Tag Archives: employers

Long Term CARING – Introduction

This is an introductory blog for an ongoing discussion on Long Term Caring.   It is NOT a discussion you expect from an insurance agent specializing in these products.  The goal is to paint a picture of caring for the aged and point out short comings in the current system.  To understand the need to prepare everyone for the imminent onslaught of baby boomers that are about to enter this arena.  Education needs to start now.  Employers need to employ tactics to prepare for the business interruption and how they can help their employees. 

Note: I have always been and will continue to be supportive of Long Term Care Finance Planning.  However, financing and legal preparation are not the topic of this particular conversation.   Please feel free to reach out for a discussion on the several routes to attack this looming financial issue.  You may be able to shore up your liabilities by simply moving your existing life and annuities around.  Existing cash value policies can be used to fund new life policies that include Long Term Care benefits.

 

My parents did everything right.    I can’t imagine the additional stress and issues that we would have had to tackle had they not done the groundwork.   They set aside money to pay for their long term care needs.  They kept up the most comprehensive PPO healthcare options.  They even made sure all legal documents were in order so that we could make decisions and transactions on their behalf.  With all of the obvious boxes checked on the the road to long term care planning, future caregivers need so much more education and preparation for what may lie ahead.  Through our story, I would like to enlighten you on things that we have learned and suggest how we can prepare future generations on these overseen aspects.

Caregivers have a myriad of levels of responsibility.  From taking over the physical care of one or more individuals to overseeing and directing hired care workers and facilities.  Every day you need to take the time to review the situation, seek out new information, find new resources, weigh care options and make decisions.   In all of the conversations I have with people, I get the idea most people don’t understand the reality of the situation.  It’s not about the money, the time investment or the hard work.    It is personal, it is heart-wrenching, it is about your family…….it’s about caring.

Although we had been introduced to the issue years ago when we assumed the oversight of care of our grandparents, we never expected what we have and are continuing to experience today.  When we look back, the experience with our grandparents went as predicted and was on one end of the long term care spectrum.

When we became empty-nesters, we moved into a home with the proverbial “parents room” downstairs.   We had always promised to bring my parents home when and if they ever needed the help.  There was no way MY parents would go to a nursing home with strangers!  In almost every conversation on the topic, clients tell me they don’t need much LTC insurance because they are just going to take care of their parents at their home.  It’s the master and universal plan for most American families.   I don’t know the numbers, but it doesn’t always go down like that and it certainly didn’t go down that way for us!  Before you start making pronouncements and promises, here are a few reasons this plan may be problematic.

  • Your parents may not want to move in with you because “they can take care of themselves”.  When they need you, they will likely need medical oversight and/or professional nursing care.
  • The issue could come up under catastrophic/emergency conditions.  It may not be a planned event.  Many things in your life will be set aside until further notice.
  • If there is any issue with Alzheimers or Dementia, you aren’t offering someone a place to live, you are offering to be someone’s shadow 24/7.  Day and night, every second of every day.  If they are a fall risk due to physical limitations, there is NO wiggle room on this 24/7 shadowing.  You had better have back up even if you just want to run to the bathroom or walk outside to get the mail.  You will need to make sure your bed is right next to theirs because nighttime no longer means anything.
  • You may need to make adjustments to make your home ADA accessible or at least safe.
  • All hands on deck.  You can’t assign this to one spouse to handle.  It’s takes a team.

With the same mindset as most Americans, the following is how this journey launched for us.

My parents would not be told where they need to live or that they need any intruders in their home.  We took them on tours of wonderful Assisted Living Facilities and even tried in-home visiting caregivers.   As members of the Greatest Generation, they are tough, self sufficient and have withstood everything the world has thrown at them in the last 80 years.   We couldn’t force them to move to safety and we were less inclined to push it because they had mastered hiding their mental and physical decline.  My dad was quick to admit years prior that he could no longer take care of financial duties and immediately turned that over to us, but that was the end of their request for help.

It wasn’t lost on us that they were lacking in personal care, acting forgetful, ignoring illnesses and becoming increasingly fragile and physically unstable.  With this in mind, for years we had ramped up our oversight by making the countless 100 mile drives after work.  Even predicting something was going to happen, we had no idea how traumatic and overwhelming it was going to be for everyone.

Just hours after returning home from the Thanksgiving dinner we had taken to their home, we get a phone call from the ER in the middle of the night.  Both of my parents had fallen in the kitchen and had been brought to the hospital with a myriad of injuries.

My father was immediately hospitalized with a fractured pelvis where he would remain for months.  After a frantic search for my mom at the hospital, we found the unbelievable.  Due to preexisting conditions that precluded any surgical intervention and my mother’s insistence on getting home, the hospital didn’t see a need to admit her.  She was discharged into a taxi with a crushed shoulder that had been put in a cloth sling and was whisked off with no surgery, no painkillers, no notice to family.   She was off in the care of a random taxi driver that had set her in a chair in her home where we found her the next day.  She was scared, incapable of moving (or being moved), broken and bruised, partially blind, very confused, in excruciating pain, dependent on oxygen and in need of a multitude of cardiac and pulmonary drugs.

That was Day 1.   Thanksgiving 2014.

LESSON TO LEARN:  Be prepared to be available on the spur of the moment.  Have a plan for your family and business responsibilities.  Have all legal documents, insurance and personal health data available in various formats on hand.  Do it now.

 


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.

 


My thoughts on the status of Wellness Programs

With a bit a research you will find that nearly every report, from bloggers to Rand, clearly report that Wellness Programs that have a Disease Management program AND effectively communicates with the employees, will see the most return for their investment.

Spending a lot of money on Healthy Lifestyles is warm and fuzzy and may help the country out in the long run, but there isn’t so much of a bang for a buck.  Especially for the average 100 employee group.

True wellness companies just aren’t in that small employer (<500) market any longer and the costs associated with putting one together just don’t make sense.   

In a time where the competition lies in the bells and whistles, most carriers have built in a wellness program for their clients.   Anthem Blue Cross of California has one of the best I have seen.  Their Wellness Program is called “Time Well Spent” is turnkey.   It provides the employer and the employee with the following:

  • Wellness calendar with links to print or download 3 different flyers on the topic of the month.  This allows for quick distribution to employees.
  • Provides an introductory brochure to let employees know that it is time to get online and create an account for their health plan.
  • They are reminded to get their annual exam so they know their numbers.  Risk Assessments require current cholesterol, blood pressure and sugar
  • Provides a free Health Risk Assessment.
  • Employees with identified risks will be contacted in some manner by the carrier to jump into their disease management program.

I cannot detail the cornucopia of information that is available through this program.  I can say that Anthem of California’s is very impressive and user friendly.

Frankly, most carriers have these program.   In order to stand out to our clients, I try to pass the information on to both employer and employees.  Although, without the commitment from the employers, they won’t get much traction.   In the case of Anthem Blue Cross, it is VERY simple for an employer to decide if this effort will work for them.   I only need print out the calendar, a few sample brochures, some of the reports backing up the efficacy of this particular route and get them going.    

During this time of national change, employees are a bit worried about hearing from HR departments and Benefit Agents on their health plans.  Employers looking for ways to bring some sunshine into their benefit program should consider this opportunity to spread a little positive action.


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.


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.