cost tends to follow the 80/20 rule.  Eighty percent of the cost of healthcare can be attributed to twenty percent of those that are insured.  So if you are in that twenty percent population that is using hospital care, it would be in your best interest to try to control your cost.  The seven steps listed could save you thousands of dollars and a lot of grief.

Baer Hanuz-Rajkowski cut the middle finger on his right hand with the claw end of a hammer. After the cut to heal on its own, Mr. Hanuz-Rajkowski visited the Bayonne Medical Center emergency room in Bayonne, New Jersey. After receiving a tetanus shot, antibacterial ointment, a finger splint and bandaging, Mr. Hanuz-Rajkowski got a bill for $9,000!

After NBC New York reported on Mr. Hanuz-Rajkowski’ s $9,000 bill, Bayonne Medical Center agreed to accept his health insurance provider’s payment of $6,640 for the emergency room visit. That might seem like a happy ending, but it is cost like this that drives up health insurance premiums. According to the Institute for Health & Socio-economic Policy, Bayonne Medical Center’s average charge to cost ratio is 1084%. Based on this information Mr. Hanuz-Rajkowski’ s actual cost was probably $830.26. Bayonne Medical Center’s charge to cost ratio is the sixth highest in the country. In Texas our average hospital cost to charge ratio is 398.31%. Had Mr. Hanuz-Rajkowski been treated at an average Texas hospital his injury would have been something like $3,307. That is still high compared to Maryland with the lowest hospital cost to charge ratio of 140.18% where his hospital visit cost would have most likely been about $1,163.86. If Mr. Hanuz-Rajkowski worked for an employer that offered insurance that used a market based pricing model, his hospital visit would have been approximately $954.80. Market based pricing is a simple concept: cost + a reasonable profit margin = patient cost.

ihsp bayonne med center

Market based pricing eliminates the network and deals directly with the hospital. As reported in the NBC New York story, the health insurance company involved, United Healthcare is not a preferred network provider for Bayonne Medical Center. A market based pricing model would have eliminated this problem. Insurance company hospital networks do not offer the same benefit that they did twenty years ago. Almost every hospital is in every insurance network. As a result, networks have lost most of their leverage. Employers have had great success in controlling health insurance plan cost by eliminating hospital networks completely. However this does not eliminate the doctor network. In market based pricing, employer’s health insurance plans deal directly with hospitals by using a third party administrator to negotiate pricing on a case-by-case basis. Market based pricing saves employers an average of 30% on their health insurance premiums. Baker Nissan in Houston, Texas has not had health insurance rate increases for employees for the past three years by using this strategy.

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Three Problems With Health Insurance For Employers & The Solution

Three problems with health insurance for employers & the solution

Three problems exist when it comes to renewing your company’s health insurance. The first problem is that renewal proposals are usually received very close to the renewal deadline allowing little time for analysis. The second problem is that benefits continue to be reduced to avoid premium increases. And the most significant problem to employees is that when all else fails, employers pass the increased cost on to the employees.

Employers put a great deal of time and effort into changing their complete benefit plans, changing pharmacy benefit managers, changing the amount they pay of the employee and dependent cost. Many of the changes are only temporary. The same process has to occur prior to the next renewal every year.

The key to reducing the cost of large group healthcare plans is identifying what is driving the cost from company to company. What drives cost for the oil and gas industry is different than what drives cost for wholesale and retail companies. Oil and Gas companies tend to have richer plan designs to compete for technical employees. Wholesale and retail employers tend to have more unmarried workers that result in fewer dependents. To remain competitive, it is vital that employers first know how their benefits and cost compare to their peers. If your costs are not competitive, find out why. Cost differences within an industry sector can be due to items such as plan design, level of dependents covered or the cost of illness within a group.

The renewal process should be more than a once a year decision. Employee utilizations should be continually monitored and reviewed by executive brief throughout the year. Trends can be identified and decisions become an ongoing informed process rather than a last minute decision. This process solves the first problem. At ABS our account executives conduct new employee meetings monthly, reports are reviewed regularly with key employer staff and decisions begin to be formulated six and three months prior to the formal renewal date of the healthcare plan.

