The Demise of a Health Insurer in 1 Year!

 

Although the following chain of events directly affects some 120,000 health insurance policyholders residing in the states of Nebraska and Iowa, it could be a bell weather for individuals residing in one of the other 23 states that have/offer health insurance through a federal government approved/funded, non-profit, member owned health insurer. (see http://sstevenshealthcare.blogspot.com/2014/12/coop-health-insurancealert.html for the states currently offering health insurance through a government funded/approved COOP).
 

March 23, 2010 – The Patient Protection and Affordable Care Act (PPACA) is signed into law by the President.  Section 1322 of PPACA includes a provision allowing for the establishment of “consumer operated and oriented plans”, or COOPs.

January, 2012 – CoOportunity Health is founded as a non-profit, 501c(3) entity in Iowa, led by former Wellmark/Blue Cross Blue Shield executives.

February, 2012 – The Centers for Medicare and Medicaid Services (CMS) approves CoOportunity Health, along with 22 other COOPs in 23 states around the country.  CoOportunity Health receives initial, low interest loans from the U.S. government totaling $112.6 million.  (Note: the loan included a 15 year payback, and an initial interest rate under 0.4% on the solvency portion, and a 5 year payback time frame on the initial start up portion.) This initial amount was divided/used as follows: $14.7 million for initial operations; $98 million as operating capital, meeting insurance department solvency and surplus to premium requirements. (Note: according to the Omaha World Herald; Money & Jobs; December 28, 2014 article, the initial operating capital allocation was $15.4 million and $130.6 million in solvency funds, respectively.)

October, 2013 – CoOportunity Health is officially open for business in the states of Iowa and Nebraska, and begins enrolling members, both on and off the federal health insurance exchange, individual and employer group coverage.

January 1, 2014 – The earliest allowable effective dates of issued coverage.

Q2, Q3, 2014 – CoOportunity Health realizes significant growth, reaching 5,000 covered members by Q2, 89,000 members in Q3, and 120,000 members by early Q4.

November 1, 2014 – 2015 open enrollment begins (concludes 2/15/15)

December 13, 2014 – The $1.1 trillion Budget Reconciliation Act (or CRomnibus Bill) is passed by Congress.  One of the provisions of the bill eliminates anticipated funding for the 24 COOPs, including CoOp Health.  As a result, $60 million of CoOp Health’s anticipated, additional $125.6 million of government funding was eliminated, placing them at risk. (Note: the Iowa Department of Insurance allowed CoOp Health to include the $125.6 million on its balance sheet as an asset.)

December 23, 2014 – The Iowa Insurance Commissioner submits a petition for an “order of rehabilitation”, ceasing any new business activity from that point forward.  Within an issued statement, the commissioner says – “…people who signed up for the first time with CoOportunity Health after December 15, 2014 will not have coverage and should find other insurers”. 

January 7, 2015 – The Iowa Department of Insurance issues guidance strongly encouraging agents and brokers to “explore other coverage options for individuals and groups”.  The guidance also outlines the possibility of CoOp Health’s status changing to “liquidation”.  In such an event, insured groups would be terminated 45 days after a liquidation order is issued.  Affected terminated members would have the option of filing claims through the state guarantee fund, which has a $500,000 per member limit on medical and pharmacy claims.

January 23, 2015 – The Iowa Department of Insurance announces its intent to file a petition with the court for liquidation.  The insurance commissioner indicates that “there is no expectation for additional cash inflow until the second half of 2015 and medical claims currently exceed cash on hand”.  It is anticipated that a hearing will take place in February (2015), and the order to liquidate CoOportunity Health will commence on February 28, 2015.

                #####     

COOP Health Insurance...Alert!

Section 1322 of the Affordable Care Act (ACA) allowed for the establishment of "consumer operated and oriented plans" or COOPs.  Bolstering the ACA's goal of expanded health insurance coverage, and borrowing from the agricultural industry's adoption of COOPs in the 1920's, twenty-four COOPs were approved and funded by the federal government.  Specifically, the fed awarded nearly $2 billion to the 24 approved COOPs operating in 24 different states.  In theory, the COOPs would bring more competition and choice into the market, which is a welcome change from the hundreds of insurers who have abandoned the health insurance market over the last several years (see Metropolitan Life, Travelers, NY Life, Prudential, Principal, American Chambers Life, and Mutual of Omaha to name just a few).  And if not for funding cuts, and a significant reduction of the originally proposed $6 billion funding allocation, there would likely be even more COOPs in existence. 

