Archive | Health Care Bill Impact on Business

More People Turn to Faith-Based Groups for Health Coverage

In a trend that could challenge the stability of the Affordable Care Act, a growing number of people are turning to health-care ministries to cover their medical expenses instead of buying traditional insurance according to a Wall Street Journal article published last week on their wsj.com website.

The ministries, which operate outside the insurance system and aren’t regulated by states, provide a health-care cost-sharing arrangement among people with similarly held beliefs. Their membership growth has been spurred by an Affordable Care Act provision allowing participants in eligible ministries to avoid fines for not buying insurance.

But now, some insurance commissioners are concerned that the ministries could put consumers at risk if bills aren’t paid. The ministries aren’t overseen by state commissioners, which generally guard against unfair practices and ensure solvency.

  • Ministry officials say they aren’t offering insurance, don’t guarantee claims will be paid, and don’t need to be regulated. The nonprofits are well managed, according to ministry officials, with third-party audits and a sterling history of sharing members’ claims.
  • Ministries generally don’t allow members to sue and require disagreements to be settled by arbitration and mediation.
  • Most ministries don’t always share bills for certain pre-existing conditions, whereas the ACA requires insurers to cover anyone regardless of their past or current medical history.

State regulators also say health ministries disrupt the insurance market because they tend to attract healthier consumers, siphoning them from commercial plans that can be left with sicker or older customers. Insurance commissioners in some states have moved to shut down the ministries’ state operations.

Many of the estimated 50 health-care ministries in the U.S. are small operations, and some churches have their own programs limited to parishioners. There are several large Christian ministries, and at least two other ministries open to people regardless of specific religious faith.

Members typically must abide by Biblical principles such as not having sex outside of marriage, and may have to sign a statement of religious faith.

Some consumers say they joined ministries to avoid rising deductibles and premiums on the health law’s exchanges, and to be free from the law’s penalty, which starts at $695 for 2016.

Consumers generally pay a set monthly amount that goes into a general account or directly to others who have eligible medical bill. They can also submit their own eligible bills to be shared by other members. In some ministries, members make contributions directly to others—and tuck gifts, personal cards and get-well wishes into the envelopes. Preventive care in some cases isn’t covered.

There have been lawsuits by ministry members against a cost-sharing ministry, claiming particular medical bills that should have been shared were not. The cases were ultimately settled or resolved through arbitration.

*Modified from a wsj.com article and other online sources.

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2016 OPEN ENROLLMENT FOR INDIVIDUAL HEALTH INSURANCE

Open Enrollment for 2016 individual plans will begin on Monday November 1st, and continue until January 31, 2016. During this period of time, you will be able to change insurance carriers and your individual plan category (Bronze, Silver, Gold, Platinum).

All carriers have made minor changes to their individual plans based upon Obamacare mandates. There are low or moderate increases in premiums for plans offered through the Covered California State Exchange (for those who need a federal premium assistance subsidy), and for Off Exchange plans for those that do not qualify for the subsidy.

Based upon review of next year’s plans, only Anthem Blue Cross and Blue Shield of California will have PPOs available in every county in California. Both carriers have increased for 2016 the number of providers that make up their individual plan provider networks. In addition, both carrier’s individual plans will have access to the full Blue Cross / Blue Shield nationwide provider network.

Anthem and Blue Shield have added new Bronze and Silver plans available for Off Exchange enrollment. These plans have unique features, and lower non subsidized premiums than On Exchange (Covered CA) plans.

If you choose Covered California in order to obtain a federal premium assistance subsidy, you need to begin the enrollment process immediately, because of the paperwork required to prove your anticipated 2016 income level.

For Off Exchange enrollment, you have adequate time to review options. Your application must be submitted by December 15th to have a January effective date.

If you have questions regarding Off Exchange plans and enrollment, please call me at (626) 797-4618 or email me at john@healthinsbrokers.com.

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75% of Obamacare plans in California use narrow networks, study shows

A new study finds that 75% of California’s Obamacare health plans have narrow physician networks — more limited choices than all but three other states. The report examines health plans sold to consumers last year under the Affordable Care Act and shows wide variation in the prevalence of narrow networks across the country.

