California Legislature Votes to Restore Tax on People Without Health Insurance

The California Legislature voted Monday to tax people who refuse to buy health insurance, bringing back a key part of former President Barack Obama’s health care law in the country’s most populous state after it was eliminated by Republicans in Congress.

The tax now heads to Democratic Gov. Gavin Newsom, who proposed a similar plan in January — an indication he will likely approve it.

California Legislature Votes to Restore Tax on People Without Health Insurance

POSTED 3:59 PM, JUNE 24, 2019, BY ASSOCIATED PRESS, UPDATED AT 06:04PM, JUNE 24, 2019

The Importance of Getting a Broker for Health Care Coverage

The Importance of Getting a Broker for Health Care Coverage.

Out-of-Pocket Limits Delayed to 2015

Out-of-Pocket Limits Delayed to 2015

AUGUST 13, 2013 – 12:34 PM

Author:  Michael Gomes,  Executive Vice President, BenefitMall

On August 13, the New York Times reported that the Obama Administration has delayed the out-of-pocket cost limits that protect individuals and families to 2015. This delay allows health plans one more year to offer plans with more lenient out-of-pocket cost restrictions. These limits represent one of the most publicized “insurance market reforms” contained in the Patient Protection and Affordable Care Act (PPACA) and this delay follows a string of recent announcements by the administration postponing portions of its signature health insurance reform law.

Delay Announced in February

The delay of out-of pocket limits for many health plans was explained in a February 2013 FAQ issued by the U.S. Department of Labor (DOL) but did not receive attention until recently, when DOL officials confirmed the delay.  Since the passage of PPACA, DOL, as well as the Internal Revenue Service (IRS) and the U.S. Department of Health and Human Services (HHS) have often issued far-reaching decisions in FAQ’s. DOL alone has published 15 separate FAQ sections since PPACA’s passage answering a total of 137 questions.

Details of the Delay

PPACA restricts out-of-pocket cost limits, including deductibles and copays, at $6,350 for individuals and $12,700 for families. The one-year delay to 2015 allows some health plans to “set higher limits, or no limit at all on some costs.”  Health plans can require enrollees to pay $6,350 for services like doctor and hospital services and another $6,350 for prescription drugs. The New York Times article notes that the delay on these limits was justified because employers and health plans use different companies to administer coverage. These companies often have “separate computer systems” for medical coverage and drug coverage “that cannot communicate with each other.” The delay gives these companies more time to upgrade their computer systems to accommodate the new federal requirements.

The following is the DOL FAQ that led to the delay:

Where a group health plan or group health insurance issuer utilizes more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket maximums under section 2707(a) or 2707(b), the Departments will consider the annual limitation on out-of-pocket maximums to be satisfied if both of the following conditions are satisfied:

a. The plan complies with the requirements with respect to its major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage); and

b. To the extent the plan or any health insurance coverage includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (for example, if a separate out-of-pocket maximum applies with respect to prescription drug coverage), such out-of-pocket maximum does not exceed the dollar amounts set forth in section 1302(c)(1).

This statement essentially means that a consumer may have to pay the maximum out-of-pocket costs for “major medical care” and then pay the same maximum costs for prescription drug coverage.

Impact of the Delay

One immediate impact of the delay is the extra costs it will impose on Americans with chronic illnesses, disabilities, or unexpected health conditions. Prescription drugs and medical treatments for conditions like cancer, diabetes and multiple sclerosis can cost tens of thousands of dollars a year or more. The limit on out-of-pocket costs was supposed to prevent individuals from having to bear large portions of these costs. This delay will, at least through 2014, compel many Americans to continue paying for these treatments.

Despite the close attention being paid to implementation of PPACA, it is impossible to grasp every aspect of the law’s enforcement. As a result, this provision has gone almost unnoticed for the past six months. With the hundreds of FAQ’s, dozens of regulations and all other relevant information regarding PPACA’s implementation, questions remain regarding what other provisions of this law have escaped the notice of the health care industry and the public at large.

We will continue to monitor this issue and keep you informed of any new developments. In the meantime, please visit www.BeWellInsurance.com to view past blogs and Legislative Alerts. Or, you may visit www.HealthcareExchange.com for more blog posts, polls, surveys and numerous resources.The views expressed in this post do not necessarily reflect the official policy, position, or opinions of Be Well Insurance Solutions. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.

