Archive for June, 2010

Individual, Family, and Employer responsibilities in the new health insurance law

Tuesday, June 29th, 2010

Good Neighbor Insurance, Inc, www.gninsurance.com and www.gnazhealth.com, is keeping up with the changes in our US health care system and will be, over the course of the next months and years, expanding this section with up-to-date information.   Health care overhaul will bring change but it is going to happen slowly.  There will be a lot of minor as well as major changes over the course of the next few years with a bulk of these changes happening in 2014 and the last parts being implemented by 2018. 

There are six major coverage options for those in the US and even though some of the rules and regulations are similar for all many differences are there and it all depends on how old you are and for whom you work. 

 These six major coverage options are:

 (1) Individual or family coverage (private health insurance)

 (2) Employee/employer group option for small businesses (typically under 50 employees)

 (3) Employee/employer group option for large businesses (typically larger than 50 employees)

 (4) Exchange options, two or more plans, through the state you are residing in (fully integrated 1-1-2014) are quasi-government and private insurance coverage combined

 (5) Medicare (which include Parts A, B, C, and D) for those 65 years onwards, www.gninsurance.com/medicare.asp

 (6) Full government health plans like Medicaid, CHIP, Veterans insurance, and others based mostly on financial criteria

 Overview

The health reform package is made up of two parts: a bill that passed the Senate on Christmas Eve, passed the House on March 21, and was signed into law by the President on March 23, and a second piece of legislation: the House’s reconciliation bill, which makes changes to the original law, passed both chambers on March 25, and was signed by the President on March 30.

Many of the provisions in the law will not take effect for several years. At the earliest, provisions that affect employer-sponsored health plans will take effect six months from the date of enactment – in late September. Even then, those early provisions will not affect plans until they renew for the next plan year.  The health reform law has thousands of pages and hundreds of provisions. So it’s important to remember that before many of those provisions are put in place, additional laws and regulations will need to be developed. That could be a lengthy process.  Here are some highlights of the major provisions.

Individual responsibility

Starting in 2014, everyone must have coverage or pay a penalty, which will be enforced by the Internal Revenue Service. The penalties will be phased in over time:

• In 2014, an individual without insurance must pay whichever amount is greater:  $95 or 1 percent of income.

• For 2016 and beyond, that penalty rises to $695 or 2.5 percent of income, whichever is greater (the $695 is indexed from 2016 on).

• Families will pay half the penalty for children, with a cap of $2,085 per family.

• There will be exemptions to this requirement, such as in cases of financial hardship and other limited circumstances. Subsidies to buy insurance in new state exchanges will be available in the form of tax credits and cost-sharing assistance for people above Medicaid eligibility but below 400 percent of the federal poverty level. Medicaid eligibility will be increased to 133 percent of the federal poverty level.

Employer responsibility

New employer penalties and obligations

Starting in 2014, employers don’t have to offer their employees health insurance coverage, but most of them with more than 50 employees will pay an assessment if they don’t, or if they offer coverage that isn’t affordable. Full-time and part-time employees are included when determining whether an employer has 50 employees (based on current full-time employee equivalency rules).

• Employers with 50 or more employees that do not offer “minimum essential coverage” will pay $2,000 for each employee over the first 30 employees if one of their employees gets a tax subsidy to buy insurance under an exchange.

• Employers with 50 or more employees that do offer minimum essential coverage but have at least one full-time employee receiving subsidized coverage under an exchange will pay whichever is less: $3,000 for each employee receiving a premium credit, or $2,000 for each full-time employee. 

*Employers must provide “free choice” vouchers to employees with incomes below 400 percent of the federal poverty level if the employee’s contribution to coverage is between 8 percent and 9.8 percent of income and the employee chooses to purchase coverage in the exchange.  No penalties will be imposed on employers with respect to employees who receive these vouchers.

*Employers with more than 200 employees that offer coverage must automatically enroll new full-time employees in coverage. Employees may opt out.

New employer reporting requirements

• Beginning in 2011, employers will be required to disclose the value of health care benefits on an employee’s annual W-2.

• Employers will be required to notify employees:

– About the availability of the exchange

– for new employees, at the time of hiring;  for current employees, by March 1, 2013

– They may be eligible for a subsidy under the exchange if the employer’s contribution to the plan is less than 60 percent of total allowed costs of the benefits;

– If the employee purchases coverage in the exchange, he or she will lose the employer’s coverage contribution.

• In 2014, large employers will be subject to expanded 5500 reporting requirements to include information on the health insurance coverage of their employees.

Small business tax credits

Beginning in 2010, small businesses with fewer than 25 employees and average wages of less than $50,000 get a tax credit for their contributions to buying health insurance for employees.

The tax credit starts at up to 35 percent and increases to 50 percent in 2014 when the exchange is operational. A full tax credit may be available to small businesses with fewer than 10 employees and average wages of less than $25,000.

Taxes and fees on small business

*Starting in 2014, a small business (when talking about the new health insurance law the US government states that small businesses employ 2 to 49 employees) that already offers group insurance can pay a $3,000 per-year tax on each employee if that employee qualifies and accepts government health care premium subsidies or government-run health care. Thus, if the employee takes the government-run plan over the employer’s plan even for one month of the calendar year the employer will have to pay a $3,000 annual tax. This can happen even though the employer’s plan may have stronger benefits than the government-run plan. Government-run plans can be Medicare, Medicaid, CHIPS, Veteran, and other possible State government plans including exchanges.  This also is applicable if your employee’s spouse takes any government-run plan you as an employer will be liable for this $3,000 tax.  Thus, the employer of your employee’s spouse and you will be paying a total of $6,000 annual tax if one takes any government-run insurance plan.

*Businesses electing not to have group coverage for their employees will be charged an 8% tax on payroll.  This tax will be applied for each employee not meeting the government’s minimal coverage requirement.