To hold down premiums under the health law, big insurers such as Anthem Inc. and Blue Shield of California cut the number of doctors and hospitals available to patients.

Consumers often have the ability to search for specific doctors before picking out a policy. But that information doesn’t tell a consumer how restricted an overall network may be for primary-care doctors or specialists.

Covered California, the state’s insurance marketplace, and its participating health plans have said networks have been expanding since the initial rollout in January 2014 to ensure patients’ needs are met. But 18% of exchange policyholders surveyed said a medical provider would not accept them as a new patient.

State and federal regulators have been grappling with how to respond to consumer complaints about skinnier networks and inaccurate information in provider directories. It took considerable time and effort to clean up insurance company provider lists before any analysis could be done.

Better data on exchange networks is essential so regulators can ensure patients have sufficient access to doctors and consumers can determine whether a lower-priced narrow network policy is a good deal.

“Network composition is a major way in which insurance companies can attempt to control costs in the marketplace, and for consumers there is often a tradeoff between access and price,” said the director of health coverage issues at the Robert Wood Johnson Foundation.

Health researchers also mapped how narrow networks vary within states with the prevalence far higher, for instance, in several areas of Southern California.

It also differs by plan type. More than 90% of California’s HMO networks for individual coverage were narrow, compared to a third of PPO plans in the state.

*Modified from a LA Times.com article, Covered California, and other online sources.

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44% of Covered California customers report difficulty paying premiums

A new survey shows that 44% of Covered California policyholders find it difficult to pay their monthly premiums for Obamacare coverage. And a similar percentage of uninsured Californians say the high cost of coverage is the main reason they go without health insurance.

The issue of just how much people can afford will loom large as the state exchange prepares to negotiate with health insurers over next year’s rates.

  • Many analysts are predicting bigger premium increases for 2016 in California and across the country. Insurers have more details on the medical costs of enrollees, and some federal programs that help protect health plans from unpredictable claims will be winding down.

This latest pulse on consumer attitudes is drawn from a Kaiser Family Foundation survey of 4,555 Californians from September to December 2014. It examined the experiences of people in Covered California, Medi-Cal, other private coverage and the uninsured.

  • Forty-four percent of exchange policyholders surveyed said it’s somewhat or very difficult to afford their premiums. That’s compared with 25% of adults who had employer-based or other private health insurance.

Peter Lee, executive director of Covered California, acknowledged that many Californians find it hard to fit health insurance premiums into their household budget, even when they qualify for generous federal subsidies.

“If you are making $25,000 a year that $70 premium is still a struggle,” Lee said. “The Affordable Care Act is providing nobody with a free lunch. This issue of making healthcare affordable is not easy.”

  • Anthem Blue Cross, Kaiser Permanente and other health insurers have submitted their proposed 2016 rates for individual policies to Covered California, and negotiations are expected to begin next month.

The final statewide rates should be announced in July, Lee said. For 2015, the average rate increase was 4.2%.

Modified from a LATimes.com article.

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After Expanding Under Obamacare, This 123-Year-Old Insurance Company (Assurant) Is Closing Its Doors

After expanding to do business on the Affordable Care Act’s exchanges last year, a Wisconsin-based health insurance company founded in 1892 has announced it will close its doors.

Assurant Inc. announced last week one of its subsidiaries, Assurant Health, an insurance company, will either be sold or shuttered after losing tens of millions of dollars this year. The decision comes 18 months after the implementation of the Affordable Care Act (ACA), and industry watchers argue Assurant Health’s end can be attributed to the new health care law.

  • In California, Assurant’s Time Insurance Company subsidiary began writing policies under ACA rules in January of 2014. Individuals enrolled in these medical plans were able to use the Aetna nationwide provider network. The carrier began the process of withdrawing from California in late December of 2014.   

“The health and employee benefits business segments possess differentiated capabilities in their respective markets, but we do not believe they can meet our return targets at the pace we require,” Alan Colberg, president of Assurant Inc., said in a statement. “While this is a difficult decision, we believe they would be strong assets for new owners that are focused more exclusively on health care and employee benefits.”

