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

Thursday, August 22, 2013

Healthcare Reform School, Lesson 16 - SHOP Marketplace for Small Businesses

Hello everyone, and welcome back to school. As our kids go back to the real deal school, many people are having more time to focus on other matters. The fall is a busy season for health insurance and this fall will certainly be the busiest in history!

This morning I will write about the SHOP marketplace for small businesses. SHOP stands for "Small Business Health Options Program". This is the option that the Affordable Care Act (ACA) provides to employers to try to help them with small group insurance plans.

As part of the Affordable Care Act (ACA), small businesses will have the option to purchase a small group plan through the new small business SHOP marketplaces. The Small Business Health Options Program (SHOP) is a required program of each state's Health Insurance Marketplace. Small businesses with less than 100 employees or less than 50 employees are eligible, depending on the state. The small business SHOP marketplaces will open on October 1, 2013, with plan coverage starting January 1, 2014.

Small Business Health Care Tax Credits Through the SHOP

A key change is that the small business health care tax credits will only be available through the SHOP marketplace in 2014. Small businesses with 25 or fewer employees who receive less than $50,000 a year in wages may be eligible for tax credits if they purchase the plan through the SHOP marketplace. These credits will cover up to 50% of the employer’s cost (35% for non-profits) for the first two years of coverage.

Plan Coverage Options Through the SHOP

Depending on the state, plan coverage selection through SHOP marketplace will fall into one of three categories:

Employer choice: Employer selects one or more plans for employees
Hybrid choice: Employer selects metallic level, and employee selects plan from within that level
Employee choice: Employee can choose any plan that meets SHOP benefit plan requirements.

Starting in 2015, each state will be required to offer the "Employee Choice" option. Until that time it is an optional feature in the state marketplaces. To see if the "Employee Choice" will be offered in your state see 15 States to Offer 'Employee Choice' in Small Business SHOP Marketplace. Illinois and Indiana are not on the list.

Source: Blue Cross Blue Shield of Illinois.

The cost of the plans available through the SHOP marketplaces will vary state to state.

This is the basic information, I will expand on this next week and go over some options that small businesses have in addition to SHOP.

If you would like to review previous lessons. They are listed below. Your comments are welcome.

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

Thursday, August 15, 2013

Healthcare Reform School, Lesson #15 - Out of Pocket Spending Limits - Law change

Hi students,
Welcome back to class. Summer is nearly over and it really feels like fall here in Chicago. The winds of change are also sweeping through the Patient Protection and Affordable Care Act (ACA)!

I had planned on writing about the Small Business Health Options Program (SHOP) part of the Marketplace this week, however I am going to delay that until next week. If you were waiting on pins and needles to find out about it, then click on the acronym to go the their website. The federal government dropped another bomb this week regarding the maximum out of pocket spending for qualified insurance plans and I want to explain that this week.

Built into the ACA are many form of patient protection. One of which is a maximum limit on out of pocket spending that a patient must pay towards their overall medical care each year. This provision, originally to be implemented in 2014, specified there must be an overall limit on consumer's annual out-of-pocket costs for deductibles, co-payments, and co-insurance. The new out-of-pocket annual limits were set at $6,350/year for individuals and $12,700/year for families. There will be some insurance plans that have lower limits on out of pocket spending, but to be a qualified plan under the ACA, this was a maximum.
But the Department of Health and Human Service (HHS) Has delayed the Out of Pocket Spending Limits.

Image courtesy of digitalphoto.net Michelle Meiklejohn

Under this delay, employers and insurers with more than one benefits administrator do not have to combine their members’ out-of-pocket spending into one total until 2015.

The one-year postponement of the consumer out-of-pocket limits applies only to group health plans and only to plans which use multiple independent administrators to handle health insurance benefits.
Individual policies sold in the new marketplaces, or on the private individual market, still must comply by 2014 with the annual limits on out-of-pocket costs.

