Category Miscellaneous

President Biden officially signed into law H.R 1319 aka American Rescue Plan Act of 2021 on March 11, 2021.   One of the goals of the law is to expand Health Insurance by making it more affordable.

Marketplace Tax Credits Expansion on Health Insurance

Under the new law, people that purchase individual and family Health Insurance through the federal marketplace could see their monthly premiums drop.

Currently to be eligible for the tax credit aka premiums assistance household income has to be under 400% of the federal poverty level.   Under the new law, the 400% requirement is being lifted. It’s not clear what the income cap is going to be or if there is going to be an income cap.  

Currently, those that qualify for premium assistance pay no more than 9.83% of their household income towards premiums.   Now qualify subsidies recipients will not pay more than 8.5% towards Health Insurance premiums.   Those making less than 400% of the FPL could pay as low as 2% of their income for the Individual health insurance policy. 

Health Insurance Premium

If there is indeed no cap in household income for premium assistance, we could see a huge migration to the individual market.   Small groups with less than 20 employees could see participation drop off.


Under H.R. 1319 the government will fully subsidize 100% of COBRA premiums for those employees that were laid off, furloughed, or had a reduction in hours.   This should allow any employee that qualifies to continue the group health to keep that coverage in place with no cost to them.  In fact, the subsidized cobra premium may be lower than what they were contributing as a full-time employee.   Employees that leave employee voluntarily are not eligible for the premium assistance.  This benefit will expire in September of 2021.  

The American Rescue Plan is going to have a huge impact on the individual Health Insurance markets.  We will see a large portion of individuals that have purchased a short-term, med share, & indemnity policies return to the exchanges because now they will qualify for premium assistance. 

Small employers with less than 10 employees that are offering group health plans may be forced to drop coverage because of participation issues.

As always, Nefouse & Associates is in a position to provide our client with the best Health Insurance options.

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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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Short Term Health Insurance Final Rule 36 months of coverage

Short-term health insurance is a policy that is very similar to pre-affordable care act coverage.  The plan does not cover preexisting conditions and requires underwriting.  If your accepted, the cost is 50%-60% less than an ACA product. These plans are also using traditional PPO networks, which gives greater access to medical providers.

The final rule allows for short-term coverage to be extended up to 36 months. Currently, coverage can be offered up to 90 days.  This could be a game changer in the current individual health insurance markets.  Even though the final rule states a plan can be offered for 36 months, does not mean that all insurance companies will embrace this. We could see contracts that are guaranteed renewable for 36 months.

There is much criticism that these short-term plans will negatively impact the ACA marketplace. That criticism is valid because if someone is healthy and can obtain a 36-month policy for 50% less, that will be very attractive. Then the ACA pools will lose a portion of the healthy members that help to offset higher utilizers. Thus ACA rates will increase.

Why did the Administration Extend Short Term Plans?

Currently in Indiana and the rest of the country, if you are not eligible for tax credits/subsidies on the marketplace, the premiums are astronomically for most middle-class families.  Then add in the limited network access with huge out of pocket maxes, it’s not uncommon for a family to have $17,000 in premium with potentially another $14,000 in out of pocket, that could cost a family $30K a year.

That same family looks at the short term for $7,000 a year with the same out of pocket, given the short term does not provide the same level of coverage or covers pre-existing conditions. If a family is healthy, it’s hard not to entertain the short-term option.   That is why the administration extended short-term plans.

Short-term plans are underwritten which is where you have to answer medical questions and can be denied the plan.  Most of these policies are now enrolled through web-based applications, which makes for easy enrollment. The insurance companies use a technique called Post Claim Underwriting when you have a claim.  This where the insurance reviews your past medical history to determine if the claim was preexisting. If it is a prior condition, the insurance company can and will deny the claim.  One of the real problems with Post-claim underwriting is the delay of payment to the medical provider.  The insurance company may request all your medical records for the past five years.  Even if you are persistent most medical provider will take at least a month to release records.  If you get diagnosed with the condition that needs immediate treatment, the delay in payment could prevent an obstacle to continuing treatment.

