Two Minute Drill

Hobby Lobby Politics – will the “brand” win or lose?

Have you been keeping up with the controversial Hobby Lobby case in the Supreme Court of Sebelius v. Hobby Lobby? The company has taken a very public position against certain provisions of The Affordable Care Act, specifically as it relates to covering contraception for women. They cover male contraception in the form of vasectomy, but take issue with providing contraception for women. David Green, founder of the very successful family-owned retail chain, wants the court to expand the Religious Freedom Restoration Act of 1993 so that businesses like his can opt out of certain provisions of Obamacare on religious grounds.

Whatever your political or religious views on contraception, consider what politics and religious views can have on your company’s brand. Mary Buffett, writer for The Huffington Post does an excellent job of laying out the facts and the potential toll this case may have on the successful brand name Hobby Lobby has made for itself over the past several years. Why Hobby Lobby Loses Even if it Wins at the Supreme Court.

Open Enrollment is Over. So Now What?

Media outlets have been buzzing since Tuesday about the passing deadline of open enrollment and what the next phase of implementing the new health care system will bring. There is a lot of “noise” about whether the 7.1 million number of new enrollees reported by the White House is an inflated number, mostly because many believe there is a large percentage of enrollees who have yet to pay for their insurance. Also, there is a great deal of speculation that insurance companies will raise their rates next year along with reports that indicate the implementation of the new health care system will weigh heavy on large employers, causing their expenses to rise [additionally] by nearly 6% [over and above what they would already spend] over the next ten years.

Kaiser Health News offers a round up of commentary from several sources in
Open Enrollment is Over — What’s Ahead for the Health Law Now?

Meanwhile, Marketwatch by Wall Street Journal reports ADP just released it’s 2014 ADP Annual Health Benefits Report. This is their second annual report, based on actual, aggregated health benefits data from U.S.-based companies with 1,000 or more employees. According to a press release by ADP, “…the report provides employers with benchmarks to better gauge the effectiveness of their current strategies and to help plan for changes on the horizon.”

The data was collected by a survey of employees (anonymous) from a group of employers spanning from 2010 to 2014. Key findings of the report include:

  • Premium increases are leveling off
  • Employers are contributing slightly less
  • Overall participation is steady, but varies with age
  • Costs vary by state

You can download a free copy of the ADP report here.

Individual Mandate and the March 31 Deadline

Info for Part-time or Other Employees Currently Without Health Insurance

There’s lots of noise out there related to Obamacare’s individual mandate and the rapidly approaching March 31 open enrollment deadline. Here’s summary information for those part-time or other employees that currently do not have any health insurance:

  • The deadline to sign up for individual health insurance is March 31 – less than a week away. This marks the end of the open enrollment period.  After March 31, those without coverage will not be able to purchase an individual health plan (on or off the exchange) until the next open enrollment period beginning in November — unless they have a qualifying event such as marriage, birth of a child, loss of employer sponsored health coverage, move out of state, have a significant income change, etc.  If that’s the case, then they can enroll during a special enrollment period.
  • Extensions may be available based on information released just yesterday.  According to latest reports if someone started to apply for coverage through the HealthCare.gov website but could not finish by March 31 or they experienced other glitches in trying to sign up, they will have until about the middle of April to seek an extension.  Individuals can qualify for an extension by checking a blue box on the HealthCare.gov website indicating that they’ve tried to enroll before the deadline. The following are links to recent news stories that reported the extension that was officially announced yesterday:

http://www.reuters.com/article/2014/03/26/usa-healthcare-enrollment-idUSL1N0MN04Y20140326

http://www.thefiscaltimes.com/Articles/2014/03/25/White-House-Extends-Enrollment-Time-Obamacare

  • If someone goes without health coverage after March 31, they may be subject to health reform law’s tax penalty come tax time next April for not having coverage.  The penalty this year is $95 or up to 1% of income, whichever is greater.
  • Some financial assistance may be available.  Individuals and families with incomes between 100 percent and 400 percent of the poverty level (about $11,490 to $45,960 for individuals) may qualify of premium tax credits (also referred to as premium subsidies).  Tax credits are based on a percentage of household income and are applied on a sliding scale for those that qualify.

Individuals who want to obtain health care insurance before the March 31 deadline should visit Healthare.gov to begin their application process.

Your employees. Are they medicaid eligible?

There are many opinions about Medicaid expansion and my post is opinion free.

Employers across all sectors of the economy are likely to have Medicaid eligible employees/dependents in their population. Many do not know they are Medicaid eligible and some may be on the employer plan.

What does this mean?

Like anything, researching it may be the best first step. Simply finding out if this exists in an employer population may make sense.

