by Admin. | Dec 19, 2019 | Health Care Reform, healthcare, Obamacare, Tax
BREAKING: HIT and Cadillac Tax Repealed
Congress has voted to fully repeal the Cadillac Tax and Health Insurance Tax effective January 1, 2021. This means the Health Insurance Tax will still be in place for 2020 and will be gone in 2021.
Both unpopular taxes with bipartisan approval delayed the Cadillac Tax but put the Health Insurance Tax(HIT) back in for 2020 earlier this summer. See
Cadillac Tax Out Health Insurance Tax (HIT) Back In. Below are summaries of these two taxes that are now fully repealed.
Whats is the Health Insurance Tax (HIT)?
Health Insurance Tax: This tax included in the Affordable Care Act (ACA) increased the cost of health care coverage for consumers and employers in every state. The ACA imposed a new sales tax on health insurance that started at $8 billion in 2014, increased to $14.3 billion by 2018, and continued to increase each year.
The HIT costing an estimated 2.5%-3% added surcharge or an estimated $500/family annually and $241 for Seniors. Website
Stop The Hit calculates $5,000 as the average tax for a 10 man small business for example.
Update:On December 20, 2019, President Trump signed into law a full repeal – with varied effective dates – of three ACA taxes: the Cadillac Tax, the Health Insurance Industry Fee (a.k.a. the Health Insurer Tax), and the Medical Device Tax. Additionally, the agreements extended the Comparative Effectiveness Research Fee (CERF) through 2029.
The HIT fee is in effect in 2020, then fully repealed and will no longer exist in and after 2021.
Whats is the Cadillac Tax?
The
Cadillac Tax was to take effect in 2022 and had been twice delayed since its original inception scheduled for Jan 2014. This tax called for a 40% excise tax on the amount of the aggregate monthly premium of each primary insured individual that exceeds the year’s applicable dollar limit, which will be adjusted annually to the Consumer Price Index plus 1%.
The 40% excise tax applies to the cost of employer health plan coverage exceeding certain threshold amounts, which were originally set for 2018 at $10,200 for individuals or $27,500 for families.
Originally, the
Cadillac Tax was pushed back by the behest of Unions to 2018 from the original proposed 2014 date. Most Unions with generous health care packages would not be complaint within that time frame. For average Gold Plans in regions such as NY, the widely unpopular Cadilac Tax would have been felt.
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by Admin. | Aug 9, 2019 | healthcare, individual health insurance, NY News, Obamacare, Small Business Group Health
NYS has approved 2020 health inusrance rate requests today. Small group rates increase 7.9% and 6.8 8.6% for individuals.
As per NY State Law, Health Insurers are required to send out early notices of rate request filings to groups and subscribers see original –NYS 2020 Rate Requests. Despite only 3 months of mature claims data experience for 2019 health insurers’ original requests were noticeably below average. Ultimately NYS reduced this request substantially by approximately 55%.
The 2020 small group rate increase was in line at 7.9% vs 2019’s approval of 7.5%. This reflect a stabilizing ACA market. Insurers’ financial performance improved nationwide last year to its highest level since the passage of the law. The average medical-loss ratio, which represents the portion of premiums spent on medical claims and quality improvement, was 70% last year in the individual market nationwide. That led to plans paying $800 million in rebates for failing to meet requirements on medical spending, according to the Kaiser Family Foundation.
Rate Factors
The state noted that premiums increases main driver are medications. “The drug costs account for the largest share of medical expenses, followed by inpatient hospital costs, and outpatient hospital costs.”
More than one million New Yorkers are enrolled in small group plans, which cover employers with 1 to 100 employees. Insurers requested an average rate increase of 12.2% in the small group market. DFS cut the weighted average requested rate increases by 4.3 percentage points, or 35%, from 12.2% to 7.9% for 2020, saving small businesses over $313 million. The federal ACA Health Insurance Tax, which was reimposed for 2020, accounts for approximately 3% of these rates. Without this tax, the increase would have been 4.7%. A number of small businesses will also be eligible for tax credits that may lower those premium costs even further.
The HIT (Health Insurance Tax) is back. 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.
Website Stop The Hit calculates $5,000 as the average tax for a 10-man small business for example.Calculates how the HIT affects your State and your business, here. Take action now: tell Congress to repeal the HIT! Join small business owners across the country in stopping the HIT. Sign the petition here.
