by Admin. | Mar 7, 2013 | Health Care Reform, Health Exchanges, State Exchanges
![Type of Insurance Exchange, by State Map of State Exchanges Final](https://5zs2d3.p3cdn1.secureserver.net/wp-content/uploads/2013/03/medicaid-map-insuranceexchange1-300x234.jpg)
Map of State Exchanges Final. The final map of 2014 State Exchanges or health insurance marketplaces are now in.
States have had the option of either using Federal Grants to establish their own Exchanges or letting the Federal run their State’s Exchange. There is even a middle version, a Partnership Exchange Program. Under this arrangement, the State might oversee the selection and management of health plans and assisting people with enrollment. The federal government would have primary responsibility for the remaining marketplace operations, including managing the marketplace, their websites and call centers, accepting applications, and determining eligibility for premium subsidies.
Seventeen states and the District of Columbia have received conditional approval from HHS to operate a state-run marketplace in 2014. These states are: California, Colorado, Connecticut, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Utah, Vermont, and Washington.
This map is very close to last years blog we posted Map of State Exchanges Status May 2012 . For the most part this goes by partisan lines with majority of Federally Run State Exchanges located in GOP Governor States. An example of this is highlighted in our blog on NJ Exchange Chrstie Rejects State Exchange.
It is vital that as many uninsured’s get health coverage. Nationally approximately 30 million people are expected to gain coverage with 600,000 in States like NY.
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by Admin. | Mar 4, 2013 | Health Care Reform, Health Exchanges, Individual Exchanges, PPACA, SHOP Exchanges, Small Business Group Health, State Exchanges, Tax
![Pay or Pay Employer Guide Pay or Play Health Reform Tax Penalty](https://5zs2d3.p3cdn1.secureserver.net/wp-content/uploads/2013/03/Pay-or-Play-Health-Reform-Tax-Penalty.jpeg)
Pay or Pay Employer Guide
Pay or Play Employer Guide
Tick! tick! tick! As the 2014 Employer Mandate to either pay or play gets closer the nation’s employers move a step closer to having to make a decision: Do I play or pay? This Employer mandate under Patient Protection and Affordable Care Act (PPACA) does not apply to smaller groups under 50 FTE (full time equivalent) employees. Many small groups such as food service industry, retailers, construction etc. in fact have many FTE and while they may work minimal hours can trigger the “pay or play” mandate.
The IRS has released recently guidance published in the form of a Notice of Proposed Rulemaking (NPRM), addresses a number of issues tightly linked to an array of practical considerations related to the employer mandate. These include defining a “large employer,” determining “full-time” status for employees, clarifying the meaning of “dependents,” and determining what constitutes “affordable” coverage.
The guidance also tackles several stickier questions such as how and whether to count foreign or seasonal workers, as well as how to calculate the full-time status of employees who work unusual hours, such as teachers or airline pilots.
Three safe harbors relating to the provision of “affordable” coverage to employees in order to avoid exposure to the mandate penalties are also included in the guidance. Transition relief is offered in recognition of certain employers’ needing time to bring their plans into compliance.
Still, there are several regs that the IRS is awaiting commentary and resolution on due on March 18, 2013.
A Q&A summary of the rule has been released by the IRS and is available by clicking here.
Some employers assert that the play-or-pay mandate will raise their costs and force them to make workforce cutbacks. As a result, a number are considering eliminating their health care coverage altogether and instead paying the penalty on their full-time employees. While the “pay” option might be worth considering, there are strong reasons why employers should look carefully at all of their options and do their best to calculate the actual outcomes of each.
Other Key Issues Addressed in the Proposed Rules
Additional issues addressed in the proposed regulations include:
- Determining which employers are subject to the “pay or play” requirements;
- Determining who is a full-time employee, including approaches that can be used for employees who work variable hour schedules, seasonal employees, and teachers who have time off between school years;
- Determining whether coverage is affordable and provides minimum value; and
- Calculating the amount of the penalty due and how the penalty will be assessed.