Then what?

Some employees will be delighted to know they qualify, some may be upset. Some employers will take advantage of Medicaid expansion to reduce the rolls on the employer-sponsored plan while others may hate the idea and avoid it all together.

We respect all opinions but we also are developing a tool to determine eligibility and — if the employer would like — assist in the enrollment process. We will be launching it next month.

We want to help any employer that wants to know who in their population is eligible for Medicaid and then listen to find out if there is anything the employer would like to do about it.

What is Medicaid?

  • Medicaid is funded largely by the federal government but run by the states
  • Unlike Medicare, Medicaid eligibility is based on income.  The Affordable Care Act expanded medicaid to reach well beyond prior eligibility pools (it will now 133% of poverty level).
  • Medicaid operates as nearly 100% coverage for all medical expenses.
  • Medicaid networks are more restrictive than Medicare or commercial policy networks
Medicaid used to be accessible only to children and low (really low) income parents with dependent children. Single people did not qualify. Parents with eligible children did not qualify often. Eligibility now is much much wider.
In the next few weeks we will be rolling out a tool to assist any employer/employee evaluate Medicaid eligibility.

Insurance policies are like pay-day lending.

Some insurance policies remind me of pay-day lending. People are strapped for cash and prescriptions are expensive. So, we buy insurance policies with “baked-in” prescription co-pay plans. Is it efficient? NO. Is it expensive? YES!

It is like pay day lending. You can’t afford the short-term cash flow challenge (the copay solves that) so you end up buying a much more expensive policy than what you really need.

Employers often do the same thing because they don’t want to impose on their workforce the worry or challenge of paying the full cost for their prescriptions at the point of sale.

This is a real problem.  So we developed a solution.

Several years ago we partnered with our clients and a group of pharmacies. This partnership allows employees to pay ONLY their share of the costs at the time of purchase. The employer pays the balance using a program we developed called SharedFunding. SharedFunding has worked great for our clients.  Why?

  1. The employer saves a substantial amount of money by purchasing a high deductible plan where even prescriptions are subject to the high deductible. They then promise to cover a set portion of the prescription for the employee (a copay, for example).
  2. The employee has the option to fill a prescription at one of our partner pharmacies and only pay their share when they pick up their script.

I was naive at the beginning, but then I learned:

  1. People tend to be terrified when the hear they have to pay up front for prescriptions…. even if they are going to get reimbursed.
  2. Some people are in a tight financial situation and cannot deal with any float — it is embarrassing to them and many end up NOT getting the prescriptions they need.
  3. Employers want to save money and offer smart strategies, but they don’t want to inject anxiety into their workforce.
  4. The total financial equation saves everyone a lot of money and no one gets hurt.

We can’t help you much with payday lending, but we CAN help you with the equivalent scenario baked into some health plans.

Letter to Jimmy Fallon: Abbott & Costello Meet Healthcare Reform

Dear Jimmy:

First, congrats on hosting the Tonight Show gig. You’ve made us laugh and we’ve enjoyed your work for a number of years now. Way to go!

Undoubtedly, recent events related to healthcare reform and Obamacare have provided you and your late-night talk show colleagues with an endless supply of comedy material. Nevertheless, in case you needed more material, we thought we’d pass along a prime example of a day in the life of today’s health insurance and business world.

Here’s an all too common, truth-is-stranger-than-fiction scenario that’s playing out with insurance companies and many small businesses across the country. It’s a direct result of the mass confusion surrounding the roll out of the Affordable Care Act. It centers on the scenario that many small businesses faced at the end of 2013 — “You Can Keep Your Plan. Wait! No, You Can’t Keep Your Plan. OK. Now, Yes. You Can Keep Your Plan Again Even Though the Clock is About to Strike Midnight.” 

It reminds me of the the classic Abbott and Costello “Who’s on First” comedy skit. It would be really funny to those of us in the insurance business, except that it is generating real frustration and proving to be a major productivity drain on small businesses and their owners. Unfortunately, it’ s playing out like this all across the country.

Our Client Services Manager, one of the best and brightest around, was able to help an exasperated and frustrated client, a construction company executive. Despite the fact that insurance companies often earn the scorn of their policyholders, they clearly are not to blame this time. It’s the unorganized “Keystone Cops” style roll out of the Affordable Care Act that gets the blame here.

Okay, here we go…a real, honest-to-goodness scenario that would most certainly make Abbot and Costello proud:

Dear Joe (not his real name):

Attached is the worksheet – sorry about the roughness of it, but I am no rocket scientist. I think if this continues, we are going to need rocket scientists to do the figuring! Anyway, the worksheet shows more or less how everything was figured on the previous invoices…I tried the best I could to make some sense out of it. I was able to get copies of your 2013 invoices, so I have also attached them for your convenience.