*A small business could incur two types of taxes for the same employee if the employer does not provide group insurance and if an employee receives premium subsidies from the government to help pay for health insurance.

Doug Gulleson loves to scuba dive overseas. He makes sure he always takes his credit card AND international travel insurance. Visit Good Neighbor Insurance at  www.onlineglobalhealthinsurance.com/trip-cancellation for your next overseas trip and get a FREE quote.

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Posted in 2010 updates |

Health plan changes in the US from 2010 to 2018

Monday, June 28th, 2010

Good Neighbor Insurance (www.gninsurance.com and www.gnazhealth.com) is continuing to update our clients on the new health insurance laws.   There are six major coverage options for those in the US and even though some of the rules and regulations are similar for all many differences are there and it all depends on how old you are and for whom you work. 

These six major coverage options are:

(1) Individual or family coverage

(2) Employee/employer group option for small businesses (typically under 50 employees)

(3) Employee/employer group option for large businesses (typically larger than 50 employees)

(4) Exchange options through the state you are residing in (fully integrated 1-1-2014 and are quasi-government and private insurance coverage combined)

(5) Medicare (which include Parts A, B, C, and D) for those 65 years onwards

(6) Full government health plans like Medicaid based mostly on financial criteria

HEALTH PLAN CHANGES 

Under the new law, individuals and employers/employees have the right to keep the coverage they had as of March 23, 2010 and are exempt from many reforms. These individual and group health plans are considered “grandfathered plans.” Collectively bargained plans that were ratified before the date of enactment are grandfathered until the date that the last collective bargaining agreement related to coverage ends.

Health plan changes that impact individuals and employers (both fully insured and self-funded plans unless otherwise noted) over the next few years (Starting 3-23-2010):

IMMEDIATELY:

• Federal rate review. The Department of Health and Human Services (HHS) will establish a process for federal review of fully insured premium rate increases.

I N 9 0 DAYS:

• Internet portal. By July 1, an Internet portal will be created for consumers and small businesses to shop for health Insurance.

• High-risk pool. $5 billion has been appropriated to create a temporary high-risk insurance pool to help adults with pre-existing conditions get coverage if they have been uninsured for six months. The program will be effective through 2013.

• Reinsurance for early retirees. A temporary reinsurance program will be established for employers providing coverage to early retirees over age 55 who are not eligible for Medicare.  The federal government will provide $5 billion to fund the program. Participating employers or insurers will be reimbursed 80 percent of retiree claims between $15,000 and $90,000.  The program will be effective through 2013.

 IN 6 MONTHS:

Effective for new plans and plans renewed six months after the law’s enactment date, unless otherwise noted (includes “grandfathered plans”):

• Lifetime and annual limits. Plans may not impose lifetime limits on the dollar value of essential benefits. Annual limits will be restricted (to be determined by HHS). Restricted annual limits do not apply to grandfathered individual plans.

• Rescissions. No rescissions are permitted, except in cases of fraud or intentional misrepresentation.

• Coverage for adult children. Children may stay on their parents’ policies until age 26 if coverage isn’t available through their work, regardless of their marital status. Any employer contribution toward the premium is a tax-deductible business expense for the employer and not taxable income for the member.

• Pre-existing conditions. Plans may no longer impose pre-existing condition exclusions for children under 19 (does not apply to grandfathered individual plans).

Effective for new plans and plans renewed six months after the law’s enactment date (does not include “grandfathered plans”):

• Preventive services. New policies must cover the full cost of preventive care as recommended by the U.S. Preventive Services Task Force, recommended immunizations, preventive care for infants, children and adolescents, and additional preventive care for women.

• Appeals. New minimum requirements for internal and external claims appeals processes.

• Patient protections. Plans that require or provide for a primary care provider (PCP) designation must allow each member to designate any in-network PCP, or pediatrician for children, accepting new patients. Plans may no longer require an authorization or referral to an Ob-Gyn. Prior authorization or increased cost-sharing for emergency services is also prohibited.

• Nondiscrimination rules. Nondiscrimination rules that apply to self-funded health plans are expanded to group fully insured health plans. Plans cannot base an employee’s eligibility or continued eligibility on hourly or annual salary.

I N 2011:

• Medical loss ratio (MLR). An insurer must publicly report on its MLR and spend at least 85 percent of large group premiums and 80 percent of individual and small group premiums on medical services, or provide rebate payments to enrollees.

• Spending accounts. Health savings accounts (HSAs) and flexible spending accounts (FSAs) may no longer be used to purchase over-the-counter drugs unless prescribed by a doctor.

Increases tax for nonqualified HSA withdrawals from 10 percent to 20 percent, and for Archer MSA withdrawals from 15 percent to 20 percent.

• HHS studies. HHS is required to study the group health plan markets to compare employer characteristics and determine whether the new insurance market reforms are likely to cause adverse selection in the large group market or to encourage small and midsize employers to self-insure. HHS and the Department of Labor must also collect information on self-funded plans. These studies could lead to additional employer reporting requirements.

• Uniform explanation of coverage. Within 12 months of the law’s enactment, HHS, in consultation with the National Association of Insurance Commissioners, will develop uniform standards and definitions for summaries of benefits and coverage explanations. Within 24 months of enactment, group health plans must provide enrollees and applicants with coverage documents that meet these standards.

 I N 2012:

• Comparative effectiveness fee. A new fee is imposed on individual and group health

plans to fund comparative effectiveness research ($1 per participant through 2013; $2 per participant through 2019).

• Release of Medicare claims data. The private sector may purchase standardized data extracts of Medicare Parts A, B and D claims data to combine with their own claims data to evaluate provider performance measures on quality, efficiency, and the effectiveness of care.

