Why employers need to pay attention to ACA's insurance exchanges
Originally posted November 06, 2013 by Al Karr on www.federaltimes.com
When the Affordable Care Act first passed, most self-insured employers thought they wouldn't need to pay much attention to the new health insurance exchanges (or marketplaces) created by the law. After all, they were intended to help uninsured people get access to insurance, and their employees were obviously insured. And President Obama did promise that if people liked their employer coverage, they would get to keep it. So there wasn't really anything for self-insured employers to worry about, right?
Well, it turns out that things aren't that simple. Employers do need to pay attention to the exchanges that have launched in their states — either by the state or the federal government — because even if their employees don't use them, the functioning of the exchanges depends pretty heavily on some critical interactions among exchanges, employers, and their employees.
Most employers are aware by now that the requirement for large employers to offer coverage has been delayed for one year. But there are still many provisions in the ACA that place burdens and obligations on employers related to the exchanges. Most importantly, all employers (regardless of whether they currently offer insurance) must still provide notification to their employees describing the exchanges, and explaining the implications of applying for a tax credit on the exchange. There are also regulatory processes for exchanges to verify with employers information that individuals provide on exchange enrollment applications.
So employers are starting to realize that they really do need a communications strategy for how to tackle exchange education with their employees. Simply mailing the required notification form to all employees and calling it a day won't cut it.
Confused employees
Employees are going to have questions — lots of them. Some have been following the health care reform discussion, and those that hadn't been following it probably are now, thanks to the major issues the federal exchange has been having since its launch on October 1. Employees are seeing TV ads, print ads in magazines and newspapers, in addition to the media coverage on the exchange launch. And policy experts have noticed that some of these advertisements are totally devoid of any mention that the exchange is Obamacare or the ACA, and most don't mention anything at all about the individual mandate and that the exchanges are how to fulfill the mandate.
Employees could come into contact with navigators, certified application counselors, or in-person assisters (individuals hired by exchanges to assist with enrollment), all of which will be emphasizing the exchanges and the individual mandate, but probably don't know much about employer-sponsored plans in general, let alone each individual's circumstances regarding employer-sponsored coverage.
Recent polls have shown that as many as half of Americans believe the ACA was either repealed, or held unconstitutional, so these messages will no doubt be confusing for employees to hear. Despite all of the media coverage of the disastrous exchange launch, there are still people out there who might know about exchanges, but don't know what the ACA means to them.
Employers should be taking action now to devise a communications strategy aimed at their employees that is relevant to their workforces and fits appropriately within their company cultures. We all know that employees don't read the volumes of (boring) information employers provide during open enrollment season. Educating employees about exchanges is going to require a different and more ongoing approach. Some of the tactics employers should consider include:
- Human resources staff should be meeting with executive leadership to devise and invest in an employee communications strategy
- Contracting with a call center to do outbound calling to every employee
- Requiring all employees to meet face-to-face with an HR staff member
- Producing short videos about the exchanges for use in company communications
- Requiring attendance at "all staff" meetings
- Creating one-pagers to post on company intranet sites or to distribute through company newsletters
Navigators
One thing that has been discussed by some employers, but that may not be the best thing to rely on as a sole tactic, are the navigators. While a lot of organizations have become navigators, there is general agreement among policy makers that the program itself is woefully underfunded. And since some exchanges are run by states themselves, and the federal government runs others, it’s anticipated that the number of navigators hired and the training they will receive will vary from state to state. Also, there is no statutory requirement that navigators be trained on the nuances of employer-sponsored coverage, so there is no guarantee that they will be able to answer employees' questions about the coverage they are offered at work.
How Employers Can Prepare for PPACA Compliance in 2014
Where has 2013 gone?
Has 2013 left you with questions about Benefit Reform, Human Resources, Retirement Reform or what's coming in 2014? Don't worry! We have an expert from each department to answer your questions. See how talking with our experts can give you the insight you need during health care reform.
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When we say experts, we mean EXPERTS
Jamie Charlton and Frank Lopez were on a recent episode of Business Talk. Watch the video now to hear what they had to say about Health Care Reform, how it will effect you, and what employers need to know moving forward.
Speakers
Jamie Charlton, CFP
Is it time to offer your employees more?
Show your employees that their company understands the impact this payroll tax change has had at home and that you are there to help them by offering a Financial Wellness Workshop.
