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Health Care Reform

Keeping Your Plan Until 2017

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On Wednesday, March 5th, the Obama Administration announced a 2 year extension to the policy that if your individual or small group plan was due to be cancelled in 2014 as a result of the essential health benefit benchmarks and other market reform requirements imposed by PPACA, you would be able to keep it, as long as your state insurance commissioner and the carriers in your state say it’s ok.

This policy only applies to existing policies.  All newly sold coverage will have to meet all of the market reform requirements and other benchmarks imposed by PPACA (or ACA or ObamaCare).

Here in Kentucky, when this was announced last November for the first extension, we were allowed to do so.  However, the state of Indiana didn’t allow it.  We are still waiting to hear from our carriers if this will be allowed a second time.

 This is a political move by the Democrats with the mid-term elections coming up.  Pricing for renewals will be coming out in July/August of this year, which probably won’t be favorable.  Plus, if last week’s Florida election was any indication, then it may be too little too late.

New Taxes

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Starting in 2014, there are new charges on health insurance companies and on individual taxpayers to fund the ACA (PPACA or ObamaCare).

The first one is known as HIT – the health insurance tax.  This is an assessment on some health insurance companies based on their market share. Health insurers oppose the tax because it will lead to increased premiums, which is what health care reform wants to avoid.  A study by the consulting firm Oliver Wyman confirmed the tax will increase premiums by more than $2,800 per person and $6,800 per family over 10 years.

The second tax is on individuals making more than $200,000 and couples making more than $250,000.  They will pay a 3.8% tax on dividends and capital gains when they file their 2013 returns this year.  This income group also saw a 0.9% Medicare wage tax increase in 2013.

For the next three years, insurers will pay $63 per health insurance recipient; this is known as a reinsurance fee.  The $12 billion collected will be used to spread out risk so insurance companies that end up taking on the sick will be protected.

The penalty for being uninsured begins this year.  Individuals won’t have to pay it until they file their 2014 returns, the penalty this year is $95 or 1% of income, whichever is greater.  Next year, the penalty rises to $325 or 2% of income.

The last fee is on insurance companies that sell their health plans on healthcare.gov; they will pay a monthly user fee of 3.5% of the premiums for health plans sold on the website.

This information was taken from an email I received from Humana.

Updated Enrollment Numbers

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I read in some online publications today that President Obama’s administration finally released some enrollment numbers of citizens enrolling in medical insurance plans for January 2014. I have my own questions about these numbers.

Some of this information is taken from articles across the Web, but most of it is from Ezra Klein’s blog, which is linked here:

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/14/the-death-of-obamacares-death-spiral/

There are 2.2 million Americans that signed up for private insurance. Of these 2.2 million, roughly 25% are the desired age group of 18-34. According to Ezra Klein’s blog, the Obama Administration, along with others, wants 38%.

The next set of numbers show that 55% of the sign ups were between the ages of 45-64.

These numbers don’t include the state exchanges of Minnesota, Oregon and Nevada.

The most popular metallic level plans are the silver level, with 60% of enrollees selecting these.

Most of the people enrolled haven’t paid yet. In my opinion this is a big deal. If you sign up and don’t pay, you don’t have insurance. As of right now these numbers are just citizens that have signed up, not paid.

Lastly, no Medicaid numbers have been released yet. These should come later this month.

A question I have about these numbers, are they reflective of what the insurance companies thought they would get, which in turn directly impacts the premiums that they charge.

Of course there are two sides to each argument, one side stating that a “modest” increase of 2.4% could be in store for next year. The other side states that if more young and healthy individuals don’t sign up, then it could be much higher.

Only time will tell…

Some questions that come to mind –

  • How many were they expecting?
  • What did each insurance company expect to get?

Understanding ObamaCare

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Here is some information to help you navigate Obamacare.

1 – Does your current health insurance plan need to change?

If you have a grandfathered plan your going to be able to keep your plan (as long as the health insurance company you have your grandfathered plan with allows you to do so).

If you have what they call a “transitional plan” you’ll be able to keep that plan until your renewal date in 2014.  Once your renewal date hits in 2014, you will then be required to buy a plan that meets all of the essential health benefits.

If you buy a plan with an effective date of January 1, 2014, that plan will meet requirements.

2 – How will you pay for your health insurance in 2014?

Depending on your household income, you may be able to qualify for payment assistance that make insurance more affordable.  The only way you can obtain assistance, is if you purchase your plan from either the state or federal exchange.  If you buy a plan “off exchange” you will not received payment assistance or special discounts.

3 – What is the difference between on and off exchange plans?

In my opinion, the only reason you would go to either the state or federal marketplace (the government prefers this word, but it’s the fancy word for exchange) is if you qualify for payment assistance.  If your income is over the assistance limit, then going off exchange is the way to go.  I say this because you won’t have to prove your income, and answer all of the questions that the state and federal government require from you.

For example, here in Kentucky, Humana offers some plans that aren’t available on the state exchange.  These plans have a more comprehensive network, then the current on exchange plans have.

4 – What type of plans are available?

Networks, co-payments, deductibles, and out of pockets differ between all the carriers.  You must decide for yourself what is most important to you, and then work with an agent or broker (Zinser Benefit Service, Inc. would be one) who should be able to guide you to the right plan.

5 – When can you buy coverage?

The new open enrollment period for a January 1, 2014 effective date started in Oct 2013 and ends on December 23rd 2013.  Once this date passes, you’ll have dates similar all the way up through March of 2014.  If you miss during this time, you will have to have a qualifying event in order to enroll in a plan during 2014.  A qualifying event would be any of the following:

  • Loss of essential health coverage
  • Change of family structure – gain or become a dependent because of a marriage, death, birth, or adoption of a child
  • Change of citizenship status
  • Government error
  • Change in subsidy eligibility – so if you make more money or lose some of your income, this could trigger a qualifying event
  • Move to a new coverage area – state, county, etc.

This is just a brief overview.  I hope it helps!

New Health Insurance Taxes

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This was taken from something I received from Humana.

 

The health insurance tax
The Affordable Coverage Project, a coalition of business groups that includes the U.S. Chamber of Commerce and the National Association of Manufacturers, wants more lawmakers to throw their support behind a House bill that would delay the health insurance tax for two years. The reform law imposes this new tax – or fee – on health insurers beginning in 2014. “With the economy still struggling to recover, small businesses, middle-class families and public program enrollees are not in a position to bear the burden of this tax,” stated a coalition letter urging members of Congress to cosponsor the bipartisan bill.

Meantime, the Department of the Treasury and the Internal Revenue Service (IRS) issued final regulations on the premium tax, and guidance on the timing and manner of health insurer filings. The final regulations and related guidance closely mirror the proposed rule issued on March 1. However, a few minor changes and clarifications were made, including moving up the deadline for insurers to submit their net premiums to the IRS (from May 1 to April 15). The IRS is to send preliminary fee calculations to health plans by June 15; health plans are to send error corrections by July 15; final fee calculations are to be sent to health plans by Aug. 31, and payments to the IRS are due Sept. 30.

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