Last week the House voted the unpopular Obamacare Cadillac Tax to be permanently repealed 419-6. However, much like a bad cold, the Health Insurance Tax (the HIT) is back for 2020. Website Stop The Hit calculates $5,000 as the average tax for a 10 man small business for example.
No one escapes the $16 billion HIT. The return of the Health Insurance Tax (HIT) means higher costs and fewer jobs for hardworking Americans. Absent immediate Congressional action to delay the HIT, small businesses and families will face $500 on average in higher premiums for 2020. To make matters worse, the increased cost burden on small businesses from the HIT could result in the U.S. workforce being reduced by 152,000 to 286,000 jobs over a decade. Te HIT is projected to increase premiums for seniors by $241.
How much for 2020?
For Small business, this translates to an estimated 2.5%-3% added surcharge. For States like NYS where there is already approx. 16% added surcharge to high premiums, this becomes daunting. It is no surprise the unpopular HIT was suspended. In 2017, payers escaped making $13.9 billion in payments due to the moratorium, according to a 2018 analysis by Oliver Wyman, commissioned by UnitedHealth Group. This may have saved consumers billions on their insurance coverage.“The taxes on health insurance are non-deductible for federal tax purposes for health insurers,” the report explained.
In some states, such as Vermont, the price of insurance would have more than quadrupled. The payer trade group published a fact sheet on this. “Allowing a tax to resume in 2020 valued at an annual level of $16 billion, would saddle individual market consumers, small businesses, state Medicaid programs, and Medicare Advantage enrollees with higher health care costs,
Can this be repealed?
Relief from the health insurance tax would result in real savings to the American people. We strongly urge Congress to provide an additional two-year suspension of the health insurance tax by passing H.R. 1398.
Learn more about how we are successfully helping navigate SMB for 20+ years. If you have any questions or would like additional information, please contact us at 855-667-4621 or [email protected].
NYS Pushes Back Association Plans and Short Term Medical
NYS is pushing back on Association Health Plans (AHP) In reaction to President Trump’s Executive Order of Association Health Plans expansion. The President expanded the role of association plans earlier this week rule to makes it easier for small businesses and trade groups to band together to purchase health coverage outside of Obamacare’s insurance markets.
These regulations provide an additional basis for a group or association of employers to be treated as an “employer. New York’s top insurance official said the Trump administration’s final rule making it easier to form association health plans will not hamper the state’s ability to continue regulating the health insurance industry. Other states like Massachusettes have have also pushed back over Association Plans. “Yesterday’s announcement by the Trump Administration to dramatically expand the footprint of Association Health Plans will invite fraud, mismanagement, and deception – and, as we’ve made clear, will do nothing to help ease the real health care challenges facing Americans,” Healey and Underwood said in a joint statement. “We believe the rule, as proposed, is unlawful and would lead to fewer critical consumer health protections.”
One program getting attention are inpexpesivive but limited short-term health insurance plans. According to yesterdays NYS DFS annoncment, however, New York regardless of federal actions will prohibit these plans as consumer protection. Current federal rules only permit short-term plans — which are exempted from certain health benefits coverage requirements, such as chronic pre-existing conditions — to last up to three months, but the Trump administration wants to expand that up to 364 days. “Such ‘limited health’ plans, whether limited to less than three months or one year, are not short-term at all, but rather an end-run around requirements applicable to individual or group hospital, surgical or medical expense coverage and are prohibited under New York State law,” DFS wrote in a circular letter to insurers.
Summary of Trump’s Association Health Plans Expansion
• Purpose of Association. Employers may band together in an association for the purpose of obtaining health coverage. However, the association also “must have at least one substantial business purpose unrelated to offering and providing health coverage or other employee benefits to its employer members and their employees.” The DOL clarifies in its safe harbor that a “substantial business purpose is considered to exist if the group or association would be a viable entity in the absence of sponsoring an employee benefit plan.”
• Commonality of Interest. Employers in the association can either (1) be from the same trade, industry, line of business, or profession; or (2) all have a principal place of business in a State (or portion of a State, such as a city or county) or in the same metropolitan area (even if the metropolitan area spans more than one State, like New York, Washington, D.C., or Kansas City
• Structure and Control. There must be a formal organizational structure with a governing body and by-laws or similar formalities, to control the association, including the establishment and maintenance of the group health plan. The control can be direct or indirect through the regular election of directors, officers, or other similar representatives; however control must be present both in form and in substance. Ultimately, the functions and activities of the group or association are controlled by its employer members, and the group’s or association’s employer members that participate in the group health plan control the plan, by determining contributions, plan designs, and benefits.