 I N 2013:

• FSA contributions. Contributions to flexible spending accounts are limited to $2,500 a year.

 I N 2014:

The federal definition of a large employer is an employer with 101 or more employees, whereas a small employer is defined as 1-100 employees. States can modify the definition of a large employer to 51 or more employees and small employer to 1-50 employees until January 1, 2016.

• Pre-existing conditions. Individual and group health plans can no longer impose pre-existing condition exclusions for any person of any age (does not apply to grandfathered individual plans).

• Annual limits. Annual limits on essential health benefits are prohibited (does not apply to grandfathered individual plans).

• Guaranteed issue. Health insurers must accept every individual and employer who applies for coverage.

• Rating restrictions. Rating restrictions go into effect for new individual and fully insured small group plans. Insurance companies cannot base premiums on health status, claims experience or gender. Premiums can only vary by:

– Age (no more than 3:1)

– Geography

– Family size

– Tobacco use (no more than 1.5:1)

• Merged markets. States are allowed to merge the individual and small group markets.

• Clinical trials. Coverage of routine patient care costs is mandated for participation in approved clinical trials (does not apply to grandfathered plans).

 • Exchanges. State health insurance exchanges are up and running for small businesses and individuals to buy insurance. States can allow large employers to participate beginning in 2017.

• Brokers. HHS will establish procedures, which may include rate schedules for broker commissions, for a state to allow brokers to:

– Enroll individuals in any qualified health plans in the individual or small group market as soon as the plan is offered through an exchange in the state;

– Assist individuals in applying for premium tax credits and cost-sharing assistance for plans sold through an exchange.

• Essential benefits. Essential benefit plan is created, which mandates the level of benefits that must be included in plans offered in the exchange, as well as in the individual and small group markets outside the exchange. Deductibles are limited to $2,000 for individuals and

$4,000 for families in the small group market (self-funded plans and grandfathered plans are exempt from this requirement).

• Cost-sharing limits. Cost sharing imposed under health plans is limited to current health savings account amounts (does not apply to grandfathered plans).

• Waiting periods. Waiting periods cannot exceed 90 days.

• Wellness. Expands health plan wellness incentives up to 30 percent of total coverage costs (up to 50 percent with HHS approval).

• Reinsurance. A temporary reinsurance program will be established for the individual market and funded by individual and group health plan assessments ($25 billion in 2014-2016).

 I N 2016:

• Health choice compacts. States can form health choice compacts to allow insurers to sell individual policies in any state participating in the compact.

I N 2018:

• Taxes. A new excise tax goes into effect for high-value, “Cadillac” health plans: 40 percent

for amounts over $10,200 for individuals and $27,500 for family plans, paid by insurance companies and plan administrators.

 Medicare and Medicaid

• Part D donut hole. Provides a $250 rebate for Part D enrollees who enter the “donut hole.”

coverage gap (2010 only). Beginning in 2011, there will be a 50 percent brand discount on

drugs in the gap. Members will pay less for generic drugs in the gap as well: 93 percent in

2011, which phases down to 25 percent by 2020. The donut hole is eliminated by 2020.

• Retiree drug subsidy. Beginning in 2013, employers may no longer deduct the retiree

drug subsidy when offering qualified coverage under Medicare Part D.

• Medicaid. Beginning in 2014, states are required to provide premium assistance and

wrap-around benefits to any Medicaid beneficiary who is offered employer-sponsored

coverage, if it is cost-effective to do so.

• Medigap. The National Association of Insurance Commissioners will create new model plans

for benefit packages C and F that include nominal cost sharing. The new models will be available in 2015.

Other

• Administrative simplification. The law also requires HHS to adopt a single set of operating rules for electronic transactions to create uniformity (e.g., health claims or equivalent encounter information, eligibility and claims status, enrollment and disenrollment, premium payments, and referral certification and authorization). Group health plans will have to certify compliance with these standards.

• CLASS Act. Creates a new government-run voluntary long-term care insurance program (CLASS  Program). Employers must automatically enroll employees and facilitate payroll deductions. Employees may choose not to participate.

Revenue-raising provisions

• Starting July 1, 2010, imposes a 10 percent tax on tanning services.

• Beginning in 2011, the pharmaceutical industry will pay annual industry fees. The fee will be phased in and will hold steady at $2.8 billion a year after 2019.

• Beginning in 2013, manufacturers of medical devices will pay a 2.3 percent excise tax on sales of medical devices.

• Beginning in 2013, the Medicare payroll tax rate will increase by 0.9 percent for individuals who make more than $200,000 and couples that make more than $250,000.

• A new 3.8 percent tax will be added on income from interest, dividends, annuities, royalties and rents for those at the same income threshold.

• Beginning in 2014, a non-deductible premium tax will be imposed on insurers ($8 billion in 2014, $11.3 billion in 2015 and 2016, $13.9 billion in 2017 and $14.3 billion in 2018.  After that, it will increase in an amount proportional to overall premium growth).

Doug Gulleson totally adores scuba diving and travels overseas throughout the year with his underwater camera in one hand and a cup of coffee in the other.  He knows through experience never to leave home without his travel insurance and credit card too.Visit Good Neighbor Insurance at  www.gninsurance.com/multi-trip  for your next overseas trip and get a FREE quote.

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Tips From a Wise Man (My Father) for the Over 65 International Traveler

Friday, June 25th, 2010

Before he took on the challenge of a second career when others were retiring, my father traveled extensively around the world. He is now in his 70′s. He’s picked up a thing or two about travel for those over 65, which I share with you.

First, did you know that Medicare won’t cover most medical expenses outside the United States?

Let’s say you want to rock-climb in Italy, rebuild in Haiti, and whale watch in Norway. Medicare offers few benefits beyond the United States’ border. Medicaid offers nothing. Medicare Part D coverage for prescriptions also stops at the border.

