Are you ready for Open Enrollment for 2016? Under the ACA (Obamacare), individual health insurance plans are issued as a twelve-month contract that begins in January and ends in December. New rates on individual plans will begin on January 1st, and remain in effect until December 31, 2016.

  • If you currently have an individual Anthem Exclusive Provider Organization (EPO) policy, Anthem Blue Cross will change your plan to a Tiered PPO for 2016. In Southern California these EPO plans are offered in Los Angeles, Orange, and San Diego counties. Beginning in 2016, plans in these counties will be changed to Tiered PPO plans.

The major difference between EPO and PPO plans is that EPO plans do not offer any out of network benefits. The means you will receive no reimbursement for out of network medical expenses. PPO plans do offer out of network benefits.

Anthems Tier PPO plans split hospitals in their provider network into two categories: Tier 1 and Tier 2. Members utilizing Tier 1 hospitals pay a lower share of cost (co-insurance). The maximum out of pocket (OOP) is the same for both Tiers.

The other major change for Anthem individual plans is they will become part of the nationwide Blue Cross/Blue Shield provider network. Currently, other than emergency services, all providers outside of California are considered out of network, and not subject to reimbursement.

Structurally. deductibles and out of pocket costs will increase for Bronze plans. The maximum deductible will increase to $6,600, and the maximum OOP will increase to $6,850.

The maximum deductible for Silver plans will increase to $2,250, and the OOP to $6,350. For Gold and Platinum, which have no deductibles, the OOPs of $6,200 and $4,000 respectively will remain the same for 2016.

  • The 2016 plans offered in Southern California have small rate increases for Bronze and Silver plans, and larger increases for Gold and Platinum plans. In Southern California the lowest rates are still in the Pasadena/San Gabriel Valley, and the highest rates are in San Diego County.

If you have questions please call me at (626) 797-4618 or email me at


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 article, Covered California, and other online sources.



A disturbing trend has begun to occur for those individuals who enrolled in coverage Off Exchange directly with the insurance carriers – A spike in the rise of cancellations for non-payment of premiums.

There are three reason for cancellations: (i) intentional nonpayment of premiums because of financial hardship; (ii) the inability of the carriers to debit the credit card or bank account established to pay the premiums; (iii) failure to send in an actual check in a timely manner to the insurance company.

It’s important for those with Off Exchange plans, the majority of those in California enrolled in individual plans (those without a Federal subsidy or Medi-Cal), to understand the grace periods offered by the carriers for late payments.

  • Insured’s who DO NOT get a Federal subsidy of their premium have a 31 day grace period for making payments.

I have had a number of calls from both clients and others regarding the cancellation of their policies. The majority have been told by the insurance carrier they may not reinstate their policy, and will be uninsured until January 1, 2016.

Therefore, it is important to understand that monthly premium payments are due the first of each month. If the premium payment is not received by approximately the 7th of the month a late payment notice will be mailed to the member.

The grace period for payment begins the postmarked date the carrier mails the first warning notice that the member’s premium is overdue. It is not when member receives the letter, which can be anywhere from two days to a week after the actual letter’s postmark.

The letter will tell when the grace period ends, and warns that the member will lose coverage unless the full past due amount is paid before the 31 day grace period ends. After the grace period ends, the carrier has the right to cancel the policy, even if the member has sent in their premium payment.

An example of the process:

  • Payment is due on first of the month, but if a payment is not received by the end of seven days, a late payment letter will be generated and mailed to the member.
  • The member will receive the letter approximately the second week of the month. The 31 day period begins on the day the letter is mailed (postmarked).
  • If the member pays the premium by the last day of the month, no action will be taken by the carrier.
  • The member may reinstate if full payment is made within the 31 day grace period. However, if payment is not received by the last day of the grace period the policy will be cancelled, and cannot be reinstated.
  • If the policy is cancelled the member will need to wait until the next Open Enrollment period, which begins in November for a January 1st effective date.

If you receive a late notice, react immediately by contacting your insurance broker or the carrier directly. Do not wait until you discover your policy has been cancelled, by then it will be too late.

