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Health Insurance Marketplace

Vice President of Benefits

Vice President of Benefits

In a little over 49 days the Health Insurance Marketplace will be open.  Millions of people that have struggled to find affordable health insurance without pre-existing conditions, riders, or exclusions will now have new options to choose from.

I have had several people ask me if their doctors would take the Government Insurance (Obama-care…if you will).  Many do not realize that Blue Cross Blue Shield of TN, Cigna, Humana, Coventry, and a new COOP called Community Health Alliance will be the insurance companies offering policies.

Open enrollment begins on October 1st and will run though March 31st.  If you apply for a policy before the middle of December, you can get a January 1st effective date.  This is the earliest effective date you will be able to get.

Many also do not realize that depending on their Household Income (HHI), they may qualify for subsidies that will reduce the amount of premium they will need to pay on a monthly or annual basis.  For example, a family with a HHI less than $94,200 may qualify for a subsidy.  I feel that the hardest thing for individuals to understand it their eligibility for the subsidy.  Many do not know that they may be disqualified from the subsidy if their employer offers them affordable coverage.  This simply means that you would not qualify for a subsidy if your portion of the “Employee Only” premium is less than 9.5% of your income.

In 2014, most small employers will be forced to change their plan designs due to Healthcare Reform.  Employers with less than 50 employees will not be able to have an individual deductible higher than $2,000.  Many employers renew at different times of the year.  That said, it may be the middle of the year before you find yourself in a situation where the employer had to make the health plan more rich, and consequently has to raise your contributions to help pay the additional premiums.  This may either take you past the 9.5% of income, or force the employer to drop the health plan entirely.

One thing is for sure; Full Service Insurance is certified and ready to help you and your employer navigate through this changing landscape.  The government has their website ready to assist those that want to go at this alone.  We suggest you work with certified specialists here at Full Service Insurance.

Make sure you check out our dedicated Health Insurance site by going to




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Obama Administration Announces Delay Of ACA’s Employer Mandate.

Major news out of the White House was covered widely last night through Wednesday morning: the delay of the Affordable Care Act’s employer mandate saw three minutes of coverage across all network broadcasts, and is on the front-page of several national papers.

The political implications of the delay, and the suggestion that it was intended to help Congressional Democrats grappling with criticism of the ACA ahead of next year’s elections, are covered by inside-the-beltway publications. But the midterms angle is not the focus of much of this morning’s print coverage, nor was it mentioned during the network newscasts. These outlets report mainly on the criticism that led to the delay, and what it means for the Affordable Care Act at such a critical time in its implementation. Notably, it was not HHS, but the Treasury Department, that announced the delay. As such, no major HHS officials are quoted regarding the news.

NBC Nightly News Share to FacebookShare to Twitter (7/2, Story 2, 1:20, Williams) reported that Tuesday night, the Obama Administration announced it was postponing a major Affordable Care Act provision, “delaying penalties for large employers who don’t provide health insurance coverage to their workers for a full year.” NBC’s Peter Alexander added, “The White House insists this will be its opportunity to help simplify the process.”

The CBS Evening News Share to FacebookShare to Twitter (7/2, Story 2, 1:10, O’Donnell) reported on the “late word from the White House,” that “a central component of President Obama’s healthcare overhaul will be delayed for a year.” Wyatt Andrews noted that the move comes “after months of complaints and backlash.” He added that with the extra time, the Administration is “promising to reduce” the burdens of the employer mandate on smaller companies, and to ensure that they do not follow through on threats of layoffs or reduced hours. According to Andrews, “Workers will still be allowed to buy their own health insurance on a state exchange. … The only thing that changes here is that their employers won’t be penalized next year if they do.”

And in a brief segment, ABC World News (7/2, story 7, 0:30, Sawyer) called the delay “surprising,” noting that the Obama Administration “says it wants to simplify the requirements to make it less confusing.”