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Americans will have an extra six weeks to buy health coverage before facing penalty
Originally posted by Sandhya Somashekhar, Amy Goldstein and Juliet Eilperin on https://www.washingtonpost.com
The Obama administration said last Wednesday night that it will give Americans who buy health insurance through the new online marketplaces an extra six weeks to obtain coverage before they incur a penalty.
The announcement means that those who buy coverage through the exchange will have until March 31 to sign up for a plan, according to an official with the Department of Health and Human Services.
Administration officials said that the rejiggered deadline is unrelated to the many technical problems that have emerged with the Web site, HealthCare.gov, in its first three weeks. Instead, they said, it is designed to clear up a timing confusion about the 2010 law, which for the first time requires most Americans to buy health coverage or face a penalty.
Under the law, health plans available through the new federal or state marketplaces will start Jan. 1, but the open enrollment period runs through the end of March. The law also says that people will be fined only if they do not have coverage for three months in a row. The question has been this: Do people need to be covered by March 31, or merely to have signed up by then, given that insurance policies have a brief lag before they take effect?
The administration made clear Wednesday night that people who buy coverage at any point during the open enrollment period will not pay a penalty.
It is the latest sign that the health-care law remains a moving target, even after the launch of the federal insurance marketplace, which has faced myriad problems that have frustrated many people trying to sign up for coverage.
Contractors and others have begun assigning blame for the Web site troubles, and the fault-finding will get its first extensive public airing Thursday, when four of the contractors involved in the project will testify before the House Energy and Commerce Committee.
In the written testimony submitted to the panel in advance, CGI Federal, the main contractor on the project, takes partial blame for the site’s shortcomings. But it also notes that the Centers for Medicare and Medicaid Services (CMS), an agency within HHS, was the “ultimate responsible party for the end-to-end performance” of the site. And it blames a piece created by another contractor, Quality Software Services (QSSI), for creating the initial bottleneck.
QSSI built part of the online registration system that crashed shortly after the Oct. 1 launch and locked out many people for days. In a statement, the company counters that it was not the only one responsible for the registration system, which is now working.
“There are a number of other components to the registration system, all of which must work together seamlessly to ensure registration,” said Matt Stearns, a spokesman for UnitedHealth Group, the parent company for QSSI. “The [QSSI-built] tool has been working well for weeks.”
But both contractors are likely to be taken to task by Republican and Democratic committee members. They were among the vendors who testified at a Sept. 10 Energy and Commerce Committee hearing that their parts of the project were moving along well, and that the Web site would be ready Oct. 1. Those assurances are likely to be questioned Thursday.
The hearing is the first of many planned by Republicans, who are expected not only to question the contractors but also to examine the administration’s management of the project. Some Republicans have called for the ouster of HHS Secretary Kathleen Sebelius, who is scheduled to appear before the panel next Wednesday.
President Obama and his deputies have given no indication that they are considering replacing Sebelius. White House press secretary Jay Carney has consistently defended her, and officials have been focusing on fixing the site rather than assessing blame for its defects.
The administration, however, has sought to assure jittery business leaders and insurers that can fix the enrollment system. On Tuesday, Vice President Biden told business supporters in a conference call that the nation’s best technology minds were working on the site and urged them to “stick with us.” And on Wednesday, top Obama advisers met with insurance executives to discuss system repairs.
CMS had enormous responsibility, and was charged with ensuring that there would be a mechanism for millions of Americans to easily sign up for coverage in time for some of the law’s main benefits to begin Jan. 1. Officials have said ease of signing up is critical to the administration meeting its goal of getting 7 million uninsured people — many of them young and healthy — to sign up.
But the agency assumed an outsize role in the management of the project, coordinating the activities of 55 contractors rather than hiring a separate firm to serve as a systems integrator. That is likely to be a key issue during Thursday’s hearing.
People familiar with the project have said the time frame was too tight for adequate testing, which one source said would have highlighted the problems.
There also have been inconsistencies about how and when the decision was made to scrap a key feature of the Web site, with QSSI telling congressional investigators that it did not know about the major change until the site’s launch. But in the written testimony the company plans to deliver Thursday, it says it found out shortly before the rollout date.
Republicans have been eager to learn more about how and when the decision was made to end that feature. The feature would have allowed people to browse plans and rates before signing up for an account. Technology experts have said the last-minute decision to stop it put too much pressure on a different tool that was set up to handle a small number of simultaneous users, crashing the site.
