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If you work or own a small business, you may be familiar with using HRA’s to help reimburse employees for individual health insurance. This strategy has been around for over a decade and has always been controversial under the tax code.

Small businesses that have struggled with group health insurance costs and participation requirements have utilized the HRA approach to offer employee benefits. Many of these small businesses are in industries or locations with lower compensated employees who qualify for Medicaid or under the Affordable Care Act qualify for subsidized health insurance (premium tax credits).  This has created a tax advantage for both the employer and individual regarding individual health insurance.

The Government has now changed the regulations for HRA’s in conjunction with Individual health insurance reimbursements. If an employee participates in a company-sponsored HRA, they can no longer receive premium tax credits.  This will negatively impact a lot of Hoosier that are not aware of these new regulations resulting in the paying back of all the premium tax credit one receives.

Here is an example of what is going to happen.  An employee of Company X works for a company that provides $400 a month in an HRA benefit. The employee has a family of 5 with a household income of $80,000, which qualifies them for a tax credit/premiums assistance of $1,053 a month.  The plan they choose on the marketplace costs $1,549 a month. Subtract the $1,053 tax credit, $400 HRA benefit- Now, the employee’s health plan for their entire family costs $96 a month.  Great deal!

Now when that employee goes to filer their taxes, they will be required to pay the tax credit back. $12,636 This will create severe hardships for families that will not be aware of the new rules.  Most employers offering the HRA do not have time to stay compliant on new rules and regulations, so they will not know, which leads to a massive surprise to the employees and employers.

For 2021, employers may want to reconsider offering an HRA if they suspect their employees will qualify for subsidized premiums on the exchanges.

Here is a link to healthcare.gov that provides more details.

https://www.healthcare.gov/small-businesses/learn-more/hra-guide/

 

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Indiana residents seeking COVID-testing can find testing locations by visiting www.coronavirus.in.gov.  The Indiana State Dept of Health has partnered with OptumServ to provide testing to anyone seeking a test across Indiana. You will need to register before testing at https://lhi.care/covidtesting or call 888-634-1116.

How much will the test cost?  

Nothing.

What if I receive a bill?  

If you received COVID-19 related services after March 18, 2020, you should not receive a bill thanks to the Families First Coronavirus Response Act, which requires Medicare, Medicaid, and private insurance plans to cover the cost of services entirely.

Be sure your medical provider sends correct billing codes to your insurance carrier.  Incorrect billing codes can result in billing errors.

Reach out to your insurance company.  New procedures are in place, and mistakes happen.  Call member services on your insurance ID card to find out more.

Call your insurance broker for assistance.

File an appeal with the insurance company.  You have six months to appeal an adverse benefit determination.

What if I choose a non-network facility for testing?

Most insurance companies cover the cost of services in full, even if you choose to go outside of the network.

What if my doctor did not order a COVID-19 test?

Your doctor will bill for services conducted.  If there are no COVID-19 related charges, the services will be billed according to your benefit plan.

What if I need more than one COVID-19 test?

Insurance companies will pay multiple tests at zero cost-share.

What about at-home COVID-19 testing?

The FDA has not authorized any test available for in-home use.

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With shelter-in-place orders across the country, there has been a considerable drop off in medical services as result insurance companies are returning some of the premiums to employers in the form of credits.

Each carrier is taking a different approach:

On health plans- an employer could receive anywhere from 5%- 15% credit based on a previous month’s premium.

Dental plans- Credit could be 50%-100% premium credit for an entire month. A few carriers have decided to reduce the dental premium by 10% for the rest of 2020.

We know the last thing a decision-maker wants to do is open an email from their insurance carrier, so if you get a credit on the premium statement, this may be the reason.

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With the economic shutdown from COVID-19, is this a time review insurance benefits and processes?

Every business is different, and COVID has impacted every industry, which may lead some employers to re-address their benefits and procedures.

