Tag obamacare

groupUnder the Affordable Care Act (ACA) or” Obamacare” health insurance companies are required to offer coverage to all people and businesses. This is called guaranteed issue and has helped a lot of Hoosiers.

With Guaranteed issue, the ACA requires health insurance companies to use community ratings for Individual and small businesses. This is where the insurance companies charge premiums that are not based on the health history of the Insured. This used to be called underwriting. Now health Insurance companies must base rates off of a group or people. This is called a risk pool. By pooling a group of people together, healthy people should help to offset the cost of unhealthy people. Then the risk and costs are shared by the entire group.

Community Ratings

The ACA introduced rules for community ratings. The insurance companies now base rates on age, tobacco use and geographical location. The ACA limits how much the coverage can cost. The highest rate can’t be more than 3 times the lowest rate. Indiana is able to keep Individual and small business risk pools separate. The rates are based on the entire risk of the pool. The ACA is does not allow the insurance companies to create separate risk pools

The Impact on Indiana Health Plans

With the removal of underwriting, we are seeing large rate increase in both the individual and small group markets. There are many reasons why we are seeing the rate increase. One of the biggest impacts is there is no underwriting. In the past, health people had better rates because they had less risk. Now the healthy people are in the same risk pools as unhealthy. Then we add in that highest premium can’t be more than 3 times the lowest. Young healthy people are seeing a very large rate increase under the ACA plans.

What are the options to reduce costs?

On Individual plans, it is worth looking at the exchange to see if you qualify for tax credits. If you do qualify for tax credits, then this will be your best option for coverage. If don’t qualify for tax credits, then you may want to explore a health saving account.

On Small group plans, If your group has more than 10 employees, you may want to explore an underwritten plan. These plans may be a self funded option, Associations, or even a PEO. If you have a healthy group plan, these may be your only options to control health premium.

At Nefouse and Associates, we are a company that will help you navigate the Exchange site and find the best insurance plan for you!

If you have any questions, get in touch with us! We’ll be glad to help.

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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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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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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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narrownetworksIf you’ve been searching for a new healthy policy, you’ve probably heard by now about the narrow networks that are available. Since the insurance industry is trying to reduce costs, they have formed narrow networks to lower the cost of care. This applies to plans both on and off of the exchange.

In the beginning, this transition will be tough since many people will be forced to find a new doctor or health care provider. But it’s not an evil plan to keep you away from your family doctor. Narrow networks might be the solution that will help keep the cost of health care and health insurance down. Insurers say that limiting the size of the network allows them to steer patients to high-quality facilities and doctors, while the providers might consider price cuts since they will be getting new volumes of clients.

Fortunately, we still have the option for true PPO plans off the exchange. These plans have large national networks with access to health care. These policies are more expensive, but some people will find it worth the extra money to have this option. We still have a free market for health policies. There are not a ton of options, but we have a couple available. If you have the means and you do not want to change doctors, we can help you with that.

The plans designs are traditional co-pay and HSA plans.  There are also really rich plans in the Gold and Platinum categories. Please contact me if you want the rates for these plans; there are no more quotes, only rates!

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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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federal_exchanges_onpageThe new Indianapolis Health Insurance Exchange will go live in only one week!  Here at Nefouse & Associates, we are authorized to sell and service the exchange plans.

There will be four options of coverage: Bronze, Silver, Gold and Platinum. Under the Affordable Care Act, often referred as Obamacare, no one can be denied coverage due to pre-existing conditions.  The other huge benefit is the access to subsidies to lower your monthly premium. These subsidies will only be available through the Indianapolis Health Insurance Exchange.

We are predicting that you will enter an authorized quote engine (which we will provide) and that platform will guide you to the subsidy portal. Once at that portal, you will have the option to apply for subsidies. When your eligibility is determined, then you should be assigned some type of identification number and you would place this number on the health insurance policy. The federal government will then send money to the insurance company, bringing your monthly premium down.

So we are looking to major factors that are going to change the way we purchase health insurance. The first one is guaranteed issue, meaning that no one can ever be declined for coverage. The second factor is the access to subsidized premiums, making health insurance affordable to you and your family.

Currently in Indianapolis we have about 800,000 people without health insurance. It is being projected that about 300,000 take advantage of the new health care law.




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autismFor families that are faced with Autism, there is great concern about how the new health care laws will impact them.

All of the insurance companies that will be participating have filed their plans with the Indianapolis Department of Insurance. From what we can tell, it looks like all of the plans will cover the Autism Mandate. It doesn’t matter if the plan is on the exchange or off of the exchange, the mandate will be covered.

When we look a the Federal Exchange plans, these plans are all HMO plans (Health Maintenance Organization) and operating on narrow networks. These plans state they are covering Autism under the mandate. The question is this: how difficult will it be to go out of network for the treatment of Autism? Unfortunately, we cannot answer this until we have actual claims. On an HMO plan, your doctor is the gate keeper to all of your care, so every medical procedure would have to be approved by your attending physician. This would add one more layer to the process of getting a treatment covered.

Outside of the exchange, we should see the same level of coverage that we have today. If you purchase a policy on a PPO plan (Preferred Provider Organization), then you will have one less obstacle to getting care covered. PPO plans allow you to visit whatever in-network physician or healthcare provider you wish without first requiring a referral from a primary care physician. One issue that we are waiting on is if stand-alone child policies will be available, which would help families a great deal if they only have to pay premium on the child.

From a carrier standpoint, our options are going to be limited.  We predict there will only be a handful of carriers selling PPO plans off the exchange. Right now, it looks like Humana and Anthem will be the main carriers.  UnitedHealthOne and Medical Mutual will not be offering individual health plans next year. Autism treatment facilities will want to build relationships with Humana and Anthem as they may be the only carriers left in the PPO market.

If the exchange plans work out, we could end up adding three more carriers to the equation, which would give us a total of five carrier options. The question then becomes this: do you want to be the first person to file claims for the treatment of Autism with a carrier that does not have experience in that field?

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