Category News

affordable care actThe health insurance companies that offer small group plans, have had their rates for 2016 approved.

The definition of small group is about to change for Indiana. Currently, small group is a company with less than 50 full time employees. For 2016, this number is going to change to less than 99 employees.

This is going to a big change for Indiana businesses. Right now if you have more than 50 employees, there is still the underwriting factor. Once small group goes to under 99, we will go to pooled rating, which mean no underwriting. This will change the fully insured landscape in Indiana. Employer sponsored wellness programs will have no impact on health insurance premiums.

Anthem was approved for a 2% decrease on average. Averages do not tell the full story because each plan design is rated differently and each county is as well. Some Anthem plans will receive a 14% decrease, while other will have a 4% increase. Anthem small group rates have not been competitive since 2014. Even with the decrease, from a price standpoint, they will be higher. Anthem’s focus since 2014, has been on Individual health insurance plans and it shows.

United Healthcare was approved for an average rate increase of 6%. The plan designs have a 9% decrease to a 20% increase. UHC has been creative with their plan designs. They developed plans that have no out of network coverage, which helped to price them lower. They also developed “gate keeper” plans, where your doctor has to be involved with all of your health care or it’s not covered. The gate keeper plans are receiving the 9% decrease.

There are only 14 other companies offering small group health insurance for Indiana. This shows there really is not that much competition. The other companies are not competing from a premium standpoint with UHC or Anthem on fully insured products. There is competition in the partially self-funded market and there is big push on the PEO options.

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Under the Affordable Care Act reporting obligations for large employers, is about to get complex. There are 2 new sections of the IRS code that every controller, accountant, broker, & insurance company are trying to understand.

6055 & 6056

In my own words, I will try to explain what the codes are and why they are important.

Under the ACA, it was decided the only way to track if an individual or company has or offers health insurance, is by using the IRS. Do to this, the IRS created these reporting requirement to do the following:

1. Confirm you have health insurance.

2. Confirm that your health insurance meets the standards set by the ACA.

What is 6055?

6055 is a form submitted to the IRS to confirm that health insurance is being offered by an employer. This will allow the IRS to confirm that the group coverage offers the minimum essential coverage under the ACA. IRS will then verify that the employee covered by the plan does meet the Individual mandate.

The good news on this reporting is the insurance company should handle this filing on behalf of the large group employer. If you are on a self-funded plan, this responsibility may fall on to the employer.

What is 6056?

6056 is the responsibility of the employer to file with the IRS and then provide each full time employee a copy 1095-C. Following this, the information provided will be used to confirm coverage.

This is an extremely complicated issue and a company would be wise to look at a third party to help with the admin.

 

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http://www.dreamstime.com/-image13756165Anthem is buying Cigna for $48 Billion! This buyout would create the largest health insurance company in the US.  It’s estimated that Anthem would then cover over 53 million belly buttons. Currently, Anthem is the 2nd biggest insurer and Cigna is the 4th biggest.

This buy out creates less competition for the consumer, business, or medical provider. Anthem will be the biggest health insurance company in the US, which gives them leverage with every medical provider to lower medical reimbursement rates. Anthem will also have a large footprint on the east coast in employer sponsored health plans. Anthem will also gain a significant stake in the growing Medicare Advantage business.

Anthem will now have a large percentage of every health insurance policy in America. Medicaid, Medicare Supplement’s/Advantage, individual health off exchange, individual health on exchange, fully insured small and large group, self-funded & ASO plans & the list goes on. Any association plan, private exchange, PEO plan any reinsurance contracts, network leasing and on and on.

Not that long ago, Anthem was a mutual insurance company and now they will be the largest health insurance company in the country. They have lead the industry with technology and new concepts. With this acquisition, they will be in position to change the medical fee structure, which should lead to lower premiums. The only problem is they may not have competition to keep them check. The competition brings out the best in everyone.

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The individual health insurance companies have submitted their 2016 rates for Indiana. Each health insurance company must submit a very detailed rate submission to the department of Insurance (IDOI). The IDOI then reviews the submission and then approve the filling if the math behind the submission makes sense. Making sense of the filling can be very difficult.

The IDOI will go back to the insurance companies and ask for explanations on certain aspects of the filings. This gets very interesting because the carriers may submit conflicting data.

