How to Navigate the Health Insurance Exchanges (Marketplace)

As we haven't been allow to see the steps involved with the Marketplace website (healthcare.gov, in Illinois you can also try getcoveredillinois.gov), here are some general ideas for you to be aware of.

1. You can go directly to each health insurer's website (that is in the Exchange) and look for health insurance both within the Exchange and outside of the Exchange.

2. You can go to healthcare.gov for any Federally Facilitated Marketplace or State/Federal Marketplace.

3. You will need an idea of what you think you will make in 2014. The rules state income is based upon Modified Adjusted Gross Income. They did not give details as to what that means, but for all practical purposes, think "Adjusted Gross Income." Estimate conservatively. If your income is much greater, then inform the Exchange to dial back your subsidy. The reason to do this is because the subsidies are actually forward looking tax credits. This means that the IRS will settle up with you at the end of the year. If the government has overpaid for your health insurance, they will ask for the money back! Of course if you had a bad year, the opposite is true too.

4. BE CAREFUL OF THE PLAN DESIGNS!!!!! I cannot stress this enough. The plans you will be viewing will be DIFFERENT that what you are used to.

• Some will include extremely high prescription drug deductibles (for example, you pay a $1500 drug deductible before the drug copay kicks in). 
• Others will include PER OCCURRENCE DEDUCTIBLES. Simply put, you pay this IN ADDITION to your normal deductible for things such as hospitalization, outpatient surgery, etc. An example would be you'd pay an extra $1000 each time you were admitted into a hospital, then you'd pay your deductible. 
• Silver level plans will have HIGH DEDUCTIBLES. Insurance companies did this to keep the costs down. You will need to choose between having a $4000+ individual deductible for a reasonable premium or a higher premium and lower deductible.
• THERE IS LESS CHOICE in the Exchange. If you do not qualify for a subsidy (you and your family make over 400% of Federal Poverty Level), then search for NON-EXCHANGE plans. In DuPage County, there are 3 insurance companies on the Exchange. Off-Exchange there are at least 5 with many more plans available. The rates for the same plan on and off the exchange will be exactly the same.
• PEDIATRIC DENTAL will be a question on the applications. If you say you do not have a dental plan, then they will charge you extra for including dental coverage for children. My best guess is that if you do not have children on the health insurance plan and don't have dental, you shouldn't be charged extra, but we won't know until tomorrow.
• IF YOU DON'T QUALIFY FOR A SUBSIDY consider getting a plan that starts 12/1/2013 with one of the insurance companies that will allow you to keep the plan for 1 full year. This will delay the increase in costs due to Health Reform for that much longer.
• PLEASE - USE AN AGENT!!! There is no cost to use an insurance agent certified to sell in the exchange. The rates are exactly the same and they will be able to help you avoid the pitfalls of choosing a plan that doesn't work for you. What you don't know WILL hurt you.

Please call me if you want help. My phone is 630-779-1144.

Thanks,

Robert Slayton

Employer Mandate Delayed. Many Questions Remain

Employer Play-or-Pay Mandate Penalties and Certain Employer Reporting Requirements Delayed Until 2015

Posted: 11 Jul 2013 09:27 AM PDT

Copyright ©2013 Towers Watson. All Rights Reserved

Treasury Says No Impact on Any Other Provisions of the PPACA in 2014

The Obama Administration unexpectedly announced on July 2 that employers will be provided an additional year, until 2015, before any penalties are assessed under the employer play-or-pay mandate in the Patient Protection and Affordable Care Act (PPACA) (i.e., both the $2,000- and $3,000-per-year employer penalties are delayed until 2015).

In addition, the mandatory employer and insurer reporting requirements (including identification of full-time employees and their months of coverage) under Internal Revenue Code (IRC) Sections 6055 and 6056 are also delayed for a year. Thus, employers will not incur penalties for failing to provide affordable, minimum-value health coverage to their full-time employees in 2014, nor will insurers or employers be required to comply with the extensive information reporting requirements under those code sections for the 2014 calendar year.

In an unusual fashion, the Obama Administration announced the delay only via postings on the Treasury Department and White House websites. Mark Mazur, assistant secretary for tax policy at the Treasury wrote in a blog post, “We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively.” Mazur went on to write that “our actions today do not affect employees’ access to the premium tax credits available under the ACA (nor any other provision of the ACA).”

The Administration stated that the goals of the one-year delay are twofold. First, it will allow the government to consider ways to simplify the new reporting requirements, and second, it will provide time for employers to adapt health coverage and reporting systems. It is important to note that the delay also takes a controversial piece of the law off the table before the midterm congressional elections.

According to the Treasury, rules regarding the delay will be proposed this summer. Employers will be encouraged but not required to adopt and follow those reporting requirements in 2014. The full text of the announcement by the Treasury can be found at treasury.gov.

What Does This Mean?

Aside from the delay in employer reporting under IRC Sections 6055 and 6056, and the delay in the play-or-pay penalties, the Treasury says the delays will not affect employees’ access to the premium tax credits nor any other provision of the PPACA. Even if one accepts that statement at face value, employers need to begin considering the potential impact of the delay as we await details from the government that will provide answers to the following questions:

§ What is the practical impact of the delay in play-or-pay penalties on counting employee hours in 2014 (i.e., will employers be required to identify full-time employees in 2014 for any other reasons, aside from play-or-pay, such as inquiries from public health insurance exchanges)?

§ Will employers still need to distribute the mandatory notice to employees regarding public health insurance exchanges by October 1, 2013? If so, should that notice be modified to reflect the delay in the employer play-or-pay mandate? Similarly, what is the relevance of information in the government’s model notice regarding details of the employer’s group health plan in view of the delay in the play-or-pay mandate?

§ If employers will not be subject to the play-or-pay mandate in 2014, how will public health insurance exchanges determine eligibility for the premium tax credit (recalling that individuals are ineligible for the credit if they have been offered minimum essential coverage that is affordable and of minimum value)?

§ Will the public health insurance exchanges still be contacting employers in 2014 to verify employee information (in some cases) on employees’ full-time status and health coverage contributions (for purposes of the premium tax credit) — even though employers will not be subject to penalties under the play-or-pay mandate? If so, will the affordability and minimum value of employer coverage still need to be determined in 2014 for purposes of the premium tax credit if those same elements of the play-or-pay requirements are waived for employers in 2014?

§ How will the individual mandate be affected by the delay in the employer play-or-pay mandate? Will there now be political pressure to delay the individual mandate if the employer play-or-pay mandate has effectively been deferred to 2015?