On its front page, the New York Times Share to FacebookShare to Twitter (7/3, A1, Calmes, Subscription Publication) reports that in announcing the delay of the employer mandate, the Obama Administration was both “responding to business complaints and postponing the effective date beyond next year’s midterm elections.” The article adds that while “the change does not affect other central provisions of the law,” it may complicate efforts of “officials running the exchanges to know who is entitled to subsidies if they are not able to confirm whether employers are offering insurance to their employees.”

On its front page, the Washington Post Share to FacebookShare to Twitter (7/2, A1, Goldfarb, Somashekhar) calls the news “a fresh setback for President Obama’s landmark health-care overhaul as it enters a critical phase.” And while the White House “portrayed the delay as a common-sense step that would reduce financial and regulatory burdens on small businesses,” Republicans, “who are planning to target ‘Obamacare’ in the 2014 midterm campaigns, said the delay is an acknowledgment that the health-care overhaul is flawed.”

Also on its front page, the Wall Street Journal Share to FacebookShare to Twitter (7/3, A1, Radnofsky, Subscription Publication) notes that the mandate, which was to levy penalties on all companies with 50 or more full-time workers not providing them with insurance, had faced a torrent of criticism from restaurant and retail industries, who had threatened to cut workers or hours to avoid the penalties. As such, the mandate had received significant negative media attention for threatening the wages or employment of low-wage workers in an already weak economy.

To that point, on its front page, USA Today Share to FacebookShare to Twitter (7/3, A1, Kennedy) reports that “business groups had argued for months that the law created an administrative burden for businesses as they tried to update technology and plan to offer health coverage to their employees without knowing how much the coverage would cost.”

On its front page, the Los Angeles Times Share to FacebookShare to Twitter (7/2, A1, Levey) reports that the announcement was made “late Tuesday” in a post to the Treasury Department’s website. Assistant Secretary for tax policy Mark J. Mazur wrote, “We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively. We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”

Another representative of the White House spoke out Tuesday, as CNN Share to FacebookShare to Twitter (7/3, Liptak) reports “Obama’s senior adviser Valerie Jarrett – who acts as the White House’s liaison to big business – wrote the new delay was indicative of the administration’s determination to implement the health care law effectively and fairly, and that it wouldn’t affect other aspects of Obamacare.” She wrote, “While major portions of the law have yet to be implemented, it’s already a little more affordable for businesses to offer quality health coverage to their employees. As we implement this law, we have and will continue to make changes as needed. In our ongoing discussions with businesses we have heard that you need the time to get this right.”

Larry Kudlow began Tuesday’s CNBC Kudlow Report (7/3) with news of the delay. CNBC’s Bertha Coombs said that businesses were “applauding the decisions,” calling it a “wise move.” At one point, Kudlow said, “I wonder whether they shouldn’t delay the entire program.”

Other sources reporting on the announcement include Reuters Share to FacebookShare to Twitter (7/3, Morgan), McClatchy Share to FacebookShare to Twitter (7/3, Pugh), the Huffington Post Share to FacebookShare to Twitter (7/2, Young), the ABC News Share to FacebookShare to Twitter (7/3, Good) “The Note” blog, the NPR Share to FacebookShare to Twitter (7/3, Chapell) “The Two-Way” blog, The Hill Share to FacebookShare to Twitter (7/3, Sink) “Healthwatch” blog, the FOX News Share to FacebookShare to Twitter (7/3) website, the Atlantic Share to FacebookShare to Twitter (7/3, Graham), the Atlantic Wire Share to FacebookShare to Twitter (7/3, Olheiser), Politico Share to FacebookShare to Twitter (7/3, Cheney), Modern Healthcare Share to FacebookShare to Twitter (7/3, Daly, Block, Subscription Publication), Kaiser Health News Share to FacebookShare to Twitter (7/3, Carey), New York Daily News Share to FacebookShare to Twitter (7/3, Warren), the Tulsa (OK) World Share to FacebookShare to Twitter (7/3, Greene), the Tennessean Share to FacebookShare to Twitter (7/3, Wilemon), Alabama Live Share to FacebookShare to Twitter (7/3, Gore), the Washington Business Journal Share to FacebookShare to Twitter (7/3, Fischer, Subscription Publication) “WBJ BizBeat” blog, the Portland (OR) Business Journal Share to FacebookShare to Twitter (7/3, Hayes, Subscription Publication) “Healthcare Inc. Northwest” blog, the Birmingham (AL) Business Journal Share to FacebookShare to Twitter (7/3, Ranaivo, Subscription Publication) “BizTalk Birmingham” blog, BBC News Share to FacebookShare to Twitter (7/3), and the Daily Mail (UK) Share to FacebookShare to Twitter (7/3, Martosko).

