President Signs Important ACA Modification Bill!


Yesterday (October 7, 2015) the President signed the Protecting Affordable Coverage for Employees, or PACE Act, giving states the flexibility to define "small employer group", for purposes of the Affordable Care Act (ACA).  The PACE Act also redefines the definition of small employer to 1 - 50 employees.  This is an extremely important tweak to the ACA, especially for employer groups that employ between 50 - 100 full and part-time employees.  Had the PACE Act not been signed into law, the ACA was set to change the definition of small employer group from the current, 1 - 50 employees, to 1 - 100 employees, as affected plans renewed on and after January 1, 2016.  

For more information on the impact of this law, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

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Long Term Care's Silver Tsunami


Recently I read an article in a trade publication that addressed the so called "silver tsunami", related to long term care.  While the word "tsunami" certainly got my attention, some of the statistics mentioned in the piece had me downright concerned. As an employee benefits consultant/broker, health insurance is almost always at the top of the list in terms of importance and cost, followed by dental, life insurance, disability income, vision, and tax preferred spending accounts (e.g., health savings accounts, flexible spending accounts, health reimbursement arrangements).  However, with 10,000 Americans turning 65, each and every day, and the propensity to need some form of assisted care in the future as we age, LONG TERM CARE INSURANCE (LTCI) deserves a "seat at the table".  Here are some important considerations relative to long term care, which includes facility care at various levels, and potentially care received in the comfort of one's own home...

Based on insurance company – Northwestern Mutual Life Insurance Company’s 2014 Long Term Care Study:
  • Currently 1 in 3 Americans provides or is expected to provide care for a loved one.
  • The largest share of caregivers is in their peak earning years of age (45-64).
  • 47% of working caregivers reduce or deplete personal savings to cover expenses related to care giving.
  • 80% of primary and 50% of secondary caregivers reduced retirement plan contributions to cover long term care related expenses.
  • 75% of Americans agree that as people live longer, the need for long term care is greater.
  • By the year 2020, it is estimated that 25% of the workforce will be 55 years of age or older.
And finally…
  • Someone turning 65 years of age today has a nearly 70% chance of needing some form of long term care services/support in their remaining lifetime.
There are a number of quality insurance companies offering long term care insurance protection in the form of both individual and group policies. And, there are a several factors to take into consideration when evaluating long term care insurance.  Some of these factors include:
  1. The maximum benefit period (usually expressed in a number of years, or in some cases, for life).
  2. The per day or per month benefit amount.
  3. The total amount of benefits available or the lifetime maximum benefit (generally determined by multiplying the per day benefit amount (no. 2.above) by 365, then multiplying this figure by the number of years associated with the maximum benefit period (no. 1. above).
  4. The length of time before benefits are payable (referred to as the benefit waiting period).
  5. Whether or not the policy provides coverage for care provided in and out of a nursing home, assisted living facility, and/or the person’s home.
  6. Whether or not the policy only provides benefits for licensed care givers.  Some policies provide benefits to care givers that are not necessarily licensed providers, but rather, friends, neighbors, and relatives.
  7. Inflation protection.
  8. Partial or full return of premium in the event benefits are never triggered.
  9. Whether or not the policy can continue with limited benefits if the policy owner decides to stop paying premiums (generally referred to as a non-forfeiture option).
  10. Whether the policy pays benefits based on an expense incurred, indemnity, or disability model.
  11. Whether the policy is considered qualified or non-qualified.  (Note: in order to be eligible for tax deductability of premiums, the policy must be qualified.).
And unlike other forms of insurance that have clearly defined benefit “triggers” (e.g., death, accident, fire, theft), LTCI benefits are usually triggered by a physician’s certification of either or both of the following:
  1. Inability to perform a specific number of “activities of daily living”, or ADL’s, which may include bathing, continence, dressing, eating, toileting, and transferring; or
  2. Cognitive impairment (e.g., dementia, Alzheimer’s disease).
Finally, the federal government encourages the purchase of LTCI by allowing tax deductability of a portion, and in certain instances, all of the premiums paid for coverage.  For example, in 2015, an individual between the ages of 60 - 70 can deduct up to $3,800 if such premiums and other allowable medical expenses exceed 10% of adjusted gross income (AGI).  Tax deductability of LTCI premiums paid for group/employer provided coverage depend on the structure of the organization (i.e., partnership, S corporation, C corporation).  And, like many other insurance benefits provided by employers, LTCI benefits received are tax free to covered employees and dependents!

