Michael Stack from Workers’ Comp Resource Center hosted the first Cavalcade of Risk for 2014, full of lots of good risk-related articles. If you’re looking for a really interesting read, I recommend David Williams’ post about medical child abuse and a case that has pitted Boston’s Children’s hospital against a patient’s parents. David links to… Read more about Kicking Off 2014 With A Great Risk Round Up
Individual/Family Health
Updates For Colorado Residents Enrolling In Exchange Plans After December 23
Connect for Health Colorado is one of only five exchanges that extended the enrollment deadline for a January 1 effective date out beyond Christmas Eve. If you’re in Colorado, you have until the end of the day today (December 27) to enroll in a plan and get a January 1 start date. If you enroll… Read more about Updates For Colorado Residents Enrolling In Exchange Plans After December 23
Dear Santa: Can you help me pick my favorite entry in a stellar HWR?
Julie Ferguson hosted one of the best ever Health Wonk Reviews yesterday at Workers’ Comp Insider. Definitely something for everyone – and lots of holiday cheer – in this “Dear Santa” edition. I had so many favorites that I couldn’t narrow it down to just one or two, so here are my votes for the… Read more about Dear Santa: Can you help me pick my favorite entry in a stellar HWR?
What Is An Essential Health Benefit (EHB)?
Essential Health Benefits (EHBs) are one of the most important aspects of the ACA’s transformation of the individual health insurance market (they also apply in the small group market, but group policies have historically been more benefit-rich than plans sold in the individual market). In the past, insurers were given tremendous leeway in plan design;… Read more about What Is An Essential Health Benefit (EHB)?
Pediatric Dental on 2014 Individual Health Insurance Policies in Colorado
If you’re confused by the new pediatric dental requirements, you’re not alone. Here’s a rundown of how the ACA and HHS regulations impact pediatric dental coverage, with Colorado-specific details: The ACA defines pediatric dental coverage as one of the ten essential health benefits (EHBs) that must be covered on all new individual and small group… Read more about Pediatric Dental on 2014 Individual Health Insurance Policies in Colorado
The Cavalcade of Risk – making us all smarter since 2006
Be sure to check out the latest Cavalcade of Risk, hosted by David Williams. For all of us who love a nurse, Julie Ferguson’s post from Workers’ Comp Insider is an eye-opener… not only do nurses face on-the-job violence and abuse from patients, but also from other staff members. And Mom and Dad Money has… Read more about The Cavalcade of Risk – making us all smarter since 2006
Good News From the Health Wonks for ACA Enrollment in 2014
Jason Shafrin hosted the latest Health Wonk Review at The Healthcare Economist, and it’s an excellent edition. It’s mostly all about the ACA, and there are lots of different viewpoints to consider. One of my favorite posts in the HWR is from Health Affairs, written by Rick Curtis and John Graves. Rick and John make… Read more about Good News From the Health Wonks for ACA Enrollment in 2014
Tobacco Use: ACA and Colorado Regulations
Back in January, I looked at the issue of tobacco use and the ACA from a mostly philosophical perspective. But we also wanted to provide a summary of what’s going on here in Colorado with regards to tobacco and the new health insurance policies that are available for 2014. Although the ACA has eliminated the practice of… Read more about Tobacco Use: ACA and Colorado Regulations
Catastrophic Plans Not Significantly Less Expensive In Colorado
Even if you’ve been paying pretty close attention to media coverage of the ACA over the last few years, you might not know a whole lot about the ACA’s catastrophic plans. They haven’t been heavily publicized by HHS or the rest of the Obama Administration, they’re not eligible for subsidies, and they have relatively thin… Read more about Catastrophic Plans Not Significantly Less Expensive In Colorado
Thanksgiving Cavalcade of Risk
Happy Thanksgiving and welcome to the 197th Cavalcade of Risk! If you’re a brave soul who relishes the thought of a family dinner filled with spirited debates about healthcare reform, insurance and risk, we’ve got plenty of fodder for your conversations. Just don’t steer the conversation over the line into politics, especially after a glass… Read more about Thanksgiving Cavalcade of Risk
Imagine How Much Better Open Enrollment Would Have Been Without The Exchanges
We’ve all heard Secretary Sebelius talk about how amazing it is that “for the first time” Americans who buy their own health insurance have a place where they can see all of their options in one place, compare plans, and enroll in coverage. Anyone who has taken more than a cursory glance at the individual health… Read more about Imagine How Much Better Open Enrollment Would Have Been Without The Exchanges
Rational Thoughts on the Exchange Rollout, and Other Health Wonkery
Hank Stern did an excellent job hosting the Health Wonk Review today. Head over to check it out – you’ll learn all sorts of things about health care policy and reform, and you’ll also learn why this Thanksgiving/Chanukah overlap is truly a once in a lifetime event. My favorite posts in this edition come from… Read more about Rational Thoughts on the Exchange Rollout, and Other Health Wonkery
How Does Obama’s Policy Continuation Announcement Impact Colorado’s Individual Market?
