Why are my rates going up?

Why are my rates going up?

Why are my rates going up? The recent 2014 health insurance rates  ranging in 15-20% increase is having a profound impact especially on small businesses. Benefits are furthermore deteriorating with new  deductibles adding a 10% to the out of pocket costs for a net total 25-30% rate increase.

No pre-existing condition. Several new cost  contributors aside from Essential Health Benefits Mandate are assigned. Recent articles such as Kaiser’s Popular Provision Of Obamacare Is Fueling Sticker Shock For Some Consumers attributes new Pre-Existing condition waiver as a factor.  Starting Jan 1, 2014 anyone with or without prior health insurance can get immediate treatment without a 12 month waiting period.  “But the provision also adds costs. To a larger degree than other requirements of the law, it is fueling the “sticker shock” now being voiced by some consumers about premiums for new policies, say industry experts.”  With the guaranteed issue there are unknown  costs that cannot be accounted for just yet.  Example: An uninsured individual we know is delaying needed surgeries until January for this reason.  The member will pay a $250/month premium and get a $40,000 surgery paid for immediately.  How many young healthy members are needed to offset this cost?

New Taxes.  The IRS Affordable Care Act Tax Provisions  is a handy itemized list. Several of these taxes such as MLR (Max Loss ratio) have been in effect.  New 2014 Taxes estimate  an additional 5.5% tax.  See New Taxes and Fees: What They’re for and Who Pays Them:

  • Transitional reinsurance fee. This is paid by fully insured and self-funded plans. The goal of the fee is to stabilize the individual markets by reimbursing companies who insure a disproportionately large number of individuals who are high utilizers of health care services. Fees will be collected between 2014, 2015, and 2016.
  • Health insurance providers’ fee, also referred to as a health insurance tax, annual fee, and insurer fee. This will be assessed annually beginning in 2014 on health insurance carriers. The total amount to be collected in 2014 is $8 billion. The tax is based on premiums and by some estimates is expected to have a cost impact of 2 to 2.5 percent in 2014, and higher in subsequent years.
  • Exchange fee. For 2014, our state’s online exchange marketplace is funded through federal start-up grants. But states that run their own exchange, such as Washington, have been tasked with implementing a funding mechanism after 2014. In the session that ended in June, the Washington State Legislature approved a funding plan for our exchange that authorizes the use of a current insurance premium tax for the qualified health plans (QHPs) sold in the exchange and, if necessary, an additional assessment on carriers who sell QHPs through the exchange.
  • Patient-Centered Outcome Research Institute (PCORI) fee (also known as comparative-effectiveness fee). Health insurance issuers and sponsors of self-funded group health plans will be assessed this annual fee beginning in 2012 and ending in 2019. It funds patient-centered outcomes research. PCORI is a nonprofit corporation whose mission is to help people make informed health care decisions, and improve health care delivery and outcomes. The Group Health Research Institute has received two research awards from PCORI to study ways to improve care for back pain, and connect patients with community resources.

 

Essential Health benefits. The quintessential question asked is why are my rates going up so much this year has multiple answers with new Essential Health Benefits leading the way.  The Essential Health Benefits Not Delayed essential-health-benefits-additional-benefits--higher-costs_510aef69edfe3article explains that The Affordable Care Act mandates that the plans include ten essential benefits, from care for pregnant mothers to substance abuse treatment.  Popular local plans such as Healthy NY and Brooklyn Healthworks have afforded coverage for over a decade are are missing  Mental Health, Chiropractic, and have a $3,000 Rx limit.   All Individual Healthy NY and Sole Proprietors are terminating this year .  Existing small businesses must buy the full version with Essential Health Benefits.

CASE: A Healthy Ny client just had an increase for singles from $412 to $519.  She is a successful generous Caterer who is covering majority of a staff of  10 employees which is unusual for that industry.  Her staff had an affordable benefits as well.  They  loved paying only $20, her Rx copay was only $10/generic and $20/brand for providers she did not have any deductibles.  Hospitalization had full coverage with a modest copay.  Statistically  nearly 90% do not use more than $3,000 Rx.  her new plan rolls automatically into the GOLD PLAN increasing her premium 25% along with a new $600 deductible on all benefits and a $40 copay for Specialist.  She asked me I thought the new tax was only .9% medicare tax but evidently this IS HER NEW TAX.

So much for if you like your plan you can keep it promise. Even supporters such as Former President ClintonWeighs in on Obamacare. “Obama should honor his health-care promise: Pres. Clinton”,  He personally believes President Barack Obama should honor his promise that people who have and like their insurance can keep it.

Do not under estimate the power of the Bill.  The President is reviewing ways to allow some to keep their health plan but this would only apply to policyholders losing coverage.   Stay tuned.

