8 things employers must do to comply with post-DOMA rules
Originally posted November 21, 2013 by Paula Aven Gladych on https://www.benefitspro.com
Employers need to ensure their retirement plans are in compliance with new rules regarding same-sex marriage.
With the Supreme Court’s decision in June to strike down a key provision of the Defense of Marriage Act allowing the federal government to recognize same-sex marriages and subsequent clarification by the IRS and the Department Labor, many plan sponsors now have to recognize same-sex couples when it comes to retirement benefits.
Only 14 states and the District of Columbia allow same-sex marriage. But according to new rules which went into effect in mid-September, same-sex couples are entitled to all of the federal rights entitled to opposite sex couples, including workplace benefits —even if the couple resides in a state that doesn’t recognize same-sex marriage.
According to Laura Pergine and Janet Luxton of Vanguard Strategic Retirement Consulting, there are eight things plan sponsors must do to make sure their retirement plans are in compliance post-DOMA:
1. Review plan documents.Vanguard recommends that plan sponsors sift through plan documents to determine if there is a definition of “spouse.” If a definition is there, they need to make sure it is compliant. The company said that plan sponsors also should review provisions in their documents that refer to domestic partnerships or civil unions.
2. Review marital status when it comes to beneficiary determination. If a plan participant who is legally married to a same-sex spouse dies, but his beneficiary designation is for someone he isn’t married to, that person may not receive the promised benefits unless the same-sex spouse waives his spousal rights.
3. Review qualified domestic relations procedures.Legally married same-sex couples have the same rights and obligations as opposite-sex couples if their marriage is dissolved. Qualified Domestic Relation Order procedures need to be reviewed to make sure there are no gender-specific references. If there are, they should be removed, Vanguard said.
4. Hardship withdrawals for same-sex spouses are now available.Plan sponsors need to follow the same rules regarding hardship withdrawals as those that apply to opposite-sex spouses.
5. Required minimum distributions.Gender-specific references to required minimum distributions in plan documents need to be removed. Spouses have more options regarding the treatment of distributions received as beneficiary payments.
6. Gender-specific references to rollovers in plan documents or distribution forms need to be removed. Spouses have more flexibility than non-spouses in how they treat rollover distributions, according to Vanguard.
7. Gender-specific references should be eliminated from participant communications. Plan sponsors should consider targeted communication to those employees most likely affected by these changes. Same-sex couples should be reminded to update their beneficiary designations.
8. Previous payment/Denial of benefits based on marital status. The IRS plans to issue guidance on whether or not same-sex couples who were denied an annuity benefit prior to the DOMA decision can now receive that benefit because of the Supreme Court decision.
Cost of benefits, ACA compliance main concerns of midsized businesses
Originally posted by Andrea Davis on https://ebn.benefitnews.com
The cost of health coverage, the Affordable Care Act and the volume of government regulations are the top three concerns of midsized business owners and executives, according to a new survey from the ADP Research Institute.
Seventy percent of midsized businesses – those with between 50 and 999 employees – surveyed said their biggest challenge in 2013 is the cost of health coverage and benefits. ACA legislation came in as the No. 2 concern, cited by 59%, a 16% increase over last year. And rounding out the top three list of concerns was the level and volume of government regulations, cited by 54%.
“What was a surprise to us was that midsized business owners’ level of confidence in their ability to comply with the laws and regulations doesn’t reflect reality,” says Jessica Saperstein, division vice president of strategy and business development at ADP.
For example, the survey finds that, overall, 83% of midsized businesses are confident they’re compliant with payroll tax laws and regulations, nearly one-third reported unintended expenses – fines, penalties or lawsuits – as a result of not being compliant.
“The majority say they’re confident but many of them are experiencing these fines and penalties,” says Saperstein. “On average, it’s about six times a year and the average cost of one of these penalties or fines is $90,000.”
Nearly two-thirds of benefits decision-makers at midsized companies are not confident they understand the ACA and what they need to do to be compliant. Ninety percent aren’t confident their employees understand the effects of the ACA on their benefits choices.
FSA use-it-or-lose-it rule changed!
Originally posted October 31, 2013 by Kathryn Mayer on https://www.benefitspro.com
Use-it-or-lose-it is no more.
The U.S. Department of the Treasury and the IRS on Thursday issued a notice modifying the longstanding “use-or-lose” rule for health flexible spending arrangements. Participants now can carry over up to $500 of their unused balances remaining at the end of a plan year.
