Are you seeing Lasso Healthcare for the first time? Whether you've just seen it come up on Medicare's Plan Finder or you heard about this unique MSA through the grapevine, you've come to the right place.
Lasso Healthcare's Medical Savings Account (MSA) is the largest MSA on the market right now – by far – and it's headed into its second year.
There’s a pretty common statement we’ve been hearing from agents that are already contracted to sell the Lasso MSA: “This is the plan I’m going to choose when I’m Medicare eligible.”
There’s a reason for that, and we want to explore it with you. As an agent, you also want to know all of the MSA plan details to be prepared, so we’ve split this article up into sections.
Table of contents:
- What is an MSA?
- The MSA Deposit, Explained
- What Does the Custodial Bank, Optum Bank, Do?
- What’s Covered by the MSA?
- How Do Claims Work?
- Ideal MSA Client Profile
- The MSA vs. Medicare Supplements
- Enrollment and Disenrollment
- Marketing the Lasso MSA
- Appointing/Contracting with Lasso Healthcare
Don't have time to read all about the Lasso MSA? Call us at 888-780-7676 and we'll tell you what you need to know.
What is an MSA?
An MSA is an acronym for Medical Savings Account. MSAs are a Medicare Advantage product, though they're structured very differently as you'll soon see.
The Lasso Healthcare MSA plan is a $0 premium, high-deductible healthcare product underwritten by Lasso. Just like other Medicare Advantage products, the client will still be responsible for the monthly Medicare Part B premium.
We like to explain the MSA by highlighting its 4 key "pillars" that will never change:
- There are no networks.
- It's $0 premium.
- There's no prescription drug plan included.
- You get an annual deposit.
MSAs have no networks
To elaborate a bit, the MSA product doesn't have any networks – you can see any doctor that accepts Medicare. That's very unique, especially when we're talking about Medicare Advantage products.
This is an excellent fit for snowbirds who like to travel frequently and have a hard time staying within a strict network.
MSAs have no premium
The MSA is also $0 premium, and that'll never change.
MSAs don't have drug coverage
There's no drug coverage included with the plan, but we actually see that as a positive, not a negative.
With typical MAPDs, the client may enjoy the health coverage, but the drug coverage wrapped up into the plan doesn't really suit them. With the MSA, they have the freedom to pick a standalone Part D plan that's tailored to their prescriptions and the pharmacy they want to go to.
While you can't use the annual deposit for the Part D premium, you can use it for copays or coinsurance at the pharmacy.
MSAs have an annual deposit
Finally, speaking of that annual deposit, an MSA always comes with an annual deposit that's put into the beneficiaries medical savings account. For 2020, that annual deposit is $3,240.
That money comes from the government, is paid to Lasso, and is then deposited in the policyholder’s account.
The deposit can be utilized as first-dollar coverage to fulfill the deductible, but we'll cover that in more detail shortly.
MSAs have a high deductible
MSAs do have a high deductible, which means it won't necessarily be right for everyone. We'll share some client profiles and sales scenarios later in this article, but the high deductible isn't an immediate concern for many seniors.
For 2020 deductible amounts, there are 3 regions:
- Region 1 is a $7,400 deductible
- Region 2 is a $8,400 deductible
- Region 3 is an $9,400 deductible
MSA state availability
There are 26 states plus the District of Columbia that have access to Lasso products, and more than 50% of the available counties have the lowest deductible available ($7,400).
2019 SERVICE AREA: AZ, AR, DE, HI, IL, IN, KS, MD, MS, MT, NC, ND, PA, SD, TX, UT & WY.
2020 SERVICE AREA: all the 2019 states plus GA, KY, LA, MN, NM, NV, OH, RI, SC & the District of Columbia.
In our opinion, the MSA is one of the most consumer-friendly products available in the whole Medicare Advantage space – if not the whole Medicare space.
In sum, an MSA is a high-deductible healthcare product backed up with a medical savings account utilized at a custodial bank.
The MSA Deposit, Explained
The way the MSA deposit works is very simple, but you may get some questions from clients about how those funds roll-over, what happens at tax time, and what happens in the event of death.
