Healthcare Solutions Team

Thursday, November 21, 2013

Health Care Reform School - Lesson 23 - What should I Do?

Hello everyone, this post will cover the crazy world of Healthcare Reform from a perspective of the individual. This is not from a political point of view, but rather a practical view point. Many people are wondering "What should I Do?"

This is a big question especially with the recent televised apology from President Obama and his odd request that the insurance companies re-instate people that have had their policies cancelled and that they extend existing policies for another year. I will give one piece of advice on this.

Don't count on changes to be made in a week that have taken three years to affect!

What I mean is that an insurance company that has cancelled and individual policy probably is not going to pick it back up. And a company that has not extended coverage on existing polices through next year already, will have a hard time making the change that the president requested.

There are already companies that have been working on this strategy of extending existing policies through the end of next year. This is exactly what I have been helping my clients do for the last 6 months. It is a strategy that makes sense, which is get covered with good insurance that is less expensive and wait out the first year of the law to see how they work out all of the details to make it actually affordable.

So what you should do is get coverage before December 15th. Call an insurance broker like myself for assistance. It is too important and too complicate to leave it chance.

To give you a basic idea of the legal requirements, check out the attached flow chart from Blue Cross about who need to get covered to comply with the law. "Do I need to get insurance"

Good luck and don't hesitate to contact me if you have questions.

To learn much more about Healthcare Reform, review any of my previous blogs.

Lesson #1 - Introduction
Lesson #2 - Basic Reason for creating the Patient Protection and Affordable Care Act
Lesson #3 - Public exchanges for Purchasing Insurance
Lesson #4 - Essential Health Benefits that will be added to all Health Insurance policies in 2014
Lesson #5 - Tax Credits to Help Pay for Health Insurance
Lesson #6 - Enforcement and Penalties in the Affordable Care Act
Lesson #7 - Preparing for the Affordable Care Act
Lesson #8 - Options for Small Businesses
Lesson # 9 - Will my Insurance Premiums change in 2014?
Lesson #10 - What Will Happen to Small Groups in 2014?
Lesson # 11 - Why Should I Buy Insurance Before the Deadline?
Lesson #12 - What does the Delay in the Employer Mandate Really Mean?
Lesson #13 - Can I keep my Current Health Insurance Plan?
Lesson # 14 - Who is Providing Insurance During Open Enrollment?
Lesson #15 - Out of Pocket Spending Limits - Law Change
Lesson 16 - SHOP - Marketplaces for Small Businesses

Lesson #17 - Options for Individuals and Small Businesses

Lesson 18 - Advice from an expert

Lesson # 19 - Top Three Questions About the Law

Lesson #20 - Open Enrollment is Here!

Lesson #21 - What Should My small Business Do Now

Lesson #22 - Review of purchasing options

Thursday, October 31, 2013

Healthcare Reform School - Lesson 22 - Review of Purchasing Options

Hello all of you wonderful people. Today's lesson will be about the options that are available for purchasing health insurance. The two major options are on the Federal Marketplace or on the Private Marketplace. I will explore these two options.

As most people know, the Federal Marketplace website has experienced substantial problems with getting people signed up. Another concern about the Federal Marketplace website with many people is the protection and privacy of their personal information. The privacy issue stems from the fact that shoppers need to enter a lot of personal information before being presented with any types of options for purchasing insurance.

But I am here to tell you that the FEDERAL MARKETPLACE IS NOT YOUR ONLY OPTION. This very important fact has not been advertised at all by the federal government. Zero, Zilch, Nada.
Actually buying insurance from the Private Marketplace (not the Federal Marketplace) is the best option for many Americans. Taking this route before December 31st will be the best move for many young and healthy Americans. But this route will always be available during open enrollment. Following is a list of reasons that buying from the private market is the best option for that group.