When conducting a cost-benefit analysis, the key tax issues the employer should consider are:
- Employer Tax Penalty for Not Offering “Qualified” Group Health
- Not applicable for employers with less than 50 FTEs
- $2,000 penalty per full-time employee (minus 30 employee credit)****
- Employer Tax Penalty for Offering “Qualified” Health That is Not “Affordable”
- Not applicable for employers with less than 50 FTEs
- $3000 per employee receiving subsidy
Example:
Jungle Corp. has 100 full-time employees and is a leader in its market, using a talent differentiation strategy. Jungle’s family coverage costs $15,000, of which employees pay $3,000. Bob Smith, a highly skilled worker with a strong performance record, earns $50,000 and has family coverage through Jungle’s plan.
On Jan. 1, 2014, Jungle Corp. announces it is dropping its group health plan coverage and will instead pay the $2,000-per-full-time-employee penalty. On Jan. 2, Bob walks into HR and asks about receiving replacement compensation for the $12,000 that the business had been paying toward his family coverage.
Wanting to retain Bob in accordance with its strategy of maintaining market leadership with an experienced workforce, Jungle offers him another $12,000. But clever Bob points out that his share of Social Security and Medicare payroll (FICA) taxes will take a bite out of that $12,000, as will federal and state income taxes, so the HR manager agrees to make good on those amounts as well. Of course, the company will also have to pay its share of FICA taxes on Bob’s additional compensation. As a result, instead of paying $12,000 toward Bob’s family coverage using pre-tax dollars, Jungle Corp. now finds itself paying an additional:
- Bob’s salary adjustment: $14,500
- Employer’s share of FICA taxes: $1,109
- Excise tax (penalty): $2,000
———————————-
- Total: $17,609
(versus $12,000 currently)
Similar per-employee costs will be reflected across the company’s workforce. A move that seemed like a no-brainer, the consequences could make you look silly.
For More Information
Due to the complexity of the law in this area, and the absence of finalized guidance, employers are strongly advised to review their benefit plans to prepare for the changes ahead. Additional information regarding the penalty is featured on our Employer Shared Responsibility page.
Ask us about our Health Care Reform Compliance Audit Assessments. See Health Care Reform Timeline and Preparing for Reform by UHC.
In the coming months, Millennium Medical Solutions Inc will host seminars and will share information you’ll need to know as the countdown continues to October 1st. Please contact us for immediate information on how to implement these initiatives for your group-specific needs at info@medicalsolutionscorp.com or Call (855) 667-4621.
by Admin. | Dec 11, 2012 | Health Care Reform, Health Exchanges, Obamacare, State Exchanges
Governor Christie vetoes Health Insurance Exchange – Washington Post “Christie Vetoes Obamacare”.
“New Jersey and all other states still await substantial federal guidance on the functioning of all three types of exchanges,” Mr. Christie said in his veto message. “To be sure, the decision of whether to move forward with a state-based exchange can only be fully understood when competitively compared to the overall value of the other options.”
States have until Dec. 14 to decide whether to establish a state-based exchange. They have more time to decide whether to partner with the federal government or let federal bureaucrats design and run the state exchange. Many states with Republican governors have said they would not participate in the process, citing their opposition to the law and its potential costs. This is the current Map of State Exchange Status.
What is an Exchange? One of the centerpieces of the recently passed Patient Protection and Affordable Care Act (PPACA) is the establishment of state based health insurance exchanges by the year 2014.
An “Exchange” is a mechanism for organizing the health insurance marketplace to help consumers and small businesses shop for coverage in a way that permits easy comparison of
available plan options based on price, benefits, service and quality. By pooling individuals and small groups together, transaction costs can be reduced and transparency can be increased.
Exchanges can create more efficient and competitive markets for individuals and small employers.
States have until Dec. 14 to decide whether to establish a state-based exchange. They have more time to decide whether to partner with the federal government or let federal bureaucrats design and run the state exchange. Many states with Republican governors have said they would not participate in the process, citing their opposition to the law and its potential costs.
