Category News

President Obama recently signed the Consolidated Appropriations Act of 2016! This act will provide a 2 year delay on the Cadillac Tax and Impose a moratorium on the medical device tax for 2016 & 2017.

The Cadillac Tax was supposed to go active in 2018.  This is a 40% tax on health plans that cost more than $10,200 for single and $27,500 for family.

There is a lot of concern with about this tax. 1st who is responsible for paying the tax? Employer or Employee? With many large companies, $27,500 benchmark, is not that high.

There is family coverage in fortune 500 companies, Unions and mid-size companies that exceed that cost.  There is really concern the tax would take away the incentive of provide rich benefits to employees.

The Medical Device Excise Tax Moratorium

This is a 2.3% tax on medical device manufactures or importers and has been in place since 2013.  This industry has been negatively impacted by this tax, where some companies had to restructure their business model.  This usually leads to employees losing their jobs and additional locations not being opened.  The new law will freeze this tax for 2016 & 2017.

For more information on the law click here.

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costsThere is not a lot of good to mention for policies off the exchange. With Humana and Assurant leaving this Indiana market, this has left just one insurance company offering a PPO plan. That company is United healthcare.

United Healthcare has publicly stated they want to limit the amount of policies they sell in both Indiana and the rest of the country.

They have removed all online quotes and online applications from their broker distribution channels. This has created a lot of issues because the only way to get rates is for the broker to call in and retrieve them. This step should not be a problem, but the carrier has repeatable given out the wrong rates. I don’t believe this is intentional but it comes from a lack of training.

Narrow networks will be the only option in 2017. It is my view, that United Healthcare will pull the current PPO plan move to more of a gatekeeper. This will be for both on and off the exchange. This will have a dramatic impact on Hoosiers. The options in the individual market will become options of networks.

For the many micro companies with less than 10 employees, many have dropped group benefits and moved to the individual markets. With tax credits and employees being able to decide on health options, this was is a very attractive option. With narrow networks on the horizon for all individual plans, small group employer will look at group health plans again. This will happen.

There has been one new carrier to the Indiana market that has lowered premiums, that is the IU health plan. This is a traditional HMO and I think will become the norm in the individual market. If you are wiling to move to this type plan, this is the only low costing health plan on the market. If they are successful and they might be, this will become a trend with all carriers in Indiana.

The Affordable Care Act, is not working the way the authors had intended. The Insurance companies have implemented many cost controls that most people have not experienced. Now plans have step procedures in place before covering higher costing services.

To get an MRI for back pain, you may have to go 6 weeks of treatment before that diagnostic service is covered. Brand name drugs are going to go towards the deductible 9 times out of 10. Pre authorization is going to be needed on almost every procedure, the attending physician is going to have to prove the procedure is needed. With some companies they will only pay 65% above the Medicare reimbursement rate. This is serious because the doctors are not aware of these restrictions or reimbursement rates when they agree to the network contracts.

These type of cost controls are just the beginning in the individual market.They will continue to get more restrictive.

2016 may be the beginning of the end of the ACA as we know it. The changes that are on the horizon do not look good for the insured.

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insurance-300x291By now everyone has heard the news of United Healthcare pulling out of Obama care.

First thing, United healthcare (UHC) has multiple companies. The company that is on the exchange in Indiana is All Savers.

UHC also has an off the exchange individual plan through United Life Insurance Co.

The Exchange division of UHC had a very aggressive distribution model for 2016. They doubled their footprint in the United States. They went into almost every county in the country.

That was a mistake.  In 2015, UHC had about 500K people on exchange policies and they could not manage that block.  If you can’t smoothly handle 500k policies, what makes you think you can handle 2 million?

Risk!

The announcement that UHC was going to pull out of the exchange because of risk, should not come as a shock. The company choose to go into areas in the country where there was not a lot of data on the risk of the population.

Then they choose to go into states that were known to be really high risk. UHC has had risk data on exchange policies since 2014. Why was that data not analyzed before making distribution decisions?

All Savers current covers about 28K Hoosiers on exchange. If they pull out of the exchange market, people will have to go back to the narrow network plans.

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openenrollmentThis has been another shaky 1st week of open enrollment.

A day before open enrollment began, there were changes from both CMS and the Insurance industry.
These changes had huge impacts on subsidy estimates and even premiums.