Meanwhile, it seems relatively clear that other provisions of the PPACA that become effective in 2014 can proceed without being affected by the one-year delay in the employer play-or-pay mandate. For example, the annual distribution of Summaries of Benefits and Coverage (SBCs), compliance with the new out-of-pocket maximum limits and 90-day waiting period limit on group health plans, as well as the annual $63-per-covered-life, transitional-reinsurance fee do not appear to be affected by the delay.

Employers should anticipate questions and concerns from stakeholders about this latest development. Employees, vendors, line supervisors, senior management, board members and others will all react to media coverage of the delay, and some confusion should be expected. Employers should begin to consider some thoughtful messaging about this development even as we await details from the Treasury.

Conclusion

The main elements of the PPACA were designed to take effect in 2014 in a sort of health care reform grand opening. The announcement of the delay by the Treasury on July 2 appears to set the stage for a “soft opening” for health care reform in 2014. For employers, most of the implications will flow from the one-year delay in enforcement of the play-or-pay penalties and the delay in information reporting under IRC Sections 6055 and 6056. While nothing in this latest bit of drama suggests that health care reform is going away, further guidance will be needed from the government to understand the full implications of the delay for employers. That guidance is promised by the Treasury this summer, and Towers Watson will be following those developments closely in order to assist plan sponsors through this period.

What if you build it and NOBODY comes? What happens if you offer health insurance coverage to your employees and only a few take it? Will you be penalized?

What if you build it and NOBODY comes? What happens if you offer health insurance coverage to your employees and only a few take it? Will you be penalized?

Many Large/Small employers are sweating whether insurance companies will allow them to have a plan if they don’t meet participation guidelines (roughly a minimum of 50% of employees must enroll for coverage or else the insurance company will NOT offer coverage – it’s more complex than that, but good enough this post).

The short answer is that if you are a small employer, the answer is YES you will be able to offer coverage without meeting participation guidelines, BUT open enrollment will ONLY be November 15 through December 15^th for a January 1^st start date. If you do meet the insurance company participation guidelines, you can have any renewal date you choose (just like it is now).

What about large employers who have less than 50 employees who want coverage? I have a client who has 268 full time employees, but only 16 will take the coverage. Will they be penalized? The answer is “we don’t know.” The National Association of Health Underwriters is working with HHS to come up with rules surrounding this occurrence.  My best guess is that there will be something just like what will happen for a small group (above).  Of course if you can be creative with “Standard Measurement Periods” and the “Look Back Period” you may be able to say to an insurance company that you only have 16 employees eligible for coverage. Most insurance companies at this point would consider the group a “small employer group” as they’d only recognize the 16 employees as full time eligible (and meet the participation guidelines).

Now let’s say that out of the 16 eligible, only 2 want the insurance (meaning you DON’T meet the guidelines). They would not be allowed to have the November 15^th – December 15^th open enrollment period because this special “Open Enrollment” period due to lack of participation would most likely be done only within the SHOP (small employer group health insurance) Exchange. 

As it is in the Exchange, the Government would not allow this particular group to shop in the exchange because, according to the ACA formula, they are a “large group employer.”  See the very last sentence of this blog post as to why I say this.

Companies with 50+employees who take coverage have more flexibility when it comes to getting insured. Some insurance carriers will say 20% participation (with a minimum of 50 taking coverage) is okay.

Ultimately, this is another thing that was unforeseen by the lawmakers which needs to be resolved.   

  

Below is text I took that describes the participation/open enrollment guidelines.

The following excerpt is from the Federal Register, Vol 78, No. 39/ Wednesday, February 27, 2013/ Rules and Regulations, page 13416. Here is a link from the state of Kentucky or you can google it yourself. http://healthbenefitexchange.ky.gov/Documents/Guaranteed%20Availability%20of%20Coverage.pdf

Comment: We received a few comments about the proposal that issuers would be allowed to decline to offer coverage to small employers for failure to satisfy minimum contribution or group participation requirements under state law or the SHOP standards.

Several commenters expressed support for the policy and recommended extending it to the large group market. One commenter emphasized that minimum participation and contribution standards must be reasonable and not burdensome to the point that small employers are discouraged from offering coverage.

Response: Upon further consideration of this issue, we have determined that small employers cannot be denied guaranteed availability of coverage for failure to satisfy minimum participation or contribution requirements.

As in the case of the bona fide association exception discussed above, while Congress left in place an exception for failure to meet contribution or participation requirements under the guaranteed renewability requirement in section 2703(b), it provided no such exception from the guaranteed availability requirement in section 2702.

To the contrary, language in the guaranteed availability provision for group health plans that was in place before the Affordable Care Act was not included in section 2702.

Accordingly, the proposed approach would conflict with the guaranteed availability provisions in section 2702 of the PHS Act. Moreover, permitting issuers to deny coverage altogether to a small employer with between 50 and 100 employees based on a failure to meet minimum participation or contribution requirements could subject such employer to a shared responsibility payment under section 4980H of the Code for a failure to offer coverage to its employees.

While section 2702 contains no exception to guaranteed availability based on a failure to meet contribution or minimum participation requirements, section 2702(b)(1) permits an issuer to limit enrollment in coverage to open and special enrollment periods.

Under our authority in section 2702(b)(3) to define ‘‘open enrollment periods,’’ we are providing in this final rule that, in the case of a small employer that fails to meet contribution or minimum participation requirements, an issuer may limit its offering of coverage to an annual open enrollment period, which we set forth in this final rule as the period beginning November 15 and extending through December 15 of each year.

As such, the group market will have continuous open enrollment, except for small employers that fail to meet contribution or minimum participation requirements, for which the enrollment period may be limited to the annual enrollment period described above, from November 15 through December 15. This approach addresses concerns about adverse selection in a manner that is consistent with the statutory provisions. We do not extend this provision to the large group market because large employers generally do not present the same adverse selection risk as small employers.

Latest News on the Affordable Care Act

I've compiled a series of interesting articles this week about different aspects of the Affordable Care Act.