By now you’ve probably heard about the Obama Administration’s compromise over the policy cancellation uproar. The fix that Obama has offered is that health insurance companies can extend existing plans for one more year, allowing them to continue to exist in 2014. This has been incorrectly reported in some media outlets as allowing carriers to continue… Read more about How Does Obama’s Policy Continuation Announcement Impact Colorado’s Individual Market?
Colorado Senator Udall Introduces Bill To Allow Individual Policies To Continue For Two More Years
Colorado Senator Mark Udall introduced legislation today that would allow people with individual health insurance to keep their existing policies for two more years – through the end of 2015 – regardless of any cancellation notices that have already been sent out. Udall’s Continuous Coverage Act is designed to smooth the transition to ACA-compliant plans…. Read more about Colorado Senator Udall Introduces Bill To Allow Individual Policies To Continue For Two More Years
News From The Health Wonks – Lots Going On In Health Care Reform Land
Brad Wright did an outstanding job with the Health Wonk Review this week, hosted at his always excellent blog, Wright on Health. There are plenty of posts about the latest in ACA implementation, including several differing viewpoints on the recent news about policy cancellations. I particularly liked Joe Paduda’s article about Medicaid expansion – it’s an… Read more about News From The Health Wonks – Lots Going On In Health Care Reform Land
Getting Past The Health Insurance Plan Cancellation Hysteria
Much has been said recently about how the ACA is causing a tidal wave of policy cancellations, and resulting in people losing coverage that they would prefer to keep. The frustrating part about this – as has generally been the case with every big uproar about the ACA – is that we’re not really getting… Read more about Getting Past The Health Insurance Plan Cancellation Hysteria
Fewer Plans Available In Exchanges In 2013, But Maybe That’s A Good Thing
At the end of September, just as the exchanges were about to open for business, HealthPocket created a comparison of the number of individual and family health insurance policies available in each state in 2013 and compared that with the number of policies that would be available in each state’s exchange in 2014. It’s an… Read more about Fewer Plans Available In Exchanges In 2013, But Maybe That’s A Good Thing
The Public Should Be Aware Of Actual Health Insurance Premiums As Well As Subsidized Rates
Jaan Sidorov hosted this week’s Health Wonk Review at his most excellent Disease Management Care Blog – be sure to check it out if you haven’t already. One particularly interesting post in this edition comes from Hank Stern, writing about how one of the widely-criticized flaws in the HHS-run exchanges was actually an intentional part… Read more about The Public Should Be Aware Of Actual Health Insurance Premiums As Well As Subsidized Rates
Early Renewal Does Not Mean You’re Taking Advantage of a Loophole
A few weeks ago, I wrote a post about our family’s health insurance policy and the changes coming in 2014. To make a long story short, our premiums are going to go up significantly and we don’t qualify for subsidies. We’re not complaining… we know that the ACA makes healthcare more accessible for a lot… Read more about Early Renewal Does Not Mean You’re Taking Advantage of a Loophole
Government Shutdown: Is The Republican “Plan” Actuarially Feasible?
Although I’ve seen a lot of media references placing blame for the government shutdown squarely at the feet of House Republicans, I’ve also heard people saying that both sides are to blame and that the Democrats could have “compromised.” I’ve just finished reading the text of the House amendment to H.J. Res. 59. This is the amendment that would have “delayed Obamacare” by a year.
There are a couple specific aspects of the ACA that House Republicans were trying to delay or delete. The most significant is the individual mandate (keep in mind that this has been challenged all the way to the Supreme Court and found to be Constitutional), which the amendment would postpone until 2015. [The amendment also contains some other provisions regarding health insurance for Congress and the President, which I’ll address tomorrow.]
The initial provisions of the ACA started to take effect in 2010. January 1, 2014 is about 3.5 years after that, so the individual mandate had a significant built-in delay. But let’s assume for a moment that the Democrats wanted to accept this “compromise” and allow the individual mandate to be delayed until 2015. What would that have involved from a practical standpoint?
