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... an Employee Benefits, Health Care/Insurance/Funding, Consumer Driven Healthcare -  Trusted Advisor - helping organizations of all types and size reduce human capital related costs, improve morale, and maximize organizational objectives relative to wellness and health care. 

Wednesday, January 24, 2018

More ACA (Tax) Delays

The recently signed (1/22/2018) "short-term spending bill", also referred to as the "continuing resolution" (CR) does more than keep the United States government open and fully functioning until February 8, 2018.  It also delivers yet another set of Affordable Care Act (ACA) delays.  Employers offering group health insurance to their employees can breathe a collective sigh of relief as virtually ALL employers offering ALL types of group health insurance (i.e., small group, large group, fully insured, self-funded) will benefit from these delays.  Here's what's happening and when....

The ACA's so called Cadillac tax, originally set to take effect this year (2018), and previously delayed by congress to 2020, is now delayed until 2022.  But wait....there's more!!!  The triggers for Cadillac tax applicability are required to be reset prior to the implementation of the Cadillac tax, which is welcome news to affected employers.  So originally, benefit amounts that exceeded annual, cumulative thresholds set by the ACA ($10,200 for employee only coverage; and $27,500 for employee plus dependent(s) coverage) would be subject to a 40%, employer directed excise tax.  The recently passed, 2018 CR bill requires these thresholds to be reset prior to 2022.  The Cadillac tax applies to all forms and types of group health insurance.
For a review of the Cadillac tax, see -

The HIT tax only applies to fully insured group health insurance plans, and originally took effect in 2014.  This tax added 2% - 2.5% to premiums in 2014, then ramped up to 3% - 4% in 2015 and beyond,  and is collected and remitted by insurers to the federal government.  This tax increases in future years commensurate with premium increases.  Congress suspended the HIT tax for 2017, but it resumes in 2018.  Per the CR, it is now set to be suspended for 2019, resulting in reduced premiums to impacted employers beginning in 2019.

Although the medical device tax does not have a direct impact on health insurance, it definitely has a cost shifting impact on the ultimate cost of coverage.  Originally taking effect in 2013, Congress suspended the medical device tax, which applies a 2.3% tax on revenues derived from the sale of U.S. medical devices, for 2016 and 2017.  The CR now delays this tax through 2019.  Presumably this tax would resume in 2020, barring an additional delay or repeal.

Importantly, the ACA's Comparative Effective Research Fee (CERF), which applies to all group health insurance plans, is NOT delayed by the CR.  So affected employers must still comply with the collection and remittance of this tax.  Generally speaking, insurers collect and remit this tax on behalf of fully insured plans, and partially self-funded employers must calculate/collect/remit this tax in July of each year.
For a review of the CERF, see -

Note: The ACA's transitional reinsurance fee, which applied to all group health insurance plans from 2014 - 2016, went away after 2016 and is no longer applicable.
(see -


Friday, December 1, 2017

Preventive Healthcare Services and Coverage

An important and often overlooked benefit of the Affordable Care Act (ACA) is full coverage and benefits for preventive care.  Specifically, the ACA established that virtually all private health plans must provide 100% coverage (i.e., no cost share) for a host of preventive healthcare services.  The only exception to this requirement are so called "grandfathered" plans, which are becoming more scarce every year.  So in short, all non-grandfathered health insurance plans (i.e., individual, small group, large group, fully insured, and partially self-insured) may not require cost-sharing such as copays, deductibles, or coinsurance, for any of the listed preventive services, within the following broad categories:
  1. Evidence Based Screenings and Counseling
  2. Routine Immunizations
  3. Preventive Services for Children and Youth
  4. Preventive Services for Women
The list of required preventive services comes from four specific government bodies including:
  • The U.S. Preventive Services Task Force (USPSTF)
  • Advisory Committee on Immunization Practises (ACIP)
  • Health Resources and Services Administration (HRSA) and Bright Futures
  • Institute of Medicine (IOM) 
Underscoring the importance of this benefit, and the need for people to seek preventive screening and care, is the fact that cost is often a real or perceived barrier in seeking preventive care.  The following data from the Kaiser Family Foundation captures the depth of this challenge by gender, income relative to federal poverty level (FPL), and insured status:

The list of covered preventive services has grown considerably since this aspect of the ACA went into effect for non-grandfathered plans beginning/renewing on or after September 23, 2010.  In 2012, specific "Women's Preventive Services" were added, including some contraception drugs and devices.  Initially, some 38 specific preventive services were indicated on the list, and as recently as 2014, there were 63 distinct preventive services included.  Currently (2016/2017) there are 72.

