health insurance

Senate Considering Legislation to Improve HSA's

The House of Representatives passed two pieces of legislation that, among other things, purport to improve and “modernize” health savings accounts (“HSAs”). Both pieces of legislation have been sent to the Senate for consideration. Whether the Senate will take up these bills, let alone approve them “as is,” remains uncertain. There appears to be some bi-partisan appetite to loosen the current HSA rules, which means it is possible that we may see changes to these arrangements, which could be effective as early as January 1, 2019. 

CLICK HERE TO READ A SUMMARY OF PROPOSED CHANGES

VISIT CAPSTONE'S HEALTHCARE REFORM WEBSITE: WWW.CAPSTONEHEALTHREFORM.COM

The ACA Undergoes a New Legal Challenge

Several states have lodged a legal challenge to the entire Affordable Care Act (“ACA”) on the basis that the lack of an Individual Mandate tax makes the remaining provisions unconstitutional. While the Administration is not intervening, several other states are, defending the ACA’s sustainability without the Individual Mandate tax. No resolution to the legal questions is expected imminently, although the uncertainty that it causes could result in higher premiums now.

How will this affect employers? 

Visit our Healthcare Reform Resource Center to read more... 

WWW.CAPSTONEHEALTHREFORM.COM 

 

Message from Aetna CEO on Proposed CVS Deal

This week, CVS Health announced that they have agreed to buy Aetna for an estimated $69 billion in a deal that would combine one of the largest drugstore chains with one of the largest health insurers in the United States. The joining of these two healthcare giants has the potential to drastically change how consumers access and utilize care. 

In an effort to keep our clients informed, we wanted to share the letter we received from Aetna's CEO, Mark Bertolini, regarding the transaction. As of now, the deal is set to close in the second half of 2018. Our Benefits & Compliance Teams will continue to monitor the situation and provide our clients with updates as they materializeOur Benefits & Compliance Team will continue to monitor the situation and provide updates as they come in. 

If you have any questions on how this deal may impact you or your employees, please feel free to contact our Benefits Team at benefits@capstoneinsgroup.com 

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Trump Halts Cost-Sharing Reductions

On Thursday, October 12, 2017, the White House indicated that President Trump will end ACA cost-sharing reduction (“CSR”) payments to insurance companies effective immediately. This was followed up by a White House statement indicating that the payments had lacked appropriations and therefore the government could not lawfully continue making them. While the impact to insurance companies and individuals who obtain subsidized coverage in the Marketplace is expected to be significant, the direct impact to employers and employer sponsored health plans is expected to be minimal.

Implications for Employers

The direct impact of this decision is minimal. Applicable large employers (“ALE”) - those with 50 or more full time equivalent employees - are subject to ACA employer shared responsibility “A” or “B” penalties for failure to offer affordable and/or minimal value coverage to fulltime employees, if one or more of those employees obtain a subsidy or CSR in the exchange.

Even if CSRs are eliminated, since a prerequisite to an individual obtaining a CSR subsidy is to qualify for a premium reduction subsidy, there should be no change to an ALE’s “A” or “B” penalty exposure since premium reduction subsidies are not impacted by this White House decision.

Further, since an ALE must make an offer of affordable and minimum value coverage in order to avoid “A” or “B” penalties, we do not anticipate a significant increase in employees forgoing coverage in the Marketplace and enrolling in employer sponsored plans (since those individuals would generally have been ineligible for Marketplace subsidies due to the employer’s offer of affordable and MV coverage in the first place).

Additionally, if carriers exit the Marketplace or otherwise cancel plans in light of this change in policy, employers may see an increase in requests for special enrollment in their group health plans due to the loss of eligibility for Marketplace coverage.

The indirect implications are less clear. Stopping CSR payment will make individual insurance more expensive in the Marketplace. This may lead to carriers dropping out of the Marketplace, or if they remain, pricing plans beyond the reach of those individuals who previously benefited from CSR payments. This will likely result in an increase in the uninsured population. All payers in the health care system are affected by higher costs when there is a high uninsured population receiving uncompensated care.

 

Read more: http://www.capstonehealthreform.com/

New Executive Order and Insight on the Employer Mandate

President Trump signed an Executive Order (“EO”) on October 12, 2017, directing various federal agencies to take regulatory action that will “increase health care choices for millions of Americans.”