The rule will go into effect for the 2014 plan year.
Effective immediately, employers that offer FSAs that don't include a grace period will have the option of allowing employees to roll over up to $500 of unused funds at the end of this plan year.
An employer cannot offer a FSA carryover provision and an FSA grace period at the same time, officials said.
For nearly 30 years, employees eligible for FSAs have been subject to the use-it-or-lose-it rule, meaning any account balances remaining unused at the end of the year are forfeited.
FSAs allow employees to contribute pre-tax dollars to pay for out-of-pocket health care expenses – including deductibles, copayments, and other qualified medical, dental or vision expenses not covered by the individual’s health insurance plan.
Health savings accounts, on the other hand, are similar vehicles, but allow participants to build up savings over time.
The move, the departments announced, is making “FSAs more consumer-friendly and provide added flexibility.”
“Across the administration, we’re always looking for ways to provide added flexibility and commonsense solutions to how people pay for their health care,” Treasury Secretary Jacob Lew said in a statement. “Today’s announcement is a step forward for hardworking Americans who wisely plan for health care expenses for the coming year.”
The change responds directly to more than 1,000 public comments the Treasury fielded. Employers and employees complained about the difficulty for employees to predict future needs for medical expenditures. Many FSA users said they scrambled at year end to spend the remaining amounts, often buying unnecessary medical supplies.
IRS officials said they believe a $500 rollover cap is appropriate because most employees who lost money under the rule lost far less than that amount.
Bob Natt, executive chairman of Alegeus Technologies, a health and benefits payments firm, said he’s grateful the administration has “eliminated the most significant barrier to FSA participation – namely consumers’ fear of losing their money.”
He said that though more than 85 percent of large employers offer FSAs, only about 20 percent of eligible employees actually enroll, mainly for “fear of forfeiting unused funds at the end of the plan year.”
“With this new provision in effect, there is really no reason for eligible employees not to enroll and contribute to an FSA," Natt said. "All contributions are tax-free, the employee’s full election is available on the first day of the plan year, and now unused funds up to $500 can be rolled over to the next plan year.”
Alegeus Technologies has been lobbying for four years to modify the use-it-or-lose-it provision, he said.
Wageworks, a benefits management provider of consumer-directed benefits, has also been pushing the administration for flexibility on FSA provisions. The company's CEO, Joe Jackson, said it's a very "positive change" and a long time coming.
"The timing of this change could not be better, as most companies are now in their open enrollment period," Jackson said. "We encourage all eligible employees to take advantage of this change and sign up for an FSA and lower their health care expenses.”
The rule will have far-reaching effects: An estimated 14 million families participate in FSAs.
Under the Patient Protection and Affordable Care Act, the amount an employee can set aside in an FSA dropped to $2,500 this year. The $500 carryover won’t reduce the $2,500 maximum a worker can contribute to a FSA each year, Treasury officials said.
Shutdown stalls remaining DOMA guidance
Originally posted October 10, 2013 by Andrea Davis on ebn.benefitnews.com
While much attention has been focused on the federal government shutdown and its effect on Affordable Care Act regulations, employers are still awaiting guidance on another key piece of legislation with benefits plan implications, the Defense of Marriage Act.
“The good news is the most critical guidance has already been issued,” says Todd Solomon, partner in the employee benefits practice of Will McDermott & Emery. “The IRS and DOL have already come out with their notices that explain the state of celebration rule for federal tax purposes so we know the way forward for plan administration.”
Plan sponsors, however, are still awaiting federal guidance on two key issues: retroactivity and the deadline for plan amendments.
“The retroactivity is a bigger issue because plans can and probably will be getting claims with or without the IRS guidance,” says Solomon. “The theory was that the IRS was going to address what employers had to do with retroactivity, and employers were going to hold their breath and hope nothing came with respect to retroactive claims until the IRS guidance came out.”
A delay in the guidance will only affect employers if they get claims for retroactive benefits, says Solomon, with the most likely scenario being a claim for a survivor annuity within a pension plan.
“If a same-sex employee died six months ago, for example, and the plan didn’t pay a survivor benefit to the same-sex spouse, the spouse can make a claim. The plan has to decide whether it’s going to pay that benefit and there’s no clear answer right now on whether the plan is required to,” he says.