Process & Procedures:

Employee education on Insurance Benefits has been changing the last five years, to a more digital environment.  There was a time where open enrollment meetings consisted of insurance professionals on-site with a stack of papers.  Will this continue in a post COVID environment?  

The solution is going to digital enrollment & Insurance Benefits administration platforms that also help to educate employees and their spouses on insurance options, which should Include lines of communications for specific benefit questions.

An employee receives a welcome email, and they register to view and enroll in benefits. Controllers/HR/Owners can quickly track the employee’s progression through the enrollment process with reporting features.

Just a few years ago, a benefits admin platform had a high cost to employers. As technology has evolved, that cost has dropped significantly. Here at Nefouse & Associates, Inc, we can provide a full benefit admin system to our clients at no additional cost.

Insurance Benefit Review

Right now, Insurance companies like every other industry are ready to get back to bringing in new business. Underwriting departments being more aggressive with issuing competitive rates. Small groups with less than 20 employees electing coverage will need to complete applications that can be quickly streamlined with a benefits admin system.

If you have 20+ employees on the plan can benefit from GRX underwriting. GRX underwriting is where they use a member level census to determine risk and issue rates. Businesses with 50+ employees can also benefit from this type of underwriting.

Now is also an excellent time to look at what type of plan designs are being offered compared to the industry. Using benchmarking tools, we can quickly advise if your plan offering is competitive.

Ancillary products:

When it comes to dental, vision, life & disability, the insurance carriers are incredibly competitive both on cost and increasing benefits.  With COVID-19, there has been an increase in employees electing voluntary life for themselves and dependents. Some employer is taking the opportunity to launch a new open enrollment for life selections.

 

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The health insurance industry has been responding as fast as they can to the treatment of COVID-19. This started as a health crisis and has now turned into a financial crisis.

The health insurance industry has made multiple changes concerning COVID-19.

Testing

With most health insurance companies, there is not member cost for being tested for the virus.
This included video medicine and telemedicine, as the industry is steering initial treatment to these resources in an attempt to limit exposure to the virus. Here is an Anthem resource on finding locations for testing.

https://www.anthem.com/microsites/covid19-assessment/covid-finder.html

Treatment

Most health insurance companies are waving member cost for the treatment of COVID-19. This includes waiving co-pays, deductibles, and coinsurance. The insurance carrier will list types of services that are covered at no cost.

Prior Authorization

Most insurance companies have modified their requirements for prior authorization with a diagnosis of COVID-19. This does include pharmacy benefits.

With most elective surgeries being postponed because of the virus, your authorization may only be suitable for 90 days.

Prescription Drug

Most carriers are allowing a member to early refill their medication to make sure patients do not have a disruption in treatment.

Group Health Insurance eligibility

Most insurance companies have relaxed eligibility requirements to remain on the group health plan.

Insurance Companies response:

Most of the large insurance companies are working with government entities and providing information into the treatment of COVID-19. What’s the time after diagnosis to being admitted into the hospital? Length of stay in the hospital.

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1st what is the coronavirus?

Coronavirus is a type of virus that causes a respiratory infection in the lungs and airways. It is part of the same family as the virus, which includes the common cold.

2nd What are the symptoms?

Symptoms include fever, cough, and shortness of breath, which can be mild to severe—appearing 2-14 days after infection.

3rd How does the virus Spread?

Experts think the virus is spreading through person to person contact—a cough, sneeze or kissing. With COVID -19 being a new “disease,” experts around the globe are racing to learn more.

4th Prevention

The best way to prevent infection is to avoid exposure to the virus. Here is a link to the  https://www.cdc.gov/coronavirus/index.html   Centers for Disease Control and Prevention.

Wash Hands for 20 seconds, after going to the bathroom, before you eat, after a cough, sneeze, & blowing your nose.

How Health Insurance benefits could work

The insurance companies should cover Individuals if they get diagnosed with COVIDD-19. This treatment will most likely go towards your deductible and out of pocket max. There is the chance the government/state could mandate treatment covered at no cost to the member.

