2017 Medicare Parts A & B Premiums and Deductibles Announced. On October 18, 2016, the Social Security Administration announced that the cost-of-living adjustment (COLA) for Social Security benefits will be 0.3 percent for 2017. Because of the low Social Security COLA, a statutory “hold harmless” provision designed to protect seniors, will largely prevent Part B premiums from increasing for about 70 percent of beneficiaries. Among this group, the average 2017 premium will be about $109.00. A modest increase compared to $104.90 for the past four years.
For the remaining roughly 30 percent of beneficiaries, the standard monthly premium for Medicare Part B will be $134.00 for 2017, a 10 percent increase from the 2016 of $121.80. Because of the “hold harmless” provision covering the other 70 percent of beneficiaries, premiums for the remaining 30 percent must cover most of the increase in Medicare costs for 2017 for all beneficiaries. This year, as in the past, the Secretary has exercised her statutory authority to mitigate projected premium increases for these beneficiaries. While continuing to maintain a prudent level of reserves to protect against unexpected costs. The Department of Health and Human Services (HHS) will work with Congress as it explores budget-neutral solutions to challenges created by the “hold harmless” provision.
“Medicare’s top priority is to ensure that beneficiaries have affordable access to the care they need,” said CMS Acting Administrator Andy Slavitt. “We will continue our efforts to improve affordability, access, and quality in Medicare.” Medicare Part B beneficiaries below are not subject to the “hold harmless” provision. These groups represent approximately 30 percent of total Part B beneficiaries.
This includes beneficiaries who do not receive Social Security benefits
those who enroll in Part B for the first time in 2017
those who are directly billed for their Part B premium
those who are dually eligible for Medicaid and have their premium paid by state Medicaid agencies
those who pay an income-related premium
CMS also announced that the annual deductible for all Medicare Part B beneficiaries will be $183 in 2017 (compared to $166 in 2016). Premiums and deductibles for Medicare Advantage and prescription drug plans are already finalized and are unaffected by this announcement.
On Tuesday The 21st Century Cures Act Passed and signed by President Obama. The ‘Act” has numerous components but the the greatest impact on small business is the HRA ( health reimbursement arrangement) component.
The Cures Act allows small employers to reimburse individual health coverage premiums up to a dollar limit through HRAs called “Qualified Small Employer Health Reimbursement Arrangements” (QSE HRA). This provision will go into effect on January 1, 2017.
The IRS previously limited Employer reimbursement of individual premiums in light of the requirements of the Patient Protection and Affordable Care Act (ACA). For many years, employers had been permitted to reimburse premiums paid for individual coverage on a tax-favored basis, and many smaller employers adopted this type of an arrangement instead of sponsoring a group health plan. However, these “employer payment plans” are often unable to meet all of the ACA requirements that took effect in 2014, and in a series of Notices and frequently asked questions (FAQs) the IRS made it clear that an employer may not either directly pay premiums for individual policies or reimburse employees for individual premiums on either an after-tax or pre-tax basis. This was the case whether payment or reimbursement is done through an HRA, a Section 125 plan, a Section 105 plan, or another mechanism.
Who is eligible?
The Cures Act now allows employers with less than 50 FT employees (under ACA counting methods) who do not offer group health plans to use QSE HRAs that are fully employer funded to reimburse employees for the purchase of individual health care.
What are the funding limits?
The reimbursement cannot exceed $4,950 annually for single coverage, and $10,000 annually for family coverage. The amount is prorated by month for individuals who are not covered by the arrangement for the entire year. Practically speaking, the monthly limit for single coverage reimbursement is $412, and the monthly limit for family coverage reimbursement is $833. The limits will be updated annually.
Impact on Individual Subsidy Eligibility?
For any month an individual is covered by a QSE HRA/individual policy arrangement, their subsidy eligibility would be reduced by the dollar amount provided for the month through the QSE HRA if the QSE HRA provides “unaffordable” coverage under ACA standards.
Employees applying for coverage on federal or state health insurance exchanges will need to disclose the amount that the employer is making available via the HRA. That amount will be used by the exchange in calculating whether an employee’s household income exceeds ACA affordability thresholds (2017 – 9.69 % of household income), as well as determining subsidy amounts for those that meet the eligibility requirements. Those employees eligible for a subsidy will have their monthly amount reduced by the monthly HRA amount available through their employer.
If the QSE HRA provides affordable coverage, individuals would lose subsidy eligibility entirely. Caution should be taken to fully education employees on this impact.
COBRA and ERISA Implications?
QSE HRAs are not subject to COBRA or ERISA.
Annual Notice Requirement?
The new QSE HRA benefit has an annual notice requirement for employers who wish to implement it. Written notice must be provided to eligible employees no later than 90 days prior to the beginning of the benefit year that contains the following:
A statement to the employee that it is their responsibility to provide the federal or state health insurance exchangewith the amount being provided in HRA funds, as this amount will be used by the exchange when calculating need based premium assistance.
A statement that if the employee is not covered by minimum essential coverage for any month of the tax year, they could be subject to a penalty under the Individual Mandate provisions of the ACA.
Failure to provide this notice will result in a penalty to the employer of $50 per applicable employee, up to a $2,500 maximum per calendar year. Transition relief is available for plans starting in the first quarter 2017 – they will have until April 1, 2017 to provide notices to employees.
Record-keeping, IRS Reporting?
Because QSE HRAs can only provide reimbursement for documented healthcare expense, employers with QSE HRAs should have a method in place to obtain and retain receipts or confirmation for the premiums that are paid with the account. Employers sponsoring QSE HRAs would be subject to ACA related reporting with Form 1095-B as the sponsor of MEC. Money provided through a QSE HRA must be reported on an employee’s W-2 under the aggregate cost of employer-sponsored coverage. It is unclear if the existing safe harbor on reporting the aggregate cost of employer-sponsored coverage for employers with fewer than 250 W-2s would apply, as arguably many of the small employers eligible to offer QSE HRA’s would have fewer than 250 W-2s.
Individual Premium Reimbursement Prohibitions
Outside of the exception for small employers using QSE HRAs for reimbursement of individual premiums, all of the prior prohibitions from IRS Notice 2015-17 remain. There is no method for an employer with 50 or more full time employees to reimburse individual premiums, or for small employers with a group health plan to reimburse individual premiums. There is no mechanism for employers of any size to allow employees to use pre-tax dollars to purchase individual premiums. Reimbursing individual premiums in a non-compliant manner will subject an employer to a penalty of $100 a day per individual they provide reimbursement to, with the potential for other penalties based on the mechanism of the non-compliant reimbursement.
For analysis if this works for your small business? Please contact our payroll and reimbursement team on your HR/Payroll/Compliance needs at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.
Overtime Pay FLSA on HOLD. Yesterday, Judge Amos Mazzant III issued an injunction blocking the overtime rule changes that were set to take effect on December 1.
The New FLSA Overtime Rules changes would have raised the white collar exemption from $455/week ($23,660/year) to $913/week ($47,476/year). This is welcome news for groups struggling with the impact of the rule-both to their budgets as well as its impact on workplace flexibility and employee morale.
Overtime Pay FLSA on HOLD
At this time, employers do not need to implement changes by the December 1, 2016 deadline. After hearing the full case, the court could allow the rule to go forward. The incoming Trump Administration now has more time to make changes, including ending the rulemaking permanently or issuing a new rule with a more reasonable salary threshold, as SHRM and Employers have advocated.
Understanding the Labels on Your Thanksgiving Turkey
Use this cheat sheet to help navigate labels when shopping for your Thanksgiving turkey
From our wellness partner, Cleveland Clinic
There’s a lot to consider when shopping for your Thanksgiving turkey. Use this cheat sheet to help you navigate what the labels mean and ask the right questions so you’re bringing home a bird that suits your needs.
1. USDA-certified organic turkey
This means it was raised without antibiotics or pesticides, fed organic feed and given access to the outdoors. They are usually more expensive than grocery store turkeys and they need to be ordered a couple weeks before Thanksgiving.
2. Heirloom or Heritage turkey
Specific breeds of turkey that are naturally raised outdoors without hormones or antibiotics. This slower-growing turkey has a little more fat marbling, meaning a richer flavor and texture. These also need to be ordered a week or two ahead of Thanksgiving Day.
3. Conventional grocery store turkey
These are factory farmed turkeys known as the Broad Breasted White Turkey. They are bred to have more white meat and typically raised with antibiotics to promote growth.
4. “Enhanced,” “prebasted” or “marinated”
These labels mean the turkey has been injected with a solution to enhance flavor, increasing its sodium content from 75 mg to as much as 710 mg. Read the fine print so you know all of the ingredients.
5. “Hormone-free” or “No hormones added”
This is a misleading label you can ignore. It implies a healthier choice, but federal regulations already prohibit the use of hormones in poultry.
6. “Natural”
A turkey labeled natural can still be enhanced or prebasted and fed antibiotics. It is supposed to mean minimally processed, containing no artificial flavoring, coloring, ingredients, preservatives or other artificial ingredients. Read the fine print to know all of the ingredients and talk to your grocer.
7. Final Tip
If you’re buying a bird from a local poultry farmer, be sure to ask how it was raised and whether or not it’s been enhanced with a solution to add flavor.
Gobble! Gobble! We hope you all enjoy the long Thanksgiving weekend. Get the latest on healthcare news on our website.
The employer reporting deadlines are delayed, not deleted! When are the 1095 filing forms due?
Form
Delivered to the Employee
Delivered to the IRS (Paper)
Delivered to the IRS (Electronically)
1095-C
3/2/2017
2/28/2017
3/31/2017
1094-C
N/A
2/28/2017
3/31/2017
What does this mean?
Similar to last year, the IRS is making an accommodation to employers to prepare their forms. The filings are still due to the IRS as per the original deadline. Our HR/Payroll parters are still prepared to help your compliance needs and meet all of the deadlines and reporting burdens.
For a copy of Notice, please click on the link below:
https://www.irs.gov/pub/irs-drop/n-16-70.pdf
Please contact our team for immediate answers on your HR/Payroll/Compliance needs at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.
