Category News

With the passage of the Patient Protection and Affordable Care Act (“PPACA”) and the Health Care and Education Reconciliation Act of 2010, Americans face a new era in health insurance. While there is still much guidance to come from the government,

Major changes to the limited medical industry are coming this Fall. Limited medical plans will be subject to new rules. Policy holders should contact the carrier ask them how the new laws will affect their plans.

Employers utilizing limited medical plans are facing many changes, beginning as soon as September 24, 2010 when grandfathered health insurance plans begin to renew. Group health plans, even those which have been grandfathered, will have to meet new requirements, including no lifetime and annual limits, on or after September 2010. All limited medical plans that were considered “group health insurance plans;” plans that issued Letters of Creditable Coverage under HIPAA; plans identified as Limited Major Medical Plans that function similarly to traditional group plans with co-pays, deductibles, co-insurance and an annual overall maximum or a separate inpatient/outpatient maximum; will be subject to these new regulations.

Within the limited medical industry, there are two styles of limited medical benefit plans: coinsurance and indemnity-based insurance. Fixed indemnity style limited medical plans that do not issue creditable coverage letters or represent themselves as a “true group health insurance plan” are exempt from the new regulations because they are filed as supplemental and not subject to these new regulations, as opposed to the coinsurance-based limited medical plans, which are.

Employer groups renewing after September 23, 2010 that are currently on a limited medical plan subject to the health care reform rules regarding the removal of annual and lifetime limits have several options:

1) Their carrier will not renew the plan because it cannot meet the new rules;

2) They are renewed with significant rate increases; or

3) They move to a fixed indemnity style limited medical plan

If you are a policy holder of one of these types of plans it’s important to contact the carrier for more information.

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This is going to be very interesting to see how the grandfathered plans are treated from a carrier standpoint. It’s very possible that these plans could cost less than the new generation of plans that will be launched under the health care reform.

The next few years these grandfathered plans either group or individual could become very valuable. If you have a plan where the premium is 35% lower than market condition you will not want to let that plan go.


What is a “grandfathered” health plan?

A “grandfathered” health plan is any group health plan or individual coverage that was in effect on the date of the Acts’ enactment on March 23, 2010. “Grandfathered” status is important under the Acts as certain provisions of the Acts do not apply to grandfathered plans (or at least to many participants under “grandfathered” plans), or apply to such plans at a later date. There remain many questions regarding “grandfathered” plans and the extent to which “grandfathered” status will apply

What provisions of the Acts apply to “grandfathered” health plans
The following lists some of the key provisions of the Acts that apply to “grandfathered” health plans with plan years beginning on or after September 23, 2010:

  • Dependent Coverage Until Age 26 – The Acts require group health plans (including “grandfathered” health plans) that cover dependents to provide coverage for dependent children until they reach age 26, regardless of student status or marital status. However, for plan years beginning before January 1, 2014, coverage need not be offered by a “grandfathered” plan if a dependent is eligible to enroll for coverage under another employer-sponsored group health plan.
  • Restrictions on Annual and Lifetime Limits – Group health plans (including “grandfathered” health plans) may not impose lifetime limits or “unreasonable” annual limits on the value of “essential benefits” for any plan participant or beneficiary. 
  • Prohibition on Retroactive Cancellation of Coverage – Group health plans (including “grandfathered” health plans) may not retroactively cancel a participant’s coverage once the participant is enrolled in the plan unless the individual has engaged in fraud or made an intentional misrepresentation of a material fact. 
  • Restrictions on Preexisting Conditions – The Acts mandate that group health plans (including “grandfathered” health plans) may not impose any preexisting condition exclusions for eligible children under age 19.



It is very possible if these are the only acts that are imposed on the grandfathered health plans they very well might end up costing much less.


What provisions of the Acts do not apply to “grandfathered” health plans?

“Grandfathered” health plans are excluded from the following provisions of the Acts so long as the plan maintains its “grandfathered” status:

  • Preventative Care Benefits – For plan years beginning on or after September 23, 2010, the Acts require that group health plans (other than “grandfathered”  health plans) offer certain preventative care benefits, such as immunizations and breast cancer screening, on a first-dollar basis, without cost to participants.
  • Nondiscrimination Testing – Currently, the existing Internal Revenue Code rules for nondiscrimination testing apply only to self-insured plans. For plan years beginning on or after September 23, 2010, the Acts require that fully-insured health plans (other than “grandfathered” health plans) apply the same nondiscrimination tests in an effort to discourage plans that cover only high-ranking employees.
  • External Review of Claim Denials and Appeals – For plan years beginning on or after September 23, 2010, group health plans (other than “grandfathered” health plans) must provide a mechanism in their claims procedures for an external review process, among other things.

