On Saturday, September 6, 2013 I spent all day in a training seminar in order to be able to interface successfully with the new Colorado computer software program for the Affordable Care Act. Prior to this I had completed a 10 hour on-line course in preparation for the in-class portion of the training. Our access to the Marketplace, formally known as the Exchange, is scheduled to begin on October 1, 2013. The Marketplace is where individuals, with or without the aid of a broker or guide, can go to find out if they are eligible for federal subsidies for their health insurance premiums, as well as apply for the new ACA qualified plans.
All the on-line courses, as well as the class material was designed for the broker in training to have access to an on-line practice Marketplace in order to fully familiarize ourselves with the program before the kickoff in three weeks. However, the practice programs were not working and are not scheduled to be working before the start of the real thing. I have to give the instructor high marks in attitude and for attempting to familiarize us with how each of the program pages will supposedly work. But, without real practice, we mostly learned the theory of how it is supposed to perform, but no skill in navigating the system.
So, my guess is now I will spend the first week of October stumbling through the Marketplace in an attempt to figure out how it all works.
Do yourself a favor, if you want to work with me to find a new plan under the Affordable Care Act, don’t call me until late October.
On August 27, the Internal Revenue Service (IRS) issued a final rule for the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA).
As a reminder, the individual mandate requires most individuals to have minimum essential coverage in 2014 or pay a penalty. The penalty is called a shared responsibility payment. Some individuals may qualify for an exemption from the mandate so they will not be required to have coverage or pay a penalty. An individual seeking an exemption may do so in advance through an application submitted to the Exchange/Marketplace or after the fact with the IRS through the tax filing process. An applicant can apply for multiple exemptions simultaneously.
The final rule, which is largely consistent with the proposed regulations, confirms the following:
1. What qualifies as minimum essential coverage
2. What wasn’t addressed in regard to minimum essential coverage
3. Who is exempt from paying the penalty
4. How penalties will be determined and paid
1. What Qualifies as Minimum Essential Coverage
An individual is considered to have minimum essential coverage for any month in which he or she is enrolled in one of the following types of coverage for at least one day. Changes from the proposed rule are noted in italics.
• An employer-sponsored group health plan offered in a state, which is defined as the 50 states plus the District of Columbia. This includes plans offered by, or on behalf of, an employer to an employee, e.g. multiemployer plans, single employer collectively bargained plans, plans sponsored by third parties such as professional employer organizations, temporary staffing agency, etc.
• An individual health insurance policy offered in the individual market in a state or through an Exchange/Marketplace in a territory.
• A government plan such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE (a U.S. Department of Defense Military Health System) or veterans coverage
• Insured student health coverage
• Self-insured student health coverage*
• Medicare Advantage plan
• State high risk pool coverage*
• Coverage for non-U.S. citizens provided by another country**
• Refugee medical assistance provided by the Administration for Children and Families
• Coverage for AmeriCorp volunteers**
*Designated as minimum essential coverage for plan/policy years beginning on or before December 31, 2014. For coverage beginning after December 31, 2014, sponsors of high risk pool or self-funded student health coverage may apply to be recognized as providing minimum essential coverage.
**Coverage provided by another country and coverage for AmeriCorps volunteers are no longer automatically deemed minimum essential coverage. However, individuals may apply to have their coverage recognized as minimum essential coverage.
2. What Wasn’t Addressed in Regard to Minimum Essential Coverage
The final rule does not specifically address arrangements in which an employer provides subsidies or funds a pre-tax arrangement (e.g., a stand-alone Health Reimbursement Account) for employees to purchase a plan in the individual market. The final rule also doesn’t address wellness incentives. These issues will be addressed in future guidance.
3. Who is Exempt from Paying the Penalty
The final rule confirmed the broad exemption categories, including a few changes in italics.
• Individuals who cannot afford coverage
• Taxpayers with income below the tax filing threshold. A taxpayer is not required to file a federal income tax return solely to claim the exemption, and may apply for exemption via the Exchange/Marketplace.
