Category News

Employer Shared Responsibility Payment (ESRP)

If you are researching this topic, then you may have received a letter from the Department of Treasury Internal Revenue Service with regards to Employer Shared Responsibility Payment (ESRP).

Under the Affordable Care Act’s employer shared responsibility provisions, large companies are required to offer affordable health insurance coverage that meets the requirements of the ACA. This rule is also referred to at the employer mandate, which applies to companies with 50 full time employees or the full-time equivalence for the previous calendar year.

The employer shared responsibility penalty took effect in 2015, but there were multiple delays to give businesses time to comply.

An employer may be subject to ESRP, if one or more full time employees obtained a tax credit through a state or federal market place. The employee was eligible for the tax credit because the employer did not offer a group health plan, or the plan was deemed unaffordable. The IRS started to issue these letters the 4th quarter of 2017.
The letter states, under section 1411 of the ACA, that for at least one month of the year, one or more of your full-time employees was enrolled in an individual health plan that was eligible for tax credits or subsidies.
In the letter, it will state which employee/s had the tax-credit and for how many months. In that summary table, it will indicate the penalty.

At this point, take a deep a breath if you did offer a group health insurance plan. You have the right to appeal! One thing to keep in mind, during years 2015 & 2016, the marketplaces were slow to verify eligibility for tax credits. It was more like a “free for all” as the marketplace was unable to certify a employers group health plan meeting ACA requirements. Another issue was these were the first years some employers starting to file ACA reporting requirements. It is very possible that an employer or the firm they hired made an error on the filing. It’s also quite possible that the filing was missing information, so the ESRP is being sent as default letter.

Since these letters are just now starting to hit Indiana businesses and the rest of the country, it should be interesting how many appeals win.

One thing is for certain, the IRS is going to hold business accountable for employer shared responsibility tax.

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Amazon, Berkshire Hathaway & JPMorgan Healthcare TransformationThere have been huge shockwaves caused in the health care industry with news that Amazon, Berkshire Hathaway & JPMorgan would form an independent health care company for their employees in the United States.

Upon the release of this news, publicly traded health care companies saw their stocks prices drop as the news of new competition entering the health care marketplace has caused major speculation on how  these three behemoths’ will take on healthcare.

First between these three companies, there is over 1 million employees and potentially over 3 million people insured. This creates a huge advantage because the three behemoths have their own healthcare claims data. This information is impossible to obtain and they should have years of it along with the technology to analyze it.

With the recent news we are seeing speculations like integrated health records, personalized healthcare recommendations, medical provider reviews, and price transparency. All of these are great and have been around for 10+ years and may reduce costs by 5%.

Another speculation surrounding the news is that the three companies will band together and develop internal medical divisions that treat their employee populations. They recruit the best medical professionals, build facilities, and even develop their own pharmacy & pharmacy benefit manager (PBM). They could develop centers of excellence where complex treatments could be performed and managed more effectively than current options. They would have the ability to negotiate directly with pharmaceutical companies for lower pricing. Having their own pharmacies & PBM they could reduce RX costs significantly. This speculation would reduce health care cost for their employee and members. This strategy could be developed by a bunch “old guys” crunching numbers who all think alike.

What is the most “outside the box” speculation surrounding this news?

One extreme speculation is that Amazon, Berkshire Hathaway & JPMorgan merge to attack the very fundamentals of healthcare. Instead of practicing medicine, the develop process to match your genes with medical treatments. If your genes are known, then it can be determined what medications will work the best in your body. This technique is called ‘Pharmacogenomics’, which is defined as the study of how genes affect a person’s response to drugs.

If we were to take this a step further, if genetic testing can determine what disease an individual is at high risk for, a regiment of preventive care could be put in place to prevent that disease from ever occurring.

They could even work on developing Artificial intelligence (AI) to help diagnose medical conditions. If a video gaming council can have face recognition, why can’t a camera scan out tonsils and let us know if we have strep throat?

What if you have an integration between pharmacogenomics and prescription drug dispensing?