Since these acts do not apply these plans should cost the carriers less in claims which means less in premium for the policy owner.

Time will tell.

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UniCare Life & Health Insurance Company (UniCare) has made decision to terminate its group and individual health insurance business locally. Following a transition period, UniCare will no longer provide health insurance in Indiana.

UniCare is pleased to collaborate with Anthem Insurance Companies, Inc., (Anthem), which will offer replacement coverage, on a guaranteed issue basis with no requirement for medical questions, to UniCare’s existing employer groups and to individual policyholders living in the state. The group proposals will of course be contingent upon there being no material change in the group census, use of the correct SIC factor, and compliance with eligibility, participation, and contribution requirements.

UniCare will send 180-day advance notice termination letters to Individual policyholders and 365-day advance notice termination letters to Small Group policyholders in late April. Soon thereafter, Anthem will contact you regarding offers for your small group clients and send offer letters to Individual policyholders. Your clients will have until June 30, 2010, to accept Anthem’s offer in writing.

For UniCare customers who elect to accept Anthem’s offer of replacement coverage, the coverage under the UniCare plan(s) will terminate on June 30, 2010, and the coverage under the Anthem plan(s) will begin on July 1, 2010. Although the Anthem benefits and premium will not be identical to those of the UniCare health insurance policy being terminated, Anthem will undertake to offer comparable products, which for Individual business, will be at a premium differential of no more than 12% for the first 12 months. This maximum premium differential does not include any premium increase due to changes in age and/or address. After the expiration of the initial 12 months, the premium for these Individual policies will be based on the policies’ applicable rates. There will be no break in coverage and no preexisting condition waiting periods for UniCare customers who elect to transition to Anthem. Additionally, if the offer is accepted, Anthem will provide credit for the 2010 UniCare accumulated deductibles.

For UniCare customers who choose not to move their health insurance coverage to Anthem, UniCare will terminate and discontinue coverage at 12:01 a.m. on November 1, 2010, for Individual coverage and at 12:01 a.m. on May 1, 2011, for small group coverage. If those customers have UniCare dental, life or disability coverage, it will not be terminated and will continue in accordance with the terms of those plans.

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There have been some huge jumps in technology when it comes to shopping for healthcare procedures. The large insurance companies have developed price shopping tools that resemble a menu. The ability to price shop an MRI on your lower joint within 20 miles from your zip code can make the difference of thousands of dollars. It’s truly amazing to see the price difference of the same procedure at different facilities. The interesting thing is the different locations are using the same equipment and processes. How can a hospital charge $1,800 more for an MRI than the clinic down the street?

This is why it is very important for people to starting looking at the cost of procedures.

Along with these price shopping tools there has been the development of “quality of care reports”. This is a very unique tool that can be informative for your future surgery. These reports contain information ranging from the percentage of complications, to the bed side manner of the attending physician. There are even reports on how clean the bathrooms are kept.  This type of reporting is extremely useful in deciding where you want to have a surgery.

These national health insurance companies put a lot of time and money into developing these tools and that is why it’s important you talk to us about where and how to access them.  Give me, Tony Nefouse, a call at (800) 846-8615 today.

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SCHIP Expansion up to 250% Income Guidelines / Premiums

This is an interesting program that very few people are aware of. If your house hold income is below 250% of the federal poverty level then you may be eligible to put your children on this health plan.

Currently in Indiana the SCHIP program is being admin through Hoosier Health wise. So for a family of 4 to be eligible the house hold income cannot exceed the 250% of the federal poverty level ($53,000).

So if you are a business owner, controller, or a citizen of Indiana you should know about this program.

Being a business owner or controller it’s important to be able to advise newly hired employees and existing employee that they might be eligible to put their kids on this program.  Currently most group health plans could cost an employee or company much more than what it would cost on SCHIP. On SCHIP two children could cost up to $70 a month in premium. In the private sector those same kids could cost anywhere from $120 and up depending on the group and plan design.

This program could help out a lot of Hoosier families.

Now here are is one of the big obstacles of the plan. The child must be uninsured for 3 months before they are eligible.  This is a huge obstacle.

From an employer standpoint they should inform any new hires with children about this option.  With the current economic conditions we are seeing a lot of families that are going uninsured do to cost. So they might qualify for SCHIP which will reduce what they are spending on premiums.

This October 2009 we might see an increase from 250% to 300% of the federal poverty level to qualify.

This program has very little advertising to it.

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