• Individuals who qualify for a hardship exemption
• Individuals who have a gap in minimum essential coverage of less than three consecutive months in a calendar year, with the continuous period beginning no earlier than January 1, 2014
• Members of religious groups that object to coverage on religious principles
• Members of health care sharing ministries
• Individuals in prison
• Individuals who are not U.S. citizens and not lawfully present in the United States as defined by Health and Human Services
• U.S. citizens residing in a foreign country who meet certain IRS tests
• Individuals who are not members of a federally recognized Native American tribe, but who are eligible for services from the federal Indian Health Service
4. How Penalties will be Determined and Paid
The first penalties will be due when individuals file their 2014 tax returns in 2015. A penalty is the greater of either a specified dollar amount or percentage of income. The annual penalties for 2014 through 2016 are noted below. Beginning in 2017, penalties will increase based on the cost of living.
• 2014: Greater of $95 per adult and $47.50 per child under age 18, maximum of $285 per family, or 1% of income over the tax-filing threshold
• 2015: Greater of $325 per adult and $162.50 per child under age 18, maximum of $975 per family, or 2% over the tax-filing threshold
• 2016: Greater of $695 per adult and $347.50 per child under age 18, maximum of $2,085 per family, or 2.5% over the tax-filing threshold
If the penalty applies for less than a full calendar year, the penalty will be 1/12 of the annual amount per month without coverage.
WHAT YOU NEED TO KNOW Beginning in 2014, many individuals and families will be eligible to receive financial assistance to reduce health insurance costs through the new Affordable Care Act if they are not eligible for Medicare, Medicaid or the Children’s Health Insurance Program and are not offered affordable coverage through their employer. Nearly 500,000 Coloradans are eligible for a new kind of tax credit to lower the cost of health insurance.
- a couple earning between $21,404 and $62,040 a year
- or a family of four earning between $32,499 and $94,200 a year
You may qualify for a break on your monthly premiums. You may also be eligible for health plans with lower co-pays and deductibles,
based on income.
You can no longer be denied health insurance, even if you have had a serious illness or a pre-existing condition. Open
enrollment is October 1, 2013 through March 31, 2014.
Limited Coverage health insurance plans have been around for a long time. According to a recent article by Kate Pickert in Time Magazine experts warn that the debut of the health care exchanges could create a prime moneymaking opportunity for these questionable products as well other, more illegal scammers.
There are two main types of potential snares for consumers: outright cons and insurance-like plans that give the impression of offering more coverage than they actually provide. Regulatory agencies are already on high alert for fraud. Both the Federal Trade Commission and the Better Business Bureau have posted warnings about Obamacare-related identity theft.
Some quasi-insurance products expected to proliferate come October are “discount medical plans,” which promise lower health care costs in exchange for a recurring fee. Many of these plans lure customers with language that implies comprehensive coverage, but the reality is far more limited.
Obamacare bans some forms of skimpy coverage, but with enforcement left to the states–some of which are less than enthusiastic about the law–don’t count on those misleading plans disappearing overnight. And, for those states not enforcing the Affordable Car Act at all?”
Let the buyer beware.
As you probably know by now, your health insurance premium will probably go up substantially next year when you are required to switch to an Affordable Care Act compliant policy or pay a fine to the IRS.
The younger you are the greater the negative impact will be on you.
There are ways to buy a plan this year that will be good through all of 2014. This will allow you to avoid the high cost Affordable Care Act policy premiums until 2015 and who know what changes might happen before then.
If you’d like to know more about these options, give me a call at 303-541-9533.
Here is an article published recently in the Wall Street Journal that cites areas of concern for those of us who support the Affordable Care Act.
By LOUISE RADNOFSKY and SARAH E. NEEDLEMAN
Government officials have missed several deadlines in setting up new health-insurance exchanges for small businesses and consumers—a key part of the federal health overhaul—and there is a risk they won’t be ready to open on time in October, Congress’s watchdog arm said.
The Government Accountability Office said federal and state health officials still have major work to complete, offering its most cautious comments to date about the Obama administration’s ability to bring the centerpiece of its signature law to fruition.
“Whether [the government’s] contingency planning will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined,” said the GAO in twin reports to be released Wednesday.
The 2010 Affordable Care Act created two exchanges, seeking to provide coverage for many Americans who now go without health insurance. President Barack Obama has said the exchanges will be ready on schedule in October, offering coverage to take effect Jan. 1, 2014, but he has cautioned that “glitches and bumps” are likely.
