Taking Action to Prevent the Harmful Impact of Short-Term Plans

This article explores the recently established rule on short-term limited duration plans - as proposed by HHS - which would not comply with consumer protections afforded under ACA.

The U.S. Department of Health and Human Services (HHS) has proposed a new rule, open for comment until April 23, 2018, that is dangerous to consumers and to health care marketplaces. This rule would expand the sale of “short-term limited duration plans” that do not have to comply with the consumer protections afforded under the Affordable Care Act (ACA) and often leave consumers uncovered for major medical expenses.

The short-term plan rule will harm consumers and health care markets

The proposed rule would alter the definition of short-term plans as a backdoor way of creating a new class of plans that do not have to comply with the ACA, extending the duration of short-term plans from policies that last for 3 months to policies that can last just short of one year. Under this rule, insurers may also be allowed to renew a short-term plan for an enrollee after that period is up.

Companies selling these plans can make large profits at consumers’ expense, and the plans do not have to cover pre-existing conditions, provide essential health benefits, include adequate provider networks, or comply with a host of other key protections, as we describe in Seven Reasons the Trump Administration's Short-Term Health Plans Are Harmful to Families. Moreover, if many young and healthy people are drawn into these plans, the plans will undermine the market for real coverage, driving up prices in the ACA-compliant marketplace.

Now is the time to take action to prevent short-term plans from harming consumers and insurance markets throughout the country. Here we outline how advocates, consumers, and states can take action to address this harmful rule.

Stakeholders can urge HHS to stop the spread of harmful short-term plans

It’s important that HHS hears from stakeholders all over the country about how short-term plans will leave those who enroll in them without adequate protection from the costs of care, and how those who seek to stay in the market for comprehensive coverage will experience spikes in premiums and jeopardized access to coverage if short-term plans are allowed to expand.

The short-term plan rule will also burden states and insurance companies that are interested in making comprehensive coverage affordable. Particularly if the rule allows the proliferation of short-term plans that last for up to 12 months to take effect after insurers have already planned their premium pricing for 2019, these plans will cause chaos for comprehensive insurance providers and states alike in maintaining a stable insurance market. These expanded short-term plans should not be put on the market at all, but at the very least HHS should delay implementation of the final rule to give states and insurers more time to plan for it to take effect.

Advocates, consumers, state officials, health care providers, and other stakeholders can all make a difference by commenting to HHS about these problems. Stakeholders can also make a difference by urging state policymakers and officials to comment on the rule as well. Comments should urge HHS to stop or at the very least delay implementation of the rule on short-term plans. Comments should be submitted here by 5 PM on Monday, April 23rd.

States can take direct action to protect against short-term plans

States can take direct action to protect consumers and insurance markets from the harm of short-term limited duration plans. States have broad authority to regulate short-term plans and can adopt new laws or issue new regulations or guidance that exceeds the standards in the proposed rule. Given other upcoming changes in 2019 that will also pose risks for the market, including the repeal of the individual mandate penalty, taking swift action is particularly important.

These strategies can provide protections for consumers and help limit market instability caused by the expansion of short-term plans.

States can prohibit short-term plans altogether. Massachusetts, New Jersey, and New York currently prohibit short-term plans, and California is pursuing a prohibition via SB910 (Hernandez).

States can require that short-term plans comply with all protections that health plans sold on the comprehensive individual market meet. For example, a few states prohibit short-term plans from refusing to sell to a consumer based on their health status— those plans cannot “underwrite,” or take people’s health status into consideration when people seek to buy them. States could protect consumers from the harm of short-term plans by applying the same requirements to them as apply to comprehensive insurance. These include requirements for external review, essential health benefits and state benefit mandates, network adequacy, medical loss ratios, and pre-existing condition protections, including a requirement that plans do not charge people rates based on their health status. States can also ensure companies that offer short-term plans have to pay any existing state-based assessments, such as insurer taxes. States could also consider assessing short-term plan insurers and using those funds for a reinsurance program for plans that meet ACA standards.

