Network, Network, Network!!!!

I have spent a lot of time talking about how businesses can possibly avoid some of the rating provisions of the Affordable Care Act through Association Programs.  I am a strong believer that if you have a small to mid sized company; you NEED to look into what is available through your professional trade association.  If they have a program, you owe it to yourself to explore that option.  The worst thing that can happen is that you end up participating in a benefit offering that is community rated, which is exactly where you would have been had you not looked in the first place. 

Additionally, I feel that you need to know how confusing the “Health Care Exchanges” are going to be for your employees.  I have been told by a very reliable source, that the web site is ULTRA confusing.  My fear is that for the average person, it will be overwhelming.  Most will give up after page 3 of 16 or so.  In my experience, frustrated employees become non-productive employees and something that you as an employer are trying to clear from your to do list becomes a source of torment for you.  Another thing to keep in mind as we enter into this brave new world is attraction and retention of quality employees.  As the economy slowly recovers, the forward thinking employer that offers a plan that meets the requirements will be head and shoulders above the employer who decides that insurance is not a part of the overall compensation package that his employees should have.

But if that is not a compelling reason for you to look in to providing group insurance for your people, I think it is vital that you know what the biggest surprise of the Health Care Exchanges will be, in my opinion.  Networks, Networks, Networks!!

As individuals go to the Exchange to shop” Travelocity style” for health insurance, most will be thinking that price is the only factor that is important.  While price is a component of the overall decision making process, access to the doctors and the hospitals that you wish to use in the event of a health related episode may in fact be more important in the long run.  In Kentucky, you will have three (3) choices for individual coverage through our exchange; Anthem, Humana, and the Kentucky Co-op.  All three of those carriers will be offering limited networks to the policy holders.  Although I don’t know what they will look like as of this writing, I have been told that they will be restrictive.  So someone who is used to the Anthem network may be in for a rude awakening when going to use their insurance at a provider that is not in network.  I have also read that in some parts of the United States, some carriers will be offering plans with NO out of network coverage at all. This means that if you go intentionally or unintentionally to a provider that is not IN NETWORK, you will pay for the entire cost of those services.  Therefore, please relay this information to people that you know who will be shopping for coverage on the exchange.  One way to avoid those potential disasters is to contact a professional insurance agent like the ones at Logan Lavelle Hunt.  Don’t let the details pass you by. 

Lastly, I have updated the Subsidy Calculator from Kaiser.  It now includes a place to add zip codes so you can determine what cost may look like in certain areas of the country. This is from them:

The Kaiser Family Foundation has updated its health reform subsidy calculator to provide ZIP code-specific estimates of the insurance premiums and tax subsidies available for people who buy coverage for 2014 through the new state health insurance marketplaces.

By entering their ZIP code, income, age, family size and other factors into the calculator, consumers can get estimates of the tax subsidies and insurance premiums available to them if they were to purchase insurance through the marketplaces, or exchanges, once open enrollment begins Oct. 1.

The calculator includes local premium data from 46 states plus the District of Columbia. The remaining four states (Kentucky, Massachusetts, New York and Vermont) either set premiums using different formulas than other states or have not yet provided needed premium data.

 Peace

Defunding, Health Savings Accounts and Chaos!!

Well here we are…things are starting to heat up regarding health care reform.  There are many questions that remain unanswered and I think that each of us need to be prepared to have answers that actually raise more questions than satisfy our curiosity to begin with.  The sheer enormity of this act makes the very nature of implementation overwhelming.  Thus chaos!  I want to devote the first part of this week’s message to some general thoughts about defunding Obamacare, and the second part will be more practical with some information about how the act affects Health Savings Accounts.

To Defund or not to Defund…that is the question.  I am not going to weigh in on the political realities of this question, but I really want to focus on what defunding this act would mean to the average citizen of America.  To defund the act without delaying the portion of the bill which requires individuals to actually purchase health care would be problematic for the very people that this law is intended to help.  If health insurance premiums are as expensive as we are being led to believe in the exchange environment, individuals and small business simply won’t purchase the policies and thus will pay the fines.  Defunding means the following:

1.     No government subsidies for lower income people

2.    No small business tax credits for employers

3.    No incentive for carriers to compete for this market segment (read higher premiums)

4.    Millions of Americans remain uninsured and under the law responsible for a fine for not purchasing health insurance

Regardless of my personal point of view on the law, defunding only complicates the matter in my mind.  For small employers, Logan Lavelle Hunt may have a solution in the form of Association Health Plans, but for the individual consumer that does not have a group health plan; this makes a bad deal even worse.  We shall see how this all plays out, but like anything else in this world, the 11^th hour panic has ensued and generally speaking, no good decision comes under this amount of pressure.

