BREAKING: The young Co-Op start up of 2014 will be shutting down Dec 31, 2015. With membership totals approx. 200,000+ the early exit comes as a shocking surprise despite their recent losses and 15-20% rate increase approved for 2016.
On Friday, a joint announcement came from the state Department of Financial Services, the Department of Health and the federal Centers for Medicare and Medicaid Services (CMS), with DFS directing Health Republic to cease writing new health insurance policies and begin an orderly wind-down of business.
“Given Health Republic’s financial situation, commencing an orderly wind down process before the upcoming open enrollment period is the best course of action to protect consumers,” said Anthony Albanese, acting superintendent at DFS. “Moving forward, we will work closely with New York State of Health and federal regulators to help ensure continuity of coverage for Health Republic’s customers.”CMS officials said decision was made after state and federal agencies determined it was likely Health Republic would become financially insolvent.
According to recent announcements Health Republic of NY was exiting the small group and individual markets for Mid-Hudson, Albany, and Utica/Watertown regions. These counties include: Albany, Columbia, Delaware, Dutchess, Essex, Greene, Hamilton, Oneida, Orange, Oswego, Putnam, Rensselaer, Saratoga, Schenectady, Sullivan, Ulster, Warren, and Washington. The reasoning was the high delivery costs driven by Provider consolidation, see https://healthrepublicny.org/media/2563/faqs-service-area-reductions.pdf.
With recent exits for Insurers such Atlantis, Emblem Health/GHI and Empire blue Cross the transitions were handled differently. Some allowed groups to see their plan through renewal anniversary date or end of year. Further announcements are expected on transition of coverage.
Our Agency as in the past will be out and early in front positioning our clients for best options. For more information on this or to schedule a call please contact us info@medicalsolutionscorp.com today.
The rate requests for 2016 marked the first year in which insurers could rely on actual data from exchange enrollees. In many cases, insurers participating in exchanges in other states requested double-digit rate increases. New York is the second-largest state to receive final approval of its rate requests. Earlier this week, California insurance regulators approving an average rate increase of just 4 percent.
To the relief of customers of industry leader Oxford/UnitedHealthcare the rate increase for groups will be 3.9 to 6.5%. Importantly, the rates are a collective average and may range depending on one’s particular health plan. Additionally, Helath Insurers can opt to tweak or remove plans. Reminder: be sure to check back again our site in 30-60 days. Rates will be posted upon Health Insurer’s release. Also 2016 Individual Exchange Marketplace opens Nov 15th.
Individual Market
On average, insurers requested a 10.4 percent increase in health insurance rates for 2016 in the individual market. DFS reduced that average increase more than 30 percent to 7.1 percent – which is below the approximately 8 percent average increase in health care costs.
Starting on January 1, 2016, New York will add a new Basic Health Plan a.k.a ” Essential Health Plan” to the plans that can be purchased by lower income New Yorkers through NY State of Health. Households at or below 150 percent of the federal poverty level ($17,655 for a household of one; $36,375 for a household of four) will have no monthly premium for the Basic Health Plan. Those with slightly higher incomes at 200 percent of the federal poverty level ($23,540 for a household of one; $48,500 for a household of four) will have a low monthly premium of $20 for each adult.
The Basic Health Plan will provide the same covered services as other plans offered on the Marketplace. The Basic Health Plan has no annual deductible and lower copayments, making health care even more affordable for hundreds of thousands of New Yorkers. For example, a person who earns about $20,000 a year and uses moderate health care services including an inpatient hospital stay, prescription drugs and doctor’s visits, will pay about $730 a year for premiums and out-of-pocket costs under the Basic Health Plan in 2016 as compared to about $1,830 in 2015 if they were enrolled in a Qualified Health Plan.
Small Group Market
On average, insurers requested a 14.4 percent increase in health insurance rates for 2015 in the small group market. DFS reduced that average increase by 32 percent to 9.8 percent. A number of small businesses will also be eligible for tax credits that would lower those premium costs even further.
