Posts Tagged ‘Arizona insurance’

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Understanding medical loss ratio (MLR)

Wednesday, November 16th, 2011

health insurance, medical insurance, PPO, HMO, HSA, maternity coverageGood Neighbor Insurance (www.gnazhealth.com and www.gninsurance.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.  Many critical details of this new insurance law will be clarified in the months and years to come. 

These six major coverage options are:

(1) Individual or family coverage (private health care plans)

(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, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service.

Issue:  

On December 1, 2010, the Department of Health and Human Services (HHS) published an Interim Final Rule implementing medical loss ratio (MLR) requirements pursuant to the Affordable Care Act (ACA).  Beginning in 2011, these regulations would:  impose a medical loss ratio of 80 percent on individual and small group plans, and 85 percent on large group plans, meaning that insurers are required to spend 80-85 percent of each premium dollar on claims and other government-approved activities.  MLR standards would be measured on a state-by-state basis.

Recommendations:  

Insurance carriers, in general, are concerned that a minimum MLR will have the counterproductive effect of raising premiums for consumers and causing unintended market disruptions.

The federal MLR regulation will penalize investment in fraud prevention, utilization management, and development of connectivity or administrative simplification systems.  It also will hinder the development of more affordable insurance options, such as high-deductible health plans.  Moreover, the new MLR rules will reduce competition in both the individual and large group market.  All of these issues could lead to higher premiums for consumers.

bali, indonesia, australia, bonaire, scuba diving, diving, underwater photographyThe MLR also may result in fewer product choices.  The creation of an unlevel playing field that favors HMOs over plans that offer open access to providers may drive the market towards closed networks – the opposite of the product selected by the majority of consumers.

Further, the implementation costs of the MLR regulation itself will be significant, especially with respect to mandatory data collection and reporting, not only of an insurer’s own data, but also extensive new information to be collected from employers, vendors, and providers (none of which, incidentally, have significant inducement to facilitate such data collection). 

Here are ideas to avoid some anticipated negative effects of the MLR regulation:

1) Rebates should be provided to employers:   Rebate administration should be simplified to provide greater clarity to employers and to insurers.  In group markets, where the insurer contracts with an employer, the insurer generally does not have access to enrollee information specific enough to permit accurate rebate payments directly to the enrollee. In such cases, rebate payments should be permitted to the employer.  Alternatively, insurers should be permitted to apply a good faith effort standard in calculating individual enrollee rebate amounts.

2) Small employer should be defined as 1-100 employees for MLR:   The conforming amendments to ACA clearly require a small employer definition of 1-100.  These provisions do not provide flexibility for states to have lower definitions.  If HHS continues to allow states to define employer as 1-50, states should be required to provide 12 months advance notice before such definition could go into effect.  Otherwise, states could modify the employer definition after rates already have been filed and products have been sold.  And finally, the state where the headquarters of the employer is located should determine whether the employer is small or large in all states.  Otherwise, employees of the same employer could alternatively find themselves located in both a small and large employer.

3) Employee counts should be based on “eligible” employees. The IFR does not address how an employer or insurer calculates the number of employees for purposes of determining group size in the MLR context. For consistent application, the regulation should clarify that group size is to be determined by measuring the number of employees who are eligible for plan benefits, which would track most consistently with the predominant current practice and with the standard in most states.  Insurers do not have total employee information and have been unsuccessful in collecting this in the past.

4) The special adjustments for limited benefit (‘mini-med’) and expatriate plans should be continued beyond 2011. The unique characteristics of these kinds of plans will continue to pose MLR reporting and calculation challenges beyond the current one-year adjusted application period. Uncertainty about future MLR applications may hurt employer decisions in this area.  Therefore, an announced extension of this treatment would be helpful. 

5) ICD-10 expenses should be included as “quality improvement activities.” Conversion to ICD-10 will improve quality in numerous ways, including enhanced clinical research and improved disease management.  Therefore, implementation costs associated with ICD-10 should be classified as a “quality improvement activity” with respect to MLR calculation.