“Plans without guidance are in a bit of a box — on the one hand, you could say ‘just pay,’ because that makes the issue go away but, of course, just paying costs money to the trust and if it’s not something that’s required under the terms of the plan, money should never leave a retirement plan trust.”
The IRS also needs to issue guidance about a deadline for when plans need to revise their definition of the term ‘spouse.’
“Absent guidance, it would need to be done by the end of the year,” says Solomon. “If they [federal agencies] want to extend that, they’d need to do that fairly quickly. … it’s not hard guidance to issue so I would guess the shutdown should not impact that too much as long things don’t go on too long.”
Following the Supreme Court’s decision striking DOMA down last June, the Internal Revenue Service and Department of Labor issued regulations adopting a state-of-marriage approach — anyone who is legally married in a state or country recognizing same-sex marriage is now treated exactly the same as an opposite-sex spouse for all qualified plan purposes, including the taxation of medical, dental and vision benefits.
State exchanges not viable choice for active employees
Originally posted October 03, 2013 by Andrea Davis on https://ebn.benefitnews.com
The state and federally facilitated health care exchanges are not a realistic option for active employees, according to one expert. Bryce Williams, managing director of exchange solutions for Towers Watson maintains that while the public exchanges offer a good solution for early retirees and COBRA-eligible participants, “it’s not yet a viable alternative to move [active employees] to state or public exchanges.”
Employers showed little confidence in public exchanges, according to a recent survey from Towers Watson that was released prior to the public exchange launch earlier this week. Eighty-eight percent of employers said they were not confident that the public health insurance exchanges would provide a viable alternative to employer-sponsored coverage for active full-time employees in 2014.
“They were prescient in terms of what would happen given the complexity of the launch,” says Williams.
Employers expressed skepticism even heading into 2015, with 71% saying they were not confident the public exchanges would provide a viable alternative to employer-sponsored coverage for active full-time employees.
“We believe later this fall public exchanges will right themselves and be in good shape, but certainly they’ve gotten off to a bumpy start,” says Williams, adding he continues to see employers not making any big changes this year. “They want to see results.”
Still, “public exchanges continue to be a great alternative to early retiree coverage, to any of the mini-meds they’re providing to seasonal and part-time workers – this [public exchange] is a vastly better ecosystem and [offers] better coverage,” he says.
Towers Watson runs three private exchanges: OneExchange Retiree, a Medicare exchange for retirees; OneExchange Active, a self-insured exchange for active employees; and OneExchange Access, a concierge service that connects part-time employees, early retirees, dependents and others who aren’t eligible for employer-sponsored coverage, to the state exchanges.
Small-group employers skip SHOP, move to individual exchanges
Originally posted October 03, 2013 by Elizabeth Galentine, additional reporting by Brian Kalish on https://ebn.benefitnews.com
While President Barack Obama has frequently told Americans, “if you like your plan, you can keep it,” that is not ringing true for some small groups across the country. A number of small-group employers are already planning to send their employees to the Affordable Care Act’s exchanges. It’s an outcome predicted by many in the industry, but one surprise to some is the choice of exchange.
Rather than utilize the Small Business Health Options Program (SHOP exchanges) that the ACA has set up for employer groups of 50 or fewer full-time employees, some brokers are finding their clients are more interested in sending their employees to the individual exchanges instead.
Kelly Fristoe, owner of Financial Partners in Wichita Falls, Texas, is wary of the fact that his state’s SHOP exchange only has one insurance company participating at this point. Rather than deal with potential consequences of that, he is steering his small-group clients interested in the exchange market toward the individual plans. “We’ve had some small-group customers — not a lot — telling us that they’re going to dump their plan and send their employees to the individual market,” says Fristoe, president of the Texas Association of Health Underwriters.
“So we’ve made some arrangements with those employers to be able to be the agent that sits with those employees. They’re going to let us have time with their employees to educate them on purchasing insurance through the marketplace and qualifying for a subsidy.”
Because he wants to keep those individuals as clients no matter what, Fristoe was particularly “frustrated” Tuesday when technical glitches kept him from checking out the plans on healthcare.gov. “I’m needing to salvage that business and I need to know what those individual rates are so that I can go back to those people and show them how to qualify for a subsidy, if they qualify, and get them enrolled,” he says. “… We’re going to be the agent that’s going to try to salvage that business instead of it going to one of our competitors.”