2016 Small Group Rate Actions – Overall Summary
Company
Requested
Approved
Reduction
Aetna Life
23.87%
21.47%
-2.40%
CDPHP HMO*
-19.84%
-19.84%
0.00%
CDPHP UBI*
16.56%
16.56%
0.00%
Emblem HIP*
29.74%
29.74%
0.00%
Empire Assurance
8.70%
3.40%
-5.30%
Empire HMO
9.21%
4.37%
-4.84%
Excellus*
13.90%
10.00%
-3.90%
Health Republic*
20.00%
20.00%
0.00%
HealthNow*
8.06%
0.66%
-7.40%
Independent IHA*
-15.60%
-15.60%
0.00%
Independent IHBC
-6.19%
-6.19%
0.00%
Managed Health
5.60%
3.94%
-1.66%
Metro Plus*
-0.81%
-0.81%
0.00%
MVP Health Plan*
7.28%
6.36%
-0.92%
MVP Services*
16.71%
15.90%
-0.81%
North Shore LIJ*
3.27%
3.27%
0.00%
Oxford OHI
13.61%
6.75%
-6.86%
Oxford OHP
10.58%
3.90%
-6.68%
United UHIC
18.79%
11.61%
-7.18%
All Companies Combined
14.41%
9.80%
-4.61%
You may view the DFS press release, which includes a recap of the increases requested and approved by clicking here.
For specific details on all available health plans in 2015, 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.
Obamacare Midsize Employer Mandate Delayed Till 2016.
For small businesses employing 50-99 the Treasury Dept is not requiring compliance of the Employer Mandate until 2016. Companies with 100 workers or more could avoid penalties in 2015 if they showed they were offering coverage to at least 70 percent of their full-time workers, the Treasury said.
The large group employer mandate had been originally delayed until 2015 in July 2013 see- Obamacare Employer Mandate Delayed, More Guidance. Employers with the equivalent of 50 full-time workers or more had to originally offer coverage or pay a penalty starting at $2,000 per worker beginning in 2014.
Employers with 100 or more full-time employers will have to comply with the Internal Revenue Code Section 4980H “play or pay” provision Jan. 1, 2015. Companies with 100 workers or more could avoid penalties in 2015 if they showed they were offering coverage to at least 70 percent of their full-time workers, the Treasury said.
Under the new rules, companies would be allowed during the phasing-in year to offer coverage specifically to a subset of employees, such as those working 35 hours or more a week, the Treasury said.
Treasury also set new rules for how the requirement would apply to workers such as volunteers and seasonal employees, saying that employers wouldn’t be penalized for failing to offer those people coverage, regardless of the number of hours they were working. Teachers, however, wouldn’t be considered part-time workers even if they were away over the summer, and adjunct faculty would have a special arrangement for how their classroom hours should be counted.
The penalty the employer pays would be based on the number of full-time workers that the employer employs. For purposes of calculating the penalty, the employer would not have to include part-time and seasonal workers in the calculations. Under PPACA, only workers who are not offered group health coverage are eligible to apply for exchange coverage.
The coverage must encompass a core set of benefits and be affordable – which the law defines as premiums costing no more than 9.5 percent of an employee’s income – and the employer must pay for the equivalent of 60 percent of the cost of coverage for workers but not their dependents.
As reported in Washington Post: “Administration officials said that organizations with a large number of volunteer employees – such as firefighters and first responders – would not have to provide coverage, along with those hiring seasonal employers who work six months or less in a given year. Teachers will not be considered part-time just because they do not work for three months during the summer, officials added, while the status of adjunct faculty will be calculated on a formula where they would receive credit for 2¼ hours of service per week for each hour they spent teaching or in the classroom.”
Many Employers are asking for flexibilities of defining FT as higher than 30 hours. The law has already had unintended consequences with shift in employment hours especially in industries such as dining, entertainment, services and construction.
