Wednesday, November 27, 2013

ACA's Top 10 Misconceptions (Nos. 6 - 10)


Last week's post revealed the first 5 of my "Top 10 List of ACA Misconceptions".  This week I finish out the Top 10 list with nos. 6 - 10.  There's a tremendous amount of information pertaining to the Affordable Care Act (ACA) that must be read, understood, translated, and communicated.  I will continue informing and communicating as much as possible on this site; and I encourage readers to reach out to me with questions, comments, and suggestions.

Here are nos. 6 - 10 of my "Top 10 List of ACA Misconceptions"...

Wednesday, November 20, 2013

ACA's Top 10 Misconceptions


Over the course of the last 3 years, I have had both the honor and pleasure of discussing the Affordable Care Act (ACA) with a number of organizations, clubs, groups, and even a local radio show.  Throughout this time, and unfortunately it persists, I have encountered a number of misconceptions and misunderstandings relative to several provisions of the law.  So I decided to assemble a list of...you guessed it...the top 10 most common ACA misconceptions that I have come across to date. Here are the first 5:

Thursday, November 14, 2013

***SPECIAL EDITION - Individual Plans May Offer Non-ACA Compliant Coverage in '14!***

Earlier today (11/14/13) the President announced that he will "allow 2014 sales of previously cancelled Individual Health Plans that don't meet Affordable Care Act (ACA) guidelines".  Administration officials clarified that the exception would only be available to those who have lost their [individual health] insurance coverage. 





The announcement was lacking many of the details that are necessary in order to move forward with this exception.  Among the few details mentioned were that Insurers will...
  • NOT be allowed to offer the non-ACA compliant plans to "...other Americans as it would threaten the ACA's financial viability".
  • Be required to notify customers that "alternatives exist" under the ACA, including the availability of tax credits.
  • Have to point out the areas where their plans fall short of government (i.e., ACA) standards.
  • Have to get permission from state insurance commissioners.
The exception, which has no direct impact on group health plans, is a de facto extension of the grandfather clause that was already a provision of the ACA.  Insurers have the choice of whether or not to continue offering the (formerly) non-compliant plans in 2014.  The other challenge would be reaching out to the millions of insureds (like me) that have already received notice of the cancellation of their current plan, and the automatic conversion to an ACA compliant plan.  With only 6 weeks left until the new year, and the various considerations involved in taking advantage of this relaxation of the rules (i.e., cost, technology, impact on rates, etc.), there might not be very many takers on the insurance company side.

I just received an email from the largest issuer of Individual Health Insurance coverage in the state of Nebraska - Blue Cross Blue Shield of Nebraska - which read in part - "...leaders are analyzing the impact of the President's proposal, and will give further information soon about how we will proceed".

Once again I want to stress that although this announcement does not directly affect or pertain to the Group Health Insurance market; to the extent that a significant number of individual health insurers decide to "un-do and/or re-do" policies could impact open enrollment.  In other words, if fewer individuals are forced to accept higher premiums and/or reduced coverage (like me) associated with some of the 2014 renewal offers, there will be fewer "group insurance eligible" individuals wanting to enroll in employer coverage during open enrollment.

Stay tuned!
 
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Wednesday, November 13, 2013

FSA Rollover…An Early Christmas Present From the IRS!


When people hear or see the acronym – IRS – they generally do not associate it with gift giving.  But that is precisely what the IRS delivered on October 31, 2013 in the form of Notice 2013–71, which allows for a partial carryover of unused FSA funds (click - http://www.irs.gov/pub/irs-drop/n-13-71.pdf). The often cited “use it or lose it” rule deters many otherwise eligible Flexible Spending Account (FSA) enrollees from setting aside funds on a pre-tax basis for future use.  However, with the issuance of Notice 2013-71, the IRS is allowing the option of a rollover of up to $500 at the end of the FSA plan year…even for 2013 plan years!  This is great news for FSA plan participants and employers alike.