One of the biggest issues in pharmaceutical industry is the drug dose. If a drug is produced in 200mg but the data of 167mg is going to treat the patient most effectively, why not develop a compounding device that creates the exact dosage for the patient? There’s no telling how much time and resources would something like this save.

The current healthcare environment has been created by the industry players and government regulations. If the mission to completely overhaul the cost, effectiveness, and how we receive healthcare, will current industry leaders be involved with the strategic planning? Is it even possible to overhaul the healthcare system without those leaders being involved? Only time will tell.

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Outside of open enrollment there has been little news on the Affordable Care Act. On January 22nd it was announced that the Cadillac Tax will be postponed until 2022. The postponement was included in the short-term budget bill that was signed by the president.

This is a huge relief for Indiana and the rest of the country. The tax was set to become effective 2020, so this year was when most employers were going to start planning for the benefit tax. The problem with planning for the Cadillac Tax is there is little to no guidance currently.

What is the Cadillac Tax and what does it do?

The Cadillac Tax would assess a 40% penalty on the cost of employer sponsored health insurance. The tax would be on premium over $10,200 for single coverage or $27,500 for family coverage. For large Indiana employers that have self-funded plans, the tax could be assessed on what the Cobra rates are.

The fact the penalty has been delayed to 2022, is a huge relief and it could be anticipated that we will continue to see the postponement of this penalty.

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Group Health Insurance Indiana

We quickly approach Jan 1st, 2018, the state of health insurance in Indiana is nowhere near close to being stable.

Individual Health Insurance

The Affordable Care Act has failed every Hoosier that pays for or towards a health insurance policy. One segment of the population has benefited from the ACA, and that is the Medicaid Expansion (HIP2.0). HIP 2.0 members has swelled to over 500K Hoosiers. The marketplace did make it much easier to start the enrollment into Medicaid. Originally Indiana was projected to have 1 million residents that were buying health insurance coverage from the exchange. It was estimated we had 150K on the exchange in 2017. Estimated is the correct description because half of the membership would drop off mid-year.

Hoosiers who purchase coverage through the exchange will only have two carriers to choose from in 2018. (Ambetter & CareSource) Both of these companies have large Medicaid divisions. CareSource’s exchange network is about 20% larger than their Medicaid network. One of the frightening concerns that no one is talking about is the artificial specialist network. This is where they will list the same doctor multiple times under different addresses.

If you have traditionally purchased individual health insurance off the exchange, that is no longer an option. There will be no carriers offering off-exchange policies. The only option will be the two carriers offering coverage through the exchange.

If you live in an Indiana county that offers Ambetter, then that is the best of bad options. They will be offering a Health Saving Account plan. If you want to know why this is the best of the bad plans, contact us.

Group Health Insurance Indiana Plan Options

Indiana Small Group Health Plans
A small group in Indiana is less than 50 employees. If you currently have a small group health plan that is considered grandmother on Anthem’s legacy platform, it’s been a wild ride. 2018 your renewal date has most likely moved to Jan 1st. This is after four years of having the renewal date move moved every year. This grandmother block was not supposed to renew this year under the ACA, but the new administration decided to allow this business to continue. Which is good news for most small groups, but some are receiving big rate increases. The average rate increase is 13% but can go as high as 30%. This block of business is rated based off of claims. The last three years, these group plans have received low rate increase because the plans were all underwritten. Over time, claims do occur, and now it’s showing.

The fully insured group options you can count on one hand.
There are three carriers who offer small group coverage. Unitedhealthcare, Anthem, & IU. 2018 rates have increased with all three carriers. The average composite premium was already around $500 a month per employee; now they are closer to $600. This is getting very close to out of reach for most small group employers. Now a company has to get creative with not only plan design but with how the premium is rated. What to know an effective strategy? Contact us to learn more.

Level Funded Partially Self Funded
One group health option that has shown to be effective is using level funded health plans for small groups. These plans have underwriting, which creates significant savings if your employees and dependents are healthy. Premiums can be as low as $300 per employee per month. After underwriting the average premium is about 30% lower than the fully insured market. Indiana now has multiple carriers offering these options. Each carrier viewed risk differently, the best approach is to underwrite with all of them to get the best deal. The largest saving happens with there are multiple dependents being covered.