David Smith, vice president at Ebenconcepts in Morrisville, N.C., agrees that accessing the information on exchange rates is of the utmost importance right now. “You have to recognize that we’re going to have some percentage of very small groups that have already decided they’re not going to offer a group health insurance plan next year,” he says. “So if you have four or five employees a lot of them have made a business decision to not do it, and they just want to get a feel for what it’s going to cost their employees when they make that decision.”
As an administrator for the testing process for agents to be certified with Covered California, Neil Crosby, director of sales at Warner Pacific Insurance Services in Westlake Village, Calif., is surprised that the majority of people attending his classes so far have been serving the individual market. “I’m shocked at how many … are coming to primarily do it individually. There’s so many of them,” he says. “Some of the ones that do individual they also do small group, of course, but a lot of them are representing the individual. I’d say maybe 65% of people in the room.”
A lot of agency owners “want to get a feel for” for the individual market exchanges, says Ebenconcepts’ Smith, because it is very appealing for micro groups, those with nine, 10 employees, to “go to the marketplace for subsidized coverage and maybe pay less for that than they would for their group insurance today.” An employer who is looking at saving $3,500 to $5,000 in premiums by making the switch, “they’re not walking that border, they’re running to that border,” says Smith.
A common sentiment among several brokerages contacted by EBA, EBN’ssister publication, in the days following the opening of the exchanges was that they have yet to take a look at the individual or SHOP exchanges. While online enrollment in SHOP exchanges run by the federal government is delayed until Nov. 1, applicants still have the option of submitting over the phone or through the mail.
Some are using the delay as a reason not to take a look at SHOP exchanges yet, but Michael Wolff, chief operations and financial officer at Dickerson Employee Benefits in Los Angeles, cautions against such an approach. “I don’t think that’s a good idea. … I think you want to have all the tools in your tool box. In California at least they have been successful in negotiating with the carriers to come to the table and give their best offers … there’s a chance they are giving a very good rate,” he says.
Wolff references the SHOP exchange tax credit for small businesses with low-wage earners that is available for 2014. “Of course we don’t know how long that will be upheld, but it’s a real tax advantage for next year at least,” he says. “… Why not have it in your portfolio to show? Everybody’s talking about it. You don’t want to say, ‘Well, I don’t know about it, but it’s probably bad because [it’s] the government [offering it].’ Well, maybe some clients will believe you, but it’s a better story if you say, ‘Yeah, I have that, and this is what they offer.’ Why would you not?
“Our model is … to bring a representation of the market to the agent and to the client,” adds Wolff, whose agency is one of only four in the state of California authorized to be a wholesaler for Covered California’s SHOP exchange, which did open on time Oct. 1. “This is a market phenomenon right now that we want to offer and explain. That is our role. We are ready.”
Meanwhile, like millions of others in the last few days, Don Garlitz, executive director of exchange technology provider bswift Exchange Solutions, logged on to a couple of SHOP exchanges to do a little window shopping. However, he could not get past the registration screen. If people are going to purchase such plans, the window shopping experience needs to improve, he says.
“People will look until they [get] what they want. [On Tuesday] I wasn’t able to find any kind of window shopping experience, which will be important for consumers,” he said. “They will not want to go through a 35-45 minute application process just to look at a rate. The call center I spoke with was not sure if there would be window shopping available. That will be an important thing for the federal government to consider.”
Health Q&A: ‘Obamacare’ Exchanges Start as Questions Abound
Originally posted September 30, 2013 by Alex Nussbaum on https://eba.benefitnews.com
Just don’t expect the usual ending to an election: a clear winner at the end of the day.
While the exchanges are expected to open on time, that milestone is unlikely to settle the 3 1/2-year grudge match over the Affordable Care Act. A long enrollment season, complicated by a threatened U.S. government shutdown and a growing list of technical glitches, means it may be as late as April before it’s known how many uninsured Americans sign up under the law.
While the shutdown won’t stop the roll-out, which is largely funded through mandatory appropriations that can’t be curtailed by congressional inaction, it’s an open question whether it will lessen public enthusiasm to enroll. In the meantime, technical glitches are beginning to surface.
People in Oregon, for example, won’t be able to enroll in a plan for the first few weeks unless they go through a broker or designated nonprofit groups, and the exchange in the nation’s capital won’t include premium prices until mid-November.
The Obama administration says other glitches are inevitable as the system starts up. The question is how serious and how long it takes the exchange to fix any issues. An extended crash or a problem calculating subsidies could be an embarrassment for the White House -- and sour consumers just as the administration tries to convince them to enroll.