An actuarial nightmare
Back in the spring of this year, health insurance carriers all across the country were scrambling to submit rates and plan designs for review. There were some delays, and some carriers ended up having to redo their rates and submit them again, but by the middle of August we had a pretty good idea of what plans were going to be available in the Colorado marketplace (exchange) – and news was also coming in from lots of other states. This was six weeks before the marketplaces opened, and a full 4.5 months before the new policies were going to be effective. Once the rates were finalized, they had to be loaded into each marketplace’s online quoting software so that they would be available to navigators, brokers and applicants once the marketplace opened for business.
This whole process took many months. Creating the ACA-compliant plan designs and doing the actuarial work to price them was not something that happened overnight. Carriers were working on this early in the year, getting their plan design and rate info ready to submit in the spring. And then the rate reviews, final approval, and user interface updates added to the time frame.
So let’s go back and look at the Republican “compromise” of delaying the individual mandate for a year. All of the new plans and rates that actuaries, marketplaces and Divisions of Insurance have been working with this year are designed around the basic concepts of the ACA: Policies 
must be guaranteed issue (a huge change from the way policies have historically been issued in the individual market, where underwriting has been part of the process in all but five states), they can only be issued during open enrollment or following a qualifying event (loss of other coverage, birth, adoption, marriage, divorce), and the individual mandate is expected to generally increase enrollment.
Removing any of these elements would drastically change the pricing of the policies and basically mean that the actuaries would have to start over. Incidentally, the House Amendment does not mention delaying the requirement that individual health insurance be guaranteed issue starting in 2014. To roll out guaranteed issue coverage without the individual mandate would mean that rates would be significantly higher for the people who do opt to purchase a plan. But regardless, removing one of the primary elements upon which the 2014 rates have been based would mean a complete do-over of the actuarial process of pricing the new policies.
But what about just keeping things the way they are? Can’t we just keep our 2013 plans and roll them into 2014 with no changes?
No. Remember, the House Amendment to “delay Obamacare” (that’s the language most often used in the media and by lawmakers themselves) would actually just delay the individual mandate. It doesn’t delay the other crucial aspects of the ACA that guided plan design for 2014. So policies would still have to provide essential health benefits. They would have to be guaranteed issue and priced the same regardless of gender (in Colorado, this has been the rule for almost three years now, but the ACA bans it everywhere).
So current 2013 policies could not continue to be issued in 2014. They’re not compliant in terms of plan design, even if actuaries were able to perform a miracle and redo all of the pricing in the next few weeks.
That puts us back to starting over with the new ACA-compliant plans that carriers created months ago, and trying to reprice them for 2014 to reflect a delay in the individual mandate. Remember that the actuaries have to come up with the pricing (not a quick process), DOIs and marketplaces have to review the pricing, and then the final rates have to be uploaded to quoting systems (both marketplace systems and private “off-exchange” quoting systems) and added to printed sales materials in time for consumers to be able to use them. For 2014 plans, this process started early in 2013. Starting over at the beginning of October would have been mission impossible.
Consumers have generally always been able to submit applications one to two months prior to the effective date they want. A lot of people wait until the last minute, but quotes are available several weeks out. That means that if actuaries were to start over at the beginning of October and redo everything, the entire process would have to be completed by mid November at the latest in order for accurate pricing information to be available for consumers looking for a January 1 effective date. The House Amendment did not mention delaying the opening of the marketplaces, so it’s unclear what lawmakers wanted the marketplaces to do. Would plan information still be available in early October, but with no rate data?
To say that this was a poorly planned amendment is an understatement. It was political posturing designed to appeal only to people who “hate Obamacare” (and unfortunately, some of those people are woefully uninformed about the law). It had no basis in actuarial reality, and would have thrown […]
Getting ACA Information and Ignoring “Obamacare” Misinformation
One of the major hurdles for the ACA has long been a lack of public understanding about the basics of the law. This is significantly exacerbated by the blatantly false information that has been circulated by many “Obamacare” opponents over the last few years. That’s not to say that the ACA is perfect – it definitely has its flaws. But public understanding of the law has been greatly hampered by people whose sole purpose is to defeat it. If you’re trying to learn about the ACA and how it will impact you and your family, you’re probably better off getting your information from a source that isn’t hell-bent on doing away with the law (and if that’s their intent, they probably have zero interest in your family’s access to healthcare, which is one more reason to ignore them).
In addition to a widespread lack of understanding about the law, there’s also a significant gap between how people expect to learn about the law and how they probably actually will learn about it. A recent AFLAC survey found that 75% of employees think that their employer is going to educate them about changes to their health insurance as a result of the ACA, but only 13% of employers indicated that was a priority for their company (more info from the AFLAC study available here).