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2016 Health Savings Account (HSA) Guidelines


Earlier this summer (2016) the IRS released its annual guidance affecting Health Savings Accounts (HSA), and associated qualified high deductible health plans (QHDHP).  Interestingly, for the first time since rules were relaxed to allow contribution amounts to be higher than a percentage of the deductible (remember those days?), the IRS chose to keep the maximum HSA contribution limit for individual coverage static; but increased the HSA family coverage limit.  Despite keeping the maximum allowable HSA contribution amount unchanged for those having individual only coverage, the IRS did, however, increase the maximum out of pocket limit associated with the required/accompanying QHDHP for individuals (in addition to families).
Here's an overview of the changes affecting both HSAs and QHDHP's, starting in 2016...

Health Savings Account (HSA) contribution limits:

  • Individual Coverage: $3,350 (no change from 2015)
  • Family Coverage: $6,750 (an increase of $100 from 2015)
  • As a reminder, so called family coverage is defined as an individual plus one or more dependents.
Qualified High Deductible Health Plan (QHDHP) out of pocket limits:
  • Individual Coverage*
    • Deductible must be at least $1,300 and no greater than $2,600 annually.
    • Out of Pocket limit (deductible plus additional requirements such as post deductible copays and coinsurance) may not exceed $6,550 annually (which is a $100 increase from 2015).
  • Family Coverage
    • Deductible must be at least $2,600 annually
    • Out of Pocket limit (deductible plus additional requirements such as post deductible copays and coinsurance) may not exceed $13,100 annually (which is a $200 increase from 2015).
* IMPORTANT: Recent guidance issued by the trilogy of ACA compliance and enforcement -Departments of Labor/Treasury/Health & Human Services – affects QHDHPs (both inforce and newly established) starting in 2016.  The guidance indicates that the annually published ACA out of pocket maximums affect so called “aggregate” or "non-embedded" family deductibles that are part of many QHDHP’s.  (Note: QHDHP’s that utilize embedded family deductibles and grandfathered plans would not be impacted by the change.)  

This means that QHDHPs having a non-embedded or aggregate deductible for family coverage will be required to limit the deductible exposure facing any one family member to the ACA individual maximum out of pocket limit for 2016, which is $6,850.


For more information on this guidance and the impact on affected plans, go to -https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

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ACA 2016 Maximum Out of Pocket Limits and CDH Plans


Recent guidance issued by the trilogy of Affordable Care Act (ACA) compliance and enforcement -Departments of Labor/Treasury/Health & Human Services – could have a major impact on many of the Consumer Driven Health Plans (CDHPs) currently in force, starting in 2016.  In short, the recently published guidance (released in the form of an FAQ) indicates that the annually published ACA out of pocket maximums affect so called “aggregate” family deductibles that are a part of many CDHP’s.  CDHP’s that utilize embedded family deductibles and grandfathered plans would not be impacted by the change.  Here’s what all of this means…
Click here to access the full article -https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Supreme Court Rulings Affecting Employee Benefits


The Supreme Court of the United States (SCOTUS) recently issued separate rulings affecting the health insurance and employee benefits sectors.  The "King v. Burwell" decision assures that health insurance subsidies will continue to be provided to eligible individuals in all states, even those that don't have a "state based health insurance exchange".  And the "Obergefell v. Hodges" ruling held that state laws (in 14 states) banning same sex marriages were unconstitutional.  While the former ruling affecting ACA subsidies will primarily assure continuation of previously implemented aspects of the law, and prevent what could have been serious disruption, chaos, and premium rate impact; the later ruling will require examination of, and changes to many policies and procedures.  Here's a brief overview of the more pertinent areas deserving attention...

