Tag Indianapolis Group Health Insurance

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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00_HC_shutterstock_117506374_HealthCare_RisingInsuranceRates_3Recently, there have been publications saying that health insurance rates are going up 72% under Obamacare. For example, here is a story in the Indy Star which explains the that under the mandate, everyone must be covered, including those with pre-existing conditions. If this turns out to be true, it will be quite a shock to the wallets of Hoosiers across the state.

The industry really does not know if these statements are accurate. For one thing, all of the health plans have yet to be approved by the state, so we won’t know anything for certain until a later date. Forbes published a piece contradicting the information about the 72% rate increase and we think there might be some truth to it.

The individual health insurance market is going to go up, but the question is how much? As consumers, you will still have options between the four tiers of health insurance plans. When taking a look at the projections for how much insurance rates will increase, the projections you read about are averaged between all four tiers. Those tiers have significant differences, so it is unfair to group someone with a bronze plan in with someone with a gold plan.

Also, subsidies will be offered through the Federal Exchange to  many Hoosiers.  This will have a huge impact on monthly premiums, lowering the cost for many of our residents. As for group health insurance rates, we are hearing about rate increases of just 8%. If that turns out to be true, then that could be a good thing in the fully-insured market.

Until October comes, no one can say with 100% accuracy what will happen. But once the official rates are released, all of this uncertainty will disappear and we’ll know exactly what to expect for 2014.

 

 

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medical_mutualMedical Mutual of Ohio has decided to exit the Indianapolis market for group and individual health insurance.

This is a real blow to competition in the small group and individual health insurance market. Medical Mutual was a good carrier in the small group market, which gave a nice level of competition  to the national carriers. They had plans designed that were not only unique but saved small groups money.

From an administrative standpoint, they were also very easy to deal with. They had launched their own network in Indianapolis, which started to get deep network penetration.  All in all, Medical Mutual was a good alternative small group health insurance carrier.

They have stopped taking new business as of July 1st. All individual policies will end December 31st 2013 and all group health plans will end June 30th 2014. If you have an existing policy with Medical Mutual it will be business as usual. There should be no disruption in claims or administration.

If you have an individual policy with them, it may be time to start looking to move that policy. On the group side, waiting until your renewal date may be the best option. If you are not comfortable with that, then we can move you now.

Why has Medical Mutual pulled out of the Indianapolis market?

This is a decision made due to Health Care Reform under the Affordable Care Act.  The smaller health insurance companies are scrambling because they don’t know what is going to happen in 2014.  Under the ACA, there will no longer be underwriting, which insurance companies have used as a way to control risk since the inception of insurance. Under the new law, underwriting is taken out of the equation.

There are also some real concerns that the small group health insurance market will drop off. With guaranteed issue in the Individual market along with Federal Subsidies inside the exchange, many small companies may choose to drop coverage.  It may also be a decision they are forced to make because of cost increases.  We may see small group health insurance rates spike up to 50%. Very few employers will be able to absorb that kind of price increase.

The new health care laws are suppose to increase competition! As a broker, we are seeing the exact opposite. The bottom line is you still want to find the best policy in 2014. It may come from inside or outside the exchange. You may look to a fully insured health plan or a self funded group health plan. If you need help finding a plan, contact us to find the best solution for you!

 

 

 

 

 

 

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link-exchange-placeWe’re less than 100 days away from the Indianapolis Federal Facilitated Exchange opening.

There are two very big things that need to happen before October for the exchanges to be fully operational.  The first one is from a technical standpoint; the government still needs to complete the infrastructure of the exchange. This will enable government agencies to transmit information between one another to see if one is eligible for subsidies. This is an enormous task because  Health and Human Services, Treasury, Homeland Security and other agencies will have to communicate with one another, and this has never happened before.

The next technical aspect is to finish the online portal for the Federal Exchange which will be operating in Indiana and many other states.

Let’s say that all of these technology issues are solved and tested. The next big issue is going to be outreach. Most have no idea how the exchanges are going to work.  Currently there are very few brokers that are touting the benefits of the exchange for Hoosiers. Luckily, we are!

It’s our belief that  many Hoosier families will benefit from the subsidies offered in the federal exchange. Contact us today to be prepared for Health Care Reform.

 

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the_exchange_FINAL.wideaAccording to this article from WSJ, health insurance exchanges are falling behind schedule, and there is a risk that they won’t be ready to open in time by October.

There are multiple news organizations that are commenting on the two reports from the Government Accountability Office.

“Whether [the government’s] contingency planning will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined,” said the GAO in twin reports released Wednesday.

The report states that the exchanges are about 44% behind meeting key milestones of establishing the exchanges. So what does that mean for Indianapolis?

It has been predicted that about 900,000 Hoosiers will benefit from getting their Insurance from the Federal Facilitated Exchange. The way the exchange would work is that people who do not have access to affordable group benefits could apply for advance tax credits or subsidies. These subsidies would pay a portion of the health insurance premium thus bringing down the cost of health Insurance in the Individual market.

If you make under 400% of Federal Poverty level then you could qualify for subsidies. A single person making less than $45,960, or a family of four making less than $94,200 will qualify.  Looking at those numbers, there are a lot of Hoosiers that can benefit from these subsidies.