Note: This delay does not impact the timing of Form 1095 A, Health Insurance Marketplace Statement. 1095 A is the form you receive if you purchase your health insurance through the Marketplace and not through your employe
The 2017 Election Results and ACA is a hot topic creating buzz. With the outcome of the 2016 elections now official, the Republicans will hold the majority in both chambers of Congress and control of the White House beginning in 2017. Our posting CLINTON VS TRUMP ON HEALTHCARE was a general summary of their differences on Healthcare.
Since President-elect Trump ran on a platform of “Replace and Repeal” of the Affordable Care Act (ACA), we anticipate that acting on this campaign promise will be one of the top priorities of the new Trump administration. We anticipate there will be significant disruption for individuals, employers, brokers and carriers across the country.
Republicans will likely need to use the process of Budget Reconciliation to pass legislation through the Senate, given the party did not secure enough seats to control a filibuster-proof supermajority. In other words, the legislation can pass in the Senate with a simple majority vote and not a super majority (which requires 60 votes). Reconciliation can be used to take away some, but not all, of the ACA. It is anticipated that certain provisions of the ACA would be targeted such as Medicaid expansion, the availability of subsidies and premium tax credits in the Marketplace, and the employer and individual mandate. It cannot be used to remove non-budgetary provisions (for example, insurance mandates like “to age 26”). In addition, it is conceivable that a Trump administration may simply direct various federal agencies (such as the Department of Labor) to not enforce certain ACA provisions.
The Republicans have not laid out a specific plan on what will replace the ACA. Generally, the party has supported the existing employer-based system (with some party members calling for limits on the tax exclusion). Based on published white papers on the President-elect Trump’s website, other aspects of a healthcare overhaul plan may include:
Tax credits for purchasing individual health insurance;
Expansion of Health Savings Accounts and HighDeductible Health Plans;
Continuation of the prohibition on pre-existing condition exclusions from health insurance;
High risk pools;
Interstate sales of insurance; andMedical malpractice reform.
The process to repeal and replace the ACA will take time and nothing will happen between now and the New Year. Open enrollment is currently underway in the Marketplaces across the country and it is expected that individual policies (and subsidies for lower and middle-income individuals) will be available to enrollees as of January 1, 2017. What is unknown is whether the Trump administration and subsequent legislation will affect the Marketplace and subsidies in mid-2017 or instead phase out this coverage after the 2017 calendar year.
The employer mandate (for applicable large employers);
Form 1094-C and 1095-C reporting for CalendarYear 2016;
Any ACA taxes and fees for self-funded plans to pay directly (such as reinsurance fees); and
Plan design changes applicable to plan years thatbegin on or after January 1, 2017.
In addition, all other federal law mandates impacting employer health and welfare plans such as ERISA,HIPAA, COBRA, Code Section 125, the Mental Health Parity and Addiction Equity Act, and the Service Contract Act / Davis Bacon and Related Acts are still good law. There has been no indication that these non-ACA laws are targeted for repeal or replacement.
Stay tuned for updates as more information gets released. Sign up for latest news updates. Please contact our team on your 2017 health plan renewal at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.
Why a Private Exchange? A Private Exchange Answers These Top 10 Questions.
Defined Contribution: I don’t want to get involved in peoples individual health insurance needs. How does the Employer extricate from this very personal and important employee need and yet still offer this benefit? I like the defined contribution similar to a 401k.
Tax Advantages: How do I offer the group and employee pre-tax advantages not offered on an individual basis?
Group Insurance Upgrade: How do I upgrade from the diminishing individual market and meet strict group underwriting? Rates are higher, smaller networks and lower benefits in this segment.
Full Fortune 500 Benefits: How do I offer balanced voluntary benefits similar to a Fortune 500 company? Some employees are asking for group discounted dental, vision, disability, life insurance and supplemental coverage such as AFLAC but we can’t guarantee the minimum participations.
Simplify: I don’t have the time needed to make annual plan changes. How do I empower my employees with choice, education and various networks to make their own choices? Many times I’d just rather absorb the 10% increase than deal with the changes.
Choice: I have employees all over the Metro area. How can you help me offer more than 1 or 2 health plans as benefits have become more complex and networks increasingly narrow geographic sensitive in nature?
Technologies: Can you give me the technologies needed to make this paperless? Do you have a platform that I can use as an intranet communication portal? Can I securely store documents such Employee handbooks and notification?
Added Value: Can you offer additional supporting tools aside from technology? Do you have COBRA and section 125 cafeteria documents?
HR: Do you have an HR Services for Employers Support? Will you have employee support such as a 24/7 independent CS concierge services?
Personalization: Will I have an in person experienced knowledgeable consultant available for support on plan design, metrics, and customer care and employee open enrollment?
Is a Private Exchange Right For My Group?
If you’re a small business owner who has concerns about payroll, filing paperwork, and complying with government regulations, co-employment may be the service you’ve been looking for. In some cases, a Private Exchange may NOT be right for you. With Health Care Reform your company may qualify for a small business tax credit or a be eligible for a large group discount under a PEO.
Try us on a custom demo, contact us at (855)667-4621 .
Everything you need to know ahead of tomorrow’s 2017 Individual Open Enrollment. This Open Enrollment marks the 4th anniversary of Obamacare a.ka. The Affordable Care Act. As a helpful resource, the new NY and NJ rates with important deadlines are listed below. 33 States such as NJ use the healthcare.gov website or at https://medicalsolutionscorp.demo.hcinternal.net/individual/individual/homePage. States such as NY and CT use their own Marketplace – NYS of Health and AccessHealth CT. Importantly, individuals not expecting a subsidy may also apply Off-Exchange which in many case has more options and Insurers.
2017 NY Individual Health Plans
These rates are for New York City unless otherwise indicated, and for a single person. For a family premium, multiply by 2.85, Husband/Wife multiply by 2.0 and Parent/Children multiply by 1.70. The non single deductibles are out of pocket maximums are doubled. These are for standard plans, which two-thirds of customers enrolled in during 2016.
While deductibles for platinum, gold and silver plans have stayed the same, many bronze plan deductibles have increased 33 percent. That means consumers who purchase a bronze plan — presumably for its lower monthly premium — are paying more out of pocket for their medical costs before their insurance company kicks in a dime. A family of four that purchased a bronze plan will have an $8,000 deductible in 2017, up from $6,000 in 2015. For someone young and relatively healthy, that might be OK, but that person is vulnerable to a very large bill if he or she needs expensive medical care. It’s the platinum plans where New York State really shows itself to be a national outlier. Roughly 18 percent of New Yorkers chose a platinum plan in 2016, compared to 2 percent across the nation, according to the Kaiser Family Foundation.
NJ Dept of Banking and Insurance posted the 2017 NJ individual health plans Monday. Only two carriers will offer plans on the state’s Obamacare marketplace next year: Horizon Blue Cross Blue Shield of New Jersey and AmeriHealth.
Additional insurers are participating off-exchange or outside the Marketplace. Examples: Aetna, CIGNA and Oxford. There are additional 20 plan options available off exchange. A notable new entrant, Health Republic of NJ, will no longer be available for 2017. See – Health Republic NJ Shutting Down.
November 1, 2016: Open Enrollment starts — first day you can enroll in a 2017 insurance plan through the Health Insurance Marketplace. Coverage can start as soon as January 1, 2016.
December 15, 2016: Last day to enroll in or change plans for new coverage to start January 1, 2017.
January 1, 2017: 2017 coverage starts for those who enroll or change plans by December 15.
January 15, 2017: Last day to enroll in or change plans for new coverage to start February 1, 2017
January 31, 2017: 2016 Open Enrollment ends. Enrollments or changes between January 16 and January 31 take effect March 1, 2017.
If you don’t enroll in a 2016 health insurance plan by January 31, 2017, you can’t enroll in a health insurance plan for 2016 unless you qualify for a Marketplace Special Enrollment Period.
Penalty: The uninsured penalty rises to $695 or 2.5% of your income, whichever is higher.
Coverage start dates
If you enroll before the 15th of any month, your coverage starts the first day of the next month. If you enroll after the 15th of the month, you’ll have to wait until the month after that for your coverage to start. So, for example, if you enroll on January 16, your coverage would start on March 1.
Enroll using our online comparison shopping tool for both on and off-Exchange Marketplace to be released next week. Email us or Contact us at (855)667-4621.
The Cleveland Clinic announced its list of the top 10 medical innovations for 2017 that have the potential to transform healthcare.
The 11th annual list was announced Wednesday during the Cleveland Clinic 2016 Medical Innovation Summit, held this week at the Huntington Convention Center of Cleveland and the adjacent Global Center for Health Innovation.
A team of more than 100 doctors and researchers assembled by the Clinic examined nearly 200 nominations to identify and rank the top 10 innovations. The panel doesn’t highlight brands or companies, but rather the innovation and its potential applications in healthcare.
The Top 10 Medical Innovations of 2017 are listed below in order of anticipated importance:
1. Using the microbiome to prevent, diagnose and treat disease
Trillions of bacteria in the body make up communities known as the microbiome. Within the last 10 years, researchers have discovered that the chemicals microbes emit can interfere with how food is digested, medicine is deployed or how a diseases progresses.
The National Microbiome Initiative has accelerated research and development, and biotech companies are looking at the microbiome’s potential to develop new diagnostics or therapies and probiotic products to prevent microbe imbalances.
Experts believe that next year the microbiome will solidify itself as “the health care industry’s most promising and lucrative frontier,” according to a news release.
2. Diabetes drugs that reduce cardiovascular disease and death
In the past, medications have fallen far short of addressing the mortality rates for type 2 diabetes. Half will die from complications from cardiovascular disease. Those odds reach 70% after the age of 65. But new medications began dropping mortality rates this year.
Empaglifozin modifies the progression of heart disease by working with the kidneys, and liraglutide has a comprehensive effect on many organs, according to the release.
2017 could bring a complete shift in the medicines prescribed and further research into new ways to target type 2 diabetes, experts predict.
