Tag Indianapolis Group Health Insurance

Next year all health insurance plans must meet the essential health benefits to be considered a Qualified Health Plan (QHP)

These requirements are base on:

  1. If the plan is offered inside or outside the exchange
  2. IF the plan is fully insured  or a self funded plan

Premiums for Individual and small groups will no longer be based of health status. They will be based off of family tier, age, geography, and Tobacco use.

All of the plans must use a 3 to 1 age bands. This means the highest premium cannot be more than 3 times the lowest premium for the same plan.

All of these requirements will impact rates.

Health Insurance premiums on Individual plans will sky rocket. Under the new guidelines, health plans will be required to cover more benefits. The coverage of maternity on an individual health plan will have a huge impact on premium.

Small group rates will very interesting. A young healthy group could see a large increase but an older high claims group could see a decrease.  The healthy group will help to offset the high claims group. That is if the healthy group keeps a group health plan in place.

When it comes to rating in geographical areas is a very interesting topic. There are some counties that are much healthier than others in the area. If we were to compare Hamilton County to Lake County there should be a large difference in rates. Hamilton County is a healthier county and should have lower rates than a county like Lake, where utilization is very high.  Could this type of rating have an impact on where business chooses to be located?

What about Indianapolis businesses that border other states?  If a company in Elkart, has employees crossing over to Illinois for medical services will they have higher rates? There is a chance they will have higher group rates because medical services in Illinois cost more than Indiana.

The geographical question for health insurance in 2014 is going to play a huge issue on group health insurance rates.

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  1. Insurance companies are held accountable. The insurance company must spend at least 80% of the premium collected on medical care.  If they don’t, then a rebate check will be issued to the group.
  2. Insurance companies are health accountable for large rate increase. Insurance companies must publicly justify any rate increase over 10%.
  3. Tax Credits for Small group Health Plans. If you have fewer than 25 full time employees, you may qualify for a small business tax credit. This tax credit can be up to 35% of your premium costs. Additional tax credits will be available in the future.
  4. You are not required to provide insurance for your employees. Companies with less than 50 employees are exempt from all penalties for not providing health insurance.
  5. More Health Insurance options. Under the law no American will have to worry about losing coverage if they change their job. All American will have access to the individual market and exchange market for guaranteed issue health insurance policies. In 2014 companies with less than 100 employee will have the option of purchasing group health insurance through an exchange.
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It turns out that everyone that has a health insurance policy will have to pay an additional $63 a year. This $63 is to help fund the health insurance industries risk for in 2014. If you have an individual, small group, large group or self funded plan you have to pay.

In 2014, the individual and small group health insurance carriers lose the ability to address risk. There will no longer be any underwriting to help the carriers offset risk.  In the 2000+ pages of the health care law was a provision that every policy holder must pay the $63.

This creates a major problem for large companies with self funded plan. They pay their own claims up to a certain stop loss.  They do not benefit from the health care laws of offsetting risk but now they have to pay for it.

So every policy holder in the country will have to pay this $63 a year to offset risk in the guaranteed issue market of health insurance.

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Community rating is most often found as part o...
Community rating is most often found as part of health insurance systems in various countries

In 2014, we are going to see a major transformation of the small group health insurance market.

One of the biggest changes is the community ratings. No longer will a small group premium be based on medical conditions. This means most will groups will have similar pricing. Right now small groups in the area are medical underwritten.  Healthy groups have lower cost than high utilization groups. The high utilization groups could have a decrease in premium.  The healthy groups could have an increase in premium.  This will create a unique situation for small business that has not been seen.

At this time, we do not know what the community rating will look like. Some of the carriers do! The national carriers that have been operating in states that have community ratings have large amounts of data on this subject.  This could create a problem for the smaller companies that do not have experience in these markets. This could lead to less competition in the small group market.

If a small business decided to keep a group plan they will want to be with a company that has the experience of community rating.

United Healthcare is really the main carrier in the Indianapolis market, that has that kind of experience for small group.

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Health Savings Accounts look to be qualified health plans under the health care reform act. This is huge news!

Initially when the health care laws were passed, Health Saving Account we not considered qualified. This meant that if you had an H.S.A plan you would be subject to the tax penalty.

From this report, the Actuarial Value calculator gave a pass to the H.S.A plans under the Bronze category.  This means that local residents will be able to purchase an H.S.A plan inside and outside the exchange. Inside the exchange, a policy holder could qualify for subsidies which would pay a portion of the premium.

When the private carriers join the federal exchange the H.S.A plan may be their primary offering. This plan designs encourages people to become a consumer in their health care spending.

Some Hoosiers really dislike the H.S.A approach because there is no first dollar benefit. A first dollar benefit is co pays for office and RX. Other Hoosiers love the plan design. The plan design is very easy to budget for and the premium is less. If you are not using first dollar benefits why pay the higher premium?

