Two Minute Drill

Wonder Why Our Healthcare Costs Are So High?

Bob Laszewski is an insurance health industry expert we regularly track to stay up to speed on the national healthcare picture. His typically even-handed analysis has been consistently the most accurate of any of the opinion leaders we follow.  Here’s how Laszewski summed up the primary reason for our country’s runaway healthcare costs during a recent interview broadcast on the national news program Full Measure in a segment entitled Zombiecare: 

The healthcare establishment has been getting unlimited dollars from government, from employers, from consumers. They built this incredible infrastructure now that’s very expensive. And the only way we’re going to make healthcare more affordable is to deal with all this infrastructure we’ve got and get it to an efficient place.

 When asked how we address this infrastructure problem, here’s the pragmatic Laszewski take:

“We’re going to have to do it over many years. In the private sector and the public sector, we’re going to have to put them on a diet. It really is the prices we charge. We’re going to have to, in real terms, ratchet those back so that hospitals and doctors understand there’s going to be less money in the years to come.”

During the interview Laszewski addressed several things related to the current status of health insurance and the Affordable Care Act. Among the items he addressed:

The Individual Mandate and Paying the Penalty

“The law technically says that you have to have health insurance. If you don’t have health insurance, you will pay a fine. But the Trump administration has told the Internal Revenue Service, who is in charge of collecting the fines, that when people file their tax returns, if they refuse to say whether they have health insurance or not, the IRS should not pursue them. You technically have to pay it. Your accountant’s probably going to tell you, you technically have to pay it, but it’s not being enforced.”

ObamaCare as Zombie Care(because a Zombie is the walking dead)

“Obamacare is still there, it’s still walking around. It’s still selling health insurance plans to people. But it has no chance in its present form of ever offering affordable and attractive health insurance. And more and more people are just exiting it and going uncovered because they can’t afford it.”

Our takeaway from all this? Be smart.  Stay incredibly vigilant.  Take full advantage of every tool we have at our disposal to do the best we can to help our clients control costs and navigate the turbulent healthcare waters.

There’s still no clear big picture path anywhere in sight.

To watch the entire interview or to read the full transcript, go here.

The Check’s in the Mail — MLR Premium Rebate Checks and What Do We Do with Them

Some BBG employer clients are reporting that they have received MLR rebate checks from their carrier.

What are MLR rebate checks and why do only some employers receive them?

Affordable Care Act rules stipulate that insurance carriers must spend a certain percentage of health insurance premiums on medical claims and other specified related activities. This is referred to as a Medical Loss Ratio (MLR).

The MLR ratio for small groups is 80/20, For large groups it’s 85/15.

If an insurance company spends less than the MLR amount designated by Obamacare then the insurance company must rebate the unspent portion back to the employer sponsoring the plan.

Wondering what to do if you are one of those employers receiving an MLR rebate check?

There are rules established by the Department of Labor governing distribution. Employers must use these as guide when allocating and distributing the rebate dollars. The rules can be found here http://dol.gov/ebsa/newsroom/tr11-04.html.

In a nutshell:

Employer groups are required to treat the rebate as a plan asset.  Uses may include, but are not limited to, reducing future premiums or premium increases, or rebating a portion back to the subscribers.  The rebate is required to be used for the benefit of the subscribers in one of the following ways:

• To reduce subscribers’ portion of the annual premium for the subsequent policy year for all subscribers covered under any group health policy offered by the plan;
• To reduce subscribers’ portion of the annual premium for the subsequent policy year for only those
subscribers covered by the group health policy on which the rebate was based; or
• To provide a cash refund only to the subscribers who were covered by the group health policy on which the rebate is based.

A more thorough review of what to do with MLR Rebate Checks can be found by clicking here How Employers Should Handle MLR Rebates

Clients can contact BBG for assistance.

Example Rebate Check

This and That on FMLA: Non-Traditional Families and the FMLA

Employers with over 50 employees must pay attention to FMLA. With some employers, we are finding that concerns about abuse are growing.