Large Group Coverage 50-99
The Large group allows for underwriting, and this is key to getting lower premiums. If the company has 50 eligible, then you can go to large group. For 2018, Anthem is counting part-time employees at full time, so that you can go to the underwritten market. This is a game changer for many Indiana companies. There are only a couple of companies competing in this segment. One thing that has come as a surprise, is the level funded carriers are not as competitive in this segment.

The President Executive Order
The new executive looks to be another failed attempt by Washington DC to help the current health insurance markets.

First, the ending of the government paying cost-sharing reductions. Most politicians and journalists have little understanding of the actual impacts of this. Cost Sharing Reduction (CSR) is where people making less than 250% of federal poverty level (FPL) would receive lower deductibles and out of pockets when they purchased health insurance through the exchange. The government was paying the difference directly to the insurance companies. Under the order, these payments will stop, but the health plans will still have CSR. So now the two insurance companies left in Indiana, will charge more in premium for those options. On the exchange, a qualified member will not pay more than 9.5% of income towards premiums. It will impact Hoosiers that don’t receive tax credits and want to purchase a silver level plan.

The second order has to do with increased flexibility with Health Reimbursement Accounts (HRA). The idea here is to give employees money on a tax-deferred basis so that they can purchase Individual plans. If there is no individual market, this has little impact in the short term.
The third is the creation of association plans or buying health plans across state lines. Currently, the carrier can sell across state lines but choose not to. There are multiple reasons why they don’t do this, but if state regulation along with federal mandates removed, this could create another individual market. With association plans, if they don’t have to abide by ERISA and ACA laws this could also open up different health insurance options. None of this would happen in 2018; it would take years for products to be created.

A recent two-year study revealed how much Indiana hospitals are charging for health care. The study used Medicare reimbursement rates as the benchmark. The study that received almost no consideration proved that Indiana hospitals are charging over 300% of Medicare rates. In 2018, hopefully, more attention is raised about what our medical community charges. There is a very quiet movement of using health insurance plans that reimburse based off of Medicare rates. The cost is significantly lower than using a network. The medical community is reluctant to accept these low reimbursement rates when they are used to getting 300% above Medicare.

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Group Health Insurance Indiana

When the Affordable Care Act (ACA) went active, a large a majority of Indiana small business dropped their group health plans and moved to the individual market. At first, this was an excellent option for reducing costs for both the company and the employee.

Businesses that had little employee turnover, no growth strategy, and lower compensation, have benefitted from dropping the group health plan. The main advantage came from tax credits from the marketplace.

Group Health Insurance Indiana 2018

We fast forward to 2018, tax credits are available, but the individual carriers left in Indiana have limited network access. These medical providers are built from the Medicaid system, and there have a been an exodus of providers that will no longer accept any marketplace plan.

Small group owners now realize that the individual options are no longer the best solution for their personal and business needs.

Small employers are now looking to set up new group health plans. Group Health insurance, allows the company to retain what key employees they have and allows the business owner to have access to all of the medical providers.

Attracting Employees with Group Health Insurance Indiana

A company that is not willing to offer group health insurance may not be able to attract employees, and a company is only as good as their employees.

For 2017 in Indiana, we have seen a lot of companies putting in 1st-year benefits or returning to offer a group health plan.

Some companies have tried to turn to the group health plan, but have problems with meeting participation. Most health insurance companies require 50% of the full-time employees to take the health plan. Employees that have lower compensation have benefited from tax credits and HIP 2.0 Expansion. It would cost these Hoosiers more money on a group plan vs. subsidized health insurance. Most small group employers will contribute towards the employee only portion, which can create financial hardship for the employee to pay for dependents.

There are some solutions to meeting participation; the first thing is if the employee is open to the idea. If they are then looking for subsidized coverage for the dependents. Another solution is offering multiple choices of health plans.