Health Savings Account rule changes.

On September 13, the Department of Labor and the Internal Revenue Service  issued guidance clarifying how the Patient Protection and Affordable Care Act applies to Health Reimbursement Arrangements (HRAs), Health Care Flexible Spending Arrangements (FSAs), and certain other types of plans.

 

Key provisions include:

 

HRAs for Active Employees – For plan years beginning in 2014, employers cannot offer a stand-alone HRA to employees. Employers can only offer HRAs that are integrated with a group health plan.

Integrated HRAs – For an HRA to be integrated with a group health plan, the following requirements must be met:

·         The HRA is only available to employees enrolled in group coverage;

·         The employer must offer a group health plan that provides minimum value or that does not consist solely of excepted health benefits.

·         The employee must be enrolled in a group health plan (either the employer’s plan or another plan such as coverage through a spouse);

·         If the group health plan is self-insured and does not cover certain Essential Health Benefits (EHBs), the HRA cannot be used to reimburse EHBs that are not covered by the group health plan; and

·         The employee can waive future reimbursements from the HRA at least annually, and the remaining amounts in the HRA are forfeited if employment ends.

Retiree HRAs – A stand-alone retiree HRA that is used to pay health insurance premiums will be considered an employer-sponsored group health plan providing minimum essential coverage. As a result, a retiree covered by an HRA will not be eligible for premium tax credits through the Marketplace/Exchange.

FSAs – A health care FSA does not have to comply with PPACA if:

·         The employer also offers group health plan coverage; and

·         The maximum annual FSA benefits payable to any employee do not exceed two times the employee’s contribution (or, if greater, do not exceed $500 plus the employee’s contribution).

Employer Payment Plans – Employers may not reimburse an employee’s premiums or pay premiums directly to an insurance company to purchase individual health insurance for an employee.

EAPs – An employee assistance program (EAP) will generally be considered not subject to PPACA market reforms, provided that the EAP does not provide significant medical care benefits.   

For more details, here is a link to the guidance:

Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements

Peace!

UPDATE- DOL Announces Non-Enforcement of Marketplace/Exchange Notice

 

PPACA requires employers covered by the Fair Labor Standards Act to provide a notice about the upcoming health marketplaces (also called exchanges) to their employees. The notice is due Oct. 1, 2013. On Sept. 11, 2013 the Department of Labor (DOL) announced that it will not penalize employers that do not provide this notice. As a practical matter, this means that providing the notice is now optional.

Employers that have already provided the notice do not need to do anything - it is fine to provide the notice. The change simply is that the DOL will not penalize employers that fail to provide the notice. 

Employers that have not yet provided the notice may either distribute the notice or not, as they prefer. Employers that want to increase awareness of the marketplace (perhaps because they expect that some of their employees will need or want to purchase from the marketplace) may still want to provide the notice. Employers with complicated distribution situations, or that are concerned that the notices may generate questions the employer is not staffed to answer, may prefer to not distribute the notice.

FAQ on Notice of Coverage Options

Q: Can an employer be fined for failing to provide employees with notice about the Affordable Care Act's new Health Insurance Marketplace?

A: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.

The notice should inform employees:

•   About the Health Insurance Marketplace; That, depending on their income and what coverage may be offered by the employer, they may be able to get lower cost private insurance in the Marketplace;

    and

•   That if they buy insurance through the Marketplace, they may lose the employer contribution (if any) to their health benefits

The U.S. Department of Labor has two model notices to help employers comply. There is one model for employers who do not offer a health plan and another model for employers who offer a health plan or some or all employees:

    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

The model notices are also available in Spanish and MS Word format at http://www.dol.gov/ebsa/healthreform/.

Employers may use one of these models, as applicable, or a modified version. More compliance assistance information is available in a Technical Release issued by the US Department of Labor.

This information is taken from the Department of Labor Website.  http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html

Three Weeks and a Cloud of Dust!

