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Q and A on health care exchanges in the US health insurance marketplace

Wednesday, April 20th, 2011

PPO, HMO, Arizona health insurance, Gilbert, Mesa, Tempe, ArizonaGood 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

Health Exchanges are, by US federal law, going to be created by each state.  States are working on these plans now to have them start rolling out in the next couple of years with a dead line of 1-1-2014.  The purposes of health insurance exchanges will be to provide more health insurance options for each citizen of that state.  Health exchanges are going to have to follow the same set of rules set up by the US government, signed into law by President Obama on March 2010, and thus the premiums will not be much different than with other methods of getting health insurance.  With the state governments getting involved there will be additional rules and laws set up which will, inadvertently, cause the premiums to increase.  

Myth #A: If we build it, they will come.

Truth: While health insurance exchanges hold many great benefits, the law as it’s currently written contains very weak penalties for those employers that choose not to participate. As a result, some employers, at first glance, will likely opt to accept the penalties rather than provide coverage for their employees. However, as history has shown us governments raise penalties very quickly since it is an “easy” form of income for the tax coffers.  So the penalties for the first couple years will be low but as the years progress those penalties will be a big bite to the bottom line of company’s annual financial statements.  

Myth #B: New state exchanges are going to be strictly for the uninsured.

Truth: To be sustainable, state exchanges will need to be as welcoming to those currently insured as they are to the uninsured. They will also need to appeal every bit as much to individuals and small groups that do not qualify for subsidies or tax credits as they do to those who qualify for these incentives. Recognizing this, some states have made it part of their goal to tap into currently insured individuals and groups. To do this, they would be well advised to not only harness private sector distribution channels (such as brokers) but to offer products and services that align with commercial purchaser interests and needs. Only by being inclusive to all individuals can an exchange attract the type of balanced enrollment that will allow it to be a meaningful force in the market. diving, scuba diving, Bali, Indonesia, traveling, overseas, travel insurance

Myth #C: It will be complicated for employers to cover employees through a health insurance exchange.

Truth: Not true. The beauty of an exchange is that employees get access to a number of great health plans and benefit choices while employers get ease of administration and a single point of contact. The big change for employers will be to convert the funding of their employee health benefits program from defined-benefit to a defined-contribution model. Here employers provide employees with a voucher-like premium contribution; employees then use that premium contribution toward the health plan option they like best within the exchange. Employees who wish to “buy up” to coverage not covered by their employer’s contribution can do so by increasing their premium contribution, generally through payroll deduction.

Myth #D: Health insurance exchanges are expressly designed to save individuals and employers money.

Truth: Some policymakers falsely believe that by attracting a larger volume of purchasers, an exchange will turn around the rising cost curve. It doesn’t work that way. Health plans will still need to price to the risk and underwriting losses that can’t be made up strictly by volume. That’s because medical trend increases are driven by utilization, provider costs, hospital costs, and an aging and often unhealthy population. So while there should be a small administrative savings, health insurance exchanges are really more about value-based purchasing. Exchanges create an online shopping mall where consumers, employers, and brokers can view health insurance plans side by side and compare benefits, costs, and other features. Each of the plans offered in an exchange includes an essential set of benefits at different levels of cost sharing. By giving individuals the freedom to choose what’s right for their needs and budget, purchasers will be able to determine what is most valuable to them and, as a result, get the greatest value for their dollar.

Myth #E: The creation of health insurance exchanges will eliminate the need for agents and brokers.

Truth: While exchanges will be selling direct to consumers and using a still undefined network of “navigators,” the health reform legislation says that state exchanges can use brokers. But brokers who wish to stay competitive will need to ask themselves “Why would a client use me to purchase exchange coverage when they could go straight to the exchange themselves?” The answer is the same as to why employers use brokers today when they can go directly to a carrier. It’s because brokers, more than anyone else, can provide the information and unbiased recommendations purchasers need to make well-informed decisions, as well as service for both routine issues and more serious policy interpretation concerns.  Equally as important is the fact that, despite some other myths, exchanges will not turn health insurance purchasing into an annual transaction. During the course of a year, an individual can encounter many lifestyle changes – including a change in marital status, the birth of a child, a change in income, etc. This means that the need for the broker as “ombudsman” will not diminish, nor will the need for competent and responsive service.

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care, www.overseashealthinsurance.com/trip-protection.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 Exchanges |

Understanding the basics of FSA, HRA, and HSA plans for US group insurance

Wednesday, March 16th, 2011

property and casualty insurance, dental insurance, group insuranceGood 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.