6) Vendors should be required to report administrative expenses in the aggregate.  Rather than requiring vendors to provide a detailed breakdown of administrative costs on a claim-by-claim basis, which in many cases is infeasible, the regulation should require vendors to report their administrative charges in aggregate to an insurer, which the insurer should then be permitted to rely upon for purposes of MLR calculation.

7) HHS should clarify that state-based MLR standards are pre-empted by the new federal standards.  The regulation should clarify that the ACA requires full federal pre-emption of state MLR methodologies.  States are limited to modifying the percentage only.  Otherwise, administration of two MLR methodologies would be infeasible and create unnecessary administrative costs. 

8) Student health plans should not be subject to the federal MLR.  Student health plans (SHPs) provide coverage for between 1.5 and 3 million students.  Many of these students are 26 or older, foreign or cannot use their parent’s policies because of network restrictions.  Access to affordable student policies is critical for students.  Historically, student health plans have been considered short term limited duration policies and therefore should not be subject to the federal MLR.  If HHS does apply an MLR, it should be a lower percentage to account for the higher volatility of this group and should be done on a total book of business basis – not state by state. 

9) The playing field should be leveled between HMOs and Open Access Insurers:  The MLR creates an unlevel playing field between HMOs and the more popular open access plans. To mitigate this problem, insurers should be allowed to include in their quality definition key functions such as fraud prevention, concurrent review and utilization management, and expenses incurred as a result of federal or state requests for data to improve quality and efficiency.

10) The regulation should permit national aggregation in the large group market. Requiring insurers to disaggregate their large group market into state MLRs, and to disaggregate MLRs to the legal entity level, would erode the normally vibrant competition, consumer value, and wide choice of products currently available to consumers in the nation’s large group markets.  Specifically, such MLR disaggregation would hurt employers that offer multiple products or coverage across state lines, reduce choice of coverage, increase prices for groups, decrease competition, and increase administrative costs.

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care, http://onlineglobalhealthinsurance.com/my-travel-guard.asp , information with him at all times when he travels   Keep our blog close by you, www.gntravelinsurance.com, for continual updates on the changes with the US health care system.

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Posted in Medical loss ratio (MLR) |

Health care reform timeline from 2011 to 2020

Wednesday, August 31st, 2011

Arizona health insurance, Medicare, travel insurance, trip cancellation insurance

Good Neighbor Insurance (www.gnazhealth.com and www.gninsurance.com) is continuing to update our clients on the new health insurance laws that were signed into law in the spring of 2010.   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.  Many critical details of this new insurance law will be clarified in the months and years to come. 

These six major coverage options are:

(1) Individual or family coverage (private health care plans)

(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, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service.

The new health care reform law is already impacting the benefits landscape, but some provisions will not take effect until 2014 and beyond. Explore our timeline below to learn more about when changes under the law begin to take effect.

2011 Insurance Reforms

  • New uniform coverage documents and standard definitions developed (applicable in 2012).
  • Must meet minimum medical loss ratios.
  • Rate review requirements will be effective.

Medical Reforms

  • Medicare Advantage cost-sharing limits take effect.
  • Medicare beneficiaries who reach the “donut hole” get a 50 percent discount on brand-name drugs.
  • Primary care doctors and general surgeons practicing in underserved areas, such as inner cities and rural communities, get a 10 percent Medicare bonus.
  • Medicare Advantage plans begin restructuring of payments and freeze 2011 payments at 2010 levels.

Other

  • The voluntary long-term care insurance program starts. The program provides a cash benefit to help those with disabilities stay in their homes or pay nursing home costs. Benefits start five years after paying the coverage fee.
  • Increased funding for community health centers to provide care for many low-income and uninsured people.
  • Costs for over-the-counter drugs not prescribed by a doctor excluded from being reimbursed through an HSA or FSA.
  • Employers may report the value of health care benefits on employee W2 tax statements (optional for 2011 tax year; mandatory thereafter).
  • Start of new annual fees on pharmaceutical manufacturing sector.

