Tag aca

This is possibly the most interesting time in small group health history locally, not to mention the rest of the country.

Anthem releases 4th quarter renewals

Small group health insurance renewals have been released for the 4th quarter from Anthem. “WOW” is all I can say!

The renewals that are being released are all “grandmothered.” This means that the group can keep the current plan, even though it does not meet ACA compliance. In Indianapolis this block of business is renewing at low rate increases. In fact, we are seeing single digit rate increase on most groups. This is because these groups are running very well from a claims standpoint. Some groups are getting hit with double-digit rate increases and this has a lot to do with claims.

As I understand it, you may be able to keep that group plan through 2016. This can be a great option for the next two years because your premium will much lower than a ACA-compliant group plan. It’s important for any owner to also request numbers on a ACA plan just in case. This can be provided to you very easily, though this is where the premiums get very ugly. If your broker has been working for you, then they should have reduced your rate increase over the years with Anthem. Those years of constant negotiations with underwriting has saved small group thousands. This is a service Nefouse & Associates has always provided to even our smallest groups. Under the ACA plan, be prepared to see very large rate increases.

Anthem Small Group Renewals
Anthem groups can keep their current plans through 2016.

Small groups affected most

Small groups that are going to be hit the hardest are small-group plans that have run single digit rate increases and have composite rates in place.

An example would be a group of 22 employees electing coverage. There is one premium rate for each tier. So if you’re 62 or 22 years old, the employee-only premium is the same. Now under the ACA, there will be no more composite rating for small groups — it will be all age based. The 62-year-old employee that was running $435 a month, might see a new premium of $1,400 a month. On groups like this, we are seeing 85% rate increases on a ACA compliant plan.

Groups that have age-based rates in place right now are not seeing as large rate increases. If you have 15 employees on the plan and have had low rate increases you may a see a 37% rate increase with an ACA plan.

Among the grandmothering block in Indianapolis, the lowest ACA increase I have seen is 23%. This was on a case of 40 employees that had age-based rates in place.

You need to know what the impact of healthcare reform is going to have on your group benefits. We are being told groups will be able to keep the plans through 2016, but anything can happen. If the Indianapolis Department of Insurance decides not to allow non-compliant plans to stay in place next year, then you may be faced with these kinds of rate increases.

What to Do:

First, find out what kind of ACA rate increase you are looking at, then contact Nefouse & Associates, or call us at (800) 846-8615.

We may be seeing the beginning of the end of traditional small group plans. So let’s think outside the box!

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Last week, we had two different rulings come out of the courts. The U.S. Court of Appeals for the D.C. Circuit ruled that it was not legal to give tax credits/subsidies to residents of states that did not develop a state-based exchange. In Richmond, we had another court rule that is was legal for the IRS to give tax credits to the residents of these states.

The Affordable Care Act is no stranger to conflict. Since the inception of this law, everyone has debated this issue. From the kitchen table to the courtroom, this topic is debated daily.

There is no doubt that the ACA has created many problems, but at the same time, it has given us affordable access to healthcare. Here in Indy, we have had over 130,000 residents take advantage of the health insurance marketplace. Most Hoosiers were found eligible for tax credits, and have received a 79% decrease in their premium. At the same time, the ACA is eroding employer-sponsored health insurance for small businesses, along with significant increases in premiums for higher-income residents. The employer mandate is going to have a crushing impact on industries in the area that can’t afford to offer group health insurance.

Dual Rulings on the ACA: How does this affect Hoosier small businesses?
It’s important to know that the subsidies aren’t going anywhere.
I don’t think you can’t take away the subsidized premiums. If this were to occur, then the entire individual market would crash. Under the ACA, we have had huge rate increases to the individual premiums here in Indianapolis. Rates have doubled in some situations. Therefore, the subsidies are absolutely mandatory for a majority of Hoosiers.

There will, undoubtedly, continue to be a flurry of rulings associated with the ACA and any aspect of it. Some rulings will fall the law’s way, and some will invalidate part of it. It’s a safe bet that your subsidies are safe for the time being, though, at least until the Supreme Court takes up the ACA — again.

If you have any more questions about how your small business is affected by this ruling, if at all, and how you can secure more affordable health insurance for your employees, contact Nefouse & Associates, or call us at (800) 846-8615.