To view the February 2013 FAQ, click here.

To view the DOL that led to the delay, click here.

For the New York Times report, click here.

Covered California Individual Health Plans Announced

May 23, 2013 – 10:30am.

The Covered California Benefit Exchange hosted a press conference today, during which it announced the selected participants for the new Covered California individual health insurance marketplace.

Thirteen plans will be made available in 19 rating regions statewide – to the 5.3 million Californians who can purchase insurance through Covered California. Many may qualify for federal subsidies to help pay for their monthly insurance premiums.

The health plan participants in the individual Covered California marketplace include:

• Alameda Alliance for Health
• Anthem Blue Cross
• Blue Shield of California
• Chinese Community Health Plan
• Contra Costa Health Services
• Health Net
• Kaiser Permanente
• L.A. Care Health Plan
• Molina Healthcare
• Sharp Health Plan
• Valley Health Plan
• Ventura County Health Care Plan
• Western Health Advantage

Additional information about ratings and plans can be found here.      An announcement on the Small Business Health Options Program (SHOP) marketplace is expected in June. We’ll advise you on those participants when the information is made available

Employers Large and Small – How the Affordable Care Act Impacts YOU

Employers Large and Small – How the Affordable Care Act Impacts YOU

It’s a myth that the Affordable Care Act (“ACA”) only applies to “large employers” (defined under the Act as those employers with 50 or more full-time employees, including full-time equivalents).  In reality, ACA consists of thousands of pages of rules and regulations affecting businesses of all sizes—including small and midsize employers.  All employers, including small employers, should started earlier in the year, and if not Now preparing to meet the ACA’s legal requirements.  Below are answers to some commonly asked questions:

I want to offer coverage.  What options do I have? – Starting in 2014, businesses with fewer than 100 employees can shop in an “Affordable Insurance Exchange”—a competitive marketplace where individuals and small businesses can buy affordable, qualified health benefit plans.  The goal is to give small businesses purchasing power similar to what large businesses have, resulting in better choices and lower prices for employee coverage.  In California, the Small Business Health Options Program (“SHOP”) will offer approximately 375,000 small businesses access to various health coverage options for their employees starting in the fall of 2013.

What if I have 25 employees or less? – You may be eligible for a small business healthcare tax credit if you cover at least 50% of healthcare insurance costs for your employees, based on the single-person rate.  This credit, specifically designed for small businesses with lower income workers, applies to employers with 25 or fewer full-time equivalent employees [FTE’s].  The average annual wages of your employees must be less than $50,000 per person.  Businesses can claim the tax credit by filing IRS Form 8941 with their business tax returns.   The small business tax credit provides an offset of up to 35% (up to 25% for non-profits) against the cost of providing health insurance.  Starting in 2014, the small business tax credit goes up to 50% (up to 35% for non-profits) for qualifying businesses.

Do the Employer Shared Responsibility payment provisions (i.e. penalties) apply to me? – The Employer Shared Responsibility provisions apply to all large employers (50 or more full-time employees, FTE’s).  Employers will need to count their employees to determine whether they qualify as a “large employer” for purposes of the penalties that may be imposed starting January 1, 2014.    [To determine the FTE equivalency, visit our website at: www.BeWellInsurance.com or contact us directly for a complimentary consultation.]

• What if I have 50 full-time employees or more? – You may be subject to penalties if you do not offer affordable health coverage that provides minimum value to your full-time employees and their dependent children up to age 26.  A full-time employee is defined as an employee who averages at least 30 hours of service per week.  You may be subject to an affordability penalty if your employees are required to spend more than 9.5% of their pre-tax income on the healthcare coverage you offer (a plan is considered affordable if the employee’s contribution to the lowest cost self-only plan is less than 9.5% of the employee’s household income).  For more information on ACA regulations applicable to large employers and available safe harbors, please contact us directly, at www.BeWellInsurance.com .
• Must I report the value of the health benefits I provide on my employee’s W-2 form? – Employers who issue 250 or more Forms W-2 must report the aggregate cost of employer-sponsored health coverage (excluding stand-alone dental and vision plans) on an employee’s Form W-2 each year, as of January 2013.  The cost of coverage generally includes both the portion of the cost paid by the employer and the portion of the cost paid by the employee, regardless of whether the employee paid for that cost through pre-tax or after-tax contributions.  The reporting requirement is intended to be informational and provide employees with greater transparency into health care costs.  The amounts reported are not taxable.  Form W-2 reporting is currently optional for smaller employers, but we expect it to be required when the IRS issues future guidance.
• What parts of ACA apply to all employers, small and large? – No matter how many employees you have, the following ACA provisions apply to all employers:

