Group or Individual Plan After the Implementation of ACA 1/1/2014?

These are tough decisions for Consumers, Employees and Small Business Owners
1. Small Business Employers
Should Small Business Employers (<50 employees) Disband their Group plans, and allow employees to buy their own private Individual Health plans either inside Covered California (the State's Healthcare Exchange), or outside in the private marketplace? 2. Employees of Small or Large Businesses
Should Employees of Small Businesses enroll in their Employer’s Group Health plan, or try to apply for a subsidized plan from Covered California (the State’s Healthcare Exchange), or outside in the private marketplace?
Should Dependents (Spouses and children) of Employees who work for Small Businesses enroll them in their Employer’s Group Health plan, or try to apply for a subsidized plan from Covered California (the State’s Healthcare Exchange), or outside in the private marketplace?
3. Consumers who do not work for an Employer (Self Employed, Unemployed, Retired, etc.)
Should you continue your current plan, buy an Individual plan from the Exchange or buy one from the outside marketplace?

To help you in your decision-making, I have outlined some Pro’s and Con’s of Group plans vs. Individual plans.
Group Plans
Advantages
• Premiums tax-deductible to business
• Employee share of premiums tax deductible to employees.
• Possible Tax Credit available to Businesses with low income employees.
• A good health benefit plan makes an Employer more attractive when competing for competent employees.
• Employers may choose plans either within or outside of the Exchange. (To qualify for a tax credit, they are limited to just the Exchange plans.)

Disadvantages
• Employer’s time required to administer group plans.
• Employees cannot qualify for a tax subsidy if they are on an employer group plan.
• These plans are not portable for the employees if they terminate employment.

Individual Plans
Advantages
• Employees may apply for a tax subsidy if they are eligible.
• Employees may choose plans either from inside or outside of the Exchange.
• These plans are fully portable.
Disadvantages
• Premiums paid by the employees, are not tax deductible to the employees.
• If an employer reimburses the cost of individual premiums to employees, those contributions may not be deducted as a business expense.

Phil Lee
Phil Lee
www.Health-Insurance.com
www.HealthPlanTalk.com

Implementation of ACA (Health Care Reform)

California Health Care Insurance Exchange Updates
Many developments have occurred since my last update. I will give a brief recap of the most important items that may impact your personal health care insurance situation.
Due to the large number of regulations and sheer volume of information related to health care reform. I will give you brief summaries of the most important items, in bullet point fashion. I have divided the items into 4 categories so that you only need to read the category that’s relevant to you.
You may choose to buy health plans either inside the California Exchange (Covered California) or outside. The only difference is that if you want either a subsidy or a tax credit, you have to choose an Exchange plan.

Your objective should be to:
1. Be insured.
2. Find the most affordable plan for your needs.
3. Qualify for a subsidy or tax credit, if you are eligible.

Individuals and Families
1. Major carriers participating in the Individual Exchange will be Anthem Blue Cross, Blue Shield, Health Net and Kaiser.
2. The guarantee-issue rule for individual health plans will go forward as planned on Jan. 1st. Individuals and Families may enroll between Oct. 1st 2013 and March 1st 2014. Enrollment effective dates will be Jan. 1st or later.
3. Starting on Oct. 1st, Individuals and Families may start choosing and applying for Individuals health plans within Covered California (the State Individual Exchange) or from plans available outside the Exchange. Plan choices within the Exchange are likely to be more limited than plan offerings outside of the Exchange. However, if one needs a federal subsidy based on their income, they may only apply for plans within the Exchange.
4. Agents who are certified by the Exchange may offer health plans both inside and outside of the Exchange, and may assist consumers in applying for subsidies.
5. Federal and Cal Cobra will continue to be offered to terminated employees.

Small Groups (under 50 employees)
1. Major carriers participating in the Group Exchange, aka SHOP, will be Blue Shield, Health Net and Kaiser.
2. Tax credit will be available to employer groups with low salaried employees.
3. Most insurance carriers allow existing groups to renew early in Nov. or Dec. of 2013 so that they will not be subject to the new Jan. 1st ACA-compliant plans and rates for another 12 months.
4. 2 employee groups consisting of only the owner and spouse will no longer be allowed.
5. 1099 employees will not be considered employees for group eligibility.
6. Employer groups in CA must have 51% or more of its employees in CA in order to qualify. Out of State employees may enroll in an Individual/Family plan in their own state.
7. Agents who are certified by the Exchange may offer health plans both inside and outside of the Small Group Exchange, known as SHOP.
8. Flex Spending Account Salary Deferral limit of $2500 for 2014.
9. Employer Model Notices requirement – On Oct. 1st or within 14 days of hire.

