Smoke Em’ If You Got Em’

Many people will be surprised at what the Affordable Care Act will bring in the near future. Perhaps none will be more surprised than folks who think that their income will entitle them to a subsidy from a state or federal healthcare exchange only to discover that the smoking surcharge WILL NOT be subsidized.  That’s right folks, something that is getting little fan fare, perhaps rightly so, the only health consideration in the rating formula under the new law is whether you are a smoker or not.  The law allows up to a 50% surcharge for smokers.  Simply put, if your age and geographic location dictate a rate of $1000 per month and you are a smoker, you will pay $1500 per month.  Here are two estimates from the subsidy calculator for you to puff on…

John Q Clean           Unsubsidized Premium estimate= $3,761

Age 38                       Amount you pay for Premiums = $3,325 which covers 88% of Premium
$35,000 per year      305% of poverty level
No dependents        You would qualify for $436 in subsidy which is 12% of the overall premium
Monthly Spend         $313.41 per month

John Q Marlboro     Unsubsidized Premium estimate= $5,641 ($1880 Surcharge or 50%)

Age 38                      Amount you pay for Premiums =$5,205 which covers 92% of Premium          
$35,000 per year     305% of poverty level
No dependents       You would qualify for $436 in subsidy which is 8% of the overall premium
Monthly Spend        $433.75 

These price estimates are for a Silver level plan.   You are guaranteed access to a Silver plan with an actuarial value of 70%. This means that for all enrollees in a typical population, the plan will pay for 70% of expenses in total for covered benefits, with enrollees responsible for the rest.

 I see two things to keep in mind here.

 

1)     The subsidy for either one of these scenarios is still pretty light for someone of that income level. The media is touting that most people will qualify for a subsidy, but in this scenario, the employee would be better off under an employer plan where the employer is paying 50% of the single premium.

2)     The additional costs added for the smokers premium is a regressive “tax” on the lower income brackets that this act is reportedly striving to help.  

 Even at substantially lower income levels ($20,000)  on the Rate Subsidy Calculator the overall premium remains the same, the subsidy does increase but the $1,880 tobacco surcharge remains unsubsidized even at an income of $15,000 less per year, making that surcharge a larger percentage of the overall income of the individual. 

I feel very confident with the Logan Lavelle Hunt solution of Association Health Plans for employers under 50 employees.  Give us a call; we can see if we can help you.  We want to be your trusted source for Health Care Reform. #kyhealthplans#kyexchange#healthcarereform#kynect#healthinsurance#obamacare#healthexchange

Peace

Did You Know You have to Notify?

One of the items that will be on every employers plate this fall is a new requirement that you, the employer, must notify all of your employees and new hires about the new Health Care Exchanges that take effect on October 1, 2013.  We want to make sure that everyone is aware of these notification requirements so, in conjunction with one of our administrators, we have some reference materials that you can use.

The links below provide a draft cover letter and attached fillable PDF that is to be distributed to each employee. Feel free to use the cover letter draft as necessary.

You will want to download new model noticess released by the U.S. Department of Labor (DOL) to comply with changes as a result of Health Care Reform.

New Model Exchange Notices -- Distribute to Employees No Later Than October 1, 2013
Following a delay in the original effective date (it was originally required in March), employers need to comply with the new requirement to provide employees a written notice with information about a Health Insurance Exchange (Marketplace) beginning this fall. Two separate notices are available from the DOL:

• Model Notice for Employers Who Offer a Health Plan to Some or All Employees
• Model Notice for Employers Who Do Not Offer a Health Plan

Employers are required to provide the written notice to each current employee not later than October 1, 2013, and to each new employee at the time of hiring beginning October 1, 2013 (a notice will generally be considered to be provided 'at the time of hiring' if it is furnished within 14 days of an employee's start date).

Employers must provide the notice automatically and free of charge to each employee, regardless of plan enrollment status or of part-time or full-time status. The notice may be distributed by first-class mail, or electronically if certain requirements are met. Employers do not need to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.

