Two Minute Drill

THE LAW OF DISPROPORTIONATE COSTS: SMALL NUMBER OF EMPLOYEES ACCOUNT FOR LION’S SHARE OF GROUP HEALTH PLAN MEDICAL COSTS

There’s plenty of cost related analytics available to support the disproportionate cost premise that medical expenses are highly concentrated among a very small proportion of enrolled employees.  These highlights, for example, from a Agency for Healthcare Research and Policy (AHRQ) are pretty telling:

  • 1 % of the population accounts for 21.4 % of total health care expenditures nationally
  • 5 % of the population account for 49.9 % of total expenditures
  • 10 % of accounts for 65.6 % of all medical costs

EMPLOYER REIMBURSEMENT OF INDIVIDUAL HEALTHPLAN PREMIUMS REMAINS A BANNED PRACTICE UNDER ACA

While this was more of a hot topic when the full monty of healthcare reform was implemented back in 2014, some employers perhaps unaware of the turmoil in the individual marketplace still ask about reimbursing employees for individual health insurance policies.

The IRS, the Department of Labor and Health and Human Services have all released several directives and guidelines that pretty clearly prohibit the practice. The most recent was issued in December 2015 (n-15-17).

Definition of Predicament: People Who Don’t Have Access to Employer Coverage, Aren’t Medicare Eligible, and Don’t Qualify for Subsidies

Yes, this is a bit anecdotal. Nevertheless, I think it’s  worth reporting and some may find it interesting.

First, recently our team managed the annual open enrollment process for the group health plan of one of our employer clients. After a quick but thoughtful evaluation of options, one employee who was previously covered by an individual market policy opted to enroll on the employer’s group plan (family coverage) and terminate coverage under the individual market plan. Both the individual plan and the group plan were Qualified Health Plans (QHP) under ACA. The plans had similar benefits. And, they were underwritten by the same large insurance carrier.

Savings?

$600 a month in gross premium. That’s quite a spread.  Add in the employer contribution and the savings to the employee were even greater.

The HHS Move to Curtail the Availability of Short Term Health Coverage Will Hurt Consumers In Need of an Affordable Bridge To Other Coverage……

………Like Medicare or Other Employer-Sponsored Coverage.

Yesterday the Obama Administration and HHS announced they were significantly curtailing the availability and use of short-term health insurance.

Their reasons? Not exactly sure.

Maybe it’s due to the myriad of current issues in the individual market – rising rates, carriers pulling out, and actuarially not enough covered lives (especially healthy people) – and the need to get more healthy people to buy individual policies. Take away options and hopefully it’ll drive more people to buy on the exchange.

Maybe, it’s a shot at UnitedHealthcare (UHC is one of the main providers of short –term or temporary coverage). Retribution, possibly, for UHC pulling out of the exchanges?

Ohio’s Health Co-op (In-Health) Shut Down

In-Health, the Ohio health insurance Co-op established as a part of ACA, is shutting down.  Here’s an explanation of the co-op program. HCR Consumer Operated and Orientated Plan CO OP Program.

Although no BBG client is insured by In-Health, we wanted to let you know in case it hits your radar with employees that get their insurance from a source other than your employer sponsored plan.

In-Health insured approximately 23,000 Ohioans.
We will help anyone who needs it.

In the meantime,

Things to know:
– Claims are to be paid (according to the Ohio Department of Insurance)
– Members will be informed of how the run-down will work
– In the near future the members will need to shop for new insurance and will be provided an special open enrollment period

We hope this does not affect any of your people, but if it does feel free to let us know. We will help.

You can read more about the implications of InHealth’s shut down here.

“Dear Employer” Letter from Medicare (Part 2) – Compliance Overview

The CMS Data Match program determines whether an employer-sponsored group health plan has the responsibility for paying health care claims before Medicare. As discussed in last week’s post, with the number of workers age 65 and over steadily increasing, many employers are receiving letters from CMS asking for information about their employer-sponsored health coverage.  Employers are required to respond or be subject to penalties (fines).  This Compliance Overview summarizes these requests for information and highlights the corresponding steps for responding………………Medicare Secondary Payer IRS SSA CMS Data Match.

Medicare Secondary Payer IRS SSA CMS Data Match

 

Letters From CMS (Medicare) to Employers Regarding Group Health Plan Reporting Are Causing Some Confusion

Many employers are receiving letters from CMS (Medicare) requesting information and it’s causing some confusion. The actual title of the letter reads “Requirement to Submit the Group Health Plan Report for the IRS/SSA/CMS Data Project”.

Here’s an overview that may help clarify for you.

This letter from CMS is separate and apart from the new ACA employer reporting requirements that recently went into effect (employers with 50+ employees). Employers are required to provide the requested information but it’s pretty basic and, other than complying with the request, not anything to really be concerned about.

In Case You Missed It – HHS Has Again Extended the Small Group “Keep Your Plan” Provision of the Affordable Care Act

We know you get updated on a lot of healthcare issues.  Just in case you missed our previous announcement this is worth repeating for those employers in the under 50 segment who have kept pre-ACA plans in place.

For our under 50 employee groups, we were ramping up to help construct ways to continue the option of keeping your current plan (unless something better becomes available).  In the past, we have had to shift renewal dates or juggle “grandfathering” vs. “grandmothering” your plan.

This year we will not have to do any such juggling.

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