FSA – Flexible Spending Account

HRA – Health Reimbursement Account

HSA – Health Saving Account

Please note: HSA plans are medical insurance plans while FSA and HRA are not medical insurance plans.  Instead, FSA and HRA plans are stand-alone benefits to help pay towards HSA deductibles and/or high deductible plans that do not include co-pays.

 

FSA

HRA

HSA

Who Can Use

Any size group (Excludes Partners, more than 2% Stockholders in Sub S Corp, and LLC Members)

Any size group (Excludes Partners, more than 2% Stockholders in Sub S Corp. and LLC Members)

Individuals and any size group

Maximum Dollar Contribution

Employer sets maximum Medical Reimbursement limit. IRS sets Dependent Care limit.

Determined by Employer

Limit set by federal guidelines for single/family (CPI rated annually)

Who Can Contribute

Employee primarily, but Employer can also fund

Employer only

Individuals, Employers & Employees (or both)

Tax Deductible / Tax Free

Yes: Employer/Employee

Yes: Employer/Employee

Yes: Employer/Employee

Who Owns the Account

Employer

Employer

Employee

Portability

No

No

Yes

Rollover

No, Optional Grace Period

Yes.  However, not required

Yes

 

 

FSA

HRA

HSA

Funding

Per pay period by employee

Funded when claim is paid

Funded dollars

Health Plan Styles Required

No restrictions

No restrictions

Aggregated high deductible / No co-pays on office visits or RX (HSA plans are no-co-pay plans)

Section 125 FSA (funds may be used for dictated by the IRS under this section)

N/A

No restriction

Insurance premium(s) (only for age 65 onwards), medical, vision, and dental expenses

Minimum Deductibles

N/A

No restrictions

Set by federal guidelines annually

Maximum Out of Pocket

N/A

No restrictions

Set by federal guidelines annually (out of network not included)

Claims Substantiation

Required

Required

No, Employee’s Responsibility

Non-Qualified Withdraws

Each claim is adjudicated to meet IRC Section 213(d)

Qualified expense only. Employer determines past age 65 payments

Taxable plus 20% penalty to age 65

 

FSA

HRA

HSA

Eligible Expenses

All IRC Section 213(d) expenses. Employer can not restrict

All IRC Section 213(d) expenses. Employer can not restrict

All IRC Section 213(d) expenses. Employer can not restrict

COBRA Required

Yes, MRA only

Yes

No

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care, www.overseashealthinsurance.com/trip-protection.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 HDHP - High Deductible Health Plan |

United States health care reform measures becoming effective January 2011

Friday, February 11th, 2011

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

As of 1 January 2011, some of the provisions of the 2010 Health Care Reform legislation become effective. What follows is a summary of these provisions.

Allocation of health care premiums
To ensure that premium dollars are spent primarily on health care, the Health Care Reform legislation generally requires that at least 85% of all premium dollars collected by insurance companies for large employer plans are spent on health care services and health care quality improvement. For plans sold to individuals and small employers, at least 80% of the premium must be spent on benefits and quality improvement. If insurance companies do not meet these goals because their administrative costs or profits are too high, they must provide rebates to consumers.

FSA & HSA drug eligibility
Over-the-counter (OTC) drugs are not eligible for reimbursement under health flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), health savings accounts (HSAs) or medical savings accounts (MSAs). Insulin remains reimbursable.

Also, starting 1 January 2011, the excise tax for non-medical HSA or MSA distributions increase from 10% to 20%.

Medicare/Medicaid
Pharmaceutical manufacturers are required to provide a 50% discount on brand-name prescriptions filled in the Medicare Part D coverage gap. Concurrently, federal subsidies for generic prescriptions filled in the Medicare Part D coverage gap begin to phase in.

A 10% Medicare bonus payment is introduced for primary care services and for surgery services provided by general surgeons practicing in health professional shortage areas.

Cost-sharing for Medicare-covered preventive services rated A or B that are recommended by the U.S. Preventive Services Task Force is eliminated. In addition, the Medicare deductible for colorectal cancer screening tests is waived and Medicare coverage for a personalized prevention plan, including a comprehensive health risk assessment, is authorized.