Small group, health insurance companies, have decreased in Indiana with the passing of the ACA. This may be a result of the guaranteed issue in the fully insured market.

Insurance companies that are offering small group health plans are Anthem, UnitedHealthcare, & IU health plans. When it comes to level-funded plans, where there is underwriting, Indiana has Starmark, All savers, National General, Lifestyle and a handful of other carriers.

Most of the level funded carriers have minimum employee requirement. With most of them, you need at least five employees to take the health plan. However, National General will accept just two employees. These can be great solutions for controlling cost. Since these plans are underwritten, insurance companies can offer lower premiums. This can create up to a 30% saving vs. the fully insured market. So there are options out there!

Contact Nefouse & Associates for your Group Health Insurance Indiana

If you are a small company, offering a group health plan may not be something you want to do, now you may have too. Contact us today to learn more.

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Group Health Insurance

Insurance companies in both Indiana and the rest of country have always enforced participation requirements. Small groups (under 50 employees) and “Large” groups (50+ employees) have had to have at least 50% of the full time employees elect coverage. Insurance companies do vary on employee participation.

Group Health Insurance for Small Groups

Fully insured small group carriers have not altered from the 50% rule. There is a provision in the ACA, which allows for companies to enroll in small group health insurance without meeting participation. This is only allowed for Jan.1st effective date.

Fully insured large group carriers do have different participation levels. Anthem requires the 50% of the employee to be eligible. Unitedhealthcare does not have a participation requirement in large group.

How can 2 companies have different participation requirements?

Broker assumption:

If a company in Indiana is considered large group, this means they go through underwriting for the group health plan. Anthem may be concerned with a level of adverse selection. Unitedhealthcare may feel that since they are underwriting the group, they are able to assess the amount of risk they are taking on. That assessment can lead to an increase in the health premium, which is an extremely effective tool for an insurance company.

Employee Class Carve out:

An effective technique to meeting participation, is carving out a class of employees for the health insurance plan. Example, a company with 40 employees and benefits are only being offered to management. Companies that have low income employees, have had a difficult time meeting participation because the low income employees can qualify for Medicaid benefits. This was true prior to the Medicaid expansion, now it is a major issue within certain industries. There are only a handful of insurance companies that will allow this technique.

Level Funded/Self-Funded participation:

The self-funded or partially self-funded insurance plans, have different participation requirements. Some carriers still require the 50% employee rule, then there are a few that will insure less than 50% as long as the waiving employees currently have qualified coverage. Qualified coverage waiver includes, Individual plan, Spouse group, VA, Medicaid, Medicare, or a parents plan. For small groups, that want to offer coverage to all of their employees, the level funded plan may be the best option. The group still has to go through the medical underwriting process but at least this option exists.

Employee Participation under the ACA

Since the Affordable Care Act (ACA) went into place, employer sponsored health insurance participation has been negatively impacted. The ACA created guaranteed issues in the individual health insurance market. Prior to the ACA, Indiana, the only way to get a guaranteed issued policy, was through a employer plan or Medicaid. Now employees were no longer “stuck” to their group health plan because of preexisting conditions. This allowed employees to go out to the individual market and shop for an alternative policy. For an employee or spouse, to take the time to research health insurance usually meant they felt they were paying too much on the employer plan. The other reason could be the out of pocket max on the employer plan. If a family knew they were going to have claims, they were able to purchase an individual policy with a lower out of pocket. Another reason is an employer composite rating. This is where the group health plan has the same employee cost for all the employee coverage. If the group was running rich benefits or had an older employee average age, the composite rate could have been much higher that what was being offered in the individual market. Medicaid expansion does have an impact on the group plan. Employees with families, are able to take advantage of Hip 2.0 & Hoosier Healthwise.

Companies all over Indiana and the rest of the country have had their participation rate impacted. In rural communities with lower average incomes, companies have been forced to drop their group health coverage. Blue collar industries with lower entry wage employees, have lost the 50% participation.

