Will Your Health Insurance Premiums Be Higher in 2014?

From:  Real Health Care Reform

Today, you have access to plans catastrophic plans with high deductibles, but many such plans will disappear in 2014. Fortunately, catastrophic plans with more limited benefits will still be available for people under age 30. According to a senior fellow at the Urban Institute, Linda Blumberg, adding more benefits is tantamount to premium hikes. Premiums will also increase on younger people, because they will be subsidizing older insureds.  Young men will also be subsidizing the premiums for women, so they can expect the largest rate increases.

The health care reform law also mandated a lot of added health care benefits that are responsible for some of the increases in health insurance premiums. The removal of underwriting starting in 2014 will also result in much higher claims, and are expected to further drive costs up.

And, that’s not all that’s changing in 2014.  Preventive care services are already covered with no out-of-pocket costs, but people are treated quite differently once they get sick. If they have to buy their own policy on the individual market, applicants with pre-existing conditions may find their application is denied.  That’ll change as of 2014 and they’ll have guaranteed acceptance then. But, insurance companies will increase premiums in
order to cover added claims.

For those who find it impossible to pay for health insurance, the Affordable Care Act provides federal subsidies. Tax credits will be provided to individuals with incomes below 400 percent of the federal poverty level if they get health care coverage via a state exchange. According to the Department of Health and Human Services, compared to the cost of health insurance under the current rules, the tax credits could help a family of four with an income of $33,525 save $14,900.

How to Save on Health Insurance Right Now

Of course, with 2013 just rolling into view, you have opportunities to save on your health insurance right now.  We offer our Annual Comprehensive Policy Review to see if a plan is available that has either a lower premium or more comprehensive coverage than your current plan.  This is a free service and it comes with no obligation. December is one of the best times to compare health insurance.  That’s because companies hand out rate hikes for Jan. 1.  If you find a plan with 2012 rates this month, you can probably avoid switching to higher premiums for a whole year.

If you qualify, we can also help you establish a Health Reimbursement Arrangement.  This can enable married self-employed people to legally run all their medical and insurance expenses through the business, saving potentially thousands in taxes every year.

The Sacramento (CA) Business Journal (12/3, Robertson, Subscription Publication), Kathy Robertson writes, "Anthem Blue Cross, California's largest for-profit insurer and leader in the individual market, is seeking an average rate hike of 26 percent for 340,000 members, effective Feb. 1. Another 296,059 may get an average increase of 24.6 percent the same day." Another group of 1,659 members may get a 2.1 percent cut in their rate. Aetna proposed an average 18.8 percent hike in rates while Kaiser is seeking to increase rates by an average of 7.7 percent. Regulators at the California Department of Insurance and the California Department of Managed Health Care will review the plans but "cannot set rates or deny them."

New Devices Help Baby Boomers Stay In Their Homes.

The Detroit Free Press (12/26, Erb) reports, "From talking pill dispensers to tracking devices tucked inside tennis shoes to digital medical scanners that can transmit vital signs to the doctor, today's gadgets help seniors stay in their homes and can give relief to loved ones and caregivers." Now, "the new gadgets - once available only to hospitals and the wealthiest consumers - are accessible now to more modest-income homes."

How State Exchanges Are Playing Out
From: Real Health Care Reform

The all-too-quickly-approaching deadline is approaching for state officials to declare whether they’ll run an exchange for their state of let the feds do it.

This deadline has actually come and gone, but Health and Human Services announced a new deadline to give officials more time to decide. By February 2013, all states must declare whether they plan to create their own exchange or let the federal government do it for them.

Whether the state or the federal government end up hosting the exchange for your state, time is running out to get the works in place. You’re supposed to be able to check out a new exchange in less than a year. The coverage you select is supposed to be in effect by January 2014. And it looks like many states, and the Federal government, will have a hard time being ready by these deadlines.

The new exchanges are envisioned as online marketplaces where small business owners and individuals can shop for affordable and quality health insurance products. We’ll continue to monitor the coming changes and look for insights that can help you navigate the new ways health insurance and health care may become available.

Some changes are already apparent. Florida Republican Gov. Scott, for example, has said he wants to negotiate with federal officials to try to help nearly four million uninsured Florida residents. Scott was one of the strongest opponents to the health care reform law.

In Iowa, Governor Branstad said that he is delaying a decision about running the state exchange, but his spokesman said the Governor is considering a partnership with other states in order to run an Iowa exchange. Florida and Ohio officials may take the same path.

Mississippi Republican insurance commissioner Chaney has already notified the Obama administration that his state will proceed with a state-run exchange. Republican Governor Martinez of New Mexico has also agreed to run an exchange.

There are a number of potential benefits available to state governments that build their own health-insurance exchange. One of the biggest is that this would help keep state officials involved when it comes to coordinating Medicaid. And, many people may be moving between Medicaid and state-exchange private coverage.

The states that stay “in the loop” will have choices to make, like whether to allow all insurance companies to participate in the exchange. They can opt to only allow in companies that agree to meet their criteria.