The income threshold for income-related Medicare Part B premiums for 2011 through 2019 are frozen at 2010 levels, and the Medicare Part D premium subsidy is reduced for those with incomes above USD 85,000 (individual) and USD 170,000 (couple). Payments for private Medicare Advantage plans are frozen at 2010 levels.

A new Medicaid state option is created to allow certain Medicaid enrollees to designate a provider as a “health home.” States receive a 90% federal matching payment for two years for health home-related services. Federal 3-year grants are available to states that develop programs to provide Medicaid enrollees with incentives to participate in comprehensive health lifestyle programs to meet certain health behavior targets.

Wellness program grants
Employers with less than 100 employees working at least 25 hours a week, that establish wellness programs on or after 23 March 2010, may apply for federal grants of up to 5 years starting in fiscal year 2011.

Other measures becoming effective in 2011

  • 23 March 2011: Federal funding becomes available to states to begin planning the establishment of American Health Benefit Exchanges and Small Business Options Program Exchanges. States are required to create and maintain health care exchanges through which health insurance providers compete on equal terms. All employees whose employers do not offer health coverage and would like to purchase a plan may participate of these exchanges. Enrollment in Exchanges begins 1 January 2014.
  • 1 October 2011: Funding becomes available for the establishment of a 15-member Independent Advisory Board to submit legislative proposals containing recommendations to reduce the per capita rate of growth in Medicare spending whenever spending exceeds targeted growth rates. First Board recommendations are expected for 15 January 2014.
  • 1 October 2011: The Medicaid State Balancing Incentive Program is created. The Program is to provide enhanced federal matching payments to increase non-institutionally based long-term care services, and to establish the Community First Choice Option in Medicaid to provide community-based attendant support services to certain people with disabilities.

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 2011 updates |

W-2 reporting requirements for employers – starting 2011

Friday, January 28th, 2011

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.

Overview

Section 9002 of the Patient Protection and Affordable Care Act (PPACA) requires all employers to disclose the aggregate cost of “applicable employer-sponsored coverage” on each employee’s Form W-2.

What is included as “applicable employer-sponsored coverage”?

For purposes of this reporting requirement, “applicable employer-sponsored coverage” includes coverage under any group health plan made available to an employee by the employer, regardless of whether the employer or the employee paid the cost, including coverage provided under FSAs, HSAs and HRAs. Applicable employer-sponsored coverage also includes coverage under any group health plan established and maintained by the U.S. government, the government of any state or its political subdivision, or by any agency or instrumentality of such government.

What is not included as “applicable employer-sponsored coverage”?

Applicable employer-sponsored coverage does not include:

Coverage only for a specified disease

Coverage for long-term care

Coverage only for accident insurance

Hospital indemnity or other fixed indemnity insurance

Does the W-2 reporting requirement apply to all employers who provide health coverage, regardless of the employer’s size?

Yes.  The W-2 reporting requirement applies to any employer that provides health coverage for its employees if the employer is required to deduct and withhold employment or income taxes from an employee’s wages under Sections 3401 or 3402 of the Code.

When is this new requirement effective?

The new Form W-2 requirement is effective for taxable years beginning after 2010 (i.e., the 2011 W-2 due in January 2012). On October 12, 2010, the IRS announced that this W-2 reporting requirement will be optional in 2011 (see IRS Notice 2010-69). Employers choosing to delay the reporting requirement will not be penalized by the IRS. This delay is intended to give employers time to make changes in their payroll systems or procedures in preparation for compliance with the new reporting requirement. The IRS is expected to publish additional guidance on the new Form W-2 reporting requirement before the end of 2010.

How is the aggregate cost of employer-sponsored coverage determined for a self-funded plan?

The aggregate cost of coverage is determined under rules similar to those for determining COBRA premiums (as set forth in Section 4980B(f)(4) of the Internal Revenue Code). Therefore, the aggregate cost of employer-sponsored coverage that must be reported on an employee’s W-2 is equal to the COBRA rate for the coverage option in which the employee is enrolled, less the 2% administrative charge that may be applied to COBRA coverage. For this purpose, FSAs, HSAs and Archer MSAs are excluded from the calculation.

Who will get the Form W-2?

Under current rules, employers file Form W-2 with the IRS and furnish a copy to each employee for wages subject to federal income and employment tax withholding. PPACA indicates reporting also will be required for former employees, retirees and surviving spouses, but it isn’t clear what IRS form(s) will be used. Further guidance from the IRS is expected.

Is this requirement a carrier requirement as well?