Starting in late 2017/early 2018, the list of required covered preventive services increases to 98, and includes coverage for cholesterol screening and some statin drugs. So as health insurance plans begin renewing, and preventive care services grids are updated, expect to see certain statin drugs like Atorvastatin, Lovastatin, Simvastatin, and Pravastatin covered at a $0 cost-share, as early as the end of 2017The actual drug(s) and dosages covered without a cost-share will vary depending on the insurance company and coverage.

The USPSTF's  new guidelines affecting cholesterol/lipid disorder screening lists the following criteria for obtaining no cost screenings and covered statin drugs, for patients with no prior history of cardiovascular disease:
  • Patient ages 40 - 75;
  • have one or more cardiovascular risk factors such as dyslipidemia, diabetes, hypertension, or smoking; and
  • have a calculated 10-year risk of a cardiovascular event of 10% or greater.
IMPORTANT: All insurance companies and plans provide a detailed grid outlining the covered preventive services for the particular plan year.  These grids can typically be found on employer, administrator, and/or insurance company web portals.

To access a comprehensive list of all covered preventive services by type, gender, frequency, click -


Friday, September 8, 2017

The ACAs Health Insurance Subsidies

In order to accomplish its objective of "affordable health insurance coverage", the Affordable Care Act (ACA) created three (3) separate, cost reducing initiatives:

1. Premium Tax Credits - reduce out of pocket PREMIUM costs;

2. Cost Sharing Reductions (CSR) - reduce point of service out of pocket costs such as copays, deductibles, and coinsurance; and

3. Medicaid Expansion - designed to close the gap on eligibility for coverage based on income that is below the thresholds for nos. 1. and 2. above.

Eligibility for, and applicability of premium tax credits and cost sharing reductions is based on "modified adjusted gross income" (individual or family), and affect insureds differently depending on the number of individuals in the household.  Medicaid eligibility rules vary by state, and are impacted by each states decision to expand its Medicaid program, pursuant to the ACA.  Generally speaking, individuals that are not eligible for the above tax credits and/or CSR's because their income falls below the minimum thresholds (generally less than 100% of the federal poverty level - see below), may be eligible for Medicaid.  (Note: Another program - the Children's Health Insurance Program (CHIP) - provides low-cost health insurance to children (and in some cases, pregnant women) whose families earn more than the Medicaid threshold.)

The 2017/2018 calendar year chart below lists the income eligibility thresholds for:
1. Premium tax credits only;
2. Premium tax credits and CSRs; and
3. Medicaid eligibility in states that expanded under the ACA .

So for example, a family of four with income below $61,500 per year would be eligible for both premium tax credits (to offset the cost of the coverage); and CSRs (to offset point of service costs such as copays, deductibles, and coinsurance).  The range of income figures depicted reflects the lower end of the federal poverty level scale (i.e., 100%) to the highest level (i.e., 400%).  Per ACA guidelines, the lower the income amount, the higher the premium subsidy and CSR, and vice versa.

Note: The CSR's are only available to individuals making between 100% - 250% of the federal poverty income thresholds.  Also, in order to receive either the premium tax credits or the CSRs, individual health insurance coverage must be purchased on the Exchange (see

Persons in Family/Household100% FPL: Minimum to Qualify forACA Assistance138% FPL: MedicaidCap (in States that Expanded)250%
CSR SubsidiesCap
FPL: Premium Tax Credit Cap
For families/households with more than 8 persons, add $4,180 for each additional person
Source: 2017

It's important to note that while the premium tax credits are firmly embedded in the ACA, the CSR's are not, and have actually been challenged in a court of law. The U.S. House of Representatives sued the U.S. Department of Health and Human Services (HHS) over the release of CSR payments and a district judge ruled in favor of the House.  The ruling was appealed by the Secretary of HHS, and CSR payments were permitted to continue...FOR THE TIME BEING.  Insurance companies rely heavily on both premium tax credits AND CSR's in order to offer individual health insurance, subject to all the ACA guidelines, both on and off the exchanges.  Either a court ruling or a unilateral decision by the White House could summarily end CSR payments, and thus create a significant disruption in the health insurance marketplace.