UNDERWRITING - Insurance charge less for young healthy people. It is the job of underwriters to classify people and assign premiums. This function of insurance companies is eliminated starting January 1st.
OPTIONS - Currently there are many options available that can help reduce the cost of health insurance premiums. Most of these options go away in 2014. For example, every single person will have maternity coverage starting next year, young and old alike. Most people may not need maternity, but the mandated maternity coverage is reflected in premiums.
PRICE - Because of underwriting a options. The price is generally lower for policies that are written off of the exchange before January of 2014.
DOCTORS NETWORKS - This is an extremely important element of health insurance. I have reviewed many options on the Federal and State Marketplaces. Some of the companies have very small, meager doctors networks. This means that fewer doctors and hospitals will take the insurance, which limits your options for care. Even Blue Cross/Blue Shield has cut down their networks for the plans they are offering on the exchange, especially at the lower cost levels.
PPO's -vs-HMO - This is another extremely important element of health insurance. The lower level plans on the Federal Marketplace are almost 100% HMO (Health Maintenance Organization) style networks. Currently the popular choice for Doctors Networks when buying health insurance is a PPO (Preferred Provider Option). HMO's were popular for a short while in the 1990's, but the model of health insurance proved unpopular because the HMO requires referrals from your primary care physician to see specialist and the HMO has the final decision on approving medical procedures, not the doctor providing the service.
Quality of Care - Because of the Doctor's networks and the style of plan, you are likely to get a better quality of care by purchasing a plan of the marketplace. This is tru even after Janaury of 2014. Plans will still be available from insurance companies that are not on the marketplace and that have not reduced their networks and still provide the same care.
Exact Same Benefits - The 10 Essentail Health Benefits mandated by the ACA will be built into every single major medical health insurance plan purchased after 2014 starts. It does not matter if the plan is purchased on or off of the exchange.
Deductibles - Believe it or not, there are many better options for lower deductibles when buying health insurance from the private exchange. To get a low deductible from the Federal Marketplace, the monthly premium is very high. The private marketplace now and in 2014, will have options to reduce the deductible while keeping monthly premiums low.

I try to keep these blogs short and sweet and just hit the major points, if you have questions, just post a response.
If you would like to learn more, than choose the topic from the lessons below to learn what normal people will want to know.

Lesson #17 - Options for Individuals and Small Businesses

Lesson 18 - Advice from an expert

Lesson # 19 - Top Three Questions About the Law

Lesson #20 - Open Enrollment is Here!

Lesson #21 - What Should My small Business Do Now

Thursday, October 10, 2013

Healthcare Reform School - Lesson 21 - What should my small business do now?

Welcome back. What a crazy week it has been in the New World of health insurance! The State and Federal Marketplaces (exchanges) are open and were a big topic of news stories both national and local. I of course was listening with reat interest. Sadly, much of what I heard was misleading, I don't think it was intentional, but there is so much to learn and so many intricacies in this law that it is actually hard to get it right. I am sure that the newscasters had researchers create the stories, so hopefully if the researchers did their job they would have a good and true story. Unfortunately many of the stories told only a small part of the story.

One part that of every story that was true is that the State and Federal marketplaces are woefully inadequate to handle the volume of visitors. I still have not been able to make it all of the way through an application process and I only know of one agent who was able to. So while I am authorized and accredited to help clients purchase policies through the exchange, I am putting these clients off for a few weeks until the bugs are worked out. After all the insurance purchased on the exchange is not effective until January 1, 2014.

Back to the topic of my blog "What should my Business Do Now". In terms of insurance the most important thing to know is that this law does not affect businesses with less than 50 full time equivalent employees. So you are not required to change anything.
But here is what I recommend...If you have group insurance plan for your small business change it to a Health Benefits Arrangement (HRA). First I will explain the reason and then I will explain what this is.

Change to an HRA to reduce the financial exposure inherent in small insurance groups!

This means you will drop your current group plans
Set up an HRA theough an On-Line Benefits Provider, Like Zane Benefits.
Each of your eligible employees will work with an agent/broker to purchase a customized health insurance plan that fits their needs.

2. An HRA is a method for an employer to pay a predetermined fixed benefit amount to each employee. And the employee is required to utilize that benefit for health insurance and/or health qualified expenses.