Keep in mind that HHS expects that the employees will use these sheets to provide information to the Exchange staff as they shop for coverage options.

Yes this is happening, get ahead of the game.  If you have any questions, feel free to contact the insurance professionals at Logan Lavelle Hunt and we will help you navigate the changing tide of health care. #kyhealthplans#kyexchange#healthcarereform#kynect#healthinsurance#obamacare#healthexchange

Peace!

Buyer Beware!

Buyer Beware

I’ve often heard that you shouldn’t buy the initial model of any technology product, but rather wait for the second generation to come out, just to let them get all the bugs worked through.  Well, I think that strategy will serve you well if you apply that to the changes that will occur next year in health insurance.  If you are reading my ramblings, you know that I am an insurance agent, and you know that I have opinions on the dramatic changes that are getting ready to slam into the general public January of 2014.  So I thought I might spend a few paragraphs talking about some “new” products that you might see in the very near future.  This post is mostly dedicated to employers, so if you are an individual, not covered by an employer it may not be of interest.  Your time may be better served by checking out our web page by clicking this link: Logan Lavelle Hunt

Employers, you will have the pleasure of seeing many new ideas in the coming months.  The majority of them are going to be designed around avoiding, postponing or shedding altogether the negative effect that Obamacare could have on your business.  Please understand, I do not mean to say that these products lack merit, I am simply advising that most of these products will be “sold” to you rather than “purchased” by you.  So let’s dig in, shall we?

Self-Funded plan designs.  This has long been a strategy for larger employers, traditionally with at least 100 employees, although my personal comfort level for this type of arrangement is more like 250 employees or more.  We have already seen insurance companies who are willing to write these types of plans down to as few as 10 employees.  Because they potentially could:

·         Avoid community rating for premium calculation

·         Avoid most state mandated coverage add ons

·         Avoid rate reviews that fully insured plans must do

·         Avoid the essential health benefit mandate of Obamacare

·         Allow some employer flexibility and data regarding claims

These plans set a monetary cap on what the employer can spend annually on claims for the company.  Fixed costs include purchasing re-insurance, claims administration, network rental as well as agent compensation.  We here at Logan Lavelle Hunt have seen far too many of these plans fail miserably for the smaller employer. If you are looking at this option, call us, we can make sure you have all the facts prior to making that choice.  We can write that coverage for you with a partner that will stand by you if that is your true best option.

PEO’s (Professional Employer Organizations) a firm that provides a service under which an employer can outsource employee management tasks, such as employee benefits, payroll and workers' compensation, recruiting, risk/safety management, and training and development.  This is basically an employee leasing arrangement.  These are evolving in the marketplace, and may or may not be an answer to your problem.  We are still looking into this option as a hedge against the reform laws.  Our initial opinion is to not take the plunge yet…stay tuned, there is more to come.

Logan Lavelle Hunt does have one solution to the Affordable Care Act that does not require the buyer to beware.  That is the Association Health Plan option.  If you qualify to participate in one of these plans, you should get in one as soon as possible.

Association Health Plans.  This is something we know a lot about.   Professional trade associations have been around for many years.  Many associations have had health insurance programs for over 30 years.  The new law does allow for members of trade associations to participate in these health insurance programs if certain conditions are met.  We have several of these available and would welcome any inquiries as to your firms’ eligibility for those programs.  These plans provide the following:

·         Significant savings for member groups who qualify.

·         New Anthem group customers can save on average 8% to 10% over a non-association plan

·         Current Anthem customers can save up to 5% by transferring to the association plan

·         Gain purchasing power by aggregating many small employers into a larger group

·         Stability after the 2014 reforms take effect

With 25 years of successful operations as a fully insured member benefit program, these plans are tried and tested. 

The bottom line for employers is this, you are going to be hit with many options.  Find an agent who has the expertise and the options available to meet your needs.  There are a lot of great agents out there, make sure you pick the one who is not fighting for his or her own interest, because, chances are those interests will not be the same as yours.

Peace.  

What is your plan for 2014????

