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…

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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...

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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...

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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:




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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...

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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.

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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?

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