Two key drivers across all industry sectors continue to be pharmacy cost and hospital cost. The state that has done the best at controlling hospital cost is Maryland. The State of Maryland has implemented an “all-payer rate setting system” for hospitals. Controlling pharmacy and hospital cost in Texas and other states can be done in a similar manner by indexing the true cost to a benchmark such as Medicare. In this benchmarking process a reasonable profit margin is negotiated with the pharmacy benefit manager and the hospital service provider. By using a system like this, the State of Maryland has the acquired the lowest hospital rates in the United States. According to the Institute for Health & Socio-Economic Policy Maryland has an Average Charge to Cost Ratio of 140.18%. Compare that to Texas which has an Average Charge to Cost Ratio of 398.31%.

Lower cost solves the second and third problems mentioned above. Lower cost results in a stable level of benefits and employers are not forced to increase rates for employees. Stable cost mitigates a great deal of tension between employer and employee. A stable healthcare plan goes a long way in creating a better work life balance for employees.

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The DOL and the IRS offers the equivalent of a “get out of jail free card”.



The DOL and the IRS offers the equivalent of a “get out of jail free card”.  The second quarter of 2014 has been an active month for the Department of Labor.  Large and small retirement plans were the focus of the DOL’s enforcement actions. The DOL received judgment on May 30th for an Antioch, Illinois employer to restore $50,000 to an employee benefit plan for breach of fiduciary duty. On June 3rd the DOL reached a $5.25 million dollar settlement with GreatBanc Trust for breach of fiduciary duty.  Of this agreement, Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi said “Others in the industry would do well to take notice of the protections put in place by this agreement”.

If you have not reviewed your fiduciary duties in some time, now is the time. The DOL has set the precedent of compliance with this month’s settlements. However, the DOL offers the Voluntary Fiduciary Correction Program and the IRS offers theVoluntary Correction Program. These correction programs include any employee benefit plan that files a Form 5500, i.e health insurance plans and retirement plans. This is not a license to violate laws. But the IRS and the DOL do realize that a majority of the employers want to do the right thing. This is their offer to help employers get on the right track and back in compliance.

The IRS has also just published a new series of forms for use in connection with the Voluntary Correction Program: IRS Form 14568 Series (Jan. 2014).   To help you get a start on reviewing your fiduciary obligations we have developed a comprehensive Fiduciary Audit Checklist.  The FAC covers eleven major sections of compliance and will help employers to set up a comprehensive fiduciary audit file.  Having a paper trail of all documents and actions is essential in the event of a DOL or IRS inquiry.   We’d like to invite you to take advantage of this free tool to make sure you are in compliance.  If you have problems, this may be your “get out of jail card”.  So why not take advantage of it?  It just might help you sleep better at night.  To receive your free Fiduciary Audit Checklist (your “get out of jail free card”) click here.  This is not legal or tax advice. If you have your own legal or tax counsel, please consult them.  Advantage Benefit Solutions does provide up to 10 hours of free counsel from an attorney that specializes in ERISA matters for clients that have at least 100 employees participating in a health insurance plan that we service. To find out more about our offer for up to 10 hours of free counsel, please click here.

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White Paper: Unique pricing model and management strategy decreases health insurance cost up to 30%.

What you don’t know can cost you.

Ignorance of the law is no excuse.

As part of a company’s annual compliance check-up, employers should now include a documentation system that verifies the full time and part time status of employees.   This is one of many new clarifications recently issued by the IRS.   The Treasury Department issued 227 new pages on February 12, 2014 as final regulations governing the “shared responsibility” for employers regarding
health coverage.   These new clarifications should be included in your company plan annual review with your consultant or broker.  To discuss how these new regulations should be addressed with your company please free to contact Van Richards at Advantage Benefit Solutions through linked in at  or email at

Here are the highlights of the final regulation:

  • In determining full-time employees for 2015, employers can use a six-month measurement period, even with a twelve-month stability period, on a one-time basis.
  • Employers can determine if they have 100 or more full-time employees or full-time equivalent employees and are subject to the employer shared responsibility requirement in 2015 by using a period of at least six consecutive months, rather than a full year.
  • The final regulations provide two methods for identifying full-time employees: the Look-back measurement method (not permitted for variable hour employees) or the Monthly measurement method (not permitted for more predictable hours of service)
  • The final regulations provide that a seasonal employee means an employee in a position for which the customary annual employment is six months or less.
  • The final regulations exempt employers with 50 to 99 employees from their application until 2016.
  • Large employers must offer coverage to at least 70% of full-time employees for the 2015 plan year, increasing to 95% for 2016 and later years.
  • The final regulations exclude both stepchildren and foster children from the definition of dependent for the shared responsibility penalty.
  • Employers with non-calendar year plan years will not be required to comply with the shared responsibility requirement until the beginning of the 2015 plan year rather than on January 1, 2015 if they satisfied certain conditions on February 9, 2014.
  • Teachers and other educational employees will not be treated as part-time simply because their school is closed or operates on a limited schedule during the summer.
  • The final regulations provide a “bright line” method for adjunct faculty.  Specific hours must be credited for hours in the classroom.
  • The regulations do provide that service performed by students under federal or state-sponsored work-study programs will not be counted in determining if the students are full-time employees. However, service performed under an internship program would count as hours of service for the outside employer and not the educational institution.