How Do the Deposited Funds Work?
As you know, Lasso deposits $3,240 into the MSA at the beginning of the year. However, what happens if the client doesn’t use all of those funds?
Good news! It rolls over to the next year. The end-of-year account balance is never “use it or lose it.”
If you keep your Lasso Healthcare MSA, the funds will stay in your account for the next year. If you choose not to renew your MSA, those funds are still yours to keep. They are subject to the same IRS rules as when you were a part of the MSA plan.
Once your client is officially signed up for the plan, they’ll receive a welcome packet, a debit card that’s linked to their MSA bank account, and a health plan membership ID card. Let your client know that these three items might be shipped separately.
As a nice bonus from Lasso, your client can earn up to $250 in gift card rewards to major brands like Amazon, Walmart and more, or a Visa® prepaid card by completing three simple activities:
- Completing a health survey ($75)
- Ordering labs and discussing the results ($75)
- Seeing their provider ($100)
These are all a part of the For Your Health incentive program. Directions on how to complete all of these tasks are included in the welcome packet, which will be mailed to your client when they sign up for the plan.
What Happens at Tax Time?
If your client uses any of the funds from the MSA account, they will need to file an IRS Form 8853 and 1040 at tax time.
They’ll receive a Form 1099-SA from Optum Bank reporting the account distributions by January 31. That form will report all distributions and expenditures from the account. Optum Bank will also report that information to the IRS.
What Happens If I Die?
If you die, whatever is left in your MSA will go to your beneficiary. If that happens to be your spouse, there is no tax penalty. If not, ordinary income would apply subject to IRS rules.
Custodial fees would be charged by Optum Bank, but the account could also be moved to a custodial account that the beneficiary chooses.
What Does the Custodial Bank, Optum Bank, Do?
Optum Bank is the place where the Lasso Healthcare MSA annual deposit will be housed.
Optum Bank is the market leader in HSAs, currently servicing over 3 million accounts and $9 billion in assets under management.
Medical Savings Accounts (MSAs) are similar to Health Savings Accounts (HSAs) that are available outside of Medicare, which makes Optum Bank a fantastic partner for the Lasso product.
With Optum Bank, there are no fees to keep your money inside the MSA. This means you and your beneficiaries will get a monthly statement, and there will never be a negative number due to fees.
Optum Bank also provides all the tax forms the beneficiary will need to file at the end of the year regarding any withdrawals from the MSA.
Optum Bank is able to put the funds within the MSA into some interest-bearing accounts. In other words, you can earn higher interest rates than the typical savings account.
This helps augment the MSA, which can offset future claims costs. There must be a minimum of $2,000 inside the account in order to have access to the interest-accruing options.
The money deposited and any interest earned is NOT taxed as long as you apply the monies toward any QMEs, whether they’re Medicare-covered or not.
Don’t worry – all of this will be set up at the time of enrollment.
What’s Covered by the Lasso MSA?
If you sell the Lasso MSA to your client, they're responsible for all medical bills up to their high deductible.
Since they get a deposit they can use for medical expenses, their real risk is the difference between the deposit and the deductible – Lasso calls this the "Member Responsibility."
When it comes to what's covered, here's the quick answer: after your client reaches their deductible, all Medicare Part A/B approved expenses are covered 100%.
However, before their deductible, your client has some freedom. Their deposit can cover more than just Medicare-approved expenses.
There are 3 categories when it comes to how your MSA deposit is spent:
- Medicare-covered expenses
- IRS Qualified Medical Expenses that are non-Medicare
- Non-qualified expenses
All Medicare A/B covered expenses will count toward the MSA deductible, and they are not taxed by the IRS. Basically, if Medicare covers an item or service, that will count toward the deductible – or eventually paid for – by the MSA.
Qualified medical expenses
For IRS Qualified Medical Expenses (QMEs) that are not covered by Medicare – like Part D prescription drugs, chiropractic services, long-term care, and hearing aids – they won’t count toward the MSA deductible, but they’re still tax-free. You can see a full list of the services and products that count as QMEs in the IRS Publication #502 for the applicable tax year.