  • States can restrict the duration of short-term plans. For example, states can pass laws prohibiting short-term plans from lasting for longer than 3 months. This will ensure that these plans are used as they were intended- to fill short gaps in coverage- and not as a long-term solution to substitute for real coverage. Some states already limit the period for which a short-term plan can be sold to less than the nearly 12 months allowed in the proposed federal rule. For a good index of such state laws, see State Regulation of Coverage Options Outside of the Affordable Care Act: Limiting Risk to the Individual Market from the Georgetown Center on Health Insurance Reform.
  • States can prohibit short-term plans from renewing consumers’ policies beyond their allowed duration: To ensure that short-term plans are not treated as a replacement for comprehensive insurance, states can prohibit plans from renewing their contract with a consumer once the duration of the short-term plan is over. For example, a state could prohibit insurers from selling a short-term policy to anyone who has enrolled in one during the last 12 months.
  • States can require strong disclosure and marketing rules to ensure short-term plans are transparent about their shortfalls. States can require short-term plans to include prominent disclosures in marketing materials (including websites), application forms, and other forms to warn people about what the plans do not cover and how they may expose consumers to high out-of-pocket costs. For example, Colorado requires short-term plans to provide such a disclosure to warn people about the lack of coverage for pre-existing conditions in short-term plans. Additionally, states can require short-term plans to supply simple, clear, and comparable information about what benefits they do and do not cover, and corresponding cost-sharing requirements. Comprehensive plans must comply with requirements to produce a summary of benefits and coverage, and states could apply such requirements to short-term plans as well.

There are additional protections that states may want to consider to protect people from the harms of short-term plans. For additional discussion of how states can take action, see State Options to Protect Consumers and Stabilize the Market: Responding to President Trump’s Executive Order on Short-Term Health Plans by the Georgetown Center on Health Insurance reform.

State legislators and insurance departments can lead the efforts to enact these important protections. And, they along with any health care ombudsman programs or other organizations that assist health insurance consumers in the state may know of complaints and problems regarding short-term plans that can inform what protections the state should enact. State attorneys general, Better Business Bureaus, or other consumer protection agencies may also be aware of problems and can be helpful allies in efforts to prevent short-term plans from harming consumers and insurance markets alike.

Additionally, the National Association of Insurance Commissioners (NAIC) is currently updating its model law for states on Accident and Sickness Insurance Minimum Standards (Model #170) and its companion regulation, the Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (Model #171). NAIC consumer representatives including Families USA are advocating to make these models as robust possible in their protection of consumers and the market from the damage of short-term plans. (See the March 2018 report by the NAIC consumer representatives and former Montana regulator Christina Goe, Non-ACA-Compliant Plans and the Risk of Market Segmentation.)

This article was brought to you by Families USA by Claire McAndrew on April 2018.


Half of Americans think the ACA marketplace is collapsing

Most Americans are happy with the insurance they buy on the individual market, yet those same people think the markets are collapsing before their eyes.

A poll by the Kaiser Family Foundation  (Kaiser Health News is an editorially independent program of the foundation), released Tuesday, found that 61 percent of people enrolled in marketplace plans are satisfied with their insurance choices and that a majority say they are not paying more this year compared with last year’s premium costs.

Yet, more than half of the overall public — 53 percent — also think the Affordable Care Act’s marketplaces are “collapsing.”

Experts have warned that some policy actions supported by the Trump administration would undermine the market, including repealing the penalty for going without insurance and giving people the option to buy short-term plans. Such plans are often less expensive but cover fewer benefits. They are not automatically renewable, and insurers are able to charge people with medical conditions more — or exclude them altogether.

But only about one-fifth of people who obtain coverage on the individual market were even aware that the mandate penalty had been repealed as of 2019, according to the poll. It is still in effect this year.

Nine in 10 enrollees said they would still buy insurance without the penalty, and 34 percent said the mandate was a “major reason” they chose to buy insurance at all.

“They may have been prompted to buy the coverage in the first place because of the mandate,” said Sabrina Corlette, a professor at Georgetown University’s Health Policy Institute. “But now that they’ve got it, they clearly value it.”

Most of the people who buy plans because they don’t get coverage through work or the government, 75 percent, said they bought insurance to protect against high medical bills, and 66 percent said peace of mind was a major reason.

