Tag Indianapolis Group Health Insurance

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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Self-Funded Plans

What is a self-funded plan? It’s where an employer provides health benefits to employees out of the company’s own pocket. We have seen the introduction of self-funded plans for small groups in Indianapolis. Small employers are looking for options to try to control rate increases caused by the Affordable Care Act. The self-funded option is worth entertaining, but a small-business owner should approach the concept with extreme caution.

A self-funded arrangement is a sophisticated approach to group health insurance. People will try to simplify the approach to get new clients, or to keep existing clients. Buyer beware!

Beware of the details in the contracting. A self-funded arrangement may have more than a hundred pages that you have to sign off on. It you are well-versed in insurance contract law, it should not be a problem. Most small-group employers are not well versed in self-funded arrangements. Most small-group brokers are also not well versed in this area.

So are you entering a contract that is adding additional liability? YES!

All about small group self-funded insurance plans for Indianapolis
It pays to study the self-funded insurance contract before you sign anything.

A Closer Look at the Self-Funded Plan Contract

Contract definitions you need to pay attention to:

  1. Aggregate stop loss: This is the total risk a employer will pay in one year in claims. It’s just like it sounds: stop the losses. It is extremely important that you understand the total risk you are taking on. If you are a small group, is it worth taking on the risk of $20,000 to save $2,000?
  2. Specific stop loss: This is the limit that you will pay for on one individual’s claims on your plan.
  3. Fixed costs: These are your administration costs for the third party to manage your self-funded plan. This will include your stop-loss insurance and broker compensation.
  4. Run-out claims: This refers to claims that were not filed prior to the plan year.
  5. Definition of a claim: Its extremely important that you know the definition of a claim in a self funded contract.

It Pays to be Informed

A self funded plan for a small company may be a good option. Take into consideration that it’s a complicated insurance vehicle. The broker may not be well-versed in the plan contract. The Sales rep for the insurance company may not be well versed in the plan structure. You, the owner, need to align yourself with a broker like Nefouse & Associates that understands self funding.

Contact Us

To talk to us anytime about self-funded plans, or any other aspect of healthcare plans locally, contact Nefouse & Associates, or call us at (800) 846-8615.

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A topic that will likely be addressed at your next next health insurance renewal meeting is likely going to be: Who will pay the Affordable Care Act related fees?

Will it be the employees, employers… or both?

Let’s find out more about what each of these ACA fees are and how much they will cost you:

 

Insurer Fee or Health Insurance Industry Tax:

This tax is funding people who purchase health insurance on the marketplace and qualify for tax credits.

  1. This fee is permanent and is paid on an annual basis.
  2. This fee is about 2.5% of the total health premium.

If your group plan is running at $500,000 a year, then that is about $12,500 in additional costs. Some of the carriers will show this fee as a part of your premium statement, while others will embed it in the total cost.

The Risk Adjustment Fee:

This tax is on small group health plans and individual health plans to redistribute premiums from low-risk to high-risk policyholders.

  1. This is a permanent tax and is about $66 per subscriber.
  2. This tax is also either embedded or a line item on your premium statement. Anthem shows the line item while UnitedHealthcare (UHC) embeds it.

This tax is to be used to help carriers offset claims in high risk areas. For example, Lake County may have higher premiums than Hamilton County. These funds would then be distributed to carriers that continue to insure Lake County despite losses.

Transitional Reinsurance Fee:

The transitional reinsurance fee impacts both fully insured and self-funded group health plans.

  1. This fee is collected for the years of 2014-2016.
  2. Estimated at $5 a month per member.

This fee is to help Individual carriers offset claims both on and off the exchange.

Patient-Centered Outcomes Research Institute (PCORI) Fee:

This fee impacts both fully insured and self-funded groups.

  1. This fee runs about $1 -$2 per member.
  2. This fee started in 2012 and will go until 2019.

The fee funds research that evaluates and compares health outcomes, clinical effectiveness, and risks and benefits of medical treatments and services.

Note: Per member means total number of people on the plan.

Who Covers the New Costs?

So now the big question is: Who is going to pay these new costs? Should it be passed to the employee, absorbed by the owner, or split up into current contribution levels? When we look at UHC’s billing, all of the fees for the fully insured groups are being embedded. For them, it is most likely to go into the contribution split.

In Anthem’s case, it is showing as a line item. The cost could be passed onto the employee or be covered in full by the company.

On self-funded plans, the situation is very different. Some of the carriers and third-party administrators are not collecting the fees. Instead, they are passing that responsibility on to the client. They are stating that because the group knows the accurate information on employee count, they would be best at determining the correct amount.