You can download the complete Essential Health Benefits NYS.  Also, for a downloadable guide on self-insuring and secondary market reinsurance for your group please send contact form below. In the meantime, please visit to view past blogs and Legislative Alerts at https://360peo.com/feed. 

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Health Exchange Marketplace Top Ten List

Health Exchange Marketplace Top Ten List

HIX TOP 10

Health Exchange Marketplace Top Ten List

The Health Exchange  also known as The Health Marketplace or Obamacare Exchanges are  set to open in less than 12 hours.  Are you ready or aye you like most asking What is an Exchange?  Starting Oct 1 you can enroll until March 31, 2014, though you’ll generally need to sign up by Dec. 15 of this year, to be covered as of Jan. 1. You can find your state’s marketplace at healthcare.gov.  The prices for the marketplace plans are likely to be similar to those sold privately. A plan that is also available on the exchange  may be eligible for subsidies.  Heres an easy top 10  list of what you need to know.

10. Locate your State Exchange

Look up your state’s exchange here  and Healthcare.gov.  Some states are running their own exchange, others are running it through the federal government see www.healthcare.gov.  For NY Tri-State the sites are:

NYS –  http://info.nystateofhealth.ny.gov       See rates here

NJ – https://www.healthcare.gov/how-do-i-choose-marketplace-insurance

CT – https://www.accesshealthct.com  See rates here

9. Individual Mandate Penalty

For 2014, the annual penalty is $95 or 1% of your income, whichever is greater. The penalty will increase over the first three years. Coverage can include employer-provided insurance, individual health insurance, Medicare or Medicaid.

Health Insurance Individual Penalty for Not Having Insurance
Pay the greater of the two amounts
YearPercentage of IncomeSet Dollar Amount
20141%$95 & $285/family max
20152%$325 & $975/family max
20162.5%$695 & $2,085/family max

8.  Individual Subsidies

Individuals who do not have affordable minimum essential coverage from their employer will be eligible for tax credit subsidies for their health insurance purchase on a state exchange if their income is below 400 percent of federal poverty level.

If you make under $45,960 or your family makes under $94,200, you could get a real break on health insurance costs More low-income people will also be eligible for free coverage under Medicaid For those eligible, the subsidies will cap the amount you pay for your exchange policy at between 2% and 9.5% of your income (on a sliding scale, based on your income). To find out how much you would pay, estimate your income for this year and plug it into any health subsidy calculator. You can also see estimate subsidies with these “health subsidy charts”.

7.  Small Business Subsidy – SHOP Exchange

A key change is that the small business health care tax credits will only be available ONLY through the SHOP Exchange marketplace in 2014. Small businesses with 25 or fewer employees who receive less than $50,000 a year in wages may be eligible for tax credits if they purchase the plan through the SHOP marketplace. These credits will cover up to 50% of the employer’s cost (35% for non-profits) for the first two years of coverage. Click here to read more about the small business health care tax credits.

6. Your income

not your assets, such as your house, stocks or retirement accounts – will count toward determining whether you can get tax credits. When you buy your plan, you estimate your income for next year, and your tax credit is based on that estimate. The next year, your tax returns will be checked by the IRS and compared against your estimate.

5.  Pre-Existing Conditions Eliminated

Your insurer generally can’t drop you, as long as you keep up with your insurance premiums and don’t lie on your application. Generally, people will be able to enroll in or change plans once a year during the annual open enrollment period. This first year, open enrollment on the exchanges will run for six months, from Oct. 1 through March of next year. But in subsequent years the time period will be shorter, running from October 15 to December 7.

4. Essential Health Benefits Covered

Each plan covers 10 “essential health benefits,” which include prescription drugs, emergency and hospital care, doctor visits, maternity and mental health services, rehabilitation and lab services, among others. In addition, recommended preventive services, such as mammograms, must be covered without any out-of-pocket costs to you.  More info here.

3. Ninety-Day Maximum Waiting Period

Group health plans and health insurance issuers may not impose waiting periods of more than ninety days before coverage becomes effective. This also applies to grandfathered plans.

2. Annual or Lifetime Limits

Group health plans, including grandfathered plans, may no longer include more than restricted annual or any lifetime dollar limits on essential health benefits for participants. Limits may exist in and after 2014 for non-essential benefits.

1. Not Everyone is Eligible

  • Immigrants who are in the country illegally will be barred from buying insurance on the exchanges.  However, legal immigrants are permitted to use the marketplaces and may qualify for subsidies if their income is no more than 400 percent of the federal poverty level (about $46,000 for an individual and $94,200 for a family of four).
  •  members of certain religious groups and Native American tribes
  • incarcerated individuals
  • people whose incomes are so low they don’t have to file taxes (currently $9,500 for individuals and $19,000 for married couples)

Conclusion:

There has been a lot of news about individual Obamacare provisions getting delayed – Obamacare Employer mandate Delayed. Some people may assume that means the health law is being slowly dismantled, or put off for an additional several years. .The Affordable Care Act is an extremely complicated law with a lot of moving parts, but ultimately, the biggest provisions are still moving forward. There will likely be more hiccups along the way. As the enrollment period opens for Obamacare’s new exchanges, industry experts predict there will probably be other issues that need to be ironed out — but that doesn’t mean the whole law is collapsing

Still confused?