People familiar with the project give conflicting accounts of the reason for the move. The decision was made at a two-day meeting in late September to which CMS invited all its major contractors. According to one person familiar with the project, CGI gave a presentation that convinced CMS officials that the shopping feature was not ready.
Another person close to the project had a slightly different account, saying that CGI believed that the feature was, in fact, ready.
Republican lawmakers have alleged that the administration made the change to hide the cost of insurance plans from consumers.
“Evidence is mounting that political considerations motivated the decision,” said a letter sent to two administration officials Tuesday from members of the House Oversight and Government Reform Committee, including Chairman Darrell Issa (R-Calif.).
Lena H. Sun, Ed O’Keefe and Tom Hamburger contributed to this report.
Most workers worry benefits will fall short
Originally posted October 18, 2013 by Dan Cook on benefitspro.com
The twin promises of “affordable” and “protection” contained in the Patient Protection and Affordable Care Act sound great. But they’re not enough, at least yet, to assuage the health insurance concerns of most employees.
Because most folks still receive health insurance at work, the throw-the-cards-up-in-the-air nature of health care reform has people worried that their employer may not provide coverage that protects them from the vagaries of life.
That’s the major contention of a white paper from Colonial Life & Accident Insurance Co., which advises employers that they need to look at their benefits plan from a holistic viewpoint if they want it to serve as a recruiting and retention tool.
“Although medical insurance is the cornerstone of a good benefits package, we encourage employers to think about their benefits as a whole right now,” intoned Steve Bygott, assistant vice president of core market services at Colonial Life. “Small and large employers face ongoing cost concerns, in addition to new legal requirements, that challenge their ability to remain competitive. Taking their eye off the big picture of employee benefits could be a costly mistake.”
Employers need to reassure their workers that their coverage will protect them and their families from both routine and unforeseen medical costs — if it does. And if not, employers need to address coverage gaps and serve as a resource to employees for filling those gaps in a cost-effective manner.
When Colonial’s researchers delved into whether employees trusted that their coverage would offer enough protection and be affordable, here’s what they found:
- 83 percent of U.S. employees (full-time and/or part-time, with or without coverage) are at least somewhat concerned about their ability to pay for health premiums.
- 82 percent are concerned with expenses no longer covered by their health insurance plan and the addition of or an increase in co-payments and deductible amounts.
- 81 percent express concern about unexpected medical expenses (emergency room visits, major surgery, etc.).
Given this level of concern, Colonial’s white paper emphasized the need to master a way to talk to workers about health coverage so that their concerns could be alleviated.
“Both large and small employers will need to pay more attention to benefits communication in the years ahead to help them attract and retain a strong workforce,” said Bygott. “Workers will look to their employers to provide them with good, reliable information so they can make the best benefits decisions for themselves and their families.”
Colonial suggested that employers that can’t afford to pay for coverage for their workers offer them voluntary benefits combined with a clear education about how those benefits work and what they cost.
"Voluntary benefits and personalized benefits education can be a tremendous asset to employers looking for a cost-effective way to offer a competitive benefits package," says Bygott. "Though health care reform has everyone asking lots of questions now, staying focused on the big picture will help employers stay competitive in the long run."
Can Obamacare Beat Your Employer's Insurance?
Originally posted October 14, 2013 by Susan Ladika on https://finance.yahoo.com
If you already have health insurance through your job, you're probably wondering whether Obamacare will give you some new options. Will you be able to comparison-shop for a plan on the new online exchanges that might be better than your employer health insurance? The answer is a big, resounding "maybe."
Like almost everything else having to do with health care reform, there are plenty of nuances and caveats. Trying to decipher them and choose the best health insurance plan for your situation "makes homeowners insurance seem really simple," says Brian Haile, senior vice president for health policy at the tax services company Jackson Hewitt.
Exchanges will be open to all, but ...
The exchanges are online health insurance marketplaces set up under the Affordable Care Act. In 34 states, the marketplaces operate through the federal government's HealthCare.gov website, while 16 states and the District of Columbia are running their own exchanges.
Even if your employer already offers health insurance, there's nothing to prevent you from shopping on your state's exchange. However, if you decide to leave your work-based plan and purchase coverage on the exchange, you "may not qualify for some of the benefits that the uninsured have," notes E. Denise Smith, a professor of health care management at Gardner-Webb University in Boiling Springs, N.C.