Around two million people are projected to receive insurance through the small business exchanges and seven million people will be enrolling in the individual insurance exchanges in 2014, according to the Congressional Budget Office.
The small-business exchanges in particular have had some early setbacks. The federal government said in April that contrary to initial plans, it wouldn’t allow workers in the first year to choose between a range of insurance options offered through employers. For the first year, companies will select one plan to offer to workers.
In some states, only one insurance carrier has expressed interest in the small-business exchange. In Washington state, officials have had to postpone the exchange altogether because they couldn’t find a carrier willing to offer small-business plans for all parts of the state.
Seventeen states are running their own small-business exchanges, with the federal Centers for Medicare and Medicaid Services carrying out the task on behalf of the remaining 33 states.
The GAO report on the small-business exchanges said officials still have big tasks to complete including reviewing plans that will be sold and training and certifying consumer aides who can help companies and individuals find plans.
It said that the 17 states running their own exchanges were late on an average of 44% of key activities that were originally scheduled to be completed by the end of March. “While interim deadlines missed thus far may not impact the establishment of exchanges, any additional missed deadlines closer to the start of enrollment could do so,” the report said.
The Obama administration has long said that it expects to be ready on Oct. 1. “We have already met key milestones and are on track to open the marketplace on time,” said Joanne Peters, a spokeswoman for the Department of Health and Human Services.
“This GAO report confirms our suspicions about the implementation of the health care law,” said Rep. Sam Graves (R., Mo.), chairman of the House Committee on Small Business. “With each passing day it appears the creation of the exchanges are very much in doubt.”
The administration has welcomed signs that the growth of health-care costs has tempered recently. Some economists believe that may be partly due to the new health law encouraging more cost-effective care. The Labor Department said Tuesday that its price index for medical care fell a seasonally adjusted 0.1% in May, the first monthly drop in almost four decades.
The administration and liberal groups are stepping up efforts to prepare people to enroll for coverage. For the economics of the exchanges to work, they must attract healthy people to balance the risk of those who have chronic diseases.
Enroll America, an administration-backed nonprofit group, opened its “Get Covered America” campaign Tuesday. “We are at a place where…78% of the uninsured aren’t even aware of what’s coming their way,” said Anne Filipic, the group’s president.
Republicans who oppose the health-care law are poised to highlight any glitches in the rollout, and many believe implementation of the law could be a key issue in 2014 elections.
Regulators in New Hampshire have said they received applications from only one carrier, Anthem Blue Cross and Blue Shield, a unit of WellPoint Inc., WLP +0.36% to sell small group plans or individual policies through the exchange next year.
Small-business owner Nancy Clark of North Conway, N.H., said she was disappointed more carriers didn’t apply because Anthem is already one of just two carriers that doctors in her area accept.
“I was hoping more [insurance] providers would step up to the table,” said Ms. Clark, whose firm, advertising agency Glen Group Inc., has 10 employees and has offered benefits to full-time staff since 1997 to attract and retain talented workers. “I had these rose-colored glasses on, thinking that doctors in our area would then accept more insurance plans, truly giving everyone a choice.”
Ms. Clark said she also worried that without more carriers in the exchange, the cost of a group health plan wouldn’t stabilize or go down as she had anticipated. She said her premiums have increased every year by double digits despite her work force’s good health.
Some Democratic members of Congress also are beginning to express concerns about particular aspects of the law relating to employers. Sen. Joe Donnelly of Indiana, who voted for the law as a member of the House, on Wednesday is expected to become the first Democrat who backed the law to support changing a requirement that larger firms must provide coverage to employees working 30 hours a week or more, his staff said.
Joe Trauger, vice president of human resources policy for the National Association of Manufacturers in Washington, D.C., said the trade group’s 12,000 members are “deeply concerned” about the lack of information available about the state exchanges. “It comes up in every meeting I’m in,” he said.
Backers of the law say that over time, competition between carriers and new restrictions barring insurers from setting small group premiums based on members’ medical history will keep costs in check for business owners and enable them to keep offering coverage.