Large Groups (50+ employees)
• The employer mandate to provide a minimum level of health insurance to employees, along with the associated penalties; have been delayed to Jan. 2015.

Medicare
• ACA and the Exchanges are not expected to affect Medicare.

For More Information:
Please go to the official website for the California Exchange, aka Covered California, at www.coveredca.com. You will find:
• Summaries of Exchange plans that will be available.
• Sample rates for Exchange plans for your age in your zip code.
• A calculator to help give you some idea if you might qualify for a subsidy.

Phil Lee
www.Health-Insurance.com
www.HealthPlanTalk.com

Health Care Reform Employer Mandate or “Play or Pay” Delayed until 2015

The White House announced yesterday that enforcement of the Health Care Reform mandate, aka Play or Pay, will be delayed until 2015. This mandate requires large employers with 50 or more full-time equivalent employees to offer minimum essential coverage to full-time employees (and dependents) or incur a penalty tax of between $2,000 and $3,000 per employee should any full-time employee obtain coverage through a “marketplace” with the assistance of a federal subsidy. The delay of this (large employer) Pay or Play mandate does not affect employees’ access to premium tax credits, nor does it affect any other provision such as the Individual mandate. This delay is intended to allow the Treasury Department (IRS) time to consider ways of simplifying the new reporting requirements consistent with the mandate and also time to adapt health coverage and reporting systems while employers are taking steps toward making health coverage affordable and accessible for their employees. Formal guidance describing this transition is expected within the next week. Following is a link to one of many articles reporting on this story: http://www.bizjournals.com/bizjournals/washingtonbureau/2013/07/02/health-care-reforms-employer-mandate.html

What if the Supreme Court Overturns Obama’s Health Care Reform?

There is growing consensus that if the most controversial element of President’s Obama’s Health Care Reform Act (PPACA or ACA), the individual “mandate”, is overturned by the Supreme Court, most of the rest of the bill would also have to be ditched, resulting in a “mess”.
If ACA (Affordable Care Act) is overturned, insurers may have to reverse not just all the changes that they have already implemented over the past 2 years, but also all the preparations and advance planning that had gone into the implementation of the 2014 changes.

Although some of the changes that have already taken place have been the least controversial, the most damaging, costly and controversial elements of ACA have yet to be implemented.

For more information,please contact Phil Lee at [email protected] or go to www.health-insurance.com.

Read related article “Health Case Ripples Outward” at:

http://online.wsj.com/article/SB10001424052702304177104577310050863533554.htmlat

For more information,please contact Phil Lee at [email protected] or go to www.health-insurance.com.

Full article below:

By JANET ADAMY, JESS BRAVIN and ANNA WILDE MATHEWS

Wall Street Journal

After three days of historic Supreme Court debate, the political world and health-care companies confronted the prospect of President Barack Obama’s health law being wiped away, a decision that would upend years of planning by businesses and roil the November elections.

Justices in the Supreme Court’s conservative majority said Wednesday that it would be difficult to figure out which parts of the Obama health-care law should survive if one part of it is judged unconstitutional. Jess Bravin has details on The News Hub. Photo: Reuters.

Among those set to implement the law, insurers would have to ditch changes to their businesses designed to bring in millions of new customers. Provisions that have already gone into effect, including letting children stay on their parents’ insurance plans until they turn 26, would no longer be required.

Companies facing the law’s requirements would be reprieved, including health firms set to pay new taxes and businesses that would have been required to insure their employees or pay a fee.

As the affordable health care law arguments wrap at the Supreme Court, WSJ’s Peter Landers checks in on Mean Street to outline the next steps in the legal process. Photo: Getty Images.

It is impossible to predict how the court will rule, but skepticism from key justices heightened the possibility the 2010 health overhaul could be overturned in June, when the court is set to announce its opinion.

During the marathon arguments, the government’s attorney was grilled by the conservative majority over the constitutionality of the law’s central plank, the mandate to buy insurance. On Wednesday, the final day, the court’s conservatives appeared inclined to wipe away the entire law if it found the mandate in error.

The same justices even questioned the basis for the law’s expansion of the Medicaid insurance program for the poor, giving credence to an argument that even some of the challengers had declared a long shot.

The Supreme Court’s liberal justices went head to head with their conservative counterparts Wednesday in an effort to protect the Obama administration’s health-care law. Janet Adamy has details on Lunch Break.

Few disputed that untangling the law would be tricky if it is overturned. It would leave “a mess,” said Jon Kingsdale, a managing director with Wakely Consulting Group and a former official of Massachusetts’ near-universal insurance system. “It just ripples throughout Medicare and Medicaid and the private markets.”