This comes in conjunction with the announcement that employers should communicate with their employees about the health insurance marketplace (exchange) by October 1, 2013, but there is no fine or penalty for employer who don’t. Of course some employers will provide information and support to their employees. But some will not. In the latter group, you’ll have a combination of employers who lack understanding themselves about the ACA and the marketplace, and those who simply forget or are too busy to deal with it. But there will also be employers who are actively opposed to the ACA and choose not to inform their employees about the marketplace or changes to health insurance as a result of the ACA.
Ultimately, a lot of people, including the self-employed as well as employees who don’t have access to employer-sponsored health insurance (keep in mind that the employer mandate that requires employers to offer health insurance only applies […]
No More HRA Funded Individual Health Insurance Policies In 2014… But Does It Make Sense?
A couple years ago, I wrote extensively about the rules regarding HRAs (Health Reimbursement Arrangements) and individual health insurance in Colorado. To sum it up, it used to be against the law for employers in Colorado to reimburse employees for individual health insurance premiums. Then, the IRS said it was ok for HRAs to be used to pay for individual health insurance premiums. Colorado’s DOI resisted though, and initially said that employers could only pay – directly or indirectly – for group health insurance, period. But then they repealed that order and said it was ok for HRA funds to be used to purchase individual policies. And then Colorado passed a law in the spring of 2011 that expressly allowed employers to pay for individual health insurance premiums, but only if the employer had not had a group health plan in place during the past 12 months (this was to prevent employers from dropping their group health insurance in favor of an HRA and individual policies). There are a lot more details about the whole saga in the two posts I linked to at beginning, but that’s the story in a nutshell.
And now it looks like it’s all changing again in 2014. The IRS issued new guidelines last week about HRAs, and they’re pretty clear about the fact that stand-alone HRAs can no longer be used to reimburse employees for individual health insurance premiums for plan years starting in 2014 (most of the details about this start on page 4 of the IRS regulations document).
What I find interesting is their reasoning: They note that “an HRA is not integrated with primary health coverage offered by an employer unless, under the terms of the HRA, the HRA is available only to employees who are covered by primary group health plan coverage that is provided by the employer and that meets the annual dollar limit prohibition.” They then go on to explain that an HRA cannot be integrated with individual health insurance (obviously, because that’s part of the definition they wrote for what it means to be “integrated”). And that an HRA used to reimburse individual health insurance premiums would fail to comply with the annual dollar limit prohibition.
The most interesting thing about all of this is that for plan years starting in 2014, individual health insurance cannot have annual benefit limits (or lifetime limits, a rule already in place) on “essential health benefits.” This is the same in the small group market (although curiously enough, the large group market doesn’t have the same restrictions).
So if we look at this from a practical standpoint, if an employer funds an HRA that is used by an employee to purchase individual health insurance, the policy being purchased (as of 2014) would have to have essential health benefits covered with no annual (or lifetime) benefit limits. In the past, there were a lot of differences between the individual and group health insurance markets, which had a lot to do with the huge price differences between the two (individual health insurance has historically been much less expensive, but it’s also medically underwritten and in a lot of states doesn’t cover key benefits like maternity). That’s all changing in 2014. Individual health insurance is going to look a lot like small group health insurance, both in plan design and premiums (subsidies will help a lot of people pay much less for their coverage than the “retail” price).
So although the definition in the IRS guidelines makes it impossible for an HRA to be “integrated” with individual health insurance, there’s not really a logical reason that this should be the case.
Here’s the problem as I see it. The employer mandate does not […]
Skinny Health Insurance In The Large Group Market
We’ve railed against “mini-med” health plans many times here on our blog, and have spoken with lots of people over the years who have found themselves stuck with medical bills because their mini-med had such low benefit limits. We’ve even had one client who found himself stuck paying for a mini-med until the following open-enrollment period, even after his plan had reached its very low benefit maximum.
We are not fans of mini-meds, and were glad that one of the provisions of the ACA was to do away with lifetime and annual benefit maximums on essential health benefits. For the past couple of years, most sources that report on healthcare reform (including us) have been explaining that mini-meds are going away in 2014. Not everyone was in agreement that this was a good thing – some people expressed the view that businesses that hire large numbers of minimum wage workers would be switching to more part-time employees or suffering dire financial consequences. But the general consensus was the mini-meds would be a thing of the past once all of the benefit maximum waivers that HHS had granted ran out.