A little bit of explanation is in order. For SOME employer provided plans, this limit has been removed, but only for CERTAIN TYPES of LARGE employer sponsored plans. This revision does not affect small groups or individuals purchasing their own insurance on the Individual Marketplace. To re-iterate this very important point, for individuals and small groups, the limit on out of pocket spending on deductibles, co-payments and co-insurance is still $6,350/year for individuals and $12,700/year for families.

Who does this affect.
The group plans that are affected by this are only those plans that "offer separate policies, and use more than one benefits administrators to manage different parts of their coverage, such as medical care and pharmacy." This creates complexity in implementation, because current technology does not support benefits administrators to merge the out-of-pocket maximums across plans and management platforms. And complexity in the reporting of this mandate is the reason for the 1 year delay. Does that make sense? Only a little, but complexity in reporting was also the reason given for delaying the mandate for large employers (with over 50 full time employees) to provide health insurance.

What are the new limits for this affected group?
There are not actually new limits set in place, the excerpt below is taken directly form the DOL FAQ the change in law states that as long a plan meets the following it is compliant.

The plan complies with the requirements with respect to its major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage); and
To the extent the plan or any health insurance coverage includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (for example, if a separate out-of-pocket maximum applies with respect to prescription drug coverage), such out-of-pocket maximum does not exceed the dollar amounts set forth in section 1302(c)(1).

This could be interpreted so that the out of pocket maximum is essentially doubled, because the medical portion will have that financial cap and the pharmacy or other benefit provider would also have the same financial cap.

The law it is a changing. Stay tuned for the next change. Keep in mind that using an agent/broker right now will help put you in a good position for 2014.

Friday, August 9, 2013

Healthcare Reform School Lesson #14 - Who is providing insurance during open enrollment

Good day to you and happy Friday. I got a day behind because I was busy helping people with their health insurance yesterday. That is a good day, though.

Courtesy of basketman at freedigitalphotos.net

Today I wanted to explain a bit about open enrollment and who will be providing health insurance in 2014. As with many about the Affordable Care Act, it has a mufti-faceted answer. Nothing is really that easy to explain when discussing its implementation and the ramifications in the long term. Hopefully in the short term and in the execution of the act it will be much simpler. My answer to "who will be providing insurance" will focus on Illinois, since that is where I reside and where many of my clients reside. I also have many clients in Indiana, Iowa, Wisconsin, Michigan, Minnesota, Texas, Colorado & Oregon, so if any of you are reading my blog and would like to get detailed information on what companies will be providing insurance in your state please respond and let me know.

Open enrollment will start run from October 1, 2013 and end on March 31, 2014. This is six full months and this is a very long open enrollment period due to the number of people expected to enroll and due to the newness of th experience. Each subsequent year, the open enrollment period will be only about 8 weeks. There will be three options open for business during open enrollment from October 1, 2013 to March 1, 2014. The insurance can not be effective (or start) until January 1, 2014 on the public exchanges, but on the private exchanges that is not a stipulation, it can start whenever an applicant gets qualified..

No about how to buy insurance during open enrollment. Illinois is setting up their own exchange, or Marketplace, as they are to become known, and all of the exchanges are scheduled to be open for business on October 1, 2014. Just a few short weeks away. There are three types of exchanges that will be open for business come October. I will explain these briefly and then after that will tell what we know now about which insurance companies will be offering products on which exchange.

The Marketplace for individuals

Individuals can go here and purchase insurance
If they are eligible for a tax credit/subsidy, this is where that will be arranged
I will be certified to help clients sign up on the marketplace and get their tax credit /subsidy

SHOP for small businesses

This will be a place for small businesses to shop for options for small group plans
I will be certified to help businesses sign up on the SHOP

Private Exchanges

This will be an options for individuals that do not qualify for a tax credit/subsidy because their income is more than the cut-off of 400% over poverty level. It will also be an option for those who want to get insurance from a provider that is not on the Marketplace and utilize a wider doctors network.
I am currently, and will continue to be, qualified to help people find insurance in the private exchanges. This exchange will be the same as it is now, which means all of the insurance companies that currently sell insurance in Illinois will sell on private exchanges.