If the MSA deposit is used for non-qualified expenses, then it does not count toward the deductible, and it’s subject to IRS taxes and penalties.
So, if you use that deposit for things like food, clothing, or house payments, those funds will be taxed as part of your income.
3 quick claims examples – what's covered?
I know all of that can be a bit confusing at first, so here are a few examples:
- Regular doctor visit: counts towards deductible, and you can use your deposit to pay for it
- Hearing aids: does not count towards your deductible, but you can use your deposit to pay for it
- New television: does not count towards your deductible, and you'll be taxed 50% on that purchase if you use your deposit to pay for it
How much do medical services actually cost since Medicare isn't paying?
Since your client is responsible for medical expenses until they reach their deductible, many agents have asked us how much those medical services cost.
The good news is that all medical services and expenses are re-priced to the Medicare-approved amount. Your client will not pay full retail price for any medical services when they have the Lasso MSA.
We cover this in a lot more detail here: How Much Do Medical Services Actually Cost With the Lasso MSA?, but here are few quick, real-life examples:
- A $1,174 hospital charge was re-priced to $58.48.
- A $664.44 medical bill was re-priced to $183.44.
- A $351.28 therapy bill was re-priced to $105.24.
- A $213.26 therapeutic procedures bill was re-priced to $58.17.
As you can see, basic medical items and services aren't going to be big ticket items for your Lasso Healthcare MSA clients.
While an inpatient hospital stay is probably going to expose a policyholder to their Member Responsibility, basic medical services throughout the year probably won't.
In fact, 81% of 2019 members spent less than $1,000 of their deposit amount through August 2019!
How Do Claims Work?
The MSA claims process works just like other Medicare Advantage plans.
The client will visit the doctor, and the provider will then bill that visit to Lasso Healthcare. Please note that there are NO copays required under the Lasso Healthcare MSA.
The bill will then be adjusted to match Medicare-approved rates, and Lasso will check the client’s progress towards their deductible. If the client has not met their deductible yet, they will be sent a bill. If they have, Lasso will pay.
Then, the client will be sent their Explanation of Benefits (EOB), showing how the claim was re-priced, progress made toward the deductible, and if Lasso paid that claim or if the client needs to pay it.
If the client is responsible, they can pay for that bill out of their own pocket or with their MSA funds. If they want to use their MSA funds, they have a debit card that they'll receive when they enroll.
Ideal MSA Client Profile
Here are 4 main considerations when thinking about the ideal client profile for the Lasso Healthcare MSA:
- The client is healthy.
- The client is able to handle the difference between the deposit and the deductible.
- The client is uninsurable for whatever reason, but still healthy.
- The client receives a stipend as a contribution towards post-65 healthcare.
This MSA will be the greatest fit for individuals who are healthy and that are financially able to handle the difference between the deposit and the deductible.
Another point to consider is that the Lasso MSA does not have any underwriting requirements. So, if you have clients that have a quirky condition and can’t switch Medicare Supplements, this can be a fantastic solution.
For example, a client might be healthy except for osteoporosis, which is really no big deal, but they had a stress fracture in the past year. There can be nothing else wrong with that client, but they’re uninsurable. This gives that client a wonderful option.
Finally, there are many larger employers that offer a yearly stipend as a contribution towards post-65 healthcare. I confirmed with Jim Handlan, the President of Lasso Healthcare, that as long as the employer reimbursement is not specifically designed to offset the deductible, the client can have the MSA in parallel with their reimbursements.
If you want to see what this kind of presentation would look like, Luke Hockaday shared his own experience selling the Lasso MSA to an individual who gets employer reimbursements.
As long as the client is allowed to use that money however they want to use it, it’s allowed. As the agent, please request the employer’s plan document and send that to me (Steve Spinner) to verify the details and confirm that your client can indeed get this MSA.
Beyond these notes, there are some basic eligibility requirements we need to be aware of.