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There is a new term starting to be used called “grandmothering” by business owners and controllers of companies with less than 50 employees.

Grandmothering, is the term that the federal government is using to extend current non-Affordable Care Act policies until 2016.

On March 5th 2014, the United States Department of Health and Human Services issued the “Extension of Transitional Policy”, which will allows small groups and individuals to keep non-grandfathered plans for two more years, with renewals on or before October 1, 2016.  On March 31st the state of Indiana agreed to allow this extension.

How does this impact you?

If you are running a group health plan that elected the early renewal, you may have the extension of that plan until 2016. You will still have a renewal process but you should see a small rate increase.  How can I predict your rate increases being low?  The groups that are left on the early renewals are running well from a claims standpoint. The insurance carriers do not want to lose accounts that are profitable.  It’s an assumption, but I think it is accurate. Most small companies may want to take this offer.

Individual Plans and Grandmothering

I can’t predict what decision the carriers are going to make regarding the individual plans. We could see some carriers offering the grandmothering and others opting not to.

If you are able to take the grandmothering of your current individual plan, it may be in your best interest.  Now if you qualify for tax credits on the exchange, you may want to contact me to get those rates and plan designs.

We should have more official statements from all the carriers in the next couple of weeks.

As always, feel free to contact me with any questions you may have regarding grandmothering or health insurance in general.

Anthony  Nefouse

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CompareSelfFundedandFully-InsuredIt’s common knowledge that offering health insurance benefits helps attract and retain great employees, yet businesses are looking for ways to cut costs as benefits get more expensive. Have you ever considered a self-funded insurance plan?

In a self-funded plan, a business can provide health benefits directly to employees. Instead of the insurance companies, the employer collects the premiums, assumes the risk and pays employee claims. Feel like that might be too much work? Insurance companies can still execute the administrative aspects for your company.

But what if the company underestimates its employees’ claims and can’t afford  to pay them? There are reinsurance contracts that have low stop-loss limits. Stop-loss insurance is just what it sounds like: stop the losses. This is a limit on the amount that a policyholder must make in coinsurance and out-of-pocket payments per year on an insurance policy. Generally, the stop-loss limit is stated as a flat dollar amount. Once the stop-loss limit has been reached, the health insurance company picks up all remaining expenses for the year. With a low stop-loss contract, a self-funded plan may be more of an option than what it has been in the past.

Below is a check list of what PPACA provisions will directly impact self-funded plans.If you are a group that has a self-funded plan or is entertaining a self-funded plan, these are the some of the provisions that must be covered. Once we see the full impact of the ACA on the fully-insured market, we may see that self-funded plans become an option for both small and mid-sized companies.


  • Prohibition on Lifetime Benefit Limit
  • Extension of Dependent Coverage to age 26
  • Restrictions on annual dollar limits for Essential Benefits
  • Medical FSA’s must limit reimbursements of over the counter products
  • Prohibition on cost-sharing for Preventive Services
  • Establishment of internal and external appeals process
  • Coverage for emergency services at an in-network cost-sharing level with no prior authorization required
  • Reporting on W-2’s of aggregate cost of employer sponsored coverage
  • Increase on HSA tax distribution for non-qualified medical expenses from 10% to 20%
  • Women’s Preventive Care expansion according to US Preventive Services Task Force
  • Quality of Care Reporting
  • Provide Summary of Benefits document
  • Medical Flexible Spending Plans limited election of $2,500
  • Notice of Exchanges
  • Eliminate tax deduction for employers taking the Medicare Part D subsidy for retirement prescription drug coverage
  • Comparative effectiveness research fees
  • Clinical trial coverage must be provided
  • Cost-sharing limitation for qualified high deductible health plans
  • Elimination of eligibility rules
  • Elimination of all pre-existing exclusion clauses
  • Reduce any eligibility waiting period to no more than 90 days
  • Employer mandate to offer coverage (delayed to 2015)
  • Reporting on minimum essential coverage to IRS
  • Reinsurance Contribution
  • Automatic Enrollment (delayed until regulations are published)







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Health Care Reform feesWe know you don’t want to pay anymore money than absolutely necessary for health insurance, but there are a few fees that are going to implemented in the new health care reform law. Under the Affordable Care Act (ACA), there will be new fees and taxes assessed on all Indianapolis commercial (group)  health insurance plans. These fees and taxes are to fund some of the changes mandated by the new health care reform law.