This is very good news that these plans will still be a viable option in the area and for and the rest of the country.



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NY Times

Barack Obama signing the Patient Protection an...
Barack Obama signing the Patient Protection and Affordable Care Act at the White House (

This is a article about the fear of the Affordable Care Act in low income industries. Restaurant and Hospitality owners could be impacted negatively by the tax penalty of not offering a group health plan.

In these industries it is difficult for employees to pay their portion of the premium on a group health plan. These industries have been known to have high risk from a claims standpoint which leads to higher premiums.  It will be even tougher once qualified health plans are established because the cost will go up.

Small business owners are very hesitant to expand their operation with the penalty right around the corner.  If a small business has 90 full time employees and is not offer a group health plan, the penalty is estimated at $120,000 a year.

These business are unable to cover the entire cost of the health insurance premium. The employee then will elect not to take coverage. Then group plan does not meet participation requirements and loses the coverage. So the employer has tried to establish a group health plan but does not meet requirements. Now they will be tax.

A lot of small business will have a difficult time affording the tax. There is going to be a scramble to find options that will help them. Those options could be making full time employees part time. A employee that was working 40 hours a week is now working 29 hours. They are no longer eligible for group health and the employer may not have to pay a penalty. This could be a common practice in the low income industries.

These low income employees should do better purchasing a policy through the federal exchange. In the exchange they would not pay more than 9.5% of house hold income towards a health insurance policy. These families may still have a hard time picking up the 9.5% . Look at a family of 4 with house hold income of $60,000. They may have a hard time budgeting for $5,700 a year in health insurance.



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Anthem announced the development of a Narrow Network in Wisconsin. The narrow network is a limited preferred provider organization (PPO). This new network arrangement is not just for Wisconsin but the entire country. The health insurance industry is working on reducing costs and one way to do this is to negotiate deeper network discounts.  If an Insurance network can increase participation in a local hospital network then that gives the carrier the ability to reduce reimbursement rates.

With the development of any health insurance exchange in Indianapolis we could see the narrow network become common with those plans. If the policy is regional based then that gives the carrier the ability to negotiate.


The narrow bridge over Endrick Water
The narrow bridge

This could benefit the Indianapolis residents from a claims and premium standpoint. If cost of care goes down then so should the premium. The negative would be members would be restricted to that narrow network.  If a member was to go out of network they may still have coverage but be responsible for a much high portion of the claim. It would not be surprising if the out of network expense was based on Medicare reimbursement rates.

With any narrow network we could see a delay in care from primary care doctors.  Right now in Indianapolis we have shortage in general doctors. This could become even worse the expansion of health insurance.

There will be plans in the market place that do not have these narrow networks. To the Hoosiers that can afford these plans they may choose these plans so they are not restricted in who they can see.

The cost of care is going to have to be addressed. The Government has been unsuccessful in tackling this issue. The private industry will have no choice but to come up with new approaches in reducing the cost of care.

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  Indianapolis Affordable Care Act Pricing – Current Estimates

 ACA Insurer Fee:                   

       Effective 1/1/2014

       2.68% tax off fully insured premium

       Applies to Small and Large Group – fully insured only


       Affortable Care Act Reinsurance Fee:  

       Effective 1/1/2014

       $6.35 Per Member Per Month before state tax gross-up                                 

       Applies to ASO and fully insured (so in addition to ACA Insurer fee)

       CER Fees:                     

       $1 Per Member Per Year for plan years that start on or after 10/2/2011

       $2 Per Member Per Year for plan years that start on or after 10/2/2012 (and higher for >10/2/2013)

       Apply to both fully insured and ASO


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In 2014, the health insurance landscape is going to change a great deal in Indianapolis.

There is going to be new taxes on group health insurance plans. For fully insured group plans, there will be a 2.68% tax on those plans. On self funded plans, there will be $6.35 per member per month tax. These are significant tax increases that will impact every Hoosier.

Small group health insurance plans are expected to have a have about 35% increases.  This will impact about 45% of the current small group health plans negatively.  The healthy groups will have the biggest increases where the unhealthy group may see a decrease.  Community ratings will be one of the driving forces for these increases.

Individual and Family health plans are projected to go up 42%. This is a result of guaranteed issue. No Indianapolis resident can be declined coverage. We will also see an increase in covered services. The essential benefits and community rating will have a large impact on these policies.

There will be an established health insurance exchange. We will see a Federal Exchange in Indianapolis and we will see the launch of the private exchange model. Both exchanges models with have Federal subsidies.

There are predictions that one of the plans in the exchange would be premium free for those who qualify for subsidies. This is the Bronze plan with a 60% actuarial value.

With the health care reform it is projected that 35% of the uninsured in Indianapolis will have coverage.

There is real fear that we could see the erosion of the group health insurance model in Indianapolis.

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