 2012 Insurance Reforms

Health System Changes

  • Hospitals, doctors, and payers encouraged to join forces in “accountable care organizations.”
  • Hospitals with high rates of preventable readmissions facing reduced Medicare payments.
  • Administrative simplification rules required under ACA begin to phase in.

2013 Insurance Reforms

Taxes/Deductions

  • Individuals making $200,000 a year or couples making $250,000 would have a higher Medicare payroll tax of 2.35 percent on earned income – up from the current 1.45 percent. A new 3.8 percent tax on unearned income, such as dividends and interest, also added.
  • Contributions to flexible spending accounts (FSAs) limited to $2,500 a year – indexed for inflation. And the threshold for deducting medical expenses on taxes goes from 7.5 percent to 10 percent of income.
  • Medical device manufacturers have a 2.9 percent sales tax on medical devices, with exemptions for some, like eyeglasses, contact lenses and hearing aids.
  • No more deduction for expenses allocable to Medicare Part D subsidy for employers who maintain prescription drug plans for their Medicare Part D-eligible retirees.scuba diving, www.douggulleson.com, underwater photography, bali

 2014 Insurance Reforms

Coverage Mandates & Subsidies

  • New individual and employer coverage responsibilities.
  • New individual affordability tax credits and expanded small business tax credits.

Health Insurance Exchange & Insurance Reforms

  • State individual and small group health insurance exchanges operational.
  • Guaranteed issue, guaranteed renewability, modified community rating and minimum benefit standards (“essential benefits” plan) effective.
  • No more lifetime or annual dollar limits for essential benefits.
  • No more excessive waiting periods.
  • No pre-existing condition exclusions.
  • New health plan disclosure and transparency requirements.
  • New uniform insurance rating reforms.
  • Provider non-discrimination requirements.

New taxes on health Insurers

  • New taxes to be added and told to Americans and those living in the U.S. in 2013

Medicaid and Medicare Reform

  • Medicaid expanded to cover low-income individuals under age 65 up to 133 percent of the federal poverty level – about $28,300 for a family of four.
  • Minimum medical loss ratio of 85 percent required for Medicare Advantage plans.

 2018 Insurance Reforms

  • New tax (“Cadillax tax”) on employer-sponsored health plans that offer policies with generous coverage levels.

 2020 Insurance Reforms

  • Donut hole coverage gap in Medicare prescription benefit is fully phased out. Seniors continue to pay the standard 25 percent of their drug costs until they reach the threshold for Medicare catastrophic coverage.

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care, www.gnazhealth.com , information with him at all times when he travels   Keep our blog close by you, www.gntravelinsurance.com, for continual updates on the changes with the US health care system.

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Posted in 2011 updates |

Employers – reporting group healthcare plan on W-2 forms

Wednesday, August 17th, 2011

diving, scuba diving, doug gulleson, underwater photographyGood Neighbor Insurance (www.gnazhealth.com and www.gninsurance.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.  Many critical details of this new insurance law will be clarified in the months and years to come. 

These six major coverage options are:

(1) Individual or family coverage (private health care plans)

(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, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service.

Employers will be responsible for reporting to employees the total cost of their group health benefit plan coverage on their W-2 forms under the Patient Protection and Affordable Care Act. The reporting requirements are expected to apply to the 2012 W-2 forms, which is information employers must report to employees in January 2013.

Arizona insurance, PPO, HMO, medical insurance, health careThis requirement is informational only and does not mean that employer-provided coverage will become taxable. Employers filing fewer than 250 W-2 forms in 2011 will not be required to report the cost of coverage on any forms furnished to employees before January 2014.  

Some benefits are not subject to the W-2 requirement:

  • HIPAA “excepted benefits” plans (accident, disability income, supplemental liability, workers’ compensation insurance).
  • Stand-alone dental and vision plans.
  • Coverage under an HRA, amounts contributed to an HSA or an Archer MSA, as well as salary reduction contributions to a health FSA.
  • Coverage under a self-funded plan that is not subject to any federal continuation requirements (COBRA, PHSA continuation, FEHBP continuation), such as a group health benefit plan sponsored by a church. Coverage provided by the federal government, state government or agency of the government under a plan maintained primarily for members of the military and their families.
  • Coverage for a specific disease or illness or hospital indemnity insurance. 