The business partner I have chosen to administer the benefits for clients that choose to go with an HRA is Zane Benefits because they take care of everything on-line, the employer only needs to spend literally five minutes per month to review the information. Everything thing else runs very smoothly, the and the employees see the benefits come through on their pay check so they are reminded each month of the health benefit the they are getting.

You may be wondering how an HRA reduces financial risk. And the simple answer follows. A small group insurance plan is its own "Pool of clients" or "Group" in the eyes of an insurance company. If a member of that group has a lot of claims one year, then the the insurance companies are allowed to increase the premiums on everyone in that group to recoup their expenses. By law insurance companies can make 20% profit, so they will increase the premiums as much as they can. In a small pool, the increases can be really high, because there are fewer clients to mitigate the large expenses of medical claims. However once the small group plan is dissolved, the insurance company has no recourse on the members of the old group, and now that there is guaranteed acceptance by insurance companies for everyone who applies, they have no recousrse on the individual that needed (and may still need) medical care.

Another advantage of the HRA is that the employees are allowed to utilize the benefit you provide to purchase health insurance on the public exchange. This could mean that they will get a federal subsidy, in addition to the benefit provided through the HRA. This could lower the cost of their private insurance dramatically.

For more information on getting set up with an HRA get in touch with me, Steve Breer. 773-972-5343.
To review my previous lessons see below and click into the ones that look interesting to you:

Lesson #17 - Options for Individuals and Small Businesses

Lesson 18 - Advice from an expert

Lesson # 19 - Top Three Questions About the Law

Lesson #20 - Open Enrollment is Here!

Thursday, October 3, 2013

Healthcare Reform - Lesson 20 - Open Erollment is Here!

The exchanges are open, the exchanges are open! This is the largest event in domestic policy since Medicare opened up for business, "for those Americans who until now were shut out of the health insurance market through no fault of their own, Tuesday was a big day. No longer do they have to fear bankruptcy after a lifetime of work because of health and employment factors outside their control — an unnecessarily cruel feature of the system under which the nation has operated." Chicago SunTimes and medicare actually has a lot of responsibility in making the Affordable Care Act Work.

Health Insurance Marketplaces officially opened in all 50 states! The interest level of the American public was very high, for example before 7:00 a.m. on Tuesday, October 1, more than 1 million people had already visited the websites.
Some of the states had better results on the websites than others. There are three types of websites on the public Marketplaces.

courtesy of renjith krishnan digitalimages.net

State Run Marketplace
Federally Run Marketplace
State/Federal partnership Marketplaces.

To figure out which your state runs, you can pretty much just look at your states' governor. Republicans have pushed back against this law since day 1, and republican governors have not created exchanges, so those states are ran by the federal government.

Enough about that, oh wait, just one more thing...The shut down of the federal government! How does the shut down effect the Affordable Care Act? Well from what I have read the expenditures in the Affordable Care Act have been categorized as mandatory and therefore are not immediately affected by funding pitfalls. And therefore the employess integral to the Affordable Care Act, such as website developers and navigators, are still working. All of the insurance companies selling insurance on the public exchange are private companies, so obviously are not affected by a government shutdown

The volume of visitors has continued to be very high. This is not all good news since the websites have been difficult to access due to high traffic volume. The official numbers of actual insurance applications completed has not been publicized, but from everything I have heard, it is a very low number. If people are unable to access the websites and purchase health insurance on-line then the system could be in big trouble. We can only hope that the accessibility and functionality issues will increase over time. They should be able to handle millions of people a day, because they do serve a very large country of over 300,000,000 people.

I have personally receive phone calls from people trying to get onto the exchange and asking for my help to get insured. I can help them, but it is hard when the technology is not working. Just to put some peoples minds at ease, the insurance that is purchased on the exchange will not go into effect until Janaury 1. The deadline for applying for a January 1st effective date is December 15th. And the open enrollment period goes all the way through March 31 of 2014. This first enrollment period is a marathon, not a sprint.