Michael Brey, president of Brey Corp., a toy retailer in Laurel, Md., that does business as Hobby Works, said he was looking forward to being able to shop for a small-group plan from a variety of carriers through his state’s exchange. Currently he can choose from just three carriers. “I have some degree of confidence that it will be a good move for us,” he said.
Mr. Brey also said he expected to get a better deal through the exchanges. He covered 100% of the cost of premiums for his staff when he bought the business in 1992, but he said he can only afford to contribute 50% now, and only for full-time employees.
—Jennifer Corbett Dooren contributed to this article.
Write to Louise Radnofsky at email@example.com and Sarah E. Needleman at firstname.lastname@example.org
Connect for Health Colorado has published the preliminary filings to the Colorado Division of Insurance showing that 10 carriers requested approval to provide about 150 health plans for individuals and families through Connect for Health Colorado. They include:
All Savers Insurance Company (part of UnitedHealthcare)
Anthem Blue Cross and Blue Shield
New Health Ventures
Rocky Mountain Health Plans
Additionally, six carriers – Anthem, Colorado Choice, Colorado HealthOP, Kaiser Permanente, Rocky Mountain Health Plans and See Change – requested approval to provide nearly 100 health plans to small employers through our marketplace. The health plans are new and include a comprehensive set of Essential Health Benefits, including doctor visits, hospitalizations, maternity care, emergency room care, and prescriptions.
This is the beginning of a review process by the Division of Insurance, which regulates insurance companies in the state. Final details about the types and number of health plans and about premiums will be known in August, after the Division of Insurance completes its review process. Actual health plan costs should be available soon.
Because everyone likes to have options, they will provide Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) plans. We also will offer Health Savings Account (HSA) plans, Colorado Young Adult Plans that provide minimum coverage for those under the age of 30, and dental plans.
Beginning in 2014, many individuals and families will be eligible to receive subsidized coverage through Connect for Health Colorado if they are not eligible for Medicare, Medicaid or the Children’s Health Insurance Program and are not offered affordable coverage through their employer.
Here is Connect for Health Colorado’s Cost Calculator for Individuals and Families.
Notes: This calculator shows expected spending for families and individuals eligible to purchase coverage in the Exchange under the Affordable Care Act. Under the law, maximum contributions to premiums will be based on modified adjusted gross income, while estimates in this calculator are based on the annual income entered by the user. Actual premiums in the Exchange are not yet known. The premiums in this calculator reflect national estimates from the Congressional Budget Office for silver plans, adjusted for premium inflation and age rating.
Writing in the Colorado Statesman on March 8, 2013, Miller Hudson has done the best work I have seen so far in explaining why we are in the fix we are in with the high cost of healthcare, what affect the Affordable Care Act is likely to have and what some ideas about how it might all become workable in the future. I highly recommend you invest a few minutes in reading this article.
Here, Courtesy of the Colorado Department of insurance, is their “Glossary and Definitions” for health insurance. This information is provided by DORA so you can be familiar with some of the terms you may see in a health insurance policy. If you have questions, call the Division of Insurance for more information.
Certain products and services sold to consumers may appear to be health insurance but actually address very specific concerns. Be sure the product/service you are considering is health insurance, if that is what you want to buy.
– Does the word “insurance” appear in marketing materials?
– Does the health insurance carrier and/or the salesperson for the carrier appear in the Division of Insurance database as a licensed carrier and/or licensed insurance producer in Colorado?
An ”access fee” is a specific amount that a person covered under the policy must pay each time certain services are used or received. The access fee is not part of the deductible amount, and is not usually reimbursed by the health insurance carrier.
Catastrophic Health Insurance
Catastrophic health insurance is a type of health insurance that typically has very high deductibles. The coverage for a catastrophic policy does not kick in until you have paid your share of the deductible amount in the policy.
“High Deductible Health Plans (HDHPs)” are catastrophic health insurance policies created as a way to lower overall medical costs by providing a lower monthly premium in exchange for a higher annual health insurance deductible. With catastrophic health insurance plans, you pay for almost all medical care until you reach the annual deductible amount. If eligible, some people combine a high deductible health policy with a Health Savings Account (HSA). Read the policy carefully to understand what will be covered and how much your share of the costs will be if you need medical treatment.