In February, President Donald Trump eased some of the restrictions on short-term insurance plans, allowing them to cover people for 12 months instead of three.

Critics worried this alternative would draw people away from traditional insurance plans and weaken the individual market. According to the poll, though, only 12 percent of respondents buying on that market said they’d be interested in buying one of the short-term plans.

Georgetown’s Corlette cautioned that these numbers could change when people are faced with an actual choice next open enrollment season.

“If you look at how these things are marketed, your average consumer will not be able to tell that these products are any different from a traditional health plan,” she said.

Most people said they didn’t face a premium increase this year. Thirty-four percent said their premiums were “about the same” as last year and 23 percent said they actually went down.

That’s not surprising, said Joseph Antos, a resident scholar at the conservative American Enterprise Institute who follows the health industry. Many consumers saw their premium subsidies rise too.

Thirty-five percent of people said one of the major reasons they bought insurance was because government subsidies made it affordable.

The subsidies that people receive, Antos noted, went up to offset the premium increase in many cases, especially if consumers took the advice of experts and shopped around for coverage.

“They’re buying because they feel they need insurance and that their net premiums and deductibles add up to something they’re willing to buy,” Antos said.

The poll was conducted Feb. 15-20 and March 8-13 among 2,534 adults. The margin of sampling error is +/-2 percentage points for the full sample, +/-7 percentage points for all non-group enrollees and +/-9 percentage points for marketplace enrollees.

Source: Kaiser Health News senior correspondent Julie Appleby contributed to this report.
By Rachel Bluth, Kaiser Health News | April 03, 2018 at 10:06 AM | Originally published on BenefitsPro


Summarized Report of The Kaiser Health Tracking Poll March 2018 for Non-Group Enrollees

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Kaiser Health Tracking Poll – March 2018: Non-Group Enrollees

Key Findings: As part of the Republican tax reform plan signed into law at the end of 2017, lawmakers eliminated the ACA’s individual mandate penalty starting in 2019. About one-fifth of non-group enrollees (19 percent) are aware the mandate penalty has been repealed but is still in effect for this year. Regardless of the lack of awareness, nine in ten non-group enrollees say they intend to continue to buy their own insurance even with the repeal of the individual mandate. About one-third (34 percent) say the mandate was a “major reason” why they chose to buy insurance.

Survey: 9 in 10 people with non-group health insurance plan to continue buying insurance despite the repeal of the individual mandate penalty About half the public overall believes the ACA marketplaces are “collapsing,” including six in ten of those with coverage purchased through these marketplaces. In fact, across party identification and insurance type, more say the marketplaces are “collapsing” than say the marketplaces are not collapsing. Overall, the population who buy their insurance through the ACA marketplace report being satisfied with the insurance options available to them during the most recent open enrollment period and more than half give the value of their insurance a positive rating. Yet, some (32 percent) experienced problems while trying to renew or buy their coverage and six in ten marketplace enrollees say they are worried about the possible lack of health insurance coverage in their areas.

In 2017, President Trump issued an executive order directing his administration to expand the availability of non-renewable short-term insurance plans, and regulations have been proposed to implement the order. When asked whether non-group enrollees would prefer to purchase such a plan or prefer to keep the plan they have now, the vast majority (84 percent) say they would keep the plan they have now while 12 percent say they would want to purchase a short-term plan. The most common response offered by people who are uninsured when asked the reason why they don’t have health insurance is that it is too expensive and they can’t afford it (36 percent), followed by job-related issues such as unemployment or their employer doesn’t offer health insurance (20 percent).

Who Are Non-Group Enrollees?
This report examines people’s experiences with the current health insurance market focusing on individuals who currently have health insurance they purchased themselves (referred to as “non-group enrollees” throughout the report). This is comprised of individuals who purchase their own insurance through an Affordable Care Act (ACA) marketplace (“marketplace enrollees”) as well as those who purchase their insurance outside of the ACA markets. 1 In the first half of 2017, 10.1 million people had health insurance that they purchased through the ACA exchanges or marketplaces. 2 For comparison, the report also examines individuals ages 18-64 without health insurance (“uninsured”) as well as those who get their insurance through their employer (“employer-sponsored insurance”).