Small Group Market
Learn how a Private Exchange and our PEO Partnership can help your group please contact us at info@medicalsolutionscorp.com or (855)667-4621.
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by Admin. | Jul 21, 2019 | family health insurance, group health insurance, Health Care Reform, healthcare, Obamacare, Tax
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.
Who’s affected?
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 info@medicalsolutionscorp.com.
by Admin. | Dec 17, 2018 | Health Care Reform, Obamacare
Texas Court Strikes Down ACA
A Texas federal judge ruled late Friday that the health coverage of some 20 million Americans in limbo by ruling Obamacare as unconstitutional. The entire Affordable Care Act must be scrapped because Congress repealed the individual mandate penalty for failing to obtain insurance coverage last December as part of the Tax Cuts and Jobs Act.
Why it matters: The ruling, which will appealed, would be particularly perilous for states like New York that have fully embraced its provisions and receive billions in federal funding tied to it.
3 things that wont change for Employers:
1) There is no change to the law. A statement from White House that pending the appeal process, the law remains in place. ACA reporting requirements remain and penalties are unchanged.
2) Texas ruling expected to be overturned. The ruling will be appealed, ultimately to the Supreme Court if it gets that far and may take years to appeal. The Supreme Court has consistently upheld the constitutionality of the ACA twice in previous court challenges, and experts (including those who are both for and against the law) widely expect the Court to do the same in this case.
3) ACA is actually becoming more embraced overall. More states are choosing to expand Medicaid, some are creating their own individual mandates, and employer mandate penalties are being enforced by the IRS. Any change to the law that would take away affordable healthcare coverage from those who currently receive it could be a major political challenge for the governing party.
For ALE (applicable large employers) who are preparing for 2018 Forms 1095 and 1094 reporting, the Texas ruling has no immediate impact. The Employer Mandate is in full effect and the IRS continues to assess potential penalties for non-compliance. We’ll keep our current clients informed of any changes of substance.
If you would like to know more about MMS Corp and Health Care Reform for your company, contact us today.
by Admin. | Aug 6, 2018 | CT, group health insurance, Health Exchanges, healthcare, latest health insurance news, NJ, NY News, Obamacare, Small Business Group Health
NYS 2019 Final Rates Approved 
NYS has approved 2019 Final Rates last Friday. Small group rates will increase 3.8% and 8.6% for individuals.
As per NY State Law, Health Insurers are required to send out early notices of rate request filings to groups and subscribers see original –NYS 2019 Rate Requests. Despite only 3 months of mature claims data experience for 2018 health insurers’ original requests were noticeably below average 7.5% for small group and 24% for individuals. Ultimately NYS reduced this request substantially by approximately 50%.
Experts are concerned over the long term effects. Example, the Individual mandate was removed last December by Presidential order. Without the Mandate anyone can drop insurance without penalty. A comparable take away for similar auto insurance industry would be something like this -Drivers ought not be mandated to buy auto insurance as its a profit scheme by Insurers. While a popular decision this will hardly bend the curve long term and reduce competition. Furthermore, the new order of Selling Across State lines makes NYS most unwelcoming.
OTHER STATES
Insurers have been filing to sell Obamacare plans that will go into effect in 2019, and in some states they appear to be pricing in for the fact that the mandate is going away next year. Other states are seeing mild increases, but that is in part because they saw significant hikes for the previous year.
Insurers have concluded that fewer people will enroll without the mandate than otherwise, so in some places they are pricing their plans higher based on the assumption that sicker people will be left behind, which will increase medical costs for those left. It is well worth pointing out that in recent years the loss federal risk reinsurance corridor funds account for 5.5 percent of the rate increase.
How are neighboring States doing?
In NJ, not that bad. Last year the average increase were 5.5% for small groups and some popular plans such as Horizon Blue Cross Blue Shield’s OMINA increasing only 4.8% increase. This year the increase is only 5.2. Other insurers offering EPO and HMO plans in the individual market for 2019 include Oscar Health and Oxford Health Plans.
With individual mandate repeal fewer people will buy health insurance raising the prices for those who do. NJ Banking and Insurance Department officials said premium prices would have increased, on average, by 12.6 percent.