1.  What Reporting Requirements Will Apply?Notice of Exchange – A written Notice of Exchange informing employees about the Health Insurance Marketplace and the availability of health insurance premium tax credits must be provided to all current employees by October 1, 2013, and thereafter to new employees within 14 days of hire.  [Model notices are available to our clients by visiting:  www.BeWellInsurance.com, click on our blog link, go to search bar, and type in: Employer Notification’s – Exchanges, or visit our new Be Well client exclusive Forms page on our website.]
2. Dependent Coverage to Age 26 – Plans that provide coverage for dependents are required to extend the offer of coverage to dependents (including adult children) up to age 26, regardless of their eligibility for other insurance coverage.  Plans must provide coverage to all eligible dependents, including those who are not enrolled in school, not dependents on their parents’ tax returns, and those who are married.  Plans are not required to provide coverage to spouses of dependents.
3. Limitations on Waiting Periods – For plan years beginning on or after January 1, 2014, group health plans and insurers—regardless of grandfathered status—are prohibited from requiring otherwise eligible participants and beneficiaries to wait more than 90 days before coverage becomes effective. [Note:  This has been amended to 60 days in the small group market, so carriers can have employees showing in their systems by the 90^th day.}
4. Summary of Benefits and Coverage – Health insurance issuers and group health plans must compile a Summary of Benefits and Coverage (SBC) that “accurately describes the benefits and coverage under the applicable plan or coverage.”  The SBC must be provided to employees upon application, at renewal, and upon request.  Health insurance issuers and group health plans may incur fines for failure to provide the SBC.  Employers therefore need to designate a person who can provide the SBC to employees within 7 days upon request.
5. Medical Loss Ratio Rebate – ACA requires health insurers to issue rebates to policyholders if less than a specified percentage of the premium dollars collected is used to provide medical care.  Employers must then allocate the rebates for the benefit of current participants, and have three options for doing so, including reducing future premiums for all participants in the plan, reducing future premiums only for those in the plan’s option that generated the rebate, or making a cash refund to those enrolled in the plan option that generated the rebate.
6. Cap of $2,500 on Health FSA contributions – ACA imposes a $2,500 cap on healthcare flexible spending accounts.  Employees can only divert a maximum of $2,500 in pre-tax salary into these accounts to cover qualifying out-of-pocket healthcare expenses.
   

   Please Read Disclaimer First

• Large Employer & Offering Employer Reporting Requirements – Beginning in 2015, both large employers and “offering employers” must report certain data (including the number of months employees and dependents were covered under the plan, certification of offers to enroll, and number of full-time employees) on a monthly basis to the IRS per Internal Revenue Code section 6056.  Offering employers are defined as those that require employee contributions for self-only coverage that exceed 8% of the wages they pay to the employee.  Employers required to report to the IRS must also provide written notice to each full-time employee of the information that was reported.
• Employers with Self-Insured Plans – Beginning in 2015, sponsors of self-insured plans that provide minimum essential coverage to an individual must report certain data (including the employer’s portion of the premium and dates of coverage).  The IRS may allow large employers and offering employers to coordinate this reporting with the required reporting under Internal Revenue Code section 6056.

Additional Information – Small and large employers can find additional information and resources on the U.S. Department of Health & Human Services’ webpage under the section entitled Health Insurance Basics at the following link: http://www.healthcare.gov/using-insurance/employers/index.html.

For a Complimentary Consultation regarding the Affordable Care Act, along with  you, and your business insurance needs, contact us at Be Well Insurance Solutions at:  Information@BeWellInsurance.com  or call us at (408) 615-1283.  Be Well Insurance Solutions is a Licensed and certified Agency, (CA L&H Lic. # 0B78529 and P&C #1574874) specializing in Individual, Family and Employer benefits and insurance needs.