While FMLA is designed to help employees that are in a tough spot, the prepared employer can head off abuses by having good processes in place and have access to the right information. In some cases, we have found the employees abusing FMLA are actually the experts!

Here is some FMLA info you may find useful – FMLA Rights for Nontraditional Families.

If you need assistance on FMLA resources, we can help.

IRS Announces HSA/HDHP Limits for 2018

 

 

Perhaps this is early but you can file it.

IRS Announces HSA-HDHP Limits for 2018

 

 

Who knows where the federal healthcare regulations are going, but if the Republicans (and the President) pass anything it will likely affect the group market by:

  • Removing the cost share regulations
  • Reduce the reporting requirements
  • Allow carriers to create more types of plans

We will report on those types of things when/if the Senate releases their proposed version of a new healthcare bill .

Medicare Eligible Employees/Dependents…. Don’t Assume You Can Waive Part B

Medicare can be tricky when it is coordinating with Group Health Coverage.

This is especially true when Medicare enrollees WAIVE Part B coverage, thinking that they don’t need it because they have Group Health Coverage.

Our message to those people is BE CAREFUL. You must be certain that if you waive Part B coverage that you are not opening yourself up to claims exposure.

Never assume that a Group Health Plan will step in and cover claims.

Since CMS clearly states that the INDIVIDUAL is responsible to know (not the employer nor the insurance company) the Medicare coordination with other coverage, it is critical to be careful and do the research.

Here are some examples where things get tricky:

  • When an employer has fewer than 20 employees, Medicare is primary. With some insurance companies they do not even pay claims if Medicare does not approve. If one does not enroll in Part B, that means NOTHING is approved by Medicare. Translation: Costs that would have gone to Part B are not approved by Medicare and not approved by the insurance company. This is a big problem.
  • When an employer has fewer than 100 employees, Medicare that is DUE TO DISABILITY is primary. The same rules apply.
  • When someone is on COBRA and Medicare, Medicare is primary no matter how many employees the employer has. If the member on COBRA waives Part B, they face potential liability. People could easily assume that the rules would be the same as when they were active on the plan (vs COBRA), but that would be a mistake.

While we at BBG will help our clients get the right answer and try to fix things if someone has assumed the wrong thing, we urge everyone who is Medicare eligible to engage to find the right answers. We are not responsible for errors in Medicare enrollment, but we can be a resource for assistance.

No one should assume that waiving Medicare Part B coverage will be just fine. Getting the right answers and keeping the documentation is critical if you waive Part B.

Medicare 101

Now That ACA Remains in Place Maybe We Should Keep An Eye On This Recent HHS Letter to Governors.

“……We are seeking to empower states with new opportunities that will strengthen their health insurance markets.”

Thomas E. Price, M.D., The Secretary of Health and Human Services (HHS), A Letter To Governors, dated March 13, 2017

 

On March 13, 2017, the Department of Health and Human Services (HHS) sent a letter to state governors to highlight Section 1332 of the Affordable Care Act (ACA). Beginning in 2017, Section 1332 allows states to apply for a State Innovation Waiver from certain ACA requirements.

With the lawmakers firmly stuck in the healthcare mud, one wonders if some states might start to make health insurance changes on their own. Under a little known provision of the Affordable Care Act (Section 1332) called the State Innovation Waiver, states have the ability to make changes by applying for waivers from certain major provisions of the law beginning this year (2017).  These waivers are intended to allow states the flexibility to pursue innovative strategies for providing their residents with access to high quality, affordable health insurance, while retaining some of the consumer protections of the ACA.

Examples of things that may be waived include:

  • Establishment of qualified health plans (QHPs);
  • Consumer choices and insurance competition through the Exchanges;
  • Premium tax credits and cost-sharing reductions for plans offered within the Exchanges;
  • The employer shared responsibility rules; and
  • The individual mandate.