Don’t be.  These are the common questions that we are working through with our clients daily.  Am I better off going SHOP Exchange vs. Individual  for my business?  Am I better off going off  Exchanges or onto Private Exchanges?  Whats my minimum employer contribution?  Do I have to cover employee and dependents? Is dental and vision included?  What happens to my Healthy NY when it shuts down Jan 1, 2014? What employer notices must I be posting?

Please contact our team at Millennium Medical Solutions Corp if you have additional questions regarding  how SHOP Exchanges and Individual Exchanges can benefit you     Stay tuned  to our site for updates as more information gets released.   Sign up for latest news updates.

Looking for Affordable Health Insurance? You can use this SINGLE PAGE form to get affordable health insurance quotes outside exchange and save money. If you are above 64 years, then use this link to Get FREE Medicare quotes from the most trusted carriers.

Resource:

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Federal government health care site: www.healthcare.gov

Kaiser Health Reform Subsidy Calculator:http://healthreform.kff.org/subsidycalculator.aspx

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Obamacare Employer Mandate Delayed, More Guidance

Obamacare Employer Mandate Delayed, More Guidance

Employer Shared responsibility Mandate Delayed

In an unexpected announcement pre-July 4th the big news was Obamacare Employer Mandate Delayed with penalties under the Affordable Care Act (ACA) until 2015.  The mandate also known as the “Employer Shared Responsibility” requires employers with 50 or more FTEs to offer affordable health insurance coverage to their workers or face financial penalties for not doing so.  Those penalties would originally have been applied beginning in 2014.

There has been a follow up guidance issued last week July 9th by the IRS.  According to the IRS, the delay will give employers more time to prepare for the change in how health insurance is provided and will also give the Obama Administration time to simplify the insurance-related reporting requirements that employers face. This transition relief appears to come with “no strings attached.”  Although the IRS guidance encourages employers to voluntarily comply with the employer mandate and maintain or expand health care coverage in 2014, the IRS will not impose penalties for a failure to do so.

Although the IRS guidance encourages employers to voluntarily comply with the employer mandate and maintain or expand health care coverage in 2014, the IRS will not impose penalties for a failure to do so.Notably, the guidance issued on July 9th also does not require employers to make “good faith” efforts to comply. As a result of this transition year, employers will have the option of deciding to what extent (if any) they will continue efforts to comply with the employer mandate during 2014.

Employers who intended to rely on one of the transition rules previously announced for 2014 should keep in mind that the latest IRS guidance does not provide special transition rules for 2015. Other group health plan requuirements still apply as discussed in our prior blog Essential Health Benefits Not Delayed.

This means that for plan years beginning on and after January 1, 2014, all group health plans must:

  •  Eliminate all pre-existing condition exclusions (regardless of age);
  • revised Summary of Benefits and Coverage templates;
  •  Essential Health Benefits Not Delayed; and
  •  Eliminate waiting periods of longer than 90 days.
  • Maximum Cost Sharing Deductible to $2,000/individual ($4,000/family); limit in-network out-of-pocket maximums to $6,350/individual ($12,700/family)

  • Individual Mandate Still Applies. individuals will still be required to obtain health care coverage or pay a penalty for each month they do not have coverage, beginning January 1, 2014
  • Exchanges (Marketplaces) Open for Enrollment October 1, 2013.

    The IRS notice makes it clear that individuals who enroll in coverage on the marketplaces will continue to be eligible for a premium tax credit if their household income is within a specified range and they are not eligible for other minimum essential coverage.

  • Employers Must Send Notice of Exchanges (Marketplaces) Before October 1, 2013.  These notices must be sent to current employees by October 1, 2013.  Then, beginning October 1, 2013, employers must send this notice to new hires within 14 days of their start date.
  • New taxes still apply – Patient Centered Outcomes Research Institute (PCORI) excise taxes and transitional reinsurance program fees;HRA/HSA/FSA clients also pay a monthly $1/employee tax.

We will continue to monitor ACA developments and will provide you relevant updated information when available.  In the meantime, please visit to view past blogs and Legislative Alerts at https://360peo.com/feed. 