Other transitional relief contained in the regulations include:
For employers with between 50 and 99 employees, the employer mandate is delayed until 2016. Note that an employer must provide a certification to take advantage of this relief.
Employees in positions for which the customary annual employment is six months or less generally will be considered seasonal employees and not full-time employees.
When employers are first subject to the employer mandate, they can determine whether they had at least 100 full-time employees in the previous year by referencing a period of six consecutive months, rather than an entire year.
For purposes of determining coverage in 2015 only, employers may use a measurement period (the period used to determine whether a variable-hour employee is a full-time employee) of six months, with respect to a stability period (the period following the measurement period, during which the variable-hour employee must be offered coverage) of up to 12 months.
Employers with non-calendar year plans must comply with the employer mandate at the start of their 2015 plan year, rather than on January 1, 2015.
For more information regarding both Exchanges – Individual Exchanges or SHOP 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.
SHOP Exchange Delayed One Year. The White House just announced that the online Small Business Health Marketplace also known as SHOP Exchange has been delayed until 2015. Small businesses will still have the option to purchase coverage through the new marketplace but will not be able to do so online. Instead, until next fall, employers with fewer than 50 workers will need to work through a broker or agent to buy health plans for their employees.
The Small Business Health Options Program, or SHOP Exchange, has already had a troubled launch with multiple delays as the Obama administration has focused much of its efforts on launching the individual insurance marketplace where Americans can shop for subsidized health insurance coverage.
Small businesses buying coverage will still be eligible for small business tax credits to bring down the cost, according an administration memo. Also, businesses can still purchase the same plans and same rates available on Off-Exchange. Medical Insurance premiums through the business is an ordinary tax deductible expense.
According to NY Times Article, Online Health Law Sign-Up Is Delayed for Small Business – “The announcement of the delay, just before Thanksgiving, is reminiscent of the way the White House announced, just before the Independence Day weekend, a one-year delay in the requirement for larger employers to offer health insurance to employees.”
The recent setback is the latest in a stream of missed deadlines, including a postponement for a Spanish language sign-up tool announced this week. The administration also recently pushed back the enrollment deadline for individuals: People who sign up by Dec. 23 can get coverage that starts on Jan. 1. In an earlier delay, businesses with more than 50 workers were given until 2015 to meet the requirement to provide health insurance without paying a penalty. And the deadline date for individuals to avoid penalties for failing to get coverage was pushed back six weeks.
If you should have any further questions regarding the SHOP program or comments about the above or the attached, please let us know. We will continue to monitor this issue and all ACA implementation in an effort to keep you informed of new developments. In the meantime, please visit our https://medicalsolutionscorp.com/about-us/blog to view past blogs and Legislative Alerts.
With only 6 month away from full implementation of 2014 Patient Protection Affordability Care Act (PPACA) employers are understandably uncertain. Below are Health Care reform – five things employers can do now to prepare and take action.
UPDATE JULY 2nd: Since blog posting the President Administration has delayed 1 year Employed Shared Responsibility Mandate i.e. Pay or Play to Jan 2015.
1. Employee Communications
Employers must notify employees of the online insurance marketplace known as a Healthcare Exchange. Recently released federal guidelines require employers to notify their workers of eligibility requirements for their state exchange starting Oct. 1, 2013 Open Enrollments for Jan 2014 effective date. To the relief of many, the U.S. Labor Department also provided model notices that employers can give to their workers, which eliminates the need to develop their own notifications.
Additionally, Employers sponsoring a health plan must give employees a Summary of Benefits and Coverage (SBC). The purpose of the Summary of Benefits and Coverage, or SBC, is to present benefits and coverage information in clear language and in a consistent format. Inspired by the Nutrition Facts Label on packaged food, theSBC (pdf) includes two medical scenarios: having a baby and managing Type II diabetes. It estimates how much a patient would pay for medical care in each scenario with specific insurance plans.
It’s the employer’s responsibility to distribute the SBCs to employees.
