Moderate “average” rate increases for 2015 exchange plans over 2014 exchange plans have been widely reported in the press and elsewhere. Well here’s another “not so fast my friend!”
Many folks who purchased ACA plans in 2014 on the exchange may be surprised when they get their January invoices.
Here’s how the wolf disguised as sheep reference plays out.
The “average rate increases” (increases spread across all plans offered without regard to market share) that some experts are proclaiming and the media is reporting are masking a more practical barometer of how policyholders are impacted.
For a little Halloween fun, I’ve compiled a few articles that have to do with healthcare tricks and treats. All related to Obamacare, or the Affordable Healthcare Act, of course…
Trick: Gov. Kasich’s four Obamacare tricks by Washington Examiner
Treat: Ebola: Obamacare’s ultimate pre-existing condition by The Fiscal Times
Trick: Government close to closing loophole that lets employers offer substandard insurance by The Washington Post
I wonder how much time and money employers have spent planning on the various dimensions of the Affordable Care Act (ACA) that died on the vine, have been changed, pushed back or remain so cloudy that no one really knows the correct answers. Do you think it’s enough to buy Las Vegas?
I have seen so many changes that the only thing I really know is that the guy who tells you how it is all going to look and has the blueprint on EXACTLY what you should do right now is the guy I will bet against – in Las Vegas or elsewhere.
So what should you do now about how to plan for the future and ensure you are compliant? That’s a very difficult question to answer. Here is what I think you should do:
- Don’t cave to fear mongers who say that prisons will be built all over the country to house ACA non-compliers. Compliance is important but so is having the courage to do the right thing for your employees.
- Remain aggressive on finding the best ways to take care of your people in the most cost-effective ways. If something is too edgy or pushes the edge of compliance, dump it. The ACA is a really big law and there is some wiggle room to think creatively.
- Any part of the law that is 12 months out may change. Avoid spending time on it now. If a brokerage house is hosting a seminar on a five-year plan, attend only if they are serving a fantastic free lunch.
- Keep asking good questions. The ACA rests on the understanding that American employers take good care of their people. Employers are going to be the ones to drive the innovation and provide the clear thinking on this law. If employers cave on providing health insurance solutions (even it is just guidance for their people) then the ACA is doomed. You should demand that everyone work hard thinking through the ACA and finding the best options possible.
- We have been deeply immersed in work with insurance advisory boards (of which BBG is a member), TPA experts at ODI and the federal regulators. It is believed among some that there will be an uptick in DOL audits. To that end, we at BBG are compiling all of the items an employer will need to provide. It is not a short list but we know what they will ask for and can step in to help. Our goal is to let you run your business and let us help with the things that you don’t do everyday (like provide cert to the DOL). Who knows if the DOL and other agencies will audit more groups, but if they do we will be ready to help.
Bonus (6). Don’t worry about this stuff in August. Washington is on vacation, so I don’t think they are!
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…