Category Policies

With the economic shutdown from COVID-19, is this a time review insurance benefits and processes?

Every business is different, and COVID has impacted every industry, which may lead some employers to re-address their benefits and procedures.

Process & Procedures:

Employee education on Insurance Benefits has been changing the last five years, to a more digital environment.  There was a time where open enrollment meetings consisted of insurance professionals on-site with a stack of papers.  Will this continue in a post COVID environment?  

The solution is going to digital enrollment & Insurance Benefits administration platforms that also help to educate employees and their spouses on insurance options, which should Include lines of communications for specific benefit questions.

An employee receives a welcome email, and they register to view and enroll in benefits. Controllers/HR/Owners can quickly track the employee’s progression through the enrollment process with reporting features.

Just a few years ago, a benefits admin platform had a high cost to employers. As technology has evolved, that cost has dropped significantly. Here at Nefouse & Associates, Inc, we can provide a full benefit admin system to our clients at no additional cost.

Insurance Benefit Review

Right now, Insurance companies like every other industry are ready to get back to bringing in new business. Underwriting departments being more aggressive with issuing competitive rates. Small groups with less than 20 employees electing coverage will need to complete applications that can be quickly streamlined with a benefits admin system.

If you have 20+ employees on the plan can benefit from GRX underwriting. GRX underwriting is where they use a member level census to determine risk and issue rates. Businesses with 50+ employees can also benefit from this type of underwriting.

Now is also an excellent time to look at what type of plan designs are being offered compared to the industry. Using benchmarking tools, we can quickly advise if your plan offering is competitive.

Ancillary products:

When it comes to dental, vision, life & disability, the insurance carriers are incredibly competitive both on cost and increasing benefits.  With COVID-19, there has been an increase in employees electing voluntary life for themselves and dependents. Some employer is taking the opportunity to launch a new open enrollment for life selections.


Read More

On 6/24/19, the President of the United States issues an executive order requiring Hospitals and Insurance companies to reveal what they are charging or paying for services.

The idea is to make health care cost transparent, which then would lead to consumerism and then medical providers reducing costs to attract more patients. Primarily pressuring the health care industry to become like any other industry.  “The goal is to create a more competitive marketplace where providers are competing for patients on price and quality.” CMS

The Insurance industry immediately pushed back, stating this action would have unintended consequences by pushing prices higher rather than down.  The insurance industry fears that publicly disclosing proprietary network rates (PPO, EPO, HMO) will only lead to medical providers demanding higher reimbursements based on the highest reimbursement rate.

The Department of Health and Human Services will propose regulations requiring hospitals to disclose what the standard charge for medical procedures in an easy to understand format. 

Both, which includes Insurance companies and medical providers will fight this executive order with all their resources because real price transparency could have huge implications on their business models.

If the public can retrieve what each medical provider charges for a specific procedure, that could lead to that patient going to the lowest costing provider, especially with current deductibles and out of pocket maxes.   Quality care should remain a factor, but a provider charging more for that procedure would have to justify why they are charging more. Maybe they have the best doctor in the state performing that procedure, or they have the newest technology, or it might come down to how the staff treats you before and after the procedure.  Price transparency could lead to lower prices and additional services.  

On the flip side If all the medical providers know what each other are charging, this could lead to higher prices by matching the highest price being charged.  

If the public had access to network discounts that the insurance companies negotiate with the medical provider are, it could have a massive impact on carrier selection.  Large employers with self-funded plans would have a clear picture on which insurance company offers the deepest discounts. A large employer typically will be responsible for the initial claims on each member called stop-loss insurance.   If the employer pays the first $150K in claims on each member and they have a crystal-clear picture that Insurance company X has 10% deeper discount than other carriers that can add up to significant savings.

On the flip side, all the insurance companies could arrive at a similar benchmark on reimbursements and then negotiate additional discounts that could go back to the carrier or client in the form of rebates. Thus, losing transparency

Read More

Small Group Rates Delayed 

Every year the health insurance companies of Indiana have to submit their rates and plan designs for approval through the Indiana Department of Insurance. In the past, this filing would be submitted for review and approval in the month of May.  The filing for 2019 small group fully insured policies was extended to the end of June. This extension has also extended when the department of insurance would approve the 2019 rates. 

The main Indiana insurance companies like Anthem and UnitedHealthcare are not sure when rates will be approved. It could be October 15th, or we could end up in the month of November before we have approved rates.

This delay is having large unintended consequences for Jan 1st small group both under the affordable care act and legacy groups!

80%+ of small groups renew Jan 1st.  Under the ACA fully insured market, these plan designs change every year. The plan changes are not just minor, we have seen deductible, co-pays, co-insurance have huge changes that create more cost sharing to the insured. A perfect example was UHC 2018 introduction of a plan that had 50% co-insurance for outpatient services. The plan was advertised as an 80% co-insurance plan but in the details (small print) it was determined outpatient was 50%. This creates a large cost sharing when the out of pocket max is $7,000+.