The client must:
- Be Medicare-eligible
- Live in the Lasso Healthcare MSA service area
- Reside in the U.S. for 183 days or more during the year
- Not have any other coverage that would cover the MSA plan deductible (including employer benefits, TRICARE, the VA, or FEHBP)
- Not be eligible for Medicaid
- Not be receiving Medicare hospice benefits
- Not have end-stage renal disease, unless the client was enrolled with an MA plan that left Medicare and hasn’t yet joined another MA plan
The MSA vs. Medicare Supplements
Medicare Supplement agents can be leery of Medicare Advantage plans, but in all actuality, most Med Supp agents we've talked to are embracing the MSA.
It doesn't have the constraints that typical MA plans have, like network issues. In addition, it gives agents a place to put clients who can't pass underwriting.
MSA vs. HDF
When you compare the MSA to a High-Deductible Medicare Supplement, it's really a comparison of potential and health risk.
If you want to compare an HDF to the MSA, you have to compare apples to oranges. Can we compare the dollars out of pocket? Of course we can, but if a beneficiary is healthy and they don’t anticipate any problems, the MSA is clearly the avenue in which they need to go.
Here's a couple quick comparisons of the MSA vs. a High-Deductible Plan F.
~$30 per month
$7,400 deductible in Region 1
No underwriting except ESRD
If the client has a very bad year and maxes out their deductible, they have a $4,160 Member Responsibility (annually, Region 1).
If the client has a great year and doesn’t use their deductible, they're up $3,420, and can start earning interest.
Here's a quick summary:
- With a HDF and HDG, you must pay thousands out of pocket before you get any benefits
- With the MSA, you get over $3,000 into your medical savings account at the top of the year
- There’s risk with both plans
- The health of the beneficiary plays a part
- The potential of the deposit over time
- The sum total of premiums going out over time
- Underwriting plays a part, for example: those who can’t switch supplements due to a chronic condition like COPD or osteoporosis
MSA vs. Plan G
Then we have the MSA versus the popular Medicare Supplement Plan G.
We actually did a live Q&A session on this topic and developed an MSA vs. Plan G comparison spreadsheet that's interactive. Watch that session replay and download the spreadsheet for the full picture by clicking the image below.
Enrollment and Disenrollment
You can first sign up for the Lasso MSA during the Annual Election Period (AEP) or an Initial Coverage Election Period (ICEP).
Except for rare cases, the only time you can disenroll is during AEP. Clients can not disenroll doing the OEP.
It’s important to understand the timing of things here because the deposit and deductible are affected.
How Is the MSA Deposit and Deductible Affected By Enrollment and Disenrollment?
The yearly deposit is put into the MSA at the beginning of the year. If you enroll in the middle of the year, the funds are deposited the first month your coverage begins.
If you do end up enrolling in the middle of the year, the deposit and deductible are pro-rated. For 2020, the monthly-prorated amount is going be to $270 multiplied by the number of months you’ll be covered for that year.
If you enroll during AEP, you’re allowed to cancel by December 15. The only times to disenroll are during AEP or during an SEP.
If you leave the MSA before the year is over, you are required to pay part of the most recent yearly deposit back. That amount is also pro-rated at $270 per month.
This also applies in the event of death; the pro-rated deposit amount will have to be paid back, by your estate, to Lasso.
What’s In the Lasso MSA Enrollment Kit?
The enrollment kit includes 6 items:
- Lasso Healthcare Scope of Appointment (SOA) Form
- Lasso Healthcare MSA Pre‐Enrollment Checklist
- Lasso Healthcare Summary of Benefits
- Lasso Healthcare MSA Enrollment Form
- Optum Bank Medicare Advantage MSA Authorization Form
- Lasso Healthcare Plan Overview
Just so you’re aware, the Scope of Appointment (SOA) form is the agent’s responsibility. You must keep the signed SOA for 10 years, per CMS requirements, and be able to produce it upon request by Lasso Healthcare.
You can easily download enrollment kits from the Lasso website on the document page.
Marketing the Lasso MSA
We have dozens and dozens of marketing materials for agents to use when promoting the Lasso MSA to consumers. There are even generic variations and group variations if you plan on doing any seminars or meetings.