‘In Between’
“Is it going to be a train wreck, a complete failure? The answer is no,” said Dan Schuyler, a director at Leavitt Partners, a Salt Lake City-based health care consultant. “Is it going to be completely seamless and instantaneous? No. It is going to be somewhere in between.”
The exchanges are at the heart of the law’s efforts to cover more of the 48 million uninsured Americans. About 7 million people will use the system to buy subsidized insurance by the end of the first open enrollment period on March 31, according to congressional projections.
Republicans will spotlight any problem as proof the law is a disaster. Democrats say they’ll overcome technical glitches and the law will sell itself as the uninsured gain benefits. Polls show most Americans side with the skeptics.
“The lights will go on Oct. 1, but they may flicker,” said Jocelyn Guyer, a director at the Washington-based consultant Manatt Health Solutions. “I worry the most about people making premature judgments on the first couple of weeks.”
The Breakdown
Here’s a primer on what to look for, based on interviews with consultants, insurers, analysts and state and federal officials:
Q: Who runs the exchanges?
A: Fourteen states have their own on-line exchanges, with the rest run in whole or part by the U.S. government.
Q: Who will use them?
A: The exchanges are open to people who buy coverage on their own and employees of businesses with 50 or fewer workers, as well as those currently shut out of insurance because of cost or a medical condition.
Subsidies are available, on a sliding scale, to those making as much as four times the poverty level, which is $11,500 for a single person and $24,000 for a family of four. Those making less than 138% of poverty will be eligible for Medicaid if they live in one of the 26 states set to expand the program.
Sign-Up Numbers
Q: How many people will sign up early on?
A: Call it lowering expectations or a realistic assessment: either way, supporters say they don’t expect a flood of enrollees this week.
Insurance buyers have to pay their first month’s premium within 30 days of choosing a plan and the policies don’t take effect until Jan. 1. As a result, the Obama administration says most people will wait until late November or December. Another surge may come in March as the end of the enrollment period nears.
A: The exchanges will march on. That’s because the 2010 law relies primarily on mandatory spending, which congressional inaction can’t stop. It’s the budget category used for benefits such as Medicare, the U.S. health plan for the elderly and disabled, and Social Security.
The U.S. Health and Human Services Department said in a Sept. 27 memo it “would continue large portions of ACA activities, including coordination between Medicaid and the marketplace” in the event of a temporary shutdown.
Core Unaffected
“Many of the core parts of the health-care law are funded through mandatory appropriations and wouldn’t be affected,” Gary Cohen, the director of the Center for Consumer Information and Insurance Oversight at HHS, told reporters on Sept. 24.
Q: Okay, so most of the exchanges will be up and running on time. How do you access them?
A: If all goes as planned, those not covered through work will be able to go on line or dial a call-in center, learn if they’re eligible for tax credits and choose from a menu of private plans. The exchanges can be found atwww.healthcare.gov.
Q: Who won’t use them?
A: Most of us. People who have insurance through their jobs, about 55% of Americans, aren’t directly affected by the law and are automatically in compliance with its mandate that everyone be insured. So are older Americans covered through Medicare.
Individual Mandate
Q: Do I have to buy insurance?
A: Yes, or pay a fine. The law requires that most Americans be insured starting Jan. 1. That can be through work, a government program like Medicare or Medicaid, or by buying on the exchanges. Those who opt out face a penalty starting next year at $95 or 1% of household income, whichever is higher. By 2016, it rises to $695 per individual or 2.5% of household income, whichever is greater.
Q: Is the technology for the exchanges in place?
A: Building the exchanges has been a massive technical lift, requiring computer systems with real-time links to dozens of state and U.S. agencies and private carriers. The administration says the system is ready to go, albeit with delays and reduced capabilities in places like Oregon and Washington.
Company Mandate
Q: Has anything else been delayed?
A: The law requires that large companies offer benefits to anyone working more than 30 hours a week. In July, that rule was postponed until 2015 to ease the burden of compliance.
Last week, officials said a Spanish-language version of the federal website won’t be ready until mid-October and an exchange for small business workers won’t take enrollments until November. Nevada and California also won’t transmit names of new customers to insurers for about a month, Schuyler said.
Q: Will the coverage be affordable?