3. Cellular immunotherapy to treat leukemia and lymphomas
One of the first cellular immunotherapies is about to hit the market, and early results suggest leukemia and non-Hodgkin lymphomas might be curable, even in advanced stages, according to the release.
Chimeric antigen receptor (CAR) T-cell therapies are a form of immunotherapy in which T-cells are removed and genetically reprogrammed to find and destroy tumor cells. After attacking and killing foreign cancer cells, they often remain to minimize the risk of relapse.
The treatment, results for which have been impressive, is expected to be presented to the U.S. Food and Drug Administration next year for treatment for acute lymphoblastic leukemia.
4. Liquid biopsies to find circulating tumor DNA
“Liquid biopsies” are blood tests that uncover signs of actual DNA, or cell-free circulating tumor DNA (ctDNA), which is shed from a tumor into the bloodstream and is more than 100 times more abundant in blood than tumor cells.
Several companies are developing testing kits expected to hit the market this year.
Liquid biopsies are being hailed as a flagship technology of the Cancer Moonshot Initiative, a national effort to end cancer.
5. Automated car safety features and driverless capabilities
New automatic safety features could make a dent in dangerous car accidents, which remain a leading cause of death and disability as well as a major expense. In 2015, there were 38,300 fatal car crashes in 2015, and medical costs nationwide in one year total nearly $23 billion nationwide.
The automated features include collision warning systems, drowsiness alerts and adaptive cruise control. More are likely coming.
Though legal and safety questions remain, major investments into driverless cars are being made by software, private transportation and auto manufacturing companies.
6. Fast healthcare interoperability resources
For many years, billing departments, doctors’ offices, insurance companies and more have operated with systems that couldn’t talk with each other. Experts predict that 2017 is the year to make sense of this tangled web.
An international committee called HL7 will soon release a new tool, FHIR (Fast Healthcare Interoperability Resources), which will serve as an interpreter between systems or offices. The first release will focus on clinical data while the second will look at administrative data, with the potential to end a lot of frustration.
7. Ketamine for treatment-resistant depression
For one third of patients with depression, medications don’t work. Alternatives include intensive treatment options, such as electroconvulsive therapy.
Initial studies of ketamine, a drug commonly used for anesthesia, indicated that 70% of patients with treatment-resistant-depression (“TRD”) saw an improvement in symptoms within 24 hours of a low-dose injection. Ketamine, also known in the 1960s as a party drug, was studied for its ability to target and inhibit the action of N-methyl-D-aspartate (“NMDA”) receptors of nerve cells.
The FDA granted Fast Track Status to the development of a new NMDA-receptor-targeting medications based on the ketamine profile. The FDA gave some, like esketamine, breakthrough status, enhancing the potential for these drugs to be available to patients in 2017.
8. 3D visualization and augmented reality for surgery
Two of the most intricate surgical practices, ophthalmology and neurology, began experimenting in the past year with technology that allows surgeons to keep their heads up while using high-resolution, 3D visual representations of their subjects.
Using data, stereoscopic systems create visual templates. Surgeons who’ve piloted the technology say it brings added comfort and visual information that allows them to operate more effectively and efficiently while also giving medical residents a clear picture of what they’re doing.
Augmented reality glasses that display holographic images of human anatomy could bring the end of cadaver labs at medical schools.
Along the same lines, software companies are building augmented reality glasses that display holographic images of human anatomy. Medical schools see the end of cadaver labs. The Clinic and Case Western Reserve University were among the early adopters to work with Microsoft’s HoloLens, a mixed reality device that allows users to interact with holograms.
9. Self-administered HPV test
Most sexually active woman contract the human papilloma virus (HPV), certain strains of which are responsible for 99% of cases of cervical cancer. The most common malignancy is in women 35 years and younger.
HPV prevention and treatment, which have made great strides, are restricted to women who have access to tests and vaccines.
An approach to expand that care will launch in 2017 with self-administered HPV test kits developed by scientists with the idea that women can mail samples to a lab and be alerted to dangerous HPV strains.
10. Bioabsorbable stents
In July, the first bioabsorbable stent was approved in the U.S. The stent, made of a naturally dissolving polymer, widens clogged arteries for two years before being absorbed much like dissolvable sutures, leaving behind a healthy natural artery.
Annually 600,000 people are treated for coronary artery blockage with metal coronary stents, which stay in their chests permanently most of the time. These stents may inhibit natural blood flow or cause other complications.
Experts believe the market potential for absorbable stents will approach $2 billion in six years.
NJ Dept of Banking and Insurance posted the 2017 NJ individual health plans Monday. Only two carriers will offer plans on the state’s Obamacare marketplace next year: Horizon Blue Cross Blue Shield of New Jersey and AmeriHealth.
Additional insurers are participating off-exchange or outside the Marketplace. Examples: Aetna, CIGNA and Oxford. There are additional 20 plan options available off exchange. A notable new entrant, Health Republic of NJ, will no longer be available for 2017. See – Health Republic NJ Shutting Down.
Empire recently announced their re-entry back into the New York small group market for 2017. A legendary broad networked PPO is welcome news especially in the NY small group market of 1-100 employees. Recently, the broad national networks have diminished to only 2 national health insurers, Aetna and Oxford. As a result of Empire Blue Cross participation in the BlueCard PPO program members enjoy unparalleled national access network to 96% of hospitals and 93% of doctors across the country. This national program will be on 18 of 28 plans below.
PPO/EPO Network – traditional non-gatekeeper large network of approximately 85,384 physicians, 160 facilities and the BlueCard PPO
Blue Priority Network – hybrid of broad PPO/EPO 160 facilities and similar Pathway’s 65,796 physicians network.
Pathway Network – HMO value based narrower gatekeeper referral network of 109 facilities and 60,535 physicians. Limited to 28 NYS Counties.
Additional Features:
Telemedicine will be available on all products
Vision – Limited adult vision will be available on all products at no additional cost.
Pharmacy – All plans use their large BCBS formulary Except the HMOs, and the Silver and Bronze Blue Priority Plans. They will be utilizing what they call the Select Formulary.
Clinical Programs – health coaching/advocacy, disease management, behavioral health, maternity and Gaps in Care
Online Resources – wellness coaching, discounts, health assessments and The Weight Center.
Healthy Support – Wellness program offers easy ways to earn up to $900 per member, per year. Gym Reimbursement $400 single/$600 couple, $100 Wellness + Flu Shot, Online Wellness toolkit, up to $150 and $50 Tobacco-free certification online.
Ask us about Empire’s flexible low participation voluntary group dental, vision, disability and life insurance plans. Stay proactive and contact us today for a customized consult on how your organization can prepare ahead for ACA, Benefits, Payroll and HR @ (855) 667-4621 or info@medicalsolutionscorp.com.
In yesterday’s surprise announcement, NJ regulators will be shutting down Health republic NJ for 2017 “because of its hazardous financial condition”. This marks the demise of the second Metro area healthcare co-op with the same name-sake Health Republic but different managed healthcare co-op, see Health Republic NY Shutting Down Nov 30.
Since Obamacare’s rollout in the fall of 2013, 16 co-ops that launched with money from the federal government have collapsed. Now, just six co-ops—Wisconsin’s Common Ground Healthcare Cooperative; Maryland’s Evergreen Health Cooperative; Maine Community Health Options; Massachusetts’ Minuteman Health; Montana Health Cooperative; and New Mexico Health Connections—remain.
In a bizarre twist of fate or unintended Affordable Care Act design flaw small affordable startups not only have to gain new client footholds but also support large established companies “with sicker patients”. Start-ups, by contrast, with much lower rate of diagnosed sick patients essentially pay into this tax. This tax is part of the risk adjustment program intended to stabilize Insurers who took on sicker patients and spread this risk. While some correctly blame too low pricing and some miscalculated business decision-making the inherent extra tax doomed the majority of the original 16 co-ops.
Health Republic in fact grew steadily and made money the first 9 months of 2015. However, HRNJ lost 17.6 million end of 2015 and is choking off at this $46.3 million payment to the government through the risk adjustment program. This is considered one of the 3 R’s of the reinsurance program – risk corridor, reinsurance and risk adjustment that were intended to level the playing field. The first “R”—“reinsurance”—subsidizes insurers that attract individual customers who rack up particularly high medical bills. The second—“risk adjustment”—requires insurers with low-cost patients to make payments to plans that share the benefits with those who insured higher-cost ones. And the third, called “risk corridors,” is a program to subsidize health plans whose total medical expenses for all their Obamacare customers overshoot a target amount.
The co-ops received less money than they initially anticipated last year under Obamacare’s risk corridor program, which resulted in the collapse of at least five co-ops and a $5 billion class action lawsuit filed by 6 state’s co-ops – ” Oregon-based insurer Moda Health Plan Inc., Blue Cross Blue Shield of North Carolina, Pittsburgh-based Highmark Inc., and the failed CoOportunity Health, which was based in West Des Moines, Iowa, and Health Republic Insurance Co. of Oregon, which was based in Lake Oswego.”
“The risk corridor program, however, has been an unmitigated debacle. In December 2014, the Republican Congress voted to prohibit the Obama administration from spending any money on the program, decrying it as a bailout for the insurance companies. Sen. Marco Rubio, then thought to be a leading GOP presidential contender for 2016, was particularly vocal in pillorying the program.
Unlike all those symbolic “repeal Obamacare” votes, Congress actually succeeded in blocking those risk corridor payments, and it hit Obamacare hard. Insurers filed claims seeking $2.9 billion, but under the limits imposed by the GOP there was less than $400 million available to make good on those payments. The end result: insurers initially received only 12.6 cents for each dollar they had counted on. Many of the new Obamacare co-op plans that went out of business blamed their collapse in part on the fact that they’d been counting on the full payments to keep them solvent.”
Regrettably, in a Presidential year no one wants to touch this burning hot potato. Perhaps NJ’s handling of this pressure cooker and taking 2017 off may be the best course of action after all.
9/16/16 Addendum:
As of Monday, September 19, 2016, the portal for Health Republic Insurance will be shut down, as they are no longer accepting new business for the year.