These extended interviews were conducted as part of the February and March Kaiser Health Tracking Polls and were completed after the close of the law’s fifth open enrollment period, which ended earlier this year. The Individual Mandate as part of the Republican tax reform plan signed into law at the end of 2017, lawmakers eliminated the ACA’s individual mandate penalty. The tax plan reduced the individual penalty for not having health insurance to zero beginning in 2019, effectively repealing the least favorable provision of the ACA (according to polling conducted by Kaiser Family Foundation). There is still uncertainty among the public as well as among the groups most directly affected by the individual mandate (non-group enrollees and the uninsured) on the status of the mandate.

—kff.org


Employer Responsibility Under the Affordable Care Act

Here's a helpful chart from the Kaiser Family Foundation to decipher the penalties employers may have for not offering ACA coverage in 2018.


The Affordable Care Act does not require businesses to provide health benefits to their workers, but applicable large employers may face penalties if they don’t make affordable coverage available. The employer shared responsibility provision of the Affordable Care Act penalizes employers who either do not offer coverage or do not offer coverage that meets minimum value and affordability standards. These penalties apply to firms with 50 or more full-time equivalent employees. This flowchart illustrates how those employer responsibilities work.

Read the article.

Source:
Kaiser Family Foundation (5 March 2018). "Employer Responsibility Under the Affordable Care Act" [Web Blog Post]. Retrieved from address https://www.kff.org/infographic/employer-responsibility-under-the-affordable-care-act/


Despite Compressed Sign-Up Period, ACA Enrollment Nearly Matches Last Year’s

President Trump decided to take away ACA, but that didn’t stop people from signing up. Read this article for the shocking numbers of enrollment.


A day after President Donald Trump said the Affordable Care Act “has been repealed,” officials reported that 8.8 million Americans have signed up for coverage on the federal insurance exchange in 2018 — nearly reaching 2017’s number in half the sign-up time.

That total is far from complete. Enrollment is still open in parts of seven states, including Florida and Texas, that use the federal healthcare.gov exchange but were affected by hurricanes earlier this year. The numbers released Thursday by the Department of Health and Human Services also did not include those who signed up between midnight Dec. 15 and 3 a.m. ET on Dec. 16, the final deadline for 2018 coverage, as well as those who could not finish enrolling before the deadline and left their phone number for a call back.

And enrollment has not yet closed in 11 states — including California and New York — plus Washington, D.C., that run their own insurance exchanges. Those states are expected to add several million more enrollees.

The robust numbers for sign-ups on the federal exchange — 96 percent of last year’s total — surprised both supporters and opponents of the health law, who almost universally thought the numbers would be lower. Not only was the sign-up period reduced by half, but the Trump administration dramatically cut funding for advertising and enrollment aid. Republicans in Congress spent much of the year trying to repeal and replace the law, while Trump repeatedly declared the health law dead, leading to widespread confusion.

On the other hand, a Trump decision aimed at hurting the exchanges may have backfired. When he canceled federal subsidies to help insurers offer discounts to their lowest-income customers, it produced some surprising bargains for those who qualify for federal premium help. That may have boosted enrollment.

“Enrollment defied expectations and the Trump administration’s efforts to undermine it,” said Lori Lodes, a former Obama administration health official who joined with other Obama alumni to try to promote enrollment in the absence of federal outreach efforts. “The demand for affordable coverage speaks volumes — proving, yet again, the staying power of the marketplaces.”

“The ACA is not repealed and not going away,” tweeted Andy Slavitt, who oversaw the ACA under President Barack Obama.

The tax bill passed by Congress this week repeals the fines for those who fail to obtain health coverage, but those fines do not go away until 2019. Still, that has added to the confusion for 2018 coverage.

And it remains unclear whether Congress will make another attempt to repeal the law in 2018.

“I think we’ll probably move on to other issues,” Senate Majority Leader Mitch McConnell (R-Ky.) said in an interview Friday with NPR.

Read further.

