Tag Indianapolis Group Health Insurance

We are starting to see projections of the rate increase fully insured group health plan can expect.

30%-50% increases in fully insured premiums under the health care reform laws. These are huge increase that very few small group or large group plan will be able to afford.

These increase are due to different aspect of the law.

1. The Essential Health Benefits (EHB) provision of the Affordable Care Act of 2010 (ACA)
created 10 general categories of benefits:
} Ambulatory patient services
} Emergency services
} Hospitalization
} Laboratory services
} Maternity and newborn care
} Mental health and substance abuse services, including behavioral health treatment
} Prescription drugs
} Rehabilitative and habilitative services and devices
} Preventive and wellness services and chronic disease management
} Pediatric services, including oral and vision care

2.  Deductible caps cannot exceed $2,000 for individual and $4,000 for a family.

The deductible caps will have a huge increase on premiums. Most fully insured plans have a 3x single deductible and now they will have to be moved to 2x single.

3. Reinsurance Fee

The reinsurance fee is a per member per month assessment of approximately $5, which will vary by state. Now this is per member, so a family could be assessed an additional $20 a month in premium.

4. Insurance Fee

Industry sources have estimated that the amount to be collected under this provision will represent 2.3 percent of total premium. The 2.3% will be added in with the health insurance premium.

5. Adjusted Community Rating

Adjusted community rating, guaranteed availability (issue), guaranteed renewability, single risk pool, catastrophic plans and rate review provisions. The insurance industry can no longer underwrite against risk.

These are some of the aspect of the law that are impacting fully insured health insurance premium. The impact is insane!

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There has been a lot of news about the government trying to replace Health Insurance Agents with non-licensed, non-insured and in-experienced “navigators” whom will be paid by the government and have less than 20 hours of training. The government has now realized they cannot successfully implement this extremely complicated law without agents. The government is now going to allow insurance agent to enroll people both inside and outside the health insurance exchanges. This will impact millions of Hoosiers. Insurance agent’s advice is free and we will continue to offer out advice for free.

Health insurance premiums are the same if you use an agent or go direct with the carrier. This will continue to be the case if you buy a policy through the Indianapolis health insurance exchange which is going to be run by the federal government.

We have spent our entire career getting clients the best deal in the insurance market. We have also provided the highest level of customer service when it comes to claims and administration.  We will continue to offer this level of service in 2014 and beyond.

We believe that we will still offer the best solutions for your company or your family.

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Employer Mandate Calculator

Many people have heard of the employer mandate. Under Health Care reform, employers with more than 50 full time employees to offer health insurance to their employees.
IF they don’t they will have to pay a penalty that is not tax deductible.
They may also have to pay a penalty if any of their employee get subsidies through the health insurance exchange.
This calculator will help you determine if you fall under the employer mandate.

1. Count the employees who worked at least 30 hours per week each month (including seasonal employees) in the prior calendar year.
2. Count the employees considered full-time by adding the number of hours worked by all part-time employees (as well as seasonal) and dividing by 120.
3. Add the monthly totals of steps 1 and 2 and divide by 12.

What are the penalties?

There are different kinds of penalties, based on what part of the rule the employer didn’t follow.

Employers have to pay a penalty for:

1. Not offering health coverage to full-time employees and their dependent children to age 26, and if any full-time employee gets government aid to lower the cost of coverage. The  annual penalty is $2,000 x the number of full-time employees, minus the first 30 employees.
2. Offering health coverage for only part of the year. The penalty is based on the number of full-time employees and the number of months coverage was not offered.
3. Offering health coverage to 95% of full-time employees but one or more full-time employees gets government aid to lower the cost of their coverage because the coverage is not considered affordable. The annual penalty is $3,000 per employee getting government aid.


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The President of the United States recently spoke about the new health care law.

He stated that the public does not know about the benefits of the new law.  Most of Congress does not know about the benefits of the new health care law.

Anytime you have a 2,000 page law and then another 15,000 pages on explanation it may be a bit difficult to get the message out.

There are positives to the new law and there are negatives to the new law.

The positive aspect of the new law is we are going to have guaranteed issue in the individual market. In 2014, no one can be declined a individual health insurance policy. This is one of the essential parts of health care reform. It has been viewed that it is not fair for the health insurance industry to be able to cheery pick the lowest risk individuals.  So a individual that need treatment of any kind will be eligible for the coverage.

The negative aspect of guaranteed issue is the premium are going to increase. The one major tool the individual market used to control cost was underwriting. Now that they no longer have that tool, they will have to increase prices to offset all the claims they are going to take on.

The health care law has a positive for the cost of the policy and that is the development of the exchange. www.indianahealthinsuranceexchange.com  With in the exchange a individual or family can apply for federal subsides to help pay the premium. If you do not have access to a group health plan you may qualify for the subsidy.  A family of 4 living in Indianapolis, making under $70,000 a year, could end up paying $500 a month for a policy that cost $23,000 year.

The negative aspect of the exchange is if you don’t qualify for subsidies, you may not be able to afford the premium. Thus we could see a new class of uninsured in the state and that would be the upper middle class.

