Field Report

THANK YOU TO EVERYONE WHO ATTENDED OUR FEBRUARY SEMINARS ON HEALTHCARE REFORM FOR EMPLOYERS.  GREAT TURNOUT and EXCELLENT Q&A.   MORE TO COME...

As many of you know, I was one of the delegates from Charleston in Washington, DC last week to attend the Capitol Conference on Health Insurance.   Overall the experience was very positive and I look forward to sharing the latest insurance news with our clients.  

Below are some updated Snapshots of hot items regarding Healthcare Reform. ALSO, please use our  presentation as a complete point of reference. It is available on our website and stays up to date.  Or contact me and lets schedule a time to discuss. 

Snapshots from DC Insurance Conference and HC Reform. - 

1. The Value of a good Insurance Broker/Agent - Having a knowledgeable and pro-active broker/agent will be very important for employers and individuals.  This is complicated information and a mistake or poor strategy will prove costly to employers and individuals alike. 

THE TIME TO PREPARE IS NOW!

2.  The Essential Health benefits (EHB) for individuals and small groups is likely to change to higher deductibles as the Administration is realizing  that the original $2,000 deductible max is likely to cause an undue strain on premiums.   Qualified plans will still need to have at least 60% actuarial value.  And there will be out of pocket caps for all plans. 

3.   3:1 age ratio - unless this ruling is reversed (LIBERTY ACT -  encourage your representative to vote for repeal) , young healthy people(less than age 40) should expect to see "rate shock" as their rates will not be allowed to be more than 3 times less than age 64 rates.  This will affect small group and individual policies.  

4. Calculating 50 Full Time Equivalent (FTE) employees for purposes of the Penalties - You should use a consecutive 6 month period in 2013 to determine if you have 50 FTE..  Seasonal employees working less than 120 days for 2013 can be excluded. Employers should be keeping track of these numbers as of January 1, 2013 for 2014 calculation.  

5. Who must be offered Coverage?  Employees who work 30 hours or more per week based on a 3 to 12 month measurement period.   Employers need to offer coverage but employees will continue to have the right to waive coverage. 

6. Employer Penalties if employee waives coverage  -  If a large group employer offers qualified and affordable coverage to at least 95% of all Full time employees and employee waives coverage and seeks a subsidy,   the employer will not be liable for the penalty/ fine.  There will be an IRS triggering process "e-mailed" to the employer if a waived employee tries to collect subsidy so the employer can confirm they offered qualified and affordable coverage and avoid the penalty.  I recommend all employers keep on file waivers for proof of coverage offer.

7.  Premium Contribution Discrimination -  Can't discriminate in favor of highly compensated employees.  Premium contributions based on job classification or tenure should be clearly defined by employer....though expect changes and more clarification especially with the 9.5% affordability clause.

8.  9.5% affordability clause - Employees that  are forced to spend more than 9.5% of their  individual gross income (BOX 1 on W-2) will be eligible for exchange subsidy.  The 9.5% rule is based on employee only premium.  If they are spending less than 9.5% of premium and have a qualified employer plan they will not be eligible for subsidy. 

9. Common Ownership - Common ownership rules apply when calculating 50 FTE to determine if a penalty applies for not offering qualified, affordable coverage.  Common ownership can't be defined based on EIN alone.  The ruling is based on "Controlled Group" status and can be defined by parent/subsidiary companies or sister companies.  I will ask all groups to confirm their controlled group status with a qualified CPA.  I can refer one if needed. 

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Thank You, Marshall

THE ADVANTAGES OF SELF FUNDING

Employers choosing to self-fund their health plans have the following advantages:

Self-funded plans sometimes have lower administrative costs and employers pay claims as they occur. This avoids Insurance company profit margins and can allow companies to have more control over costs. Employers often find that administrative costs for a self-funded plan through a third party administrator (TPA) are lower than those being charged by a carrier under a fully-insured program.

Self-funded employers are afforded more flexibility in the design of their benefit plans. This helps to control of cost, quality and levels of service for each component of their plan.

Decision making on what to include and how to adjust spending on certain aspects of the benefit plan can be directly determined by data received from utilization reports and claim information.

Self-funded plans incur lower taxes than other health plans and many of the provisions of health care reform do not apply to self-funded plans.  Working with wellness programs helps employers to see their efforts come to fruition in the form of dollars saved. Funds usually held by the insurance carrier in various reserves are available for use by self-funded employers. The employer controls the reserve if the claims expense is less than expected the employer benefits financially.  However, the group must be of an acceptable size to take this approach as they will also be assuming some of the risk of claims occurring.  We have found the optimum size for self-funding is around 100 employees.  There are TPA’s and stop loss carriers willing to work with employees on a level funding plan for smaller employers but we always remind our groups there is a little more financial risk.  By choosing the right broker,  employers offering self-funded health plans take advantage of cost savings, increased cash flow, flexible benefit decisions, as well as choice in administration and how to invest their funding; not to mention the cost savings incurred by being exempt from several provisions of health care reform.   Maybank and Beckham, LLC have years of experience working and designing self- funded plans.   For our current clients we always shop self-funding to see if this is a cost saving option. 

What Debt Collectors Can and Cannot Do

Over 60% of bankruptcy and credit issues are with medical bills.  Good information to give to employees so they know their rights. 

 What Debt Collectors Can and Cannot Do

What Debt Collectors Can and Cannot Do
In the United States collection agents are limited in the methods they can use to collect personal debts by the Fair Debt Collection Practices Act (FDCPA). Personal debts include credit card debt, auto loans, mortgage payments, medical bills and other family and household expenses not used for a business.
Collection agents MUST:
• Contact you in writing, or attempt to do so, before taking any further action to collect a debt, including legal actions to secure payment of the debt;
• Identify themselves when contacting you about a collection matter;
• Provide information on the original creditor and amount owed. The original creditor is the company or institution to which the debt was owed before it was transferred to the collection agency.
Collection agents are NOT permitted to:
• Harass you or your family with threats of harm or violence, use of obscene language or by making calls at unreasonable times of day;
• Deceive you by providing inaccurate or misleading information;
• Send you false legal documents or threaten to take legal action they are not authorized or willing to take;
• Charge interest or other fees that are not authorized by law;
• Demand payment on an account that you have disputed without providing proof that the debt is legitimate;
• Contact your employer, relatives, friends and neighbors for anything other than your direct contact information. In some instances debt collectors may be permitted to contact employers to verify employment, job title and mailing address.