First, this piece on the Federal Pre-Existing Condition Insurance Plan’s solvency (or lack thereof). The Federal Government totally under estimated the claims of those people who went on it.

http://newsmanager.commpartners.com/nahuw/issues/2013-05-24/index.html

Second is a study of the current cost of health insurance. Please look at the dollars that are currently being spent and tell me whether this is sustainable.

http://newsmanager.commpartners.com/nahuw/issues/2013-05-24/2.html

Third is Chicago Politics as its best. What do politicians do once they are elected? They hire all of their supporters of course. It looks like if you’d like a job as an assister, go talk to HHS.

http://newsmanager.commpartners.com/nahuw/issues/2013-05-24/3.html

Oops, the Government forgot that some people don’t have bank accounts with which to pay for their premiums.

http://www.npr.org/blogs/health/2013/05/21/184814772/latest-health-hurdle-buying-insurance-without-a-bank-account

Here’s something that came to my attention last week. This is in California, but may apply to other states. Doctors may be stuck with paying for patients’ care due to non-payment of health insurance premiums.

http://www.sacbee.com/2013/05/21/5438115/loophole-in-health-care-law-could.html

Unions are figuring out that they are being treated like everyone else in regards to Health Reform. Businesses don’t get special treatment, but Unions believe they should.

http://thehill.com/business-a-lobbying/300881-labor-unions-break-ranks-on-health-law

Here’s an interesting study on the impact of increasing premiums and young adults purchasing insurance. Note that this is from an organization that doesn't like the ACA.

http://americanactionforum.org/topic/young-adults%E2%80%99-insurance-decisions-dependent-cost

Obama Administration simplifies, significantly shortens application for health insurance

Obama Administration simplifies, significantly shortens application for health insurance

By Larry Grudzien, Attorney-At-Law

April 30, 2013

 

The Centers for Medicare & Medicaid Services (CMS) today announced that the application for health coverage has been simplified and significantly shortened. The application for individuals without health insurance has been reduced from twenty-one to three pages, and the application for families is reduce by two-thirds. The consumer friendly forms are much shorter than industry standards for health insurance applications today.

In addition, for the first time consumers will be able to fill out one simple application and see their entire range of health insurance options, including plans in the Health Insurance Marketplace, Medicaid, the Children's Health Insurance Program (CHIP) and tax credits that will help pay for premiums.

The applications released today, which can be submitted starting on October 1, can be found here:

http://cciio.cms.gov/resources/other/index.html#hie

"Consumers will have a simple, easy-to-understand way to apply for health coverage later this year," said CMS Acting Administrator Marilyn Tavenner. "The application for individuals is now three

The online version of the application will be a dynamic experience that shortens the application process based on individuals' responses. The paper application was simplified and tailored to meet personal situations based on important feedback from consumer groups.

Consumers can apply online, by phone or paper when open enrollment begins October 1, 2013. There will be clear information provided about how to complete the application, and how to access help applying and enrolling in coverage.

This consumer-focused approach will facilitate the enrollment of millions of Americans into affordable, high quality coverage while minimizing the administrative burden on states, individuals and health plans.

For more information about the Health Insurance Marketplace, visit: www.HealthCare.gov pages, making it easier to use and significantly shorter than industry standards. This is another step complete as we get ready for a consumer-friendly marketplace that will be open for business later this year."

For More Information:

If you have any comments or questions regarding any of above information, please do not hesitate to contact me at 630-779-1144 or Larry at (708) 717-9638.

Noncalendar Plan Years & the Employer Mandate in 2014

Noncalendar Plan Years & the Employer Mandate in 2014      

February 20, 2013 

By Larry Grudzien

Attorney-At-Law

An employer's health plan's plan year begins on September 1 each year.  If the employer is a "large employer" under health care reform, when is the employer subject to the employer mandate, January 1, 2014 or September 1, 2014?

The employer mandate is generally effective on January 1, 2014. However, two transition rules apply that may delay the assessment of penalties until the first day of your first plan year that starts on or after January 1, 2014. The transition rules say that if the employer  maintained a noncalendar year plan as of December 27, 2012, and all of its  full-time employees are offered affordable coverage that provides minimum value no later than that first day of the plan year that starts in 2014, penalties will not be assessed for the months prior to the first day of the plan year that starts in 2014 for:

1. Any employee (whenever hired) that would be eligible for coverage, as of the first day of the first plan year that begins in 2014 under the eligibility terms of the plan as in effect on December 27, 2012; and

2. Any other employees if (a) the employer's noncalendar year plan was offered to at least one third of its employees (full-time and part-time) at the most recent open season; or (b) its noncalendar year plan covered at least one quarter of its employees.

Therefore, for any employees who are eligible to participate in the plan under its terms as of December 27, 2012 (whether or not they take the coverage), the employer will not be subject to a penalty for those employees until the first day of it noncalendar plan year that starts in 2014 if employees are offered affordable coverage that provides minimum value no later than that first day of the plan year that starts in 2014.

For any other employees that were not eligible to participate under the terms of the plan in effect on December 27, 2012, if the employer offered coverage under its noncalendar year plan starting on September 1, 2012 to at least one third of your employees, or if the plan covered at least one quarter of its employees, the employer could avoid liability for a penalty until September 1, 2014 if it expands the plan to offer coverage that is affordable and meets the  minimum required value to the full-time employees who had previously not been offered coverage. For purposes of determining whether the plan covers at least one quarter of the employees, the employer can use any day between October 31, 2012 and December 27, 2012 for doing the calculation.

For More Information:

If you have any comments or questions regarding any of above information, please do not hesitate to call Robert Slayton at 630-779-1144 or Larry Grudzien at (708) 717-9638.

IRS Issues Guidance on Health Insurance Premium Tax Credit -Clarification

IRS Issues Guidance on Health Insurance Premium Tax Credit -Clarification

February 5, 2013

By Larry Grudzien, Attorney-At-Law

The IRS issued a final regulations on when an employer-sponsored plan is considered "affordable" for an individual related to the employee for purposes of eligibility for a premium tax credit. Under Health Care Reform, employees may be eligible for a premium tax credit to purchase health insurance through the future health insurance exchanges if, among other reasons, the employer plan is deemed unaffordable.

The final regulations clarify that for taxable years beginning before January 1, 2015, an eligible employer-sponsored plan is affordable for related individuals if the portion of the annual premium the employee must pay for self-only coverage does not exceed 9.5% of the taxpayer's household income.

An employer plan will be affordable for family members if the cost of self-only coverage does not exceed 9.5% of the employee's household income. In other words, for purposes of whether family members are eligible for tax credits, the affordability of family coverage is not taken into account; all that matters is that the cost of self-only coverage is affordable to the employee

For purposes of applying the affordability exemption from the individual

mandate in the case of related individuals, the required contribution is based on the premium the employee would pay for employer-sponsored family coverage.