ACA's Small Group Definition Changing



2016 is shaping up to be yet another impactful Affordable Care Act (ACA) year, particularly for employers with 51-100 employees (full and part-time).  The two year reprieve from the ACA's employer mandate/shared responsibility for such employers ends beginning in 2016.  But perhaps more importantly, and having a potentially greater impact, is the redefinition of what constitutes a so called SMALL EMPLOYER.  Plans that begin or renew on or after 1/1/2016 that are: (i) fully insured; (ii) non-grandmothered; and (iii) have 1-100 employees, will be required to comply with certain ACA regulations heretofore applicable only to fully insured groups with fewer than 51 employees. Let's take a look at the impact of this redefinition...

To access full article, go to - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Understanding the ACA's Modified Community Rating Requirements


This week's post is dedicated to explaining one of the many new provisions of the Affordable Care Act (ACA) which is scheduled to be implemented in 2014 - MODIFIED COMMUNITY RATING (MCR for the rest of this blog post).  Let me begin by stipulating which stakeholders this provision affects and which it does not:




To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Health Insurer For Sale!



Insurance holding company - Assurant Inc. - announced their intent to exit the health insurance marketplace by 2016; and have retained investment banking firm - Barclays Capital - to locate a potential buyer for their health insurance and employee benefits subsidiaries.  Like the legions of health insurers that have exited the market before and after passage of the Affordable Care Act (ACA), the reason is simple - quarterly losses in the millions with seemingly no end in sight.  In the case of Assurant Health (and its more recognizable subsidiary insurers in the health insurance market including Time, John Alden Life, and Union Security Life) it appears the ACA was the proverbial "straw that broker the camel's back".  Here's what we know based on a variety of media outlets, and Assurant's own press release...

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Health Care Payment Alternatives


Back in the 1960's, the average cost of an overnight hospital admission was around $100.  Not coincidentally, most health insurance plans at the time set their deductible amounts somewhere between $0 and $100.  Today, adjusting for geographical differences, PPO discounts, etc., an overnight stay in a hospital will run you between $1,700 - $2,500.  According to the Kaiser Family Foundation (KFF), the average health insurance plan deductible in 2014 for an individual covered by employer based coverage was $1,214 (up from $826 in 2009).  Smaller employers (fewer than 200 employees) tend to have higher deductibles (nearly $1,800); while larger employers lean toward lower deductibles ( $971).  Clearly, there is a relationship between health insurance deductible amounts, and the average cost of an overnight hospitalization.

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Defined Contribution in Health Insurance

 
Many in the health insurance and employee benefits space are claiming to have found the next new, innovative and sure fire way to reduce health insurance costs.  Actually its an old idea, originally deployed in the retirement/pension area of the overall employee benefits palette, and fairly recently resurrected for use in employer provided health insurance.  The next "silver bullet"?

DEFINED CONTRIBUTION

(Remember 401(k)s gradual replacement of many defined benefit retirement pension plans in the eighties?)
Two large, well known U.S. businesses recently announced their intent to go with a defined contribution strategy for their health insurance offering (Time Magazine and Hilton Worldwide), joining others previously taking the plunge including Darden Restaurants, Sears, and Walgreens.  So what are the pros and cons to such an approach?  What is it exactly?  How does an employer deploy it?

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

King v. Burwell ~ Deciding the ACA's Future


Next week (March 2, 2015), the Supreme Court of the United States (SCOTUS) will take up a very important case - King versus Burwell.  All politics and rhetoric aside, this case has the potential to virtually upend the Affordable Care Act (ACA), and stakeholders should be informed as to its implications.   At the core of the case is whether or not the federal government has the authority to issue subsidies (or tax credits) to otherwise eligible individuals that reside in a state that does not have a "state based health insurance exchange" (emphasis on the word - state).  Nearly three years ago, the SCOTUS rendered a decision addressing the constitutionality of the ACA...specifically the individual mandate. This time around, the SCOTUS will be interpreting specific language within the 2,700 pages of the law, and their determination could have a profound impact on the future of health care in America.