Here's the big hiccup: Unless your employer's coverage for an individual is considered unaffordable under the law (that is, if your share of the premiums costs more than 9.5 percent of your household income) or inadequate (picking up less than 60 percent of the cost of covered benefits), you aren't eligible for a government subsidy to help pay for your insurance. Subsidies are one of the things that can make plans on the new state exchanges appealing.
Subsidies in the form of tax credits are available even if you earn up to 400 percent of the federal poverty level, currently about $46,000 for an individual and $94,000 for a family of four. The subsidies vary based on income and the size of your family.
Trade in your employer plan?
And that brings us back to the central question: If you have employer health insurance, should you check out the Obamacare exchanges anyway? There are differing opinions.
"It would generally not benefit an employee to leave their employer-sponsored plan," Smith concludes, adding that your employer would be under no obligation to help pay for an exchange plan.
Haile says you may not be able to do better than your work-based coverage. "Look at how robust your employer plan is" and the benefits it provides, such as whether it includes dental and vision care, which are not part of the essential health benefits that must be offered with plans sold in the Obamacare exchanges, he says.
Still, if your employer-sponsored health insurance seems to eat up a big chunk of your budget, you might want to explore your options on the state exchange, Haile says.
Few workers have 'unaffordable' plans
Again, one of the key criteria of whether you'd qualify for subsidized insurance through your state's exchange is if your share of the premium for an individual health plan where you work would amount to more than 9.5 percent of your household income. Whether you take more expensive family coverage doesn't matter; the benchmark is what an individual policy would cost.
The rule means that someone earning $40,000 a year and paying $3,775 for individual coverage would not be eligible for a subsidy, says Brian Poger, CEO of Benefitter, a software company that's helping employers navigate their way through health care reform. That same worker paying even more for family coverage would still not be eligible because, again, the premium for an individual is less than $3,800 (or 9.5 percent of $40,000).
The 9.5 percent-of-income threshold is one that few workers would meet, according to one recent study. The ADP Research Institute found that only 8.6 percent of employees are required to pay premium contributions that would meet the Affordable Care Act's definition of "unaffordable."
How will you know whether your premiums and income put you in that group and make you a good candidate for an exchange plan? Right now, it's a little unclear.
"The answer is sort of a mish-mash," Haile says. Many of Obamacare's employer requirements were delayed until 2015, though companies were still supposed to provide notices by Oct. 1 telling workers whether their current coverage would be considered affordable. But the U.S. Labor Department says there's no fine or penalty for failing to provide the notices.
Exchange coverage for family members
Under those same delayed "employer mandate" provisions, companies with at least 50 full-time workers will be required to offer health insurance to their workers and the workers' dependent children in 2015. But coverage for workers' spouses will not be mandatory, notes Christine Barber, senior policy analyst at Community Catalyst, a health care advocacy group.
"If your spouse isn't covered by your employer's insurance and doesn't have insurance through his or her own employer, your spouse could shop for insurance on the exchange and potentially qualify for a subsidy," Barber says.
Others who might find it valuable to shop on the exchanges are working singles under the age of 30 who don't have health issues and would be able to purchase a catastrophic plan, Haile says.
Catastrophic plans available on the state exchanges will have low monthly premiums but high deductibles. According to Haile, they're not eligible for subsidies.
All workers at a particular company often pay the same rate for their employer health insurance, regardless of age or medical history, he says. Opting for an Obamacare catastrophic plan "could be cheaper if you're the young kid on the block," especially if your co-workers are decades older, which could drive up everybody's insurance costs.
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.
PPACA hasn’t killed COBRA – yet
Originally posted by Gina Binole on https://www.benefitspro.com
With full implementation of the Affordable Care Act looming – delays in the employer mandate aside – many in the HR world have been wondering whether health care reform will render COBRA obsolete.
The short answer: yes – and no.
While the new law has no direct impact to the Consolidated Omnibus Budget Reconciliation Act, the indirect effects of the Patient Protection and Affordable Care Act could eventually render COBRA meaningless.
COBRA was designed to bridge coverage for employees who lose their job, or lose health coverage through their job. This was deemed necessary because individual policies can be expensive and quite often imposed pre-existing condition exclusions.
The PPACA, however, seeks to sever the link between employment and health care. It does this by prohibiting pre-existing condition exclusions and creating state exchanges where individual coverage is supposed to be available at affordable rates.