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care, www.gnazhealth.com , information with him at all times when he travels   Keep our blog close by you, www.gntravelinsurance.com, for continual updates on the changes with the US health care system.

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Posted in 2011 updates for employers |

Why carry an accident coverage or critical illness insurance policy?

Wednesday, June 22nd, 2011

travel insurance, medical travel insurance, trip cancellation insuranceGood Neighbor Insurance (www.gnazhealth.com and www.gninsurance.com) is continuing to update our clients on the new health insurance laws including critical illness and accident coverage plans.   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.  Many critical details of this new insurance law will be clarified in the months and years to come. 

These six major coverage options are:

(1) Individual or family coverage (private health care plans)

(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, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service.critical illness plans, PPO, HSA, Arizona medical plans, Gilbert Arizona

Good Neighbor Insurance provides great critical illness plans and you may view them on our web page at www.gnazhealth.com/critical-illness.asp.

A voluntary accident plan offers coverage for accidents, injuries, ambulance services and accidental death in addition to primary medical insurance. It’s also available to a spouse and children, so it’s a plan that can protect a whole family.  Whereas critical illness coverage pays up-front cash benefit upon diagnosis of a covered critical illness policy and it is coverage that pays you for living. Typical critical illness covered are Alzheimer’s disease, blindness, life threatening cancer, deafness, heart attack (myocardial infarction), major organ transplant, multiple sclerosis, and a few others.

Why have critical illness coverage plans?

  • Helps pay for the higher health insurance deductibles so you do not have to deplete your 401k or saving accounts.
  • Helps pay for those daily expenses that you must have even when you are away from work like child care, transportation and lodging cost to seek the best treatment, domestic help like cooking, cleaning, laundry, and lawn maintenance.
  • While the odds of surviving a critical illness have never been better, survival has a price, and a critical illness plan can help lessen the financial hardship.
  • How you use that money is completely up to you like taking a family vacation so you can spend time together

 Here are a few facts to consider from the National Center for Health Statistics:

  • Nearly 40% of self-reported injuries leading to hospitalization occurred during sports or leisure activities, and 44% occurred in or around the home.
  • When nonfatal injuries are specified, falls are the leading cause of inpatient and outpatient care in emergency rooms, outpatient clinics, and doctors’ offices.
  • Injuries due to motor vehicle accidents, overexertion, and strenuous movements, as well as striking against or being struck accidentally by an also make up a large portion of injuries.

 Did you know that in the US: (2008 figures)

  • Every 26 seconds, someone suffers a coronary event
  • Every 40 seconds, someone suffers a stroke
  • About 1.4 million new cancer cases are expected to be diagnosed in 2008
  • Data from 2008 heart and stroke statistical update from American Heart Association and 2008 cancer facts and figures

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care, www.gnazhealth.com , information with him at all times when he travels   Keep our blog close by you, www.gntravelinsurance.com, for continual updates on the changes with the US health care system.

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Posted in Critical Illness plans |

Understanding the government high risk pool also called the pre-existing condition insurance plan (PCIP)

Wednesday, June 8th, 2011

PPO, HMO, HSA, international health insurance, medical insuranceGood 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.  Many critical details of this new insurance law will be clarified in the months and years to come. 

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, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service.

What is PCIP (pre-existing condition insurance plan) also known as the government high risk insurance pool?

PCIP was created as part of the Affordable Care Act. The PCIP program provides a new health coverage option for you if you have been uninsured for at least six months, you have a pre-existing condition or have been denied health coverage because of your health condition, and are a U.S. citizen or are residing here legally.

What benefits will high-risk pool enrollees receive?

The high-risk pools will cover a range of benefits, including primary and specialty care, hospital care and prescription drugs. The health plans will be required to cover pre-existing medical conditions upon enrollment. The high-risk pool programs must cover at least 65% of the health care costs for a standard population.

How will the high-risk pool be funded and administered?