These are the three options and they will be open for business during open enrollment from October 1, 2013 to March 1 2014. The insurance can not be effective (or start) until January 1, 2014 on the public exchanges, but on the private exchanges that is not a stipulation, it can start whenever an applicant gets qualified.. This first open enrollment period is 6 months, but each subsequent year after that it will be only around 6 weeks.

The following list of insurance companies just submitted their plans to the Department of Insurance (DOI) August 8, 2013. They submitted a combined 165 plans that will be offered on the Marketplace for Individuals and SHOP for Small Businesses.

Blue Cross & Blue Shield of Illinois
Humana
Aetna
Carle Foundation
Coventry Health Care
Land of Lincoln Health Inc Co-op

The exchange plans will be reviewed by the Illinois DOI to determine whether the plans meet required Essential Health Benefits, were underwritten under acceptable actuarial standards, and meet network sufficiency standards. Once the review is completed, the DOI will make recommendations to the federal Health and Human Services (HHS). HHS will make the final determinations by August 31, 2013.

While still a work in progress, the exchanges are coming together. I did speak with a gentleman last night that is working extensively with dental insurance companies and they are working on a an exchange for dental insurance as well, but that is a deifferent subjext for a different blog.

I hope this cleared up some questions about open enrollment. Next week I will be talking about SHOP for Small Businesses. If you would like to review any of my previous blog or learn more in depth about a particualr topic, they are all listed 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?
Lessone #13 - Can I keep my Current Health Insurance Plan?

Thursday, August 1, 2013

Healthcare Reform School, Lesson #13 - Can I keep my Current Health Insurance Plan?

Welcome back to class. I will welcome myself back as well, since I was on vacation with the family last week and missed my normal Thursday blog post. This morning I will write about what happens to group and individual plans starting January of 2014. Next week I will write about open enrollment for the health exchanges and the week after that I will write about SHOP which is the exchanges for small businesses/groups.

So many people are wondering what will happen to their current health insurance plan when the Affordable Care Act goes into effect on January 1, 2014. The answer depends on a few factors. I will take a few scenarios and answer that question very directly. Do you remember back before 2010 when President Obama was trying to get this bill passed and made a promise that went something like this "If you like your current health insurance plan you will be able to keep it", well do you remember? So plans that were in place way back then, can be kept the same forever. However plans that have changed since then or have been purchased since then, can not be kept. Read on.

Courstesy of Victor Habbick http://www.freedigitalphotos.net

This paragraph is for people in the individual market, I will cover group plans next. So the magic date on which the Patient Protection and Affordable Care Act (ACA) was passed is March 23, 2010. Therefore a plan is "Grandfathered" if it is a Major Medical insurance plan that was purchased before that date and has not changed substantially. That plan can be kept forever with one positive revision, there is no cap on medical benefits. These are the "Grandfathered" plans for this bill and allow the president to keep his promise. All plans that have been purchased since March 23, 2010 will need to meet the minimum requirements put in place under the ACA, and therefore are subject to change. So how much will plans change and when will this change take affect? This is where the answer gets complicated. First I will cover how much they will change. Essentially all plans that convert will have the "Essential Health Benefits" added into them (I also covered Essential Health Benefits in Lesson #4) and will ensure a maximum dollar exposure per person of $6,350 of medical expenses per year (double that for a family of two or more). This exposure does not include premium costs. How much will this affect a current plan depends on what that plan looks like now. If it does not meet all of the essential health benefits or the financial exposure limits, then it will need to change. The next part of the question is when will it change. That answer depends on what company is providing the insurance and how that company is dealing with the ACA. Some insurance companies are getting out of the individual market al together and dropping all of their clients. Some companies are converting plans on January 1, 2014. Some companies are delaying the change to the plan renewal date in 2014 and some companies are delaying the conversion until December of 2014. Some companies are even guaranteeing that their premiums will not increase all of the way through December of 2014.