In 2018, short-term insurance sales exploded in Indiana and the rest of the country. Smaller insurance companies got creative with their product offering. To be compliant with the rules set by the Obama administration, short-term was only good for 90 days, and companies created 3×4 policies that included 4 short-term policies with one application.  These created a huge saving for health Indiana families.  Now with the new ruling, I would predict that UnitedHealthcare & Humana launch new short policies.

When you start looking to purchase a short-term policy, buyer beware. You need to make sure you know what you are buying. Always look at the last page of the brochure that lists exclusions.  With these plans, you may want to consider buying them from a name brand carrier.

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There has been a lot of news about the government trying to replace Health Insurance Agents with non-licensed, non-insured and in-experienced “navigators” whom will be paid by the government and have less than 20 hours of training. The government has now realized they cannot successfully implement this extremely complicated law without agents. The government is now going to allow insurance agent to enroll people both inside and outside the health insurance exchanges. This will impact millions of Hoosiers. Insurance agent’s advice is free and we will continue to offer out advice for free.

Health insurance premiums are the same if you use an agent or go direct with the carrier. This will continue to be the case if you buy a policy through the Indianapolis health insurance exchange which is going to be run by the federal government.

We have spent our entire career getting clients the best deal in the insurance market. We have also provided the highest level of customer service when it comes to claims and administration.  We will continue to offer this level of service in 2014 and beyond.

We believe that we will still offer the best solutions for your company or your family.

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Washington Post reported on the use of  Temp Employees to help keep companies below 50 employees.

This is very interesting article because is establishes a strategy of keeping a group from paying a penalty for not providing group health benefits. From the article, there looks to be a loop hole with providing coverage to Temporary employees. This could become a power full strategy for many Manuel labor industries.

A company could have 40 employees but need 60 to operate. If the group goes over 50 then they would either provide group health benefits, that follow the federal guideline, or a pay a penalty. That penalty would be $2,000 per full time employees. With many companies that have low paying jobs, group health benefits have always been a struggle.

Any company that is looking to game the new health care laws have had there problems providing health insurance in the past. The problems have be participation and underwriting. Many companies that have a lower pay scale can attract high utilization health conditions. The usually leads to higher premiums and unless the company is paying a large portion of the premium the employee will drop off.  At these lower pay scales, many of the employees can qualify for a subsidized plan through the state which leads to a lack of participation.

Many companies will have to take advantage of this loop hole to stay in business.


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Next year where will you get health insurance from?

Health Insurance will come from the same places that you are buying it from today. It may be delivered in a different platform. Currently you purchase health insurance from the individual market, employer sponsored group health plan, COBRA, HIP, Medicaid or Medicare.

In 2014, you purchase health insurance from the same places you get in now.

The individual market will be very different that what we have today. The big difference is going to be guaranteed issue. This mean there will no longer be medical underwriting to buy a individual health insurance policy. There is a segment of the population that is going to be very happy about this. We do predict that the cost of these plans are going to go up significantly. The cost of a Individual health insurance policy will resemble the cost of guaranteed issue group plan.  Premium could go up 200%-300%.  Now those policies are going to cover much more services like maternity and the essential health benefits.

Hoosiers will still have access to group health insurance on both small group and large.  If your small group employer (under 50 employees) continues a group health plan then not much will change. We do predict cost on those plan could go up. This has to do with the new health care reform laws. These plans will continue to have guaranteed issue but with no underwriting.  In Indianapolis we will have community rates. This could be a good thing for high risk groups. They could see their premium drop.  Large group will continue to cover their employees.  For a company to keep top talent they will be forced to continue to invest in health insurance. Some blue collar industries could entertain dropping coverage because the employees will GI in the Individual market.

Cobra coverage will continue to be an option for former employee. To this day people still don’t realize that COBRA is the coverage through the actual group health plan. The difference is that you no longer have the employer contribution.

HIP plans and other subsidized health plan may no longer be an option. Those Hoosiers would be have the option of buying health insurance through the Federal Health Insurance Exchange.  The exchange plans may very well turn out to have better access to Doctors than prior plans.

Medicaid and Medicare people will still have that option on the table. Now it does not look like Indianapolis is going to expand medicaid coverage. This will force a lot of people to look at the  Federal Health Insurance Exchange for coverage. They would have to pay something for that plan but it may only be 1.5% of household income.  Considering that plan could cost $20,000 a year that might be a good deal. There might also be tax credits available for medical claims. To the actuarial value of those plans could be in the 90% range.