Political Angle Of Delay Considered. Emphasizing the political angle, The Hill Share to FacebookShare to Twitter (7/3, Viebeck, Baker, Parnes) titles its report on the delay, “ObamaCare Employer Mandate Delayed Until After 2014 Midterms.” According to The Hill, Republicans “seized on the news, arguing that the delays suggested the law was a ‘train wreck,’” a term used in April by Sen. Max Baucus, a Democrat and “one of the primary architects” of the ACA, in his warning about potential problems with the implementation of the law. The Hill reports that in contrast to Congressional Republicans, “the offices of Democratic leaders fell notably silent Tuesday evening” as reporters sought comment about the delay.

According to Politico Share to FacebookShare to Twitter (7/3, Norman, Haberkorn), the delay is “at least partial proof of what Republicans have been predicting for months: that the health law is way too complex to be ready to go live in 2014.” The Washington Times Share to FacebookShare to Twitter (7/3, Howell) says Republicans “are sure to do a victory lap over the delay in an integral part of Mr. Obama’s signature domestic achievement.”

CQ Roll Call Share to FacebookShare to Twitter (7/3, Dennis, Subscription Publication) reports that “the decision is embarrassing for the administration,” and, to Republicans, it is “simply more evidence that the law should be repealed.” Sen. Orrin Hatch said, “That the Obama Administration is putting off this job-killing requirement on employers, but not individuals and families, shows how deeply flawed the President’s signature domestic policy achievement is.”

On the other hand, the AP Share to FacebookShare to Twitter (7/3, Alonso-Zaldivar) is reporting that the delay may help Democrats “by blunting a line of attack Republicans were planning to use.”

Similarly, Zeke Miller, in a post for Time Share to FacebookShare to Twitter (7/2, Miller), reported that former CBO director Douglas Holtz-Eakin contended that the delay is “deviously brilliant” because Congressional Democrats “no longer face the immediate specter of running against the fallout from a heavy regulatory imposition on employers.”

Other politically focused reports come from sources including CQ Share to FacebookShare to Twitter (7/3, Reichard, Attias, Subscription Publication), Kaiser Health News Share to FacebookShare to Twitter (7/3, Hancock, Appleby), and the National Journal Share to FacebookShare to Twitter (7/3, Sanger-Katz, Subscription Publication).

Stakeholders React To Employer Mandate Delay. Reporting some of the initial reaction to the announcement, Bloomberg News Share to FacebookShare to Twitter (7/3, Dorning, Wayne) reports that Senate Minority Leader Mitch McConnell said the delay is more evidence that “Obamacare costs too much and it isn’t working the way the administration promised.” And Randy Johnson, a senior VP at the US Chamber of Commerce, wrote, “The administration has finally recognized the obvious – employers need more time and clarification of the rules of the road before implementing the employer mandate.”

Several other outlets report on reactions, including USA Today Share to FacebookShare to Twitter (7/2, Kennedy), which reports that “businesses reacted with relief.” Politico Share to
FacebookShare to Twitter (7/3, Cunningham) also notes that businesses “applauded” the delay, “but warned that the yearlong delay doesn’t fix some of the law’s other messy issues.” Meanwhile, another piece in Politico Share to FacebookShare to Twitter (7/3, Millman) reports that the GOP “gloat[ed],” while The Hill Share to FacebookShare to Twitter (7/3, Sink) “Healthwatch” blog demonstrates this by publishing tweets and statements out of several key Republicans, including Speaker of the House John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA).