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Essential Health Benefits Not Delayed

Essential Health Benefits Not Delayed

health-reform-essential-benefits-package-resized-600.jpg

Essential Health Benefits

 

 

 Essential Health Benefits Not Delayed

 

The pre-July 4th news of Obamacare Employer Mandate Delayed until 2015 decision may have started early fireworks. The administration did not, however, delay the larger new requirements facing employers who choose to offer health insurance in the small group market––employers with less than 50 workers. The biggest requirement – Essential Health Benefits not delayed.

Whether the rationale was to alleviate business pressure to meet new mandates by Jan 2014 or the real fear that Employers have already begun making necessary employment hours cut backs to avoid the $2,000 penalty. A $3,000/employee penalty was also looming for Employers offering unaffordable insurance.

Keep in mind that this limited delay does not affect other provisions of the Affordable Care Act slated to go into effect in or before 2014, such as:

  • Individual mandate which requires most individuals to purchase insurance by January 1, 2014, or pay a tax penalty.
  • a 90-day maximum on eligibility waiting periods;
  • monetary caps on annual out-of-pocket maximums;
  • total elimination of lifetime and annual limits (including expiration of waivers that permitted certain “mini-med” plans and stand-alone Health Reimbursement Arrangements to stay in place through plan years beginning in 2013);
  • new wellness plan rules;
  • revised Summary of Benefits and Coverage templates;
  • Patient Centered Outcomes Research Institute (PCORI) excise taxes and transitional reinsurance program fees; HRA/HSA/FSA clients also pay a monthly $1/employee tax.
  • a notice informing employees of the availability of the new health insurance Exchanges (a model notice is available on the U. S. Department of Labor website); and insurance market reforms.

See NYS specific Essential Health Benefits chart.

The biggest impact is the Essential Health Benefits (EHB) which will not be delayed and this affects fully insured or ALL Small Businesses. While small employers are not required to offer coverage, if they do then they come under that large number of new essential health benefit mandates and group rating rules that won’t apply to large employers. These small group requirements are expected to increase the cost of small group coverage by an average of 15%––with wide variation by state and the average age of the group.

An employer sponsoring a Healthy NY or Brooklyn Healthworks Plan today for example would be disqualified as this does not carry all Essential Health Benefits. The very popular Healthy NY is slated to shut down for Jan 2014 and most Employers have just received this transition letter last week. Individual and Sole Prop Healthy NY is terminating and small business Healthy NY must be reapplied under a new higher cost version. While the plan did not carry Ambulance and had a $3,000 limited Pharmacy plan it is priced 35% below market and did manage to capture hundreds of thousands that would otherwise had been uninsured. The same is true for those on Hospital Only or high deductible catastrophic plans.

So what are these Essential Health Benefits?essential-health-benefits-additional-benefits--higher-costs_510aef69edfe3

All individual and small group policies on and off-Exchange must cover ten categories of minimum essential health benefits.

—  Ambulatory services

—  Emergency services

—  Hospitalization

—  Maternity and newborn care

—  Mental health & substance abuse services

—  Prescription drugs

—  Rehabilitative and habilitative

—  Laboratory services

—  Preventive/wellness services, disease management

—  Pediatric oral and vision car

Under the ACA, each state must choose one plan from among popular health insurance plans offered statewide to serve as a benchmark for EHBs. The benchmark plan will act as the model for how plans must define and include EHBs in their coverage — in both the individual and small group markets. New York selected the benefits of the State’s largest small group plan as its EHB benchmark. There is also a Minimum Value requirement, See NYS Minimum Value STANDARD BENEFIT DESIGN COST SHARING DESCRIPTION CHART (5-6-2013) Some of the plan’s components include:

  • No cost-sharing for routine preventive services
  • Pediatric dental and vision coverage
  • Habilitative and rehabilitative services, including physical therapy, speech therapy and occupational therapy
  • Rich mental/behavioral health services
  • No annual or lifetime dollar limits on benefits

Conversely, a shift to self- insurance is underway as self-insureds can avoid many taxes and instead ONLY cover the Minimum Essential Coverage which is different than the Essential Health Benefits. The strategy coupled with reinsurance is a great sophisticated model usually reserved for larger groups. This segment will be able to avoid local additional State mandates which in States like NY account for 14-16%% of the costs. Thats a total swing of 30% for a fully insured NY group. Also, self-insured groups do NOT pay added taxes such as the health insurance tax of $9 Billion annually over the next 10 years.

The administration has shown their sensitivity to larger groups. This segment already covers 94% of its employees at least in some fashion while small businesses cover less than 50%.

Why not do the same for small employers as well? And while they are at it, use the time to reconsider the impact many of these regulations are likely to have on the number of small employers continuing to offer coverage.

For a downloadable guide on self-insuring and secondary market reinsurance for your group please send contact form below. In the meantime, please visit to view past blogs and Legislative Alerts at https://360peo.com/feed.

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