The technolgy on the marketplace has not been avaialble to brokers/agents until October 1. so I have not received a lot of training on that yet. I have receive a lot of product training on the providers and product on the exchange. One of the most significant developments that I have learned during company wide meetings with insurance company executives over the last month is about the variations in network coverage between plans that are sold on the Public Marketplace - vs - on the Private Marketplace. It turns out that the plans on the publice marketplace have very narrow networks and mostly are HMO style plans. The plans on the Private Marketplace have the same robust networks and PPO style options that people have become accustomed to. So this is a big buying decision. For thos individuals and families that do not qualify for a subsidy based on their income, time should not be spent searching for plans through the public marketplace. Better plans will be available on the private marketplace with all of the same mandated coveraes but with better doctors and pharmacy networks.

One other thing before I wrap up. One of the questions driving traffic to the Marketplace is "How expensive is it". That information is on the exchange, it is just clunky and difficult to access right now. But it is expensive...unless you qualify for a subsidy. Which means the government will pay for some of the cost of your premium. If yo do not qualify for a premium than people are much better off buying insurance on the private exchange, just like today.

My last 19 blog posts are listed below. If you want to find out more about a specific lesson, then scroll down through and learn to your hearts delight.

Lesson #17 - Options for Individuals and Small Businesses

Lesson 18 - Advice from an expert

Lesson # 19 - Top Three Questions About the Law

Thursday, September 19, 2013

Healthcare Reform School, Lesson 19 - Top 3 Questions About the Law

Welcome back to class. Finals are right around the corner, because the Healthcare Exchanges open on October 1, less than two weeks from now. This blog will give some basics about the exchanges. Many people are wondering how they will work and what the insurance will look like on the exchanges. I will answer the most common questions I have heard. If you have any questions please send them to me by responding to this blog or sending them directly to me.

Danilo Rizzuti, www.freedigitalphotos.net

These are the most common questions with the most succinct answers:

So people who don't work get free insurance?
How will it affect my small business?
How much will the insurance cost?

Following are my answers:

So people who don't work get free insurance? The follow up question for this is "why should I work at all?" My answer is typically silence........... The real question seems to be "How much do I have to pay in taxes" to support this law. The short answer is approximately $67 per year per individual plus a 5.5% to 7.5% tax on our health insurance premiums. There are six new taxes imposed to help pay for this law. Some of these new fees and taxes will be paid directly by health insurance issuers,while others will be paid directly by the sponsors of self-funded health plans. Some fees and taxes begin in 2013 and 2014,while others are imposed in later years. Some are temporary, and others are permanent. The bottom line is that, in total, these new fees and taxes will impact premiums for all individuals covered under fully insured or self-funded plans and policies.

Patient-Centered Outcomes Research Institute (Comparative Effectiveness) Fee.

Cost is $1 to $2 per year
This will be phased out after 2019.

Annual Health Insurance Industry Fee

2%-4% tax on insurance plans
Expected to be between $8 Billion to $14 Billion per year

Transitional Reinsurance Program Assessment Fee

$63 per individual
Paid by health insurers
Collected for 2 years only, 2015 and 2016

Risk Adjustment Program and Fee

Paid by insures in the individual marketplace in each state that have a lower risk pool of clients.
extimated to be between $1 - $2 per individeaul per year

Marketplace (i.e., Exchange) User Fees

A tax of 3.5% of monthly premiums on issuers of plans and others that may profit from the market place
This will be a permanent tax

Cadillac Excise Tax (tax for high-cost plans)

This tax starts in 2018
It is a 40% tax on the portion of a health insurance premium that exceeds a very high limit....which is $10,750 annual premium for an individual.

How will it affect my small business

It will not affect your business expenses.
Small businesses are not required to provide health insurance to employees

How much will the insurance cost?

Individual plans will typically be much more expensive. By factors of 2 or 3 times in many cases.