Therefore, remember to bring all the medication you need with you in their original bottles, along with a letter from your doctor explaining your need for them. This includes over-the-counter medication.

Second, if you have a medical emergency while outside the USA, the State Department cannot pay to bring you home. Proper medical evacuation costs tens of thousands of dollars even from nations close to the USA. Beyond the border neither Congress nor the President can be of much help when natural disasters or political upheavals strike.

The third thing to keep in mind is that there are insurance plans that specifically cater to older travelers. Travelers with many different pre-existing conditions can be covered up to age 84. Now that’s great news.

With travel insurance you will get:

  1. A call-collect phone number that you can call 24/7
  2. Access to board certified medical personnel
  3. Medical evacuation, if you need it
  4. Reimbursement for travel delay, lost baggage, and health care costs

And you may be surprised to know that international travel insurance is rather inexpensive. Rates vary from $1.50 to $6.00 per day depending on age and benefits.

Travel Insurance from Good Neighbor Insurance is a simple and an inexpensive way to make sure you are covered for any medical emergencies.

Doug Gulleson loves to scuba dive overseas and he makes sure he always takes his Amex card AND international travel insurance policy. Visit Good Neighbor Insurance at www.gninsurance.com for your next overseas trip and get a FREE quote. Or call us at 480 813 9100.

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Global health insurance updates (Canada, Israel, Russian Federation, South Africa, Spain, and Taiwan)

Friday, June 18th, 2010

CANADA 05-31-2010 / Changes to Ontario drug plan changes postponed until end of June

The Ontario government has postponed its plans to lower generic drug prices, eliminate professional allowances, increase dispense fees, and set a limit for markup. The changes were initially intended to take effect in mid-May, but the government is still deliberating on the actual policies that will be put in place. Changes are not expected to be effective until the end of June.

Of the proposed changes, the one that is most certain to take effect is the elimination of professional allowances, the payments that drug companies provide to pharmacies to stock their products. The elimination of professional allowances was included in Bill 16, which the legislature passed on May 18th, 2010.

The following are the proposed changes to drug plans, both the public plan (Ontario Drug Benefit or ODB) and private plans.

Generic drug prices
The government has emphasized that limiting generic drug prices is one of the most important components of the proposed drug plan changes. The government’s proposal calls for a limit on generic drug prices of 25% of the retail/brand-name versions. This limit would take effect immediately for the public plan, which has a current limit of 50%, and be phased in for private plans, which currently are not subject to any limits. For private plans, the limit would be 50% in 2010, 35% in 2011, and 25% in 2012.

Mercer estimates that while generic drug prices are 30% to 80% of brand name versions, this average is skewed by the higher cost of drugs released since 2006, so the weighted average is about 55% to 65%. This would mean that significant decreases in generic drugs would not occur until 2011.

Professional allowances
The elimination of professional allowances would take effect immediately for the public plan (currently a 20% limit), and be phased in for private plans, which are not subject to regulations on these allowances. For private plans, professional allowances would be limited to 50% in 2010, 35% in 2011, 25% in 2012, and eliminated completely in 2013.

Dispense fees and markups
The government’s proposal only calls for changes in the public plan regarding the dispense fees and markups (for ingredient costs) that pharmacies may apply. For the dispense fees, the proposal calls for an increase from CAD 7 to CAD 8, plus a 2.5% annual increase as from April 1st 2011 for the next five years. The increase would be different (CAD 1 to CAD 4) in rural areas.

The proposal calls for the markup cap to remain 8% (same rate as before) but to be subject to a new cap of CAD 125 applicable for prescriptions in excess of CAD 1,500.

Observers expect for dispense fees and markups to increase for those on private plans as pharmacies attempt to generate revenue to replace losses caused by the drug price limits.

SPAIN 05-28-2010 / European Court of Justice to decide if Spain violates EU law by not paying for medical expenses incurred abroad

The European Commission contends that EU law is breached by Spanish legislation that allows reimbursement of hospital or non-hospital care received by a Spanish resident in other EU countries only in cases of “vital emergency.” The Commission points out that the EU regulation on the coordination of social security systems requires an EU country to grant authorization for treatment abroad when the conditions in the regulation are satisfied. Authorization only can be refused if the same or equally effective treatment can be obtained without undue delay in the patient’s own member state. The Commission says that Spain is acting unreasonably by systematically refusing to reimburse hospital costs when a request for reimbursement is submitted late; i.e., at the time of treatment or after the treatment. Thus, the Commission has asked the European Court of Justice to decide whether Spain will have to change its legislation on this matter.

ISRAEL 05-28-2010 / Court overturns inclusion of children’s comprehensive dental care in basic health benefits package

On May 20th  2010, the High Court overturned the government’s decision to include comprehensive dental care for children in the basic health benefits package (also referred to as a “health basket”). All Israel residents are compulsorily covered by a health insurance fund (Clalit, Maccabi, Meuhedet, or Leumit), and all funds are legally required to cover the services in the basic health benefits package.

This court decision overturns the Cabinet’s approval on May 2nd, 2010 of the Health Ministry’s plan to add dental care for children up to age 8 in the basic benefits package. This dental care was to include two check-ups and x-rays per year and a cleaning for free, and filings, extractions, and other services at a subsidized cost of ILS 20 each up to a cap of ILS 40 per visit.

Currently, the basic health benefits package only covers preventive dental care for children up to age 5. The health funds offer coverage beyond this minimum in supplemental policies. In its decision, the court stated that the approval of the Knesset (the legislative body) was necessary in order to add this new category of comprehensive dental care for children up to age 8 to the basic benefits package

Now that this comprehensive dental care coverage for children has been struck down, there is a push to return the ILS 65 million that was diverted for this coverage from the ILS 415 million in overall funding for the basic health benefits package. The government approved this allocation back in December 2009.