Wednesday, August 2, 2017

Individual Health Ins. When's Who's and What's

This particular blog post is primarily directed to residents of my adopted home state of Nebraska. However it may shed light on some of the "when's, who's and what's" that health care/insurance stakeholders may be facing in other parts of the country next year.

As we inch closer to the 2018 individual health insurance open enrollment season (WHEN - November 1, 2017 - December 15, 2017), we're beginning to see WHO is going to be selling individual health insurance throughout the country (in NE - Medica Health only).  Unfortunately, there are a number of counties throughout the country that will not have a health insurance seller.  Hopefully, some regulatory changes that have been implemented at the federal level...
(see - ...may encourage more insurers to re-enter those and other counties.

In a clear sign of the times, there are three (3) separate and distinct factors that could significantly impact health insurance cost and coverage in 2018.  Interestingly, some insurers are even resorting to filing separate sets of premium rates with the departments of insurance, that vary based on "scenario". These three (3) factors are based on whether or not the federal government...
  1. continues to collect tax penalties associated with non-compliance of the so called individual mandate (i.e., non-exempt folks that don't purchase health insurance); 
  2. continues paying insurers subsidies to offset plan related out of pocket costs such as copays, deductibles and coinsurance, for those that are eligible for such subsidies (based on income); and
  3. implements a reinsurance program to offset some of the higher costs associated with treating the chronically ill.
The impact of the rate increases filed by Medica Health in NE (and around the country by other insurers) is largely dependent on whether insured individuals are eligible for, and receive premium subsidies.  For example in NE, increases filed by Medica Health (if approved) could reach as high as 60+% (WHAT?) for those that are not currently eligible for premium subsidies (estimated at 20% of the ACA compliant insured population in NE).  Those who qualify for subsidies, which vary based on income, could see little or in some cases, no effect of the rate increases, because the subsidies increase commensurately with premium hikes.  Here are some examples:

Omaha, NE20172018
For a 25-year-old making $30,000
Monthly cost to member$203.20$203.20
For a 40-year-old (no subsidy)
Monthly cost to member$368.40$579.12
For a 60-year-old making $36,000
Monthly cost to member$287.79$287.79
Source: Omaha World Herald, Steve Jordon

At the time of this writing (August 2, 2017) these rates are merely "filed", and not yet "approved" by the Nebraska Department of Insurance.  However, recent history tells us (notwithstanding the aforementioned 3 factors) insurance department's have been approving health insurance premium rate filings.  In addition, these renewal rates provide a glimpse of WHAT new business rates might look like for those newly entering the individual health insurance market next year, and those moving from insurers like Aetna and Blue Cross Blue Shield of Nebraska who have exited both the exchange and non-exchange markets for 2018.


Thursday, July 13, 2017

Stabilizing the Individual Health Ins. Market

Those of you who read my previously released - "7-Point Health Care/Insurance Reform Plan" - may recall point no. 2, which was to entice and encourage insurers to come back to the markets and resume offering affordable coverage to willing, able, and ready buyers. 
Several folks that read the blog outlining my reform plan posed this question - "If there are no insurers offering individual health insurance in my county (or state) in 2018 (and beyond), will the federal government still enforce the Affordable Care Act's (ACA) individual mandate; even if its impossible to secure coverage and meet the requirement"? Absent a change in law or regulations relaxing the mandate; or the return of health insurer(s) to the markets that lack any, the answer would be "yes"! This situation presents a formidable conundrum. may be on the way!

The Department of Health and Human Services (HHS) recently issued FINAL regulations (on 4/13/17, taking effect 6/19/17) designed to "stabilize the individual health insurance markets".  These regulations are primarily aimed at reducing (if not preventing) the instances of people gaming the system and waiting to purchase health insurance until healthcare is needed, and subsequently dropping coverage after treatment and charges are complete. Such manipulation of health insurance markets by some consumers has reportedly resulted in a large percentage of health insurance industry losses, compelling many insurers to "cut and run".  The old analogy of "waiting until the house is on fire before purchasing coverage" comes to mind!