The health reform law allocates $5 billion to administer the national high-risk pool. This funding will go toward health care claims and administrative costs that exceed the premiums collected for the high-risk pool.  On April 2, 2010, U.S. Department of Health and Human Services Secretary Kathleen Sebelius issued a letter that gives states the following options for operating the temporary high-risk pool: (1) Operate a new high-risk pool alongside an existing state high-risk pool; (2) Establish a new high-risk pool if the state does not currently have one; (3) Build upon other existing coverage programs designed to cover high-risk individuals; (4) Contract with current HIPAA insurance carriers or insurers of last resort to provide subsidized coverage; or (5) Do nothing, in which case the U.S. Department of Health and Human Services would carry out the coverage program in the state.

When does the high-risk pool go into effect?

The federal high-risk pool will begin taking applications on July 1, 2010 and coverage will begin on August 1, 2010. States operating their own high-risk pools will also aim to begin coverage relatively soon, but may not all meet the August 1 date for coverage. The high-risk pools will terminate on January 1, 2014 when the state-based American Health Benefit Exchanges are established and other insurance market reforms go into effect, providing new coverage options for people with pre-existing health conditions.vacation, scuba diving, underwater photography, bali, indonesia, thailand

Given that this is a temporary form of coverage, what happens to people when the high-risk pool terminates in 2014?

When the temporary national high-risk pool terminates on January 1, 2014, high-risk pool enrollees will transition into receiving health coverage through the state-based American Health Benefit Exchanges. Procedures will be developed to ensure that there are no lapses in coverage. Individuals without employer health coverage and small businesses with up to 100 employees will be able to purchase coverage through the Exchanges. Premium and cost-sharing subsidies will be available for individuals with incomes between $14,404 – $57,616 and for families of four with incomes between $29,327 – $88,200. People will also be able to choose to purchase coverage in the individual market. As of 2014, insurers will not be able to deny adults coverage or charge higher premiums based on health status.

Who is eligible for coverage through PCIP?
Eligible individuals must:

  • Be a U.S. citizen or a legal resident
  • Have a pre-existing medical condition
  • Not have been covered under creditable health coverage (as defined by Section 201(c)(1) of the Public Health Service Act) for the previous six months before applying for coverage

How is the PCIP funded?

The program is funded entirely by the federal government. The health reform law allocated $5 billion for the program nationwide. Funding will go toward health care claims and administrative costs that exceed the premiums collected for PCIP.

How much will high-risk pool health coverage cost?

Premiums will vary depending on the state you live in and which health plan you choose. To see rate information for the PCIP states administered by GEHA, click here to see the rates in each state, http://www.pciplan.com/applicants/rates.html.

For example, those who reside in Arizona would pay these premiums:

Here are the 2011 monthly PCIP premium rates for Arizona by the age of an enrollee.

Age Standard Option Extended Option HSA Option
0 to 18 $174 $234 $181
19 to 34 $261 $351 $271
35 to 44 $313 $422 $325
45 to 54 $400 $539 $416
55+ $557 $749 $578

The premium cost for high-risk pool coverage will be established for a standard population in the non-group market and will not be based on the health status of enrollees. Premiums will be allowed to vary by age (by a 4 to 1 ratio), geographic area, and family composition. Premiums for the high-risk pool operated by the federal government will be available on July 15, 2010. Yearly out-of-pocket costs will be limited to $5,950 for individuals and $11,900 for families, excluding premiums.

What you pay for care / Schedule of benefits

This web page, http://www.pciplan.com/forms/pdfs/2011BenefitsSummary.pdf , explains in detail the 3 options you may choose from. 

 PCIP enrollees can choose from three plan options, with different levels of premiums, calendar year deductibles, prescription deductibles and prescription copays. The HSA Option provides an opportunity to open a Health Savings Account, a tax-exempt account where you can deposit funds for eligible medical expenses.

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.   Visit Good Neighbor Insurance at www.gnazhealth.com  and www.gninsurance.com/tripcancellation for Arizona and international travel insurance coverage.

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Posted in High-risk pool |

Health care reform basics: what you need to know for 2011

Friday, December 31st, 2010

Good Neighbor Insurance (www.gnazhealth.com and www.gninsurance.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.  Many critical details of this new insurance law will be clarified in the months and years to come. 