There are options available if your policy is cancelled to provide you with short term coverage to bridge you to January 2016. However, short term coverage is month to month for up to six months, and is basically catastrophic coverage for inpatient or ER/Urgent care medical services.

If you have questions, please call me at (626) 797-4618 or email


Health Insurers Seek Hefty Rate Boosts

Major insurers in some states are proposing hefty rate boosts for plans sold under the federal health law, setting the stage for an intense debate this summer over the law’s impact.

One state, New Mexico is asking for an average jump of 51.6% in premiums for 2016. Insurance carriers in several states have proposed 36.3%, 30.4%, and 25% rate increases. In dozens of other larger states carriers have applied for increases averaging 10%.

  • Insurers in California have not announced the percentage increase in their rates; however they have begun the process of filing their rates with state insurance regulators.

All insurance carriers cite high medical costs incurred by people newly enrolled under the Affordable Care Act.

Under that law, insurers file proposed rates to their local regulator and, in most cases, to the federal government. Some states have begun making the filings public, as they prepare to review the requests in coming weeks.

  • Insurers say their proposed rates reflect the revenue they need to pay claims, now that they have had time to analyze their experience with the law’s requirement that they offer the same rates to everyone—regardless of medical history.

Health-cost growth has slowed to historic lows in recent years, a fact consumer groups are expected to bring up during rate-review debates. Insurers say they face significant pent-up demand for health care from the newly enrolled, including for expensive drugs.

  • “This year, health plans have a full year of claims data to understand the health needs showing enrollees are generally older and often managing multiple chronic conditions,” said a spokeswoman for America’s Health Insurance Plans, an industry group. “Premiums reflect the rising cost of providing care to individuals and families, and the explosion in prescription and specialty drug prices is a significant factor.”

The federal government subsidizes premiums for some consumers, based on income, and the validity of those subsidies in most of the country is the subject of a lawsuit the Supreme Court is expected to decide in late June.

  • The filings from insurers are based on the assumption that those subsidies remain in place.

Obama administration officials weathered a storm as some younger, healthier consumers saw their premiums jump when the law rolled out, but were also able to point to modest premiums overall as insurers focused on other ways to keep costs down, such as narrow provider networks.

For 2015 insurance plans, when insurers had only a little information about the health of their new customers, big insurers tended to make increases of less than 10%, while smaller insurers tried offering lower rates to build market share.

Modified from a article



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 article.


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.


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 article, and the Society of Human Resource Management survey.


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 article, and other online sources


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 article


California love for ACA only goes so far as sign-ups sag

California led the nation in embracing the health-care law, and in enrolling its citizens for 2014 coverage. This year, however, sign-ups for private health plans in California, New York and other states that opted to build and run their own insurance markets has stagnated.

  •  In California, enrollment was flat, with about 1.4 million signed up, the same as in 2014.
  •  In more conservative parts of the country that declined to participate and where enrollment is run by the federal government, sign-ups have surged.

As an example, for 2015, 1.6 million Floridians chose insurance plans sold through the federal system, 62% more than a year before, according to an analysis by Charles Gaba, in Bloomfield Hills, Mich., who has accurately predicted enrollment under the law.

  • The development is made stranger because California had more uninsured people than any other state in 2013, the year before the health law’s insurance expansions began – 5.8 million, according to the Kaiser Family Foundation, a health research group. About 3.6 million people were uninsured in Florida.

In the 37 states that used the U.S.-run website, growth in sign-ups from 2014 to 2015 ranged from 25% to 81%, according to Gaba. Among states that run their own exchanges, only Massachusetts and Hawaii did better – in part because those two states struggled with technology failures in 2014.

  • Medicaid may be one reason why. Any comparison of enrollment in California and Florida should include people in the program for low-income people, said Dana Howard, a spokesman for Covered California, the state’s Obamacare agency.

California and New York both expanded Medicaid to cover the working poor in 2014. Florida, Georgia, North Carolina and 19 other states didn’t, and as a result some low-income adults in those places who would have been eligible for Medicaid are instead enrolled in private coverage. California’s uninsured population has been halved since last year, including its Medicaid expansion, Howard said.

Modified from an Employee Benefit Advisor article,, and other online sources.