Category Archives: Uncategorized

IRS Announces 2013 HSA Limits

Not really blogging today.  Just passing on information many of you have been waiting for.    The IRS has published the  2013 HSA limits.   Understanding these limits and how they work is very important before purchasing a Qualified High Deductible Medical Plan.   Please contact our office for a complete analysis of your options both within and outside of the Qualified Plan spectrum.

HSA contribution limits:

  • Individuals (self-only coverage) – $3,250 (up $150 from 2012)
  • Family coverage – $6,450 (up $200 from 2012)

HDHP minimum required deductibles:

  • $1,250 for self-only coverage
  • $2,500 for family coverage

Out-of-pocket maximum:

(Out-of-pocket expenses include deductibles, co-payments, and other amounts, but not premiums)

  • $6,250 for self-only coverage
  • $12,500 for family coverage

Under guidelines implemented in the Patient Protection and Affordable Care Act, over-the-counter drugs may only be reimbursed if they have a prescription. If a policyholder uses an HSA to pay for items or services that aren’t qualified medical expenses, the tax penalty is 20 percent of the HSA distribution.


Sometimes you just have to change the name to make it sell!

Changing names keeps this topic off the front page but it’s still lurking out there and EVERYONE will be impacted.

Originally, Obamacare(PPACA) called it the Federal Commission Coordinating Comparative Effectiveness Research (FCCCER).  ObamaCare opposition leaders called it the Death Panels.   Now it has been officially renamed the Patient-Centered Outcomes Research Institute (PCORI).  The new name certainly sounds better and the acronym is certainly better when trying to say it on national television.  Almost sounds like a private market think tank.  I’m getting warm and cozy feelings just saying it now.

The purpose of the “Institute” (cozy again) is to determine where medical dollars are best spent as the inevitable tightening of the belt looms on the horizon.  There research is supposed to provide insurers with information, not mandate levels of care.  However, there is a time coming when we just won’t do expensive life saving surgeries on 90 years olds or otherwise terminal patients.   Morbidly obese people aren’t going to get those knee replacements when they aren’t going to take care of them.   Does everyone need an nice electric wheel chair?   Maybe not.   They will get what Canadians get now, univeral and cheap walkers.  The Institute will be the panel determining your options in the future.

The purpose of today’s blog is to let you know who is paying for the “Institute”.  The insane will tell you that those nasty thieves at the insurance companies are going to pay fees!   The sane know that people pay all taxes, one way or the other.   In this case, the Institute will be funded by a trust fund that is financed in part by fees from health plan insurers and self funded plan sponsors.   Fees will be collected for plan years ending after September 30, 2012 and before October 1, 2019.   (Anyone want to start betting on the date they raid the trust fund and extend this temporary “fee”?)

The fees look like this:

From 10-1-2012 to 9-30-2013    – The fee is equal to $1 per average number of lives insured.

From 10-1-2013 to 9-30-2014   – The fee is equal to $2 per average number of lives insured.

From 10-1-2014 to 9-30-2019 –   The fee is equal to $2 per (adjusted for medical inflation) average number of lives insured.

I know it is just a couple of bucks, but they are YOUR bucks and my bucks.  Large employers who fully self fund their own benefits even have to pay the fee.   And by the way, it is a fee.   Taxes are paid to government entities.    This Institute was intentionally called a Nonprofit, NonGovernmental organization supported by a trust fund.   The fact that it is created and mandated by federal law and supported by forced contributions from the general public doesn’t mean it’s Governmental!  (Note: Medicare, Medicaid, SCHIP, VA and Indian Health are exempt)

You aren’t hearing about this anymore because they changed the name.  It’s all about what you call it.    FCCCER, Government Death Panels, Taxes have been replaced with cheery, non-instrusive, Patient-Centered, Non Profit, Fee based Institutes!   Oh joy!

Paula L. Wilson, RHU, REBC is an insurance agent and benefits consultant in Southern California.

2014 – Mandates, Exchanges and Executive Carve-Outs

2014 – Mandates, Exchanges and Executive Carve-Outs

Employers have come to me for years asking if they can write a health insurance plan for the Key Employees within their company and exclude the rank and file.   Over the past 20 years there has been as many ways to accomplish that goal as there have been laws passed to prevent it all together.  Therefore, employers that can still afford coverage, continue to offer reduced benefits to all employees and throw in ancillary products as good faith gesture.

Intrusion of government plans have continued to increase the price of group health insurance by eroding the participation.   Healthy Families and expanded Medicaid opportunities drain these employer pools of the healthy young premium payers leaving the higher risk behind to push premium higher.  The implementation of ObamaCare over the next few years is the Gorilla beating on the backs of my employer clients.   The employer mandate and penalties are sending company planners running into the hills looking for cover.