No. The requirement to report the aggregate cost of employer-sponsored coverage on an employee’s W-2 is an employer reporting requirement, not a carrier reporting requirement. Aetna will not take the responsibility for preparing and/or issuing W-2’s on behalf of its customers; however, Aetna will provide the health benefits data necessary for customers to fulfill their W-2 reporting requirements.

Does this reporting requirement change the tax treatment of the benefit to the employee?

No. With respect to the W-2 reporting, this is solely a reporting exercise and does not change the tax treatment of the benefit to the employee under the current law.

In what box on the W-2 is the aggregate cost of employer-sponsored coverage reported?

On October 12, 2010, the IRS issued a draft Form W-2, a copy of which may be found at the following web address: http://www.irs.gov/pub/irs-utl/draft_w-2.pdf . The draft Form W-2 issued indicates that the aggregate cost of employer-sponsored coverage will be reported in Box 12, using Code DD. It is expected that the IRS will publish additional guidance on the new Form W-2 reporting requirement before the end of 2010.

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care, www.gnazhealth.com ,  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 2011 updates for employers |

Frequently asked questions and answers on preventive care, 2011 – Part 1

Wednesday, January 5th, 2011

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.

Some plans cover preventive care after an office visit copay. Can a copay still apply or must coverage be at 100%?
The regulations clarified that co-pays, deductibles and coinsurance are not permitted for preventive care services. If a plan uses a provider network, coverage is required at the in-network level only. Coverage of preventive care is permitted but not required out-of-network. If coverage is provided out-of-network, it can be subject to co-pays, deductibles, and coinsurance.

It appears that the preventive care legislation actually does not impact grandfathered plans. Please clarify this.
The prohibition on cost-sharing for preventive care does not apply to a grandfathered plan. Any plan in effect on March 23, 2010 would be a grandfathered plan, and the prohibition on cost-sharing for preventive care would not apply as long as the plan maintains its grandfathered status. Events that might cause a plan to lose its grandfathered status in the future have been clarified in regulations provided by the Secretary of Health and Human Services.

My plan covers preventive care at 100% up to a plan year maximum of $600. Charges that exceed the maximum then apply towards coinsurance (no deductible). How will the legislation impact that benefit?
Because preventive care is considered an essential health benefit, an annual or lifetime dollar limit is not permitted in-network. In addition, application of coinsurance to charges for preventive care services exceeding $600 would not be permitted under the in-network coverage.

My understanding of cost-sharing is that the customer will not have to pay a copay / coinsurance / deductible for preventive services. Do you know if this applies to both in-network and out-of-network doctors, or to in-network doctors only?
The PPACA regulations clarified that a plan can satisfy this requirement by eliminating patient out-of-pocket expenses solely for in-network preventive care services.

When will this no-cost-sharing-for-preventive-care requirement take effect?
The no-cost-sharing-for-preventive-care health requirement is effective for plan years beginning on or after September 23, 2010 (October 1, 2010 for plan years beginning on October 1, 2010), but is not applicable to grandfathered plans.

How is the recent healthcare reform legislation affecting vaccinations and the delivery of vaccines?
Under the new health care reform law, all non-grandfathered health plans will be required to provide a preventive benefit package that covers routine immunizations. Regulations from the Secretary of Health and Human Services require coverage of all immunizations and vaccines that are recommended by the Advisory Committee on Immunization Practices (ACIP).

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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Posted in 2011 updates; FAQ and answers |

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 |

US group insurance: “How do you decide who and what to cover?”

Friday, December 10th, 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.

Please Note:  Good Neighbor Insurance agency provides US individual, family, group health insurance, and property & casualty insurance in the US as well as for those traveling and residing outside the US. 

*          US health insurance and US property and casualty insurance:  www.gnazhealth.com

*          International travel and medical insurance:  www.gninsurance.com

*          International property and casualty insurance:  www.gninternationalpropertyinsurance.com

How do you decide who and what to cover?

Before we can help you decide what types of insurance to offer, you’ll need to know who and what you want it to cover.

Ask yourself these five questions and then talk with one of our agents at Good Neighbor Insurance to help determine which insurance plans and coverage are the right fit for yourself, your family, your business, and its employees.

1.   Are there any government mandated insurance plans you need to offer?

Of the many types of insurance plans available to business owners, only a few Property and Casualty policies are required by federal or state law. These include Workers’ Compensation, personal or commercial auto, and homeowners’ insurance

Property and Casualty Insurance – Unlike health insurance, which protects people, property and casualty insurance covers the physical assets that are vital to your success and that of your business.