Visit our Blog at: https://bewellinsurance.wordpress.com/  for continuous updates regarding the ACA and Employer Compliance.

 

 

Understanding the NEW Group Health plan Mandates

Group Health Plans

A group health plan is a health plan you get through your job or union, or as a retiree. It usually costs less than an individual health plan which you buy on your own.

Sign Up for a Group Health Plan

• When you start a new job, ask how to sign up for the health plan, when the plan starts, and what you will pay.
• Compare plans. Look at all the plans your employer offers. Try to find the one that has the most benefits you need.
• Most employers have Open Enrollment in the fall of each year. Open Enrollment is when you can change your benefit choices. For example, you can change health plans if your employer offers more than one plan.
• You can add new dependents to your health plan when you join the plan, during Open Enrollment, or when you marry, have a baby, or adopt a child.
• You can keep your dependent children on your plan until they turn age 26. You may be able to add a domestic partner. When you add someone to your health plan, your monthly premium may go up.
• The group health plan at your job cannot refuse to cover you if you have a pre-existing condition. (A pre-existing condition is an injury or illness that started before you joined the plan).
• However, some plans have exclusion periods. This means that they will not pay for services for pre-existing conditions for up to 6 months. (If your group health plan has only 1-2 members, it can have an exclusion period of up to 12 months.)
• Group plans cannot exclude services for pre-existing conditions in children under age 19.
• They cannot exclude services for your pre-existing condition if you have not had any diagnosis or care for your condition in the last 6 months.
• They cannot exclude services if you have had 6 months of “credible coverage”. This means that you had health insurance for 6 months and it ended 62 days or less before your new insurance starts.
• The exclusion period must be shortened if you had credible coverage for 1 to 6 months.
  • For example, Mary had health insurance with her last job for 5 months. She got a new job within 61 days. Mary had 5 months of credible coverage. The exclusion period for her new health plan can only be one month.

Exclusion Periods for Pre-Existing Conditions

Waiting Periods

Some group health plans have “waiting periods” or “affiliation periods.” This means that there is a waiting period before your health plan starts. Ask your employer if there is a waiting period.

• You will not pay any premium during the waiting period.
• Under California law, the new waiting period cannot be longer than 60 days.
• If your health plan has a waiting period, it cannot also have an exclusion period for pre-existing conditions. In other words, it can have a waiting period or an exclusion period, but not both.

Keep Your Group Health Plan

Federal COBRA and Cal-COBRA are laws that help you keep your group health plan for a certain amount of time if your job ends, your hours are cut, or you change jobs and there is a waiting period before your new health plan starts. You will have to pay the premiums yourself. But it may cost less than individual health insurance, which is insurance that you buy on your own. And the benefits may be better. If you qualify for Federal COBRA or Cal-COBRA you cannot be denied coverage because of a medical condition.

These laws also help your spouse, former spouse, or child keep health insurance after your job ends, or after divorce or your death.

Before Your Health Plan Ends

• Get a letter from your health plan that says how long you were insured. This is called a Certificate of Creditable Coverage. You may need this letter when you get a new group health plan or apply for an individual health plan.

Uninsured remain uncertain about PPACA

Uninsured remain uncertain about PPACA

In a recent article by BenefitsPro Magazine, author Kathryn Mayer explains that almost 2/3rd’s of Americans have not decided on whether they will purchase insurance by the January 1st, 2014 deadline.

This mirrors a recent survey by the U.S. Chamber of Commerce, in which the survey reflects the uncertainty business owners are facing and how many are still very confused by the regulations being imposed, potential premium/costs, fines, and how the Exchanges will be implemented.

At Be Well Insurance Solutions we began demystifying the complexities of the Affordable Care Act long before the legislation became the law.  We have been instrumental in keeping our clients informed through seminars, one on one conversations with our clients and potential customers; way before many of our colleagues in the industry .  Our Blog and Twitter feeds are updated often, to reflect recent changes in the law, and we stay committed to bringing you the most up to date information regarding this evolving and complex law.