In a letter to its shareholders, Assurant Health said it lost money because of a reduction in recoveries under Obamacare’s risk mitigation programs and increased claims on the health care law’s 2015 policies.

Before Obamacare’s implementation, Assurant Health would underwrite its customer’s policies, which gave the company a competitive edge. The process involves adjusting the cost of a consumer’s premium based on factors such as medical history and age.

The Affordable Care Act, though, prohibited medical underwriting, and advocates touted the law as easing access to health insurance for people with pre-existing conditions.

In addition to offering insurance on exchanges in more than a dozen states, Assurant Health also sold plans to individuals in 41 states and small businesses in 34 states, insuring close to 1 million people.

Despite the company’s efforts to reach more consumers, Assurant Health saw a $64 million loss in 2014. During the first three months of 2015, the company reported operating losses of $80 million to $90 million.

*Modified from The Daily Signal article, and Assurant press release.

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Employees working fewer hours due to Obamacare: survey

Critics and supporters of Obamacare have argued about its impact on business. A new survey by the Society of Human Resource Management released Tuesday found that some US workers are working fewer hours because of the health care law.

  • The survey found about 14 percent of businesses have reduced part-time hours and another 6 percent plan to do so. Employers are reducing hours to avoid Obamacare’s employer mandate, which requires companies to provide health insurance to all workers that work 30 or more hours a week.
  • In addition, 5 percent of companies have already reduced or plan to reduce the total number of employees. The remainder of those surveyed chose not to reduce employee hours.

The Society for Human Resource Management surveyed 743 human resources professionals from a variety of companies.

This year the law’s employer mandate went into effect for organizations with 100 or more full-time employees, requiring those companies to provide health insurance for 70 percent of their employees. That figure goes up to 95 percent in 2016 and all employees beyond that date.

The small business part of the mandate, which affects business with 50-99 full-time employees, goes into effect in 2016.

  • A common criticism with the law is that companies will have to lay-off workers or reduce full-time employees to part-time to avoid having to pay for health insurance.
  • If any business violates the mandate, they must pay a fee calculated by the number of employees who don’t have insurance. The Internal Revenue Service has said that a company could pay an excise tax of $100 a day per applicable employee.
  • The survey found that 77 percent of companies faced higher healthcare plan costs this year compared to 2014 and 6 percent saw their costs decrease.
  • For that 77 percent, about 24 percent saw their costs go up 16 percent or more. Of the 6 percent that decreased costs, a majority decreased by up to 10 percent.

The survey has a margin of error of plus or minus 4 percent.

Modified from a washingtonexaminer.com article, and the Society of Human Resource Management survey.

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Many Uninsured Choose Penalty Over Enrollment Offer Under Health Law

Tax preparers, and several surveys find tepid response to the Obama administration’s effort to boost sign-ups. A special enrollment period to obtain health insurance for millions of uninsured people who owe a tax penalty under the Affordable Care Act is off to a slow start.

About 11.7 million people have already signed up on state and federal exchanges this year, though not all of them have yet paid premiums.

The health law requires most Americans to have insurance or pay a fine at tax time. The open enrollment period under the health law ended Feb. 15, but the Obama administration said it would allow people who discover they owe a fine to sign up for coverage through April, at the end of the tax season.

The special enrollment period applies to people who have to pay a penalty for going without coverage in 2014, and also face a penalty in 2015. They must pay any penalty they owe for not having coverage but can use the special enrollment period to obtain coverage and not generate any more fines.

  • It is still early, since the special enrollment period launched Sunday, but research also suggests that many people who lack health insurance will pay the penalty and not get covered this year.
  • Only 12% of uninsured people would buy policies if informed of the penalty, according to a survey of 3,000 adults polled through Feb. 24 by McKinsey & Co.’s Center for U.S. Health System Reform.
  • At H&R Block Inc., “our analysis indicates that a significant percentage of taxpayers whose household members were not covered for at least a portion of 2014 are opting” to pay the penalty, said a vice president of health-care enrollment services at the tax-preparation firm.
  • “It was a good PR move and aligns enrollment with tax season, but we’re not seeing a massive rush,” said a spokesman with Jackson Hewitt Tax Service Inc. “It’s been pretty unremarkable.”