Beginning Jan. 1, individuals who lose employer-provided coverage will have the choice of either purchasing COBRA coverage, or purchasing coverage through the exchanges. While COBRA only allows people to elect the coverage in which they were enrolled on the date they lost their job, the exchanges are meant to offer a range of options and coverage levels.
The premium subsidies that will be available to individuals with household incomes up to 400 percent of the federal poverty level also are expected to make purchasing coverage through an exchange more attractive than paying for insurance through COBRA.
But COBRA isn’t going to disappear overnight, if ever.
“Heath care reform is being marketed as a mechanism for enhancing choice in health care options. (Once Obamacare goes into full effect), the option to remain on an employer’s plan is likely to remain a choice, in addition to plans available through the exchanges,” said Iris Tilley, an Oregon-based benefits attorney. “In addition, while COBRA coverage is typically expensive, for some individuals it may remain less expensive than exchange coverage because the cost of exchange coverage correlates directly to an individual’s age, while employer coverage (and in turn COBRA coverage) reflects a broader range of ages.”
Tilley said individuals who suffer a loss of coverage are likely to weigh the plans available through the exchanges against their employer’s plan. For some, COBRA will make sense.
Moreover, employers with a qualified health plan still will be required to provide the opportunity for a person to elect COBRA coverage. Its rules will remain in force. Tilley also noted that the PPACA does not cover dental, vision, Medical Flexible Spending Accounts, Health Reimbursement Accounts or Employee Assistance Plans, which are subject to COBRA regulations.
“There is certainly a perception that the health care exchanges eliminate the need for COBRA since with the health exchanges, individuals will have access to insurance in ways they don’t today. But employers subject to COBRA today will remain subject to COBRA until such time as Congress decided to potentially do away with COBRA,” Mary Jo Davis, Ceridian’s vice president of product management said during a recent podcast.
Davis sought to clear up what she described as a few myths surrounding COBRA and PPACA. First, she said individuals assume health exchanges will be consistent across every state. But the reality is that states will have latitude to design their own coverage. Secondly, she said people are counting on the exchange premiums to be much cheaper than employer-sponsored health care coverage.
“We don’t know that. It could be more expensive,” she said.
Finally, she said people also assume that health care exchanges will be an option for all employees and consumers in 2014. But that is true only for small employers. Depending on the state, that means those with 100 employees or fewer or 50 and fewer.
Individuals also might have met their out-of-pocket deductible costs with their employer, and it would be costly for them to switch to an exchange. Another reason for COBRA to stay relevant might be that people want to stick with existing health care providers.
Other points to consider:
- One of the qualified events that trigger the need for a COBRA notice is a dependent losing eligibility under the health plan. Now that the age for dependents to lose coverage has been extended to age 26 under PPACA, it is possible that an adult dependent can continue for an additional 36 months under COBRA or until age 29 on the employer’s health plan.
- Under PPACA, waiting periods for coverage will be no more than 90 days. This means former employees may not need COBRA coverage for as long as in the past. However, depending on the viability and quality of health plans offered through the state exchanges, it might make more sense for a former employee to elect COBRA coverage if it looks like they will have more than a three-month gap in coverage during the year that could result in a penalty under the individual mandate.
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.”
Shutdown places ACA guidance in jeopardy
Originally posted October 03, 2013 by Andrea Davis on https://ebn.benefitnews.com
The federal government shutdown could delay much-anticipated guidance on a number of provisions of the Affordable Care Act.
“If the shutdown lasts a week or two, that could really throw a monkey wrench into the timing of guidance,” says Paul M. Hamburger, co-chair of Proskauer’s employee benefits, executive compensation and ERISA litigation practice center. “The biggest problem with the shutdown, vis-a-vis guidance on the ACA, is the ability to get all of this updated guidance from the DOL, HHS and IRS out there quickly before the end of this year.”
At issue is the need for updated guidance on the employer mandate. While the mandate has been delayed until 2015, employers need to start preparing for it now by figuring out how they’re going to accurately measure and report to the IRS on which employees qualify as full time workers.
Hamburger says update guidance was expected in November but the shutdown may delay it. Employers are “just going to have to sit and wait and hope that when the shutdown is over, the guidance will come out,” he says.
Also at stake, he says, is regulatory guidance related to certain coverage mandates coming into effect in 2014. The requirement that waiting periods cannot exceed 90 days, the elimination of pre-existing conditions exclusions and other coverage-related mandates “all need some additional guidance, presumably before 2014,” says Hamburger. “The shutdown is going to dramatically reduce the extent to which that guidance can come out.”