If you would like to know more about options contact me.

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Anytime you travel outside the United States, one should look at taking out a Travel policy. Most health insurance policies will have some level of coverage for travel but it is not enough. Most Indianapolis based health insurance policies will cover emergency room visits as in network. One issue that you will run into is reimbursement in a timely manner. Take all of the medical claims you incurred abroad and submit them to the insurance company. If they are emergency visit claims then they should be reimbursed with accordance to your plan design. This process can take some time. They have to translate the claims which create a delay. Then the claims will be processed.

Where this insurance policy lacks coverage is on medical evacuation. 9 times out of 10, you will not have coverage for this. If you need medical attention on the flight home, this can be very expensive. We are talking $10,000 and up. This is why you take out a travel policy.

The travel policy will cover the medical evacuation and most medical treatment abroad. These travel policies can also help in directing you to the best medical provider. The carriers have developed networks in other counties. This can be a key source of getting quality medical attention abroad.

The travel policy is relatively inexpensive. For a $50,000 benefit it can cost as low as $50.

When we go on vacation no one wants to think about medical claims, but if you have medical claims, the last thing you want to think about is the cost.

Travel Insurance Quotes


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Indianapolis Union Health Insurance Carve out


A lot of Union shops have a handful of non union employees in Indianapolis.  Owners have a option when it comes to health insurance for these employees.

Depending on the Union contract, the owner could choose to put these employees on their own group health plan. It just takes two W2 employees to form a group.

An owner will look at this option for a couple of reasons but the big one is a reduction cost.  Most union health plans are very rich and costly. A company could choose to design their own group health plan for the non union employees. The owner now has control over the health plan. They can choose plan design, contributions levels, waiting periods, wellness programs and employee education.

If you have 4 non union employees  and it costs $38K a year to insure them on the union plan, why not look to save $15K-$18K by forming a small group plan?

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As we enter 2013, there are huge changes on the horizon for health insurance locally and the rest of country.   Here are few of the bullet points of what health care reform is suppose to put into place.


•             Administrative simplification begins

•             Annual fee on medical device sales begins

•             Deduction for expenses allocations to the Part D subsidy for  eliminated

•             Employee notification of access to Exchanges

•             FSA contributions limited to $2,500

•             High earner tax begins (applies to individuals)

•             PCORI fee increases to $2 per member/year

•             W-2 reporting of the value of employer sponsored


Individual health plans and small group health plan will operate the same as they did in 2012. There is still going to be an underwriting process for both lines of coverage.

This year, we should know how the Federal Exchange is going to operate.  This is the essential part of the health care reform laws that will impact most people.  Through the exchange residents should be eligible for subsides. These subsidies could be significant to the point where some people pay no more than 9.5% of house hold income towards health insurance premium.

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Anthem announced the development of a Narrow Network in Wisconsin. The narrow network is a limited preferred provider organization (PPO). This new network arrangement is not just for Wisconsin but the entire country. The health insurance industry is working on reducing costs and one way to do this is to negotiate deeper network discounts.  If an Insurance network can increase participation in a local hospital network then that gives the carrier the ability to reduce reimbursement rates.

With the development of any health insurance exchange in Indianapolis we could see the narrow network become common with those plans. If the policy is regional based then that gives the carrier the ability to negotiate.


The narrow bridge over Endrick Water
The narrow bridge

This could benefit the Indianapolis residents from a claims and premium standpoint. If cost of care goes down then so should the premium. The negative would be members would be restricted to that narrow network.  If a member was to go out of network they may still have coverage but be responsible for a much high portion of the claim. It would not be surprising if the out of network expense was based on Medicare reimbursement rates.

With any narrow network we could see a delay in care from primary care doctors.  Right now in Indianapolis we have shortage in general doctors. This could become even worse the expansion of health insurance.

There will be plans in the market place that do not have these narrow networks. To the Hoosiers that can afford these plans they may choose these plans so they are not restricted in who they can see.

The cost of care is going to have to be addressed. The Government has been unsuccessful in tackling this issue. The private industry will have no choice but to come up with new approaches in reducing the cost of care.

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