A retired employee of United Parcel Service, Inc. found out he will pay a $250 penalty for going without insurance. He said won’t take advantage of the special enrollment period because it is cheaper for him to pay out-of-pocket for health care than to buy insurance on the exchange.

He said he shopped on the exchange but would have to pay $400 a month for a plan with a $6,000 deductible.

“I think it’s wrong I have to pay the penalty… “But it beats paying more than $10,000 a year.”

Modified from a wsj.com article, and other online sources

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IRS blames Obamacare for shoddy customer service

The IRS is unable to answer most taxpayers’ calls this year because it’s had to put money into getting up and running for Obamacare, agency Commissioner John Koskinen told Congress on Wednesday.

Mr. Koskinen said his agency has had to shift tens of millions of dollars from customer service over to build the computer systems and get ready to handle questions this year about Obamacare and the law’s tax penalty, which kicks in for the first time this year.

The commissioner said President Obama’s 2010 law requires the agency to handle Obamacare taxes, but Congress has refused to provide any money, so he’s shifted user fees that used to go to customer service over to handle the Affordable Care Act and the Foreign Account Tax Compliance Act.

“We knew, and it’s been true, that we would get a significant number of inquiries on the Affordable Care Act,” Mr. Koskinen told the House Appropriations Committee, which is considering how much money to give the tax agency for fiscal 2016.

Mr. Koskinen said the IRS is answering just 43 percent of taxpayers’ calls so far this year, which is a huge drop is customer service for the agency.

Congress has cut the IRS’s funding in recent years as Republicans have tried to send a signal of disapproval with the agency’s activities, including its targeting of tea party groups’ applications for nonprofit status.

On Wednesday, Rep. Anders Crenshaw, the chairman of the House Appropriations subcommittee that oversees the IRS, said the agency acts as though it is “entitled to $13 billion” in funding, but in reality the IRS must prove it has earned that level of funding.

“We deliberately lowered the IRS funding to a level that will make the IRS think twice about what you’re doing and why you’re doing it,” the chairman said.

Modified from a washingtontimes.com article

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How ObamaCare Harms Low-Income Workers

The primary purpose of the Affordable Care Act was to make health insurance affordable for people with modest incomes. Yet as the employer mandate begins to kick in for 2015, the law is already hurting some of the people it was intended to help. 

  • Full-timers become part-timers, losing wages and the opportunity to buy the health coverage they most prefer. By this time next year, we may find that many workers who earn within a few dollars of the minimum wage have less income and less insurance coverage (as a group) than they did before the mandate began to take effect.

This is the conclusion from survey conducted by John Goodwin Senior Fellow at the Independent Institute in December of 136 fast-food restaurants (franchisees) that employed close to 3,500 workers.

Before 2014 about half the employees were “full time” as defined by ObamaCare; that is, they worked 30 hours or more a week. The potential cost to the employers of providing mandated health insurance to their full-time staff would have been about $7 million a year.

But by the time the employers took advantage of all their legal options they were able to reduce their cost to less than 1% of that amount.

  • The first step was to make all hourly workers part time. That may seem easy to do, but in the fast-food business it’s not uncommon that employees fail to show up for work.

Other employees are asked to work additional hours to prevent the restaurant from shutting down. By the end of 2014, 58 employees had crossed the line to full-time status and were eligible for mandated health insurance in 2015.

  • The companies offered these employees ObamaCare-compliant health insurance—bronze plans—but asked them to pay the maximum premium the law allows: 9.5% of their annual wage.
  • For a $9-an-hour employee working 30 hours a week, the maximum monthly premium was $111. The total premium was $367, and the law requires the employer to pay the difference.

The bronze plan has very large deductibles and copayments—up to $6,600 or $13,200 for a family, depending on the family’s income. But the designers of the Affordable Care Act apparently did not understand that high deductible health insurance with no Health Savings Account is not attractive to young, healthy, low-income workers.

  • These workers are far more likely to prefer mini-med plans that pay for generic drugs and doctor visits but not catastrophic care.