RUSSIAN FEDERATION 05-24-2010 / New law waives foreign worker quotas for “high skilled specialists”; social contributions payable for these employees

On May 20th 2010, the president signed into law a comprehensive package of revisions to the Federal Law No. 115-FZ (“On the legal status of foreign citizens in the Russian Federation”). These changes aim to create a more favorable legal framework for foreigners working in Russia. New provisions will come into effect on January 1st, 2011.

Previously, the amendments were approved by the lower house, the State Duma, on May 12th and approved by the upper house, the Federation Council, on May 13th.

High skilled specialists
The main novelty of the revised law is introduction of “high skilled specialists” as a new category of migrant workers. In essence, to be considered a high skilled specialist, an individual must be paid not less than RUB 2,000,000 annually. The Russian government reserves a right to lower this ceiling if necessary for the country’s economic futherment.

Employers are no longer limited by quotas on foreign workers when it comes to high skilled specialists. This is particularly important given the continuing trend of cutting foreign labor in Russia — in January 2010 the quota was reduced from 2,000,000 to 1,300,000.

While by definition foreign high skilled specialists must have experience, skills, or achievements in a certain area, employers are now entitled to establish the competency of such individuals on their own. They also do not have to obtain an authorization to employ a foreign expert (this particular provision becomes effective on July 1st, 2010).

Income tax for foreign high skilled specialists is set at 13%, the rate currently applicable to Russian citizens. For comparison: all other types of migrant workers are subject to 30% income tax.

High skilled specialists are not subject to the requirement to live in Russia for at least a year to become eligible for residency. Residency can be granted to high skilled specialists and their family members for a term of more than five years (based on the employment contract). High skilled specialists will be able to receive a legal resident status at the same time as the work permit.

Unskilled migrant workers
Unskilled migrant workers from the countries having no visa requirement with Russia will now have to provide their biometric information (photographs and fingerprints) to the country’s immigration authorities as of January 1st 2013. These workers must also obtain a “patent” (work license) in order to work in the country. The patent will cost a laborer RUB 1,000 per month. It will be issued for a term of 1 to 3 months and can be renewed for up to one year. According to the revised law, the patent or a rejection notification must be issued not later than 10 days after the application.

Work permits
Work permits to high skilled specialists will be issued for the length of their work agreements not to exceed 3 years. This permit can be renewed multiple times but no longer than for a 3-year period each time.. Additionally, the amended law established a new timeframe of 14 days for processing work permit applications. It currently takes from 12 to 23 months to process such paperwork. The purpose of the described amendments is to simplify the procedure of bringing foreign work migrants into the country.

In Russia, government regulation No. 681 from November 15th 2006 (“On the procedure for issue of permitting documentation to foreign citizens for performing temporary labor activities in the Russian Federation”) sets the rules for work permit procedures. Importantly, in 2009 Russian immigration authorities began to strictly enforce one of the regulation provisions that requires apostilles or consular legalized copies of foreign educational qualifications (diplomas, certificates of degrees etc.). Previously, notarized diplomas accompanied by translation would be accepted in most cases. Now a legalized copy of educational qualifications must be submitted with every work permit.

As an exception, notarized documents will still be accepted for 31 countries having mutual recognition of official documents with Russia. The newly enforceable rule equally applies to foreign workers submitting work permit applications for the first time and to those already working in Russia.

Health insurance and benefits for foreign workers
Employers must provide high skilled specialists health insurance, social security coverage, and accommodations. All the benefits must become effective on the first day of work of such individuals. Notably, high skilled specialists’ income is subject to social taxation as long as they have a legal resident status. Therefore, such individuals are entitled to medical insurance coverage and other social security benefits (temporary disability, maternal benefits) to the extent Russian citizens are.

Foreign workers temporarily residing in Russia (not having a legal resident status) are not entitled to medical insurance or any social security coverage.

BACKGROUND
During work permit application process notarized diplomas will be accepted from the following countries, no apostille required: Albania, Algeria, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Cuba, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Kazakhstan, Macedonia, Moldova, Panama, Poland, Romania, Serbia, Montenegro, Slovak Republic, Slovenia, South Korea, Spain (applies to documents issued by the Spanish Registry Office only), Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Vietnam.

TAIWAN 05-31-2010 / Legislative committee completes first reading of draft bill amending the National Health Insurance Act

On May 20th 2010, the Health & Environment Committee of the Legislative Yuan completed its first reading of the draft bill to amend the National Health Insurance Act. This bill is primarily focused on the adjustments of premiums. It is not expected for this bill to be signed into law any earlier than 2011.

After this first review, the bill sets a new standard premium rate of 2.67%. This is lower than the previous proposed rate range (3-4%) because of the consideration of single insurers. The current total premium rate is 5.17% (split amongst employer, employee, and the government), which was raised from 4.55% in April. The same rate applies to individuals/ non-employees.

The draft bill proposes setting highest and lowest income limit to differentiate the premium for individuals with different levels of income. Those whose income exceed the highest earning ceiling of TWD 7.5 million per household will pay a monthly fixed amount of TWD 16,688 per person and those whose income fall below the lowest earning line of TWD 150,000 per household will pay a monthly fixed amount of TWD 334 per household. For those whose household income range falls between TWD 150,000 and 7.5 million, their premium will be calculated at the rate of 2.67%.

The basis of the premium calculation will be the total household income. In the first reading, the Health & Environment Committee of the Legislative Yuan was unable to reach a conclusion about whether the calculation of total family income should consider non-salary elements including dividends, rental income, pension income and donation. This particular provision will be sent to the Legislative Yuan for further debate.

The draft bill also states that expatriates who leave Taiwan for four years will only be able to resume participation in the national health insurance program after a six month waiting period.

So far, there has been no evidence that this legislation will affect the scope of covered medical treatments.