These six major coverage options are:

(1) Individual or family coverage (private health care plans)

(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, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service.

Health plan coverage for your dependents

Dependents, up to the age of 26, are eligible for coverage under your group health plan, as long as your plan includes dependent coverage. Dependents may not be eligible for coverage if they are able to enroll in their own employer-sponsored group plan. A dependent whose coverage or benefits ended because they reached a prior age limit must be given written notice that dependent coverage is available and informed of their 30-day enrollment (or re-enrollment) opportunity. Employees and dependents under age 19 cannot be denied coverage because of a preexisting medical condition.

Preventive care

For health plans effective on or after September 23, 2010, certain preventive services must be covered without charging a deductible, copayment or coinsurance when these services are provided by a network provider. The types of preventive services covered are defined by federal law and can vary based on your age, gender and health status. There may be services you had in the past that will now be covered as preventive at no cost to you. And, there may be services you received in the past that were considered preventive that may no longer be covered as preventive under the new guidelines. The preventive services included in this provision are described at www.healthcare.gov.

Lifetime and Annual Limits

For health plans effective on or after September 23, 2010, there will be no lifetime or annual dollar limits on your health benefits. Other non-dollar limits on essential benefits, such as the number of allowable visits, may apply. Nonessential benefits may continue to have dollar or frequency limits as outlined in your plan. For an explanation of services considered “Essential health benefits” go to http://www.healthcare.gov/.

Emergency Room Services

You are not required to get prior approval before seeking emergency care at a network or non-network hospital. In a true medical emergency, the copayment or coinsurance you pay will be the same regardless of whether the emergency room was in- or out-of network. This is not a change in coverage.

Mental Health Coverage

Beginning July 1, 2010, mental health and substance abuse treatment claims will be covered at the same benefit level as medical claims. This means that copayments will be the same as medical copayments and there are no longer any limits on the number of visits for mental health and substance abuse treatment. Certain types of mental health and substance abuse treatment may require pre-notification and authorization. Visit www.healthcare.gov for more specifics.

Flexible spending accounts (FSAs)

Effective January 1, 2011, you will no longer be able to use your health care flexible spending account (FSA) to pay for over-the-counter (OTC) medications at a pharmacy, supermarket or other retail store without a prescription from your doctor. In some cases, if the medication is prescribed by a physician, you may still be able to use your FSA to pay for it. The final definition of OTC medications, subject to this new law, has yet to be fully defined. OTC medications typically include non-prescription pain relievers, allergy, and cold and flu medications. Health reform also made it clear that FSAs will still be able to be used to pay for insulin. Most major grocery, department, retail and drug stores will be able to identify, at the cash register, what OTC medical supplies may be purchased with an FSA debit card beginning January 1, 2011.

Health savings accounts (HSAs)

Effective January 1, 2011, you will no longer be able to use your health savings account (HSA) dollars to pay for over-the-counter (OTC) medicines at a pharmacy, supermarket or other retail store without a prescription from your doctor. If you have a health care debit card you can still use it to pay for prescription medicines, including insulin, if those are eligible expenses under an employer’s health plan. If you have a prescription for an OTC medicine, such as Zyrtec or Prilosec, and use your HSA to pay for it you will need to keep copies of the prescription and receipt for the purchase with your tax records. Beginning January 1, 2011, if your HSA is used to pay for items or services that are not qualified medical expenses, the IRS penalty will increase from 10 percent to 20 percent of the HSA dollars used.

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care information with him at all times when he travels (check out his diving travels at www.douggulleson.com).  Keep our blog close by you, www.gntravelinsurance.com , for continual updates on the changes with the US health care system.

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Posted in 2011 updates |

Understanding how Exchanges work which start on January 1, 2014

Wednesday, December 8th, 2010

Good Neighbor Insurance (www.gnazhealth.com and www.gninsurance.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.  Many critical details of this new insurance law will be clarified in the months and years to come. 