The New Jersey State Department of Banking and Insurance has also provided a list of FAQs related to the shutdown and how it affects individuals, small employers, brokers and providers. For more information, click here.
As always, our team is here to assist you and to help you grow your business.
Break Your Sugar Addiction in 10 Days (Infographic)
From our wellness partner, Cleveland Clinic
Do you have a sweet tooth? Most of us will overindulge at times. But the more sugar we consume, the more we want, says Mark Hyman, MD. However, the good news is that people can break the sugar addiction in 10 days. Here’s how.
Break Your Sugar Addiction Infographic
For more information on setting up a Wellness Program for your group please call us (855) 667-4621
NYS has approved 2017 Final Rates. Small group rates will increase 8.3%, a reduction from the 12.3% average originally requested. In the individual market, the average increase will be 16.6%, a reduction from the originally requested 19.3%.
As per NY State Law carriers are required to send out early notices of rate request filings to groups and subscribers see original –NYS 2017 Rate Requests. With only 3 months of mature claims experience for 2016 health insurers’ requests are historically above average. Ultimately the State reduces this request substantially. This year, however, NYS acknowledged that medical costs increased, citing a 7-percent average increase on the individual market and an 8.5-percent increase on the small group market. The administration also acknowledged drug prices have impacted insurers, pointing specifically to blockbuster drugs for Hepatitis C.
OTHER STATES
The national rate trend, however, has been much higher than in past years due to higher health care costs Like other states throughout the nation, the 2017 rate of increase for individuals in New York is higher than in past years partly due to the termination of the federal reinsurance program. The lost of the program’s aka federal risk reinsurance corridor funds accounts for 5.5 percent of the rate increase.
How are neighboring States doing? In NJ, not that bad. According to a review of filings made public last week the expected rate increase will be likley ve half. Example: Horizon Blue Cross Blue Shield requested a 4.8% increase on their OMINA Plans. For CT market, on the other hand, things are much worse at least for individual marketplace with average 25% rate increases.
SMALL GROUP MARKET VS. INDIVIDUAL MARKET
The new premium hikes ranged from as little as 5.6 percent for Oxford Small group to a whopping 58.5% percent increase for Crystal Run Health Insurance Company, an insurer that covers parts of the Hudson Valley and Catskills. Importantly, small group market are still more advantageous than individual markets unless one gets a sizable low income tax credit.
Overall, about 350,000 individual plan consumers will be affected by the price hike, while more than a million users will be hit by higher small group fees.Earlier this year, Blue Cross Blue Shield released a study showing Obamacare user costs were 22 percent higher than people with employer-sponsored health plans, while UnitedHealthplans to exit most Exchanges see – Breaking: Oxford Exits Metro Indiv & Oxford Liberty HMO 2017.
The correct approach for a small business in keeping with simplicity is a Private Exchange. This is a true defined contribution empowering employees with choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll. Both employee and employers still gain tax advantage benefits under the business. Also, the benefits, rates and network size are superior under a group plan as the risk are lower for small group plans than individual markets.
* All amounts are rounded to the nearest 1/10.
**Indicates that the company makes products available on the “New York State of Health” marketplace.
***After rate applications were filed on 5/9/2016, additional information, including the final results of the federal risk adjustment program, prompted several insurers to update their initially filed rates.
For more information on how a Private Exchange can help your group please contact us at (855)667-4621.
Clinton vs Trump Healthcare. A helpful overview from SHRM on the differences between the Candidates. They presumably agree on repealing the Cadillac Tax and well-needed price transparencies.
HILLARY CLINTON’S HEALTH CARE REFORM PLAN:
Defend the Affordable Care Act. Clinton will continue to defend the ACA against Republican efforts to repeal it.
Lower out-of-pocket costs like copays and deductibles. The average deductible for employer-sponsored health plans rose from $1,240 in 2002 to about $2,500 in 2013. Clinton believes that workers should share in slower growth of national health care spending through lower costs.
Reduce the cost of prescription drugs. Prescription drug spending accelerated from 2.5 percent in 2013 to 12.6 percent in 2014. It’s no wonder that almost three-quarters of Americans believe prescription drug costs are unreasonable. Clinton believes we need to demand lower drug costs for hardworking families and seniors.
Build on the Affordable Care Act and require plans to provide three sick visits without counting toward deductibles every year. The Affordable Care Act required nearly all plans to offer many preventive services, such as blood pressure screening and vaccines, with no cost-sharing at all. But because average deductibles have more than doubled over the past decade, many Americans would have to pay a significant cost out-of-pocket toward their deductible if they get sick and need to see a doctor. Clinton’s plan will build on the Affordable Care Act by requiring insurers and employers to provide up to three sick visits to a doctor per year without needing to meet the plan’s deductible first.
Provide a new, progressive refundable tax credit of up to $5,000 per family for excessive out-of-pocket costs. For families that still struggle with prescription drug costs even after out-of-pocket limits on drug spending and free primary care visits, Clinton’s plan will provide progressive, targeted new relief. Americans with health coverage will be eligible for a new refundable tax credit of up to $2,500 for an individual, or $5,000 for a family, available to those with substantial out-of-pocket health care costs. The credit will be available to insured Americans with qualifying out-of-pocket health expenses in excess of five percent of their income, and who are not eligible for Medicare or claiming existing deductions for medical costs. This refundable, progressive credit will help middle-class Americans who may not benefit as much from currently-available deductions for medical expenses. This tax cut will be fully paid for by demanding rebates from drug manufacturers and asking the most fortunate to pay their fair share.
Enforce and Broaden the ACA’s Transparency Provisions. Americans deserve real-time, updated, and reliable information to guide them in selecting a health plan, navigating changes to their out-of-pocket costs in their existing plan, choosing a doctor, and determining how much they will need to pay for a prescription drug. Clinton’s plan will vigorously enforce existing law under the Affordable Care Act and adopt further steps to make sure that employers, providers, and insurers provide this information through clear and accessible forms of communication so that Americans can make informed choices about their coverage and realize meaningful savings.
Repeal ACA -Modify existing law that inhibits the sale of health insurance across state lines. As long as the plan purchased complies with state requirements, any vendor ought to be able to offer insurance in any state. By allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up.
Tax deductible health insurance premium payments. Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. -Allow individuals to use Health Savings Accounts (HSAs). Contributions into HSAs should be tax-free and should be allowed to accumulate. These accounts would become part of the estate of the individual and could be passed on to heirs without fear of any death penalty. These plans should be particularly attractive to young people who are healthy and can afford high-deductible insurance plans. These funds can be used by any member of a family without penalty. The flexibility and security provided by HSAs will be of great benefit to all who participate.
Price transparency. Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.
Reform mental health programs. Families, without the ability to get the information needed to help those who are ailing, are too often not given the tools to help their loved ones. There are promising reforms being developed in Congress that should receive bi-partisan support.
Block-grant Medicaid to the states. Nearly every state already offers benefits beyond what is required in the current Medicaid structure. The state governments know their people best and can manage the administration of Medicaid far better without federal overhead. States will have the incentives to seek out and eliminate fraud, waste and abuse to preserve our precious resources.
Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Though the pharmaceutical industry is in the private sector, drug companies provide a public service. Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers.
Add our blog & sign up for newsletter on latest in Healthcare Reform News. Please contact us for a free evaluation on your group’s benefits at 855-667-4621.
Empire recently announced that they will be re-entering the New York small group market in 2017. This is welcome news indeed especially in the NY small group market of 1-100 employees. Recently, the broad national networks have been diminished to only 2 health insurers, Aetna and Oxford.
There will be upcoming fall webinar in which we will share more about Empire’s new comprehensive product offerings and the ways you can partner together to bring a more valued health care experience to your employees. Please read the full announcement below.
We will be significantly expanding our small group products we offer in the New York market. Watch Empire President Larry Schreiber’s video announcement.
January 1, 2017, we will be offering a comprehensive portfolio of products and networks to the New York small group market in our 28-county service area. These additional product offerings will bring employers more choice and access, while providing you with competitive options for these groups.
Empire has participated in the small group market for more than 80 years. But in 2012 we began the process of reducing market share due to a cyclical inability to obtain necessary rate increases on our small group products.
However, a combination of evolving market dynamics has created what we believe is a new opportunity for us to work closely together again in the New York Small Group market. Three of the most influential factors are:
The implementation of the new Risk Adjustment Model. This critical underpinning of the Affordable Care Act compensates health plans on a “net-neutral” basis for obtaining a disproportionate share of unhealthy, below-average risk.
The definition of “Small Group Employer” has changed. As you all know, under the law, small groups have gotten bigger in New York and other states to include employers with up to 100 employees.
Well-publicized carrier changes over the past 12 months have created the need for more options to help balance the Small Group market in New York.
With these in mind, since the start of the year, we have done extensive market research, worked with our regulators at the Department of Financial Services and built new small group market solutions from the ground up to address the unique needs of the New York market.
As you might imagine, this requires a strong combination of pricing, product and network.We are excited by this next chapter.
Stay proactive and contact us today for a customized consult on how your organization can prepare ahead for ACA, Benefits, Payroll and HR @ (855) 667-4621 or info@medicalsolutionscorp.com.
Breaking: Oxford Exits Metro Indiv & Oxford Liberty HMO 2017
A neat quote mentioned in yesterday’s Crains Health Pulse. I only wish it were for better news.
1. Oxford will be leaving NY Individual health plans. The popular Oxford Metro plan offered off-exchange marketplace will no longer be offered next year. Notably, this is the only plan that contained par excellence cancer hospitals such as Memorial Sloan Kettering.
Oxford Metro will still be available for NY Small groups.
2. Oxford Liberty HMO plans will be leaving ALL segments – Individuals to commercial large groups. For restaurants and retail shops, as an example, this is a very popular platform as this allowed flexibility of NO minimum participation. If only 1 person wanted to enroll on plan out 20 that was OK.
Oxford will be sending these letters out to Employers starting with Jan 2017 renewals.
This change does not affect their regular Oxford Health Insurance, Inc. (OHI) plans. Their OHI portfolio in New York offers a wide range of coverage options for employers of all sizes.