After you have met the deductible for the covered period of time, your health policy may have a “co-insurance” that provides the patient will be responsible for a certain percentage of medical costs after the deductible has been met.
An individual health insurance policy may have a defined contestability period, so if the insured person becomes seriously ill during that time the health insurance carrier may check for any fraud or deception in the person’s application and medical history. This is intended to protect the carrier from individuals who may buy health insurance policies knowing they are in poor health and who may be misrepresenting themselves during the application process.
A “co-pay” is a fixed payment amount that is the responsibility of the patient. For example, a health policy may state that the patient must make a $25 co-pay for each doctor visit, and/or that the patient must pay $15 co-pay for each covered prescription medication that is purchased. (These amounts are examples, your policy may have different co-payment amounts.) The patient, or covered person, must make the required payment each time covered services are used. The amount of any required co-pays should be specified in the policy you select.
A deductible is a specific amount of money that you agree to pay before you receive any benefits for covered services from the health insurance carrier. Deductibles can vary, but if your policy has a $1,500 deductible, and you receive doctor’s care and medication that costs $1,200, you must pay for all of it. The carrier is not responsible for the amount of the covered service or medication you pay for up to the amount of deductible.
In addition to the monthly premium, or cost to be covered by insurance, you must also pay for all covered services until you reach the deductible amount. Generally, the higher the deductible is, the lower the monthly premium will be. If you agree to pay a $10,000 deductible, your premium would be lower, but if you are sick or injured, you will have to pay $10,000 worth of medicine and treatment before the carrier pays anything. (Check your policy to see what the options are.)
The entire deductible has to be met before your carrier will cover many of the services you could need, including hospital stays.
After you reach the deductible amount during a specific period of time, the carrier will begin reimbursing for covered medical services and treatment as specified in the policy. This may be at 100% co-insurance or could be another percentage, such as 50% of your medical treatment and services.
Once you meet your deductible then you’re done for that calendar year or for the period specified in your policy. The following year, or next deductible period, you have to start satisfying the deductible all over again.
Disclosure (of medical history and status)
When applying for individual health coverage, you will be asked to “disclose” any existing medical conditions, existing medications and past medical history. You must answer the questions truthfully. If the health insurance carrier learns that you have not provided all requested information about your health status, the policy may be cancelled and your coverage denied.
Discount Health Plan
A “discount health plan” refers to a type of “buyers’ club” that specifically markets reduced-rate health care services. The Plan typically charges a membership fee in exchange for a list of health care professionals who will provide services at a discounted rate to members of the Plan. Plans may be marketed to consumers as a way to save money on various health services, such as medical, dental and vision care, as well as pharmacy and/or chiropractic services.
Be aware that state laws protecting consumers of insurance will not protect people who buy Discount Health Plans. For example, health insurance laws that guarantee access to providers, do not apply to these plans. Discount Health Plans do not qualify as “creditable health insurance coverage.” This means that if you drop your health insurance after purchasing a Discount Health Plan and later decide to purchase health insurance again, your new insurance may not — and probably will not — cover pre-existing conditions for a period of time.
The Division of Insurance provides a guide to understanding Discount Health Plans.
If you have been diagnosed or treated for a previous condition, illness, or injury, before you were insured, the health insurance carrier may not want to cover continuing treatment for that medical condition. The carrier does not want people to wait to purchase insurance coverage until they know they will need treatment. When a condition is already known to the consumer, the carrier may offer health insurance that covers other conditions that arise, but excludes treatment for anything that was pre-existing before the insurance was purchased. Naming specific illnesses, injuries or conditions that are “exclusions” on the policy means that the carrier will not pay for any treatment associated with them. Some individual health policies may allow coverage for the pre-existing condition after a certain time period (usually 12 months) has passed with continuous health insurance coverage.
An exclusion in your policy may also mean refer to anything the health insurance carrier will not cover, ranging from a type of drug to alternative treatments to a type of surgery. These exclusions can vary from policy to policy. A hospital stay may list a number of exclusions, sometimes anything “extra” that is not a medical necessity – from watching a rental television to using a hospital phone to deluxe meals – may not be covered. Cosmetic or elective surgery is often excluded, unless it is done in response to a medical condition. Dental treatment and vision needs are usually excluded unless treatment is required due to an accident or illness. If dental and or vision treatments are covered, it should be spelled out in your policy.