A: It depends on who you are and where you live. Six in 10 uninsured people will find insurance for less than $100 a month because of subsidies and expansions to Medicaid, the administration said last week. Those who make too much for assistance may be in for sticker shock: the same report said even bare-bones coverage, known as a bronze plan, will average almost $3,000 a year for individuals.
For families, the cost of mid-level coverage, a silver plan, ranges from $559 a month to $1,216 a month in 36 states where the federal government controls the exchanges. Tax credits will reduce the cost for many: a family earning $50,000 a year may find the price of a bronze plan cut to zero in some states.
Young and Healthy
Q: How will insurers cover the costs for all those added sick people?
A: By signing up the young and healthy. The administration said it needs about 40% of new enrollees to be in this group to help balance costs from older, sicker customers and keep premiums stable.
A: No. The polls indicate consistent confusion. Three in five say the law will raise medical costs, and more say they’ll be worse off under it than better, according to a Bloomberg National Poll conducted Sept. 20-23. Half also said Republicans should back off on demands to defund the law, a schizophrenic view that’s persisted for months.
Q: So does anybody like this law?
A: Yes. Sixty-one percent of Hispanics and 91% of blacks, according to a September poll by the Pew Research Center and USA Today. That could make the sales pitch easier because those two groups comprise the bulk of the uninsured in the U.S. – 47% of the total, according to an analysis by the Kaiser Family Foundation. The law also is designed to benefit people with pre-existing medical conditions: insurers will no longer be able to deny them coverage.
Big States
Q: What’s happening in the big states?
A: Supporters have focused on states such as Texas, Florida, Ohio and New Jersey, where many uninsured live and Republican governors refuse to help in enrollment. California, which has the most uninsured, is spending $100 million to promote its exchange while New York plans to spend $27 million to train community groups and brokers to assist consumers.
Q: How much help do consumers get?
A: The administration is spending $67 million to train health workers, hospitals and other groups, called navigators, to help people enroll. Grants didn’t arrive until August, though, and many began a two-week training course this month. If they’re not up to the task, enrollment may suffer.
“You’re going to have tens of thousands if not hundreds of thousands of individuals who have never been exposed to health insurance before -- don’t know what a premium is, what a deductible is,” said Schuyler, the Leavitt Partners consultant.
Changes Needed
Q: Do Democrats think the law needs to change?
A: Some have called for changes: Families of workers whose company plan doesn’t include dependents can’t get subsidies. A tax credit for small businesses has been criticized as ineffective. And there are bipartisan bills in Congress to change a provision that may encourage businesses to cut workers’ hours to avoid insuring them. A quick fix seems unlikely: Republicans say they won’t tinker with a law they consider fundamentally flawed.
Q: What’s happening with Medicaid?
A: While the government health program for low-income Americans is expanding under the law, about half the states have opted out. The Obama administration last week agreed to let Arkansas use the money to help poor citizens buy private insurance on its exchange. The deal could entice other states where Republicans have opposed the expansion.
Expense Rising
Q: Is Obamacare making health-care more expensive?
A: Time will tell.
Medical costs have moderated in the U.S. the past three years, offering some relief to the public and private sectors alike. Prices for medical care rose 1% in July compared with a year earlier, the lowest growth rate since the 1960s, according to U.S. Commerce Department data.
There’s a debate among economists about how much credit to give the health law compared with a weak economy and employer moves to curtail benefits. Obamacare supporters say at least some of the slowdown is thanks to regulations and pilot programs in the act aimed at reducing waste in the medical system.
HHS delays SHOP Web enrollment launch
Originally posted September 26, 2013 by Allison Bell on https://www.lifehealthpro.com
The U.S. Department of Health Human Services (HHS) is pushing the launch of the federal small-group public exchange Web enrollment system back to November.
The delay in the Small Business Health Options Program (SHOP) online enrollment system start affects only the states in which HHS will be running federally facilitated exchanges (FFEs).
States that are running their own state-based exchanges can still get their Web-based SHOP enrollment systems going Oct. 1, the official launch date for the new Patient Protection and Affordable Care Act (PPACA) public health insurance exchange system.
The delay will also have no direct effect on the FFE individual exchange program.
Reuters is reporting that Obama administration officials told it that small employers in FFE states will still be able to enroll in SHOP plans Oct. 1 by filling out paper forms or calling an FFE call center.
John Greene, a vice president at the National Association of Health Underwriters, said his group has learned that agents and brokers will be able to sell SHOP plans Oct. 1.