2018 Participation Predictions:

With the individual market imploding in Indiana and across the country, group participation will increase. Most employers have had lower costs because of a lack of employee participation. This is about to change in 2018 and I’m not sure all small and mid-size employers are preparing.

With individual plans not having network access, those Hoosiers are going to be looking for plans that keep access to their doctors. Group plans with either PPO or EPO networks, will give access which will lead to a huge increase in participation. This will also increase employer contributions.

Employee may be tired of dealing with the individual market and be happy with their employer making the health insurance decisions for them.

Employees Need to be Proactive With Group Health Plans

With this segment of the employees coming back to small or large group, employers need to be proactive. If this influx is younger employees, this may create an opportunity to lower the cost of the group coverage. If you are in the small group fully insured market, this average age decrease could reduce the premiums by as much as 30%. Unfortunately, this may not lead to lower overall employer cost but can help reduce the increase.

If a company has more than 20% of the employees waiving coverage, they should be concerned. The time to reevaluate the health plan, is prior to December 1st. Look at the employees that are currently waiving coverage, determine if it’s a spousal waiver or Individual. If the majority of the waivers are because of Individual coverage, you will be impacted. Once those individual plans end on December 31st, that is a qualified life event to join the group health plan. There is also discussion about forcing HIP 2.0 participants to work certain amount of hours a week. This could lead them to being qualified for a group health offering. Small and mid-size business, should budget a accordingly. Review the currently plan offering, look at making adjustments or even changing the plan offering completely.

If a company is facing a 30% increase in participation, this could open new options for health plans. Offering a dual option or even a multi option could create an effective strategy. If the company’s philosophy is offering a consumer driven health plan, the group may want to keep that philosophy, but add a lower costing health saving account.

If you have a company of 20 or more employees, it would be wise to look at the potential impact.

Here at Nefouse & Associates, Inc. we will provide the attention needed for you to make an informed decision.

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Indiana Health Insurance Company Updates

Recently, it was announced that Federated is leaving the group health market. They are exiting the state of Indiana and the rest of the country. They will end providing group health, life & disability on Dec. 31st of 2017.

“Federated does not see an end to the uncertainty surrounding the ACA” Federated said in a press release. This may sound familiar since most insurance companies have been using this type of language also when they announce they are exiting a market.

Federated provided group health insurance in the small group market. The majority of their clients appeared to be in “blue collar” industries. They also offered coverage in the property and casualty markets. Federated had the option of offering both liability and employee benefits to their clients. This did appeal to some Indiana companies and could have been a good solution.

Broker Assumptions:
The majority of their Indiana group health clients, may be on grand mothered or grand fathered policies. These would have been group plans, purchased prior to the affordable care act, which means they were purchased without having all the rules of the ACA. These plans had medical underwriting, which kept the premiums down vs ACA small group plans.

Federated may have been faced with multiple problems with their current business model. The individual market place, would had eroded membership. Small companies, especially in rural communities, took advantage of individual tax credits, which led to dropping group health. Another issue is the age of the group health members. A lot of Indiana small companies, blue collar, have an aging employee population. This can lead to a small group having a higher average age, which leads to higher premiums and the potential of higher claims. If the majority of their small groups fall in this category, they could have had issues with attracting lower risk groups. All of these assumptions, could be accurate, which means they could have been experiencing adverse selection. Without the ability to develop new small group health products, the decision to exit small group could have been made with math.

Impact to Indiana companies:
Federated group health insurance is good until the end of 2017. This gives you plenty of time to research the small group health insurance market. There are only a handful of insurance companies offering small group policies. It will not take much time to review the options. Most small group’s insurance proposals can be generated in less than 24 hours. Under the ACA, fully insured group plans do not have underwriting and no medical questions. The process of moving to a new small group plan is not difficult. Most Indiana group plans will have little to no disruption in medical services. With the move occurring at the first of the year, most deductibles will start over, so an employee will not be hurt by paying the deductible twice in one year. If the current plan is on a year plan, then there is a chance the member may be paying the deductible twice. In that situation, a group can request for a deductible carry over credit. The process of moving to a new group health plan, can be made easy, if you choose a brokerage like Nefouse & Associates. Click here to get in contact with us.