The insurance industry was offline for most of this week. They had their IT departments trying to resolve the issues as quickly as they could.
This create a huge barrier for even reviewing plans especially plans that showed cost sharing reductions.

We are still experiencing problems with tax credit estimations. We are seeing some problems with dependent children being eligible for coverage.
Example, you could be a household of 3, with an income of $35,000. The entire family should be eligible for the marketplace plan with tax credits and cost sharing reductions.
The estimators are stating the child is eligible for Children’s Health Insurance Plan (CHIP), but the child is not eligible under the requirements.

$35,000= $2,916 a month

Here are the eligibility requirements taken form www.indianamedicaid.com

Income level for a family of 3

HIP 2.0  =  $2,338

Hoosier Health wise = $2,646

This can lead to frustration with enrollments.

Please contact us with questions.

 

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As most of you know who are covered by Assurant or Humana, those PPO options will no longer be offered in 2016.

This is truly a big blow to any competition in the Individual PPO health plans.
Assurant shut down their individual division for the entire country. They had huge financial losses and had no choice but to close the individual division and sell off the rest of the company.
Humana pulled their PPO out of Indiana and 14 other states. This decision had to be based on losses in this market.
Both companies offered a PPO plan the 1st year of Open Enrollment under the Affordable Care Act (ACA).   It is thought that they absorb so much high claims that financial disaster was imminent.  In just Indiana, we saw the High Risk Pool dissolve under the ACA. Where did they go?  It’s believed that most of them ended with coverage from these 2 carriers.
For 2016, the only Individual PPO option available is through Unitedhealthcare.  If you currently have coverage through Humana or Assurant and prefer to use a PPO, the UHC is your only choice for 2016.
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The Affordable Care Act (ACA) is close to full implementations for employer-sponsored group health plans.

The ACA has had mostly negative impacts on the small group market for Indiana and the rest of the country.  Any group under 50 lives, now has no underwriting for fully insured coverage. This has created large rate increases for small groups. Most small groups that had coverage in place prior to 2014, chose to “grandmother” the policy.  This is where the group can keep the plan, without the plan meeting all the requirements of the ACA.

Grandmothering/transitional policy is a good option to try to control group health insurance premiums. Anthem is moving all of the renewal dates on this block of business to 10-1.  Make sure you accept that renewal date or you will lose the plan.

Last year this block of business renewed at very low rate increases, this year we have seen that rate increase spike up to double digits.  This is still a better option than taking a 50% rate increase under an ACA group plan.

Groups 50-99 employees

This size business has been up in the air under the ACA. Originally, the ACA was going to move this segment into the small group division.  This would have led to no underwritten group health plans or pooled rating. There is a lot of fear from business owners and carriers on what pooled rates are going to look like.  Recently, there were legislations passed that will allow the state to determine the definition of small group.

Insurance Options

As we enter 2016, there are a couple of carriers participating in the Indiana small and mid-size group market. Anthem and UnitedHealthcare are the main 2 carriers offering fully insured plans. There are few other companies but there is a huge lack of competition in this market.  The lack of carrier choices has a lot to do with the passing of the ACA. We were losing carriers before the passing of the ACA, but that was because they could not compete.

Plan designs

The industry is starting to offer different insurance vehicles for group coverage. These options revert back to underwriting the case. This allows for more competitive pricing for lower risk groups. There is now Associations plans, PEO options and the Self-funded options.

There are few associations out there and most of the health insurance is through Anthem. If you are already insured with Anthem, I would not expect them to give a large amount of savings through the association. It can happen, especially if Nefouse & Associates is representing you.

PEO option is a professional employer organization

In this arrangement, a company will lease their employees to the PEO to receive a decrease in pricing on financial services. Health Insurance, Property & Casualty Insurance, Pay role, Worker comp and shift ACA reporting liabilities onto the PEO. This is a serious option if the company can afford the admin fee of the PEO.  Anthem & UHC have PEO arrangements in place along with regional PEO’s self-funding the plan.