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

2015 ACA Compliance and Planning


As we approach the 5th anniversary of the signing of the Affordable Care Act (ACA) into law, compliance and planning have become more important than ever.  Listed below are ACA provisions that have particular relevance this year, and deserve attention and planning...

The Demise of a Health Insurer in 1 Year!


 
Although the following chain of events directly affects some 120,000 health insurance policyholders residing in the states of Nebraska and Iowa, it could be a bell weather for individuals residing in one of the other 23 states that have/offer health insurance through a federal government approved/funded, non-profit, member owned health insurer. (see http://sstevenshealthcare.blogspot.com/2014/12/coop-health-insurancealert.html for the states currently offering health insurance through a government funded/approved COOP).
 
March 23, 2010 – The Patient Protection and Affordable Care Act (PPACA) is signed into law by the President.  Section 1322 of PPACA includes a provision allowing for the establishment of “consumer operated and oriented plans”, or COOPs.
January, 2012 – CoOportunity Health is founded as a non-profit, 501c(3) entity in Iowa, led by former Wellmark/Blue Cross Blue Shield executives.
February, 2012 – The Centers for Medicare and Medicaid Services (CMS) approves CoOportunity Health, along with 22 other COOPs in 23 states around the country.  CoOportunity Health receives initial, low interest loans from the U.S. government totaling $112.6 million.  (Note: the loan included a 15 year payback, and an initial interest rate under 0.4% on the solvency portion, and a 5 year payback time frame on the initial start up portion.) This initial amount was divided/used as follows: $14.7 million for initial operations; $98 million as operating capital, meeting insurance department solvency and surplus to premium requirements. (Note: according to the Omaha World Herald; Money & Jobs; December 28, 2014 article, the initial operating capital allocation was $15.4 million and $130.6 million in solvency funds, respectively.)
October, 2013 – CoOportunity Health is officially open for business in the states of Iowa and Nebraska, and begins enrolling members, both on and off the federal health insurance exchange, individual and employer group coverage.
January 1, 2014 – The earliest allowable effective dates of issued coverage.
Q2, Q3, 2014 – CoOportunity Health realizes significant growth, reaching 5,000 covered members by Q2, 89,000 members in Q3, and 120,000 members by early Q4.
November 1, 2014 – 2015 open enrollment begins (concludes 2/15/15)
December 13, 2014 – The $1.1 trillion Budget Reconciliation Act (or CRomnibus Bill) is passed by Congress.  One of the provisions of the bill eliminates anticipated funding for the 24 COOPs, including CoOp Health.  As a result, $60 million of CoOp Health’s anticipated, additional $125.6 million of government funding was eliminated, placing them at risk. (Note: the Iowa Department of Insurance allowed CoOp Health to include the $125.6 million on its balance sheet as an asset.)
December 23, 2014 – The Iowa Insurance Commissioner submits a petition for an “order of rehabilitation”, ceasing any new business activity from that point forward.  Within an issued statement, the commissioner says – “…people who signed up for the first time with CoOportunity Health after December 15, 2014 will not have coverage and should find other insurers”. 
January 7, 2015 – The Iowa Department of Insurance issues guidance strongly encouraging agents and brokers to “explore other coverage options for individuals and groups”.  The guidance also outlines the possibility of CoOp Health’s status changing to “liquidation”.  In such an event, insured groups would be terminated 45 days after a liquidation order is issued.  Affected terminated members would have the option of filing claims through the state guarantee fund, which has a $500,000 per member limit on medical and pharmacy claims.
January 23, 2015 – The Iowa Department of Insurance announces its intent to file a petition with the court for liquidation.  The insurance commissioner indicates that “there is no expectation for additional cash inflow until the second half of 2015 and medical claims currently exceed cash on hand”.  It is anticipated that a hearing will take place in February (2015), and the order to liquidate CoOportunity Health will commence on February 28, 2015.
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COOP Health Insurance...Alert!