Assumptions from your Indiana Health Insurance Company

My assumptions, were formed from actual experience in the Indiana small group market. Working with blue collar companies and finding health insurance solutions.
Tony Nefouse

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Group Health Insurance Indianapolis – IU Health Updates

At the end of June, IU announced that they were leaving the individual market. There announcement was very quiet and received almost no media attention.

IU Health Plan is owned/an extension of Indiana University Health. The medical group has had insurance products available in Indiana. They offer group health for both small & large employers and Medicare Advantage for the senior market.

In 2014, they launched they’re under 65 Individual health plans as quietly as they announced their exit. It took them about a year to put together an effective distribution channel outside the market place. It also took time for IU to develop their message, that message was healthcare integration.

Healthcare Integration is where all your doctors are in communication with one another. If a member was being treated for an acute condition, this doctor communication would lead to better treatment outcomes and a better patient experience.

As a broker, the healthcare integration appealed to me. We enrolled a lot of Hoosiers in the IU health plans both on and off the exchange. The first 2 years, we had no clients that had complaints. They were either all healthy or the integrated care model was working.

2015 is when IU increased their individual membership. They ended up being penalized by the Affordable Care Act under risk adjustment. Their membership was healthier than they predicted. This was one of the reasons they choose to leave the marketplace in 2017.

Now, they have decided to exit the individual market completely in 2018. With Anthem exiting the market, this creates a huge unknown when it comes to risk. Regardless of the reasons why IU chose to leave the individual market, this is another blow to the Individual market in Indiana.

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start upWhen a startup company launches, one of the last issues that is addressed is Group Health Insurance & employee benefits. The founders of the startup company, may have years of experience in their industry or are on the cutting edge of new technology. When it comes to Indiana Group Health Insurance, leadership may lack experience. If they are coming from a large company, employee benefits may have been a topic handled by another department.

These new entrepreneurs, are now faced with placing Group Health Insurance plans in place, to attract and retain employees.

Indiana Group Health Insurance Carriers:

In the small group market, there are not a lot of insurance companies offering coverage in Indiana. The main 2 carriers are Anthem & UnitedHealthcare. There are regional companies like IU Health offering plans. Then you have carriers that are offering self-funded plans for small group. The size and nature of your Indianapolis company, can determine which carrier may be the best solution.

Indiana Networks

Each carrier has a different network and some carriers offer multiple networks. Most common is the Preferred Provider Organization (PPO). The PPO is going to allow for the greatest access to medical providers. A member can have a general doctor in one medical group, a specialist in another & then a pediatrician in another. Most PPO’s also have a national network, which may be the only option for companies with out of state employees. The PPO is also effective if there are employees that are commuting from rural communities. In Indiana, Anthem has one of the best PPO for small companies. Unitedhealthcare also offers a well-accepted PPO plan.

Indiana Group Health Insurance Plan Types

Exclusive Provider Organization (EPO)

Not as common in small Group Health Insurance is the EPO network. The best way to describe an EPO, is it’s a large accepted network, may even be national, but it does not offer coverage out of network. The plan may offer access to all of your providers & specialists in Indiana. Where it does not offer access is if you wanted to go to a specialist in a hospital for treatment. A good example, would be having access to a drug treatment center out of state. It can be viewed that medical groups that will not discount their rates are not included in the EPO.

Health Maintenance Organization (HMO)

The HMO network has had limited access (no pun intended) in the Indiana small group market. Currently, IU Health plans may be the only option for a true HMO. If your company & employees are located near the HMO medical providers, this can be a good solution. With most HMOs, members have to choose a primary care physician (PCP). That PCP should have a closer relationship with that member, which creates a more knowledgeable PCP with the patient’s situation. That knowledge is supposed to create better treatment plans and general oversight with any specialist services.