This requirement applies to health plan renewals after Sept. 23, 2012.
Department of Labor will NOT impose penalties for non-compliance with the SBC notice during the first year as long as employers show a “good faith” effort to comply. Read the FAQ on SBC and ACA pdf here.
2. Determining which Employers must offer health care.
Because employers with 50 full-time equivalents face penalties for not providing affordable, minimum value insurance an employer should know whether it is subject to these requirements or not. Common law employees of the employer and any commonly controlled company must be counted. Employers with temporary or leased employees will want to discuss with their advisors whether these employees will be considered “common law employees” for purposes of determining how many FTEs an employer has. Employers with employees who are paid based on unique payment models (stipends, work product, etc) will want to discuss how to calculate these employee hours with their benefits advisors.
Employers with 50 or more employees will incur penalties of up to $2,000 per employee if they cancel their existing health care program (which up until 2014 would be considered an optional benefit to provide). They will also incur penalties if their plan is too costly, and they do not meet the affordability standards.
Employers with less than 50 employees will not incur penalties if they cancel their health care plan, and that decision will need to be made on a business by business basis. They can also choose to offer partial coverage and contribute up to the minimum 50% of single coverage not to exceed 9.5% employee
The good news is Employers can subtract 30 FT employees. This portion is known as the Employer “play or pay” option. Specific case example and details are found at Pay or Play Employer Guide.
To encourage businesses to offer health benefits to their employees, the federal government is offering tax credits to small businesses. These credits are available to an estimated 4 million small businesses, including nonprofits.The IRS has set up a web page with information: Small Business Health Care Tax Credit for Small Employers. The maximum “credit” (which offsets taxes dollar for dollar and is better than a “deduction” which reduces taxable income) is 35 percent of the amount an employer pays towards employee health insurance.
Who’s eligible?
To qualify, small employers must:
Have fewer than the equivalent of 25 full-time workers
Pay average annual wages below $50,000
Cover at least 50% of the cost of health care coverage for their workers
Because of the high wages paid in most industries in NY/NJ/CT Tri State, few small employers that provide coverage pay such a low average wage. Note, however, that the calculation of average wages and number of employees excludes the wages of an owner and his or her family members.
medicalsolutionscorp.com help clients gather the appropriate information and do a preliminary estimate of the credit amount. This information will help you and your accountant determine whether applying for the credit makes financial sense. Find out what the new tax credit could mean for your coverage. Call us at 855-667-4621.
4. Determine affordability
Beginning Jan. 1, 2014, an employer with 50 or more employees must pay a tax penalty if they either: a) Do not provide health insurance with minimum benefits or 60 percent of healthcare expenses; b) Require employees to contribute more than 9.5 percent of an employee’s household income for the health insurance and those employees obtain a government subsidy for coverage.
Companies will be required to pay $3,000 per employee without affordable coverage. (Note: there are a number of caveats that might affect the actual penalty paid, so consult your tax advisor.)
It is crucial to Understand the difference between FT and Full Time Equivalent. To determine the FTE (Full Time Equivalent) you must count FT and PT employees. Full Time Employees are those working 30 hours+/week.* The number of full-time employees excludes those full-time seasonal employees who work for less than 120 days during the year.4 The hours worked by part-time employees (i.e., those working less than 30 hours per week) are included in the calculation of a large employer, on a monthly basis, by taking their total number of monthly hours worked divided by 120.
For example, a firm has 35 full-time employees (30+ hours). In addition, the firm has 20 part time employees who all work 24 hours per week (96 hours per month). These part-time employees’ hours would be treated as equivalent to 16 full-time employees, based on the following calculation:
20 employees x 96 hours / 120 = 1920 / 120 = 16
Thus, in this example, the firm would be considered a “large employer,” based on a total full-time equivalent count of 51—that is, 35 full-time employees plus 16 full-time equivalents based on part-time hours.