Health Insurance PPO’s: From Glory to Gory?

sony walkman

Remember the Sony Walkman, disposable cameras and the compact disk?  Are you still relying on health insurance strategies that had their hey-day in the 80’s?  Preferred Provider Organizations (PPO’s) are the heart of many group health insurance plans.  They are also one of the reasons for over inflated prices today.  In the 80’s an insurance carrier could approach a hospital system or other health service provider and offer them access to their thousands of customers if they would offer a discount.  Times have changed.  Instead of dozens of insurance carriers, there are now about a half dozen.  Here is the biggest difference today: every hospital system is in every PPO network and as a result every hospital network is in every insurance plan.  There is no leverage.   The prices you see are not real.  The prices and the discounts you see are structured to give you the perception of value.  Plus the consolidation of hospital systems gives hospitals power to manipulate PPO pricing.  A study done by Cory Capps, an economist at Northwestern University found the following: “Most consolidations among competing hospitals lead to higher, not lower, prices.”[1]

Some health care providers are beginning to change the way they do business and the trend is catching on as consumers realize what they are actually paying.  Here is how one hospital in Oklahoma is changing to help their clients and be competitive in the marketplace:

So what can you do with your group health insurance plan?  Forget the PPO concept of discounts.  There are strategies that will allow employers to replace the PPO discount concept and replace it with a real-world pricing system.  For more on pricing models that could save as much as 30% in premiums, contact me through LinkedIn at or visit our website at


[1] Capps, Cory. “Hospital Consolidation And Negotiated PPO Prices.” HealthAffairs. 23.2 (2004): 175-181. Web. 30 Oct. 2013.      <;.

The Cost of a Heart Attack in Houston!

The Cost of a Heat Attack in Houston (2)

The public’s fixation on the individual mandate detracts from parts of the ACA that are good, yes good.  This is not a Democrat or Republican issue, this is an American issue.   Healthcare is such complicated problem that the breath of the Affordable Care Act will never get through to the average American.  Congress needs to break it down into smaller portions and make a more reasonable plan of implementation.  The ACA is more than the individual mandate.  One of the major problems today is that the average family pays over 20% of their income for health insurance.  At the current inflation rate of healthcare premiums that same family will be paying over 40% of their income for health insurance within 10 years.  That is an unsustainable rate of increase.  The part of the ACA that is good is it is shining the light on parts of the healthcare system that are causing cost to be out of control. Acting on disclosure requirements of the ACA the Centers for Medicare and Medicaid Services released a document called Medicare Provider Charge Data.  This details cost of medical procedures at hospitals from around the United States. Information from this report shows that if you had a heart attack and were treated at Methodist Willowbrook Hospital in Houston it would cost $72,128.  If you were taken 15 miles away to Memorial Hermann Hospital’s Memorial City location in Houston, it would cost you $31,313.  Both are great hospitals.  Why such a big difference?  The answer we have found in similar situations is unreasonable mark-ups and billing practices.  The Constitution allows Congress to pass tax laws to control commerce.  Control the cost of healthcare and you bring down the cost of health insurance.  Lower cost means more people will voluntarily buy health insurance.  When it comes down to feeding your family or buying health insurance, you feed your family.  The President and Congress need to drop the individual mandate and concentrate on fixing the current system not creating a new one.  But until Congress catches on private enterprise has already begun to fix problems like this by creating health insurance pricing models that are based on cost and a reasonable profit.  We’ve been using this model with a great deal of success thereby reducing cost over traditional pricing models by as much as 30%. For more information on fee model pricing vs. mark-up pricing contact me through LinkedIn at, or visit our website at

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