Back in 2005, the IRS issued a similar relaxation of the code, which allowed for a 2.5 month grace period in which plan participants could continue to incur FSA reimbursable expenses (see IRS Notice 2005-42; click - http://www.irs.gov/pub/irs-drop/n-05-42.pdf ).
Since plan participants still faced the prospect of forfeiting unused balances at the conclusion of the grace period, this provision seemingly had little impact on increasing FSA plan participation.  The allowance of up to a $500 rollover, if effectively communicated, should have the effect of increasing FSA plan participation, thus saving eligible individuals, and their employers, valuable tax dollars. (Note: according to a recent CNN Money article, approximately 14 million families participate in FSAs.)

Here is a summary of the IRS notice, and some things for employers and plan participants alike to keep in mind:

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Wednesday, November 6, 2013

Is Your Company CDH Ready?


Over the course of the last several years, Consumer Driven Health (CDH) has grown in popularity, and effectiveness, as a way for employers to reduce their health insurance and health care related costs.  CDH's evolution has not come easy or without its detractors.  However, both the empirical and anecdotal data collected over the last ten years point to CDH as a proven and effective method of true - "health care reform"!  According to the Kaiser Family Foundation (KFF), the number of employers offering CDH plans has jumped from 4% in 2005 to 31% in 2012.  KFF also released data indicating the average cost of family coverage is $1,500 less per employee on a CDH plan than a traditional PPO plan.  And benefits consulting firm Aon Hewitt's health care survey revealed that CDH plans had a 2 percent lower cost trend in 2012, versus all other health plan types (i.e., PPO, HMO, EPO).

Today's post provides a list of "CDH Readiness Considerations" for employers who are contemplating implementing some form/level of CDH into their organization.  Employers that presently offer a CDH plan(s) might also benefit from a review of these considerations...

1.      COMPANY/ORGANIZATIONAL READINESS

a.     The executive management of the company/organization is supportive and committed to CDH.

b.     Company/Organization is willing to offer a plan(s) that may change over time due to government regulation.

c.      To ensure effective plan use, the company/organization would be in favor of increasing funds or resources allocated to health plan education and communication.

d.     Company/Organization is willing to invest in wellness programs (health risk assessments, health screenings, smoking cessation, weight management, etc.) to keep employees healthy and reduce, if not avoid, high cost claims in the future.

2.      EMPLOYEE READINESS

a.     Employees have a solid understanding of the fundamentals of health care benefits and plan designs (e.g., copays, deductibles, coinsurance, out of pocket expenses).

b.     Employees are comfortable using, and have access to, the Internet.

c.      A majority of employees would prefer health insurance plan option(s) with lower premiums in exchange for higher deductibles. This means employees would pay less premium, yet possibly have more “out of pocket” exposure if they got sick or needed health care benefits.

3.      FINANCIAL CONSIDERATIONS

a.     Company/Organization believes it’s important to improve cash flow related to health care spending.

b.     Company/Organization would be willing to contribute to an account based health plan, and in so doing, would realize tax savings relating to such contributions.

c.      Company/Organization believes that a plan with first dollar (i.e., 100%) coverage for preventive care is important to help drive utilization savings and increase enrollment in a CDH plan. (Note: The Affordable Care Act (ACA) requires virtually all health insurance plans to cover specified preventive care at 100%.)

4.      BENEFITS PHILOSOPHY

a.     Company/Organization believes members should be more engaged in decisions about and expenses for discretionary services, such as outpatient or scheduled procedures, where they have time and information to make choices.

b.     It’s important to help employees save long term (i.e., 5-10 years) for medical expenses.

c.      Health plan might consider covering more discretionary benefits, such as in-vitro fertilization and gastric bypass surgery.

5.      PLAN DESIGN

a.     In the recent past, the company/organization has made plan design changes to increase member out of pocket expenses (e.g.., copays, deductibles, coinsurance).

b.     A large percentage of employees participate in the 401(k) plan, if available.

c.      Company/Organization would consider replacing the tiered, copay drug plan with a plan that covers drugs under the applicable deductible/coinsurance  to help drive better utilization and reduce pharmacy costs.

d.     It’s very important for the company/organization to offer health plan(s) that is/are easy to understand and use.

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