It occurred to me today that we are about 3 weeks away from the initial Open Enrollment Period for the new Exchange environment in health insurance.  I have two questions; 1) where did the time go?  2) What is this really going to look like?  If you have followed my blogs, you know that I want to relay as much information as I can to assist you in making good decisions.  I want to recap some very important points that need to be considered, and cannot be overlooked as we move into 2014.

Employee Notification (Even if you don’t have 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).

Here are some samples for you to use.

·         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

Rate subsidies for lower income employees. 

Some people may want to look at what the government would provide in the way of rate subsidy to see if it would be beneficial.

Here is a Subsidy calculator. Kaiser Subsidy Calculator

Early Renewal Strategies

Some insurance companies are approaching employers offering an early renewal in order to avoid the negative effects of the legislation until some later date in 2014.  This should give you a strong indication as to what they think the rates will be in the reform environment If you think that this is a good strategy and your company can qualify for a trade association program, you should definitely move your company to a trade association program.  Think about it this way, if avoiding reform is a good idea for 11 months, it is a GREAT idea for an indefinite period of time.  Bona fide trade association programs will avoid the “community rating” provisions of the Act.  Therefore, as long as you qualify, you should be in terrific shape in that type of a plan.

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.  Association Health Plans  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 25 years of successful operations as a fully insured member benefit program

Keep in mind that all individuals will need to purchase some type of insurance coverage or face a monetary fine.  As our economy starts to show signs of recovery, it is imperative for attraction and retention of quality employees to at least look at your options as an employer.   I have been told by a very knowledgeable source that the exchange website will be very challenging to navigate.  Take that off their plate by offering a solution.  Contact us at Logan Lavelle Hunt and we will help you navigate the changing tide of health care.

Peace

And This Will Help Me How?

I have been focusing on who will be helped by Obamacare over the past 25 months, and one question still remains…I’m not sure who that person is?  I have discussions with many people who are not currently insured and many of them feel strongly that this will provide them an avenue to get health insurance.  While I agree that everyone will have the ability to “get” coverage, I’m not sure most people understand how much it will cost to “buy” coverage.

It is estimated that 20% of the American public are uninsured.  I would guess that about 8% of that group is chronically uninsured, and those folks are more than likely poor, very poor.  We as a nation need to address that sooner rather than later, and health care is just the tip of the iceberg on that issue.   There is probably another 2-3% of that population that are in and out of health insurance, due to job change, financial conditions changing or other issues beyond their control.  I get that, it is a hard place to be.  However, the remaining 9% or so in this group are uninsured by choice.  They can likely afford to purchase a policy but choose not to do so.  The breakdown continues that 50% of the people are covered by an employer plan of some sort.  30% are covered by a government entity.  So in my feeble mind, what are we really talking about?  We are changing the entire system of health insurance (like it or hate it) for 11% of the people who are legitimately in a bad spot.

Think about it this way.  Prices will go up for the 50% of Americans who are covered by their employer.  Prices will go up for the 30% of Americans who are covered by the government, who in turn will need to come back to the American people who pay taxes and ask for more taxes to pay for the increased price in health coverage.  The 9% of Americans, who pay taxes, can afford health insurance but choose not to purchase it, will now be fined for not buying coverage on top of the tax increases they will see.  And all these gyrations are supposed to help the 8 to 11% of the American people access health insurance.  Hey, here’s an idea…let’s focus on real ways to fix the problem for the 11%. 

I know what you are thinking…he has an answer to this question.  I don’t.  What I do know is that risk, be it health risk, property risk, automobile risk is predictably unpredictable.  Wait…what????  That is my crazy way of saying that eventually, everyone spends time in the barrel.  If you drive long enough, you will have an accident.  If you have a house near a river, eventually you will have a flood.  If you live long enough you will encounter a health situation that will get you down.  I don’t think that raising the costs of 89% of the American people to solve a problem that 11% has is a good use of resources. 

Ok, off my soapbox.  The law is what it is.  Logan Lavelle Hunt is prepared to help you guys sort this out.  We do have a solution for small business that makes a great deal of sense.  We will have access to the Exchange marketplace and people ready and willing to help you out when it comes time to make the choices that you will be forced to make.

This brings me back to my original question. Who will be helped by this new law?  The answer is the 8 to 11%.  We should have been helping them all along.  I do have one favor to ask when you are dealing with the health insurance issues that you will have to deal with in 2014…Don’t Shoot the Messenger!!! #kyhealthplans#kyexchange#healthcarereform#kynect#healthinsurance#obamacare#healthexchangePeace.