As the government and the opposition party have not agreed on several provisions of the legislation, the debate has continued on the unsettled issues. As the Legislative Yuan will adjourn after June 8th 2010, the third reading of the draft bill will likely to continue in the second half of 2010. The government expects the bill to be completely passed in 2011 and become effective by 2012.

The Executive Yuan (cabinet) initially submitted this draft bill to the Legislative Yuan on April 9th 2010.

SOUTH AFRICA 05-18-2010 / Task force appointed to develop guidelines for compliance with Medical Schemes Act

The Council for Medical Schemes (CMS), the statutory body that has responsibility for regulating approved medical schemes in South Africa, has appointed a 16-member task force to monitor compliance with the Medical Schemes Act and to develop a code of conduct for the industry. Particular attention is to be devoted to the obligations of the medical schemes to provide the legally-required prescribed medical benefits. The law requires approved plans to provide coverage for diagnosis, treatment and care of 270 listed diseases, 25 chronic conditions, and all emergency medical conditions.

The chairman of the CMS said that more than 4,500 complaints were received last year about unpaid accounts, benefit limitations, and denial of authorization to receive benefits; however, it has been estimated that about 90% of all complaints are settled or abandoned before they reach the CMS. Currently, there are more than 8 million members of approved medical schemes.

 Doug Gulleson loves to scuba dive overseas and makes sure he always takes his Amex card AND international travel insurance. Visit Good Neighbor Insurance at www.overseashealthinsurance.com/short-term.asp and trip cancellation options at our web site at  www.gninsurance.com/tripcancellation/  for your next overseas trip health coverage and get a FREE quote or call one of our agents at 480-633-9500.

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Posted in Global updates 2010-2013 |

Frequent questions we get asked about the new health insurance law – Part 2

Wednesday, June 16th, 2010

Good Neighbor Insurance is continuing to update our clients on the new health insurance laws. It may seem confusing at first but as we “walk” through these laws we will learn the “upside” and the “downside” of their impact on us.  With all the changes on the horizon, one of the most common questions asked us at Good Neighbor Insurance, www.gninsurance.com, is “What do these health care laws mean to me?”  The simplest answer is:  It all depends on how old you are and for whom you work.  

Note:  Last updated: 6-15-2010

Guaranteed Issue on Children

Q – I believe one of the parts to the new healthcare legislation is guaranteed issue for children less than 19 years of age. Is this correct? If so, when does it go into effect?

A – All group and individual health plans, including self-insured plans, will have to cover pre-existing conditions for children 19 and under for plan years beginning on or after six months after date of enactment. Grandfathered status applies for group health plans. Six months after enactment is 9-23-2010, for plan years 10-1-2010 and after.

This is the verbiage from the legislation which is not the same as guaranteed issue, but that certainly is the guideline we expect from Department of Health and Human Services.

Q – Can a waiver (for example, allergy) be placed on a child under 19 under this new law? 

A – Beginning 9-23-2010 – no, children under age 19 will not have pre-existing condition exclusions.

Pre-existing Condition  

Q – I have a client that is looking for insurance for himself and his child, with pre-existing issues (cleft pallet). When do the changes take place and are some companies changing their standards early. Should this client apply for individual health insurance? If so, which company should I use?

A – If the child is 19 and under, all group and individual health plans, included self-insured plans, will have to cover pre-existing conditions for plan years beginning on or after six months after date of enactment. (9-23-2010) – in other words, for a guaranteed issue product on this child, you’ll need to wait until the end of September for them to apply. Thus far, no carriers have announced they will implement this early.

Q – If an adult child has a pre-existing condition, is there anything to be aware of?

A – The rules on pre-ex are unclear at this time, but the assumption is that they may still have the pre-existing period.

Q – I have a client who said that beginning in October of this year, insurers can no longer increase group health insurance rates based on a child. Can you confirm? I have a client that has a child with leukemia and we expect their group rates to increase substantially in March of 2011?

A – PPACA states that there will no longer be pre-existing condition exclusions for individuals under age 19 effective for plans up on or after September 23rd. This applies to all markets and grandfathered group health plans. HHS has announced its intent to issue regulations clarifying: (1) children with preexisting conditions could not be denied access to their parent’s coverage; and (2) insurers would not be allowed to insure a child, but exclude coverage for the child’s pre-existing condition. So, the short answer is if final regulations come out as expected AND the child is less than 19, there should be no impact on rates for this child.

Preventive Care on Individual Plans

Q – Do you know when the carriers are mandated to start covering all preventive care on individual plans?

A – The carriers aren’t required to cover all preventive care without cost sharing. However, this year we will receive guidelines on specific preventive care to be covered with no cost sharing – this is effective for plans years beginning 6 months after enactment. For groups this means the first plan year following 9-23-2010, (i.e. October 1 renewals and beyond). For individual, since there is no specific “plan year” this is subject to guidelines.

Q – Can you explain what you mean by “plan years beginning”? Does that mean any policy that is applied for after 9-23-2010?

A – This includes not only policies applied for after that point, but also renewal dates after that time (unless the grandfathered status applies) i.e. for a group with an October 1 renewal date, this would be applicable.

Dependent Coverage for Adult Children

Q – Is there anything stating that an adult child can get on his/her parent’s plan, if the employer sponsored group plan they have access to is too expensive?

A – No, there is nothing to that effect.

Q – The “tax-free employer coverage for children who are not otherwise tax dependents”, something to do with children not turning 27 as of the end of year. I don’t understanding how this applies, and what do I need to do about it?

A – The age “27″ showed up in a document from the IRS about the tax treatment of adult children on plans. The legislation only requires plans to cover adult children (as long as they don’t have coverage through their own employer) to age 26.

Q – What plans are required to extend dependent coverage up to age 26?