So now on to the group plans. The mandate for employers to provide qualified insurance was originally designed to affect only companies with more than 50 full time employees. However, the requirements for group plans have been delayed until 2015. So if a company currently provides a group plan, then it is that company's decision to keep that plan or drop it, AND it is their decision on what to offer in that group plan. If the plan is dropped in 2014, then the individuals are still mandated to purchase qualified health insurance. Most big corporations will keep their plans and many small companies will drop their plans because of the cost and because their employees will be able to get health insurance on the private market regardless of any pre-existing conditions.

This blog covers the question about "Can I keep my current health insurance plan?" on a relatively basic level. There are many options available in the private market right now that will not be available in 2014. I recommend putting yourself in a good position now to ride out the first bumpy years of the ACA.

If this blog has done anything, it may have opened up more questions. Learn everything I have written on the Patient Protection and Affordable Care Act by reading all my blogs lessons. They are listed 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?

Thursday, July 18, 2013

Healthcare Reform School, Lesson #12: What does the Delay in the Employer Mandate Really Mean?

Welcome back to class. Another scorching day here in Chicago, which I love. This morning on my walk with my dog, I was thinking about the ramifications of the delay in the "Employer Mandate" in the Healthcare Law and what that means to people. I have been thinking and reading about this a lot in the past week. Therefore the topic of this morning's blog was determined. First I will explain exactly what the delay means in terms of the law, and then some general ramifications to people in general.

A big part of the Patient Protection and Affordable Care Act (PPACA) is that employers with more than 50 full time employees will be REQUIRED to provide QUALIFIED health insurance to employees at a reasonable cost. If they do not provide good health insurance at a reasonable cost to employees, then they will be fined by the federal government approximately $2,000 per employee. This is the part of the law that has been delayed by one year. No other part of the law has been delayed.

Mark Mazur, Assistant Secretary for Tax Policy, wrote in a July 2nd, 2013 blog post.“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” “We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”

This was part of the announcement and the stated reason for the delay. Businesses are complaining that the law is so ornerous in its reporting and it will be too difficult to get that part up and running by January of 2014. No matter that this has been on the books since March 13, 2010. In fairness to businesses, politicians have created doubt from the beginning about the efficacy of the law, and the details for the requirements have been long in coming. Due to this lack of certainty, businesses took a wait and see attitude toward preparation. After all, why should they spend money on something that might not happen, that takes away from profits.

So we know what this means to businesses. They get a break for a year. Most large corporations already provide qualified group plans, so no biggy for them and their employees. It affects the smaller businesses and their employees and those few corporations that do not provide qualified health benefits. A prime example is the McDonald's Franchise owner or similar type of operator. Many of them do not provide health insurance to all employees. They are in the gray area of the law because they use many part time employees also, which makes requirements a bit more blurry.

All of this affects businesses in terms of what they are required to provide to employees, and in practice this affects those people that work for those businesses. Now the catch here is that individuals are still mandated to get health insurance or face a penalty. In the first year this penalty is minimal, $95 per year per person. So many people will go without health insurance anyway and the penalty is not too bad, it is much less than actually buying the health insurance.

So for most people who do not get insurance through work now, that will not change in 2014. Therefore the only option for compliance is to purchase their health insurance from a public Marketplace (online exchange) or a private Marketplace (similar to current methods of purchasing private insurance). If they are eligible for a subsidy based on their income, then they will want to go to a public Marketplace. If they do not qualify for a subsidy then a private Marketplace will be much easier and provide better doctors networks.

Courtesy of Simon Howden at freedigitalphotos.net

Note: The Federal Poverty Level (FPL) in 2013 is $11,490 for an individual and $23,550 for a family of four. So if you make less than four times these totals as your Adjusted Gross Income, then you will qualify for some level of subsidy. To figure out how much, use this subsidy calcultor.

The bottom line for the law is still this: Everyone will be required to have health insurance and the insurance companies are required to insure everyone that applies, and the subsidies are designed to make it affordable to some.

What changes for a year is that many people who were counting on employers to provide insurance will not get that option and many businesses will have one additional year to figure out how to deal with this extra government requirement and cost to their business.

If you would like my opinion on this, then write a comment. I am trying to keep this blog objective and educational. Opinions can skew the objectivity. If you would like to check out the rest of my blog, check them out 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?