An exclusionary rider is a part of your policy that states when there are certain conditions or types of illnesses that will NOT be covered by your policy. The exclusionary rider eliminates coverage for any medical treatment associated with the medical condition or previously diagnosed illness specified on the rider.
Health Savings Account (HSA)
A Health Savings Account is a type of savings product that offers a different way for consumers to pay for their health care. HSAs are designed to encourage individuals to save money they may need for future health care expenses on a tax-free basis.
To be able to take advantage of HSAs, you must be covered by a qualified High Deductible Health Plan (HDHP). Because an HDHP generally costs less than what traditional health care coverage costs, the money saved on insurance can be put into the Health Savings Account.
People can sign up for Health Savings Accounts with banks, credit unions, and insurance companies, and sometimes their employers. The IRS has more information on the tax benefits and consequences of HSAs.
Limited Benefit Health Insurance Policies
“Limited benefit health insurance policies” can cost far less than traditional insurance, but cap what health insurance carriers will pay toward medical care. For example, the policy may pay $2,500 per person, per year, an amount that would be exhausted by a single trip to the emergency room. Some limited benefit health insurance policies have daily caps, such as paying a few hundred dollars a day toward hospital coverage. This differs from traditional health insurance, which generally covers most medical expenses in a given year, after deductibles and co-payments have been made.
Before purchasing a “limited benefit health insurance policy”, find out if you will be covered for hospital visits or routine doctor’s care and make sure you understand the all of the limits in the benefits provided.
Major Medical Health Insurance
Major Medical health insurance policies typically provide comprehensive coverage for hospital, doctor, x-ray and laboratory expenses.
Mandated Health Benefit
Mandated health benefits are benefits that are required to be covered by law. There are both federal and state mandated benefits. In Colorado (as in many states), the mandated health benefits may not apply to all types of health insurance policies or plans offered in the state. Some mandated health benefits are required of group health plans, but not of individual policies. If you have previously been covered by a group health plan, and are now shopping for individual health insurance, check carefully to see what the new policy covers. Many people assume that individual policies will have the same health mandates, and they may not. Covering some of these health mandates is optional for individual health policies.
There are some mandated benefits that are required by federal law, and there are some that are required by state law. Colorado statutes may mandate some benefits for certain types of insurance (benefits that must be covered by group plans, for example), that are not mandated for all types of insurance (such as individual coverage.)
If you have experienced an illness or disability for which you have been diagnosed, treated or advised, that is considered a “pre-existing condition.” When you apply for an individual health insurance policy, you will be asked to describe any pre-existing conditions or previous treatment. The health insurance carrier may decide to offer you health coverage with an “exclusion” for the specific condition, even if you are not currently experiencing problems. This means the carrier will not cover any medical treatment for the excluded condition. Failing to mention a pre-existing condition for which you have previously sought medical advice is a reason for the carrier to rescind or cancel your policy at a later date. It is always advisable to provide a full and complete medical history.
The amount paid to the health insurance carrier each month to purchase health coverage. The premium is paid by the policyholder on an individual policy. On employer group plans, the cost of the premium amount can be shared by the employee and the employer.
Reasonable and Customary Charges (also called “Usual, Customary and Reasonable” or UCR)
The cost associated with a health care service that is consistent with the going rate for identical or similar services within a particular geographic area.
Reimbursement for out-of-network providers is often set at a percentage of the “usual, customary and reasonable” charge, which may differ from what the provider actually charges for a service.
When an insurer disallows a portion of a charge as being in excess of the Usual and Customary allowance, it means only that the charge is in excess of the standard the company used to determine Usual and Customary, or UCR. Providers are free to charge whatever fee for service they choose. Your insurance coverage is designed to provide benefits up to the plan’s Usual and Customary percentile and is priced accordingly.
Your policy should contain a definition of Reasonable and Customary (or UCR) and explain how claims will be paid. If you disagree with the amount paid or if you believe a claim was denied improperly, there is a step-by-step process by which consumers may appeal the decision.
If you have questions or complaints about your insurance, please contact the Colorado Division of Insurance for assistance.