Workers’ Compensation Insurance – If you or your employees become disabled due on an on-the-job injury or illness, workers’ compensation insurance protects your business from lawsuits while covering the necessary medical care.

Business Insurance – These plans include several policies that protect your business from circumstances that could negatively affect your operations. Policies include property, casualty, liability, commercial auto, and more.

Individual Property and Casualty Insurance – Individual property and casualty insurance helps protect policyholders and their families with policies that include personal auto, liability, and homeowners’ insurance.

Good Neighbor Insurance provides Property and Casualty insurance in many states.  Please go to our Property and Casualty site at www.gnazhealth.com and fill out the quote so we can look at the best options for you. 

Good Neighbor Insurance also provides international property and casualty insurance for those traveling and living outside the US and you may view our plans at our web site at www.gninternationalpropertyinsurance.com .

2.   Are you concerned about your business operations if you were ever unable to work?

As a business owner, you have the most impact on your company’s direction, day-to-day operation, and customer perception. That’s why it’s so important to prepare in case there’s ever a time that you and other key employees. A key employee is an owner or a highly ranked employee whose work has a direct effect on business profitability, aren’t able to work.

Key Employee Insurance – By insuring yourself and other important employees, your business can use the funds to help find a qualified successor, and protect itself from any potential economic setbacks.

Owner Life and Disability Insurance – You plan for retirement; it makes sense to prepare for unexpected contingencies that could have an even greater effect on your business. We’ll work with you to assess your long-term needs, and help you choose life and disability coverage that provides peace of mind — about your business and your budget.

3.   Do you see offering insurance as a way to attract and retain employees?

Group Health Insurance – Good Neighbor Insurance agency takes a simple, logical approach to group health insurance. We start by offering a wide selection of plans, then we help you understand your options — so you can confidently select a plan that meets the needs of your business, budget, and employees.

The ease and convenience of group plans is a major reason why health insurance is a popular employee benefit, with nearly 178 million Americans covered by health insurance where they work.

Employee Voluntary Benefits – Fill the gaps in your standard insurance plans. Qualified medical expenses not covered by existing insurance — your out-of-pocket expenses., and receive special benefits beyond traditional policies, such as payment for pre-existing medical conditions.

4.   Would you rather cover only yourself and your family?

Individual Insurance - Individual insurance provides business owners with unique benefits, starting with one that may not immediately come to mind — affordability.   Good Neighbor Insurance agency believes you should not have to sacrifice a plan that fits because of your finances.  Our licensed agents will help assess your needs and discuss your options in plain language. Because premiums can easily range from $100 to $1,500 per month, they will help tailor a plan to your needs and budget. Call us at 480-633-9500 for quotes and you may also go to our web site at www.gnazhealth.com for live quotes, up-to-date information, and even apply online.

Health, Life, and Disability Insurance – Protect yourself and your dependants from skyrocketing medical costs with plans providing health, vision, dental, disability, life and other vital coverage.

Property and Casualty Insurance – We partner with highly ranked carriers to provide a wide variety of essential policies from homeowner’s insurance, to auto, and personal liability.

Free Insurance Quotes – For individual and family quotes: View general quotes, look at plan comparisons, and even apply online through our web site quoting engine at www.gnhealthplan.com  or call all us at 866-636-9100 outside of Arizona or in Arizona at 480-633-9500 to go over any questions or concerns you may have.

5.   Would you allow employees to choose your offerings if they pay for their own benefits?

Employee Voluntary Benefits – A comprehensive employee benefits package is a powerful magnet for attracting and retaining the best employees. Whether or not you offer a group health plan, you can work with our agents at Good Neighbor Insurance agency to select voluntary benefits that will:

  • Greatly expand your benefits offerings at little or no cost to you.
  • Allow employees to choose the benefits that meet their needs.
  • Often help employees secure individual life and disability coverage regardless of medical histories, due to simplified underwriting requirements Voluntary benefits tend to attract fewer employees than group insurance as a whole, and those people are more likely to have a pre-existing medical condition that makes them riskier to cover. So to encourage more low-risk individuals to join the plan, insurance companies loosen the underwriting requirements for voluntary benefits policies..

Short-Term Disability Insurance – This replaces partial income if an employee becomes disabled, due to a covered accident or sickness, for a period ranging from three to twenty-four months.