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

Narrow Networks...Healthcare Buyers Beware!

In the current, post Affordable Care Act (ACA) world, the term - “narrow network” – is often heard, and at times, is a strategy deployed by employers and insurers.  There are a variety of other ways to describe narrow networks, such as - carve out network; exclusive provider network; select network; tiered network…you get the idea.  From a covered member's standpoint, this strategy involves limiting the number of contracted providers plan members can seek care from, and in return, receive the best benefits, and lowest out of pocket costs.  From the standpoint of the insurer or employer, narrow networks mitigate risk and reduce expenses.  Readers who have been around the healthcare scene since the eighties might recall the original introduction of narrow networks, albeit presented at the time as “HMO Lite”;  “a PPO/HMO hybrid”; or more commonly –  “exclusive provider organization”, replete with its very own acronym  - EPO! 

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

The ACA and Newton's 3rd Law of Motion

Sir Isaac Newton’s Third Law of Motion taught us that “for every action, there is an equal and opposite reaction”.  As we near the end of the fourth full year of the [partial] roll out of The Affordable Care Act /Obamacare, it has become increasingly more challenging for people to differentiate “action” from the “equal and opposite reaction”.  Put another way, some of the things we’re experiencing, required by the ACA, are directly attributable to the law itself (call these “actions”).  And then there are things we’re seeing that are the result of the many requirements, mandates, fees/taxes, expansions associated with the ACA (call these “equal and opposite reactions”).   This will all make more sense when you see the chart at the end of this article.

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

Ebola ~ Just the Facts

Readers of this blog (soon to be "resource library") typically find health INSURANCE, FUNDING, and FINANCING issues addressed here.  But occasionally, health CARE issues come to light which I feel compelled to address.  With all the media coverage and confusion surrounding the recent outbreak of the Ebola virus, I decided to attempt to clarify some important facts.  My primary source of information for this post is the Douglas County Health Department (Douglas County, Nebraska), which under the direction of Dr. Adi Pour, does a fantastic job of data mining and educating, among other things.  (See http://www.douglascountyhealth.com )

The Ebola virus was first discovered in 1976 in the Ebola River, which is located in a region of Africa now known as the Democratic Republic of the Congo in lower, central Africa.  Although the virus has been found in several African countries since its initial outbreak, as of the time of this blog post, there are four (4) countries in the western region that have experienced outbreaks - Guinea, Liberia, Nigeria, and Sierra Leone.  The current, 2014 outbreak is the largest in history, and the first to occur in west Africa.

Perhaps the most misunderstood, and in some instances, incorrectly reported aspect of Ebola, is how it is spread.  It is NOT spread via air or water, but rather through direct contact with someone who: a. is infected with the virus; and b. is also experiencing symptoms.  Clearly health care workers are at the greatest risk of contracting the virus, as evidenced by the recent reporting infected health care workers in Dallas, TX. The U.S. Centers for Disease Control and Prevention (CDC) are taking very deliberate and focused measures to mitigate, if not prevent Ebola and for that matter all infectious diseases, from arriving and spreading throughout the U.S.

IMPORTANT: CDC Director - Thomas Friedan - specifically addressed rumors relative to the ability of the Ebola virus to spread through the air, which have actually "fueled" the rumor mill.
On 10/7/14, he said:
"The rate of change [with Ebola] is slower than most viruses, and most viruses don't change how they spread.  That is not to say it's impossible that it could change [to become airborne].  That would be the worst-case scenario.  We would know that by looking at...what is happening in Africa.  That is why we have scientists from the CDC on the ground tracking that."

In addition to how the Ebola is (and is not) spread, here are some of the more relevant and pertinent facts concerning Ebola, gleaned from the aforementioned source:

• An individual that recovers from being infected can no longer spread the virus.  However, the virus can survive for up to three months in semen.
• Only mammals have shown the propensity to be infected with, and spread, Ebola.  Specifically at this point in time - humans, apes, monkeys, and bats.  Mosquito's and other insects, at this point, are not able to transmit the Ebola virus.
• The CDC and the U.S. Fish and Wildlife Service have specific protocols in place to prevent the Ebola virus from coming into the U.S. via non-human primates and bats.  The greater challenge, as we now know, is dealing with humans arriving on U.S. soil, who have contracted the virus.
• The CDC is working with all U.S. hospitals on establishing and implementing the proper infection control measures to control the continued spread of the Ebola virus.
• Since all U.S. citizens have the right to return to the U.S. for treatment of any contacted disease/disorder, we simply can not completely prevent infected citizens from re-entering the country.  For this reason, the CDC has taken specific and deliberate actions, including raising the travel alert level to Level 3 (i.e., travelers incur high risk of traveling to the four identified, west African countries, and are advised against nonessential travel to those locations).
• The CDC's Emergency Operations Center (EOC) has been activated to assist with the coordination, communication, monitoring, and management of this current challenge.