For an employee eligible under an employer plan, affordability (for individual mandate exemption purposes) will be based on whether the cost of self-only coverage exceeds 8% of the employee's household income. For a related individual (such as a spouse or child), however, affordability for this purpose will be based on whether the cost of family coverage exceeds 8% of household income. Under these rules, members of an employee's family may qualify for an individual mandate exemption, even though the offer of affordable employer coverage to the employee would require the employee to enroll or risk paying a penalty.

These final regulations apply to taxable years ending after December 31, 2013.

For a copy of the final regulations, please click on the link below:

 http://www.gpo.gov/fdsys/pkg/FR-2013-02-01/pdf/2013-02136.pdf

If you have any comments or questions regarding any of above information, please do not hesitate to call me (Robert Slayton) at 630-779-1144 or Larry Grudzien at (708) 717-9638.

Health Reform Resources

As I'm giving a talk today and hate killing trees, I thought I'd create a listing of helpful resources related to the Affordable Care Act's health reform.

Timeline for Implementation put out by the National Association of Health Underwriters

http://robertslayton.com/PPACA_Timeline_Brochure.pdf

Government Websites

Healthreform.gov - The federal government's official website. Although biased, it does include a wealth of information

     -Preventative Services Included in Health Reform:  
       http://www.healthcare.gov/news/factsheets/2010/07/preventive-services-list.html

Website showing proposed paperwork for employers to prove their plans meet the minimum requirements along with paperwork for individuals to sign up on the exchange.

http://cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html

Illinois Pre-Existing Condition Insurance Program - if you have been uninsured for 6 or more months and are ineligible for individual health insurance (due to health problems).

http://www.insurance.illinois.gov/ipxp/

Websites with a good overview of the issues

Kaiser Family Foundation is recognized as having one of the best websites on health reform available.

http://healthreform.kff.org/

National Center for Policy Analysis - It's view on health reform and how to fix the crisis

http://www.ncpa.org/healthcare/

Financial Calculators

These are online calculators designed to help assess both individual health insurance exchange subsidies or penalties for businesses.

http://healthreform.kff.org/subsidycalculator.aspx - subsidy calculator
www.retailmeansjobs.com/healthcare - this is for small businesses

Small Business Resources

What's crazy about the resources below is that almost all of them were issued within the last 2 months.

Employer requirements:

 http://www.irs.gov/pub/newsroom/reg-138006-12.pdf

Definition of full-time employee

 http://www.irs.gov/pub/irs-drop/n-12-58.pdf

 http://www.irs.ustreas.gov/pub/irs-drop/n-12-17.pdf

 http://www.irs.ustreas.gov/pub/irs-drop/n-11-36.pdf

90-day waiting period limitation

 http://www.irs.gov/pub/irs-drop/n-12-59.pdf

Affordability

 http://www.irs.ustreas.gov/pub/irs-drop/n-11-73.pdf

Minimum value

 http://www.irs.ustreas.gov/pub/irs-drop/n-12-31.pdf

W2 Guidance:

 http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage

 http://www.irs.ustreas.gov/pub/irs-drop/n-12-09.pdf

Health Reform Questions - Premium Tax Credits & Cost-Sharing Subsidies

Health Reform Questions 

- Premium Tax Credits & Cost-Sharing Subsidies                 

By Larry Grudzien

 What premium tax credits and cost-sharing subsidies are available to individuals in 2014 and who is eligible for them?

To assist individuals and families who do not qualify for Medicare or Medicaid and are not offered affordable health coverage by their employers, a refundable tax credit (the "premium tax credit") and a cost sharing subsidy will be available beginning in 2014 to help pay for insurance purchased through an Exchange. Generally, taxpayers with income between 100% and 400% of the federal poverty line (FPL) who purchase insurance through an Exchange will qualify them, as provided in Code Section 36B. and Section 1402 of the Patient Protection and Affordable Care Act ("PPACA").

A premium assistance tax credit will be provided monthly to lower the amount of premium the individual or family must pay for their coverage. Cost sharing subsidies will limit the plan's maximum out-of-pocket costs, and for some individuals will also reduce other cost sharing amounts (i.e., deductibles, coinsurance or copayments) that would otherwise be charged to them by their coverage.

Both types of assistance will be tied in some way to the value of the coverage available in the Exchanges. Four levels of plans will be offered by insurers in the exchanges. All the plans must offer a set of essential health benefits. The four plan levels vary in the total value of coverage they must provide. This amount is sometimes called "actuarial value" and represents the proportion of health insurance expenditures for covered benefits that, for an average population, would be paid by the plan. Section 1302(d)(1) of PPACA requires that the actuarial value be 60% for "bronze" plans, 70% for "silver" plans, 80% for "gold" plans and 90% for "platinum" plans. In addition, the out-of-pocket maximum for any of these plans may not exceed a limit that is determined annually. For 2013, the limit is $6,250 for individual coverage and $12,500 for family coverage.  It will be adjusted higher for 2014.

Who is eligible for the premium tax credit and cost sharing subsidy?

Citizens and legal residents in families with incomes between 100% and 400% of poverty who purchase coverage through a health insurance exchange are eligible for a premium tax credit cost sharing subsidy to reduce the cost of coverage. individuals eligible for public coverage are not eligible for premium assistance in Exchanges. In states without expanded Medicaid coverage, individuals with incomes less than 100% of poverty will not be eligible for Exchange subsidies, while those with incomes at or above poverty will be.

Would an individual be eligible for premium tax credits and cost-sharing subsidies in the Exchange if he or she is offered "minimum essential coverage" by his or her employer in that it is both affordable and provides minimum value, but declines it and obtains coverage in the Exchange?

No. As a general rule, if an eligible employer-sponsored plan constitutes "minimum essential coverage" in that it is both affordable and provides minimum value merely being eligible for the plan will make an individual ineligible for the tax credit. In  Treasury Regulation Section 1.36B-2(c)(3)(iii)(A), the IRS indicates that an eligible employee who declines enrollment in such a plan remains ineligible for the tax credit for each month in the coverage period related to the enrollment period (e.g., for the full plan year in the case of an annual enrollment period).

Would an individual be eligible for premium tax credits and cost sharing subsidies in the Exchange if he or she is enrolled coverage offered by his or employer that is either unaffordable and does not provides minimum value?