Self-Funded Option

There are now a handful of carriers that will offer groups a self-funded or partially self-funded plan. UHC has a division called Allsavers that has this option.  Other companies like Trustmark and Cigna also have similar arrangements.  The companies are designing these plans where a portion of the premium is going into a “claims bucket”. If the group does use the entire claims bucket then they may be entitled to a refund or credit.  These plans have now been around for a couple of years, they are changing quickly.   This arrangement is not offering a large upfront savings vs a fully insured product.  The savings is about 10%-12%.

Large group

Large group has the same options as they had before the ACA. Now there are more fees on the insurance and additional admin that has to be done.  Large Self-Funded groups still come down to fixed costs and claims.

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02E90029 (1)For this years’ senior open enrollment starting November 15th, Nefouse & Associate will be offering health insurance options in the over 65 market.

The over 65 health insurance market, may be the most confusing health insurance market. Having been in the individual health insurance industry since 1998, senior health insurance is the most confusing for a consumer.

There are traditional options through supplemental policies. These policies can cover the out of pocket cost from Part A & B coverage. Supplement F has the highest amount of coverage as the insured will have very little if any cost sharing. They also have the highest premiums. These policies do not have prescription drug coverage.

There are additional options through Advantage plans. These plans have lower premiums and can offer RX coverage. These plans are very different than traditional supplement plans and resemble coverages that you would see in the under 65 market. Similarities are PPO & HMO networks, along with out of pocket maxes. It’s extremely important to view the network access on the advantage plans.

Here at Nefouse & Associates, we are offering all options to our clients 65 and over. The main difference with us vs other brokers in this market is, we will offer you service after the enrollment. What I am seeing in this market, is most brokers offer nothing after the sale. Contacts us and we can help you.

If you want to look at Anthem rates check out the link below:

https://brokerportal.anthem.com/ehb/web/bkr/acc/agentconnect/ANTHONYNEFOUSE_2

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The Affordable Care Act is almost in full implementation both for groups and individuals. The individual and employer mandate are in currently in place, changing how people view health insurance.

About the Individual Mandate

If you do not have individual health insurance then you will be assessed a 2% penalty on household income, or $325 per person and $162.50 per child.

About the Employer Mandate

The employer mandate is on groups with more than 100 full time employees. They are penalized $2,000 per full time employer if health insurance is not offered. Then there is the affordability portion, if an employee pays more than 9.5% of their household income in premium, the company could be penalized $3,000 if the employee qualified for tax credits on the exchange.

This year is when all of the reporting aspects go into place for employers. This information will determine who is eligible for tax credits and who really has access to employer-sponsored health insurance. On the employer side, the reporting will determine if they are meeting the requirement of the law.

This reporting has created a lot of confusion in industries that have lower paid wage workers.   Some of these companies are looking at penalties in the six figure range. Then they have to decide if they want to spend more than what the penalty is to offer an employer sponsored health plan. There are no good options for these industries.

There are only few insurance companies that are still writing mid-size business in Indiana. The process to get health insurance quotes for virgin accounts, has become very extensive. The carriers are not staffed to generate proposals for these accounts that have not offered benefits.

It’s important if you are going out to market for the 1st time, that you have a good idea of potential cost. Right now, it would cost an employer at $4,000 per employee only per year. If you have 120 full time life company, $500K is a realistic estimate of the cost of a fully insured plan.

Unfortunately, companies that are impacted by this, may have to change their business model to stay in business.

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HealthInsurancePlansHumana’s individual health insurance division is exiting the Indiana market for 2016. Humana had offered health insurance coverage for individuals and families off the exchange. They were utilizing their PPO Network Humana/choicecare which was a national network.

This plan resembled a pre Affordable Care Act product than a post.

They had one of the best drug formularies offered in Indiana. Then you add a true PPO national network they were one of richer plans off the exchange.

It looks like they are pulling their off exchange plan in 15 states. Why?

Claims! In today’s health insurance market you cannot offer a pre ACA plan design. Assurant did the same thing and now they are shutting their doors also.

For Indiana, Humana was participated in the 1st open enrollment under the ACA. This may have hurt them form a claims standpoint. We had a high risk pool called Indiana Comprehensive Health. The high risk insurance options dissolved under the affordable care act. Now there are 12,000 Hoosiers needing acute care that are looking for health insurance coverage. Humana & Assurant were the only 2 carriers offering true PPO networks with strong drug coverage. Is it coincidence that that 2 insurance companies that offered the best plans have now withdrawn from Indiana?

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