“It won’t be an electronic train,” Greene said. “It will be a little horse and buggy. But they can still get it done.”
Having the ability to start the SHOP enrollment process before the federal exchange Web enrollment system could help brokers get an edge over that system in the SHOP market.
The initial exchange enrollment rules call for employers to make payments by Dec. 15 to have coverage take effect Jan. 1.
The SHOP will be open to employers with 50 or fewer full-time employees. Some small employers that sign up for coverage through the SHOP and have relatively modestly paid employees can qualify for temporary small-group health insurance tax credits. The Congressional Budget Office has predicted that the SHOP program will be much smaller than the individual exchange program and may attract employers with only a few million employees.
The initial exchange enrollment rules call for employers to make payments by Dec. 15 to have coverage take effect Jan. 1.
The SHOP will be open to employers with 50 or fewer full-time employees. Some small employers that sign up for coverage through the SHOP and have relatively modestly paid employees can qualify for temporary small-group health insurance tax credits.
HHS is saying that it will open a call center aimed specifically at small employers Oct. 1. Employers can call the center at (800) 706-7893 from 9 a.m. to 7 p.m. EST.
HHS also is working with the Small Business Administration to organize SHOP webinars.
About 40,000 agents and brokers have been trained to sell SHOP coverage, HHS says.
HHS releases federal exchange rates
Originally posted by Allison Bell on September 25, 2013 on https://www.benefitspro.com
With the public exchanges under the Patient Protection and Affordable Care Act preparing to open their phone lines and their Web enrollment sites Tuesday, the Obama administration is getting closer to revealing what federal exchange plans might actually cost.
A health policy office at the U.S. Department of Health and Human Services on Wednesday released a report showing what the average starting price for individual bronze, silver, gold and catastrophic exchange coverage will be for a 27-year-old in each state in which HHS will be running a "federally facilitated exchange."
The report also shows what the starting price for each level of individual coverage will be in the biggest city in each FFE state; what a 27-year-old individual coverage buyer with an annual income of $25,000 and access to exchange tax credits would pay for the lowest-cost coverage out of pocket; and what a family of four with an annual income of $50,000 would payout-of-pocket if it did or did not have access to the tax credits.
In Texas, for example, the average cost of the cheapest bronze coverage available to a 27-year-old would be $139 per month. The average cost of the cheapest gold coverage available would be $225 per month.
In Houston, the state's largest city, bronze coverage for the 27-year-old would start at $138 per month.
A look at medically underwritten 2013 rates available from eHealthInsurance.com for a 27-year-old who lives in Houston suggests that typical carriers there would now charge that consumer about $100 to $300 for coverage per month, with a majority charging $100 to $200 per month.
The family of four might have to pay $727 per month for silver coverage if it had no tax credits. Tax credits could cut the monthly cost of the coverage to $282.
Vermont posted preliminary exchange rates in April, and State Refor(u)m has posted a map showing that 27 states and the District of Columbia had at least posted preliminary rates for their state-based or federally facilitated exchanges as of Monday.
HHS — the parent of the Centers for Medicare & Medicaid Services, the agency running the exchanges — has repeatedly postponed the release date for FFE rate information without explaining why.
Some states have used state public records laws to justify releasing FFE exchange plan information on their own.
Other states, including Texas, have treated the FFE plan rates as confidential information.
HHS officials said the cost of the "second lowest cost silver plan" in the District of Columbia and 47 states is 16 percent lower than what HHS had expected, based on Congressional Budget Office projections.
HHS Secretary Kathleen Sebelius said in a statement that high prices have shut many consumers out of the health insurance market in the past.
"We excited to see that rates in the marketplace are even lower than originally projected," Sebelius said.
Open Enrollment Tips Under Health Care Reform
Originally posted September 6, 2013 on https://www.thestreet.com
This year's open enrollment season for selecting workplace benefits comes just before some of the biggest changes of health care reform go into effect.
Never before has it been more important to pay attention as you choose a health plan for you and your family.
"You really need to do your homework this year," says Carol Taylor, an employee benefit adviser with D & S Agency Inc. in Roanoke, Va.
Here are 5 tips for open enrollment this fall.