In 2018, the excise tax, or Cadillac Tax on high-value health plans, will be in effect. If your health plans cost more than a certain threshold, then a tax of 40% is applied. We are still waiting to find out what that threshold will be. Originally, the government set it at $10,200 for single coverage and $27,500 for family. If I understand correctly, if you had a group policy where the family cost was $35,000, then the issuer could be taxed an additional $3,200. This tax will have a huge impact on what kind of plans are offered by employers.

If you have any questions regarding the new fees please contact me, Tony Nefouse, at (800) 846-8615 and we can discuss them further.

 

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Is it legal to move an employee from my group health plan to the a guaranteed issue individual plan?

This is a big question with a lot of money on the line for employers and insurers.

During open enrollment (October 1, 2013–March 31, 2014), anyone could have purchased a health plan either on or off of the exchange. Keep in mind that if an employee has access to a group health plan, it might disqualify them from receiving tax credits on the exchange, but not on the actual health plan.

A University of Minnesota’s law professor had a paper published back in 2010 that predicted this exact situation. If you read the paper, you will see it was predicted that employers would redesign their health plans to intentionally try to move high-utilization employees off of the group plan. I, on the other hand, would disagree that a plan would be designed with that being the primary intention.

This issue opens up a very interesting discussion for large self-funded groups. This issue would not impact small companies that have fully-insured premiums. On large self-funded plans, the employers pay the initial claims up to a certain point. That certain point is called “stop loss” insurance. It is exactly what it sounds like, stop the losses.

Under these arrangements, the reinsurance contract to initiate a term is called lasers. Lasers (excluding individuals or setting a unique, higher pooling level for individuals who are expected to have large claims, increase customer liability) are optional, depending on risk tolerance .

An example would be a group that has a stop loss limit of $125,000 per person on the plan. This means the company is going to pay the 1st $125,000. There is a high claimant that is projected to have $700,000 in claims. The reinsurance contract has the ability to laser and moves the $125,000 stop loss to $400,000. Now, the employer is responsible for that $400,000.

At this point, options may be entertained on controlling cost. With the new Affordable Care Act, an option that might be discussed is moving the high claimant to an Individual health policy during open enrollment.

To learn more about how we can help your business, give us a call at (800) 846-8615 and we will be glad to sit down with you and answer any questions you may have.

 

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Senator Rand Paul has been one of the biggest critics of the Affordable Care Act. You might remember when he took out a policy on the marketplace for his family, which placed his son in Kentucky on Medicaid. He told the public over and over his woes of trying to sign up, trying to pay and the general confusion about if he was actually signed up.

Now, Senator Rand Paul, is saying repeal is unlikely.

In Indianapolis, we have had about 100,000 people get health coverage because of the ACA law, and many Hoosiers have benefited from tax credits. We placed a large amount of people on the exchange which brought about huge tax credits. Older couples went from $1,400 per month to only $300 per month after the tax credit! 

Large families that were accustomed to paying $1,200 per month are now paying only $500 per month. Many Hoosiers were able to place dependents on Medicaid programs when they did not even know they were eligible for enrollment.

Then there was the “Holy Grail” benefit of the ACA: guaranteed issue! No matter how you felt about the new law, this was the one aspect that everyone could agree on. The ability to obtain a health policy without being denied is a positive impact of the law no matter how you look at it.

Despite all of the positives, there are still a few segments of Hoosiers that are not benefiting from the ACA, but instead being penalized.

First is our middle class, who do not qualify for tax credits. They have seen large rate increases in health premiums. Next are the group health plans being provided by small group employers. On average, these plans have seen 35-55% rate increases. This is going to be a huge problem for local small businesses. 

Recently, Indianapolis agreed to allow “grandmothering” which will extend non-ACA compliant health plans. The administration, both locally and federally, have realized how big of a negative impact the ACA is going to have on small groups.

Going forward, the opponents of the ACA will have plenty of arguments to make about the cost of the law. The proponents will have a difficult time defending the cost. The other issue is Hoosiers having to make decisions about new doctors and taking on more risk in out-of-pocket.

It does not matter if you agree or disagree with the law, you have to make the best decision for you regarding your health policy. That’s where we come in! We can help you make an informed decision. Call us today to get started at (800) 846-8615. 

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We have been in the trenches with the healthcare reform roll out also known as Obamacare. We have seen and experienced all sides of the new Affordable Care Act (ACA) law and the impact it has had on Hoosiers.

The Affordable Care Act has had a huge impact in the area, along with the rest of the country.

There has been a lot of good things about the new law. Many Hoosiers and their families have had huge benefits.

The Good

1. Guaranteed Issue. No one can be turned away for health insurance because of ongoing health conditions. This is one of the biggest positive aspects of the law. Many Hoosiers were able to obtain new health insurance who were originally denied coverage. I can’t begin tell you how many people were able to benefit from this aspect of the law. We had cases where people had been diagnosed with major conditions that were able to get a policy that would cover that condition. This happen both on and off the exchange.