Do You Have a Plan for your Health Insurance in 2014?

Well, we are off and running towards the biggest change in the health insurance market since people started selling policies.  Mandated coverage, penalties, Cadillac taxes, rate stabilization funds, exchanges, navigators…the list goes on and on.  As if insurance didn’t already have enough jargon!!!  The real question is…What is YOUR plan for health insurance.   Will you continue to purchase your coverage through your employer?  Will you test the waters in the state or federally run health insurance Exchange?  Do you qualify for a subsidy?  Does any of this cause your head to spin on your shoulders???

Yeah, I know.  Like we needed something else to figure out!   Well, Logan Lavelle Hunt has been doing a lot of thinking for people just like you and me.  We want to make sure that people make the appropriate choices when it comes to your health insurance needs.  With 50% of Americans likely to continue obtaining coverage through their employer, we feel like that is the best option if it is available to you.  If you are an employer, consider the reason that you offer benefits to your people currently.  Most offer these types of benefits as a sweetener used to attract and retain quality employees.  It is our belief that retention of employees will continue to increase in importance as our nation rebounds from the recent recession.  If you don’t offer health care, you should consider making that a priority in 2014 and beyond.

If you don’t have coverage available to you through an employer, you will be required to purchase it from somewhere.  The law mandates that everyone (save a few exemptions for a few reasons) have health insurance coverage or face a fine. (Read TAX)  Lower income people will have subsidies available, and purchasing through a state or federal exchange will be an option.  You may also go through a traditional insurance market to get this coverage as well.  I would recommend that you at least look at the coverage through a health insurance exchange, just to see if you qualify for a subsidy.  I have included a link, Kaiser Subsidy Calculator, so you can have a better feel for where you will stand regarding individual coverage and what you may be entitled to get from the government.  These are estimated rates, using a national average; therefore your specific rate may be different from those depicted here.

Bottom line is this…get help from a professional.  Doctor and hospital networks will probably be changing; the products you will be purchasing will definitely be changing. Change is very hard, and can be quite intimidating.  It is always nice to have someone who has been down the road you will be traveling helping you along the route.  We have the staffing and the capability to handle Employer based health plans as well as individual health plans.  Open enrollment starts on October 1 for the individual marketplace.  The captain has turned on the seat belt sign; we are expecting turbulence for the next several years.  Aren’t you glad that we have already been on this route before???

Peace!

So What Will Really Happen?

As a Health Insurance agent, I get this question almost daily.  People come up to me and say ‘I heard that blah, blah, blah is going to happen and I am better off blah, blah, blah.’  (Insert your own predetermined bad outcome for the blah,blah,blah’s)   The truth is, we don’t’ know how all the market changes that will come with Obamacare are going to shake out.  The only thing that we do know is that things will CHANGE!

The Logan Lavelle Hunt team has been working on ways to minimize the impact of the law and we have some definite ideas that could be a great solution for you and your employees.  But first, I think that it is important to understand what is the likely impact of the law will be.  I was sent a link by a very wise man that explains the overall concept very well.  Take a few minutes to look at this.

YouToons Explain Obamacare

The interesting statistics that jump out at me are the percentages:

1.       50% of Americans will continue to get health insurance from their employer.  Which is about the same as exists today.

2.       30% of Americans will get insurance though a government program, or a government entity.  Think school board, state or local government, Medicare/Medicaid.

3.       10% of Americans will shop in the Health Care Exchange environment

4.       10% of Americans will still choose to remain without insurance

Small business in Kentucky and Indiana will see some pricing pressure sometime in 2014.  Many insurance carriers are offering “Off Cycle” renewal options to delay the effects of the new rating provisions that are imposing.  Don’t be caught off guard by this tactic, it could be a temporary reprieve from a potentially permanent problem.

Logan Lavelle Hunt has a few creative options that could save you some money.  Don’t wait until you feel the pain of a 40% rate increase.  Take a proactive stance and contact us. We have professionals ready to answer your Obamacare questions.  We focus on you!

Peace,

Steve