Alas, that doesn’t appear to be the case. Over the last few weeks, I’ve seen several articles explaining how a new type of “skinny” health insurance policy might take the place of mini-meds in the large group market for employers in the retail and food industries who typically hire minimum wage employees. The most thorough article I’ve seen is on Forbes, written by Avik Roy, and it’s worth a read.
To summarize, the ACA focused almost entirely on reforms in the small group and individual market. We’ve been talking about those reforms for three years now, and for the most part, they’re working well to improve the safety net that health insurance should provide. The primary reform in the large group market was the employer mandate, which requires employers with more than 50 full time-equivalent employees to offer health insurance or pay a penalty. This provision of the law has been delayed until 2015, so it’s even more of a back-burner issue right now as we head into open enrollment in the individual market and the opening of the exchanges for individual and small business coverage.
But although the idea was to make sure that large employers offered good qualify coverage in order to avoid paying a fine, it appears that some large employers will opt for the fine instead. The penalty is steep if a large employer doesn’t offer any coverage at all: if even one employee (of a business with at least 50 employees) seeks coverage in an exchange and gets a subsidy, the employer has to pay a penalty of $2000 per employee (the first 30 employees are waived). So if a company has 90 employees, doesn’t offer any coverage […]
Renewal Options for Each Individual Health Insurance Carrier in Colorado
Last week I explained how early renewal at the end of 2013 might be a good option for some people who have individual health insurance. If you’re happy with your coverage and aren’t going to qualify for a subsidy in the Colorado exchange, keeping your existing plan for most of 2014 might be a good way to save some money on premiums. This is especially true for people who prefer very high deductibles, as those plans are generally not ACA compliant and thus will not be available for purchase after the end of 2013. But if your carrier allows it, you can keep your current policy until it renews in 2014, and switch to an ACA compliant plan at that time. For people with plans that renew late in the year, this could mean keeping a lower-cost, higher deductible policy for most of 2014. If you’ll be eligible for a premium subsidy, it’s definitely worth your time to compare a subsidized exchange plan with what you have now. But if you’re happy with your coverage and you’re going to be paying full price for an ACA compliant plan, check with your carrier to see about keeping your current plan in 2014.
Keep in mind that each Colorado health insurance carrier is doing things a little differently in terms of 2013 renewals heading into 2014. It’s important to check with your carrier to make sure you’re aware of what steps you need to take – don’t assume that your plan will automatically renew – or automatically not renew. The Colorado Division of Insurance has left a lot of leeway for carriers to determine their own protocol for renewals going into 2014. There is no state requirement that existing policies be cancelled as of the end of 2013, although some carriers have opted for that as a default. All plans must be ACA-compliant by January 1, 2015. So when your policy renews in 2014, you will have to transition to an ACA compliant plan. But the date of that renewal can be anytime from January to December.
Here’s a brief summary of what we have heard so far from some of the main carriers in Colorado. This is subject to change, so check with us or your carrier before you make a decision.
Anthem Blue Cross Blue Shield: The default is for your plan to just keep its current renewal date and continue unchanged until that date in 2014. But Anthem is also offering insureds an option […]
HSA Contribution Limits For 2014
After the PPACA was signed into law, questions started to come up regarding the impact of the law on HDHPs and HSAs. People wondered if HSA-qualified plans would still be available within the confines of being ACA-compliant, and there was plenty of confusion as far as how high deductible plans would fare. Now that we’re just a month away from the opening of the exchanges and four months away from ACA-compliant plans being effective, it’s clear that HDHPs and HSAs will continue to be available in 2014.
They may even become more popular than they currently are, as they will likely attract people who would otherwise buy plans with out-of-pocket limits too high to be HSA-qualified. The out-of-pocket limits on individual plans starting in 2014 will be equal to the out-of-pocket limits on HSA-qualified plans, so there will likely be HSA-qualified plans available in all of the state exchanges. Out-of-pocket limits that exceed that amount – for example, $10,000 individual deductibles – will no longer be allowed on any policies, which will make HSA-qualified plans a popular choice for people who want to keep their premiums as low as possible.
The IRS has set the HSA contribution limits for 2014:
Individual = $3300 and Family = $6550
These limits reflect a small increase ($50 and $100, respectively) over the 2013 limits.
The IRS kept minimum deductible amounts for HSA-qualified health insurance plans the same ($1250 for individual coverage, and $2500 for family coverage), but the maximum allowable out-of-pocket on HSA-qualified health insurance plans in 2014 will increase slightly, to $6350 for an individual and $12,700 for a family (up $100 and $200 respectively from 2013).