2. Tax Credits on the Exchange. This was one of the primary selling points of the ACA. If your household income fell under the 400% of federal poverty level you had premium joy. There were many early retirees that went from $1,400 a month down to $2oo a month in premium cost. This was huge for many Hoosiers. That kind of savings creates large amounts of disposable income and makes the health policy more than affordable. Large families were able to get significant tax credits. We had families of 5 that were used to paying $1,200 a month and now pay as low as $400 a month. We also saw a lot of individuals get a policy for under $100 a month.

3. Cost Sharing Reductions. This benefit is where the out of pocket max is reduced because household income is under 250% of the Federal Poverty Level. We had families that elected to go with $200 deductible plans with $600 out of pocket costs for very little monthly premium. With the cost sharing reduction we also saw how a Health Savings Account through Anthem had huge incentives. A good example is with a lot of business owners or contract worker. They were able to elect a $1,100 Health Saving Account with 100% co insurance. In this situation they insured would only have $1,100 out of pocket expense for the entire year. Then they are able to write off their medical claims. This option created a tax benefit. Then there were others who had high claims, where this plan was a great choice. Here is an example; if you are incurring $100k a year medical claims and now all you have to pay out is $1,100 this was a huge win especially for Hoosiers that were used to paying large out of pocket fees. This kind of option really can only be explained by a broker like myself that has experience in health insurance and claims.

The Bad

1. Enrollment Process through the Federal Facilitated Exchange. The launch of the website was an absolute disaster. The customer services at the healthcare.gov was very poor. The government brought people right off the street that really had no clue about health insurance or customer service. Then when you add in difficult questions, it was a mess. They would then pass you on to management that fell into the same category.

2. Preparation. The insurance community was not prepared for the volume of calls they received. They underestimated what kind of services were needed. This is partly the fault of the government. The insurance industry estimated that they would receive 300,000 calls a day at an average of 12 minutes per call. The actual volume was around 1,000,000 a day with the average time of 29 minutes. The insurance carrier that had resources then shifted everyone they had to assist with open enrollment. This created a lack of customer service representatives for the other areas in the insurance companies like groups.

3. Lack of Information. The market place and insurance companies were unable to provide a summary of benefits of the plans that were being offered. The insurance industry did not have SBC until the middle of February. Hoosiers were buying plans where they had no idea what the benefits where. To make matters worse, the navigators were really unprepared to answer any questions. Even from a broker standpoint we had to do a lot of research to find out what was in the plan designs. I have over 16 years of experience and it took me some time. So there is no way a navigator that has zero experience could help someone understand.

4. Narrow Network. Many Hoosiers were confused about network access. Anthem created a narrow network for Pathway X for exchange business. The online network search feature was down most of January and February. Even when it was working correctly it did not show all of the participating medical providers. Even the medical providers themselves did not know what networks they were accepting. Many Hoosiers had to make decisions about getting new doctors.

The Ugly

The ACA has had a very negative impact on the Middle Class that do not have access to group health insurance. The middle class is absolutely getting hammered with increased premiums. The ACA has initially increased premiums for anyone that in not eligible for a tax credit. This has devastated many families. You take a family of 4 that is use to paying $600 a month for their health saving account plan, now they are paying $1,100 a month. This may be an extreme case where the premium doubled but we witnessed this with about 30% of our clients that were unable to qualify for a tax credit. The average increase was around 60%. Many people were able to get an early renewal and thus delay the impacts of the ACA but that will come to an end in December of this year. I am telling families right now that they are going to have to start budgeting for higher premiums.

Small group health plans also fall into the ugly category. We are seeing anywhere from 35%-55% increases. This type of increase is unaffordable to the small groups and the employees. These rate increases are a direct result of the ACA. In the 4th quarter of 2014 we have over 80% of the small group health plans coming up for renewal. There is going to a mass exodus of small groups dropping these employer sponsored plans because of cost.

On large group health plans we have seen an increase in fees/taxes on premiums. These fully insured groups are getting hit with 4.9% tax increases. Some people may think that is not a huge percentage but if we are talking about $500,000 in annual premium, that is a $24,500 tax increase which goes to fund the ACA. Is that fair? Many owners and employees would say no.

As we move closer to the 4th quarter, the ugly aspect of the ACA will become more and more known.

 

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HealthCareOct_iStock_000019170348_heroAs the new healthcare laws take firm hold in the state of Indiana, we are starting to see the full impact on small group health plans. Small group health insurance has always been a challenge for many companies over the years due to cost.

Small group health plans are for companies that have less than 50 employees.

Small business owners were supposed to gain more choices and cheaper rates from the new online-health-insurance portals. However, they have been slow to select plans through marketplaces since the rollout started last fall. This can be attributed to several factors including technical problems and the administration’s focus on recruiting individuals and families.