There may be a real disconnect in Washington D.C. and what is really going to happen in the health insurance markets.



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Potential Employer Penalties Under the
Patient Protection and Affordable Care Act (ACA)
Summary of important items and definitions to know:
1. ACA imposes penalties on “large” employers, if at least one full-time employee obtains a premium credit through the newly established exchange. Employers are not subject to a penalty if their full-time employees are eligible for Medicaid or CHIP.
2. ACA sets out a two-part calculation for determining, first, which firms are subject to the penalty and, second, which workers within the firm the penalty is applied.
A. Full-time employees are employees that work 30 hours or more a week.
B. Part-time employees are included in what is called a full-time equivalent
calculation to determine if an employer has at least 50 full-time equivalent employees (FTEs) and is thus considered large for the purpose of applying the penalty.
1. Example: A firm with 35 full-time employees and 20 part-time employees who work 24 hours per week (equaling 104 hours per month) would equal the equivalent to 51 total FTEs, making this firm a “large” employer. (20 part-time employees X 104 hours) = 2080 hours divided by 130 = 16
C. Independent Contractor: An individual who controls what will be done and how is will be done and the contract dictates the desired result of the work.
D. Temporary Worker: A worker that is not an employee of the firm he or she is “leased” to but rather an employee of the temporary agency.
E. Seasonal Worker: Seasonal worker differs across the two-part calculation. The seasonal worker definition varies depending on whether it is used in the first part of the calculation, which determines whether an employer is considered “large”, or the second part of the calculation, which determines how many employees are considered full-time for purposes of setting the dollar amount of the penalty.
1. First Part Calculation: If a seasonal employee works less than 120 days during a year, he or she is not included in the FTE calculation. In this definition, the seasonal worker is not limited to agricultural or retail workers.
2. Second Part Calculation: The 120 day period is not used to determine whether someone is a seasonal worker. Instead, IRS Notice 2012-58 provides that at least in 2014, employers are permitted to use instead a reasonable, good faith interpretation of the term “seasonal employee”. However, the notice further states that it is not a reasonable, good faith interpretation of the term “seasonal employee” to treat an employee of an educational organization, who works during active portions of the academic year, as a seasonal employee.
F. Controlled Groups: An employer of multiple entities (such as a franchise owner with several restaurants) is treated with respect to the 50-FTE requirements, as all of those franchises are essentially considered one entity. More specifically, for the purposes of the 50-FTE rule, employees in each of the franchises must be added together to determine the number of FTEs.
G. The proposed regulations provide employers some flexibility to designate certain “measurement” or look back periods (up to 12 months) during which they will calculate whether a worker is full-time or not.
1. Administrative Period: Period of identification and enroll full-time employees
2. Stability Period: Period in which penalty may be due relative to employees found to be full-time during the “measurement” period.
In order for employers who provide health insurance coverage to avoid paying a penalty, health insurance coverage that is both “affordable” and “adequate” must be offered to the employee and his/her dependents.
1. A dependent is defined as a child of an employee who has not attained age 26. A dependent does not include a spouse.
2. Coverage is considered “affordable” if the employee’s required contribution to the plan does not exceed 9.5% of the employee’s household income for the taxable year.
3. A health plan is considered “adequate” if the actuarial value (i.e., the share of the total allowed costs that the plan is expected to cover) is at least 60%.
4. Penalty for large employers offering coverage: The “monthly” penalty assessed to an employer for each full-time employee who receives a premium credit will be one-twelfth of $3,000 for any applicable month but is limited to the “total” number of the firm’s full-time employees minus 30, multiplied by one-twelfth of $2,000 for any applicable month.
Penalty for Large Employers Not Offering Coverage
A. Individuals who are not offered employer-sponsored coverage and who are not eligible for Medicaid or other programs may be eligible for premium tax credits for coverage through an exchange. Eligible individuals will generally have income of at least 100% and up to 400% of the federal poverty level (FPL).
B. For 2014, the “monthly” penalty assessed to an employer who does not offer coverage will be equal to the number of its full-time employees minus 30 (penalty waives the first 30 full-time employees) multiplied by one-twelfth of $2,000 for any applicable month
Effective Dates for Employer Penalty
A. Under the ACA, the employer penalty is effective for months beginning after December 31, 2013. Employers that intend to utilize the look-back measurement period for determining full-time status for ongoing employees for 2014 will need to begin their measurement period in 2013 to have a corresponding stability period for 2014.
B. Guidance states that employers who use a full 12 month measurement period are not required to begin the measurement period before July 1, 2013
Reporting and Other Requirements
A. The Department of Labor has delayed release of regulations requiring employers to provide employees written notice concerning:
1. The existence of an exchange (including services and contact information)
2. The employees potential eligibility for premium credits and cost sharing subsidies
3. The employers potential loss of an employer contribution if the employee purchases a plan through the exchange.
B. The Department of Labor expects the timing for distribution of notices will be late summer or fall of 2013 which will be coordinated with the open enrollment period for the Exchanges
C. Beginning in 2014, large employers will have certain reporting requirements with respect to their full-time employees:
1. Provide return including the name, address, and employer identification number
2. Certification as to whether the employer offers its full-time employees (and dependents) the opportunity to enroll in minimum essential coverage under the eligible employer-sponsored plan
3. The length of any waiting period
4. Months coverage was available
5. Monthly premiums for the lowest-cost option
6. The employer plans share of covered health care expenses
7. The number of full-time employees
8. The Name, address, and tax identification number for each full-time employee
9. Additionally, an offering employer will have to provide information about the plan for which the employer pays the largest portion of the costs (and the amount for each enrollment category).
10. The employer must also provide each full-time employee with a written statement showing contact information for the person required to make the above return, and the specific information included in the return for the employee.
D. Firms with more than 200 full-time employees that offer coverage must automatically enroll new full-time employees in a plan (and continue enrollment of current employees). Automatic enrollment programs will be required to include adequate notice and the opportunity for an employee to opt out. The Department of Labor has concluded that it’s automatic enrollment guidance will not be ready to take effect until 2014.
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Huffington Post