Before ObamaCare, these companies offered all full-time, hourly employees a standard Blue Cross health plan as well as a mini-med plan for a much lower premium.

  • No one signed up for the Blue Cross plan. About 200 signed up for mini-med insurance.

The companies in the survey offered to pay the full premium for the mini-med plans, in order to make that alternative more attractive. If employees choose the bronze plan it costs the employers about six times as much.

  • The result: Only one of the 58 remaining full-time employees enrolled in a bronze plan; the rest will likely be in MEC plans.
  • What about the families of these workers? Employers don’t have to pay the premiums for coverage of dependents.

To cover a family of three, the employee in one of these restaurants can face a premium of $805 a month for a bronze plan, almost 70% of his monthly wage.

  • Since ObamaCare considers this offer “affordable,” any family member who turns it down is ineligible for premium subsidies on an insurance exchange.
  • What about the mini-med plans? Although these plans are offered free to the employees, dependent coverage is not free.
  • An employee has to pay about 25% of his income to cover a spouse and kid. If he doesn’t, the family faces a fine next April 15.
  • Workers in the survey whose hours were reduced to part time can get subsidized insurance through an exchange, but they will be asked to pay up to 9.5% of their income for what is unattractive coverage. 

To recap: Almost half the workforce of these restaurants was involuntarily reduced to part time and has less income as a result.

  • These employees have also lost the opportunity to have the coverage they most prefer: mini-med plans that pay for medical care they are most likely to need.
  • Those few remaining full-time employees will get mini-med insurance for themselves, but they are unlikely to be able to afford coverage for any dependents they have.
  • They will not get an ObamaCare bronze plan unless they fork over about one-tenth of their take-home pay, and they won’t be able to get bronze coverage for other family members unless they forfeit more than half their income.

*Modified from an article by Mr. Goodman, senior fellow at the Independent Institute, and other online sources.

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Affordable Care Act Creates a Trickier Tax Season

The first year of the Affordable Care Act is in the books, and now comes a tricky tax-filing season for millions of Americans. The reason is that subsidy estimates may be inaccurate.

Millions of Americans who got subsidies under the law may find they are getting smaller-than-expected refunds or owe the IRS because credits they received to offset their insurance premiums were too large. As many as half of the roughly 6.8 million Americans who got subsidies may have to refund money to the government, based on one estimate by tax firm H&R Block Inc.

“The ACA is going to result in more confusion for existing clients and many taxpayers may well be very disappointed by getting less money and possibly even owing money,” said the president of a tax preparation firm.

The law’s requirement that most Americans carry health insurance means all filers must indicate on federal tax forms whether they had coverage last year and got tax credits to help pay for it.

To help avert problems, federal agencies including the IRS and the Centers for Medicare and Medicaid Services in January will reach out to consumers via phone calls, text messages and emails to tell them what to expect during the tax season. IRS officials are urging consumers to file electronically for a quicker return.

“As always, taxpayers are responsible for the accuracy of the information on the tax returns that they sign,” said an IRS spokesman. He added that “the vast majority of filers will have had coverage for the full year and will simply need to check a box to indicate that.”

The IRS also said it would allow taxpayers who have applied for—but not yet received—exemptions from the individual mandate to put “pending” on their forms so they don’t have to delay filing and obtaining their refund.

In addition to determining who has to pay a penalty, IRS has to determine the accuracy of tax credits. Because people often incorrectly estimate their future income, many Americans may have gotten subsidies—based on their own projections of 2014 income—that were too generous.

Tax credits for people eligible to use the health law’s exchanges would, on average, be too high by $208 if they were based on the applicants’ most recent tax returns, according to modeling by Vanderbilt University.

When the health law was passed, the amount of money that could be taken back from lower-income people who overestimated their incomes was capped at $250 for a single person and $400 for a household.

Those caps were significantly raised in an effort to fund Medicare physician payments in late 2010, to as much as $2,500 for a family at the upper end of the income-eligibility range. They were tweaked again in 2011 as part of a tax change to the health law’s 1099 reporting forms that required more people to reimburse over-payments in full.

 

*Modified from a WSJ.com article and other online data sources.

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