Life Insurance – We will discuss Term life plans, universal life insurance, and whole life insurance plans (3 primary main types of life insurance) as well as level or annual premium payment periods, and is guaranteed renewable. an opportunity to build cash value, coverage can last a lifetime, and help you select the type of plan that fits your needs best.

Dental and Vision Insurance – Beyond medical insurance, dental and vision insurance are popular coverage options for employees — helping insure them against some of America’s most common health problems.

Accident Insurance – Provides indemnity benefits that the carrier will pay a cash benefit in the case of a qualified accident that leaves you or an employee unable to work, for on-and off-the-job, or off-job-only accidents.

Hospital Indemnity and Critical Illness – Beyond your company’s health insurance plan, you can offer employees specific coverage for cancer treatments, out-of-pocket expenses associated with home health care, and other supplemental health insurance An indemnity-based plan with benefits payable as a lump-sum or flat benefits amount for a covered hospital stay or covered outpatient surgery..

 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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Are you a small business employer with your company in the US needing health insurance options for your employees?

Wednesday, November 24th, 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.

Here are options if you are (1) a small business employer, (2) with your company in the US, (3) and needing health insurance options for your employees?

Note:  Starting on 1-1-2014 individual and family insurance plans may not decline a US citizen due to any medical issue(s).

Small employer plan:  Insurance companies that sell small employer plans can’t turn your business down based on your employees’ health.

Below are some other ideas and options that may or may not be applicable for you and your employees.  However we want to provide these options to you in case they may meet your needs.

Exchanges:  These programs will not be ready until 1-1-2014.  An exchange is where private health insurance and the state come together to make quasi-state government health plans open to individuals, families, and small businesses with certain criteria to meet which will be spelled out more in the months to come.  For more information on exchanges please go to our blog page at http://www.gntravelinsurance.com/category/us-health-insurance-2/insurance-lingo-us-health-insurance-2/exchanges-insurance-lingo-us-health-insurance-2/

Medicaid:  Medicaid provides coverage for low income children, families, the elderly, and people with disabilities. Pregnant women may qualify with higher incomes.

Coverage for young adults under age 26:  If your parent’s insurance offers dependent coverage, you may be eligible to be covered on their policy until age 26.

Pre-existing condition insurance plan (PCIP) / High Risk Pool:  You may qualify for a pre-existing condition insurance plan or a high risk pool, which helps people who have a hard time getting insurance find coverage.  Most states have this option and you may call the department of insurance in the state you are residing for that information. However, if  your state does not have their own high risk program than they are using the US federal government high risk pool which you may find at www.pciplan.com/forms/pdfs/BenefitsSummary.pdf .

Health insurance plans for individuals and families:  If you do not have job-based or other coverage, you may want to buy a policy from a private insurer.

Finding care you can afford:  There may be local facilities that provide free or reduced-cost care, whether you’re insured or not. What you pay depends on your income.

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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Questions and answers about the new health insurance law – Part 10 (mostly about employer/group coverage)

Friday, November 19th, 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.

Carve-Out Plans

Q – I need some clarification on existing group coverage. I am trying to quote a group that renewed in April. They made changes to their plan at that time by increasing the deductible and adding an HSA option. They are a carve-out of management positions. They have 26 employees but only offer health insurance to 8. Will they have to now offer group coverage to all eligible employees? If so, when would that have to start?

A – They are now subject to 105(h) discrimination testing, so if they don’t pass, they will either need to offer coverage to the entire group or pay a penalty.

Discrimination Testing

Q – Can you explain how the 105(h) discrimination testing can be measured? What factors and information are needed and how does one use this information to find out if discrimination is determined to exist?

A – The following information is necessary to run a Discrimination test under 105(h):

1. Date of hire

2. Date of birth

3. Hours if PT

4. Status (ft, pt, seasonal)

6. Shareholder and % of stock held

7. Officer

8. Compensation

9. Collective Bargaining Arrangement

10. Non Resident Alien

This information determines the “control” group, then both the Eligibility test and the Benefits test must be performed on this group.

FSA’s

Q – If a company wants to keep grandfathered status for their medical and dental plans, and eliminates there FSA, will that cause the group to lose grandfathered status?