Impacted groups and members will receive a notice from us approximately 180-days prior to their 2017 coverage end date. The notice will outline the actions they need to take and other available coverage options.
Stay proactive and contact us today for a customized consult on how your organization can prepare ahead for ACA, Benefits, Payroll and HR @ (855) 667-4621 or info@medicalsolutionscorp.com.
Health and Human Services had released earlier this year the final version of its 2017 Notice of Benefit and Payment Parameters. Under the Affordable Care Act (ACA) this is issued annually. While the guidance is mostly relate dot the individual marketplace itt does, however, include several items relevant to employers and group health plans, specifically:
Annual limits for cost sharing (out-of-pocket limits)
Marketplace eligibility notifications to employers
Marketplace annual open enrollment period
Small Business Health Options (SHOP) Exchange
ANNUAL LIMITS FOR COST SHARING:
The annual out of pocket limits for plan years beginning on or after January 1, 2017 are $7,150 for individual coverage and $14,300 for family coverage. These cost sharing limits apply to in-network essential health benefits offered under non-grandfathered health plans, both fully and self-insured. Annual deductibles, in-network co-insurance and other types of in-network cost sharing accumulate toward the out-of-pocket limit, including prescription drug copayments. Not included are premium payments, out-of-network cost sharing and spending on non-essential health benefits.
MARKETPLACE ELIGIBILITY NOTIFICATIONS TO EMPLOYERS:
Beginning in 2017, the Marketplace will notify an employer as soon as possible when one of its employee’s first enrolls in subsidized Marketplace coverage. Since some employers may be liable for a penalty under the ACA’s employer mandate when an employee qualifies for a subsidized Marketplace coverage, this change to a more proactive notification process will hopefully provide employers with the opportunity to work with CMS in cases where an improper subsidy has been provided.
MARKETPLACE ANNUAL OPEN ENROLLMENT PERIOD:
Open Enrollment in the Health Insurance Marketplace, Healthcare.gov, for 2017 and 2018 will take place from November 1, 2016 through January 31, 2017 and November 1, 2017 through January 31, 2018, respectively.
SMALL BUSINESS HEALTH OPTIONS (SHOP) EXCHANGE:
Beginning in 2017, small employers electing coverage in the SHOP Exchange will have the option of “vertical choice,” offering plans across all metal levels (platinum, gold, silver and bronze) from one insurer. States who opt out of the vertical choice option will continue to offer employers the choice of selecting health plans that are available at one single metal level of coverage.
Stay proactive and contact us today for a custmozied consult on how your organization can prepare ahead for ACA, Benefits, Payroll and HR @ (855) 667-4621 or info@medicalsolutionscorp.com.
Updating Your Employee Handbook for Benefit Provisions
Alex Miller | Millennium Medical Solutions | (855) 667-4621 | alexm@medicalsolutionscorp.com.
Have you updated your Employee Handbook for Benefit Provisions? Handbooks are important for many reasons such as informing employees of their rights and duties, communicating available resources, and outlining paid time off policies. With respect to health and welfare benefits, here are a few things to consider:
1. Does your handbook go too far?
Handbooks cannot change the terms of governing benefit documents such as summary plan descriptions (SPDs). Handbook provisions should mirror plan terms and/or refer
to plan documents. Any provisions purporting to amend plan documents are ineffective. However, handbooks may ll in the blanks where the plan documents are silent or refer to outside policies. For example, an SPD may indicate that certain eligibility criteria is determined by the employer. In this case, that criteria may be explained elsewhere such as a handbook or benefit booklet.
2. Are all handbook provisions current?
A handbook should reflect current, compliant provisions such as those addressing benefits, eligibility, and termination.
Does your handbook exclude certain employee groups from benefits (e.g., temporary employees or interns)? If so, be aware of potential exposureunder the Employer Penalty which defines a full-time employee as any employee who works at least 30 hours per week. There are no exclusions of categories of employees. However, if using the look back measurement method, part-time employees,seasonal employees, and variable hour employees can be asked to wait up to 13+ months to determine full-time employee status without penalty.
Does the handbook contain an outdated waiting period (e.g., indicating that plan entry is the first day of the month following 90 days of continuous service?
Does the handbook contain conflicting eligibility terms? For example, does the handbook indicate that an employee must work at least 40 hours per week to be eligible for benefits when an employee must only work at least 30 hours per week?
If the look back measurement method rules are being used, are those referenced or outlined?
Does the handbook indicate that same-sex spouses are excluded from benefit eligibility? Excluding same-sex spouses is not advisable due to recent court cases and EEOC discrimination inquiries and likely conflicts with plan terms. It may also conflict with the company anti-discrimination workplace policy.
3. Does the handbook demonstrate that an offer of coverage was made?
Under the Employer Penalty rules, an employee must be offered an effective opportunity to accept coverage at least once with respect to the plan year. Final regulations do not apply any specific rules for demonstrating that an offer of coverage was made.
Many employers require an affirmative waiver of medical benefits. This is the best method to prove an offer was made, provided that a waiver can be collected from every single employee waiving. Otherwise, any waiver not returned by the employee arguably proves that he was never made the offer.
When an affirmative waiver is not required, otherwise documenting information regarding the election process is key. An employer will want to show that employees received sufficient information about the offer so that they must have known medical coverage was available.A widely-distributed handbook with clear information about the offer and its terms can be a valuable part of an employer’s distribution of information as well as benefit booklets, email correspondence, posters, mandatory meetings, etc., as applicable.
If you need assistance with creating or modifying your handbook, please contact us and we can help you with a solution.
NOTE: This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional.
According to a released study by United Hospital Fund May 2016 report Insurance companies operating on New York’s individual exchange market lost $100 million in 2014.
With recent news of Insurers reporting mounting losses (UnitedHealthcare will drop ACA exchanges) on the Individual Marketplace it wouldn’t be surprising for the next year’s Study to show even greater losses in 2015. As reported last month, the average NYS 2017 Rate Requests for individual marketplace was 17.3%.
Lower premiums, reinsurance and subsidies made coverage more affordable. “For many years in New York, annual individual premium increases far outpaced the offsetting effects of both a $38 million state-funded reinsurance program,12 and a risk-adjustment mechanism that provided a cross-subsidy from the small group market to the individual market, valued at $62 million in 2009.13 In 2014, new enrollment, PHSP participation, more competitive pricing, a better risk pool, and a federal reinsurance program resulted in an average individual monthly premium of $430.97 in New York.” The ACA subsidies reduced premiums by an average of $215/month
NYS Obamacare Future?
“More affordable premiums have been a key factor in the growth of the individual market. The loss of federal reinsurance payments will create an upward pressure on rates, and the absence of federal risk corridor reimbursement will also continue to reverberate.” Consumers with Obamacare subsidies will be shielded from most of the premium increases that may occur, but off-Exchange enrollees and NYSOH customers without subsidies could face significant monthly increases.
The State released NYS 2017 Rate Requests with average increases of 17.3% individual market and 12% for small groups. This early 5/12/16 deadline request requirement is not an Obamacare requirement. As per NY State Law carriers are required to send out notices of rate increase filings to groups and subscribers.
With only 3 months of mature claims in 2016 to work of off Insurance Actuaries have little experience to predict accurate projections. Typically the rate requests must be high and in the past final approvals after negotiations were only half, see https://360peo.com/nys-2016-rates-approved/. The national rate trend, however, has been much higher than in past years due to higher health care costs and the loss of Federal reinsurance fund known as risk reinsurance corridor.
This is one of the reasons why the individual market is significantly more costly to operate than small group as per recent United Healthcare pull out of most State Individual Exchanges, UnitedHealthcare will drop ACA Exchanges. In fact, the Health Republic NY is Shutting Down highlights how an insurer banked on the federal risk corridor reinsurance and underestimated NYS costs of care. Another local example is Oscar Health Insurance which has lost $105 million and is asking for up to 30% rate increase. The 3 year old company said the increase was necessary because medical costs have risen, government programs that helped cover costs are ending, and its members needed more care than expected. That all translates into the need for a price correction.
Importantly, the individual market subsides may be on borrowed time. Last week, The Federal Court ruled that Obamacare subsidies were illegally funded. The ruling while the Obama administration challenges it in D.C. Circuit Court of Appeals, is still allowing the reimbursements to continue for now. The practice of some small businesses dropping group health insuarnce in favor of the Individual Plans known as “cash for insurance” is put into question by this. While the IRS ruled that this is prohibited (see below) some small business are attracted to the simplicity of a public exchange and not getting involved in the managing of plans. Prohibited: The IRS prohibits employers from giving (or reimbursing) employees pre-tax funds to buy health insurance on their own—through the state-based and federally facilitated exchanges or private marketplaces alike.1 This practice may result in a $100 per day excise tax per applicable employee, according to an IRS Q&A released in May 2014.2
Instead, the correct approach for a small business in keeping with simplicity is a Private Exchange. This is a true defined contribution empowering employees with choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll. Both employee and employers still gain tax advantage benefits under the business. Also, the benefits, rates and network size are superior under a group plan as THE RISK OUTLINED ABOVE ARE HIGHER FOR INDIVIDUAL MARKETS THAN SMALL GROUP PLANS.
For more information on how a Private Exchange can help your group please Contact us at (855)667-4621.
Summary of 2017 Requested Rate Actions
INDIVIDUAL MARKET
Company Name
2017 Requested Rate Change
Aetna Life Insurance Company
19.4%
Affinity Health Plan, Inc.*
20.7%
Capital District Physicians’ Health Plan*
11.2%
Crystal Run Health Plan, LLC*
89.1%
Empire HealthChoice HMO, Inc.*
24.0%
Excellus Health Plan, Inc.*
15.9%
Health Insurance Plan of Greater New York*
14.0%
Healthfirst PHSP, Inc.*
6.6%
HealthNow New York Inc.*
6.1%
Independent Health Benefits Corporation*
19.2%
MetroPlus Health Plan, Inc.*
20.3%
MVP Health Plan, Inc.*
6.1%
New York State Catholic Health Plan, Inc. dba Fidelis Care New York*
8.1%
North Shore-LIJ CareConnect Insurance Company, Inc.*
29.2%
Oscar Insurance Corporation*
18.4%
UnitedHealthcare of New York, Inc.*
45.6%
Weighted Average Requested Rate Change – Individual Market
17.3%
*Indicates that the company makes products available on the “New York State of Health” marketplace.