Source:
Rovner J. (21 December 2017). "Despite Compressed Sign-Up Period, ACA Enrollment Nearly Matches Last Year’s" [Web Blog Post]. Retrieved from address https://khn.org/news/despite-compressed-sign-up-period-aca-enrollment-nearly-matches-last-years/view/republish/

Individual Insurance Market Performance in Late 2017

In this article from the Kaiser Family Foundation, we will take a look at the individual insurance market performance as of late 2017. This is a great article for employers to get the low down on how to understand and read performance charts, as well as prepare for any instability in the next quarter.


Concerns about the stability of the individual insurance market under the Affordable Care Act (ACA) have been raised in the past year following exits of several insurers from the exchange markets, and again with renewed intensity in recent months during the debate over repeal of the health law. Our earlier analysis of first quarter financial data from 2011-2017 found that insurer financial performance indeed worsened in 2014 and 2015 with the opening of the exchange markets, but showed signs of improving in 2016 and stabilizing in 2017 as insurers began to regain profitability.

In this brief, we look at recently-released third quarter financial data from 2017 to examine whether recent premium increases were sufficient to bring insurer performance back to pre-ACA levels. These new data from the first nine months of 2017 offer further evidence that the individual market has been stabilizing and insurers are regaining profitability, even as political and policy uncertainty and the repeal of the individual mandatepenalty as part of tax reform legislation cloud expectations for 2018 and beyond.

Third quarter financial data reflects insurer performance in 2017 through September, before the Administration ceased payments for cost-sharing subsidies effective October 12, 2017. The loss of these payments during the fourth quarter of 2017 will diminish insurer profits, but nonetheless, insurers are likely to see better financial results in 2017 than they did in earlier years of the ACA Marketplaces.

We use financial data reported by insurance companies to the National Association of Insurance Commissioners and compiled by Mark Farrah Associates to look at the average premiums, claims, medical loss ratios, gross margins, and enrollee utilization from third quarter 2011 through third quarter 2017 in the individual insurance market.1 Third quarter data is year-to-date from January 1 – September 30. These figures include coverage purchased through the ACA’s exchange marketplaces and ACA-compliant plans purchased directly from insurers outside the marketplaces (which are part of the same risk pool), as well as individual plans originally purchased before the ACA went into effect.

Medical Loss Ratios

As we found in our previous analysis, insurer financial performance as measured by loss ratios (the share of health premiums paid out as claims) worsened in the earliest years of the Affordable Care Act Marketplaces, but began to improve more recently. This is to be expected, as the market had just undergone significant regulatory changes in 2014 and insurers had very little information to work with in setting their premiums, even going into the second year of the exchange markets.

Loss ratios began to decline in 2016, suggesting improved financial performance. In 2017, following relatively large premium increases, individual market insurers saw significant improvement in loss ratios, averaging 81% through the third quarter. Third quarter loss ratios tend to follow the same pattern as annual loss ratios, but in recent years have been lower than annual loss ratios.2 Though 2017 annual loss ratios are likely to be impacted by the loss of cost-sharing subsidy payments during the last three months of the year, this is nevertheless a sign that individual market insurers on average were beginning to stabilize in 2017.

Margins

Another way to look at individual market financial performance is to examine average gross margins per member per month, or the average amount by which premium income exceeds claims costs per enrollee in a given month. Gross margins are an indicator of performance, but positive margins do not necessarily translate into profitability since they do not account for administrative expenses. As with medical loss ratios, third quarter margins tend to follow a similar pattern to annual margins, but generally look more favorable as enrollees are still paying toward their deductibles in the early part of the year, lowering claims costs for insurers.

Looking at gross margins, we see a similar pattern as we did looking at loss ratios, where insurer financial performance improved dramatically through the third quarter of 2017 (increasing to $79 per enrollee, from a recent third quarter low of $10 in 2015). Again, third quarter data tend to indicate the general direction of the annual trend, and while annual 2017 margins are unlikely to end as high as they are in the third quarter, these data suggest that insurers in this market are on track to reach pre-ACA individual market performance levels.

Underlying Trends

Driving recent improvements in individual market insurer financial performance are the premium increases in 2017 and simultaneous slow growth in claims for medical expenses. On average, premiums per enrollee grew 17% from third quarter 2016 to third quarter 2017, while per person claims grew only 4%.