A – If a plan is not changed, grandfathered status is lost only if one of six changes occurs:

  1. Elimination of all or substantially all benefits to diagnose or treat a particular condition.
  2. Increase in a percentage cost-sharing requirement (e.g., raising an individual’s coinsurance requirement from 20% to 25%).
  3. Increase in a deductible or out-of-pocket maximum by an amount that exceeds medical inflation plus 15 percentage points.
  4. Increase in a copayment by an amount that exceeds medical inflation plus 15 percentage points (or, if greater, $5 plus medical inflation).
  5. Decrease in an employer’s contribution rate towards the cost of coverage by more than 5 percentage points.
  6. Imposition of annual limits on the dollar value of all benefits below specified amounts

Assuming none of these happen, eliminating a FSA would not cause a loss of grandfathered status.

Grandfathered Status

Q – If the employer is contributing a specific amount (say $200) and the plan has a rate increase of more than 5%, because the employee’s contribution will go up by more than 5%, the plan will lose its grandfathered status…..is this true?

A – The test established in the regulation is that an employer can only decrease his/her contribution PERCENTAGE (not absolute dollar amount) by five points and retain grandfather status.

For example, if the employer contributes 70% of premium today, he or she must contribute at least 65% of premium to maintain grandfather status.

The current understanding (based on communications from EBSA and HHS) is yes, the plan would no longer be grandfathered.

High Risk Pool

Q – A dependent Spouse is currently covered under COBRA through May 2011 under the 65% discount and then one more month makes 18 months.

The spouse has Rheumatoid Arthritis, what should they do?

A) Apply now & get denials so in May or June the denials will be documented?

B) Is there a high risk pool for AZ yet? (90 days after signing)

A – A) In order to qualify for the High Risk Pool, this individual will need to go 6 months without creditable coverage.

B) Arizona is utilizing the Federal high risk pool at www.pcip.gov.

Patient Protection Model Disclosure

Q – If the plan does not need to select a PCP, etc. do they still need to send this notice out as well to stay “grandfathered”?

A – This notice is not necessary if selection of a PCP is not required.

Penalty

Q – What are the penalties if a group does not pass discrimination testing?

A – $100 per day, per person who is discriminated against; to a maximum of the lesser of 10% of the total plan cost, or $500,000.

Q – I have a group that is a small company with 6 to 8 employees and no medical plan for those employees. The owner claims he will not HAVE to start a benefit plan under the new laws, and that he will not have to pay any penalties.

I know over 50 lives if you drop coverage there is a $2,000 per EE fee to pay the government.

What is the ruling for small groups who offer NO medical coverage?

A – There is no requirement for employers with less than 50 full-time employees to provide coverage or pay a penalty.

Q – A question has come up with a small group of about six employees. The employer does NOT provide health insurance to employees because ALL the employees are either covered by their spouse’s plan, or have individual coverage. At this time it appears that NONE of these employees will purchase from the exchange. Will this employer be subject to penalties? If so effective when, and how much?

A – They will not. Penalties only come into play on groups of 50+.

Preventive Benefit

Q – If a plan renews their current benefits and maintains grandfathered status, is the preventive benefit effective on their first plan anniversary following September 23?

A – Grandfathered plans are not required to cover preventative at 100% as long as they maintain grandfathered status. All non-grandfathered plans must implement 100% coverage on preventative on the first day of the plan year following 9/23/10.

Q – I thought that 100% preventative benefit was automatically added on the plan’s anniversary?

A – Unless a carrier makes a determination to add it, the grandfathered plan has the right to voluntarily add any component of the legislation, but must do so 60 days in advance and must note their “file” that it was voluntary and they are still maintaining their grandfathered status.

Management Carve-Out

Q – I have a new group that currently has no group plan in place, a total of 12 employees, and wishes to set-up a “Management Carve Out ” for the owner and 3 managers, and offer nothing to the line employees. Are there any restrictions, special rules, or requirements I should be aware of?

A – If there is not a “business” reason for doing the carve-out, they may be subject to penalties. The plan is now subject to the Highly Compensated Discrimination test 105(h).

Miscellaneous

Q – Any idea where I can get some kind of plan design for the bronze plan in 2014? I have a group with a $10,000 deductible plan with copays for PCP visits and drugs. I would think that is not rich enough to qualify.

A – Other than it must cover 60% of the average cost of essential benefits, nothing has been published.

Q – It is my understanding that starting in 2011 a company can no longer deduct the health insurance premiums paid out. I also understand that all employees will need to claim as income the part of their health insurance premium paid for by the company.  Is this information correct?

A – No, neither piece is correct.

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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