The end result could be more of a reliance on FAQ-type guidance, rather than the preferred way of issuing proposed regulations for review and comment followed by the publication of final rules.
What employers should be doing now, says Hamburger, is looking at those 2014 coverage mandates and figuring out how they’re going to comply, even in the absence of official guidance. In the case of waiting periods, for example, “there are proposed regulations out there and I think employers need to look at that carefully and decide how they’re going to exercise reasonably good faith in interpreting those rules based on their particular waiting period,” he says.
How much will Obamacare premiums cost? Depends on where you live
Originally posted September 25, 2013 by Sandhya Somashekhar and Sarah Kliff on https://www.washingtonpost.com
A 27-year-old in Austin who earns $25,000 could pay $85 per month for health insurance next year, and a family of four in St. Louis with income of $50,000 might face a $32 monthly premium, according to new federal data on health insurance rates under the Affordable Care Act.
The report, released Wednesday by the Department of Health and Human Services, showed significant variation in the insurance premiums that Americans shopping on the individual market could pay under the president’s health-care overhaul. Across the 48 states for which data were available, the unsubsidized monthly premiums could be as low as $70 for an individual and as high as $1,200 for a moderate plan for a family of four.
The average national premium for an individual policy will be $328 in 2014, before including any of the tax credits that will be available to low- and middle-income Americans to help them purchase coverage.
Officials say these prices will be affordable for people buying insurance through the government marketplaces slated to open next week.
“For millions of Americans, these new options will finally make health insurance work within their budgets,” Health and Human Services Secretary Kathleen Sebelius said.
Information about how much insurance plans will cost under the law, sometimes called Obamacare, has been dribbling out for months on a state-by-state basis.
But the report from the administration, which has been collecting rate information since the spring, offers the first comprehensive look at the effect of the law on many Americans — specifically those who buy coverage privately and not through their employers, as well as low-income uninsured people who are not poor enough to qualify for Medicaid.
Beginning Tuesday, those people will be able to log on to government Web sites called marketplaces to peruse their plan options, apply for government subsidies and sign up for coverage effective next year. That is when the requirement kicks in that virtually every American carry health insurance or face a fine.
The report also includes information for more than two dozen states that declined to set up their own marketplaces, leaving at least part of the job up to the federal government.
Premiums will vary significantly depending on an individual’s income, where she lives and what type of coverage she buys. A 27-year-old in Fairfax County, for example, could spend between $124 and $258 on a health plan, depending on how robust she wants it to be.
A family of four in Fairfax County that earns $50,000 could get a health insurance plan with no premium at all, because the federal tax credit would cover the bill.
Most people using the marketplaces will have incomes low enough to qualify for a government subsidy. A recent administration report found that 56 percent of the roughly 41 million uninsured people eligible for the marketplaces could pay monthly premiums of $100 or less.
Health experts say it is a good sign for consumers that premiums have come in lower than expected. Under the law, the plans must offer a basic set of benefits, including mental health and maternity care, which previously were not included in many private plans. Insurers are also forbidden from rejecting or charging people more because of preexisting conditions.
Many experts worried that those factors would drive up the cost of insurance. They partially credit competition on the marketplaces, where people will be able to directly compare plans from different insurance companies, for restraining premiums.
But they warn that premiums don’t tell the whole story.
The low rates are possible in part because insurance companies created special plans that include fewer in-network doctors and hospitals than many current plans.
This may not be a problem for healthy people who currently lack insurance. But those with illnesses may discover that their specialists are not covered by an exchange insurance plan. Low-income people accustomed to a certain community clinic may find that going there is no longer an option. And everyone may encounter long waits to see a doctor.
In addition, many of the lowest-cost plans may carry high deductibles, despite a cap imposed by the law that limits out-of-pocket costs to $6,350 per person per year.
“Despite the fact that the premiums are lower than expected, enrollees on exchanges are likely to face very high out-of-pocket costs before they hit their cap, and they are at risk of being in very narrow network plans that may or may not include all the providers they need access to,” said Caroline Pearson, vice president of health reform at the consulting firm Avalere Health, which did its own report on rates this month.
Some healthy people may also experience sticker shock on premiums. A recent analysis by the Manhattan Institute, a conservative think tank, found that some people who buy low-cost private plans today could see their rates jump by 24 percent.