Navigate/Gate Keeper

With traditional HMO plans now EPO plans offer/force a navigator or gate keeper on the member. The Navigator/gate keeper is the first point of service to the member. These plans go as far as listing the medical provider on the insurance card. If a member does not go through the navigator, the claim is not covered. This option can be effective if the insured is forced to have that PCP get to know them. At first, employees can be annoyed with having to elect a gatekeeper. Once they search the network, they maybe be surprised that their doctor is participating in the network. These networks allow for the employee to easily change their navigator/gatekeeper. Unitedhealthcare is one of the few Indiana carriers that offer a navigate plan on their EPO. Would could see this become a more common option.


No Network/Indemnity Product:

A no network plan/indemnity is a health insurance plan that does not use a provider network. This means there is no pre negotiated price on medical procedures. These plans, use Medicare reimbursement rates as the bench mark for medical costs. Then they will add 50%-100% on top of the Medicare reimbursement rate. The insurance company/ third party admin will contact the medical provider after the claim is submitted. They then try to negotiate the reimbursement rate. In Indiana, the major medical groups have had issues with this type of reimbursement. They even have gone as far as to refuse to treat members on this type of insurance. This option is usually provided by a self-funded or level funded plan. Since medical providers refuse to accept these types of plans, this may not be the best option for a small group.

medicalGroup Health Plan Design:

The plan design will have a huge impact on cost and the value the employees place on the benefit. Ownership/leaderships health insurance philosophy can determine which plan design is elected.

Major Medical

The employer puts in a high deductible health plan (HDHP). The plan could have a $6,500 deductible and all claims go towards the deductible, once met then 100% coverage. The philosophy is the plan is here to cover you for major services.

Health Savings Account (H.S.A)

Plan design has a HDHP with a savings account that has tax advantages. Deductibles and out of pockets can range from $2,500-$6,500. Average H.S.A deductible is around $3,500, which is considered to be a rich benefit, even though the deductible has to meet first.

Traditional Co Pay Plan

Traditional group plans have co pays for office visits and prescription drugs. This is a first dollar benefit, you have an office visit and pay $35 for the medical service. Depending on employee’s situation, this plan can be a more acceptable insurance offering. If an insured is prescribed a medication, they may only have to pay RX copay, which can be more affordable vs. picking up the entire cost as it’s applied to HDHP plan.

High Deductible with Co pays:

This would be a combination of the traditional with first dollar benefit. The view is the plan is going to cover your office visits and prescriptions, but surgeries are going to go toward a high deductible. We see this option with groups that really don’t want to offer a group health plan, but have to keep current employees.

Multi Choice

This option allows an employer to offer multiple plan designs, then the employee can choose the plan that best fits their needs. There may be a base plan offering with a buy up option to richer benefits. With most carriers (Anthem), the company needs at least 10 employees taking coverage to offer a dual option. Unitedhealthcare, will allow a company to elect as many plans as they want with no employee requirement.

Group Health Insurance Cost:

In fully insured small group, premium is determined by ages of the employees and plan design. Under the Affordable Care Act, there is no underwriting for small groups.The average of age of the employees has the biggest impact on cost. Plan design would be 2nd and PPO, EPO, HMO, Navigate would be 3rd. On a level funded/Self-Funded plan, the case would go through underwriting. The employees would answer medical questions, then a group risk factor would be determined by ongoing health conditions.

Employer Cost:

moneyUnder most insurance contracts, the employers is required to pay at least 50% of the employee only Starts ups that are well funded, are picking up 75% on average of the total costs, which includes employee and dependents. Not all startup companies in Indiana, are in a position of being able to pick up 75% of the entire cost of the Group Health Insurance plan. Employer contribution can be guided by the industry and what type of employees the company is looking to attract. To attract employees from large companies, benefits can be a huge issue. With any new start up, the cost of a Group Health Insurance plan may not have been addressed with correct data during the business planning. Under the ACA in Indiana, the average cost for employee only is around $500 a month, a family is around $1,500 a month. For any start up to be successful, an investment into the group health is a must.