For CT market, on the other hand, things are much worse at least for the individual marketplace with average 25% rate increases last year. The 2019 proposed rate increases for both the individual and small group market are, on average lower, than last year: The proposed average small group rate increase request is a 10.22 percent and ranges from -5.0 percent to 21.1 percent. This compares to the average increase request of 18.06 percent requested last year.The proposed average individual rate increase request is 12.3 percent and ranges from -10.9 percent to 31.0 percent. This compares to the average increase request of 25.51 percent requested last year.
Final plan rates in New Jersey & CT will be finalized and released in the fall, state officials said. ACA open enrollment begins Nov. 1
- Trend: Trend is a factor that accounts for rising health care costs, including the cost of prescription drugs, and the increased demand for medical services.
- Uncertainty in Washington:
- Removal of penalty for individual mandate: The elimination of the penalty means that individuals who are typically younger and healthier would have no inducement to participate in the insurance pool, which could further destabilize the market. Lack of participation shrinks the pool and increases the cost of insurance to the remaining members.
- Short-duration health plans and Association Health Plans: Still pending are final federal regulations on non-ACA compliant short-duration plans, which may have implications for the ACA risk pool. Also, Connecticut along with other state insurance regulators, are awaiting clarification from the federal government on new federal regulations allowing association health plans, which could further shrink the ACA risk pool.
A bipartisan group of congressional representatives has discussed an agreement to extend and guarantee the payments, but it’s unclear whether they could do so by the new filing deadline of Sept. 5. A lawsuit filed by Congress against the Obama administration to challenge the payments is still pending. In addition, Trump has repeatedly threatened to withhold payments to insurers that reduce cost-sharing – deductibles, copays and coinsurance – paid by low-income customers. More than half of New Jersey’s marketplace customers receive that assistance, and without it, most would be unable to afford coverage.
Finally, a tax on health insurance premiums has been reinstated in 2018 after a one-year “tax holiday” approved by Congress for 2017. That contributed 2.3 percent to the rate hikes that insurers requested for 2019 and for 2019
SMALL GROUP MARKET VS. INDIVIDUAL MARKET
Importantly, small group market is still more advantageous than individual markets unless one gets a sizable low-income tax credit. Overall, about 350,000 individual plan consumers will be affected by the price hike, while more than a million users will be hit by higher small group fees. Last year, Blue Cross Blue Shield released a study showing Obamacare user costs were 22 percent higher than people with employer-sponsored health plans, while UnitedHealth plans to exit most Exchanges see – Breaking: Oxford Exits Metro Indiv & Oxford Liberty HMO 2017.
The correct approach for a small business in keeping with simplicity is a Private Exchange and with our large buying group PEO partnerships. This is a true defined contribution empowering employees with a 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 are lower for small group plans than individual markets.
Learn how a Private Exchange and our PEO Partnership can help your group please contact us at info@medicalsolutionscorp.com or (855)667-4621.
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by Admin. | Jan 29, 2018 | Hospitals, NY News, Obamacare
$700 Million for Struggling Brooklyn Hospitals
Gov. Andrew Cuomo announced Wednesday that One Brooklyn Health — a conglomeration of Interfaith Medical Center, Kingsbrook Jewish Medical Center and Brookdale Medical Center — will receive a substantial share of the $700 million that the administration has held for more than two years with the promise that it would one day be used to transform health care in central Brooklyn.
Why it matters:
Brookdale alone has cost $100-$150M annually. The state spends $250 million a year keeping the lights on in these hospitals. That’s tax money that could be spent on anything else if the state can somehow figure out how to make these three hospitals more financially sound.
With state and federal reforms they are exposed. Adapting to a reimbursement landscape in which payment is increasingly linked to performance has become a fail. Ironically, the very reason for this fail is that the State links performance with Medicaid funding.
In other words if you are a hospital already in need of a lifeline Medicaid was paying you ‘X,’ now the managed Medicaid people come and say we are going to pay you $2000 less per discharge. The new reimbursement shift to pay per performance vs a fee for service reimbursements consistent with Obamacare. Its designed to reward value over volume with financial incentives to keep patients healthy through preventive care and early disease detection rather than running up expenditures.
The downward spiral continues as Medicaid Patients are likely to select a more prestigious hospital whenever possible. See how your Hospital ranks here. 40 percent of Brookdale Hospital patients indicating that they would definitely recommend the hospital. Wyckoff Heights and Interfaith also scored poorly – less than 50 percent of their patients reported that ‘they would definitely recommend the hospital. Sadly, with such low scores a State spending strategy alone has not solved the problem in the past nor likely in the future.