Health Insurance agents desperate to keep agency commissions up are pushing voluntary benefits in hopes of staying in business when their base medical commissions erode or change to a direct-fee basis.   There is nothing wrong with voluntary benefits if the employees can afford those extras in this economic environment.  However, I want my clients and potential clients to understand that we have to work with what it given to us and there may be a workable and affordable solution to the future of their benefits.

The employer mandate has many facets but I would like to focus on just one here today.   There is a penalty that affects employers who offer benefits but whose employee contributions exceed 9.5% of an employee’s adjusted gross income (AGI).  This rule applies to employees that fall below 400% of the Federal Poverty Level (FPL).  The penalty is $3,000 for every qualified employee that goes to the Exchange for coverage.   The exchange will offer those low to mid income employee’s plans with highly subsidized premiums.   If it benefits the employer to have the employee go to the Exchange, why not push them there?

Why not design a plan of benefits designed to attract those Key Employees and charge a premium that intentionally blows the mandate limit of 9.5% AGI at an income level of your choice?   In the end, these employees receive low cost subsidized coverage of THEIR choice from the exchange and your key employees enjoy the plan that will keep them with the company.   Finally, a management carve out plan built to suit!

Of course, all employees are important for any company to succeed.   Those low cost voluntary plans currently on the market could easily become either partially or fully subsidized by the employer for a great set of benefits that every employee to hang their hat on.  Ancillary benefits with a great interactive Wellness Program leads to healthier happier more productive employees.

Will this work for all companies?   Maybe not this exact example, but as well informed educated agents we are here to explore the many ways this new law can be screwed together to make the best of the whatever survives the upcoming HHS regulation or Supreme Court decisions.  Coming up with the perfect plan that will avoid the 2018 Cadillac tax and conforming to new market participation requirements will need to be properly finessed.

Large employers planning ahead should be looking for the right agents for the planning to be done.  Slick marketing and new agents aren’t going to have the institutional knowledge to understand how the road ahead is going to change.

Paula L. Wilson, RHU, REBC

Paula L. Wilson, Inc.

A Professional Benefits agency since 1986


Bending the Cost Curve: ER Overuse

NEHI (New England health Institute) recently published a paper outlining the results of their research that not only points out $700 Billion in needless health care spending annually, but offer solutions to health care providers and the consuming public on how to reverse this trend.

$38 billion is attributed to overuse of ER departments.   This translates to 56 percent of all emergency room visits. This particular assertion hit home for me as a long time insurance agent because it has always been our number one customer service call.  Insureds looking for payment on $1,500 to $5,000 non emergency services rendered by the emergency room. Of course the study isn’t concerned with the bill getting paid but about eliminating the charge completely from the annual national health care expenditure.

The problem is that patients don’t understand the cost.  Even if you are simply using the ER for an ear infection, you are incurring an average charge that is $580 over the cost of the a normal office visit.   The study found that use of the ER for non emergency purposes spreads across all age groups regardless of the level or type of insurance. 

Patients admit they use the emergency room because it is a place to receive immediate care, instant access to all diagnostic tests and feedback before you leave the building.  This instant reassurance isn’t something you can get in one office visit.  The solution hovers around addressed those points.  That is why we see Urgent Care offices popping up in close vicinity to ERs.   Even markets and pharmacies are opening walk in clinics.  Insurance companies offering 24 hour nurse lines are standard but perhaps not used enough.   Even Doctors On Call, allowing phone access to a doctor 24 hours a day has become a popular part of our product line.  The alternatives are there, educatingthe public on the problem, it’s costs, and the solutions are the task everyone can work on now.

Emergency rooms are expensive to setup and and maintain.  They are full of expensive equipment and personel and done so based on expanding demand for services.  Once you hit the emergency room, defensive medicine is going to push those expensive assets into use.  Until the public gets involved and recognizes how society as a whole is pushing up the health care bill, prices aren’t going down anytime soon.

Maternity coverage – The California Mandate

Yes it’s true.   All individual and group  medical insurance policies (old, existing, recent and new) MUST include include maternity benefits on or before July 1, 2012.  There is no need for anyone to change policies to obtain the full maternity benefits. No one needs to apply or transfer their coverage to obtain full maternity benefits.  No medical underwriting can be required for in-force policies.

What will happen to your insurance costs?  I am sure you will see an increase but how much remains to be seen.   Those of us “stuck” in plans that include maternity coverage we don’t need could see a flattening of our rates.  With this new risk being spread across the entire market, unlike it ever has been before, the impact may not be so severe.

As an agent I have mixed feelings about the mandate.  Because there are only a handful of policies available on the market that include maternity coverage, it would have been a short time until those would have suffered so much adverse selection that we were about to have no coverage for an individual trying to purchase coverage outside of the group market.  I truly think a complete lack of coverage would impact how much basic care pregnant women would have foregone.

Carriers are still holding back new business rates for July.  I’ll let you know how this affects the market as the mandate takes hold.