Group Dental

With any employee benefit package, group dental is important line of insurance coverage. Employees want to get their teeth cleaned at no cost to them. The majority of dental plans will offer 100% coverage for preventive care. For most small group dental plans, the employer need to contribute toward the premium. If the plan is set up as voluntary meeting the participation requirements can be difficult. When choosing a dental plan, you may find better coverage at a competitive price using a carrier outside the health plan. With smaller companies, it’s easier to bundle the dental coverage through the health insurance carrier.

Group Vision

A group vision policy is a nice benefit for employees as more and more people are wearing glasses. Maybe there is correlation with staring at screens and the need for vision services. Vision insurance usually provides a copay for an examination and materials. Group vision usually offers richer benefits than what can be purchased in the individual market.

Group Life

Life insurance can be one of the least expensive benefits a company can offer. A company can offer $100K in life insurance for about $20 per employee per month. For a startup company to offer this level of benefit can have a huge value towards employees.

Long Term & Short Term Disability

Offering disability insurance really is determined by the industry and employee compensation. If the startup company is recruiting higher income employees, long term disability may be essential to an employee benefit offering. With a startup, getting disability coverage may be difficult until the company has been established for 2 years. There are carriers that will offer a disability plan to a 1st year company. This benefit is usually 100% employer paid. As for short term disability, this benefit can be added with the Long Term.

Supplemental/Work Site Coverage

With small group, voluntary products can be added through supplemental policies. These policies can reduce the health insurance deductible and out of pocket. With any voluntary product, it’s completely up to the employees if they want the coverage, they are responsible for the cost. The one benefit is some of the policy premiums can be paid pretax. The supplemental policies should be tailored to the Group Health Insurance plan. Minimum participation is usually just 2 employees electing the coverage.

Benefit Platform

Being a startup, you may not have the staff to allocate to the benefit administration. A benefit platform can significantly reduce the time spent on the employee benefits. The platform will aide with employee enrollment & changes. Reduce paper application and include all the benefits in one place for the employee to access the information. Then to add reporting features for HR, which can be used with premium reconciliation or educating the employee on total compensation. With the advancement of technology, the new benefit platforms can also be used for employee onboarding. Many of the system come at a price to the employer, with Nefouse & Associates we provide this platform as one of our services at no cost to our clients.

Indiana Group Health Insurance Benefits Tips

When a small company is ready to put benefits in place, all of these options can be overwhelming. Determining what benefit package is going to work best for your company starts with choosing the right broker. A good broker can advise what health insurance design is going to work best for your organization. There is a fine balance between cost and benefit design. What works in one industry may not work in another. Nefouse & Associates has worked with startup companies for over 30 years. The benefits that you put in place the 1st year, will change over the year. When a company first launches, they may be a micro company with less than 10 employees. As a company grows, the health insurance and benefit philosophy may need to change. That change can be forced by cost or industry trends. We have witnessed this business life cycle over & over. Having the experience to successful consultant our clients from startup to going public is quality few Insurance brokers have. We pride ourselves on being one of the last insurance agencies that can help companies of all sizes. Contact us today!


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pexels-photo-48603Anthem announced that they would exit in the Indiana individual market in 2018. They are pulling all on exchange plans and will offer one off exchange plan in five counties. (Benton, Newton, White, Jasper & Warren)

It is estimated that Anthem insures 46,000 Hoosiers on the exchange and about 20,000 off exchange. This decision to not offer plans in 2018 is going to have a huge impact on these members. These Hoosiers may have fewer options for coverage and some may have no options now.

Why Would Anthem Withdraw?

For on exchange, it has been a challenge dealing with the government. This includes both administrations. There has been a continuous cycle of change with operations, rules and guidance. The lack of payment, for the cost sharing reductions is a major issue. Another issue may be the overall risk that the current individual block represents. In the last 2 years, Anthem has been the highest priced plan. If they cost the most, it’s difficult to attract low risk members. They could have been experiencing adverse selection.

Anthem will offer one off exchange plan in Benton, White, Jasper, Newton and Warren Counties.

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