If an employee actually enrolls in an eligible employer-sponsored plan, the tax credit is not available-even if the plan does not meet the affordability and minimum value conditions, as provided in Code Section 36B(c)(2)(C)(iii). Employees who are automatically enrolled in an eligible employer-sponsored plan have a grace period to unwind the enrollment to maintain their eligibility for the tax credit, as provided in Treasury Regulation Section 1.36B-2(c)(3)(vii)(B). An employee is not considered eligible for minimum essential coverage (i.e., may qualify for the tax credit) during any required waiting period before coverage becomes effective under an eligible employer-sponsored plan. The IRS is expected to provide a safe harbor under which an employer would not have to pay the shared responsibility tax penalty under Code § 4980H for failing to offer coverage for at least the first three months after an employee's hire date, as provided in Department of Labor Technical Release 2012-01, Q/A-3.

Individuals who meet these thresholds for unaffordable employer-sponsored insurance are eligible to enroll in a health insurance exchange and may receive tax credits to reduce the cost of coverage purchased through the exchange.

What are the amounts of the premium tax credit and cost- sharing subsidies to be provided?

Under Code Section 36B(b), the amount of the tax credit that a person can receive is based on the premium for the second lowest cost silver plan in the Exchange . A silver plan is a plan that provides the essential benefits and has an actuarial value of 70%. (A 70% actuarial value means that on average the plan pays 70% of the cost of covered benefits for a standard population of enrollees.)

Under Code Section 36B(b)(3), the amount of the tax credit varies with income such that the premium that the premium a person would have to pay for the second lowest cost silver plan would not exceed a specified percentage of their income (adjusted for family size), as follows:

Household Income (as percentage of  Federal Poverty Line (FPL) Premium as a Percent of Household Income

Up to133%           2%  of income

133-150%             3-4% of income

150-200%             4-6.3% of income

200-250%             6.3-8.05%  of income

250-300%             8.05-9.5% of income

300-400%             9.5% of income

 

In addition, Section 1402(b) of PPACA limits the total amount that people must pay out-of-pocket for cost sharing for essential benefits. Generally, the limits are based on the maximum out-of-pocket limits for Health Savings Account-qualified health plans ($6,250 for single coverage and $12,500 for family coverage in 2013), which will be indexed to the change in the Consumer Price Index until 2014 when the provision takes effect.

After 2014, the limits will be indexed to the change in the cost of health Coverage. Individuals with incomes at or below 400% of federal poverty line have their out-of-pocket liability capped at lower levels, as follows:

Household Income (as percentage of Federal Poverty Line (FPL) 

Reduction in Out-of-Pocket Liability

100-200%             Two-thirds of the maximum

200-300%             One-half of the maximum

300-400%             One-third of the maximum

 

The limits on out-of-pocket maximum amounts means that a person with income of 150% of poverty purchasing coverage in the exchange would have the limit on their out-of-pocket spending reduced to at least two-thirds of the generally applicable maximum value (for example, if the provision were in effect in 2013, the out-of-pocket maximum for single coverage for such a person would be about $2,083 for single coverage and $4,166 for family coverage).

In addition, Section 1402(c) of PPACA provides that federal payments will be made to health insurers to increase the actuarial value of the plan for individuals with household incomes under 250% of the federal poverty line. For example, for individuals with household incomes between 100% and 150% of federal poverty line, the actuarial value of the plan will be increased to 94%. That means that in addition to keeping within the lower out of pocket maximums established above, insurers must make other changes to increase the actuarial value of the coverage. Most likely this will mean reducing plan deductibles, coinsurance or copayments in order to meet the higher actuarial value requirements.

For individuals with household incomes over 250% of federal poverty line, the actuarial value of their plan may not exceed 70%, which is the basic value of the silver plan even for those who receive no financial assistance. This means that, for some individuals, some cost sharing amounts could increase. That would happen if their out of pocket maximum was decreased to keep within the required lower maximum, because the deductibles, copayments or coinsurance that would otherwise apply would have to be increased to keep the actuarial value at 70%.

The last cost sharing subsidy is summarized below:

Household Income (as percentage of Federal Poverty Line (FPL) Net Value of the Subsidy (% of Actuarial Value)

Out-of-Pocket Liability

100-150%                            94%

150-200%                         87%

200-250%                         73%

250-400%                         70%

Who determines an individual's eligibility for the premium tax credit and the cost-sharing subsidies?

Under 45 CFR Section 155.300, HHS is requiring the Exchanges to establish a system of coordinated eligibility and enrollment so that an individual can simultaneously apply for enrollment in a Qualified Health Plan ("QHP"), as well as Insurance Affordability Programs ("IAPs"), including the premium tax credit and cost-sharing reductions. Under Treasury Proposed Regulation Section 301.6103(l)(21). The IRS is permitted to disclose income and other specified information about an individual taxpayer to HHS for purposes of making eligibility determinations for advance payments of the premium tax credit or the cost-sharing reductions.

When an individual purchases a Qualified Health Plan how are any credits and subsidies applied?

Under the Actuarial Value and Cost-Sharing Reductions Bulletin (released by HHS), when an individual receives covered essential health benefits, the provider would collect from the individual only the amount of cost-sharing specified in the silver plan variation in which the individual is enrolled. The federal government would pay in advance to the insurer amounts estimated to cover the cost-sharing reductions associated with the specific silver plan variation. HHS intends to propose that this advance cost-sharing reduction payment to the insurer would occur monthly, and that after the end of the calendar year, the federal government would reconcile the advance payments to actual cost-sharing reduction amounts. 

The Exchange must report to the IRS and to each taxpayer required information for the Qualified Health Plan in which the employee (or a member of the employee's family) is enrolled through the Exchange, as provided in Treasury Regulation Section 1.36B-4. In turn, individuals who receive advance payments of the premium tax credit must file an income tax return for that taxable year, as provided in Treasury Regulation Section 1.36B-5.

For More Information:

If you have any comments or questions regarding any of above information, please do not hesitate to call (708) 717-9638 or e-mail at  larry[at]larrygrudzien[dot]com

Look to the state of Washington to see what a health insurance death spiral looks like.

Here's an older article talking about what happened in the state of Washington. Focus on the pre-ex clause. Even with an individual mandate (which doesn't impact 47% of the population and the rest will be a very minor penalty). If we don't impose a pre-existing condition clause on a person who chooses NOT to take coverage during an "open enrollment period" then we will have the same issues as Washington did. It's not the individual mandate, it's also the pre-ex that can kill insurance.

http://www.forbes.com/sites/aroy/2012/03/30/want-to-see-a-health-insurance-death-spiral-visit-washington-state/

Family Health Premiums reach $15,745 this year and how much you'll need to pay in 2014

I was reading USA Today this morning and an article listed two surveys stating that the average cost of coverage for a family is $15,745/year (http://usat.ly/PiBDpC) with employees paying $4,300/year of that cost. This translates into a 4% increase from last year, but with salary increases flat, the average family just lost buying power.