A – The Affordable Care Act requires plans and issuers that offer dependent coverage to make the coverage available until a child reaches the age of 26. Both married and unmarried children qualify for this coverage. This rule applies to all plans in the individual market and to new employer plans. It also applies to existing employer plans unless the adult child has another offer of employer-based coverage (such as through his or her job). Beginning in 2014, children up to age 26 can stay on their parent’s employer plan even if they have another offer of coverage through an employer.

Q – Why is there a special exception for group plans in existence on March 23, 2010?

A – The goal is to cover as many young adults under the age of 26 as possible with the least amount of burden. If a young adult is eligible to purchase other employer-based health insurance such as through her job, the law does not require the parent or parents’ plan to enroll that child if the parents’ plan is a grandfathered health plan (i.e., in existence on March 23, 2010). Of course, all group plans have the option to cover all adult children until the age of 26 or beyond. In 2014, this exception will no longer apply. ***This is from the department of HHS: http://www.hhs.gov/ociio/regulations/adult_child_faq.html  

Q – What happens if they already have family coverage but there is an exclusion rider already in place on their policy for one of the children? Does the exclusion policy go away and they rate up on this condition the next plan year?

A – This is unclear at this time – we anticipate clarification from HHS that rate-ups will not be allowed, but thus far this has not been addressed and the carriers have yet to come up with procedures.

Q – Can an employer refuse to cover a dependent if they had been on the mother’s group health coverage, and graduated from college in mid May? The mother’s employer (a school district) refused to allow the dependent to continue coverage under the mother’s plan even though the dependent is under 26.

A – There are two possible issues with this situation. First, depending on the carrier, they may or may not have allowed college graduates to remain on the plan before actual required implementation (6 months following date of enactment); second, because the mother is a teacher she may be on a State program that is not subject to this legislation. Without additional details, we have no way of knowing the exact reasoning. 

High Risk Pool

Q – The date of 9-23-2010 for being the effective date of the high risk pool; is this the date that starts the clock so to speak, or is this the date people qualify if they have not had coverage 6 months prior to this date?

A – Actually 9-23-2010 is not the effective date of the high risk pool; it is July 1, 2010. This is the date the High Risk Pool goes “live”, so in order to qualify for the pool at inception, an individual cannot be covered today.

Q – Regarding the High Risk Pool, and the mandatory 6 month “no previous coverage” rule… Can that “no coverage” be voluntary? Or does there have to be proof that an applicant has been denied coverage?

A – There have not been clear guidelines, but thus far, there’s nothing to indicate that the coverage had to be denied.

Q – If proof has to be shown, what if an applicant wants to use the high risk pool because although they have coverage, it doesn’t cover a specific medical condition (it’s been waived)? Do they have a chance to apply within the high risk pool, if they voluntarily go without coverage for 6 months?

A – They can’t have coverage at this time. It appears, the “without coverage” can be voluntary.

Highly Compensated Employees

Q – When the government starts to do an audit to see if there is discrimination for the highly compensated employees getting coverage, what is the penalty? Is it the $3,000?

A – For a fully insured plan the penalty is $100 per day for each affected insured to a maximum of $500,000.

Federal Funds for Retirees

Q – On the AARP Bulletin of May 10, the bullet-point states “Commercial insurance – The federal government will provide funds from June 2010-December 2013 to help employer plans cover early retirees ages 55 to 64 and to reduce retiree cost.” Does this mean that a group has to have retirees on their medical plan?

A – If a plan allows early retirees (between the ages of 55 -65) to remain on their plan, there are funds to help offset the claims. If one of the early retirees has a claim in excess of $15,000, the government has a program that will reimburse between $15,000 – $90,000 to the health plan. The purpose is to make the plan more affordable. This provision is effective June 1, 2010 and details on how to file for the reimbursement are expected shortly.

Tax Credit

Q – If a group has fewer than 25 employees and average wages are under $50,000, would they qualify for the insurance credit?

A – At first glance yes, as long as the client is also paying at least 50% of the employees premium.

Q – If a small business with fewer than 50 employees qualifies for the tax credit, in the year 2014 that business MUST purchase their health insurance from the exchange. Is this correct?

A – Yes that is correct – subsidies and tax credits will only be available through the Exchange.

Miscellaneous

Q – The IRS document (Tax Treatment Dependents to Age 27) talks about until age 26 and up to age 27. Is 27 the new age to use?

A – No – the age 27 has nothing to do with the reform legislation – this is just the IRS tax treatment info.

Q – Has the healthcare reform caused rates to increase, decrease or stabilize?

A – At this time, none of the market reforms have really been implemented, so we’ve yet to see the impact on rates.

Q – If HSAs are to be phased out in the next few years, do you agree that we should be advising clients to consider max funding them now?

A – There is nothing in the legislation that requires HSA’s to be phased out. In fact, several time limits in the legislation are based on those of an HSA.

Exchange

Q – Are brokers involved and paid for placing business in the exchange?

A – Yes – there’s actually specific language in the legislation to include agents and brokers in the exchange.

Q – Will brokers be able to bring their clients to the new Health Exchanges?

A – The legislation is written to allow agents and brokers to sell through the Exchange.

Q – Will brokers be able to collect commissions on a monthly basis, as we do now, to bring their clients to the exchange?

A – Brokers will be compensated to sell through the Exchange but the manner and amount is yet to be disclosed.

Q – What kind of commissions? Small group is 5% to 7%?

A – Unknown at this time.

 Part-Time Employees

Q – Under the new legislation does an employer have any obligations to part-time employees? How is the legislation defining a part-time vs. full-time employee? I understand that in determining if a group has 50 or more employees, part-timers are counted in the numbers?

 A – There are neither requirements nor penalties to the employer for NOT offering coverage to part-time staff. A FTE is now defined as 30 hours per week or more.