Neil Trautwein, a vice president at the National Retail Federation, a Washington trade group that represents stores, said: “If the clock went back and health-care reform was gone, we could live with that.” He said it would be “a little trickier” if the court decided to only strike down parts of the law.

Ashby Jones on Lunch Break examines the three days of arguments over the Obama health-care law before the Supreme Court, including key takeaways and what the justices’ questions suggest about the court’s decision.

Under any outcome, the decision will wedge itself into the 2012 presidential election.

White House officials said they remained confident the law would be upheld, and that it was impossible to predict the outcome. Ultimately, one official argued, the election is likely to turn on the economy, not health care, no matter what the ruling. Mr. Obama, who returned late Tuesday from South Korea, was briefed by staff on the court deliberations.

Still, if all or part of the law is struck down, it would be a blow to Mr. Obama and Democrats, and create a liability months before the election. Republicans would hold up the victory as evidence the Obama administration overreached in trying to expand the scope of federal power. “To strike it down would send a chilling message to the administration’s agenda,” said Rep. Tim Scott (R., S.C.).

Congressional leadership aides from both parties say a health law left with holes would have no chance of getting patched until at least after the election. What happens next would be largely driven by the election result. Republicans want to repeal the law, and Democrats have little incentive to restart work on a legislative fix, given how the law has thus far been a political loser.

Lawyers for the Obama administration pressed the court on Wednesday for its preferred outcome, which would be to scrap certain popular insurance rules tied to the mandate, if the court was inclined to rule out the mandate.

Enlarge Image

European Pressphoto Agency

Supporters of health-care reform hold signs outside the Supreme Court.

Justice Antonin Scalia called it “totally unrealistic” to expect a court to “go through this enormous bill item by item and decide each one.” Justice Anthony Kennedy, a key swing vote, suggested the justices may “lack the competence” to pick and choose what parts should stay.

Chief Justice John Roberts, whose vote is also somewhat unclear, asked several questions that appeared to further the case of the challenger’s attorney, Paul Clement, who argued the whole law be struck down.

The court could decide to strike down parts of the law. If it nixed only the insurance mandate, insurers say premiums would skyrocket because there would be nothing to stop people from waiting to buy coverage until they got sick.

Health-industry officials on Wednesday began grappling with a range of problematic outcomes and said there was little they could do to prepare for them.

Molina Healthcare, which manages care for 1.7 million low-income Medicaid members in 10 states, saw in the health law a growth opportunity. Steven T. O’Dell, the senior vice president overseeing Molina’s growth strategy, said it was preparing for an influx that could as much as double its membership as states boost Medicaid rolls to comply with the law.

If the law fails in the court, Mr. O’Dell said, the company would turn instead to a state-by-state strategy, seeking to expand in states that overhaul their own health systems or expand Medicaid. That is a decision each state will make based on “politics and budget,” he said.

If the entire law fell, many parts of the law already in place would cease to exist, including checks for seniors to fill a gap in their Medicare prescription-drug program and insurance pools covering nearly 50,000 Americans who otherwise can’t get health insurance.

Planning for the main pieces of the law that are set to begin in 2014—including new marketplaces where consumers can shop for policies and subsidies designed to expand coverage to millions of lower earners—would halt. Experts said it could be years before the U.S. again tackled the issue of covering the tens of millions of Americans who lack insurance.

More

If only the mandate falls, insurers have scratched out backup plans that could potentially be done with support from state officials. These include offering narrow annual windows in which people could buy policies, or allowing plans with narrower benefits and lower premiums, which might entice younger and healthier people to sign up. They plan to press Congress to get rid of the requirements most closely linked to the mandate, should the court not strike those down, too. But with little political will among Republicans to fix a law they dislike, there is little chance a federal replacement to the mandate could get passed.

In states such as New Jersey, which in the 1990s guaranteed policies to all applicants but didn’t require all residents to carry coverage, premiums rose about 30% over the first few years of the policy, said Robert Laszewski, president of Health Policy and Strategy Associates, a consulting firm, and a former insurance-industry executive.

Mr. Laszewski said insurers could decide to voluntarily keep in place the requirement that children can stay on parents’ plans, which the Obama administration says has covered 2.5 million young adults. That change is already priced into coming policies and isn’t expensive, he said.

—Louise Radnofsky, Laura Meckler and Christopher Weaver contributed to this article.

A version of this article appeared Mar. 29, 2012, on page A1 in some U.S. editions of The Wall Street Journal, with the headline: Health Case Ripples Outward.

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