For 2020, we have the following: a Powerpoint presentation for groups and individuals, print ads, postcards, radio ad scripts, a client leave-behind and flyers, billboard templates, social media assets like copy and images, and videos!
Whether you're wanting to do some Facebook ads, you prefer leaving a flyer behind with your clients during the busy season, or you want to experiment with some radio advertising, we have all of these materials ready to go.
They're all Lasso and CMS-approved, so all you have to do is let us know you're using the ad – or request customization if you're contracted with us – and you're ready to roll!
If you're an agency owner or you have downline agents, get in touch with us! We have special commission deals and can help you grow your agency with this exciting new product.
We're even happy to share our own marketing materials and efforts with you that are agent-facing, so don't hesitate to reach out!
How Are Applications Submitted?
Paper applications should be faxed to 888‐638‐6943 as soon as possible, but never later than 48 hours from completion. Agents can also guide the client to complete the online enrollment form using his or her writing number. Just have the client go to the Enroll section.
Include the Cover Sheet, Scope of Appointment, Enrollment form and Optum Bank MSA request form.
How Do I Track Submitted Apps?
If you’re contracted with us here at New Horizons, you can call us for updates. Lasso provides us with daily updates to enrollment statuses. You can also contact Lasso Agent Support directly at 800-918-3859.
Once your client’s coverage begins, you’ll be paid your commission before the end of that month. You can also ask us for your commission statements if needed.
Here's a snapshot of the commission you'd make as an agent selling the Lasso Healthcare MSA:
- $510 first-year commission, street level ($574 first-year commission in PA/DC)
- $255 renewal for life – 50% of the street rate ($287 renewal rate in PA/DC)
- $150 cash bonus if you submit 3 apps during AEP (can be used to cover the cost of the AHIP if you choose)
And here's the commission for selling the Lasso Hospital Indemnity product:
- 10% commission on the new HIP from Lasso, street level
- $200 cross-sell bonus when you sell the Lasso MSA and HIP together
And don't forget about the Medicare Part D commission you can make as drug coverage isn't included with the MSA:
- Up to $78 Part D first-year commission, depending on Part D carrier
Do I get full comp if my client joins mid-year?
Commissions are only pro-rated when required by the Medicare Communication and Marketing Guidelines (MCMG).
Under current MCMG guidelines, it depends on the reason the client is joining. If they’re joining the Lasso MSA for the first time using the ICEP, you’d get full comp (12 months) with no proration.
However, if they’ve had the Lasso MSA before and they’re re-joining, the comp would be pro-rated for only the months the member is enrolled in the plan.
Appointing/Contracting with Lasso Healthcare
Do You Need to Complete the AHIP?
Yes – in order to sell the 2020 Lasso Healthcare MSA, you’ll need to complete the 2020 AHIP.
How Do You Get Appointed With Lasso?
When you’re ready to get contracted, or if you have any additional questions or concerns, please get in touch with us here at New Horizons.
After that, you’ll receive an email with the training you’ll need to complete as well as the Lasso Healthcare certification test. Face-to-face training is not required.
After you pass the cert, you’ll receive a welcome letter with your writing number. You’ll also receive an initial supply of 5 enrollment kits and presentation materials.
Related content you might enjoy:
- My Experience Selling the New Lasso Medical Savings Account (MSA) Product
- Marketing the Lasso MSA: Radio Scripts, Ads, Mailers, and More
- 4 Sales Scenarios That Will Help You Sell the Lasso MSA
- Step-by-Step Agent Sales Guide for the Lasso Healthcare MSA
- Video: Learning e-Apps – Lasso Healthcare MSA Application
*For agent use only. Not for use with the general public. Originally published October 24, 2018. Article updated October 1, 2019. Updates include Lasso Healthcare 2020 plan deposit and deductible information. Article updated October 16, 2019. Updates include expanding on existing content and adding 6 new sections to help agents with everything from marketing the product to understanding the claims process. Article updated November 26, 2019 with specific commission information.