While this provision and Price’s recent letter on the subject seemingly flew under the radar, you have to wonder if we might start to see some states initiating their own changes to Obamacare. If this is going to happen, we’ll likely start hearing about it in the next few months.  Sometime this summer is when carriers submit rate increases or announce intentions to withdraw from the individual market all together.  Analysts are predicting both to happen.  It’s anticipated carriers will request huge rate increases — sticker shock on steroids — for individual plans on and off exchange.  And, more carriers are expected to be leaving the individual market.  Aetna and UnitedHealthcare are already out, and Bloomberg recently reported that Anthem (BlueCross and Blue Shield in 14 states) is leaning toward exiting in most if not all of its markets.

I doubt anyone really knows where all this is going, or where it will end up. Maybe some states will act, maybe not.

One thing that’s almost certain: Access to employer sponsored health plans will be more important than any time since Obamacare (ACA) became law.

Here’s a link to more info:  HHS Promotes ACA Section 1332 Waivers

It’s Official — Transitional Relief or “Keep Your Plan” for Small Groups Extended Through 2018

The Transitional Relief Provision has been extended as expected at least through December 31, 2018. We reported on it last week here. Small employers with non-ACA compliant or “grandmothered” plans will once again have the option to keep those plans in place until the end of 2018.  Carriers will be notifying policy holders about renewal options in the near future.  BBG clients please contact us anytime if you have any questions or need assistance.

Here is the official CMS release announcing the extension of the Transitional Relief/Keep Your Plan Provision.

MEDICARE PANIC SETTING IN AS EMPLOYEES APPROACH 65th BIRTHDAY??? LET’S CLEAR UP THE CONFUSION ABOUT INITIAL ENROLLMENT

Can’t tell you how many calls and emails we get from panic-stricken employees nearing that magic 65th birthday and Medicare eligibility.  It happens a lot.  A whole lot.

Some folks think if they don’t sign up three months before they turn 65 they’ll be in trouble. Others think the drop dead date to sign up is their birthday.  And, many, many people think if they don’t enroll in Medicare by those dates they either won’t be eligible at all, or they’ll be penalized and get socked with much higher premiums.

Here’s the scoop:

THE MEDICARE INITIAL ENROLLMENT PERIOD IS 7 MONTHS LONG.  IT INCLUDES YOUR BIRTHDAY MONTH, THE 3 MONTHS BEFORE AND THE 3 MONTHS AFTER.

Here are some basics, courtesy of Medicare Made Clear, that employees approaching their 65th birthday may want to know and save them from hitting the panic button:

1.)  You Have a Set Time to Enroll in Medicare

Your Medicare Initial Enrollment Period (IEP) is 7 months long. It includes:

  • The 3 months before the month you turn 65
  • The month you turn 65
  • The 3 months after the month you turn 65

Medicare Enrollment Date Calculator.

2.)  You Can Delay Medicare Part B

Most people get Part A (hospital insurance) premium-free because they or a spouse worked and paid taxes. Part B (medical insurance) has a monthly premium.

You can delay signing up for Part B if you have other health care coverage like employer-sponsored health coverage.  Having employer-sponsored health coverage gives you to the option to delay signing up for Part B, qualifies you for a Special Enrollment Period, and precludes you from getting hit with Late Enrollment Penalties if you elect to delay Part B.

3.)  There Are Two Ways to Get Medicare

Medicare gives you two Medicare Coverage Options:

  • Original Medicare (Parts A & B), the traditional way
  • Medicare Advantage (Part C), an alternative to Original Medicare

Original Medicare is administered by the federal government. Medicare Advantage plans are offered by private insurance companies approved by Medicare. They must provide all the same benefits as Original Medicare Parts A and B. Many plans include additional benefits, such as prescription drug coverage and more.

4.)  Medicare Doesn’t Cover Everything

Original Medicare doesn’t include coverage for prescription drugs. You may buy a standalone Prescription Drug Coverage (Part D) plan to get this coverage.

Some people also buy a Medicare Supplement Insurance (Medigap) plan to help with some costs not paid by Original Medicare.

Generally, you don’t need additional coverage if you choose a Medicare Advantage plan.

 

7 Months. That should make some breathe easier.

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