In a perfect world, a small group should make renewal decision at least 60 days prior to the actual renewal date. Under the ACA, by law small group fully insured renewal rates must be released 90 days in advanced. 

If 2019 rates are not approved until November, Indiana small companies will not have much time to make decisions or even review alternate options. 

Every Insurance agency/broker active in a small group (there is not a lot of us) is going to be overwhelmed with request for proposals and learning the new group insurance policies being offered. 

group insuranceNefouse & Associates Solution for Small Group:

Our solution to the 2019 small group rate delay is both being proactive and utilization of technology. First, it must be determined if the fully insured market is the best option for your company.  If your small group company is relatively young and healthy, then reviewing partially self-funded options may be in your company’s best interest. 

With the bulk businesses renewing for Jan. 1st, technology is becoming the quickest option for enrolling and employee education for small Indiana groups. We offer a benefit admin platform delivers on both the education, installation and new employee on-boarding. We can build out a client’s enrollment platform in less than three hours, with employees reviewing and enrolling in company benefits in less than 24 hours. The platform is customized to the clients’ company with logos and dedicated domain name. This is one of the added services we provide our clients at no additional costs.

Our proactive broker approach is all about dedicating the time to reviewing the plan contracts to advise our clients of the best option. Contract review is difficult during normal business hours and really has to be done after hours, this way there are no distractions. Once reviewed, we ask the carriers for an explanation of the area of uncertainty. The response time to these questions can be long, the carrier rep normally will not answer them as they don’t know or want to take on the liability. If the insurance companies legal must give the answer, it can take over a month. If the summary of the benefit chart does not match up with the plan quote, it may be better to disqualify that plan design as an option. If we (as your broker) do not have access to a certificate of coverage (COC), which we won’t until after the plan is issued, you have to be very cautious on plan election.

For Indiana small group health plans, using a broker like Nefouse & Associates that actually cares is the first decision that has to be made.  If you are a small Indiana business will no employees or less than five, you may be a good candidate. Contact us, and we can provide information on the Jan. 1st 2019 Small Group Rates.


Read More

Indiana was one of six states to file a lawsuit against the Affordable Care Act’s health insurance provider fee (HIPF) for State Medicaid plans.

The U.S. District Judge ruled in favor of the plaintiffs, Texas, Indiana, Kansas, Louisiana, Wisconsin & Nebraska’s that the government must pay back $840 Million in Obamacare fees.

What is the Health Insurance Provider Fee?

The HIPF is an annual fee charged to health insurance companies on health insurance premiums. The Patient Protection and Affordable Care Act of 2010 assesses fees on insurance companies that provide fully insured health insurance coverage. 

The fully insured tax/fee is 3% of the total health insurance premium.

Business affected:

  • Individual and small group health insurance plans.
  • Large Group Health plans.
  • Stand- alone, dental & vision plans.
  • Stand-alone, behavioral health, and pharmacy plans.
  • Medicare Advantage plans.
  • Retiree-only plans.
  • Medicare part D prescription plans
  • Taft-Hartley Plans
  • Medicaid and Children’s Health Insurance programs (CHIP). Until recent court ruling!

The purpose of the tax/fee is to help fund federal and start marketplaces/exchange.

The estimated cost is $14 billion a year.

The authors of the ACA & PRACA projected that there was going to be enormous profits for the insurance industry because of the Individual Mandate. Thus, they could tax the industry to fund the law. They also assumed that these profits would create carrier competition.

The reality is the insurance industry passed this cost on to the members, which has led to everyone paying about 3% more to fund health care reform.

The fact that Medicaid plan is now exempt from the ACA tax is a massive blow to the ACA and the funding mechanism.  Indiana alone has over 2 million people on Medicaid, and it’s not clear the government can make up for this loss of funding for the ACA.  $840 Million is a year is just a start, other states will follow and with an estimate of $5.5 billion attributed to the Medicaid tax. 

This is a massive blow to the ACA law, that is has gotten almost no attention!   The funding of Obamacare may have just lost 25% of its funding.  This estimated operating costs for the marketplace is $2.1 billion.

It will be interesting to see if the government adjusts the federally facilitated marketplace. There could be a decision to turn those operations over to a third party. 

Read More

All the health insurance companies that want to participate in Indiana’s small group health insurance has submitted rates & plan designs to the Indiana Department of Insurance for review. These filling are for fully insured groups with less than 50 employees.

As always, it’s going to be an interesting year under the rules and regulations of the Affordable Care Act (ACA).

