Category Archives: PPACA

2018 ACA Update – Clearing up Common Misunderstandings

It’s seems like only yesterday that the Affordable Care Act (aka ACA, ObamaCare) was signed into law.   In fact, the law will celebrate it’s 8th anniversary on March 23, 2018…….and it was a big deal.   Yet, in all of this time and all of the front page conversations, so much is still not clear to so many.

Many misunderstandings are creating frustration for individuals, employees and employers.   Insurance and Benefit professionals spend countless hours providing service and guidance to those caught up in this ongoing learning curve.   I would like to take some time to highlight the most common, and often costly misunderstandings.

For Employers

The Employer Mandate to provide Affordable Coverage is in effect

Employers (and Controlled Groups) with 50 or more Full Time Equivalents must offer their eligible full-time employees health insurance that provides minimum essential coverage that is both affordable and provides minimum value.   Just this week, the IRS has released information to remind employers that they are going to be collecting penalties.   The Wall Street Journal (2-13-18) is reporting here that:

The financial impact on businesses could be significant. The nonpartisan Congressional Budget Office estimated in 2014 that companies would owe about $139 billion in penalties from fiscal 2016 to 2024.

“There are penalties of three, four, five million dollars,” said Alden Bianchi, an attorney at the firm Mintz Levin. “There is a smaller group of employers that really didn’t understand how the rules applied and didn’t offer coverage or sufficient coverage in 2015. … To a smaller company, a half-million is an existential threat.”

Employers need to offer coverage to at least 95% of their eligible full-time employees.  Penalties apply for non-compliance.  For additional information on affordability,  minimum value and penalties please contact Paula Wilson at paula@paulawilson.com.     (IRS Employer Mandate Penalties)

The Individual Mandate is still  in effect

Employers should remind their employees that the individual mandate is still in effect as well as the penalties for non-compliance through the end of calendar year 2018.  Employees declining coverage in 2018 should be warned.  Employers accepting employee declinations without proper counsel should provide time for employees to meet with your benefit advisor/agent.  We are always happy to provide this time to our clients.

Overwhelmed by 1095-C Tracking and Reporting on your Age Rated plan?

Employers subject to 1095 reporting in an age rating environment can often make their life easier with a bit of planning.    Employers offering more generous plans can often offer a Bronze level plan at no copay to the employees.   This would allow the 1095-C to be easily completed as the cost to the employee for a qualified plan would always be $0.  Because California considers groups from 1-100 to be small group, this reporting nightmare is a reality for employers with 51-100 employees.

Employers can make this reporting easier with thoughtful benefit planning and the advice of experienced benefit agents.

Plan Documents (WRAP) Documents

Employers must update and distribute a complete set of Plan Documents to all employees per ERISA.  These important Plan Documents will include but are not limited to Summary Plan Descriptions, Summaries of Benefits and Coverage as well as other documents needed based on your employee benefit package.   Simply offering an Employer Sponsored medical insurance plan constitutes an Employee Welfare Plan and you must comply with ERISA.  Be sure to ask your agent or administrator about these documents.

For Individuals and Employees

Preventive Care is covered at 100%. 

I am still shocked at the number of people who are not taking advantage of this benefit, if not for themselves….for their children.  As a society, we are living in a time when lifestyle related diseases can be caught and dealt with if you just know your numbers.  Make time to know your numbers.

Surprisingly, we spend a good part of our customer service hours explaining uncovered expenses that many thought were covered under this important benefits.   Blue Shield recently provided an excellent illustration to understand the coverage.  You can find that link here.

Even if you’re feeling fine, scheduling an appointment with your doctor for preventive care services is important. Through a preventive exam and routine health screenings, your doctor can determine your current health status and detect early warning signs of more serious, costly problems.

What’s covered in a preventive care visit

During your visit, your doctor will determine what tests or health screenings are right for you based on factors such as your age, gender, health status, and health and family history.  Plus, your medical plan covers 100% of the costs for preventive health services when care is provided through network providers. Be sure your physician understands your expectations of the free visit and testing.   IF the physician orders tests that are not covered within the limitations of ACA YOU WILL BE responsible for the charges.