(Jimmy, this is where it really gets good)

Here goes my explanation:

Your invoices for November 2013 and the prior invoices reflected the premiums for medical and dental effective with your renewal date and the renewal rates.

– Then, in December 2013, the invoice reflected the new medical rates effective 12/01/13, plus the OLD dental rates.

– Then, in January 2014, the invoice reflected the new medical rates, plus the ACA taxes put into effect 1/01/14.

– Then, in February, the invoice reflected the same rates and taxes as January. At that point your insurance carrier thought they had it right.

– BUT, after they sent the February invoice, they realized that they had been billing you for the OLD dental rates.

– So they sent a February “revised” invoice that reflected the premium adjustment from December 2013 and January 2014, plus the revised rates for February. Those differences are shown in the retro fee adjustment section of the revised February 2014 invoice. The current charges on the revised February 2014 reflect the difference between the old premiums and the new ones effective 12/01/13 – PLUS the adjustment on the taxes.*

*On this revised February 2014 invoice, the premium adjustment for one employee’s dental coverage does not come out exactly right, but it seems to even out. It looks like they under charged (by a few dollars) the retro fee adjustment, but they seemed to have overcharged (again, by a few dollars) on the taxes for January. I could not get the exact answer for that, (maybe they need to hire a rocket scientist!). But, it appears to even out in the end.

Finally, the March 2014 Invoice is supposedly correct going forward reflecting the correct premiums for both medical and dental coverage and with the correct amount of ACA taxes figured in (fingers crossed!).

There is a caveat there, though, per your carrier: The fees/taxes percentage/calculated does not change.The only issue is if the group dynamics change, then the costs will be different. 

If this is not clear, I am happy to go over it with you. Feel free to call me.

Thanks for your patience!

Mary (not her real name)

Well, there you have it Jimmy. We hope your comedy writers can do something with this. We are all still scratching our heads…

Another Delay Leads to More Certainty, More Uncertainty

In the coming days, HHS will announce another change in the health care roll out. This time, they are going to allow carriers to keep and issue policies that do not meet ACA guidelines. This adds to the recent pushback on the employer mandate to 50-100 employee companies AND the lessening of enrollment requirements on larger employers.

The Certainty. 

Groups and individuals that embraced the “early renewals” last December will now have the choice to keep those plans for another year. This will make the late summer and early fall less noisy as many will likely sign back on for another year.

The Uncertainty.

Will new products emerge?  If carriers are allowed to issue policies that do not conform with ACA, will some move to issue less expensive policies or even offer lower rates to underwritten non-ACA plans? Employers and Individuals may buy these plans if they are less costly, even if they may be available only for a year.

Will this push back the “individual mandate?” Since the mandate requires one to have a “compliant plan,” how will the IRS enforce this when HHS allows non-compliant plans to be offered?

ACA’s goal, in large part, is to regulate the market. While this and other adjustments to ACA may make the short term more quiet, it raises questions about how they will enforce the law down the road. At some point HHS is going to have to decide what they are going to stand behind (and enforce) and what they are going to abandon.

As the law gets tweeked, it increases the chances that companies will do whatever makes sense to them and stop focusing on what they need to do in order to follow the law. If employers conclude that the law is a moving target, they may just create their own strategy, their own certainty.

Health Plan Consumers Sound Off on Narrow Networks: Docs Drive the Bus

More on the topic of narrow networks…

In a recent Kaiser Family Foundation survey of health plan buyers,  a little over half (51 percent) of those responding pointed toward buying a plan that cost more but presented a greater selection of providers vs. buying a less expensive plan with fewer participating doctors and hospitals (37 percent). However, the scales were tipped a little in the other direction for those previously without health coverage who were buying insurance for the first time as well as some would-be purchasers who were already enrolled in individual plans. Interestingly, the survey also reported that when push came to shove, many of those same folks (more than 1/3) who leaned in the narrow network / lower cost direction, when confronted with the possibility of losing access to their regular or preferred doctor and/or hospital, changed their tune preferring greater choice and access despite the higher cost.

A 2013 Deloitte Health Care Consumer Survey found that the majority of consumers would not consider a network that did not include their primary care doc. 12 percent of respondents were willing to swap physician relationship with price. More were willing to accept fewer in-network hospitals to lower their costs as long as their preferred docs were in the network.

For more on this topic, read Kaiser Health Tracking Poll: February 2014 and also Deloitte Survey of U.S. Health Care Consumers

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