Section 1322 of the Affordable Care Act (ACA) allowed for the establishment of "consumer operated and oriented plans" or COOPs.  Bolstering the ACA's goal of expanded health insurance coverage, and borrowing from the agricultural industry's adoption of COOPs in the 1920's, twenty-four COOPs were approved and funded by the federal government.  Specifically, the fed awarded nearly $2 billion to the 24 approved COOPs operating in 24 different states.  In theory, the COOPs would bring more competition and choice into the market, which is a welcome change from the hundreds of insurers who have abandoned the health insurance market over the last several years (see Metropolitan Life, Travelers, NY Life, Prudential, Principal, American Chambers Life, and Mutual of Omaha to name just a few).  And if not for funding cuts, and a significant reduction of the originally proposed $6 billion funding allocation, there would likely be even more COOPs in existence. 

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Narrow Networks...Healthcare Buyers Beware!

In the current, post Affordable Care Act (ACA) world, the term - “narrow network” – is often heard, and at times, is a strategy deployed by employers and insurers.  There are a variety of other ways to describe narrow networks, such as - carve out network; exclusive provider network; select network; tiered network…you get the idea.  From a covered member's standpoint, this strategy involves limiting the number of contracted providers plan members can seek care from, and in return, receive the best benefits, and lowest out of pocket costs.  From the standpoint of the insurer or employer, narrow networks mitigate risk and reduce expenses.  Readers who have been around the healthcare scene since the eighties might recall the original introduction of narrow networks, albeit presented at the time as “HMO Lite”;  “a PPO/HMO hybrid”; or more commonly –  “exclusive provider organization”, replete with its very own acronym  - EPO! 
To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

The ACA and Newton's 3rd Law of Motion

Sir Isaac Newton’s Third Law of Motion taught us that “for every action, there is an equal and opposite reaction”.  As we near the end of the fourth full year of the [partial] roll out of The Affordable Care Act /Obamacare, it has become increasingly more challenging for people to differentiate “action” from the “equal and opposite reaction”.  Put another way, some of the things we’re experiencing, required by the ACA, are directly attributable to the law itself (call these “actions”).  And then there are things we’re seeing that are the result of the many requirements, mandates, fees/taxes, expansions associated with the ACA (call these “equal and opposite reactions”).   This will all make more sense when you see the chart at the end of this article.
To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Ebola ~ Just the Facts

Readers of this blog (soon to be "resource library") typically find health INSURANCE, FUNDING, and FINANCING issues addressed here.  But occasionally, health CARE issues come to light which I feel compelled to address.  With all the media coverage and confusion surrounding the recent outbreak of the Ebola virus, I decided to attempt to clarify some important facts.  My primary source of information for this post is the Douglas County Health Department (Douglas County, Nebraska), which under the direction of Dr. Adi Pour, does a fantastic job of data mining and educating, among other things.  (See http://www.douglascountyhealth.com )

The Ebola virus was first discovered in 1976 in the Ebola River, which is located in a region of Africa now known as the Democratic Republic of the Congo in lower, central Africa.  Although the virus has been found in several African countries since its initial outbreak, as of the time of this blog post, there are four (4) countries in the western region that have experienced outbreaks - Guinea, Liberia, Nigeria, and Sierra Leone.  The current, 2014 outbreak is the largest in history, and the first to occur in west Africa.

Perhaps the most misunderstood, and in some instances, incorrectly reported aspect of Ebola, is how it is spread.  It is NOT spread via air or water, but rather through direct contact with someone who: a. is infected with the virus; and b. is also experiencing symptoms.  Clearly health care workers are at the greatest risk of contracting the virus, as evidenced by the recent reporting infected health care workers in Dallas, TX. The U.S. Centers for Disease Control and Prevention (CDC) are taking very deliberate and focused measures to mitigate, if not prevent Ebola and for that matter all infectious diseases, from arriving and spreading throughout the U.S.