How much will the COVID-19 test cost?

There are a lot of rumors floating around that a test could cost $3,000+. These rumors could be based on emergency rooms testing for 22 upper respiratory pathogens. It’s been reported that the CDC isn’t charging patients to tested according to American Health Insurance Plans (AHIP), which is a health insurance trade association.   

COVID -19 Impact on Mediation Supply Change:

One serious impact of the COVID-19 virus is a disruption to medication being produced in China. Many of our drugs are manufactured in China. It is possible the importation of these drugs could be delayed. The health insurance company you are insured with or the pharmacy benefit manager will contact you if there is a shortage of medicine that you are currently treated with. They will make a recommendation of other medications in the same therapeutic category that can treat you.

Medications to treat COVID-19

Currently, there are no prescriptions or vaccinations that are approved to treat the virus. Experts are working on developing treatment plans along with vaccines.

Health Insurance companies in the event of Pandemic:

Right now, each insurance company is reviewing and amending its plan to supporting operations in the case of Pandemic from COVID-19. Companies are already starting to halt travel and initiate work from home operations. Attention to making sure critical business processes are met to meeting customer’s needs.

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One question we field almost on a weekly basis is: “What is health insurance going to cost if I retire before 65?” Under the Affordable Care Act, it is not an easy question to answer because everyone’s situation is different.

When trying to budget for individual health insurance it’s important what time of year you decide to retire. Other factors include both incomes, out of pocket expenses, and policy effective date.

medicine, age, health care and people concept - senior woman, man and doctor with tablet pc computer at hospital ward

For Indiana and the rest of the country, an early retiree will have access to the federally facilitated marketplace to purchase an individual insurance policy. One can qualify for premium assistance if their income is under 400% of the federal poverty level. If you retire in the middle of the year, your yearly income could be above that threshold. This would disqualify you for premium assistance. If you retire at the beginning of the year, your taxable income could drop, and you could qualify for assistance. Premium Assistance can be the difference of paying $400 or $1,400 a month per couple depending on when you retire.

The time of year in which you retire could also impact your out of pocket maximum. If you or your spouse have paid toward your deductible or out of pocket maximum. You will want to elect Cobra continuation for the rest of the year. An individual policy will not give you credit for having already paid into your deductible.

From a health insurance standpoint, an early retiree should consider retirement at the beginning of the calendar year.

In 2020, individual health insurance options for Indiana are from just two carriers CareSource & Ambetter. Both carriers only offer their plans through the federally facilitated marketplace. Click here to use our tool to review your options.

If your household income is above 400% of the federal poverty level you will not qualify for premium assistance. With an early retiree, your taxable income may drop below that 400%, which would make the monthly cost more affordable.

For a 60-year-old in Marion County, the lowest costing plan without assistance would cost $716 month. With a projected income of $40,000, your monthly cost drops to $105 for the same plan with assistance. That is a big difference especially if there are two members of the family to be insured.

When it comes to the plan designs, these Indiana health insurance plans have large deductibles and out of pocket maxes. The lowest deductible being offered is $950. This would cost a 60-year-old $1,273 a month without premium assistance. The lowest costing plan would have a $7,700 deductible. Most of the time electing Cobra for 18 months may provide a better plan at a lower cost.

Network access with individual plans may have limitations. It’s important to research each individual carriers’ network. Be sure to confirm you are searing the correct network with your provider. Even if a physician shows in your network, you may want to call their office to confirm. It’s not unusual to have a physician listed as in the network, but who has chosen not to participate anymore. When it comes to retirement, you want to save as much as you can where you can, so it’s important to check all of your options.

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The Kaiser Family Foundation (KFF) is an organization that researches a variety of health care topics.