CMS has just released data on the differences in medical cost from different hospitals. This is a very big story in the medical community because now the hospital groups have to justify what they charge. This information has always been kept out of the public eye but this report will opens everyone eyes that cares.

In the past few years, the national health insurance carriers have released tools to their members to help them research different medical procedures. People have been shocked to see just the difference in cost for diagnostic procedures.

If we look at a tool developed by Anthem. This comparison tool will allow you to research multiple procedures. If we look at the cost of a MRI on your Knee in the 46278 zip code. It is listed that Alliance Health Care Services is charging $490 for that MRI. Now if we look at what St. Francis charges for the exact same procedure the cost is $1,612.  It’s the same procedure and they are using the same equipment. So why is it that a hospital is charging so much more?

With the release of the data from CMS, this may create more questions for the health care industry.

Health insurance premiums are directly related to what the cost of care is. When the cost of care continues to rise so do our health insurance premiums.


Anthem Care Comparison

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Well there is not much information floating around about tax credits for small groups on the health insurance exchange.

If a small group employer was to purchase health insurance from the exchange they may be eligible for tax credits. That tax credit could be as high as 50% of the total premium the company contributed toward the employee portion. 50% is a big tax credit.

There are eligibility requirements for this tax credit. An employer cannot have more than 25 full time employees and the average salary cannot exceed $50,000.

In 2014 there are going to be new options in the small group health insurance market. One of the options every business owner should look at is the tax credit through the Federal Exchange.


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Washington Post reported on the use of  Temp Employees to help keep companies below 50 employees.

This is very interesting article because is establishes a strategy of keeping a group from paying a penalty for not providing group health benefits. From the article, there looks to be a loop hole with providing coverage to Temporary employees. This could become a power full strategy for many Manuel labor industries.

A company could have 40 employees but need 60 to operate. If the group goes over 50 then they would either provide group health benefits, that follow the federal guideline, or a pay a penalty. That penalty would be $2,000 per full time employees. With many companies that have low paying jobs, group health benefits have always been a struggle.

Any company that is looking to game the new health care laws have had there problems providing health insurance in the past. The problems have be participation and underwriting. Many companies that have a lower pay scale can attract high utilization health conditions. The usually leads to higher premiums and unless the company is paying a large portion of the premium the employee will drop off.  At these lower pay scales, many of the employees can qualify for a subsidized plan through the state which leads to a lack of participation.

Many companies will have to take advantage of this loop hole to stay in business.


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Health insurance companies continue to create online tools and apps to help insured have better control of their health care.

United Health Care has launched a new app call Smart Patient. This app is for either IPhone or Droid.

The app will hold of the patient medical information and more.

The application tracks 5 numbers that are essential to good health.

• Blood pressure
• Blood sugar
• Body mass index (BMI)
• Cholesterol
• Weight circumference

Smart patients are prepared with questions throughout their care.
• At a doctor visit
• Before a test
• After a diagnosis
• When filling prescriptions
• Before surgery
• When leaving the hospital
• If you need to go to the emergency room or urgent care

It also track Doctors Orders:

Once you have advice from your doctor, you’ll want to keep track of it. Store text notes or voice notes to refer to later, and delete them when you’re ready.

The app also has access to video that address certain health issues.

Get tips on when to have screenings, how to talk with your doctor, how to tell if it’s a cold or the flu, what to ask your pharmacist, and much more with short videos from UHC TV.

These types of tools are becoming more available to insureds. These tools come along with the policy so it does not cost you anything to use them. Why not take advantage of these tool to better control your health.

Smart Patient


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Indianapolis Union Health Insurance Carve out


A lot of Union shops have a handful of non union employees in Indianapolis.  Owners have a option when it comes to health insurance for these employees.

Depending on the Union contract, the owner could choose to put these employees on their own group health plan. It just takes two W2 employees to form a group.

An owner will look at this option for a couple of reasons but the big one is a reduction cost.  Most union health plans are very rich and costly. A company could choose to design their own group health plan for the non union employees. The owner now has control over the health plan. They can choose plan design, contributions levels, waiting periods, wellness programs and employee education.

If you have 4 non union employees  and it costs $38K a year to insure them on the union plan, why not look to save $15K-$18K by forming a small group plan?

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