Numbers that were very conflicting were the expedited medical trend for 2016. Some carriers had medical trend at 4.5% and other had it at 10%. This is where the IDOI will drill down the carriers on how they came up with the medical trend.

The IDOI plays a very important role in keeping the insurance companies honest.

Each company has requested rate increases or rate decreases. Then those requests must be approved by the state. As you can see, some carriers are asking for significant decreases. These requests also have to go through state approval.

For policies sold on the exchange here in Indiana, the rate reductions are going to have a huge impact on tax credits. The tax credits for Indiana are based on the 2nd lowest costing silver plan. When you review the chart, we are only seeing state averages. The averages do not show the true impact of ratings in each Indiana County.

Tax credits are based on county, income and age. Certain Indiana counties have lower premium rates. This is because they have less risk from claims. If we look at a carriers that has 22% decrease on a Silver plan in a county, now the tax credits have just gone down 22% for the entire county. If you have a health insurance policy with Anthem, and they give no rate increase for your plan, but you live in the county where another carrier had a 22% decrease. If you are receiving a tax credit, then your portion of the premium just went up 22%. Thus this can have a destabilizing impact on the plan in that county. The other issue with the unusual decreases, the insurance company may want to build up their membership, so they can bid for a Medicaid contract. This is where the IDOI will make sure the decrease makes sense.

When we look at the two off the exchange carriers, Humana and UHC, the avg. rate is very different. Humana has an avg. premium of $574 while UHC has an average rate of $462. Again the average does not tell the entire story. Humana’s premium may be much higher because of claims. Since they offered the PPO plans in 2014, they may have picked up high risk business. When Indiana Compressive Health Plan (HIGH RISK POOL) shut down, Humana picked up a lot of those members. This segment of Hoosiers have very high claims and I think this has led to Humana’s double digit rate increase for the 2nd year in a row.

Time Insurance also known as Assurant is exiting the market for 2016. The company is closing the individual health division down and sold off the rest of the employee benefits.

The rate increase that have been submitted may not be what the IDOI allows. So we will have to wait and see.

 

Individual ACA Major Medical Compliant Plans Available on Healthcare.gov SERFF Tracking Number 2016
Premium
Average
Requested
Rate
Increase
Approved
Rate
Increase
Minimum
Rate
Change
Maximum
Rate
Change
All Savers Insurance Company YES UHLC-129933469 $502.07 6.50% UNDER REVIEW -11% 18%
Anthem Insurance Companies, Inc. YES AWLP-130039118 $450.42 3.80% UNDER REVIEW -2% 18%
CareSource Indiana Inc. YES CASO-130037672 $393.68 -5.05% UNDER REVIEW -27% 20%
Celtic Insurance Company YES CELT-130073844 $378.25 -7.44% UNDER REVIEW 3% 35%
Coordinated Care Corporation NO** CECO-130078754 $746.83 UNDER REVIEW UNDER REVIEW UNDER REVIEW UNDER REVIEW
Humana Insurance Company NO** HUMA-130027837 $574.27 19.20% UNDER REVIEW 11% 23%
IU Health Plans YES IUHP-130080653 $400.84 -16.50% UNDER REVIEW -28% -16%
MDwise Marketplace, Inc. YES MDWI-130049784 $403.02 -19.00% UNDER REVIEW -23% -16%
Physicians Health Plan of Northern Indiana, Inc. YES PHIN-130059720 $458.66 14.50% UNDER REVIEW -3% 34%
Southeastern Indiana Health Organization, Inc. YES SEIH-130074033 $443.29 6.70% UNDER REVIEW -1% 9%
Time Insurance Company YES ASPC-130034581 $694.12 26.00% WITHDRAWN -36% 50%
United Healthcare Life Insurance Company NO** AMMS-129891356 $462.11 6.70% UNDER REVIEW -12% 29%

 

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The Supreme Court ruled 6-3 in favor of keeping the tax credits for states without a state based exchange.   This is a huge win for the Affordable Care Act. This was viewed by some as the last big battle of the ACA.

When you read the actual ruling, the court points out that the term death spiral. The ruling addressed if the tax credits were taken away, from the 36 state that did not establish an exchange, that the other states would be impacted negatively. Without the tax credits most people would drop out of the health insurance, leaving only the high claims members. This creates a death spiral, where only sick people have coverage, which leads to even higher rates. The court realized if the tax credit went a way, we could see the entire individual health insurance market implode. I think that is the main reason they ruled in favor of keeping the tax credits.