That said, let's see how the Affordable Care Act will impact the employee's portion of the cost of insurance in 2014. Here are the actual percent payouts based upon family income:

• 150% - 200% of Federal Poverty Level (FPL) equals people paying up to 6.3% of their income on health insurance. 
• 201% - 250% of FPL equals 8.05% of their income on health insurance. 
• 250% - 400% FPL equals 9.5% of their income on health insurance.

Let's see how this stacks up with the $4,300/year the average family pays towards their health insurance (assuming a family of 4).
In 2012, the FPL is $23,050 for a family of four.
150% of FPL = $34,575/year of income with a maximum spent on health insurance being $2,178.23.
200% of FPL = $46,100/year of income with a maximum spent on health insurance being $3,711.05.
250% of FPL = $57,625/year of income with a maximum spent on health insurance being $5,474.38.

What this means, especially in the Chicagoland area, is that you won't notice a change in your premium when health reform occurs. What health reform gives you is an opportunity of purchasing your own coverage and NOT being depended upon your employer. It will be interesting to see how many employees leave to start their own businesses or become consultants.

[Removed]

Again, the Affordable Care Act is not what it is hyped to be. There will be no "free healthcare" for the majority of Americans. Most likely, they will be paying the same or a little bit more for their coverage than what they are paying now. The best part of health reform is that anyone can obtain a plan (guaranteed issue), with no pre-existing conditions (everything is covered from day one - as long as the insurance plan covers the conditions), and a person cannot be charged an extra premium other than if they are a smoker (community rating).

IRS To Apply Tax Credits to All Health Insurance Exchanges

As stated in an Associated Press article, Republicans grilled the Internal Revenue Service on it's decision to apply tax credits to all exchanges, regardless of whether they are state run or federally run. The law itself is fuzzy in that many interpreted it to say that if the Federal Government ran the exchange, then there would be no tax credits for individuals.

Furthermore, one item which not enough people have realized is that the individual mandate has no teeth. The IRS cannot file criminal charges, seize bank accounts, or garner wages. All they can do is withhold a person's refund. As over 40% of the American population doesn't pay income tax, it really is a moot point.

Here's a link to the original article.

http://news.yahoo.com/republicans-grill-irs-commissioner-health-care-193257220.html

Transitional reinsurance program may add 3% - 4% to costs for individual and group health insurance according to United Healthcare

United Healthcare and Anthem Blue Cross Blue Shield both send out information on the transitional reinsurance program which is a part of the Affordable Care Act. According to United Healthcare, this program will increase cost 3% to 4% starting in 2014. The purpose of the reinsurance program is to stabilize the premiums of insurers who take on high cost people (think about your Aunt Edna who is 400 pounds, has high blood pressure, high cholesterol, diabetes, takes 8 medications/day and needs a double knee replacement) in the individual market due to it being guaranteed issue with no pre-existing conditions. This plan will compensate those insurance companies who insure those individuals. The reinsurance program fees will total $12 billion in 2014 and gradually decrease to $5 billion in 2016. States can actually increase these fees at their discretion.

What this means is that the average cost of a health insurance plan will be 3%-4% higher in 2014 due to this reinsurance program alone (fees are ultimately passed on to consumers).

Also starting September 30, 2012 there is a new fee assessed on health insurers (and self insured plans) of $1 per covered life and increasing to $2 per covered life in the second year. This fee helps to fund research on the effectiveness of medical treatments conducted by the new Patient-Centered Outcomes Research Institute (PCORI). The good news is that the most effective treatments will be found and recommended. The bad news is that I wouldn't be surprised if expensive and obscure treatments are "defunded" from health insurance plans (excluded from coverage). That second item is only speculation, but it seems to correlate with many single payer systems around the world.

By the way, if you offer an HRA, even if it is in conjunction with a fully insured plan, it is considered a self-funded plan and you will need to submit those fees to the government. Yes, this means you pay twice.

More updates will be coming.

Health Reform Questions - Employer Mandate

Health Reform Questions 

- Employer Mandate     

 By Larry Grudzien

What employers are subject to the employer mandate in 2014?  When are they subject to any penalties?  What are these penalties?

In general:

Beginning in 2014, certain large employers may be subject to a penalty tax (also called an "assessable payment") for failing to offer health care coverage for all full-time employees (and their dependents), offering minimum essential coverage that is unaffordable, or offering minimum essential coverage under which the plan's share of the total allowed cost of benefits is not at least 60% (referred to as "minimum value"). The penalty tax is due if any full-time employee is certified to the employer as having purchased health insurance through an Exchange  with respect to which a tax credit or cost-sharing reduction is allowed or paid to the employee, as provided in Code section  4980H.

What is a large employer for purposes of the employer mandate?

The penalty tax (or assessable payment) applies to "applicable large employers." An applicable large employer for a calendar year is an employer who employed an average of at least 50 "full-time employees" on business days during the preceding calendar year, as provided in Code Section 4980H(c)(2)(A).

What factors are used to determine whether an employer is an "applicable large employer"?

For purposes of determining whether an employer is an applicable large employer, an employer must include not only its full-time employees but also a full-time equivalent for employees who work part-time. To do so, the employer must add up all the hours of service in a month for employees who are not full-time and divide that aggregate number by 120. The result of that calculation is then added to the number of full-time employees during that month. Then, if the average number of employees for the year is 50 or more, the employer is an applicable large employer, as provided in Code Section 4980H(c)(2)(E).

Under Code Section 4980H(c)(2)(C)(i), all entities treated as a single employer under the employer aggregation rules will be treated as one employer.

How are seasonal employees counted in determining whether an employer is an "applicable large employer?

Under Code Section  4980H(c)(2)(B)(i), a special rule enables an employer that has more than 50 full-time employees solely as a result of seasonal employment to avoid being treated as an applicable employer. Under this rule, an employer will not be considered to employ more than 50 full-time employees if (a) the employer's workforce only exceeds 50 full-time employees for 120 days, or fewer, during the calendar year; and (b) the employees in excess of 50 who were employed during that 120-day (or fewer) period were seasonal workers.*"Seasonal worker" means a worker who performs labor or services on a seasonal basis as defined by the DOL, including agricultural workers covered by 29 CFR § 500.20(s)(1) and retail workers employed exclusively during holiday seasons , as provided  in Code Section 4980H(c)(2)(B)(ii).

Which employees are considered "full-time" for the employer mandate?