• Eligibility. Only employees and former employees of association members (and their eligible family members) may participate in the association health plan. In other words, it cannot be an insurance exchange for any interested party.
We will closely monitor this as awell as all Health Care Reform developments. Sign up for our premium newsletter below. Learn how our Agency is helping buinsesses thrive in today’s economy. Check out PEO Case Studies here and learn how they can apply to you. Please contact us at [email protected] or (855) 667-4621.
New Jersey Enacts Individual Health Mandate
A new law entitled the “New Jersey Health Insurance Market Preservation Act” was signed by Governor Phil Murphy on May 30, 2018 to reestablish the recently repealed “shared responsibility tax”. The law, which will take effect on January 1, 2019, will require every New Jersey resident to obtain health insurance with minimum essential coverage or pay a fee, essentially adopting the rules of the ACA.
This legislation will directly impact residents of NJ and indirectly affect employers with employees residing in the state.
State Individual Mandate
The New Jersey Health Insurance Market Preservation Act will require all New Jersey residents to have Minimum EssentialCoverage (MEC) beginning January 1, 2019, or pay a penalty.
In light of Federal repeal on Dec 29, 2017, Tax Reform Bill Includes Repeal of Individual Mandate Beginning in 2019, NJ’s mandate is scheduled to take effect on January 1, 2019, making NJ the second state, after Massachusetts, to enactan individual mandate. The mandate includes an annual penalty of 2.5% of a household’s income or $695 per adultand $347 per child – whichever is higher. The maximum penalty is based on household income and will not exceed theaverage yearly premium of a bronze plan.If it’s based on a per-person charge, the maximum household penalty will be $2,085.
A “hardship exemption” will be available for individuals who cannot afford coverage, determined by the State Treasurer. NJ expects to collect between $90 million and $100 million in penalties. This money, along with additional federal funding, willbe used on a reinsurance program, which Murphy also signed into law.
While these bills do not directly affect employer sponsored plans, the individual mandate requirement for NJ residents will likely require education for employees. As residents in NJ will now be required to obtain health overage to avoid a state income tax penalty, employers may see an increase in plan enrollment. Unlike Massachusetts which requires specific coverage components, the NJ law only requires that coverage be MEC. Thus, most traditional employer-sponsored group health plans should meet this definition. However, coverage for only dental benefits, certain medical indemnity policies and vision benefits are likely not sufficient for purposes of avoiding the state tax. For now, employers with employees who reside in New Jersey may wish to educate employees at Open Enrollment that by January 1, 2019 health coverage will be required for NJ residents to avoid a penalty.
New Jersey lawmakers feared the repeal would drive healthier people out of the marketplace causing premiums to spike. They believe this law is pertinent to stabilize the marketplace, keep people insured, and prevent a death spiral of the individual market.
Resource:Obamacare Indivudal Mandate & Individual Mandate ACA Flow Chart and https://www.healthcare.gov/fees/fee-for-not-being-covered/
Learn how our Agency is helping buinsesses thrive in today’s economy. Check out PEO Case Studies here
and learn how they can apply to you. Please contact us
at [email protected] or (855)667-4621.
NYS 2019 Rate Requests
Last Friday, June 1, 2018, the NYS 2019 Rate Requests filings were released. Great news for SMB! The total weighted average increases were a modest 7.5% small groups but 24% for the individual market. This early filing request deadline request requirement is not an Obamacare requirement. As per NY State Law carriers are required to send out notices of rate increase filings to groups and subscribers.
These are simply requests and the state’s Department of Financial Services has authority to modify the final rates. But they are the first indication of what New Yorkers can expect when shopping for health insurance on the individual marketplace at the end of this year. The news comes as insurance companies across the country brace consumers for another year of large rate hikes, owing in part to the composition of the individual market, and in part to the uncertainty over the future of the law under the Trump administration.
By contrast last year’s NYS 2018 Rate Request early filing request were higher at 11.5% small group but much lower 16.6% for individuals. The NYS final August 2018 rate approval are expected to be lower. For example, the final filing rates were aproved NYS 2018 Final Rates at 9.3% small group and 13.9% for individuals. Incidentally, the NYS 2017 Rates final rates were 8.3% small group and 12.3% for individuals. Using these past figures one projects a 2019 Final Rates of 6.5% small groups and 19% individuals.