Other state officials in places like Kansas, Louisiana, Missouri, South Carolina and Texas seem unlikely to participate in the state exchanges. That leaves it up to the federal government to take responsibility. The previously Republican-led state of Virginia has also left running its exchange to the federal government.

Newtown Tragedy Provides Impetus To Examine US Mental Healthcare.

NBC Nightly News (12/17, story 5, 1:25, Williams) reported, "This tragedy in Newtown, Connecticut has already ignited a national conversation about guns, as we have just seen." However, mental illness has been a "component...in all the serious gun crimes we have covered. One in 17 Americans lives with a serious mental illness, that's according to the government, and their symptoms range in severity, of course. But fewer than a third of them receive treatment." Chief medical editor Nancy Snyderman, MD, explained, "Less than 10% of our healthcare dollars are spent on mental healthcare." While well-to-do people can pay for care and the poor may get some care through Medicaid, other people fall through the cracks.

Lawmakers Call For Conversation On Mental Health Issues. CQ    (12/18, Attias, Subscription Publication) reports, "Lawmakers in both chambers are calling for Congress to start a conversation about mental health issues in the wake of last week's deadly shooting at a Connecticut elementary school, with one goal of ensuring adequate funding for services for those who need treatment." Even though "much of the discussion since last week's shooting has focused on gun policy, several members are also emphasizing the role mental illness has played in many national tragedies." But, "beyond a broader policy push, the shooting in Connecticut could also make it more difficult for Congress to allow spending reductions for mental health services as part of the fiscal cliff, deficit reduction efforts or the appropriations process next year."

Small Business Owner?  How To Avoid Obamacare Tax Hits

The provisions of the Affordable Care Act will be kicking in starting in 2014.  Small business owners are now doing a lot of research on how to avoid taking a severe tax hit from the law.  You often hear independent business groups complain about the additional taxes and penalties Obamacare will create.  But what type of businesses will the provisions of Obamacare exactly target?

If you are a small business owner, here are a few facts you should know:

1.  Business owners with more than 50 employees will be faced with the decision of whether to sponsor a health insurance plan for all of their workers or pay the federal government $750 per employee if the business owner chooses not to sponsor a health insurance plan.

With the poor economy, a business owner should do the math in order to find out which option would save him money, paying for a health plan for his employees, or paying the corresponding tax penalty to the government.  Some business owners would likely pay the penalty since it is a lot cheaper compared to paying for an employee health plan.

2.  Small business owners who employ 25 to 49 employees are not required to sponsor an employee health benefit plan.  Those who do have health plans for their employees will likely be burdened with a health insurance premiumincrease.  There is not a cap on health insurance premiums, thus insurers can now choose to increase premiums before the start of open enrollment.

3.  Small business owners with employees fewer than 25 will actually get some tax relief if they are offering employee health plans.  In 2014, 50 percent of the total premiums paid will be given in the form of tax credits if the business owner acquires insurance plans from the Small Business Health Options Programs.

It should be noted, however, that this tax incentive is not available to businesses with sole proprietorship, but only to corporations or Limited Liability Companies.

From: Real Health Care Reform

One Thing Health Care Reform Did Not Change For Your Business
From: Real Health Care Reform


Under federal regulations, businesses are prohibited from directly paying for employees’ individual health insurance premiums and medical expenses without the use of an HRA (Health Reimbursement Arrangement), or another tax-free arrangement that is IRS/HIPAA/ERISA qualified.

The two main reasons for this are that 1) Such payments make it would look as if the company is endorsing an individual health insurance policy, and 2) These direct payments would be taxable income to employees.

By paying directly for workers’ individual health plans, according to federal law, a company is treating the policy as if it’s part of an employer-sponsored plan that is regulated by ERISA (Employee Retirement Income Security Act).  The problem here is that your company can be out of compliance with the act because many policies fail to meet the minimum ERISA requirements for group plans.

Your company can also be in violation of HIPAA-privacy requirements because employers are not permitted access to their staff’s HIPAA-protected medical cost details.  That includes the medical expenses covered by health insurance.

The federal government has developed guidance explaining how companies can avoid ERISA and HIPAA regulation violations.  And, to ensure your company does, set up an HRA that is HIPAA and ERISA compliant.  With an HRA, your company can legitimately reimburse employees for medical costs and for health insurance premiums.

Even though, this is the very last month of the year, businesses still have until December 31 to set up an HRA for 2012. This can allow the business to reimburse for the entire year’s health insurance expenses.  Small business owners can see how to establish an HRA, which may help cut health insurance expenses in half, at 105 HRA Plans for Small Business Owners. An HRA is also an option for certain sole proprietors, who can learn more about this at 105 HRA Plans For The Self-employed.