Figure 3: Average Third Quarter Individual Market Monthly Premiums and Claims Per Person, 2011 – 2017
One concern about rising premiums in the individual market was whether healthy enrollees would drop out of the market in large numbers rather than pay higher rates. While the vast majority of exchange enrollees are subsidized and sheltered from paying premium increases, those enrolling off-exchange would have to pay the full increase. As average claims costs grew very slowly through the third quarter of 2017, it does not appear that the enrollees today are noticeably sicker than last year.

On average, the number of days individual market enrollees spent in a hospital through the third quarter of 2017 was similar to third quarter inpatient days in the previous two years. (The third quarter of 2014 is not necessarily representative of the full year because open enrollment was longer that year and a number of exchange enrollees did not begin their coverage until mid-year 2014).

Figure 4: Average Third Quarter Individual Market Monthly Hospital Patient Days Per 1,000 Enrollees, 2011 – 2017
Taken together, these data on claims and utilization suggest that the individual market risk pool is relatively stable, though sicker on average than the pre-ACA market, which is to be expected since people with pre-existing conditions have guaranteed access to coverage under the ACA.

Discussion

Third quarter results from 2017 suggest the individual market was stabilizing and insurers in this market were regaining profitability. Insurer financial results as of the third quarter 2017 – before the Administration’s decision to stop making cost-sharing subsidy payments and before the repeal of the individual mandate penalty in the tax overhaul – showed no sign of a market collapse. Third quarter premium and claims data from 2017 support the notion that 2017 premium increases were necessary as a one-time market correction to adjust for a sicker-than-expected risk pool. Although individual market enrollees appear on average to be sicker than the market pre-ACA, data on hospitalizations in this market suggest that the risk pool is stable on average and not getting progressively sicker as of late 2017. Some insurers have exited the market in recent years, but others have been successful and expanded their footprints, as would be expected in a competitive marketplace.

While the market on average is stabilizing, there remain some areas of the country that are more fragile. In addition, policy uncertainty has the potential to destabilize the individual market generally. The decision by the Administration to cease cost-sharing subsidy payments led  some insurers to leave the market or request larger premium increases than they would otherwise. A few parts of the country were thought to be at risk of having no insurer on exchange, though new entrants or expanding insurers have since moved in to cover all areas previously at risk of being bare. Signups through the federal marketplace during the recently completed open enrollment period were higher than many expected, which could help to keep the market stable. However, continued policy uncertainty and the repeal of the individual mandate as part of tax reform legislation complicate the outlook for 2018 and beyond.

Methods

We analyzed insurer-reported financial data from Health Coverage Portal TM, a market database maintained by Mark Farrah Associates, which includes information from the National Association of Insurance Commissioners. The dataset analyzed in this report does not include NAIC plans licensed as life insurance or California HMOs regulated by California’s Department of Managed Health Care; in total, the plans in this dataset represent at least 80% of the individual market. All figures in this data note are for the individual health insurance market as a whole, which includes major medical insurance plans sold both on and off exchange. We excluded some plans that filed negative enrollment, premiums, or claims and corrected for plans that did not file “member months” in the third quarter but did file third quarter membership.

To calculate the weighted average loss ratio across the individual market, we divided the market-wide sum of total incurred claims by the sum of all health premiums earned. Medical loss ratios in this analysis are simple loss ratios and do not adjust for quality improvement expenses, taxes, or risk program payments. Gross margins were calculated by subtracting the sum of total incurred claims from the sum of health premiums earned and dividing by the total number of member months (average monthly enrollment) in the individual insurance market.

 

Source:

Cox C., Semanskee A., Levitt L. (4 January 2018). "Individual Insurance Market Performance in Late 2017" [web blog post]. Retrieved from address https://www.kff.org/health-reform/issue-brief/individual-insurance-market-performance-in-late-2017/


FREE ACA RESOURCES FOR SMALL BUSINESSES

From The ACA Times, we've pulled this article that lists out some helpful resources for small businesses.


The federal government provides free online resources to help small businesses better understand the requirements of the Affordable Care Act (ACA) and how they might be able to offer health insurance to their employees. Here are some we thought might be helpful.