What’s not considered a preventive care visit

If you discuss new medical concerns or a current illness, the entire visit may be considered a medical treatment visit and would not be covered as preventive care.  Copayments, Deductibles and Coinsurance will apply. You will be required to pay the plan’s physician office copayment or coinsurance.

The complete definition and detail of what is covered under the Preventive Benefits can be found at  the Healthcare.gov website here.

If your employer offers you Affordable and Minimum Value Coverage you cannot go to the State or Federal Exchange and receive a subsidy.

Employers may charge the employee up to 9.69% of his pay as a contribution to the employee only coverage.   Employees often look to the State Exchanges for lower cost coverage when employers require employee contribution.

You will be asked to make repayment if you are receiving subsidies in error.   This often occurs when:

The Employee does not disclose the offer of the employer based coverage at the time of application to the Marketplace, or,

The Employee does not advise the Marketplace in which they are already enrolled of any change of income or employment status to justify continued eligibility.

It is important that employers utilize their benefits professional/agent at the time of open enrollment to review needs and address these issues with the employee.

 

Paula Wilson, RHU, REBC is a insurance agent specializing in benefits for employers in the Southern California area.

 


ObamaCare: It’s not Working, It’s Winning

Professional health insurance agents have a front row seat to the carnage that ObamaCare is creating as it rolls out on top of Americans.   We are the referees on the field.  Over the next year, as our small business clients receive their 2014 cancellation notices, which every single one of them will, the pain inflicted is going to be hard to watch and a constant moving target to overcome.   Nonetheless, we will fight to continue to deliver a winning result.

I’ve always thought of my “game” as another way of casually addressing my profession, a profession that I take very seriously.   I have worked very hard for over 30 years to ensure the financial health and access to health care for all of my clients.   There is an army of agents in this country who have remained very involved in health care legislation over the years to protect our clients from what is happening now.  Because of this ongoing commitment to be involved on a daily basis, we also know this law better than anyone.   No professional agent has been surprised by anything that has unfolded in the past 2 years as issues come to light.  The complete and total destruction of access to affordable health care is in process.   Continued financial health is being ripped from the hands of all of my clients.

As the dismantling continues and public outcry ensures, the administration makes minor gestures to settle the roar to a rumble.   Moves to extend coverage on non-grandfathered plans, delaying the penalties of the employer mandate and blaming the chaos on the computer system are nothing more than distractions.

I truly believe that President Obama, his administration and their followers think this is a real “game” in the true sense of the word.  Their primary goal is not to expand coverage to the masses or reduce the cost of health insurance.   If it were, they would hang their heads in shame, not to be seen in public for years.     Their goal is to win.  They are out banging their chests in victory because they are winning the game.

Where there are winners, there are losers.   Insurance agents see the effect of the bullying that has been perpetrated on the losing public every day.  The scene plays out over and over with every phone call and every visit.   An insured comes in because their plan has been cancelled and they need to replace it with an “ObamaCare approved metallic plan”.   In most instances, the new market presents a plan of options that include twice the premium, twice the out-of-pocket risk and an overall reduction in benefits.

Consumers who have long become accustomed to dozens of choices in health care options, are shocked to find only 4 basic choices in this new world.   It is truly heartbreaking as I watch the client walk in and go through the phases of denial.   Their shock and anger are quickly turned into acceptance as I pat their hand and assure them that I am showing them all of their choices.  There is no longer anywhere to go for reasonable options.  At least we are around to show them the entire market.  (Exchanges only show you exchange plans)

When I get to the point in the conversation where I have to tell them that more than half of the top rated physician and hospital groups are no longer included within their plan, they shrug their shoulders in complete and total surrender.   They complete the application process and move on with their day.    The problems they are about to face as they enter the exchange or overloaded insurer online systems is not their biggest problem.   The technical problems are just convenient cover for the myriad of real problems.   Their real problem is that they are living in a country that is retreating and accepting the beating that has been unleashed on them.  This isn’t only redistribution of wealth; it’s retaliation on the successful middle class.

As I move around my business circles, I am amazed by how many people think this is all just going to go away and be fixed.   American’s who think people are going to stand up and fight this national plague need to think again.   No one is fighting this!  Every single person that goes through process this gives up.  They have no choice but to accept the increases in premium, thousands of dollars more in out-of-pockets costs and in most of my cases, a complete loss of access to the care that they and their children deserve.