IMPORTANT: CDC Director - Thomas Friedan - specifically addressed rumors relative to the ability of the Ebola virus to spread through the air, which have actually "fueled" the rumor mill.
On 10/7/14, he said:
"The rate of change [with Ebola] is slower than most viruses, and most viruses don't change how they spread.  That is not to say it's impossible that it could change [to become airborne].  That would be the worst-case scenario.  We would know that by looking at...what is happening in Africa.  That is why we have scientists from the CDC on the ground tracking that."

In addition to how the Ebola is (and is not) spread, here are some of the more relevant and pertinent facts concerning Ebola, gleaned from the aforementioned source:
  • An individual that recovers from being infected can no longer spread the virus.  However, the virus can survive for up to three months in semen.
  • Only mammals have shown the propensity to be infected with, and spread, Ebola.  Specifically at this point in time - humans, apes, monkeys, and bats.  Mosquito's and other insects, at this point, are not able to transmit the Ebola virus.
  • The CDC and the U.S. Fish and Wildlife Service have specific protocols in place to prevent the Ebola virus from coming into the U.S. via non-human primates and bats.  The greater challenge, as we now know, is dealing with humans arriving on U.S. soil, who have contracted the virus.
  • The CDC is working with all U.S. hospitals on establishing and implementing the proper infection control measures to control the continued spread of the Ebola virus.
  • Since all U.S. citizens have the right to return to the U.S. for treatment of any contacted disease/disorder, we simply can not completely prevent infected citizens from re-entering the country.  For this reason, the CDC has taken specific and deliberate actions, including raising the travel alert level to Level 3 (i.e., travelers incur high risk of traveling to the four identified, west African countries, and are advised against nonessential travel to those locations).
  • The CDC's Emergency Operations Center (EOC) has been activated to assist with the coordination, communication, monitoring, and management of this current challenge.
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ACA's Transitional Reinsurance Fee/Tax

Self funded health plans face a rapidly approaching compliance deadline of January 15, 2015 relative to the Affordable Care Act's so called "transitional reinsurance fee".  A previous post addressed the various reinsurance (or bailout) programs devised in the ACA (click - http://sstevenshealthcare.blogspot.com/2014/01/acas-insurance-company-bailouts.html). 
These programs are sometimes referred to as the "Three R's", which are:
  1. Reinsurance Program
  2. Risk Corridor
  3. Risk Adjustment
The first of these reinsurance/bailout programs - the [temporary] reinsurance program - is funded by virtually ALL health insurance plans (e.g., individual, group, fully insured, self funded) through the assessment of a fee/tax.  Fully insured plans owe the tax, but do not have to worry about counting/collecting/remitting.  Self funded plans however, are responsible for all of the aforementioned.  So, here's the scoop on determining the amount of your organization's tax, along with when, and how to submit it....

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA's Health Plan Identifier Requirement

As the old saying goes, "the devil is in the details", and the Affordable Care Act (ACA) has its fair share of DETAILS.  Among the rapidly approaching compliance deadlines for many employers is requesting/obtaining a ten-digit Health Plan Identifier or HPID.   While ALL employers offering health insurance plans must comply with this requirement, the due date for obtaining the ID, along with determining who is responsible for obtaining it varies based on a couple of factors.  Here's an overview of the whole HPID matter...

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

    Open Enrollment Best Practices


    As we approach the labor day holiday, human resources officials, brokers, consultants, and others begin to think not as much about the end of summer, but rather, the approaching OPEN ENROLLMENT SEASON!  Before we know it, that special time of the year will be upon us.  Having been involved with so many open enrollments over the years, as an insurance company executive, third party administrator, wholesaler, consultant, and retailer/broker, I have accumulated some insight as to what employees/enrollees should be considering during this important time of the year.  Call these my "open enrollment best practices", or, put another way, the things enrollees/employees should consider as they enter open enrollment season...
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