Arthur Tacchino, J.D. - Assistant Professor of Health Insurance

Monday, May 13, 2013

New Out of Pocket Expense Limits Announced

The Internal Revenue Service recently provided the new out of pocket maximum expense limits that will apply to HSA compatible high deductible health plans in 2014.  These limits are extremely important in 2014 as they will apply to all group health plans.  The new limits are as follows: $6,350 for self-only coverage and $12,700 for all other coverage. 

Employer Notice of Exchanges

On May 8, 2013, the Department of Labor issued temporary guidance and model notices that employers may use to notify employees the exchanges. The Affordable Care Act requires employers, that are  subject to the Fair Labor Standards Act, to provide a written notice to new hires and current employees informing them about the exchanges and some of the consequences of purchasing coverage through an exchange instead of enrolling in available employer-sponsored coverage. The notice requirement was originally to go into effect for employers beginning on March 1, 2013, but was delayed. The temporary guidance confirms that notices must be automatically provided to current employees by October 1, 2013, and to new employees hired after October 1, 2013, within 14 days of their start date. All employees must receive a notice regardless of their full- or part-time status and regardless of whether they are enrolled in the employer’s plan. Separate notices for dependents or other individuals who are or may become eligible for coverage are not required. The DOL has provided two model notices to assist employers in providing the required information.  You can click the links below to view the model notices:

Notice for Employers with Plans

Notice for Employer not offering a Plan

Monday, May 6, 2013

Below are the two proposed pathways in which an agent or broker will help enroll qualified individuals and get paid by the issuer. 
Issuer Pathway: Through the Carrier

Market Pathway: Through the Exchange

Role of Agents and Brokers in Exchanges becoming Clearer

On May 1st, the Center for Consumer Information and Insurance Oversight released a document outlining the role that agents and brokers will play within Federally-facilitated and State-Partnership exchanges beginning in October of 2013.  Among other things there will be an online registration process administered by CMS that will begin in the summer of 2013, prior to open enrollment. In completing the registration process, the agent or broker will:

(1) Confirm his or her identity by answering a number of simple questions online.

(2) Complete a Marketplace-specific online training course.
(3) Agree to comply with federal and state laws, rules, standards and policies, including those related to privacy and security policies, as a condition of working with consumers in the Marketplace.

Once an agent or broker has completed these three steps, he or she will receive an active Federally-facilitated Marketplace user ID. This user ID is the agent or broker’s unique identifier in the Marketplace, and it, along with the agent’s or broker’s national producer number (NPN), will be essential for the agent or broker to receive compensation from an issuer.
The agent/broker will use this ID number identify themselves for payment upon enrolling a qualified individual.  Agents and brokers will have two enrollment paths.  One path will be through the exchange website, and the other path will be the issuer's website.  Either route that is used to obtain the  enrollment will ultimately be communicated back to the exchange itself, and they will communicate to the proper issuer that owes compensation to the agent or broker. 
More information can be found in the document by clicking the link below:

Wednesday, May 1, 2013

Exchange Application Shortened

In response to criticism over the complicated initial proposed application for exchange coverage, the Obama administration shortened the application form that would be filled out when an individual or family is applying for coverage through the exchange.  The goal of the administration is to make the application process as easy and streamlined as possible. 

Shortened Application

Tuesday, April 23, 2013

Is the Individual Mandate Motivation to Purchase Healthcare?

A survey done by HealthPocket showed that two thirds of people surveyed said that the penalty associated with the Individual Mandate of healthcare reform will not motivate them to purchase coverage.  Only 8% of the people surveyed said that it would motivate them.  This is very interesting as it relates to adverse selection, which is one of the biggest issues that exchanges face.  If exchanges cannot drive enough people in the individual and small group market, the risk that carriers in these markets may be too great, and they may need to dramatically increase premiums to cover this risk.  Adverse selection could spell doom for the exchanges. 

Wednesday, April 17, 2013

ACA Survey Results

A recent study by the International Foundation of Employee Benefit Plans shows that 70% of employers that were surveyed would continue to offer coverage to their employees.  Other interesting pieces of the survey were as follows:
-Most organizations have moved beyond wait-and-see mode (90%). More than half of organizations are beginning to develop tactics to deal with the implications of reform.
-Most organizations think their understanding of ACA is good but not quite excellent—they still need to do more reviewing.

-Employers are increasing their emphasis on wellness initiatives and incentives due to the impact of the ACA.

-A considerable portion of employers are increasing or considering increasing emphasis on high-deductible health plans (HDHPs), particularly with health savings accounts (HSAs) attached.

-About 10% of plans have adjusted their funding approach—typically, this involves the addition of stop-loss coverage.

-Most responding organizations report their plans meet the recently proposed value and affordability requirements.

-Only about one-quarter of organizations remain grandfathered and, of those, less than half expect to keep their grandfathered status beyond the next two years.

-Most ACA communication to participants occurs during the annual enrollment period. About one in five organizations have noticed an increase in contacts made to their HR/benefits staff from participants regarding ACA.

-Approximately 17% of organizations have already started to redesign their plans to avoid triggering the 2018 excise tax.

-Few organizations are changing their workforce hiring or reduction strategies as a result of ACA, but 16% of respondents have adjusted or plan to adjust hours so fewer employees qualify as full-time.