SMALL GROUP MARKET
Company Name
2017 Requested Rate Change
Aetna Life Insurance Company
12.0%
Capital District Physicians’ Health Plan, Inc.
9.6%
CDPHP, Universal Benefits Inc.*
11.6%
Crystal Run Health Insurance Company, Inc.
61.9%
Crystal Run Health Plan, LLC
66.6%
Empire Healthchoice Assur Inc
10.0%
Empire HealthChoice HMO, Inc.
12.6%
Excellus Health Plan, Inc.*
12.3%
Health Insurance Plan of Greater New York*
10.6%
Healthfirst Health Plan (Managed Health)
5.0%
HealthNow New York Inc.*
5.8%
Independent Health Benefits Corporation*
11.2%
MetroPlus Health Plan, Inc.*
13.1%
MVP Health Plan, Inc.*
5.4%
MVP Health Services Corp.
6.8%
North Shore-LIJ CareConnect Insurance Company, Inc.*
16.8%
Oxford Health Insurance, Inc.*
12.9%
UnitedHealthcare Insurance Company of New York
12.8%
Weighted Average Requested Rate Change – Small Group Market
12.0%
*Indicates that the company makes products available on the “New York State of Health” marketplace.
Last month Governor Cuomo signed into law New York’s Paid Family Leave Act,that will require employers to provide paid family leave benefits to eligible employees as part of the state’s disability insurance program.The law exceeds federal FMLA of 50+ employees and will apply to all employees who are covered by the state’s temporary disability insurance law, regardless of their employer’s size, and who have been employed for 26 or more consecutive weeks. In light of this news, New York employers and employers with employees in New York should review their existing family and medical leave policies.
Overview:
Timing: Beginning January 1st, 2018 Paid Family Leave benefits will be phased in over a four-year period. When the law is fully implemented in 2021, employees may be eligible for up to 12 weeks of paid family leave.
Funding: Unlike many of these other laws, the NYS Paid Family Leave benefits will be funded by employees’ payroll deductions through a ~$1 per employee weekly payroll deduction that will help fund a paid family leave program. No employer is required to contribute to or fund the paid family leave benefit. NYS will set the maximum employee contribution by June 1, 2017, and it will be updated annually thereafter, on September 1 of each year.
Notice: Employers will be required to post a notice about the law and provide written notice to certain employees.
Eligibility: An employee is eligible for paid family leave benefits if the employee works for a covered employer for 26 or more consecutive weeks. Covered employers include those that have one or more employees employed in New York on each of at least 30 days in any calendar year.
Effective Date
Max. length of paid leave
Payable % of the employee’s average weekly wage
To the max % of NY average weekly wage
01/01/2018
8 weeks
50%
50%
01/01/2019
10 weeks
55%
55%
01/01/2020
10 weeks
60%
60%
01/01/2021
12 weeks
67%
67%
The opposition to the law fear that employers will end up with higher expenses in overtime and training for employees who will cover for their co-workers on leave. Businesses also are rightly concerned about how much control they’ll have over employees taking leave under these state administered programs.
How does this relate to NYS DBL? Paid Family Leave (PFL) will be covered under the employers DBL. DBL and PFL benefits cannot be collected at the same time. Combined, DBL and PFL have to stay within the 26-week benefit max during any 52 consecutive calendar weeks.
I hope that you find this brief overview helpful. To download a copy of the federal law click here – FMLA Employer Guide. For additional details on this law, including a review of existing DBL policies please contact us at 855-667-4621 or email us a policy copy for immediate review.
The IRS has released the 2017 Health Savings Account (HSA) inflation adjustments. To be eligible to make HSA contributions, an individual must be covered under a high deductible health plan (HDHP) and meet certain other eligibility requirements.
New HSA 2016 limits are as follows:
HSA Annual Contribution Limit:
Single – $3,400 ($3,350 in 2016)
Family – $6,750 ($6,750 in 2016)
Catch-up – $1,000 ($1,000 in 2016) for age 55+.
HDHP Minimum Annual Deductible:
Single – $1,300
Family – $2,600
HDHP Out-of-Pocket Maximum:
Single – $6,550 ($6,550 in 2016)
Family – $13,100 ($13,000 in 2016)
Age 55 Catch Up Contribution-As in 401k and IRA contributions, you are allowed to contribute extra if you are above a certain age. If you are age 55 or older by the end of year, you can contribute additional $1,000 to your HSA. If you are married, and both of you are age 55, each of you can contribute additional $1,000.
HSA/HDHP Market Growth
HSA holders own the assets in the accounts and can build up substantial sums over time. Enrollment in HSA-compatible insurance plans has increased to 10 million earlier this year, from 1 million in March 2005, according to, America’s Health Insurance Plans (AHIP), a trade group.
HSAs were authorized starting in January 2004. Since then, AHIP has conducted a periodic census of health plans participating in the HSA/HDHP market.
The number of people with HSA/HDHP coverage rose to more than 11.4 in January 2011, up from 10.0 million in January 2010, 8.0 million in January 2009, and 6.1 million in January 2008.
30 percent of individuals covered by an HSA plan were in the small group market, 50 percent were in the large-group market, and the remaining 20 percent were in the individual market.
14% of all workers in the private sector that have access to a Health Savings Account acc. to Bureau of Labor Statistics.
States with the highest levels of HSA/HDHP enrollment were California, Ohio, Florida, Texas, Illinois and Minnesota.
HSA Advantages:
Opportunity to build savings – Unused money stays in your account from year to year and earns tax-free interest. The HSA also gives you an investment opportunity.
Tax-free contributions and earnings – You don’t pay taxes on contributions or earnings.
Tax Free Money allowed for non traditional Medical coverage– As per IRS Publication 502, unused moneys can be used for dental,vision, lasik eye surgery, acupuncture, yoga, infertility etc. Popular Examples
Portability – The funds belong to you, so you keep the funds if you change jobs or retire.
Our overall experience with HSAs have been positive when employer funding is at minimum 50% using either the HSA or an HRA (Health Reimbursement Account-employer keeps unspent money). Traditional plans trend of higher copays and new in network deductibles has also led to the popularity of an HSA.
Is your HSA compliant? Which pre-tax qualified HSA, FSA, HRA spending card is right for you? Please contact our team at Millennium Medical Solutions Corp (855)667-4621 for immediate answers. Stay tuned for updates as more information gets released. Sign up for latest news updates.
So far, New York and Nevada have confirmed that UnitedHealth plans to remain on their ACA exchanges next year. The company has also filed plans to participate in Virginia for 2017. Wisconsin said it hasn’t received an exit notice from UnitedHealth, and that it doesn’t comment on insurers’ business plans. A representative of Covered California, the state’s Obamacare exchange, said plan participation is confidential until it’s announced later this year.
UnitedHealthcare will drop out of most ACA Exchanges by 2017 as reported in Modern Healthcare. Just how significant is this to the market? Realistically, United took a cautious wait and see approach. In NYS, for example, they have been the most expensive plan on the Obamacare Exchange Marketplace. They expect to lose over a billion dollars in this space for 2015 and 2016, so to them it makes no sense to stay in that market. The concern for the individual market is to expect large pricing increases in 2017 to reflect the higher risk than the safer Group Market.
UnitedHealth, which had about 795,000 ACA customers as of March 31, warned in November that it was posting losses on ACA policies. In December, the company said it should have stayed out of the individual exchange market longer. UnitedHealth also is withdrawing from some related state insurance markets for small businesses.
See United-healthcare Individual members enrolled by State:
UnitedHealthcare will drop ACA exchanges
MODERN HEALTHCARE By Bob Herman April 19, 2016
UnitedHealth Group CEO Stephen Hemsley said Tuesday the health insurance and services conglomerate will pull out of most of its Affordable Care Act marketplaces. But the company won’t bail on the exchanges completely and will sell individual plans in a “handful” of states.
“We cannot broadly serve it on an effective and sustained basis,” Hemsley told analysts and investors on a conference call. UnitedHealth has fully or partially exited five states so far—Arkansas, Georgia, Louisiana, Michigan and Oklahoma, according to various news reports.
The company sold plans in 34 states for this policy year and did not disclose which states it will stay in. Insurers that sell plans through the federal HealthCare.gov portal have until May 11 to file rates for 2017 plans.
A new analysis from the Kaiser Family Foundation, however, notes that UnitedHealth’s exits would only have a modest effect on competition and prices nationally since it has a small ACA footprint and charged higher premiums from the outset.
UnitedHealth recorded an additional $125 million loss on its individual ACA plans, meaning the company’s total ACA losses for 2015 and 2016 will exceed $1 billion. UnitedHealth signed up many sicker-than-expected members, ending the first quarter with 795,000 public exchange enrollees, which is only a fraction of the ACA’s individual market.
The insurer also overpriced its plans in 2015 after barely participating on the exchanges in 2014. UnitedHealth expects its exchange membership will decline to 650,000 by the end of the year.
But despite those heavy losses, which UnitedHealth previewed late last year, the company’s other lines of business like Medicare Advantage and Optum have been making money at a healthy clip. UnitedHealth’s profit climbed 14% year over year, totaling $1.6 billion in the first three months of this year. Adjusted earnings per share rose 17% to $1.81, beating estimates on Wall Street.
Revenue soared almost 25% to $44.5 billion in the first quarter, putting UnitedHealth on pace to hit $182 billion of revenue for the year. The Minnetonka, Minn.-based company recorded double-digit revenue growth across every major segment, including employer, Medicaid, Medicare Advantage and its Optum health services business. UnitedHealth now covers the medical care of nearly 47.7 million Americans.