If you are in the “sit back and do nothing while it implodes” crowd, you are in the same surrender mode.   Have you considered what an implosion looks like?   You need only to understand that many of the winners will lose their jobs, face a reduction in hours or be forced in and out of MediCaid as the Exchanges find their sweet spot.   Thousands will find themselves on a medical access seesaw.   At that point, we will all be on the losing team.

Has anyone stopped to consider what the effect of this complete surrender to a government imposed hardship is going to do to the working class people in this country?   My clients are the majority.  These are not people asking for handouts from the Exchanges or MediCaid.   These are the people who make those programs solvent.   They are too busy working to fight.

This President and his followers are nothing more than schoolyard bullies, dancing in the end-zone as the rest cower en masse.   They got their win and they don’t care about the pain they are inflicting on the multitudes or the type of transformation of America they are causing.     

Mr. President.  Congratulations on your win.  What are you going to do next?


Employers Canceling Health Insurance Coverage – First Do No Harm

PPACA offers expanded coverage to the currently uninsured by subsidizing the cost of health insurance plans from the private market (via Exchanges) and by expanding MediCaid.   Low-income employees currently covered by their small business group insurance plan, are now seeking affordable coverage for their dependents through these new avenues.

These insured employees reaching out to the Exchanges for subsidized dependent coverage are quickly finding out their family is ineligible for federal help solely due to the existence of their employer group insurance plan.   Once clamoring for employer based group health insurance, the employees are now demanding the employer plan be canceled so that Exchange subsidies can be accessed for their entire family.

Many employers may see this as an easy out of the benefit business.   With no barriers to the individual market, the employer may see this as an option for everyone.   Could it be that easy?  Low-income subsidy-eligible employees and their families head to the Exchange while the rest of the group hits the guaranteed coverage options within the individual market?   The answer is not so straightforward.  Any professional benefit agent could point out the obvious problems.

Everyday issues that might be considered include:

  •  Employees age 65 and over need time to prepare for a switch to Medicare and all it entails.
  • Employees with household incomes below FPL levels of 250%-150% need to understand their private Exchange policy will not be issued as applied for.
  • Everyone needs to know new policies both in and out of the Exchanges will be providing substantially reduced provider lists.
  • Those seeking subsidies might get more than they asked for.   Part or all of the family may find they have fallen into a MediCaid plan (MediCal in CA) with no way back to the private market.
  • Individuals, especially those with specific needs, have no guarantee that providers, services, therapies and drugs will be available to them.
  • Employers need to understand the tax consequences of such a move.

Individual needs aside, the markets inside the Exchanges are a mess at best.   Quoted benefits and costs are merely estimates.   Benefits outlined are merely a promise of coverage written on a government spreadsheet.   Most States haven’t even produced specimen policies for the professional to inspect for detail.

The private market is functioning, but only as fast as the State will approve plans for sale.   It could be December before we get a glimpse of what the breadth of private options really looks like.  Do we really want to make decisions based only on what can be seen today?

Before any employer writes that cancellation letter, they need to remember why they had the group plan in the first place.   Canceling coverage and dropping people into an unknown myriad of issues is not going to further your goal to attract and retain quality employees.


Who Canceled My Insurance Policy?

If you have a private health plan for you and your family, you will probably receive a notice of plan cancellation shortly.   Please don’t panic and understand that it is all part of the metamorphosis we are all going to be forced to take over the next year.

Remember that pledge:  “If you like your insurance, you can keep it”?  Well, that is a dream for most of the population in the real world.    In reality, any policy written, rewritten or changed substantially since March 23, 2010 is considered NOT grandfathered and therefore will be cancelled and replaced with an ObamaCare approved plan.   If you hear nothing else I write, hear this:   Just because Obama approves it doesn’t mean you will.  And you must review the plan details.

In the new world, choices will be reduced DRASTICALLY.   Your new world will consist of cookie cutter plans with much smaller physician networks.   In California,  PPOs will be replaced widely with EPOs.   Get used to that term because it is going to take hold.   A PPO covers you if you use the a PPO physician while allowing lesser coverage if you don’t use a PPO physician.  An EPO ONLY covers you if you use a network physician.   If you don’t, you are not covered.   This limitation along with a much reduced list of PPO physicians greatly reduces your choices in where you get care.