With only 3 months of mature claims in 2018 to work of off Insurance Actuaries have little experience to predict accurate projections. Simply put the less credible information presented to actuarial the higher the uncertainty and higher than the expected rate increase. The national rate trend, however, has been much higher than in past years due to higher health care costs and the loss of Federal reinsurance fund known as risk reinsurance corridor.
Summary of 2019 Requested Rate Actions
Individual rates are expected to be higher than the small group market. The national rate trend, however, has been much higher than in past years due to higher health care costs Like other states throughout the nation, the 2019 rate of increase for individuals in New York is higher than in past years partly due to the termination of the federal reinsurance program. The loss of the program’s aka federal risk reinsurance corridor funds accounts for 5.5 percent of the rate increase.
The single biggest justification offered by insurers for the requested increases is the recent repeal of the individual mandate penalty –Tax Reform Bill Includes Repeal of Individual Mandate Beginning in 2019. The individual mandate, a key component of the Affordable Care Act, helped mitigate against dramatic price increases by ensuring healthier insurance pools. Insurers have attributed approximately half of their requested rate increases to the risks they see resulting from its repeal. Without the federal action, the average requested rate increase would be 12.1%. As DFS reviews all of the submissions, we will continue to ensure that any rate increases are fully and actuarially justified by appropriate medical cost increases and are not inadequate, excessive or unfairly discriminatory, in accordance with New York law.
Most encouraging to see the average rate requests for the small group market reflect the increased stability of that market in New York State. The combination of 2-50 and 51-100 market underscores the stability for msall bsuinesses under 50 employees. Prior to the NYS regulatory combination, the 2-50 market was running an average 12-13% trend.
The Obamacare health insurance tax, aka The HIT, is responsible for approximately 2.5%. Whiel the HIT moratorium was approved it had indeed come back last year. The total projection is $14 Billion. Notably, Empire Blue Cross has filed a modest 6% increase as their portfoliio is running stable. Additionaly, Oscar’s inbdustry low 3% filing is practially at break-even considering the HIT.
THE THREE R – RISK CORRIDOR, RISK ADJUSTMENT & REINSURANCE designed to mitigate the adverse selection and risk selection. The problem, according to many insurance companies, is that the formula is flawed, and CareConnect executives have consistently complained that they are at an unfair disadvantage. The Cuomo administration has taken steps to ameliorate some of those problems, giving the DFS the authority to essentially overrule the federal numbers. In its first-quarter financial report, executives made clear that the risk adjustment penalty was a threat to its business.
|Company Name||2019 Requested Rate Change|
|Crystal Run Health Insurance Company||11.5%|
|Crystal Run Health Plan, LLC||12.5%|
|Empire Healthchoice Assurance||6.0%|
|Healthfirst Health Plan, Inc.||21.0%|
|Healthfirst Insurance Company, Inc.||7.0%|
|Healthnow New York||-0.1%|
|MVP Health Plan||7.0%|
|MVP Health Service Corp*||10.3%|
|Oxford Health Insurance Inc*||8.3%|
|UnitedHealthcare Ins Company of New York||7.2%|
Defined Contribution Choice: Instead, the correct approach for a small business in keeping with simplicity is a defined contribution model using a Private Exchange. This is a true defined contribution empowering employees with the choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll. Both employee and employers still gain tax advantage benefits under the business. Also, the benefits, rates and network size are superior under a group plan as THE RISK OUTLINED ABOVE ARE HIGHER FOR INDIVIDUAL MARKETS THAN SMALL GROUP PLANS.
To be clear: These trends affect a small subset of the insurance market—non-group plans that cover less than 2 percent of the population. Many qualify for tax credits that lower their net costs and reduce or eliminate the impact of year-to-year rate increases.However, non-group customers with incomes above 400% of the poverty level ($48,560 for a single adult) get no subsidy—and feel the full brunt of any hikes.
- You may view the NYS 2019 Rate Requests DFS press release, which includes a recap of the increases requested and approved by clicking here.
- For a custom analysis detailing YOUR upcoming 2018-2019 renewal please contact our team at Millennium Medical Solutions Corp (855)667-4621. We work in coordination with Navigators to assist with Medicaid, CHIP Child Health Plus, Family Health Plus and Medicare Dual Eligibles. We have Spanish, Russian, and Hebrew speakers available. Quotes can also be viewed on our site.