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. [contact-form to=’info@medicalsolutionscorp.com’ subject=’Please contact us for immediate information on how to implement these initiatives for your group-specific needs Call (855) 667-4621.’][contact-field label=’Please contact us for immediate information on how to implememt these initiatives for your group-specific needs or Call (855) 667-4621.’ type=’text’/][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Website’ type=’url’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form]
This blog is not intended to represent legal advise and one should consult with a tax and/or legal expert.
* IRC 4980H(c)(4)
Disclaimer: This blog is not intended to represent legal advise and one should consult with a tax and/or legal expert.
Health Insurance Mandates 2012. The Councel for Affordable Health Insurance in VA released their annual “Health Insurance Mandates in the States” for 2012 last week. While NYS did not crack the top 5 they did come close at number 7 this year.
NYS Mandates were discussed in our posting Empire Leaving Small Groups Nov 2011. ” Today, we have so many State mandates that many of the mandates(overage dependents coverage, preventive care, pre-existing for kids) in PPACA didnt even affect NY since they were already in place. Mandates account for approx 17% of the costs of which Small Businesses pay more than fair share. Large corporations and Unions can self insure and avoid some mandates as they are governed by ERISA and not State. To the relief of of our struggling clients on subsidized Healthy NYthe State doesn’t play by their own rules and instead opts out of its very own mandates.”
According to the study CAHI Identifies 2,271 State Health Insurance Mandates “The sheer number of state mandates will make it difficult for states to deliver on one of the key promises repeatedly made by supporters of Obamacare: it would provide all Americans with affordable health coverage. The essential health benefit plan design was supposed to give states the flexibility to craft benefit packages which would be suitable and affordable for their unique populations. But HHS shackled the states to the full load of mandated benefits on their books, and the prices of next year’s offerings in the health insurance exchanges are going to bear witness to the free-wheeling mandate craze of the last twenty years. Recent studies have predicted double digit increases in health insurance premiums next year — the mandates are coming home to roost,” said Roy Ramthun, CAHI’s Director of Federal Affairs.”
The United Hospital Fun estimates that approximately 2.2 million New Yorkers lacked insurance coverage in 2009, (Health Insurance Coverage in New York 2009.)
The collective cost of paying for New York’s health insurance mandates equates to 12.2% of overall premium cost. Based on 2008 premiums, this translates into $1,538 expense per year for an average family policy and $566 per year for a single person policy. (Employer Alliance, NYS Mandated Health Insurance Benefits, 2003)
Higher health care costs increase the number of uninsured. In New York, it is estimated that for every 1% increase in premiums, 30,000 New Yorkers lose health insurance. (Barents Group, 1999)
Mandates have a cumulative impact on premium costs. It is estimated that the cost of the 12 most common mandates can increase the cost of health insurance by as much as 30%. (Milliman and Robertson 1996)
Rising health care costs have the biggest impact on the small business sector. For every 1% increase in premium costs, small business sponsorship of health insurance drops by 2.6%. (Morrisey et al., 1994)
The percentage of US small business workers receiving insurance through their employer declined 5% between 1996 and 1998 – from 52% in 1996 to 47% in 1998. (KPMG Peat Marwick, 1999)
Nearly one of every four uninsured Americans has no health care coverage as the direct result of state mandates. (Jensen, Morrisey, 1999)
Health insurance premiums for New York’s working families skyrocketed between 2000 & 2007
increasing by 80.7 percent. (Families versus Paychecks, Families USA 2008)
Since 1999, family premiums for employer-sponsored health coverage have increased by 131 percent, placing increasing cost burdens on employers and workers. (Kaiser Family Foundation and Health Research and Educational Trust. Employer Health Benefits 2009 Annual Survey. September 2009).
the HIT is actually a hidden tax on small business. PPACA assesses a tax on all health insurance companies based on their “net premiums” written. The tax will raise $8 billion starting in 2014, $14.3 billion in 2018 and more in later years. This is [aid for by fully insured health plans which are comprised mostly by small businesses.
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Health Republic NY is Shutting Down