Many individuals currently keep their costs down by keeping their deductibles higher and eliminating benefits that they do not want
These options will not be available next year, so premiums will be much higher.

Individual insurance will be comparable in cost to group plans that are really rich in benefits.

To learn more about specific topics, review the list of my previous blogs below.

Lesson #17 - Options for Individuals and Small Businesses

Lesson 18 - Advice from an expert

Thursday, September 12, 2013

Healthcare Reform School, Lesson #18...Advice from an Expert

Welcome back to Healthcare Reform School. I have been disseminating information about the Affordable Care Act through this blog for over 4 months. As the full enforcement grows closer, I feel like I need to give some advice to those out there who currently have to buy their own health insurance. So please share with those individuals you know that are in that position.

The best advice I can give is to prepare for the new law. Why should one prepare, because your insurance premiums could double or triple starting January 1!

Courtesy of renjith krishnan at freedigitalphoto.net

Many people (most people) want nothing to do with health insurance. Every day I talk with individuals that don't have time to spend looking at their bills or worrying about their health insurance policy. So I will give real quick advice for individuals in specific categories. Find the category you fit in and check out your best course of action.

As a broker I represent Blue Cross, United Healthcare, Assurant, Aetna & Humana.
The two companies with the best strategy to keep your individual policy prices stable up through 2015 are United Healthcare and Assurant.

For all plans in effect before March 23, 2010.

Your plan is grandfathered in and will not change
If you like it, KEEP IT, don't change.

For all plans purchased after March 23, 2010

Blue Cross policy holders

Your plan is going to be dropped on December 31, 2013 and you will need to buy a new plan that will have many benefits you may not need which will increase your premiums substantially. Your premium could double!
You should shop for a plan now and put a new plan in place.

Humana and Aetna policy holders

You have an option to convert to a new plan starting January 1, with higher premiums and benefits that you may or may not need.
You have an option to stick with your current plan until the anniversary of it's effective date.
You should shop for a plan that keeps your premiums stable until the end of August 2014.

United Healthcare & Assurant policy holders

Your policy will remain the same through 2014.
You should review your plans and make sure you like the way they are set up. If you want to lower your premiums or increase your benefits, now is the time to do it by taking advantage of choices that will not be available after January 1, 2014. you will not be able to change existing plans after that.

Policy Holders with companies that I have no mentioned above

Check with your insurance provider to see if they are converting their plans on January 1.
Many smaller health insurance companies are dropping out of the market all together. Yours may be one of them.

For anyone shopping for insurance

Shop with a agent/broker because you will get the most options that way.

I try to keep these blog posts short and simple. So that is it for now. Stay tuned for more next week. Review all my lessons from the last four months below.

Lesson #1 - Introduction
Lesson #2 - Basic Reason for creating the Patient Protection and Affordable Care Act
Lesson #3 - Public exchanges for Purchasing Insurance
Lesson #4 - Essential Health Benefits that will be added to all Health Insurance policies in 2014
Lesson #5 - Tax Credits to Help Pay for Health Insurance
Lesson #6 - Enforcement and Penalties in the Affordable Care Act
Lesson #7 - Preparing for the Affordable Care Act
Lesson #8 - Options for Small Businesses
Lesson # 9 - Will my Insurance Premiums change in 2014?
Lesson #10 - What Will Happen to Small Groups in 2014?
Lesson # 11 - Why Should I Buy Insurance Before the Deadline?
Lesson #12 - What does the Delay in the Employer Mandate Really Mean?
Lesson #13 - Can I keep my Current Health Insurance Plan?
Lesson # 14 - Who is Providing Insurance During Open Enrollment?
Lesson #15 - Out of Pocket Spending Limits - Law Change
Lesson 16 - SHOP - Marketplaces for Small Businesses
Lesson #17 - Options for Individuals and Small Businesses

Thursday, August 29, 2013

Healthcare Reform School Lesson #17 - Options for individuals and Small Businesses

Welcome back this fine Thursday morning. It is almost 1 month before October 1. The big grand opening of the Health Insurance Marketplace for individuals and SHOP for small businesses. However the insurance purchased through these marketplaces will not be effective until January 1.