U.S. Departments of Health and Human Services, Labor, and Treasury Issue Regulation on “Grandfathered” Health (Group) Plans under the Affordable Care Act

Grandfathered plans may increase deductible and out-of-pocket limits, but only to a certain limit.  Essentially, the maximum percentage is defined as “the increase in medical care component of the Consumer Price Index since March 23 plus 15 percentage points”.

With respect to copayments, a plan would maintain it’s grandfathered status if it increased copayments up to $5 or a percentage equal to medical inflation plus 15 percentage points, whichever is greater.

Also, employers cannot decrease the percentage of contribution that they pay (as of March 23) by more than 5 percentage points and retain their grandfathered status.

Changing from one carrier to another would result in a plan losing it’s grandfathered status.

Finally, retiree-only health care plans are automatically exempt from health care reform requirements

Voluntary Long Term Care

 Q – Is specific information available on the “voluntary” long-term care” insurance?

 A – Yes, the premium will be about $50 per month and the employee must contribute for at least 5 years to receive a benefit. The benefit is projected to be $50 per day, but there’s nothing about length of the benefit.

 Q – Is it true ALL employers MUST automatically enroll all employees who do not opt out, beginning 1-1-2011?

 A – Yes.

 Q – Is dependent coverage available to employees?

 A – This is unknown.

 Q – With no underwriting?

 A – Yes.

 Q – Subject to pre-taxing?

 A – This is unknown.

 Q – Is it true that no benefits will be paid during the first 5 years of the program?

 A – Yes.

Doug Gulleson loves to scuba dive overseas and he makes sure he always takes his Amex card AND international travel insurance.  Visit Good Neighbor Insurance at  www.gnazhealth.com  Arizona and US coverage or if you are going overseas grab one of our travel plans at www.gninsurance.com/tripcancellation/ .

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Posted in 2010 updates; FAQ and Answers |

Norway – A look at Health Care Systems around the world…let’s grab some Kroner

Friday, June 11th, 2010

We’ve all heard that the United States spends more (16 percent of GDP, or $2.10 Trillion) on Health Care than any other industrialized country. However, Norway, long heralded as a “shining example” of Nationalized Health Care, has its own problems to contend with. Norway’s overall tax burden, which is 45 percent of its GDP, ranks second only to Sweden, which has the highest tax burden among all the industrialized countries.

On any given day 280,000 Norwegians (out of a country of 4.6 million) are waiting for health care. Norway’s government has been trying to “legislate” these waits out of existence since 1990–successfully. 

An expert in medical ethics with the University of Oslo summed it up by saying, “It is important to see: (A) that in a public health service of the Nordic type, any given amount of resources always has alternative uses; and (B) it is neither medically nor morally defensible to put scarce resources to uses which will foreseeably yield less favorable outcomes than other uses–save fewer lives, cure fewer patients.”

While Norwegians generally report that they are “fairly satisfied” with the way their health care system is run, there has been growing discontent over such issues as the ability to choose a health care provider, involvement in decisions regarding care or treatment, and long waiting periods.

The average wait for hip replacement is more than four months; for prostatectomy, three months; and hysterectomy, over two months. It’s estimated that 23 percent of all patients needing hospitalization must wait at least three months for admission. This for a country ranked 11th in the world by the World Health Organization among industrialized countries (the US ranks 37th just ahead of last place Slovenia, and behind 36th place Costa Rica).

Norway at a glance:

Has the longest coastline in Europe.

 Has around 50,000 islands, and only 2,000 islands are inhabited.

  • Norway Vikings founded the world’s oldest parliament, the Lyn Wald, over 1000 years old.

Norwegians enjoy a very healthy diet, and they have one of the world’s highest consumptions of fish, milk, and cheese.

Norwegian inventions include the cheese slice and the paper clip.

Norwegian per-capita income ranks amongst the world’s highest.

Doug Gulleson loves to scuba dive overseas and makes sure he always takes his Amex card AND international travel insurance policy. Visit Good Neighbor Insurance at www.overseashealthinsurance.com/short-term.asp for your next overseas trip health coverage and get a FREE quote or call one of our agents at 480-633-9500.

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Posted in Europe |

Accidental Death and Dismemberment Insurance – What is It?

Friday, June 4th, 2010

Few people who purchase Accidental Death and Dismemberment Insurance (AD&D) actually understand the importance of this plan.  It often appears as a tag-a-long to life insurance.  Nevertheless, it can prove useful to many people who have never thought about it before. 

AD&D pays a benefit if the insured person dies due to an accident as opposed to a disease like heart disease.  If the plan is paired with Life Insurance, the benefit it pays is in addition to the Life Insurance benefit.  The exact amount and any exceptions are listed in your Certificate Booklet or Certificate of Insurance.

But what if you have an accident, and the doctors manage to save your life at the cost of a limb or other essential part? Life insurance only pays your beneficiary if you die.  AD&D pays the insured for certain disabling accidents.  Losing the use of your eyes because of an accident, for example, would change your life drastically.  The insurance still pays a lump sum depending on your loss.  Read your Certificate of Insurance carefully when you purchase the insurance to make sure the coverage is enough for what you might need.  It will do you no good to discover once you have a disabling accident that your insurance wasn’t sufficient.

Please note that if you plan to travel in a country for which the State Department has listed a Travel Warning, make sure your insurance will cover that.  Many AD&D plans won’t cover accidents in countries with Travel Warnings even if the accident is not related to war. 

Good Neighbor Insurance can help you select excellent travel insurance that covers AD&D.

Doug Gulleson loves to scuba dive overseas and he makes sure he always takes his Amex card AND international travel insurance policy.  Visit Good Neighbor Insurance at http://www.gninsurance.com for your next overseas trip and get a FREE quote.

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Posted in AD&D |