Employers should:

  • Be aware that we are likely to see new regulations addressing AHPs, HRAs, and STLDIs in the coming months. While changes to existing AHP and HRA rules are unlikely to affect 2018 plan years, such guidance may create challenges for 2019 and beyond.
  • As the Administration signaled its intent to enforce the Employer Mandate: • Plan for compliance with the 2017 ACA reporting. The final Form 1094-C, Form 1095-C and Instructions are available.
  • Prepare to address any notices issued by the IRS regarding Employer Mandate assessments for the 2015 and 2016 calendar year.

Read More: http://www.capstonehealthreform.com/

Capstone launches site for real-time healthcare reform updates

Capstone Group is proud to announce the launch of a new webpage dedicated to keeping readers informed of recent compliance and health reform updates. Our Benefits Team is committed to providing the guidance needed to understand and make decisions based on the evolving future of our nation's healthcare legislation. 

Visit Capstone's Compliance page...

UnitedHealth to pull the plug on individual Obamacare plans in multiple states

UnitedHealth Group, the nation's largest health insurer, will drop out of government-organized health insurance markets in at least 16 states in 2017 as the U.S. industry leader tries to stem losses from participating in Obamacare, the healthcare overhaul that has brought coverage to millions of people.

UnitedHealth hasn’t listed the markets it’s leaving, and confirmations of the company’s withdrawals have been trickling in from regulators in the 34 states where the company sold plans for this year. The insurer won’t sell individual ACA plans for 2017 in states including Texas, North Carolina and Maryland.

UnitedHealth also is withdrawing from some related state insurance markets for small businesses.

Chief Executive Officer Stephen Hemsley said Tuesday that the company will end up selling Obamacare plans in “only a handful of states” next year. The exchange market is proving to be smaller and riskier than UnitedHealth expected, meaning “we cannot broadly serve it on an effective and sustained basis,” he told investors.

UnitedHealth’s reported state departure are Alabama, Georgia, Missouri, Pennsylvania, Arkansas, Louisiana, Nebraska, Tennessee, Colorado, Maryland, North Carolin,a Texas, Connecticut, Michigan, Oklahoma and Washington.

In the states where UnitedHealth stops offering ACA plans for next year, people who are currently enrolled with the insurer will have to choose a new health plan during open enrollment. Their current coverage isn’t affected.

Volatile Markets

The Patient Protection and Affordable Care Act, President Barack Obama’s signature domestic policy achievement, is projected to cover about 12 million people this year, according to the Congressional Budget Office, providing tax subsidies that help many afford private insurance. The program has proven volatile for health insurers selling coverage in the new markets, known as exchanges, with some reporting losses.

Insuring customers in ACA exchanges has turned out to be more costly than expected. That may be because sicker people are choosing to buy coverage, or because people buying plans deferred treatment for their medical needs until they got covered. Insurers also have said some people are buying insurance, using lots of care, and then dropping their coverage mid-year.

ACA Losses

UnitedHealth, which had about 795,000 ACA customers as of March 31, warned in November that it was posting losses on ACA policies. In December, the company said it should have stayed out of the individual exchange market longer.

The exchanges are a small part of the company’s total medical membership of 47.7 million people. Yet the insurer said Tuesday that it expects to lose about $650 million on ACA plans this year.

Hemsley spoke on a conference call after the company’s release of first-quarter results, which topped analysts’ profit estimates, thanks in part to UnitedHealth’s consulting, technology and services unit, Optum. The stock gained 2.1 percent to $130.50 at the New York close.

The impact of UnitedHealth’s decision to leave the ACA markets will vary by state. In North Carolina, a quarter of consumers will see the number of available Obamacare insurers drop to one for next year, according to an analysis from the Kaiser Family Foundation. Many of the rest will have just two carriers to pick from.

Read more here. 

Almost 13 Million Americans sign up for 2016 Obamacare health insurance

About 12.7 million Americans signed up for 2016 health insurance coverage through the government insurance exchanges, surpassing its expectations, U.S. Health and Human Services Secretary Sylvia Burwell said on Thursday.

That means Republicans running in this year's elections may find it harder to deliver on their promise of repeal, while Democrats may yet be able to tap the newly insured as a voting constituency.