Under Code Section 4980H(c)(4)(A), a "full-time employee" for any month is an employee who is employed for an average of at least 30 hours of service per week.

What is the penalty if an applicable large employer does not offer minimum essential coverage to its employees?

Beginning in 2014, Code Section 4980H(a) provides that an applicable large employer will pay a penalty tax (i.e. make an assessable payment) for any month that-

(1) the employer fails to offer its full-time employees (and their dependents) the opportunity to enroll in "minimum essential coverage" under an "eligible employer-sponsored plan" for that month; and

(2) at least one full-time employee has been certified to the employer as having enrolled for that month in a QHP for which health coverage assistance is allowed or paid.

What is the amount of assessable payment (penalty tax)?

Code Section 4980H(a) provides that the penalty tax (assessable payment) is equal to the product of the "applicable payment amount" and the number of individuals employed by the employer (less the 30-employee reduction) as full-time employees during the month. The "applicable payment amount" for 2014 is $166.67 with respect to any month (that is, 1/12 of $2,000). The amount will be adjusted for inflation after 2014.

What is "minimum essential coverage"?

Under Code Section 5000A(f)(1), the term "minimum essential coverage" means coverage under any of the following: (a) a government-sponsored program, including coverage under Medicare Part A, Medicaid, the CHIP program, and TRICARE; (b) an "eligible employer-sponsored plan;" (c) a health plan offered in the individual market; (d) a grandfathered health plan; or (e) other health benefits coverage (such as a State health benefits risk pool) as HHS recognizes.

What is an "eligible employer-sponsored plan"?

Under Code Section 5000A(f)(2), it means a group health plan or group health insurance coverage offered by an employer to an employee that is (a) a governmental plan, or (b) any other plan or coverage offered in a state's small or large group market

Under what circumstances will an applicable large employer be subject to the penalty tax if it offers its employees minimum essential coverage?

Beginning in 2014, Code Section 4980H(b)(1) provides that an applicable large employer will pay a penalty tax (i.e., make an assessable payment) for any month that-

(1) the employer offers to its full-time employees (and their dependents) the opportunity to enroll in "minimum essential coverage" under an eligible employer-sponsored plan for that month; and

(2) at least one full-time employee of the employer has been certified to the employer as having enrolled for that month in a QHP for which a premium tax credit or cost-sharing reduction is allowed or paid. 

If an employee is offered affordable minimum essential coverage under an employer-sponsored plan, then the individual generally is ineligible for a premium tax credit and cost-sharing reductions for health insurance purchased through an Exchange.

When would employees offered minimum essential coverage by an employer be eligible for a premium tax credit and cost-sharing reductions for health insurance purchased through the Exchange?

Under Code Section 36B(c)(2)(C), employees covered by an employer-sponsored plan will be eligible for the premium tax credit if the plan's share of the total allowed costs of benefits provided under the plan is less than 60% of those costs (that is, the plan does not provide "minimum value"), or the premium exceeds 9.5% of the employee's household income. The employee must seek an affordability waiver from the Exchange. The penalty tax applies for employees receiving an affordability waiver. In order to get the premium tax credit and cost-sharing reduction, however, an employee must decline to enroll in the coverage and purchase coverage through the Exchange instead, as provided under Code Section 36B(c)(2)(C).

When would the penalty tax be assessed?

To be considered minimum essential coverage, the coverage will need to meet an affordability requirement (which compares cost to income and provide minimum value (i.e., it will need to pay at least 60% of the total allowed cost of benefits. The penalty tax is due if any full-time employee is certified to the employer as having purchased health insurance through an Exchange with respect to which a premium tax credit or cost-sharing reduction is allowed or paid to the employee. Employers who provide coverage under an eligible employer-sponsored plan that does not meet the affordability and minimum value requirements may nevertheless avoid the tax to the extent employees actually participate in the plan, as provided under Code Section  36B(c)(2)(C)(iii).

What is the amount of the assessable payment (penalty tax?)

Code Section 4980H(b)(1) provides that the penalty tax (assessable payment) is equal to $250 (1/12 of $3,000, adjusted for inflation after 2014) times the number of full-time employees for any month who receive premium tax credits or cost-sharing assistance (this number is not reduced by 30).  This penalty tax (assessable payment) is capped at an overall limitation equal to the "applicable payment amount" (1/12 of $2,000, adjusted for inflation after 2014) times the employer's total number of full-time employees, reduced by 30, as provided in Code Section  4980H(b)(2).

How will the minimum value for an employer-sponsored plan be determined?

In IRS Notice 2012-31, the IRS requested comments on several approaches to the minimum value determination, including evaluating plan designs that will cover part or all of 2014 and suggestions for transitional relief for plan years that start before and end in 2014. This determination of minimum value for employer plans will be consistent with previous HHS guidance on "actuarial value," which is relevant for determining coverage levels for qualified health plans ("QHPs) offered through the Exchanges.

In IRS Notice 2012-31, the IRS described three potential approaches, for determining minimum value. They include:

- Minimum Value Calculator:  The IRS will develop a MV calculator for use by self-insured plans and insured large group plans. Under this approach, plans with certain standard cost-sharing features (e.g., deductibles, co-insurance, and maximum out-of-pocket costs) will be able to enter information about four core categories of benefits (physician and mid-level practitioner care, hospital and emergency room services, pharmacy benefits, and laboratory and imaging services) into the calculator based on claims data of typical self-insured employer plans. The calculator would also take into consideration the annual employer contributions to an HSA or amounts made available under an HRA, if applicable. Comments are specifically requested on how to adjust for other benefits (e.g., wellness benefits) provided under a plan using the calculator.

-Design-Based Safe Harbor Checklists:  As an alternative, an array of safe harbor checklists would be provided so plans may compare to their own coverage. The safe harbor checklists would be used to make minimum value determinations for plans that cover all of the four core categories of benefits and services (physician and mid-level practitioner care, hospital and emergency room services, pharmacy benefits, and laboratory and imaging services) and have specified cost-sharing amounts. Each safe harbor checklist would describe the cost-sharing attributes of a plan (e.g., deductibles, co-payments, co-insurance, and maximum out-of-pocket costs) that apply to the four core categories of benefits and services.

-Actuarial Certification:  The last approach  would be available for plans with "nonstandard" features (such as quantitative limits on any of the four categories of benefits, including, for example, a limit on the number of physician visits or covered days in a hospital) since these plans would not be able to use a calculator or the safe harbor checklists. Plans would be able to generate an initial value using a calculator and then engage a certified actuary to make appropriate adjustments that take into consideration the nonstandard features. Plans with nonstandard features of a certain type and magnitude would also have the option of engaging a certified actuary to determine the plan's actuarial value without the use of a calculator.