Why did my family costs go so high?

One of the MAJOR changes with ObamaCare is how a family rate is put together.   In the past, a family could have 3 to 10 members and all be eligible for the same rate.   Not so any longer.   All family participants are now rated separately.   Remember that 22  year old you put back on your plan just because you could?   That adult child will now carry and adult rate to the table with them.   Surprise!

Back to the cancellation letter you are about to receive.  In essence, ObamaCare requires ALL non grandfathered individual policies to be cancelled 1-1-14.  BUT, that doesn’t necessarily mean you don’t have coverage. Your carrier should move you to a plan closest to your current benefits or cost.  Which benchmark they use is up to the carrier.  If you don’t like where they put you, look at the options they give you.  If you plan to make a change, don’t sit on it. You can only make a change during this national open enrollment and annually at future open enrollments. (Again, there are exceptions for qualifying events.)

To recap:

  • You probably can’t keep your plan.
  • Watch for changed family deductibles, higher out of pocket maximums, far higher specialty drug costs, and many hidden co-payments.
  • You might not be able to keep your doctor.
  • Don’t forget to take the time to inquire about the new physician list.  IT WILL BE SMALLER.
  • You aren’t going to be free to change whenever you want.

A guarantee issue market comes with limits.  Rule vary case by case.   This first Open Enrollment will run from October 1, 2013 to 3-31-14.   In subsequent years, Open Enrollment will be the fourth quarter of every year for January 1 effective dates.

There will be new choices.  Use a GOOD insurance agent to guide you.  Look for years of experience and specialty in health care.   Many newbies are picking up overnight expert designations and titles.   Don’t fall for the scam.   A good agent will have all the information available for private market and government subsidized plans through your State Exchange.   If they don’t, use Find an Agent at http://www.NAHU.org.

Since subsidies are only available if you buy a cookie cutter plan through your State Exchange, you should advise the agent you would like to inquire about the Exchange.  Any agent worth a nickel will be able to give you a good estimate of your subsidy.

Whatever you do.  DO NOT go directly to an Exchange.   They will be staffed with less educated and completely non accountable employees.  Agents are free and will explore ALL of your options, so use them.

If you get to keep your plan and you like it, stay there and let the guinea pigs work out the kinks for a few years.  I know I am holding on to mine!

Paula L. WIlson, RHU, REBC

http://www.paulawilson.com

paula@paulawilson.com


More Money! Insurance Rebates On the Way!

PPACA requires health insurers to maintain specific loss ratios.  If an insurer spends more than 20% on non claims related expenses, they need to provide rebates to the insureds. (15% for large employers).  Sounds great!

This portion of PPACA went into effect for premiums paid starting 1-1-2011.   The deadline for calculating and returning your overpaid 2011 premiums is August 1, 2012.  Many of you have already seen communications letting you know where your insurer stands on this issue.

FOR EMPLOYERS

Employers need to start thinking about how they are going to handle this refund check.  For some employers this may not be a daunting task. For others, not so easy.   You need to remember that premiums are plan assets and need to work for the member of the plans.  The law does NOT allow the employer to pocket those premium refunds unless the employer paid 100% of the premiums with no employee contribution.  Let’s consider some of the rules for the use of these rebates when any level of employee contribution is involved.

The employer has three options when dealing with the rebate.  Simply stated, they can offer:

  • A Cash rebate
  • A Reduction in future employee contributions
  • An Increase in future benefits

The DOL is discouraging Options 2 and 3 unless the cash rebate is just too expensive to process.

You aren’t going to cut everyone a check and be done with this.   Premiums that were originally deducted from the employees paycheck on a pre-tax basis will be given back to them as a taxable event.  If you use it to reduce future premium deductions, you will save that accounting step.  Either way, it’s fairly easy for you to deal with.