It has already been announced that there will be a delay in the full establishment of the small group exchange plans, also known as SHOP.  What is going to be offered to small groups under 50 employees is the option of purchasing your group health insurance through the exchange. For groups under 25 employees that meet certain requirements, there will be tax credits available.  These tax credits could be very valuable in a company that is planning on keeping a group health plan.

If the exchanges are not up and running in October, it could result in many Hoosiers being delayed from enrolling online. Here is what Nefouse & Associates is willing to do if the online enrollments are delayed.

We will go back to paper applications. We will use the paper application that has been established to apply for subsidies. We will send that application by snail mail to the government and follow up with them to make sure it’s being processed. Once processed, then we have you apply for the individual health insurance policy from a carrier like Anthem that we know will be in the exchange. We will follow up with both the carrier and the government to make sure our clients are able to take full advantage of the new law.

 

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HealthInsurancePlansWe’re finally starting to get a glimpse into the future of health insurance under the Affordable Care Act.

Post 2014, there will be no underwriting in the small group or individual health insurance markets. Underwriting has always been the key tool for insurance companies to control risk. Underwriting is the use of medical or health information in the evaluation of an applicant for coverage; an individual’s health information may be used in deciding whether to offer or deny coverage and what premium rate to set for the policy. Once 2014 hits, that tool can no longer be used by law. If the industry cannot underwrite, then they will control cost by managing care.

Many people may have experience with an HMO (health maintenance organization plan) and now we are seeing the concept redeveloped on PPO (preferred provider organization) plan. Traditionally, an HMO contracts with health care professionals and facilities to create a “provider network,”  featuring lower premiums and co-pays than other plans. A traditional PPO also creates a “provider network,” but unlike HMOs, PPO health insurance will cover some – but not all – of the cost of care administered by out-of-network providers.

In 2014, you may be offered a plan that has a gate keeper. This gate keeper will be your primary care physician.  They will be in charge of managing and coordinating your health care. To see a specialist, you will have to get a referral from your gate keeper. To get diagnostic services, you will also need a referral from them. There will also be prior authorization for medical necessity, which should make specialty care more efficient. With this type of referral management we should see the cost of this health plan cost  a lot less.

Here are a few points about this type of plan:

  • This type of plan design may not have any coverage for non-network services except for emergency care.
  • This type of plan may not provide coverage for any treatment without a referral.
  • This approach to health care is going to put a strong emphasis on your relationship with your primary care physician. This may become a problem since we have a shortage of primary care doctors.
  • If you elect this type of plan, don’t be surprised if your primary care doctor is also listed on your insurance card.
  • This type of plan may be offered inside and outside the Federal Facilitated Exchange.
  • You may also see this in both the small and large group health markets.

 

 

 

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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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A company wellness program is set up in the workplace to offer employees a kind of comprehensive health service, to encourage employees to adopt healthier lifestyles and to take measures aimed at preventing the worsening or onset of illnesses.

In the last five years, wellness programs were supposed to bring the most amount of savings for group health insurance. These small group wellness programs have had obstacles to overcome:

  • The cost of implementing a true wellness program has been difficult to budget for most small companies.
  • Obtaining a positive return on investment have been very difficult to achieve. 10% of groups usually represent 80% of the claims on a group health insurance plan, so the health insurance premiums can continue to sky rocket even with strong participation in wellness.

In a small group, there are just not enough premium dollars to offset large claims.  It only takes one complicated condition to create a large loss ratio, which in turn creates a large rate increase at renewal.

But, there is something a wellness program creates that is not in the numbers: Company Morale!

When all of the employee are active in a wellness program, you create a healthy environment.  People are eating healthy lunches and taking the stairs for additional exercise. Employees are taking walks at lunch time or wearing pedometers. Your employees come together on a common goal and it creates a positive work environment.

With careful planning, your company can create a well-designed wellness program to contribute to your employees’ healthier lives, increased productivity, reduced absenteeism and reduced health care costs.

 

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With Health Care Reform there is a lot of uncertainty in the market place.

You do have options!

The 1st option is to go with a fully insured health plan. As you may know there are only a few companies that are competitive. We will deliver you the most competitive plan. Our relationships with the carriers create savings for our clients. We also provide a high level of service to both owner and employee.

The 2nd option is to look at the Self Funded or Partially Self Funded Market.  There are new options that are hitting the market place.  We are now seeing self funded plans for groups as small as 10 lives.  We would design a plan where you take on a certain amount of risk by paying a portion of the claims your employee have.  We would broker Stop Loss Insurance which would reduce your risk.  Stop Loss Insurance is exactly what it sounds like. Stop the Losses!   There are also Self Fund options that have a feel of a fully insured plan but can deliver premium back to the group.

The 3rd options you may only here about from Nefouse & Associates. Drop your group benefits and go Individual. With health care reform, the individual market now has guaranteed issue. Meaning no one can be denied. We also will be selling the health Insurance exchange.  Your employee may be eligible for subsidies that would pay a large portion of their premium.  We can also offer broker out a Health Reimbursement Arrangement that can still provide a benefit to the employees. If you are under 50 full time employees this may be a very attractive solution.

No matter what your philosophy is for group health insurance we can deliver you a solution.

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