"It's not the unequivocal success that Obamacare advocates had hoped for, but also not the disaster that critics thought could make it a talking point on the campaign trail," said Larry Levitt, of the nonpartisan Kaiser Family Foundation.

The government began offering subsidies for individual insurance in 2014 under the Affordable Care Act, often called Obamacare, and charges a penalty to Americans who do not have health insurance.

In 37 states, customers can buy these plans on HealthCare.gov, the federally run website, while the other states and Washington D.C. run their own online exchanges. Enrollment closed on Jan. 31 for 2016.

This year was the third sign-up season, and different challenges emerged. The problem wasn't the HealthCare.gov website, which is faster, more reliable and easier to use. The issues involved the cost of coverage, the motivations of millions of people who remain uninsured, and the complexity of Obama's signature law.

Avalere Health said that based on Thursday's numbers, it expects 2016 year-end enrollment will be about 10.2 million, above President Barack Obama's administration's forecast of 10 million people being covered through the exchanges. Enrollment tends to dwindle over the year. Some people leave for employer coverage while other customers can't keep up with the costs, even with considerable financial help from the government.

More than 14 percent of Americans were uninsured in 2013 before the health care law's big coverage expansion. That share dropped to 9 percent last year, according to the government. More than 16 million people gained coverage from the end of 2013 to the middle of last year.

Insurers have been struggling to make money on the exchanges, where low enrollment has contributed to high per-customer overhead and has made it a riskier business for them.

Medical costs have also been an issue for insurers in 2015, with many reporting that they have booked unsustainable losses on these products. UnitedHealth Group Inc in November said that it may exit the exchanges after 2016.

On HealthCare.gov, about 4 million new customers signed up for plans and another 5.6 million consumers returned to buy insurance again, Burwell told reporters on a call.

In all, about 12.7 million people aged 18 to 34 signed up for the insurance, she said.

Customers who are younger tend to have fewer medical costs and are considered an important factor in creating financial stability for the private health insurers like UnitedHealth, Aetna Inc and Anthem Inc that sell these plans.

Andy Slavitt, who runs the Centers for Medicaid and Medicare Services division of the health department, said that the enrollment numbers had surpassed the mid-point of its projection to have between 11 million and 14.1 million people signed up for 2016 health coverage at this point in the year.

Read more here.

Four Ways Companies Could Adjust to Imminent Employee Benefits Tax

The Affordable Care Act's "Cadillac tax" is creeping into the picture, starting in 2018. This tax entails a 40 percent increase in employer-provided health care insurance for single plans costing more than $10,200 and family plans over $27,500. As a result, employers are currently working to cut costs that have been rising for years in order to avoid this tax. Therefore, you may be seeing some changes to benefits provided by your employer during this fall's open enrollment period:

1) Encouraging healthy living: A recent survey found that 42 percent of employers were contemplating adding or expanding programs to improve employee health. These programs begin with a health risk assessment and coaching, which may include help to quit smoking, eat better, or manage chronic health conditions, to help employees improve their well-being. All of this is done with the hope that it will ward off future medical expenses.

2) Adjust Coverage: Companies have been raising deductibles, the amount someone pays before insurance coverage kicks in, which lowers the premium or cost of coverage and could cause employees to shop around for better prices. Many companies are also adding surcharges to the cost of coverage for spouses who have other health insurance options. If your spouse is able to get coverage through his/her job, your employer will most likely encourage that option. 

It is also very possible that businesses will cut back on the usage of flexible spending accounts. These accounts allow workers to set aside money before taxes for out-of-pocket medical expenses.

3)  Offer new alternatives: More employers and insurers are attempting to shave costs by providing telemedicine options that connect people virtually with a care provider through a smartphone, tablet or computer for relatively minor conditions. These visits can cost half as much as a trip to the doctor's office, which can run around $100 for people with high deductible coverage.

Some companies also are considering moving their employees to a private insurance exchange. For that coverage, employers give workers a set amount of money and then send them to an exchange that offers several different plans.

4) Wait out the debate: Some employers are choosing to not take action yet until they see what happens with the tax.

Republicans and Democrats are both calling for the repeal of the Cadillac tax because of worries that the threshold that trigger the tax will grow more slowly than the actual cost of care, which means that each year more and more plans will be subject to the tax.