How the Affordable Care Act affects small businesses: This web page hosted by HealthCare.gov explains how the ACA can impact a small business with 1 to 50 full-time equivalent employees.

SHOP Guide: This web page on Healthcare.gov provides information for small businesses on how they can offer a Small Business Health Options Program (SHOP) insurance to their employees. The web page has links to help businesses learn more about SHOP and whether they qualify to offer such coverage to employees.

The Small Business Health Care Tax Credit: Healthcare.gov, the Taxpayer Advocate Service and the IRS both provide web pages that provide information that helps small businesses determine if they are eligible to take advantage of tax credits if they offer SHOP to their employees.

The Future of SHOP: The Centers for Medicare and Medicaid Services (CMS) is providing information on how CMS will be exploring a more efficient implementation of the Federally-facilitated SHOP Marketplaces in order to promote insurance company and agent/broker participation and make it easier for small employers to offer SHOP plans to their employees, while maintaining access to the Small Business Health Care Tax Credit.

 

Read the original article here.

Source:
Sheen R. (21 November 2017). "FREE ACA RESOURCES FOR SMALL BUSINESSES" [Web blog post]. Retrieved from address https://acatimes.com/free-aca-resources-for-small-businesses/


More than Half of Uninsured People Eligible for Marketplace Insurance Could Pay Less for Health Plan than Individual Mandate Penalty

Things are not looking up for the uninsured. Pay less and reach out to your health insurance professionals today. Want more facts? Check out this blog article from Kaiser Family Foundation.


new Kaiser Family Foundation analysis finds that more than half (54% or 5.9 million) of the 10.7 million people who are uninsured and eligible to purchase an Affordable Care Act marketplace plan in 2018 could pay less in premiums for health insurance than they would owe as an individual mandate tax penalty for lacking coverage.

Within that 5.8 million, about 4.5 million (42% of the total) could obtain a bronze-level plan at no cost in 2018, after taking income-related premium tax credits into account, the analysis finds.

Most people without insurance who are eligible to buy marketplace coverage qualify for subsidies in the form of tax credits to help pay premiums for marketplace plans (8.3 million out of 10.7 million). Among those eligible for premium subsidies, the analysis finds that 70 percent could pay less in premiums than what they’d owe as a tax penalty for lacking coverage, with 54 percent able to purchase a bronze plan at no cost and 16 percent contributing less to their health insurance premium than the tax penalty they owe.

Among the 2.4 million uninsured, marketplace-eligible people who do not qualify for a premium subsidy, 2 percent would be able to pay less for marketplace insurance than they’d owe for their 2018 penalty, the analysis finds.

The Affordable Care Act’s individual mandate requires that most people have health coverage or be subject to a tax penalty unless they qualify for certain exemptions. The individual mandate is still in effect, though Congress may consider repealing it as part of tax legislation.

Consumers can compare their estimated 2018 individual mandate penalty with the cost of marketplace insurance in their area with KFF’s new Individual Mandate Penalty Calculator.

The deadline for ACA open enrollment in most states is Dec. 15, 2017.

 

You can read the original article here.

Source:

Kaiser Family Foundation (9 November 2017). "ANALYSIS: More than Half of Uninsured People Eligible for Marketplace Insurance Could Pay Less for Health Plan than Individual Mandate Penalty" [Web blog post]. Retrieved from address https://www.kff.org/health-reform/press-release/analysis-more-than-half-of-uninsured-people-eligible-for-marketplace-insurance-could-pay-less-for-health-plan-than-individual-mandate-penalty/


us capitol

Understanding your Letter 226-J

Letter 226-J is the initial letter issued to Applicable Large Employers (ALEs) to notify them that they may be liable for an Employer Shared Responsibility Payment (ESRP). The determination of whether an ALE may be liable for an ESRP and the amount of the proposed ESRP in Letter 226-J are based on information from Forms 1094-C and 1095-C filed by the ALE and the individual income tax returns filed by the ALE’s employees.