1. Understand the health care reform individual mandate: You must have coverage.
Starting in 2014, federal law will require virtually everyone to have health insurance or face a tax penalty. So if your employer doesn't offer health insurance for next year or your company's health plan doesn't meet certain minimum standards, you'll need to shop for health insurance on your own. Your employer must let you know by Oct. 1 whether its health plan meets "minimum standards," says Taylor, a member of the National Association of Health Underwriters National Legislative Council.
To meet the minimum standards under health reform, employers must offer coverage at the "bronze level," which is one of the four levels of coverage defined under health reform provisions. The other three are silver, gold and platinum. They are based on actuarial value, which measures the amount of financial protection the policy offers, or the percentage of health costs a plan would pay for an average person. For a bronze plan, the insurance would cover 60 percent of all health care costs for an average person. Enrollees, on average, would be responsible for paying 40 percent of the costs.
If you're shopping for an individual health plan, you can buy one from an insurance company directly or through your state's new health insurance marketplace. The online health insurance marketplaces, sometimes called exchanges, are scheduled to open for business Oct. 1. Coverage can begin Jan. 1.
If you're not eligible for coverage through an employer or your employer's plan doesn't meet government standards, then you might qualify for a tax credit to save money on premiums when you buy a marketplace plan. People who earn up to 400 percent of the federal poverty level -- that's $94,200 for a family of four in 2013 -- will be eligible for premium subsidies in the form of tax credits. People who earn up to 250 percent of the federal poverty level will be eligible for lower deductibles and copayments.
2. Don't assume your family will qualify to save money in the new marketplaces.
Think you can get a better deal in the new marketplace than what your employer is offering? Maybe not. If you and your family have access to affordable employer-sponsored health insurance that meets minimum standards, then you and your dependents are not eligible for premium tax credits or help with cost-sharing - which includes aid in paying deductibles, copayments or co-insurance -- in the new marketplaces. You can shop there, but you'll pay full price.
"Affordable" means you pay no more than 9.5 percent of your household income toward the coverage for yourself. The amount you pay for your dependents to be covered on the employer-sponsored plan isn't factored into the equation. So even if you have to pay a bundle to keep your dependents on the employer plan, they're still not eligible for subsidies in the marketplace if the portion you pay to cover yourself is deemed affordable and they have access to the employer plan.
That could put a lot of moderate-income families with a sole breadwinner in a financial bind, says Mindy Anderson-Wallis, president of Employee Benefit Solutions of Indiana in Lafayette, Ind.
3. Compare benefits and health insurance plan networks.
Check out the provider networks of the plans you're offered to make sure your doctors and preferred hospital system are included, especially if you have a serious or chronic condition and are undergoing treatment. Given all the standards that must be met, one way health plans may cut costs is to cut the provider networks, Taylor warns.
You pay substantially more out of pocket to see providers outside the network with a preferred provider organization (PPO) plan. Except in special circumstances, you typically pay for the full cost of services for providers outside the network with a health maintenance organization (HMO) plan.
4. Understand that your employer doesn't have to offer coverage in 2014, and it won't have to offer coverage to your spouse.
Starting in 2015, the Patient Protection and Affordable Care Act will require employers with at least 50 workers to provide affordable health insurance for workers and their dependents or pay a penalty. The so-called employer mandate was supposed to go into effect in 2014, but the Obama administration delayed implementation for a year.
Still, most employers are gearing up for the mandate, and there's one tricky technicality you should know. The federal government will define dependents as children, not spouses. So even when the employer mandate goes into effect, your workplace won't have to offer coverage to your spouse.
Nobody knows yet how this will play out, but Anderson-Wallis says she doesn't think the definition of "dependent" will have much impact.
"I don't think we'll see large employers not continue to cover spouses," she says. "Benefits are seen as a way to attract and retain employees."
If your spouse isn't eligible for employer-sponsored coverage, then he or she will qualify for a tax credit to save money on a health plan in the new marketplace if your household income is less than 400 percent of the federal poverty level.
5. Crunch the numbers and pick the health insurance plan with the best value.
Compare the out-of-pocket costs of each health plan if your employer offers a choice of plans. Your costs include:
- Deductible.
- Doctor visits, urgent care and emergency room copayments.
- Co-insurance -- the percentage the health plan pays after you satisfy the deductible.
- Prescription drug copayments or co-insurance.
- Your portion of the premium.
Consider how often you go to the doctor, the medicines you take and what services you might need in the next year. Run some scenarios to see how much each health plan would cost, and choose one that meets your unique needs.
"Don't just roll the dice without calculating," Anderson-Wallis says.