Once established, very minimal administration is required to maintain an HRA.  And, employers have a lot of flexibility in how they wish to structure arrangements.  Employees can also be easily added or removed from HRAs, and because these are reimbursement plans, little upfront funding is

Provisions of the Affordable Care Act require health insurance in all states to cover at least ten broad categories of health care. Doctor appointments, maternity care, and prescription drugs are among required benefits. In addition, state officials must use an existing health plan as a template upon which to base standard coverage

The packages being selected by state officials look pretty similar for standard doctor and hospital care, but a lot of variety is appearing when it comes to what’s often referred to as alternative treatments. As you can imagine, a multitude of special interests are lobbying to make sure that their preferred treatment be part of the mandated coverage. The more successful they are, the more expensive coverage will be.

For instance, an advisory board for the Virginia health insurance exchange wants to include chiropractic services and speech therapy in mandated coverage. In California, the legislature agreed to include acupuncture as an essential health benefit, while other states, like Oregon, have already ruled out including acupuncture, chiropractic services and fertility treatment.

Oregon officials have also excluded bariatric surgery and other stomach-reduction procedures. Instead, they want to focus on preventing obesity. Coverage for mental health services is likewise less than uniform among the states

In some states, there remains. disagreement over whether to define a benchmark policy at all. The alternative is to rely on the federal government. In that case, the benchmark will default to match the largest small-group plan offered in the state.

What will happen if state officials try to set a benchmark that fails to meet federal requirements? We’ll have to see how that turns out because Utah officials have already upset advocacy groups by defying one federal mandate. They’ve approved a policy without coverage for substance abuse treatment, which is at odds with federal requirements. Advocacy groups are also alarmed because beginning dental coverage at age three may not be in line with federal requirements to cover pediatric dental care.

There are going to be a lot a “growing pains” between now and next October when the state exchanges are scheduled to be available over the Internet. We’ll follow the news to keep you informed about what’s happening in your state and what it may mean for your future health care.

From: Real Health Care Reform

How A Defined Contribution Plan Can Lower Business Benefit Costs
From:  Real health Care Reform

If you are a business owner, you have plenty to do simply running your business.  Do you also have to be in the health insurance business?  With ObamaCare requirements, it is going to become increasingly expensive to provide group health insurance coverage.  One strategy many business owners are taking is setting up Defined Contribution Plans.
 
Defined contribution plans can be set up with a Health Reimbursement Arrangement, or HRA.  This allows your business to reimburse employees for their health insurance or other medical expenses, as a tax-free fringe benefit.  A health reimbursement arrangement (HRA) can provide employees with a monthly allowance with which they can buy coverage through a state health insurance exchange.  An HRA can act as a business expense account specifically for health care.
 
The biggest hurdle involves HIPAA privacy obligations for dealing with personally-identifiable health information (PHI).  These obligations apply to employers offering HRAs, which are basically self-insured health plans.  And, failure to comply with HIPAA can subject a company to up to $100 per violation in civil penalties.
 
To avoid that, have medical expenses substantiated by a third-party.  Substantiation must confirm that the expenses have a medical basis, which means dealing with the specifics that get into the realm of privacy violations.
 
Thus, your business must have written PHI privacy procedures and must also appoint a privacy officer.  That officer needs to set up how employees can file complaints and a process for responding to complaints.  It’s that officer who will be responsible for ensuring PHI is kept separate from decisions about benefits and employment.
 
With that handled, your business can use an HRA to reimburse employees for dental and health care on a 100-percent tax-free basis.  That includes the cost of health insurance premiums.  When an HRA meets three requirements, the HRA money employees receive is deductible for the business and it’s excluded from gross income for employees. Here are those requirements:
 
1.    A medical connection must exist.
2.    Employee expenses must be substantiated.
3.    Employees must return amounts they receive that exceed actual expenses.
 
The steps to set up an HRA are straightforward:
 
1.    Choose an administrator.
2.    Setup the plan by specifying what makes employees eligible, how reimbursement works, and a monthly allowance.
3.    Then, provide HRA documents to employees and enroll them.
 
Having employees selecting their own policy greatly reduces administrative overhead, as does having third-party oversight.  HIPAA-compliant claims officers can substantiate and process employee requests for reimbursement up to the HRA balance.  Once the initial set-up work is finished, the business can maintain the HRA with a minimum of time to free up HR for other work.

Medicare Premiums To Rise By $5 A Month In 2013.

The AP  (11/16, Alonso-Zaldivar) reported Medicare premiums "are going up $5 a month in 2013, the government said Friday. It's less than expected, but still enough to eat up about one-fourth of a typical retiree's cost-of-living raise next year. Medicare chief Marilyn Tavenner said the new 'Part B' premium for outpatient care will be $104.90 a month. In most cases, it's deducted directly from a beneficiary's monthly Social Security check. Currently the premium is $99.90 a month."

Modern Healthcare (11/16, Zigmond, Subscription Publication) reported, "The Medicare Rights Center, an advocacy group, issued a statement that said Friday's announcement should remind lawmakers during deficit-reduction negotiations that seniors and persons with disabilities already pay a lot for healthcare."

The Wall Street Journal (11/19, Radnofsky, Subscription Publication) and CQ (11/19, Subscription Publication) also reported the story.