What you need to do

  • Read your letter and attachments carefully. These documents explain the ESRP process and how the information received affects the computation.
  • The letter fully explains the steps to take if you agree or disagree with the proposed ESRP computation.
  • Complete the response form (Form 14764) indicating your agreement or disagreement with the letter.
  • If you disagree with the proposed ESRP liability, you must provide a full explanation of your disagreement and/or indicate changes needed on Form 14765 (PTC Listing). Return all documents as instructed in the letter by the response date.
  • If you agree with the proposed ESRP liability, follow the instructions to sign the response form and return with full payment in the envelope provided.

You may want to

  • Review the information reported on Forms 1094-C and 1095-C for the applicable year to confirm that the information filed with the IRS was accurate because the IRS uses that information to compute the ESRP.
  • Keep a copy of the letter and any documents you submit.
  • Contact us using the information provided in the letter if you have any questions or need additional time to respond.
  • Send us a Form 2848 (Power of Attorney and Declaration of Representative) to allow someone to contact us on your behalf. Note that the Form 2848 must state specifically the year and that it is for the Section 4980H Shared Responsibility Payment.

Answers to Common Questions

Why did I receive this letter?
The IRS used the information you provided on Forms 1094/5-C and determined that you are potentially liable for an ESRP.

Where did the IRS get the information used to compute the ESRP?
The IRS used form 1094/5-C filed by the ALE and the individual income tax returns of your full-time employees to identify if they were allowed a premium tax credit.

Is this letter a bill?
No, the letter is the initial proposal of the ESRP

What do I need to do?
Review the letter and attachments carefully and complete the response form by the date provided.

What do I do if the information is wrong or I disagree?
Follow the instructions in the letter to provide corrected information for consideration by the IRS. The IRS will reply with an acknowledgement letter informing you of their final determination.

Do I have appeal rights?
Yes, the acknowledgement letter that you receive will spell out all your rights, including your right to appeal.

General Information

For more info visit ACA information center for Applicable Large Employers

Here’s an excerpt from the 226J letter, and a link to the official sample.

 

Source:

IRS (9 November 2017). "Understanding your Letter 226-J" [Web blog post]. Retrieved from address https://www.irs.gov/individuals/understanding-your-letter-226-j


IRS to reject returns lacking health coverage disclosure

 Where does the IRS stand on ACA (Affordable Care Act)? It's time to know. Check out this article from Benefits Pro for more information.


The Internal Revenue Service has announced that for the first time, tax returns filed electronically in 2018 will be rejected if they do not contain the information about whether the filer has coverage, including whether the filer is exempt from the individual mandate or will pay the tax penalty imposed by the law on those who don’t buy coverage.

Tax returns filed on paper could have processing suspended and thus any possible refund delayed.

The New York Times reports that the IRS appears to be acting in contradiction to the first executive order issued by the Trump White House on inauguration day, in which Trump instructed agencies to “scale back” enforcement of regulations governing the ACA.

The move by the IRS reminds people that they can’t just ignore the ACA, despite the EO. Although only those lacking coverage have to pay the penalty, everyone has to indicate their insurance coverage status on their filing.

While the uninsured rate for all Americans dipped to a historic low of 8.6 percent in the first three months...5 states with lowest, highest uninsured rates

According to legal experts cited in the report, the IRS is indicating that although the administration may have leeway in how aggressively it enforces the mandate provision, it’s still in effect unless and until Congress specifically repeals it.

While many people thought they didn’t have to bother with reporting, and many insurers have raised rates anticipating that the lack of a mandate would lead to lower enrollments and higher costs for them, that’s not the case. Initially the IRS did not reject returns because the law was new.

The penalty is pretty steep; for those who don’t have coverage, it can range from $695 for an individual to a maximum of $2,085 for a family or 2.5 percent of AGI, whichever is higher. Not everyone without coverage would be penalized, though; if their income is too low or if the lowest-priced coverage costs more than 8.16 percent of their income, they’ll avoid the penalty.

That said, it’s not known how stringently the IRS will be in enforcing the mandate. But at least taxpayers will know whether they’re exempt from the penalty or whether they’re obligated to buy coverage.

 

 You can read the original article here.
Source:
Satter M. (23 October 2017). "IRS to reject returns lacking health coverage disclosure" [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/10/23/irs-to-reject-returns-lacking-health-coverage-disc?ref=hp-top-stories&slreturn=1509378329

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