Under the ACA, small group health insurance plans are changing every year.  This has led to frustration with many Indiana small group employers.  Pre ACA, a company, would purchase a health plan, and that plan did not change until the company chooses to change it.  Now, a company could have a $2,500 deductible silver plan in place, but the renewal is mapping them over to a new Silver plan that has a $4,000 deductible.   It’s difficult for most people to see how a $2,500 deductible silver plan is the same as a $4,000.   

Under the ACA, the insurance company is forced to develop plans that meet an actuarial value that then indicates if they are Bronze, Silver, Gold or Platinum.  That actuarial value changes or is interpreted differently every year. Which leads to plan designs being a change in the small group health insurance.

We can’t put all the blame on the ACA with the forced plan changes in the small group.  I believe that if a carrier has higher claims utilization on certain plan design, they discontinue that plan.

As we review 2019 Indiana’s small group plan submissions, most of the cost information is listed in averages, which does not tell the full story.  If a carrier is introducing new plan designs, it’s difficult to determine what the cost increase or decrease as compared to their prior year’s plans.   When we look at the details, rates are determined by counties.  For example, Boone County could have a rate decrease on all of their Silver plans, while Marion County has a rate increase.   Then each plan design has a different cost, and some carriers will offer seven different silver plans.   The average price does not tell the full story.

2019 Small Group Submission

  • Anthem appears to have an average rate increase of 2.5%.
  • UnitedHealthcare appears to have an average rate increase of 8.14%
  • IU Health Plans seem to have an average rate increase of 7.21%

There are a handful of other companies that have filed, but their small group rates are so high that I don’t think they are worth mentioning. Those companies don’t want to compete in the small group market but submit plans, so should they wish to fight in future years there is less barrio of entry.

Anthem filing has decreased on specific plan designs as high as 9%.  In 2018, Anthem increased the cost of their small group on avg of 17%. That rate increase made them less competitive in the under 50 life market.   For 2019, Anthem is trying to get competitive based on the few small group carriers we have in Indiana.

UnitedHealthcare filling is difficult to read because it appears most of their 2018 small group plan designs will be discontinued.  New plan designs will be introduced, which could be a good thing. Last year, UHC offered plans that created many confusions.  They had Silver plans that 80% coinsurance but had different coinsurance levels for specific procedures like outpatient surgeries.  One had to dig deep into the summary of benefit chart to find these carve-outs.  As with Anthem, specific metallic level plans and counties have a different rate increase, so again the plans must analyze for costs and coverages. 2018 UHC was anywhere from 17%-8% cheaper than Anthem.  This led them to pick up a much more significant market share in Indiana small group.   UHC also offered a true multiple-choice option for the small group. This strategy appealed to a lot of small companies, where their employee had different health insurance needs.   With 8% average rate increase, Anthem & UHC should be comparable from a price standpoint.

IU health plans are the HMO which IU health has ownership in. With their average rate increase, they should be below both UHC & Anthem.  In 2018, IU health plans have cost about 7% less than the competition, but that is for a health plan with access to only IU providers.  Indiana small group employers have shown some reluctance to move to a true HMO. The 7% saving has not been enough.

Under the ACA, we see a reluctance from many carriers to compete for small group business. This lack of competition has led to just a few fully insured options. It’s not usually for a small group to switch back and forth between UHC and Anthem. With network access being similar along with plan designs, a small group should take advantage of saving 7%. This back and forth strategy are simplified by using benefit administration platform, which streamlines the enrollment process with the least amount of employee disruption. 

Indiana along with the rest of the country has seen a considerable influx of level-funded/partially self-funded plans enter the marketplace. These options have created substantial cost saving for small groups that are overall healthy.  Level funded allows a group to get lower health insurance costs by going through underwriting.  Groups with as few as five employees are eligible.  The level funded option on average saves a group around 20%. That savings can be even higher if the group has a high amount of dependent participation.   

2019 will be another challenging year for small group health insurance.  An owner will wont to be proactive with their insurance offering by starting their benefits review at 90 days before the renewal. 

Read More

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.

Read More

It was reported that the Trump administration has reinstated the risk adjustment program of the affordable care act.

The risk adjustment program redistributes funds from carriers with lower risk members to plan with higher risk member.  The reason this was witten in the ACA was to protect against adverse selection in the marketplace by spreading the financial risks across the markets.  Authors of the ACA through this program would prevent insurance companies trying to attract healthier members and compete based on the value of product offering. 

The risk adjustment program was a failure because more insurance companies were requesting payment, than paying into. This was the legal argument on why the current administration suspended payments based on the law being deficit neutral.

How this Impacts Indiana?

In the individual market, we only have the two insurance companies offering coverage. Both Ambetter and CareSource included receiving risk adjustment payments in their 2019 filings with the Indiana Department of Insurance.  Had the payments for Risk adjustment not been reinstated, then these two insurance companies would have had to raise their premiums.

Ambetter would have had to raise premiums by an average of $23.03 per member per month ($276.36 yr.)