How can employer determine whether its coverage is affordable when it will not know the employee's household income?

In  finalized regulations to implement the premium tax credit through the Exchange, the IRS indicated that it was their intention to issue proposed regulations or other guidance that would allow employers to use an employee's Form W-2 earnings (instead of household income) in assessing affordability. 

What Can an Employer Do with the Medical Loss Ratio Rebates

From Guest Contributor Larry Grudzien (larrygrudzien.com).

My client sponsors a group health plan for its employees. It recently received a medical loss rebate check from its insurer. The employer is asking what he should do with it.   Can he keep it? Or does he have to give a portion of the rebate to the participants?  

Allocating the Rebate

Technical Release 2011-04, the Department of Labor (DOL) outlined how employers should handle rebates for their ERISA group insured health plans. The DOL indicated that to the extent that all or a portion of the rebate constitutes a "plan asset," the employer may have a fiduciary duty to share the rebate with participants.

In the absence of specific plan or policy language, the determination of whether a rebate is considered to be a plan asset will depend, in part, on the identity of the group policyholder. If the plan or trust is the policyholder, the rebate will likely be considered a plan asset under ordinary notions of property rights. This means it stays with the plan and the employer cannot share in any part of it.

If the employer is the policyholder, the determination will hinge on the source of the premium payments and the percentage of premiums paid by the employer, as opposed to plan participants. If a portion of the premium is paid by participants, that portion will be considered a plan asset and must be used for their benefit. An employer cannot use the rebate generated by one plan to benefit participants in another plan. Such action would constitute a breach of fiduciary duty.

If all or a portion of a rebate does constitute a plan asset, then the plan sponsor will have to determine how and to whom to allocate the rebate. For example, must a portion of the rebate be allocated to former plan participants? The selection of an allocation method must be reasonable and it must be made solely in the interest of plan participants and beneficiaries.

In making the determination, the plan fiduciary may weigh the costs to the plan - and the ultimate plan benefit - when deciding on an allocation method. If the cost of calculating and distributing shares of a rebate to former participants approximates (or exceeds) the amount of the proceeds, a plan fiduciary is permitted to limit the allocation to current plan participants.

If it is not cost-effective to distribute cash payments to plan participants (because the amounts are de minimis, or they would produce negative tax consequences for the participants), the fiduciary may use the rebate for other permissible plan purposes. These might include a credit against future participant premium payments or benefit enhancements.

Notices to Subscribers

Insurers must send written notices to group policyholders - and their subscribers -informing them that a rebate will be issued. Employers should be prepared to respond to questions from participants who receive these notices, particularly if the sponsor does not intend to share any of the rebate with those participants.

The notice must include information regarding:

* The purpose of the MLR requirement imposed by the ACA;

* The applicable MLR standard;

* The issuer's actual MLR for the reporting year at issue and its adjusted aggregate premium revenue;

* The rebate being provided; and

* If applicable, an explanation that the rebate is being provided to the policyholder.

For ERISA plans, this explanation must state that policyholders may have obligations under ERISA with respect to the handling of the rebate amount, and the contact information for the ERISA covered plan. For other group health plans (such as non-federal governmental plans), the explanation must explain how the policyholders will use the rebate to benefit subscribers

Likewise, even if an insurer meets the Medical Loss Ratio requirements, it must notify subscribers that no rebate will be issued. This notice must be included with the first plan document provided to enrollees on or after July 1, 2012. Model notices are available on the Centers for Medicare & Medicaid Services website.

Tax Consequences

For participants in a group plan, the tax consequences will depend on factors such as the source of the premium payments (employer versus participant), whether participant premiums were paid on an after-tax or pre-tax basis.

If the rebate is distributed as a premium reduction for the employee, then the amount paid for the coverage is less, resulting in increased taxable wages. If the rebate is distributed in cash, then the rebate is treated as taxable wages, subject to income and employment taxes.

A link to Technical Release 2011-04 is provided below:

http://www.dol.gov/ebsa/newsroom/tr11-04.htm

How the Supreme Court ruling on the Affodable Care Act impacts you

As you already know, the Supreme Court upheld the Affordable Care Act law this morning.

WHAT THIS MEANS TO PEOPLE CURRENTLY INSURED

There are no major changes planned until January 1, 2014 when all health insurance becomes guaranteed issue with no pre-existing conditions. Details still need to be worked out as to how this will work. The changes as a result of the Act that have already been implemented will continue.

WHAT THIS MEANS TO PEOPLE WHO ARE CURRENTLY UNINSURED

If you have been uninsured for 6 or more months and cannot qualify for individual or group health insurance, then you can go on the Federal Government’s “Pre-existing Condition Insurance Plan – PCIP.” If you have been uninsured for less than 6 months, then the Illinois CHIP plan is available to you (if you live in a different state, I can get you the details about your specific state).

WHAT IF YOU CANNOT AFFORD TO PAY THE PREMIUMS

In 2014, there will be tax credits to help offset the cost of the premiums. Furthermore, depending upon how the state you live in decides. There “may” be an expansion of Medicaid to help people get the care they need. The Supreme Court left it up to the States to decide whether they wanted to expand Medicaid or not.

WHAT THIS MEANS TO EMPLOYERS PROVIDING HEALTH INSURANCE

There are changes coming in September about a Summary Benefit Coverage document that will need to be created. As far as I understand, if you are on a fully insured plan, the insurance carrier will provide this. If you are considered self insured, you will need to develop one. I have people and resources who can write an SBC.

WHAT THIS MEANS FOR PREMIUMS

Premiums will continue to rise, especially since most plans will be forced to cover more items (minimum essential benefits). This naturally leads to higher costs. Come 2014, there may be some relief for individuals and small businesses. The rules for each part of the Act still need to be written to spell out exactly who is eligible, how tax credits/subsidies will work, and where the money comes from.

SUMMARY

The Act has about 2700 pages. Most of the Act needs to be defined further in order to be able to implement the law. It is expected that there will be around 200,000 to 300,000 pages of rules written. Until the rules are written for each part, we won’t know specifically how it impacts individuals and businesses.

MEDIA

I just finished an interview with Mike Tobin of Fox News which will most likely air tomorrow morning (if they don’t leave me on the cutting room floor). I will also be live on wbjc AM 1230 (wbjc.com) at 7:10 am talking about the Act. Feel free to listen in.