Here's a summary of the new regulations, again, designed to entice insurers back to the markets:

  1.  The annual open enrollment period (AEP) for individual coverage in 2018 is changed to 11/01/17 - 12/15/17, which is shorter than previous AEP's.  This time frame aligns better with many employer plans, and Medicare/Medicare Advantage enrollment periods.
  2.  New rules apply to special enrollment periods (SEP), which are generally created upon experiencing a qualifying event, such as acquiring a dependent, a permanent move, or losing coverage.  The new rules:
    • allow insurers to require additional, expanded verification of their SEP eligibility;
    • limit enrollees ability to change metal coverage levels (i.e., increase coverage midstream) during a coverage year; and
    • adjust requirements for SEP's associated with marriage.
  3. Allows insurers to collect past due premiums for coverage that was inforce on an applicant within the past year before re-enrolling the applicant. (Note: This regulation encourages continuous coverage.)
  4. Creates more flexibility for insurers to meet ACA actuarial value minimums allowing for lower premiums and (hopefully) more coverage choices.
  5. Defers oversight of preferred provider network adequacy from the federal government to states that have the ability/means to conduct such review processes.
Those seeking the actual regulations can click here -

Many health insurance companies have already announced their intention to cease selling individual health insurance to new customers, and to terminate inforce coverage, in 2018.  Hopefully these regulations will deter further market withdrawals, and perhaps entice new entrants for 2018, 2019, and beyond!


Monday, June 26, 2017

My 7-Point Health Care/Insurance Reform Plan

Ordinarily, this Blog site is used to provide information, ideas, strategies, explanations; in short - clarity - for health care/insurance stakeholders.  Today I'm departing from the usual fact based format to provide my thoughts and opinions on what would be a good way forward with respect to REAL healthcare/health insurance reform. These ideas are based on my 30-plus year career in healthcare financing and insurance, and are absent any political bent or particular bias.  Both the current House (passed) and Senate (proposed) bills are "patchwork efforts" designed in my opinion, to address some of the many critical issues facing healthcare delivery and healthcare financing, such as the crumbling individual health insurance markets.  But both bills, and most of what I've seen and read over the last seven years, fall perilously short of actually achieving the ambitious goals of:

1. Insuring more people
2. Lowering premiums making health insurance affordable
3. Maintaining and continuously improving quality of, and access to care 

Before I lay out my seven-point reform plan, it's important to review a very important reality.  The United States has chosen a for-profit, largely private sector, government regulated (as opposed to government controlled) healthcare system. (Note: Medicare, Medicaid, and Tricare are variations from this system, and in fact, resemble many socialized healthcare systems that exist throughout the world.)  Such a "free markets based" system differs greatly from the government run, single payer style systems implemented by our Canadian neighbors to the north, and most of Europe.  As such, we rely on, and very much need insurance companies to offer affordable coverage to the masses, in order to provide citizens with the ability to pay for their healthcare.  One of the unintended consequences of the Affordable Care Act (ACA) has been the mass departure of insurance companies from the individual market.  So priority one at this time, is to get the insurers back into the marketplaces.

Interestingly, there are discussions taking place to move our healthcare system away from its current format, to more of a "Canadian style", single payer; government-controlled system.  Such a system has numerous trade-offs associated with implementation and use.  Perhaps I will address these in a future blog post!

So here is my seven-point reform plan, for what it's worth...

1. Repeal of the more onerous provisions of the Affordable Care Act (ACA)...particularly those causing the collapse of health insurance markets (e.g. community rating, pre-existing condition ban, minimum essential health benefits mandate, standardized/metallic plans, taxes/fees, etc.)

2. Entice/encourage insurers to come back and offer affordable coverage to potential customers (Note: no.1 above will help accomplish this objective.).  One of the more urgent and important ways to do this, is to allow insurance companies to penalize, if not avoid the occurrence of individuals gaming the system and waiting to purchase coverage at the precise time they need it, only to drop coverage after all claims are paid.

3. Create separate insurance risk pools for the chronically ill and the rest of the insurance buying public. (Note: The top 1% of healthcare spenders consumes more resources collectively than the bottom 75%.)  Separating risk pools, along with no.1 above, will attract insurers back to the markets, and allow for more affordable priced coverage, and competitive insurance markets.  Appropriate funds for the creation of risk pools, reinsurance programs, and innovation of ideas to address the insuring and treatment of the chronically ill, high-risk population.