CareSource would have had to increase premiums by an average $65.22 per member per month ($782.64yr.)

The administration had to reinstate the payment, even if they don’t believe in it. The few insurance companies still participating in the individual markets, were developing products based on the existing rules.  When reviewing the insurance company’s filings which justifies the premium they intend to charge, the risk adjustment receivables can determine if the company will be profitable.  The individual plans are operating on less than 5% profit margin, and if receivables represent more than 10% of the premium, without out it,  those companies could lose money and decide to withdraw altogether.

Contact Us if you are interested in learning more!

Read More

It would be wishful to say that group health insurance under the ACA has stabilized. Comparing it to the Individual market under the ACA, the group is calm.

For companies with less than 50 full time employees, or the equivalent under 50, fully insured products are guaranteed issue. This mean there is no underwriting. When employees complete applications, they are not asked any questions about current/past health conditions. The cost of the plan is based on county, age of the employees & plan designs. This can be an advantage for companies that have younger employees. The younger employees can reduce the rates through composite rates. This can have a huge impact, if a company and the employees can afford the health plan. We have been able to get the employee rate down as low as $239.

The county where the company is located act will impact rates. Under the ACA, this is perfectly acceptable to increase or decrease rates based on the county. If a county has had a history of higher risks/claims, then the group health plan can and will cost more.

Plan design has the largest impact on group premiums. The two main carriers in Indiana are UnitedHealthCare (UHC) and Anthem. They are really the only carriers that are in the small group fully insured market.

Anthem small group plans designs, really have not changed much under the ACA. The plans are somewhat straight forward. The deductibles & office visit copays have stayed the same. Anthem has slowly started to change their prescription drug co pays. The one aspect that has changed is the out of pocket max. These have increased under the ACA. As it stands Anthem is not competitively priced in the small group product. This is by choice.

UHC surprisingly, has been very creative on developing new products that reduce premiums. They have changed plan designs, networks and even added gate keeper plans, with the goal of controlling cost. They have established that a split co pay is now acceptable to most insure. This is where you have a lower co pay for general doctors, then a much higher co pay for specialists. This is to create consumerism. A specialist may cost $330 for a visit and general doctor may cost $90. So UHC would rather pay for the general office visit. The next change they have made is co-insurance. They have created some plans with 50% co-insurance after the deductible has been met. The insured will hit the out of pocket max much faster. Another surprising move from UHC was the establishment of the EPO network. This type of network is a hybrid of a PPO & HMO. It has national provider access but no coverage out of network. Gate Keeper policies, where the insured must choose a doctor for all of their care. That doctor must be involved with all care provided or it will not be covered. UHC also has changed their RX co pays significantly. It appears that they are running a three tier co pay system, the reality is they are running a six. They have increased cost to the insured, on drugs that cost more. All of these cost cutting measures add up for both UHC and small groups. These have led to lower premiums under the ACA but they have shifted more cost onto the insured.

The small group plans have stabilized with UHC. Anthem has not pulled the trigger on the new plans under the ACA. Anthem could come out with a new product line up that is very different than what they are offering small group now.

There is one segment of Indiana small group that is very unstable and that is grandmothered policies. These are policies that were sold prior to the ACA going active. The Federal government and the State of Indiana have agreed to allow these plans to be in place until Dec.31st of 2017. The health insurance companies and many so called experts, do not know what will happen when these plans are no longer terminated. Will these small Indiana companies accept a 44% rate increase under a ACA plan? The answer is NO, they will not. These business owners will look for alternative solutions. They will contact a broker like myself, Nefouse & Associates, INC, and we will provide that solutions to lessen the blow of the ACA.

Read More

Late February 2016, CMS sent out a bulletin for extended transitional policies. The bulletin outlined to extend small group health insurance policies to Dec. 31st 2017.  The former rule was that these policies would be terminated on October 1st, 2017.

How does this impact Indiana small group health plans?

If you purchased a health plan that is considered “grandmothered” that plan will continue until Dec.31st 2017. This will allow you to keep that coverage for the entire 2017. These plans can be anywhere from 30% cheaper than ACA compliant plans. This is because of the rules of the ACA with small group.

CMS in their infinite wisdom, realized the huge problem that was going to occur if the plan ended in October.  Now Indiana companies will be able to start a new group plan on the calendar year.

Beginning Jan. 1st 2018, all small group health plans will have to move to ACA complaint plans with the exception of grandfathered plans.

There is fear that we could see the additional decline in employer sponsored health plan in 2018.  Very few business owners are going to accept a 30% rate increase.  In Indiana, we have seen new solutions for the small group health coverage. There are association plans and even partially self-funded options.

January 1st is one of the most hectic times in the insurance world, it’s better to start reviewing options sooner than later. July 2017, you should contact us and we will deliver every options that is available for you to review.

Read More

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.
Read More