We realize how frustrating it can be not to have the information needed to make an informed decision, and unfortunately because the ACA was a big part of our last election, much of the implementation was placed on hold.

Although committed to implementing an exchange, California as well, was uncertain and delayed their implementation until after the election.

Thus, much of what individuals and businesses owners can expect in regards to rates, plans and compliance guidance is still To Be Determined.

As Be Well Insurance Solutions is informed by its resources, we will notify our clients via our Blog and email updates.

Please be sure to subscribe to our Blog and follow us on Facebook, Twitter andLinkedIn, for up to date changes and clarifications to the ACA.

In addition, we are always available to meet and discuss your current health plans need.  At  Be Well Insurance Solutions we realize that “One Size does not fit all,” this is why we are dedicated to assisting you in finding the Best Fit Health plan and Ancillary insurance. 

Learn More

Covered California Individual Health Plans Announced

The Covered California Benefit Exchange hosted a press conference today, during which it announced the selected participants for the new Covered California individual health insurance marketplace.

Thirteen plans will be made available in 19 rating regions statewide – to the 5.3 million Californians who can purchase insurance through Covered California. Many may qualify for federal subsidies to help pay for their monthly insurance premiums.

The health plan participants in the individual Covered California marketplace include:

• Alameda Alliance for Health
• Anthem Blue Cross
• Blue Shield of California
• Chinese Community Health Plan
• Contra Costa Health Services
• Health Net
• Kaiser Permanente
• L.A. Care Health Plan
• Molina Healthcare
• Sharp Health Plan
• Valley Health Plan
• Ventura County Health Care Plan
• Western Health Advantage

Additional information about ratings and plans can be found here.      An announcement on the Small Business Health Options Program (SHOP) marketplace is expected in June. We’ll advise you on those participants when the information is made available

California’s health exchange to serve as voter registration hub

May 17, 2013:

Millions of Californians who contact the state’s new health exchange to buy insurance will be given the opportunity to register to vote, too, a move that some Republicans fear could benefit Democrats.

Secretary of State Debra Bowen made California the first state to designate its health exchange as a voter registration agency Wednesday, but others are expected to follow suit, said Shannan Velayas, Bowen’s spokeswoman.

“This is about making sure that all eligible Californians are offered the chance to register to vote,” Velayas said Thursday.

A 1993 federal law requires states to designate their agencies and offices that provide public assistance or disability services as voter registration agencies, Velayas said.

The federal law commonly is known as “motor voter” because it ensured that applicants for drivers’ licenses nationwide would be asked if they wanted to register to vote.

Public agencies in California that currently serve as voter registration outlets include the Department of Motor Vehicles and offices overseeing the state’s welfare, tax collection and in-home supportive services.

California’s health care exchange, Covered California, is creating a marketplace for millions of uninsured Californians to compare prices and buy health insurance policies this fall to take effect Jan. 1.

Many of Covered California’s clients are expected to be families of low and moderate incomes. Some will be eligible for taxpayer-subsidized policies, and others will have incomes low enough to qualify for Medi-Cal.

Senate GOP leader Bob Huff said he supports the notion of all Californians registering to vote but that targeting specific populations of people creates the possibility of partisan advantage.

“It does beg the question about whether it’s a systematic attempt to try to empower people more predisposed to vote their way,” Huff said of the designation by Bowen, a Democrat. “And that would be concerning to us.”

When the state launched an online system of voter registration two months before last year’s November election, the new voters who signed up were more Democratic than the voting population as a whole, according to an analysis by the California Civic Engagement Project at UC Davis.

Democratic Sen. Lou Correa of Santa Ana, chairman of the Senate elections committee, said he was not aware of Bowen’s designation of Covered California this week but supports the concept.

“I believe the foundation of democracy is voters,” he said. “More voter participation means greater democracy in our country.”

Lori Shellenberger, director of the Voting Rights Project of the American Civil Liberties Union of California, characterized Bowen’s designation as “one of the most significant voter registration policy decisions in the state’s history.”

Should Congress create a national health-care exchange?

One of the core ideas behind the Affordable Care Act (ACA), President Obama’s ambitious and very controversial effort to expand access to medical insurance, is that state governments will work with the federal government to make high-quality care more accessible and affordable by creating subsidized state-based insurance exchanges. For those who aren’t covered by employer-sponsored insurance or Medicare or Medicaid, the exchanges are meant to offer a range of affordable insurance plans, with subsidies varying by household income.