- See Health Reform Resource
*These averages may change based on DFS’s review of the rate applications.** Empire submitted a filing that DFS is evaluating.
Learn how a Private Exchange and our PEO Partnership can help your group please contact us at [email protected] or (855)667-4621.
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2018 Individual Marketplace Guidance
Health and Human Services had released earlier this year the final version of its 2018 Individual Marketplace Guidance. Under the Affordable Care Act (ACA) this is issued annually. While the guidance is mostly related to the individual marketplace it does, however, include several items relevant to employers and group health plans.
- Annual limits for cost sharing (out-of-pocket limits)
- Marketplace eligibility notifications to employers
- Marketplace annual open enrollment period
- Small Business Health Options (SHOP) Exchange
Nov 2017 – How to Select a Broker on NYS of Health marketplace.
Nov 2017- 2018 Individual Marketplace Guidance.
Nov 2017- Indiviudal Enrollement on Oscar or UnitedHealthcare Essential Plan.
Nov 2017 – Emnployer Reporting 2017 Updated 1094 & 1095 Now Available
On Exchange Maximum Household Income for Subsidy
Your decision on which will depend on your Household Income and the number of people in your household applying for coverage. In the chart below, if your HOUSEHOLD income (include all members or your tax household regardless of if they are applying for coverage or not) is below the limit shown based on the number in your household applying for coverage, then it is better for you to apply via your state marketplace such as the NY State of Health.
|# of Household Members Applying for Coverage ||Maximum Household Income for Subsidy|
|Each Add’l. Household Member||$16,720|
MEDICAID EXPANSION: For those with incomes less than 200% of the Federal Poverty level you should also enroll via NYSOH as you might qualify for the United Healthcare Essential Plan.
ENROLLING ON NY STATE OF HEALTH
Alternatively, If you earn too much to qualify for a subsidy we will enroll you OFF EXCHANGE. The application forms can be found using the Oscar link above. Download the FULL ENROLLMENT KIT and complete the necessary forms to send to us for processing.
2018 NY State of Health Open Enrollment Runs from 11/1/17 – 1/31/18. Special enrollment period runs throughout the rest of the year for qualifying events.
ANNUAL LIMITS FOR COST SHARING:
The annual out of pocket limits for plan years beginning on or after January 1, 2018 are $7,350 for individual coverage and $14,700 for family coverage. These cost sharing limits apply to in-network essential health benefits offered under non-grandfathered health plans, both fully and self-insured. Annual deductibles, in-network co-insurance and other types of in-network cost sharing accumulate toward the out-of-pocket limit, including prescription drug copayments. Not included are premium payments, out-of-network cost sharing and spending on non-essential health benefits.
MARKETPLACE ELIGIBILITY NOTIFICATIONS TO EMPLOYERS:
Beginning in 2017, the Marketplace will notify an employer as soon as possible when one of its employee’s first enrolls in subsidized Marketplace coverage. Since some employers may be liable for a penalty under the ACA’s employer mandate when an employee qualifies for a subsidized Marketplace coverage, this change to a more proactive notification process will hopefully provide employers with the opportunity to work with CMS in cases where an improper subsidy has been provided.
MARKETPLACE ANNUAL OPEN ENROLLMENT PERIOD:
Open Enrollment in the Health Insurance Marketplace, Healthcare.gov, for 2018 will take place from November 1, 2017 through January 31, 2018.
SMALL BUSINESS HEALTH OPTIONS (SHOP) EXCHANGE:
Beginning in 2017, small employers electing coverage in the SHOP Exchange will have the option of “vertical choice,” offering plans across all metal levels (platinum, gold, silver and bronze) from one insurer. States who opt out of the vertical choice option will continue to offer employers the choice of selecting health plans that are available at one single metal level of coverage.
Stay proactive and contact us today for a custmozied consult on how your organization can prepare ahead for ACA, Benefits, Payroll and HR @ (855) 667-4621 or [email protected].
6 Changes to 2018 Individual Health Insurance Open Enrollment Period
HealthCare.com Offers Insight on 6 Changes to 2018 Individual Health Insurance Open Enrollment Period. The health insurance Open Enrollment Period for 2018 opens Nov 1st and now lasts only 45 days. HealthCare.com provides insight on the abbreviated timeline and other notable changes to watch out for.
HHS released final 2018 Notice of Benefit. Contact us today at (855) 667-4621 or [email protected].