They just released a quiz on health issues with the presidential election standpoint. It’s a brilliant way to test your knowledge of the politicians and their views on health care. With health care being one of the tops of the issue of the presidential election, it might be a good idea to test your knowledge.

https://www.kff.org/quiz/health-issues-and-the-election-quiz/

The democratic candidates are in favor of a more socialized healthcare system if not thoroughly socialized. Having had gone through the Affordable Care Act, it is apparent how healthcare reform can have huge impacts on the current healthcare system.

With candidates supporting a Medicare for all or single-payer system we could see something of this magnitude getting passed into law. Our healthcare system would forever be changed.

A politician that is considering supporting or introducing any health care reform should hear from all impacted parties.

KFF does do an excellent job of creating an online quiz to test the voters’ knowledge of where the candidates stand on health care.

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This is Nefouse & Associate’s sixth open enrollment since the affordable care act has gone into effect. We are one of the last Indiana based agencies to still be active in the individual market. There has been a lot of changes, but one thing has stayed the same, costs continue to rise.

We have just two carriers offering coverage in the individual market, Ambetter & CareSource. Both companies will be offering personal coverage through the marketplace in every Indiana county. Insurance companies are required to file their rates and plan for approval with the Indiana Department of Insurance.

  • CareSource average approved rate increase is 4.90%, with an average premium of $532.95.
  • Ambetter average approved rate increase is 18.9% with an average premium of $567

Each plan design and county will have a different increase and some decrease.

  • CareSource will have a -13.8% decrease and as high as 26.9%.
  • Ambetter will have as low as 5.4% increase and as high as 30.60%.

Plan options are continuing to have a large deductible and out of pockets maxes.

Lowest Costing Plans Deductibles:
CareSource $7,700 deductible.
Ambetter $8,150 deductible.

2020 Health Saving Accounts:

CareSource: $5,300 deductible with 50% co-insurance
Ambetter: $6,750 deductible with 100% coinsurance
The Caresource H.S.A is about costs about 10% below Ambetter.

Network Access:
CareSource: Health Maintenance Organization (HMO)
Ambetter: Exclusive Provider Organization (EPO)

CareSource has increased its participating medical providers in central Indiana.
Ambetter appears to have greater network access with EPO vs. the HMO.
It is essential to research your physicians to see if they are participating in these networks. The networks can change, and physicians may not be accepting new patients.

Drug Formulary:
Both offer similar drug formularies, but cost-sharing does vary from plan. Most tier 3 brand name drugs will apply towards the deductible.

The 2020 Individual open enrollment is through November 1st -December 15th.

Use our Quote Engine to review and enroll in health insurance for 2020: https://www.healthsherpa.com/?_agent_id=tony-nefouse.

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The National Association of Manufacturers (NAM) has launched an association health plan (AHP) that is available in Indiana to start January 1st, 2020. Mercer developed the health plan through UnitedHealthcare.

An association health plan (AHP) is developed specifically for an association and its members. The NAM AHP is operating under the rules where each group/company must go through underwriting to obtain a final rate. This allows for small companies under 50 employees to have an option outside of the Affordable Care Act (ACA) small group market.  

A healthy group could experience a 30% decrease with the AHP vs. the ACA small group plans. The savings come from the underwriting process and how rates are calculated with age bands. The ACA has a restriction on what the scale can be between the youngest and oldest members.

How do I get a proposal on the National Association of Manufacturers (NAM) Association Health Plan here in Indiana?

  • 1st Your company’s nature of business needs to be manufacturing.
  • 2nd You will need an employee census.
  • 3rd Contact Nefouse & Associates, and we can deliver your proposal. 

 Requirements of the AHP

  1. 50% of your full-time employees must elect coverage.
  2. The employer must contribute at least 50% of the employee on premiums.

Do we have to complete applications?

  1. Groups with less than four employees will have to complete applications.
  2. If the group is over 5 employees electing coverage, you do not have to complete applications. UHC is using an underwriting technique to retrieve pharmacy history, which allows them to determine risk.

 The NAM AHP is another group health option for Indiana manufacturing employers with less than 100 employees.  

 

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