The architects of the ACA believed the exchanges would be one of the more politically attractive aspects of the law, as they were designed to give states considerable latitude and to harness the power of market competition. But 34 states, representing two-thirds of the U.S. population, have thus far refused to establish their own exchanges, and the federal government is scrambling to create its own exchanges in the states that have refused to play ball.

Defenders of the ACA have noted the irony that conservatives, who tend to champion state autonomy, have led the opposition to the creation of state-based insurance exchanges. Yet as Douglas Holtz-Eakin of the American Action Forum, a leading critic of the ACA, has observed [2], the state-based insurance exchanges are best understood as “a second Medicaid program,” which will likely suffer from the same misaligned incentives as its more familiar cousin. While the federal government will cover the entire cost of the subsidies designed to make the insurance plans offered on the exchange affordable, state governments will be free to impose regulations and mandates on insurance plans that could raise their cost. State lawmakers might want to reward medical providers by deeming that various expensive and non-essential medical treatments must be covered by insurance, but state governments will be under no obligation to bear the cost of having done so.

Even without the exchanges, state governments are notorious for imposing costly regulations that have crippled health-insurance markets, as John Cogan, Glenn Hubbard and Daniel Kessler note in Healthy, Wealthy, and Wise [3]. Many states, for example, impose “any-willing-provider” laws that require health insurers to reimburse any medical provider willing to abide by their terms and conditions. This requirement makes it much harder for insurance plans to form efficient provider networks that can compete against others by offering less-expensive, higher-quality care.

Given the strong tendency of state lawmakers to impose onerous regulations, it is fair to ask how the United States can have a functioning private insurance market at all. The reason is that self-insured employer-sponsored health insurance plans are largely exempt from state regulations under the Employee Retirement Income Security Act of 1974 (ERISA) [4]. This is a boon to large employers that operate across state lines, and it keeps employer-sponsored insurance relatively affordable, certainly when compared to the state-regulated individual and small-group health-insurance market.

Rather than have the federal government build state-based exchanges governed by state insurance regulations, Congress should consider building a national health exchange. Insurance plans sold on the national health exchange would have to be certified by the federal government, just as employer-sponsored health insurance plans offered under ERISA have to meet certain minimum requirements, but regulations and mandates would be kept to a minimum. Whereas families purchasing insurance on state-based exchanges would have to change their policy on moving to another state, a national health exchange would make health insurance truly portable, thus removing a significant burden. And while Congress might eventually mimic state legislatures by imposing expensive regulations and mandates, it would have to bear the cost of the higher subsidies that would be required to keep insurance plans affordable. This is a powerful built-in accountability mechanism.

Conservatives tend to oppose the idea of a national insurance market along these lines in favor of allowing individuals to purchase insurance plans across state boundaries. It is easy to imagine consumers flocking to cheap insurance plans regulated by a lax state, just as many U.S. business enterprises incorporate in Delaware. Yet as Cogan, Hubbard and Kessler suggest, the potential downside to this approach for health insurance is that the states in question won’t be able to safeguard the interests of consumers living in other states, and they’ll have weak political incentives to do so.

There is another obvious conservative objection to building a federal health exchange, which is that it centralizes power in Washington, D.C. That is a fair criticism. It’s not clear, however, that it makes sense to centralize the responsibility for paying for health-insurance subsidies while decentralizing the responsibility for regulating health-insurance markets. So we can either require that state governments will pick up the full cost of health-insurance subsidies, a deal virtually all state governments would reject, or we can suck it up and accept that a federal health exchange is better than a fiscal train wreck.

None of this is to suggest that conservatives shouldn’t continue working toward the repeal of the Affordable Care Act. But even if the ACA is successfully repealed a big if state regulation of health-insurance markets will continue to exacerbate cost growth and make it impossible for families to keep their health plans as they move from one state to another. Although there are many things the states are better-positioned to do than the federal government educating children, providing social services to the poor and building and maintain infrastructure, to name just a few regulating health insurance is not one of them.

By: Reihan Salam – Reuters
March 22, 2013