4. Reform Medicaid. Consider moving to a "block grant" funding mechanism at the federal level; and give states more autonomy and flexibility with respect to administration, innovation, and funding.  Under a block grant format, states would be given a fixed amount of funding based on spending levels, with associated annual increases tied to inflation, and the ability to determine things like covered services, eligibility for coverage, etc.

5. Continue implementing the ACA's healthcare delivery reforms, which seek to move reimbursements away from fee for service, to fee for value.  The so called Accountable Care Organizations (ACOs) created by the ACA seek to reimburse providers based on standards such as quality of care, outcomes, and patient satisfaction, instead of the sheer volume and amount of care provided.  As healthcare costs decline, health insurance premiums will follow suit.

6. Place a federal limit on medical malpractice punitive awards, and allow states the flexibility to have even lower ceilings based on merit and circumstances.  The mere threat of unreasonable medical malpractice litigation results in a chain of events which cause health care and in turn, health insurance costs to spiral.  In addition, healthcare providers are sometimes compelled to order/perform procedures they might not necessarily conduct, just to build a preemptive litigation defense. Part of this particular reform effort could include the creation of medical standards of care, which if followed, would remove any liability.

7. Expand upon the "consumer driven health" initiative, including the expansion and relaxing of the use of Health Savings Accounts (HSAs).  It's extraordinarily important for healthcare patients to act more like customers; and consider cost, quality, and outcomes in reaching important healthcare related decisions.  Also, creating multiple funding sources for both lower cost/predictable and higher cost/catastrophic healthcare expenses makes more sense for everyone.  For example, it makes absolutely no sense to "insure" and rely upon insurance, for a $4 prescription drug, a $125 physician consult, or a $50 chiropractic care visit.

Some of the aforementioned points are included, and/or addressed in the current House (American Health Care Act), and Senate (Better Care Reconciliation Act) bills.  For example, each of the bills addresses Medicaid and repealing most of the ACA's fees/taxes.  But in my opinion, these bills fall woefully short of achieving the comprehensive overhaul of our healthcare system that is so desperately needed.  Stay tuned!


Thursday, May 25, 2017

IRS Announces 2018 HSA Adjustments

Recently the IRS issued it's anticipated Health Savings Account (HSA) guidance for calendar year 2018.  Listed below are the changes to current IRS rules affecting HSAs, and qualified high deductible health insurance plans, effective in 2018:

  • HSA Contribution Maximum (Individual/Self Only Coverage): $3,450 ($3,400 in '17).
  • HSA Contribution Maximum (Family Coverage): $6,900 ($6,750 in '17).
  • HSA Annual "catch up" contribution amount for eligible individuals 55 years of age and older remains $1,000.

HSA Qualified High Deductible Insurance coverage changes:

- Minimum deductible/Self Only Coverage/Non-Embedded Deductible*: $1,350 ($1,300 in '17)
- Minimum deductible/Self Only Coverage/Embedded Deductible*: $2,700 ($2,600 in '17)
- Minimum deductible/Family Coverage/Embedded and Non-Embedded Deductible*: $2,700 ($2,600 in '17)

- Out of Pocket Maximum/Self Only Coverage: $6,650 ($6,550 in '17).
- Out of Pocket Maximum/Family Coverage: $13,300 ($13,100 in '17).

Note: The Affordable Care Act's (ACA) out of pocket limits placed on non-grandfathered health insurance plans impacts an HSA qualified plans family out of pocket maximum as follows:
  • For self-only and families with an embedded out-of-pocket maximum, the maximum amounts are: $6,650 individual and $13,300 family.
  • For self-only and family with a non-embedded deductible, the maximum amounts are: $6,650 individual and $7,350 family.
  • Note: the ACA's 2018 maximum out of pocket limits applicable to non-grandfathered plans increases to $7,350 for self only coverage (from $7,150 in '17); and $14,700 for family coverage (from $14,300 in '17).
* Plans with Embedded family deductibles only require a single covered family member to meet the individual deductible amount before coverage begins.  Non-embedded (sometimes called aggregate deductible) plans require one or more family members to meet the entire family deductible amount before coverage applies.