The small business exchanges were meant to offer an online-shopping platform where employers could sort through plans from insurers and offer one or several options to their employees. Employees would then select from the options their employer had chosen, and their rates would reflect any employer contribution. That’s a different process than the one used by the exchanges for individuals, where people can select a single plan to cover themselves and, in some cases, their families.

Most of these healthcare plans are on a fully insured health contract. Under the new law, these plans no longer have medical underwriting. There are also additional mandates that the plans must cover. This creates some serious problems for most small companies. We are seeing an average rate increase of 57% on small group health insurance premiums. 57% is a significant increase not only to the owner but to the employees as well.

You, as a decision maker, do not have to accept this type of rate increase. There are other options for you! These options are going to be “outside the box” of traditional employee benefit thinking. If other consultants want to blame our current administration, that’s fine, but we are working on new solutions.

Employers can apply for coverage through the small-business exchange at any point during the year, and those who are eligible to shop for coverage (firms with fewer than 50 full-time workers) are by definition exempt from rules that will soon penalize companies that do not offer plans to their workers.

Individuals have a limited window, which closes at the end of March, during which to purchase coverage for the coming year. Those who fail to secure a health plan may be subject to a tax penalty under Affordable Care Act rules. If you want a new solution for your group health insurance, contact us.

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affordable_care_actThe Obama administration released 200 pages of Department of Treasury regulations last week. Inside these 200 pages was information about delaying the employer mandate. This is specific to companies with 50 to 99 employees and the delay is until January 1st, 2016.

This is a very big development and is being viewed as political even though they have tried to avoid it. The reality is there are certain industries that are unable to provide health insurance to their employees. These industries usually employ lower wage workers that are unable to afford any portion of the premium or choose to go without it.  This delay will help many of these industries cope with the new law. Businesses with more than 50 employees would have paid a fee of $2,000 per uninsured employee after the first 30 employees, as well as a fee for employees who receive a subsidy through the exchanges. This has been wide spread through many industries.  This new delay may be the beginning of making some changes to the Affordable Care Act law on the employer mandate.  It’s possible that we could see the employer mandate requirements moved from 50 employees to 99 employees.  A small group is defined as under 50 employees but in 2016 that will be moved to 99.

“Much like the individual mandate, the business mandate is bad for middle-class families and will harm economic growth, but the answer to this problem is not random unilateral changes, stoking uncertainty,” House Majority Leader Eric Cantor, R-Va. said.

Also included in the 200 pages of explanation is how to calculate the employer mandate requirement for companies over 100 employees. Businesses with more than 100 employees must offer coverage to 70% of their full-time employees in 2015 and 95% of their employees in 2016.

So far we know that companies with fewer than 50 full-time workers are already exempt from the rule. Volunteer firefighters, part-time teachers and adjunct professors who teach less than 15 hours a week will not be counted as full-time employees, according to a rule released Monday. There will be plenty of interpretation in this change of the law in the coming days.  The issue that will have to be addressed is, if these employees are not being offered coverage and they obtain subsidies, is the company penalized $3,000?

It is becoming more and more difficult for companies to make decisions based on this law when it changes daily.

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healthcare_reform_banner2_rdax_100We are starting to see the impact of Obamacare, both the positive and negative initial outcomes. It depends on every Hoosier’s individual situation to say if they feel joy or if they feel pain.

There is a lot of joy for Hoosiers that suffer from ongoing health conditions. This segment of our community is now able to get access to health insurance, which will lead them to receiving health care, sometimes for the first time in years. If you have ever been denied coverage then you know how frustrating this can be.  Those days are now over. Everyone is guaranteed issue and can not be carry the title of pre-existing condition.

If you have been priced out of the health insurance market, you may experience a lot of joy. With the Federal Facilitated Marketplace, you may be eligible for a subsidy which is going to reduce your monthly premium. We are seeing some estimates that the policy holder may not have a premium at all because the subsidy is more than the monthly premium. To go from not being able to afford a policy to getting a policy for free is extraordinary.

If you are healthy and do not qualify for a subsidy  you might be feeling pain right now. You have gotten a notice from the insurance company on how much your premium is going up in 2014, and these are very ugly increases. If you are a family of four, the new budget for health premiums is around a $1,000 a month.  This is creating a lot of pain for Hoosiers.

Small group health insurance premiums are going to feel a lot of pain also. There have been projections of 30%-60% increases. Most small companies can not absorb that kind of increase. Neither the employer or employee will be able to pay their portion of the premium. This could turn out to be a significant blow to small business. Small business owners are going to have to get really creative on keeping key employees. It’s difficult right now competing with large companies on employees. In 2014, it may be impossible.

One thing is for sure: we are a part of the biggest transformation in health care history. Everything is going to change.

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