By stockimages, published on 26 October 2012
Stock Photo - image ID: 100108542

Today I want to give a little advice on how middle class individuals and business owners can prepare for this by putting yourselves in good financial position and basically get a "Pass" on the first year of the high priced insurance in the Affordable Care Act.

The two biggest concerns with the law are the cost of subsides the federal government is providing to indivduals earning under 400% of the Federal Poverty Level and the cost of insurance for those earning over 400% of the federal poverty level. This amounts to $45,000 for a single person household and $95,000 for a four person house hold. So if you make more than that....LISTEN UP.

NOW is the time to prepare. This is pretty simple really. Some insurance companies are dealing with the Affordable Care Act (ACA) in hugely different ways for the first year. There two very large insurance companies that will keep your policy the same from now until the end of 2014. This means your policy will not change, and therefore the pricing will not be affected, by the ACA. What a HUGE deal! Everyone should 100% for sure try to take advantage of this by reviewing your policy with a broker to find out the real deal. Talking directly with a captured agent will only get you the "Party Line" for his/her insurance employer. Talking to a broker will give you a broader view of the marketplace because they know the plans for various companies and will have a much better chance of putting you in a good position for the entire year of 2014.

The smart option for Small Businesses with anywhere from 1 employee up to 49 Full Time Employees (FTE) or FTE equivalents is to move into and Health Reimbursement Arrangement (HRA). Remember that these business owners are not legally obligated to provide insurance to employees. However, health benefits are an effective recruiting and retention tool, so an employer that does provide benefits has advantages for employees. In the past, a small group plan would guarantee acceptance for everyone. In the new world of health insurance, small group plans are not necessary and will be cumbersome and expensive.

Drop your group plan, it is a Dinosaur. Implement an HRA that allows your employees to use benefits to purchase health insurance on the public or private marketplace. The HRA allows employers provide a specific benefits to each employer to buy health insurance and pay for health related items. The dollar amount of the benefit amount is decided by the business owner and can be fixed. Which means it will not be subject to changes in the premiums for health insurance. The money paid into the HRA by the employer has 0% taxes paid on it and the employer spends it tax free as well. The program is administered on-line and takes away the need for a large Human Relations involvement in health benefits. Which is cost saving potential for businesses.

I am a Broker, so I can help get you a free pass on the first year of health care reform. My hope is that during the first year of the law, our esteemed representatives figure out a way to reduce the high cost of insurance required through the ACA. Then by 2015, you can turn in your free pass for some reasonably priced insurance. That is a plan that kicks the can down the road...but is still the best option for many.

And by the way, there are many simple ways to make the cost of this law lower, we just need some reasonable revisions in the insurance requirements. So if the Federal Government would like some advice on how to do that...they should also talk to a broker!!

More to come on this world of change. To review previous posts scroll through my past lessons below.

Lesson #1 - Introduction
Lesson #2 - Basic Reason for creating the Patient Protection and Affordable Care Act
Lesson #3 - Public exchanges for Purchasing Insurance
Lesson #4 - Essential Health Benefits that will be added to all Health Insurance policies in 2014
Lesson #5 - Tax Credits to Help Pay for Health Insurance
Lesson #6 - Enforcement and Penalties in the Affordable Care Act
Lesson #7 - Preparing for the Affordable Care Act
Lesson #8 - Options for Small Businesses
Lesson # 9 - Will my Insurance Premiums change in 2014?
Lesson #10 - What Will Happen to Small Groups in 2014?
Lesson # 11 - Why Should I Buy Insurance Before the Deadline?
Lesson #12 - What does the Delay in the Employer Mandate Really Mean?
Lesson #13 - Can I keep my Current Health Insurance Plan?
Lesson # 14 - Who is Providing Insurance During Open Enrollment?
Lesson #15 - Out of Pocket Spending Limits - Law Change
Lesson 16 - SHOP - Marketplaces for Small Businesses