#####

ACA's Transitional Reinsurance Fee/Tax

Self funded health plans face a rapidly approaching compliance deadline of January 15, 2015 relative to the Affordable Care Act's so called "transitional reinsurance fee".  A previous post addressed the various reinsurance (or bailout) programs devised in the ACA (click - http://sstevenshealthcare.blogspot.com/2014/01/acas-insurance-company-bailouts.html). 
These programs are sometimes referred to as the "Three R's", which are:

1. Reinsurance Program
2. Risk Corridor
3. Risk Adjustment

The first of these reinsurance/bailout programs - the [temporary] reinsurance program - is funded by virtually ALL health insurance plans (e.g., individual, group, fully insured, self funded) through the assessment of a fee/tax.  Fully insured plans owe the tax, but do not have to worry about counting/collecting/remitting.  Self funded plans however, are responsible for all of the aforementioned.  So, here's the scoop on determining the amount of your organization's tax, along with when, and how to submit it....

For 2014, the amount of the transitional reinsurance fee is $63 per covered MEMBER, per year (PM/PY). Note that this breaks down to $5.25 per member, per month. Also note the term "member" includes ALL covered members of the plan...employee, spouse, and children. In 2015 the amount reduces to $44 PM/PY, and the estimated amount for 2016 is $25-$30 PM/PY.  

IMPORTANT: Affected employers are required to report the number of covered/affected member lives by NOVEMBER 15, 2014 via - https://pay.gov/public/home
Training sessions designed to assist employers are being offered/provided by CMS through November 15, 2014.  To find out more about these sessions, click - https://www.regtap.info/

Affected employers have the option of paying their 2014 fee in installments, or in a lump sum.  If the later, the required amount is due no later than January 15, 2015.  If the former, the first installment (of $52.50 PM/PY) is due no later than January 15, 2015; and the second installment (of $10.50 PM/PY) is due no later than November 15, 2015.

The ACA's regulations allow for a variety of methods to determine each affected employers PM/PY fee.  The simplest of these methods is the so called "snapshot method".   Using this method, the average number of covered members on which to base the fee is found by adding the total number of covered employees on January 1, April 1, and July 1 of each year, dividing that number by three, and multiplying by the appropriate fee amount.  For example, for 2014:

• Lump Sum: January 1: 75 members + April 1: 80 members + July 1: 90 members = 245/3 = 82 x $63 = $5,166 transitional reinsurance fee due by January 15, 2015.
• Installment: January 1: 75 members + April 1: 80 members + July 1: 90 members = 245/3 = 82 x $52.50 = $4,305 transitional reinsurance fee installment no. 1, due by January 15, 2015.  January 1: 75 members + April 1: 80 members + July 1: 90 members = 245/3 = 82 x $10.50 = $861 transitional reinsurance fee installment no. 2, due by November 15, 2015.

The federal government promises a "streamlined membership and contribution" process, through which employer's remit their transitional reinsurance fee.  A dedicated website (click - https://pay.gov/public/home) provides a secure, web based portal employers use to report and submit their required tax.  

For a more detailed overview of the transitional reinsurance fee, and the process of remitting the required fee/tax, click here - http://www.cigna.com/assets/docs/about-cigna/informed-on-reform/reinsurance-assessment-fact-sheet.pdf

 

#####

ACA's Health Plan Identifier Requirement

As the old saying goes, "the devil is in the details", and the Affordable Care Act (ACA) has its fair share of DETAILS.  Among the rapidly approaching compliance deadlines for many employers is requesting/obtaining a ten-digit Health Plan Identifier or HPID.   While ALL employers offering health insurance plans must comply with this requirement, the due date for obtaining the ID, along with determining who is responsible for obtaining it varies based on a couple of factors.  Here's an overview of the whole HPID matter...

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