The fun part for employers is going to be deciding how to divvy up the money.   The money must be returned to the employee proportionally  the way the premium was collected.  Also, the money has to go back only to the employees that were participating in the plan that is providing the rebate.   Let’s say you have two insurers in play and both of them give you a rebate.  Of course the rebates won’t be the same.   Your process needs to go like this, per carrier:

  • Who will get a rebate?  You will need to go back and see who was on the plan IN 2011.  Don’t fall into the trap of looking at your current invoices.  You have certainly experienced open enrollment and some employees have changed coverage.
  • How were they covered?  Were they in the same bracket all year?  Did they add dependents?  Did they experience an age change?  You can’t look at one invoice to determine their annual contributions.  You can’t even look at the payroll unless it specifies the insurer for each employee each month (if more than one insurer is in play).
  • Terminated employee money does not have to be returned to the terminated employee.  But, it does have to be evenly distributed the remaining employees still participating in that plan.
  • How will you distribute this rebate to them?  Cash or reduction in future payroll deductions.

The insane thing about this process is that rebates are expected to be very small.  Even in States with really inept actuaries, average rebates are expected to average $44 per employee for small groups and $14 for large groups.  That is a ridiculous amount of work for the benefit.  But employers must rebate the money.

FOR INDIVIDUALS

Individual policyholders have to pay a bit of attention as well?   If the individual paid for their health insurance with post tax dollars, there is nothing to discuss.  Cash the check.   But if the you wrote off your health insurance premiums, you will now need to pay tax on the returned premium.  Again, a ridiculous exercise for a small amount of money.

As the June 25th SCOTUS expected opinion date looms closer, employer must continue to plan as if everything is staying in place.  PPACA’s impact on employers and the added responsibility to follow numerous new regulatory hurdles is not something you want to be scurrying around for this fall.  Be prepared, pay attention and be prepared to act.

In our next blog we are going to review what we already know about the W-2 regulations that will be in effect for all W-2’s issued after 1-1-13. (for 2012 tax year)

Paula L. Wilson, RHU, REBC

Elections have consequences!


Health Care Reform Is Here To Stay (And YOU better plan on it)

No one seems to want to talk about it.   But it is almost here and you will be affected by it.  It is time to seriously start paying attention.

For Everyone:  There are reports from all directions that confirm what I keep saying:   Health Reform isn’t going away.   Many states are just waiting to enact Plan B.  Just this week Peter Lee, the Executive Director of the California Exchanges said:   “The shape and speed and nature of that effort may change a little.  We need to see, how do we adjust course after that decision.”   As a matter of fact, there is talk around Sacramento that the State just might go ahead and write their own individual mandate.   And why not?  Massachusetts did it and there isn’t any law on the books in California stopping them.    If the entire Federal Law gets thrown out in the severability issue, employers better not take a deep breath.   California would be the one State you could bet on to go after the employers.   After all, someone needs to fill up these insured pools with money so the claims can get paid.

For all Employers:  Employers who continue to ignore the reality of the situation are going to be unpleasantly surprised.   Even if the Individual Mandate is struck down by SCOTUS, the Employer Mandate will remain.  Large employers will have to make some decisions.  They may be inclined to pay to the $2,000/$3,000 fine per employee to un or underinsure, but they should be considering the entire picture when making those decisions.  Even small employers will be affected.  They are going to be inundated with employees looking for answers.   Who else are they going to ask?   Small employers not subject to the employer mandate will be analyzing which way to go with their benefits in the future.   They aren’t just going to lose all of their employees to the competition without some consideration.

Between the employees and HR, employers better have a benefit agent with some knowledge and history of being on top of benefit legislation knowledge.   Determining how to keep employees while rationally taking advantage of the individual and group subsidies will take some finessing.   Avoiding regulatory hurdles from the IRS, HHS, DOL and the new slew of agencies is going to be fun for all.

For the Average Consumer:  If the Individual Mandate fades away, rates are going to rise.   And they are going to rise like there is no tomorrow.   Does this sound like it’s going to end well?  When all is said and done PPACA is going to be the death knell of the current system.   A death that was premeditated by the U.S. Congress over time.  Forbes did a great article on the incidents leading up to the end desired result.  For the good of my profession and general public, I really hope the professional insurance agent survives in a manner in which they can remain in business.  I think the need for assistance is going to increase exponentially.