UnitedHealth’s medical-loss ratio, which shows how much of its premium dollars were spent on medical care or “quality improvement” programs, was 81.7% in the quarter. That was up slightly from the 81.4% posted in the same quarter last year, which UnitedHealth attributed to the leap day.
Insurance mergers aka Mergersurance Mania continues at a steady pace with April 2016 Florida’s approval of Anthem Blue Cross and CIGNA merger. This is one month after Florida approved the Aetna and Humana merger. Investors have given their blessings to be sure while 10 States have also given approval. The Anthem Cigna $54 billion merger leaves only three national major providers of health care. Worries remain about the potential effect on consumers and the rising cost of health care.
Health Insurers consolidation argument are that they need to be able to merge in order to absorb added costs and blunted profit margins under the Affordable Care Act. Additionally, medical groups and hospitals groups have merged themselves rapidly giving them negotiation cost controls. This has traditionally been trending in smaller regional markets but are now also felt in major US Cities.
Evidence indeed is pointing to expected large insurance increases due to overwhelming market domination by hospitals. While Doctors and AMA are rightfully concerned about Insurer mergers the vast majority are now working for a Hospital System or Medical IPA.
Without public outcry there seems to be lax Regulator oversight and the arms race should not come as a surprise. On the local level we have yet to see a recent example of hospital merger that was curtailed.
This goes well beyond political partisanship. In a tight Presidential race it is important to understand that whether or not one supports a Single Payer we all suffer. This is bad for consumers, providers and tax payer all around. In an Oligopoly health care system with lack of competition the U.S. tax payers are also stuck with inflated costs.
Under Obamacare, the IRS needs to know if your coverage met health care reform standards. The 1095-B is issued by Insurers on behalf of fully insured members directly to the IRS and send members a copy. In short you don’t have to do anything other than reviewing the info and confirming accuracy. 1095B and 6055 Reporting Requirements FAQ
The IRS will accept any number of items to prove that a member had insurance including:
insurance cards
explanation of benefits statements from your insurer
W-2 Form or payroll statements reflecting health insurance deductions
records of advance payments of the premium tax credit
other statements indicating that you, or a member of your family, had health care coverage
What information is on the 1095-B form?
For each person covered on your policy, the 1095-B lists:
Name
Address
Date of birth
Taxpayer identification number (most likely a Social Security number)
Months of coverage with us
If you are missing the taxpayer ID or Social Security numbers for anyone on your policy, the Insurer send you a letter. It’ll explain why they need the information and how to send it to Insurers securely.
How do I know if I should get a 1095-B form?
Insuerers send you a 1095-B form if:
You bought your coverage directly and did NOT go through healthcare.gov.
You get employer coverage and it met the health care reform standards.
6055 Reporting on Form 1095-B
6056 Reporting on Form 1095-C
Provided by Insurer for insured medical plan; by employer for a self-insured medical plan
Provided by applicable large employer (ALE)
Provided to each covered “responsible individual” (e.g., employee, COBRA QB, retiree)
Provided to each full time employee
Provided by March 31, 2016 for coverage in prior calendar year
Provided by March 31, 2016 for coverage offered in prior calendar year
Transmitted with employer’s Form 1094-B to IRS by May 31, 2016 (June 30, 2016 if filed electronically)
Transmitted with employer’s Form 1094-C to IRS by May 31, 2016 (June 30, 2016 if filed electronically)
If your organization can use a helpful audit on ACA, Payroll and HR please contact us today (855) 667-4621 or info@medicalsolutionscorp.com.
This communication is not intended, nor should it be construed, as legal or tax advice. Please contact a competent legal or tax professional for legal advice, tax treatment and restrictions. Federal and state laws and regulations are subject to change.
Generics or Brands? This is not a new question and has been discussed. Our blog post “Generic Drugs vs. Brand Name – Are there any differences?” was covered in 2009. But since last decade most brand drug’s patents have fallen of a cliff. See popular Rx expirations below and infographic of “Major Drugs Going Off-patent in 2016.”
Lipitor
Seroquel
Crestor
Prevacid
Nexium
Zyprexa,
Plavix
Singulair
Lexapro
Enbrel
According to Vox article “Stop wasting money on brand-name drugs “On average, generics cost 80 to 85 percent less than name-brand medicines, according to the Food and Drug Administration (FDA). And buying unbranded drugs isn’t like opting for cheap toilet paper or no-name face cream: Less expensive here doesn’t necessarily mean lower quality.”
Many people have heard that switching to a generic medication will save them money. One of the questions we hear most often is, “How do generic medications compare to their brand name counterparts?” Knowing the facts about generics versus brand names can help make us all better consumers.
What’s the difference between generic and brand-name drugs?
Generic medicines are chemically equivalent to the original brand-name drugs and work just as well for nearly all patients. Many people are concerned that because generic drugs are often much cheaper than the brand-name versions, the quality and effectiveness have been compromised to make a less expensive product. The FDA requires that generic drugs be as safe and effective as the original brand name drugs. Generic drugs are copies of brand name drugs that have exactly the same dosage, intended use, effects, side effects, route of administration, risks, safety, and strength as the original drug. In other words, the pharmacological effects of generic medications are exactly the same as those of their brand name counterparts. It is important, however, to check with a Physician and have a conversation about alternatives since generic drugs may contain slightly different INACTIVE ingredients. These are things like binding materials, dyes, preservatives, and flavors.”
Another common myth is that generic drugs take longer to work. The FDA requires that generic drugs work as fast and as effectively as the original brand name products.
When a drug loses patent protection, often only one generic version is on sale for the first six months, so the price falls a little bit initially. Then, several other generic makers typically jump in, driving prices down dramatically.
What are the actual costs differences?
Last year, the average generic prescription cost $72, versus $198 for the average brand-name drug, according to consulting firm Wolters Kluwer Pharma Solutions. Those figures average all prescriptions, from short-term to 90-day ones.
Average copayments last year were $6 for generics, compared with $24 for brand-name drugs given preferred status by an insurer and $35 for non-preferred brands, according to IMS Health. Protonix, for severe heartburn, now costs just $16 a month for the generic, versus about $170 for the brand name. And of the top sellers that soon will have competition, Lipitor retails for about $150 a month, Plavix costs almost $200 a month and blood pressure drug Diovan costs about $125 a month. For those with drug coverage, their out-of-pocket costs for each of those drugs could drop below $10 a month.
All patients are encouraged to discuss generic alternatives with their physicians prior to filling a prescription. The doctor and the patient should agree on the best course of treatment for any diagnosed medical condition.
Resource:
Discount Rx Card: www.bonusbenefit.com
Pharmacy and Rx Costs Look Up: http://www.rxpricequotes.com
The IRS Notice released today December 28, 2015 extends the due dates for the 2015 information reporting requirements (both furnishing to individuals and filing with the Internal Revenue Service) for insurers, self-insuring employers, and certain other providers of minimum essential coverage, that is, all Forms 1094 & 1095.
There is no extension for individual tax filings and individual taxpayers/employees may not receive their Forms 1095-B or 1095-C before they file their income tax returns for 2015.
Because of the delay, some employees will not receive their forms until after the April 15 tax filing deadline. The IRS indicates that these employees do not have to file an amended tax return. They should simply keep their forms in a file should they need them later.
Specifically, this notice IRS extends 1094 and 1095 deadlines to:
Form 1095-C – from employer to employees – original deadline was 2/1/16, was extended to 3/31/16
Form 1094-C and 1095-C IRS filing by the employer (paper) original deadline was 2/29/16, was extended to 5/31/16
Form 1094-C and 1095-C IRS filing by employer (electronically) original deadline was 3/31/16, was extended to 6/30/16
Resource:
For a copy of the Notice 2016-4, please click on the link:
Our payroll partners offer the ability to fill out your Forms 1094 & 1095 as well as providing copies to your employees and filing them with the IRS. For additional general Payroll Support and ACA Tax filings 1094 & 1095 please contact us at 855-667-4621.
The Cadillac Tax has been delayed for two years from 2018 to 2020 by President Obama. With this delay, a repeal could be in reach for congressional leaders and business groups who oppose the Cadillac tax. The legislation also suspends the medical device tax until December 31, 2017 and delays the health insurance tax one year.
Whats a Cadillac Tax?
The 40% excise tax applies to the cost of employer health plan coverage exceeding certain threshold amounts, which were originally set for 2018 at $10,200 for individuals or $27,500 for families. These thresholds are indexed and will be higher on the delayed effective date in 2020. The Omnibus also calls for a study on how to determine adjustments to these thresholds to reflect age and gender differences between businesses. While the tax was originally non-tax deductible, the Omnibus changes that treatment and makes the tax deductible. Originally, the Cadillac Tax was pushed back by the behest of Unions to 2018 from the original proposed 2014 date. Most Unions with generous health care packages would not be complaint within that time frame.
Bipartisanship
The bipartisan vote on the Consolidated Appropriations Act was 316 to 113 in the House, and 65 – 33 in the Senate. Many employers, unions, insurers and industry groups have opposed the tax based on concerns around administrative and financial burdens for employers and adverse outcomes for employees.
Medical Device Tax
The tax bill will place a two-year moratorium on the ACA’s 2.3% tax on the sale of medical devices. The tax imposed under this provision will not apply to sales during the period beginning on January 1, 2016, and ending on December 31, 2017. This applies to sales after December 31, 2015.
Health Insurance Industry Tax
The tax bill places a one-year moratorium on the so-called HIT tax (Health Insurance Industry Tax). If passed, the industry tax will not apply for calendar year 2017, which should result in less of an increase to group health insurance premiums for 2017.
So who said Washington bipartisanship was over? There is hope going into the New Years.
The article below summarizes in full the Aftermath of Health Republic Shut Down. The original NYS announcement to shut down Nov 30th was released on Friday October 30th. There are countless anecdotal evidence of our client’s Providers not getting paid for work already done this Fall. Brokers , our Agency included, has NOT been paid since this Summer.
Should My Doctor and Broker be paid? That really ought to be the header for this article. At the same time Health Providers and Brokers honored clients despite the Health Republic’s precarious financial status. The approximate amount owed is $150 Million. If the State truly wants to correct this they have a $1Billion surplus. How can the State obligate Providers and Brokers to meet contractual licensing & professional standards and ignore them now?