Fully Insured Health plans will see the following fees prorated into their premiums over 12 months:

1. Patient-Centered Outcome Research Institute (PCORI) Fee: The ACA imposed a new fee on group health plans and self funded health plans of $1 per member for the 1st year, $2 per member the second year and then indexed to medical inflation there after.

2.Insurer Fee: This fee is collected from health issuers based on the net premium of the group health plan. This is a permanent fee and is estimated to be about 2.5% of the fully insured premium. The Insurer fee will fund premium tax subsidies for people that buy insurance through the exchange.

3. Transitional Reinsurance Fee: Between 2014-2016, the ACA will impose a fee on fully insured  and self-funded group health plans. This fee is to help offset the initial claims that the health insurance industry is expected to take on at the beginning of 2014. The money will spread the financial risk that the health insurance industry takes on in the individual market. The fee is $5 per member per month on both fully-insured and self-funded group plans.

4. Risk Adjustment Fee: This fee is to spread the risk so that adverse selection does not occur.  The fee is $1 per member per year.

The total cost of the all the new fees is estimated at 3.8% of the fully insured premium. If your group plan is $100,000 a year you now have to pay about $3,800 a year to help fund health care reform. These fees are just one aspect that will impact rates.



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English: English: Barack Obama signing the Pat...
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The Affordable Care Act (ACA) requires that all health insurance plans sold on state exchanges beginning Jan. 1, 2014 cover ten essential benefits:


Ambulatory patient services
Emergency services
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Prescription drugs
Rehabilitative and habilitative services and devices
Laboratory services
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care
However, the specifics of what will be included in each of the categories have been left to individual states. Each state will choose an existing health plan to use as a model:

One of the three largest small-group plans in the state
One of the three largest state employee health plans
One of the three largest federal employee health plan options
The largest HMO plan offered in the state’s commercial market
In addition to addressing what will be covered, the ACA also broadly outlined the level of benefits – how health care costs will be split between health plans and consumers.

General percentage by level paid by consumer
(through deductibles, copays and coinsurance)

Bronze Level – 40%
Silver Level – 30%
Gold Level – 20%
Platinum Level – 10%

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There’s good news for children with pre-existing conditions who are below the age of 19.

Under the Affordable Care Act passed in 2010, they can’t be denied coverage under group plans and most individual family or child-only policies. This applies even if your child has a potentially life-threatening medical condition like asthma or diabetes.

This rule applies to all job-related health plans and individual health insurance policies issued after March 23, 2010.

Children account for nearly 9 percent of the estimated 57.2 million Americans under age 65 with pre-existing medical conditions, ranging from deadly cancers to routine chronic conditions.

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An accountable care organization (ACO) is a new health care delivery model envisioned by theAffordable Care Act (ACA) in which a group of doctors, hospitals and other health care providers work together to coordinate care for people enrolled in Original Medicare.

Many Medicare beneficiaries have several chronic conditions and see several different doctors. As often as not, the doctors don’t work together, and the patient receives redundant or conflicting care. Under the new model, an ACO will be responsible for all providing all health care services for a Medicare beneficiary. Through better coordination and communication, ACOs are expected to provide better care and lower costs.

As with Original Medicare, ACOs will still be paid on a fee-for-service basis. However, they will also be able to earn more if they keep costs down while meeting quality targets. If the ACO saves money, the savings will be shared between the ACO and the Medicare program.

ACOs are expected to save Medicare $960 million over three years, according to HealthCare.gov.

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Yes, the Affordable Care Act requires large employers to provide coverage to full-time employees or pay a penalty. This provision, called the “play or pay” rule, goes into effect Jan. 1, 2014. Small employers – those with fewer than 50 employees – are exempt from the coverage requirement and penalty.

As a side note, be aware that the ACA uses different definitions of “large employer” for different provisions of the overall law. While any company with 50 or more employees is considered large for the play-or-pay rule, the more frequently used definition is a business that maintains an average of 100 employees over the course of a year.

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