6 Changes to 2018 Individual Health Insurance Open Enrollment Period
MIAMI and NEW YORK, Oct. 27, 2017 /PRNewswire/ — Despite efforts from the federal government to reform the Affordable Care Act, the 2018 health insurance Open Enrollment Period – the time when Americans can change Obamacare health insurance plans or a join a new plan for the upcoming year – will still begin on November 1, 2017. But this has left most Americans confused about how this year’s open enrollment differs from the previous three.
Unlike previous Open Enrollment Periods, which each occurred over a 90-day window, this year’s open enrollment will last just 45 days – starting on November 1 and lasting until December 15. The shortened timeframe means Americans will have less time to make decisions about their healthcare. While some U.S. states have extended the enrollment periodfor their individual state exchanges (notably, California and New York), most states will follow the condensed 45-day enrollment window.
There are several major changes to the open enrollment process in addition to the condensed 45-day enrollment window. It’s likely that many consumers will be caught off-guard, as these changes to open enrollment have not been well publicized. HealthCare.com cofounder and CEO, Howard Yeh, explains how these open enrollment changes may affect consumers and the coverage options available to them.
1. Changes to Re-Enrollment:
“In previous enrollment periods, people were provided with several government notices to compare their current plan with other healthcare plans on the Marketplace. This year, it’s unclear whether consumers will be provided those notices. That’s why it’s important to shop around for a different health insurance plan during open enrollment. If consumers don’t compare their plan options, they run the risk of being re-enrolled in the same plan. This is the case even after the enrollment period has already passed. If their current plan’s monthly premium is set to increase, they may get stuck with a plan that doesn’t fit their needs, or is otherwise unaffordable.”
2. The End of Subsidies Towards Cost-Sharing Reductions:
“The Trump administration has decided to stop financing cost-sharing reduction (CSR) subsidies to insurance companies. Most insurers predicted this in fact. The prices for Silver plans (the only plans for which these cost-sharing reductions were made available). This means higher insurance premiums and out-of-pocket costs for some. This also means, though, that people in some areas of the country may encounter Gold and Platinum plans that cost just as much or even less than Silver plans.”
3. Fewer Insurers, Fewer Options:
“Several insurers have filled in the gaps left by the exit of major insurance companies like Aetna and Anthem from the Marketplace. While this ensures that consumers across the country have healthcare options available to them. In reality, the options are significantly slimmer than those in previous years. In many areas of the country, only one ACA health plan option will be available to consumers. Most plans are costlier that may be prohibitive for many.”
4. Higher Costs Overall:
“Costs for ACA plans overall will be higher compared to previous years – with insurers charging, on average, 20% more on premiums. These costs have outpaced income growth. Leading to a unique affordability gap – where people make too much to qualify for Obamacare tax credits, but make too little to actually afford a Bronze plan. Under the law, those unable to afford a Bronze plan are exempt from paying the penalty for not having health insurance, “Marketplace affordability exemption”). This year, we expect more than 1.5 million people to qualify for that exemption – a significant increase from the 600,000 two years ago.”
5. Less Government Assistance:
“The federal government has also slashed funding for different initiatives intended to encourage and support people enrolling in Marketplace coverage. Notably, there will be less help available from ‘navigators’ and government spending on Obamacare outreach and advertising is now virtually nonexistent. This means it’s up to consumers to actively seek out help when signing up – and it’s up to nonprofit organizations and private companies to step up and make sure consumers get the information they need.”
6. Decrease in Participation Due to Rise of Alternatives to Traditional Health Insurance:
“Motivated by increasing costs and limited options, more consumers are moving towards alternatives to ACA health insurance. Relatively unknown healthcare options, like association plans and faith-based healthcare, are becoming more popular. And people may start using short-term health insurance plans – which typically serve as temporary coverage solutions. They may reult in full-time replacements to traditional coverage, especially due to the President’s executive order. The short term plans may now last up to a year (compared to the previous limit of three months).”
Approximately 20 million people will shop for health insurance during this Open Enrollment Period. HealthCare.gov a top destination for consumers looking to shop around for the best-priced plan on Marketplace health insuranc. Additonaly, alternatives to ACA coverage (like short-term health insurance plans) are included.
RELATED LINKS: For important updates throughout open enrollment, follow us medicalsolutionscorp.com on Facebook, Twitter, or visit our call us 855-667-4621 for more customized information.