Many Republican governors were saying before the Court ruling that the Medicaid expansion was yet another unfunded federal mandate they could not afford. Yes the Supreme Court ruling has given the Republican governors enormous leverage. Republican governors have long argued that state control and flexibility can save lots of Medicaid money. If they put a reasonable plan on the table to expand their Medicaid programs to 133% of poverty–one that saves at least as much as their state match–it could be a win for everyone. The Republican governors get their flexibility and the Obama administration gets their expansion.
by Admin. | Nov 12, 2012 | Health Care Reform, Health Exchanges, Individual Exchanges, PPACA, SHOP Exchanges, Small Business Group Health, State Exchanges
![Healthcare Reform Commission Cuts Crains Article on Broker Commissions Cuts](https://5zs2d3.p3cdn1.secureserver.net/wp-content/uploads/2012/11/health-care-reform-overview-300x225.jpg)
Crains Brokers’ Commissions Face Uncertain Future. A quick comment on our quote in Crains “Crains Brokers’ Commissions Face Uncertain Future” today. Insurers are indeed cutting back on services resulting in cost containement measures such as layoffs, outsourcing and significant broker commissions cuts.
A significant negative development is the NYS decision to not allow licensed Agents/Brokers in the Individual Exchange. Many States such as Massachusettes, the inspiration for Health Care Reform, use a Connector which is an Exchange or an independent state agency that helps Massachusetts residents find health insurance coverage and avoid tax penalties. Instead NYS will allow Agents/Brokers to only work in the Commercial Exchange known as SHOP. HealthPass is a good pre-cursor of the SHOP Exchange offering Small Businesses a Defined Contribution Health Plan of full options form Health Insurance, Dental, Vision to Term Life Insurance and Disability.
The Individual Exchange will work with an “Assitor” or “Navigator”. In NYS Government and Non-Profit Agencies will comprise the “Navigator” which will only be allowed to operate in the Individual Exchange. By design an income subsidy will only pass through this Individual Exchange an not on the SHOP Exchange. Example: a $50,000 Family Household of 4 can get approximately 80% credited.
The Federal Gov has already spent $2.2 Billion on State Exchanges. And this figures does not include remaining States as there are only 19 States working on an Exchange for 2014. The Exchanges will be built up for 2 years and then must be fully independent by 2016. If 88% of small groups coverage purchased by Brokers acc. to Bostons Wakely Report in research study- Role of Producers and Other Third Party Assisters in New York’s Individual and SHOP Exchanges the distribution infrastructure is already there. Access to care is not the difficulty in finding a plan its the very cost of the plan! Why then does NYS decide to spend on building up new infrastructures? AgentsBrokers can easily outreach and council to uninsured as well. In fact many small businesses such as construction, consulting services and dining have many uninsured that an Agent/Broker already has a relationship with.
Despite all this and the rapid changes in reshaping health care we remain optimistic and look forward to taking on a greater role in health care reform.
With more choice, our groups and their employees will need more direction, allowing brokers to take on more of a consultative role. Healthcare plans are not a simple purchase and one plan doesn’t fit all. By delivering the latest cutting-edge benefits technologies, continued consumer focus approach and leveraging our long time relationships with Benefits/HR/Payroll partners our role will be pivotal in being part of the solution.
Pulse Nov 2012 Quote MMS
by Admin. | Jan 8, 2012 | Health Care Reform, healthcare, NY News, Small Business Group Health, State Exchanges
![NY small_business](https://5zs2d3.p3cdn1.secureserver.net/wp-content/uploads/2012/01/ny-small_business.jpg?w=300)
In the wake of Empire Blue Cross’s recent major SMB changes the 2 new Crains article below point to the early shake up results.
Tough Decisions on Health Coverage
Insurance Good Luck
Empire’s Small Group “simplification” did indeed cause groups to escape Empire’s rate increases and reduced plan selections. Additional, not mentioned in the article was that groups are facing plan modifications such as Rx changes switch to % from fixed $ copay and loss of Walgreen/Duane Reades chains. By being the largest insurer on the block heavy provider negotiations have been de rigieur as evidenced by loss of Westchester Medical Center for 14 months and counting.
Groups have been fortunate to find comparable alternatives despite these changes but we see little public evidence of concern form NYS legislature. We are not seeing the long term vision to open up markets to strong national insurance competitors. On the contrary we have deep concerns of allowing the past 2 non-profits of GHI and HIP merger and latest talks of going for profit.
Lastly, the article makes mention of possible “Health Exchanges” entering the market and lowering rates. Where is there evidence of this decrease? I’m not seeing why an insurer working in an oligopoly environment with price controls would be motivated to lower rates. Would Con Ed or Blue Bell lower rates in the 70s because now SMB can shop online??