As reported in Mahopac NY News 12/9/15 by BRETT FREEMAN
Doctors, Insurance Brokers Could Lose Millions After Health Republic’s Collapse
HUDSON VALLEY, N.Y. – When Health Republic Insurance of New York announced early last month that they were ceasing operations at the end of November, individual subscribers and small groups had to scramble for other options to keep themselves and their employees insured.
Doctors and individual insurance brokers weren’t so lucky.
Often overlooked in news reports is how Health Republic’s demise affected thousands of medical providers and individual insurance brokers, who may never see a dime from all that is owed to them.
Health Republic was a not-for-profit health insurance co-op (Consumer Operated and Oriented Plan) established under the Affordable Care Act. According to its website, at its height, it had over 215,000 members, making it the largest new health insurance cooperative in the country.
According to articles linked on Health Republic’s website, it borrowed a $265 million low-interest federal loan to begin its operations and was one of 23 co-ops receiving a total of $2.4 billion. According to reports, about half of them have since failed, with many analyses pointing to the low premiums as the cause of their collapse.
Dr. Scott D. Hayworth, president and CEO of the Mount Kisco Medical Group (MKMG), estimates that his practice, which provides medical care to 500,000 patients in the Hudson Valley (including thousands of patients in Mahopac, Somers, Yorktown and North Salem), has lost millions of dollars due to the collapse of Health Republic.
“It’s more than just the doctors’ fees,” said Hayworth, who oversees 450 physicians in dozens of locations throughout the Hudson Valley. Dr. Hayworth said that insurance reimbursements cover vaccines, chemotherapy and other ambulatory and pharmaceutical products that were paid for out of pocket by MKMG.
Despite its losses, MKMG continued to honor its contract with the insurance carrier to ensure any patients covered by Health Republic would continue to receive medical care.
“The thing we all have to remember is there is a patient in the middle of this,” Hayworth said. “Our first obligation is to our patients.”
Other health care providers, including local hospitals, have been in the same boat as MKMG.
Putnam Hospital Center is owed $1.8 million, according to Marcela Rojas, the manager of public and community affairs. Health Quest, which is the parent company of Putnam Hospital Center, is owed $4.4 million in total and doctors throughout its three hospitals are owed $350,000.
“In meetings with state officials, a discussion has focused on how to recoup any of these payments owed to individual patients as well as hospitals, physicians and other providers,” Rojas said in an email interview this past Friday. “There is a discussion on restructuring Health Republic, but the question is, what assets, if any, remain? Recouping any funds may be both a federal and state matter. There is currently no guarantee, emergency or recovery fund in Washington or Albany to cover those losses. Hospitals are meeting with state legislators this week to discuss how best to proceed to recoup at least some of the money owed.”
Officials at Northern Westchester Hospital estimate that they will be owed $2 million due to nonpayment of services provided to Health Republic patients.
“We believe NWH will recover some unknown portion of that amount,” said Joel Seligman, president and CEO of Northern Westchester Hospital. “Under New York State law, NWH must continue to provide services to patients for 60 days where continuity and transitions of care are an issue. Northern Westchester Hospital has a robust financial assistance policy applicable to all patients, including former Health Republic patients.”
All of these healthcare providers are receiving guidance and advocacy from the Healthcare Association of New York State (HANYS), a non-profit statewide association representing hospitals, health systems, nursing homes, home care agencies and other providers across the state.
In an interview, Melissa Mansfield, associate director of public and media relations for HANYS, explained that other states have something called a guarantee fund, which operates as an insurance company for the insurance company.
“New York is one of the few that does not have one yet,” she said, adding that medical providers statewide are owed $160 million, not including what will be owed for care rendered during the month of November.
“HANYS is aggressively advocating on behalf of our members with Cuomo administration officials and CMS (Centers for Medicare & Medicaid Services) to secure payment for money owed by Health Republic,” Mansfield said. “HANYS is exploring all available options for immediate payment and pursuing the establishment of a guarantee fund as a way to protect providers for Health Republic claims and from future insolvencies. Our members are obviously concerned about the impact Health Republic’s shutdown has had on patients and are committed to providing care during this transition. However, HANYS continues to raise very serious concerns about the consequences of such a tremendous financial loss when hospitals are already financially fragile.”
In Putnam County, there were 4,241 Health Republic enrollees, according to HANYS. In Westchester County, there were 20,404 enrollees, making it the third-most impacted county in the state, behind Nassau and Suffolk counties.
In a recent interview, state Sen. Terrence Murphy, who represents Mahopac, Somers, Yorktown and North Salem, among other communities, expressed outrage at the collapse of Health Republic, calling it, “at a minimum, gross mismanagement and negligence. Where the hell was DFS?” Murphy asked, referring to the Department of Financial Services, the state agency that oversees various industries that operate in the state, including all insurance companies. Murphy said DFS should be investigated.
On Sept. 25, DFS directed Health Republic to cease writing new health insurance policies and announced that the co-op would commence an orderly wind down after the expiration of its existing policies. Weeks later, after a review of Health Republic’s finances, finding it in worse financial condition than the company previously reported in its filings, DFS and New York State of Health, which is the official agency administering the Affordable Care Act, ordered Health Republic to end all of its policies on Nov. 30.
A spokesman for DFS did not return a phone call seeking comment, but on its website, officials with DFS said they opened an official investigation last week on Health Republic’s inaccurate financial reporting.
“NYDFS investigators are collecting and reviewing evidence relating to Health Republic’s substantial underreporting to NYDFS of its financial obligations,” according to the statement. “Among other issues, the investigation will examine the causes of the inaccurate representations to NYDFS regarding the company’s financial condition.”
According to DFS, medical providers who contracted with Health Republic had been legally bound to provide healthcare through the expiration of a patient’s plan with Health Republic, regardless of their concerns about reimbursement.
“NYDFS is taking actions that will apply a New York State law that prohibits providers from collecting or attempting to collect from Health Republic consumers amounts that are owed by Health Republic,” a statement on the website said. In addition, according to the DFS website, doctors must honor all new insurance policies of patients who are in an ongoing course of treatment with a provider for a life-threatening or a degenerative and disabling condition or disease, or in the second or third trimester of pregnancy for up to 60 days or through the pregnancy.
All of this is good for the patients, but Murphy expressed worry about how some local doctors might fare with all the lost reimbursements.
“You have practices that might go belly up,” said Murphy, who is a chiropractor in addition to being a legislator. “This is going to be a disaster…You will see some of them go out of business.”
While Dr. Hayworth at MKMG expressed confidence that his medical group would continue to offer top-notch care for its patients, he said that healthcare is a narrow-margin business and lost reimbursements will affect his group’s ability to recruit the best and brightest physicians, who he fears might be lured to other states.
Hayworth, who is married to former Congresswoman Nan Hayworth, declined to comment on the politics of the Affordable Care Act, but he said there definitely needs to be insurance reform. He also called on Albany and Washington, D.C. to provide “legislative relief” to the medical providers impacted by Health Republic’s collapse.
Sen. Murphy, who is chairman of the Administrative Regulations Review Commission, said he respects the legislative process, which calls for other committees to work on the problem, but has shared his concerns with state Sen. Kemp Hannon, chair of the Health Committee, who has started up round table discussions to determine the next steps.
“Anything to make sure this never happens again,” Murphy said.
Assemblyman David Buchwald, who represents North Salem, is also working on the problem.
“I have heard from constituents who are doctors and are concerned that they will not be paid for the services they provided to Health Republic patients,” Buchwald said in statement. “I have worked to raise this issue in Albany while the legislature is not in session. Understandably, the most immediate concern is ensuring that people who had Health Republic insurance are transitioned as smoothly as possible to new insurance. This is important to both patients and doctors, so that at least people are insured and health providers get paid going forward. Next, New York will hopefully see to it that insurance companies have adequate financial resources and address the needs of health professionals who have been left holding the bag. I expect that work to begin as soon as Health Republic customers are transitioned to their new insurance.”
Assemblyman Steve Katz, who represents Mahopac, Somers and Yorktown, did not return a call seeking comment. Nor did Congressman Sean Patrick Maloney, who represents Mahopac, Somers and North Salem in the U.S. House of Representatives, and Congresswoman Nita Lowey, who represents Yorktown.
In addition to the health care providers, local brokers are also out of luck. Mahopac resident Robert Simone, a broker with INS Brokers Inc., said he is owed thousands of dollars from Health Republic for his September and October commissions.
In an attempt to recoup his commissions, he called Health Republic, which told him to call DFS.
“DFS said, ‘We have nothing to do with it. Health Republic is holding your money.” Simone said he is not optimistic.
Nor is Chris Radding, one of the owners of the Forbes Agency in Katonah. Radding said he had 22 employer groups who had been members of Health Republic and he had lost thousands of dollars in commissions when Health Republic folded.
“Anything I’ve seen, there is no mention of the broker,” Radding said. Both Radding and Simone emphasized that their priority was ensuring that their clients had health coverage.
“The whole thing is pretty frustrating and really kind of disgusting,” Radding said.
In a press release issued Monday, the New York State Association of Health Underwriters estimated that insurance brokers in New York State will have lost millions of dollars due to unpaid commissions.
“What’s needed is a solution that avoids the usual outcomes of a failed insurance carrier,” the release said. It listed the usual outcome as reduced payments or no payments to those who provided their professional services even after the carrier ceased reimbursement for those services. It also said the solution should not inflate future insurance premiums or increase New York residents’ tax burden.
“We think that we have such a solution,” the release said. “NYS recently announced the existence of a $1 billion surplus, $680 million of which was generated by penalties levied by DFS. New York State should use some of that surplus to pay everyone what they are owed—doctors, hospitals and insurance brokers—and NYS should also ensure that Health Republic enrollees who have selected a licensed insurance advisor will continue to benefit from their advice by directing succeeding carriers to automatically appoint those brokers when their clients accept an auto-enrollment offer.”