The legal argument to keep the tax credits, boils down to the statement.

“at least for purposes of the tax credits. If a State chooses not to follow the directive in Section 18031 that it establish an Exchange, the Act tells the Secretary to establish “such Exchange.” §18041. And by using the words “such Exchange,” the Act indicates that State and Federal Exchanges should be the same.”

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”

Had the court ruled against the tax credits, the fall out would have been astronomical. The entire Individual health insurance market would have collapsed. What Individual health insurance companies that are still in the market, may have pulled out. The leadership at these companies have been very frustrated with the ACA.

If you agree or disagree with the ACA, this is the best outcome for keeping the health insurance markets somewhat stable.

Read more about it here

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mamogramThe Departments of Treasury, Labor and HHS released clarification on preventive care requirements under the Affordable Care Act. Specifically they addressed personal history as it relates to routine breast cancer susceptibility gene (BRCA) testing.

We should see all of the health insurance policies that are ACA compliant cover this type of test as preventive care. There are some stipulations that one must meet to have this covered at no cost to you.

A women will have to be over 18 years of age and have personal history of breast or ovarian cancer.

In the past, most carriers covered the testing if there was a family history of breast or ovarian cancer.

The higher end health insurance companies, should continue to cover the testing based on family history. The smaller companies may choose to use the government version for preventive coverage.

It doesn’t make sense, to determine the coverage as preventive, only if you have a personal history. The entire point of preventive care is to prevent the disease, not wait until you get it and then cover the preventive.

It’s very frustrating for us to learn that government agencies did not put much thought into the words they use to clarify an already complicated law.

 

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health-insurance-indianaSt. Vincent’s and Anthem have come to an agreement for Anthem’s individual health insurance network. This is a large expansion of the Pathway X HMO/POS network. Now all Anthem individual policy holders both on and off the exchange will have access to utilize St. Vincent’s medical services.

Learn more here

When the Affordable Care Act was passed, insurance companies looked for options to try to control health care cost. The number one option was limited network providers. By limiting network providers, they were able to negotiate reimbursement rates.

The expansion of the Pathway X network to include St. Vincent’s shows that Anthem understands the value of giving their members choices. This also shows that St. Vincent understands that they need their Anthem members. Both sides came to the conclusion that they need one another.

The health care/insurance markets will continue to adapt to the ACA through working together.

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UnitedHealthcare/UnitedHealth Life/ Allsavers have had major billing issues on their individual lines of coverage.

If you make a payment and it is not allocated to your account, that’s when problems begin. It’s almost like the payment stays in limbo. Automatic Bank Drafts are being drafted but are not posting to the account. In some situations, we are seeing the premium amount posting in installments.

There has been no explanation on what is causing the problems, however, they are working to correct these issues.

Earlier in the month of April, UHC was sending late notices not only to the member but to the member’s physician.

If you check your statement and it’s showing terminated and you know you made the payment.

Relax! Relax! Relax!

1st step is to call billing services and start a paper trail.

Once they have a “ticket” created for you case, resolution should happen. I would say timely manner but this problem should not be happening in the 1st place.

It seems there is no switch to flip to fix the problem all at once. Each case has to be correct manually.

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ING_19064_06177With the new laws governing business under the Affordable Care Act, a company must determine how they are viewed under the ACA. There is small group and large group categories. Companies with less than 49 employees are considered small, companies with more than 50 employees are determined large.

To determine which category your company falls into, is not an easy determination. In fact it can be extremely complicated. The complications comes from the part time employees that have a full time equivalent value. The ACA is using a 30 hour work week to define a full time employee. For part time employees, you would add all of the part time hours up and then divide it by 120. 120 hours is the figure that is used for determining your size group.

Here is an easy example: a company with 30 full time employees and then 30 part time employees working an average of 80 hours a month.  30 x 80 = 2,400 hours, this is then divided by 120 hours = 20 full time equivalents. 30 Ft +20 FTE= 50 which leads to the large group classification. Now this employer would have to comply with the employer mandate or pay a penalty. Lucky for this Indiana company, there is a 30 employee deduction before the $2,000 penalty is accessed. This example could make the company decide not to offer group health plans and also avoid any penalties.

The Indiana restaurant and hospitality industry is faced with serious issues under the ACA classification system. It’s better to start addressing this issue on a proactive basis than waiting to be reactive.

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