For Insurance Professionals:  Insurance agents making a living sells on rates and not taking this profession seriously are going to be in a world of hurt.   You can wish all you want, the California Exchange isn’t going away.  And remember, for an individual to get a subsidy, they have to purchase their insurance from the Exchange (If and how you can sell it remains to be set in stone).  Mr. Lee went on to say, “It’s misleading and not productive to just look at all of the ‘what-ifs,'” Lee said. “California will address the needs of Californians. And that includes the exchange.”    There is one “what-if” we don’t hear them talking about.   “What-If” national leadership changes and the Federal Funding to the States goes away.

Now, anyone with any institutional knowledge knows how well the State can compete with the private market in the absence of Federal Funding.   Mr. Lee can hope all he wants, unless they get the Federal Funding to support the premium subsidies…….well, game on.

Paula Wilson, RHU, REBC, Southern California Insurance Agent and Benefits Consultant


$5,000 Health Insurance Subsidy…for you?

While PPACA is simmering in the Supreme Court, the U. S. Treasury Department has been busy defining who will be the recipient of the Health Insurance Premium Tax Credits (HIPTC).   These new regulations were published last week and can be seen in their entirety here.

Who gets the subsidy?

As PPACA outlines, individual and families with incomes from 100% to 400% of the Federal Poverty Level (FPL) are eligible for the credit.   (In 2011 dollars, eligible incomes would fall between $22,350 and $89,400)  A recent estimate from the Congressional Budget Office (CBO) puts the average credit in the area of $5,000.    With the latest cost estimate for family coverage topping the $20,000 level this year, many will find this a welcome relief.   (How are you doing so far?)

Eligibility will be determined by the difference between the “benchmark plan” and the amount your contribution is expected to be.   Now stay with me on this.   The “benchmark plan” will be the second lowest (or Silver) plan offered through the Exchange.   Your contribution will be calculated between 2% to 9.5% of your annual income depending on where you stand on the FPL scale.

But what will it really cost?

It is hard for industry and non industry citizens to envision what this means because PPACA changes everything so radically that the rates you see today and the rates post-PPACA are a mystery.   When you consider the complete lack of underwriting, an unenforceable mandate* and rating restrictions that limit the ratio in premium between an 18 year old and a 64 year old to 1 to 4……your guess is an good as mine.   As soon as the rates are out they will be subject to change at the next legal opportunity.  The effect of the shift in the demographic of the insured public and the dumping of employer sponsored coverage (directly or indirectly from the 9.5% AGI limit) is yet to be seen.

Employer Concerns

PPACA subjects employers to “shared responsibility” penalities if they don’t offer affordable coverage and this set of regulations suggests there are more penalties to come if the employer contribution toward the cheapest plan offered exceeds 9.5% of the the employee’s AGI.  For employers who might pay into Health Savings Accounts (HSA) for their employees, you may be surprised to note that these regulations do state that the IRS will not include the employer HSA contributions into that calculation when determining if the employees coverage is affordable.  This is because HSA contributions cannot be used to pay for group medical insurance premiums and therefore, cannot reduce the “cost” of the insurance for the employee.

As I read this 87 page document my head is reeling with questions of implementation.  It’s almost like these people have never run a business or spent much time working with employers on the intracacies of providing benefits.   Employers who run any kind of benefits program spend money on many health related items in addition to “Health Insurance Premiums”.  Even employer expenses on Wellness Programs may not necessarily be counted as an employer contribution to the health plan.

What?

If you are asking yourself how in the heck the average Joe is supposed to follow all of this, think about how they get through it now and consider this.

Employee Benefits experts and consultants are going to need an entirely new set of expertise in their portfolio to assist employers in determining where to put their benefit dollars.   The lifespan of the Health Insurance Agent is not only under direct attack from PPACA, but the day of the agent who provides “rates only” as a mode of service is over.   Benefit Professionals like our agency will survive as long as we are welcome in the market and not regulated out of existence.

For the individual purchaser, things may get more impersonal.  Government employed Exchange “agents” are going to spend more time calculating your subsidy than worry too much about advising you what is best for you and your family.

Well, it’s not all bad….you might get $5,000!

Paula L. Wilson, RHU, REBC

*subject to SCOTUS decision due in June, 2012.