These six major coverage options are:

(1) Individual or family coverage (private health care plans)

(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, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service.

The PPACA includes an individual mandate (including penalties for not obtaining health insurance) and requires the creation of state Insurance Exchanges by January 1, 2014. I know these are years away, but can you shed some light on the initial rules that surround these measures?

Individual Mandates
Beginning in 2014, all individuals are required to maintain “minimum essential coverage.” Failure to do so for an entire year will result in a penalty or tax. The penalty is on a sliding scale for three years and is described as 1/12th of the greater of:

  • For 2014: $95 per uninsured adult in the household or 1% of the household income over the filing threshold
  • For 2015: $325 per uninsured adult in the household or 2% of the household income over the filing threshold
  • For 2016: $695 per uninsured adult in the household or 2.5% of the household income over the filing threshold
  • The penalty will be 1/2 of the amounts listed above for individuals under the age of 18
  • The total household penalty may not exceed 300% of the adult penalty or the national average annual premium for bronze level health coverage offered through the Exchange (the Exchange is another mandate scheduled for 2014)

More on This Mandate:
The “Minimum essential coverage” mandate can be satisfied through:

  • Eligible employer-sponsored coverage
  • Individual health plans
  • Grandfathered health plans
  • Medicare part A
  • Medicaid
  • CHIP
  • TRICARE
  • VA
  • Other coverage as may be designated by the Department of Health and Human Services

Individuals who do not satisfy the individual mandate through participation in one of these programs will be able to purchase coverage through the state Insurance Exchanges discussed below.

Exceptions to the individual mandate include:

  • Religious exemptions
  • Individuals not lawfully present in the United States
  • Incarcerated individuals
  • Those who cannot afford coverage (required contributions toward coverage exceed 8% of household income)
  • Taxpayers with income under 100% of the poverty level
  • Those who have received a hardship waiver
  • Those who were not covered for a period of less than three months during the year

State Insurance Exchanges
In 2014, states are required to have an operational Insurance Exchange (this may be in the form of an Internet portal). Many critical details are yet to be clarified through regulations. Below are some early requirements noted in the new law:

  • Open to individuals and small employers (up to 100 full-time employees over 30 hours/week)
  • Estimated to provide coverage to 24 million people
  • Each Exchange is required to offer individuals five benefit levels:
    • Bronze
    • Silver
    • Gold
    • Premium
    • Catastrophic
  • Individual responsibility requirements will apply and employer requirements and penalties for not offering coverage will apply

With the new state Insurance Exchanges, what is the difference between the premium assistance tax credit and the free choice voucher?
The free choice voucher must be provided by the employer, beginning in 2014, to “qualified employees” to purchase qualified health plan coverage through the Exchange. Qualified employees for this purpose are those:

  • whose required contribution for minimum essential coverage through the employer’s plan is between 8% and 9.8%* of the employee’s taxable income for the year;
  • whose household income is less than 400% of the Federal Poverty Level; and
  • who do not participate in a health plan offered through their employer.

The amount of the voucher will equal the most generous amount the employer would have contributed for applicable coverage (self-only or family) on a monthly basis under the employer’s plan.

The Premium Assistance Tax Credit is a federal tax credit available to employees whose household income is between 100% and 400% of the Federal Poverty Level and who are either:

  • not offered minimum essential coverage by their employer; or
  • offered minimum essential coverage by their employer, but the plan’s “actuarial value” (or plan’s share of the total allowed costs of benefits provided under the plan) is less than 60%, or the premium exceeds 9.5%* of the employee’s household income.

The Premium Assistance Tax Credit is also available to individuals whose household income is between 100% and 400% of the Federal Poverty Level to purchase individual coverage through the State Insurance Exchange.

Note: There may have been a technical drafting error in the legislation that did not conform the 9.5% and 9.8% of income thresholds between these two provisions. The law uses different numbers in those places and absent a technical corrections bill, it will stay as such. Implications are unclear right now for those who get caught in between.

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care, www.gninsurance.com , information with him at all times when he travels   Keep our blog close by you, www.gntravelinsurance.com, for continual updates on the changes with the US health care system.

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