Commentators Offer Analysis Of Employer Mandate Delay. Beyond just reporting the facts of the announcement, several outlets offer analysis of the delay. As Sarah Kliff puts it on the front page of the Washington Post Share to FacebookShare to Twitter (7/3, A1, Kliff), the Obama Administration “just swapped one political headache for another.” First, by delaying the mandate, “the Obama administration heads off the unseemly spectacle of companies vowing to cut jobs or workers’ hours to avoid the costly mandate.” However, the action “is not a free pass,” as it “contributes to critics’ claims that the White House does not have the ability to launch its biggest legislative accomplishment on schedule.”

Politico Share to FacebookShare to Twitter (7/3, Haberkorn, Millman, Norman) considers the “bombshell announcement,” and answers “six questions about what it all means.” One question asks, “Does this derail Obamacare?” The article responds, “It doesn’t derail it. But it hurts, at least in how the public sees it and how the critics can talk about it.”

Evan Soltas writes on the Bloomberg News Share to FacebookShare to Twitter (7/3) ‘“The Ticker” blog about the “side effects” of the delay, noting that by keeping the individual mandate in place, many employees will be “forced into individual exchanges,” adding “additional volume” to a system already predicted to be over-burdened.

Also on the Bloomberg News Share to FacebookShare to Twitter (7/3) “The Ticker” blog, Christopher Flavelle writes that the delay “raises two immediate questions.” First, “can the White House protect other components of the law from renewed attack?” And second, “what does this say about the broader problems facing implementation?” He concludes that while the law itself may not be “in danger,” this “latest concession raises the question of what will be the next thing to go – and how many more battles the administration can afford to lose before the law is in real trouble.”

CQ Share to FacebookShare to Twitter (7/3, Reichard, Subscription Publication) reports that this change came about not by the “highly charged political rhetoric” that so often marks debate on the ACA, but a different approach, one “intensely engaged with the Obama administration on implementation, and pragmatic.” The piece profiles Neil Trautwein of the National Retail Federation, who “earned credibility with the administration” by focusing not on the demise of the law but rather on how employers could “come to terms with it as best they could.”

Jennifer Rubin, in her Washington Post Share to FacebookShare to Twitter (7/3) “Right Turn” blog lists seven reasons this delay is a “huge setback” to the Affordable Care Act. First among these is that “it proves the president’s assurances that everything was 100 percent on track to be false.” Another is that “it will open the floodgates to arguments that the rest of the law should be delayed as well.”

Ezra Klein, in his Washington Post Share to FacebookShare to Twitter (7/3) “Wonkblog” says that rather than just delay the employer mandate, it should be eliminated, or “at least utterly overhaul[ed].” On top of criticizing the mandate, Klein criticizes the way the Administration went about delaying it, with “a regulatory end-run around Congress.”

Avik Roy writes in the Forbes Share to FacebookShare to Twitter (7/3) “Apothecary” blog about the “significant impact” the delay will have “on the rollout of Obamacare, the private health insurance market, and the nation’s economy.” After significant analysis of each of these, Roy concludes, “If the employer mandate were to ultimately be repealed, or never implemented, today’s news may turn out to be one of the most significant developments in health care policy in recent memory.”

Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities in Washington and a former chief economist to Vice President Joseph R. Biden Jr, downplays the delay in the New York Times Economix Blog Share to FacebookShare to Twitter (7/3), while acknowledging that the media and the right will not. He concludes, “I think it’s an unfortunate delay of an important but relatively small piece of the bill, more growing pains of the type I’m sure Medicare had when it got going than anything existential. But that’s not how it will play in the hurly-burly of the next few days of Washington politics.”

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Individual Mandate FAQ


Beginning in 2014, the Affordable Care Act includes a mandate for most individuals to have health insurance or potentially pay a penalty for noncompliance. Individuals will be required to maintain minimum essential coverage for themselves and their dependents. Some individuals will be exempt from the mandate or the penalty, while others may be given financial assistance to help them pay for the cost of health insurance.

What type of coverage satisfies the individual mandate?

“Minimum essential coverage”

What is minimum essential coverage?

Minimum essential coverage is defined as:

  • Coverage under certain government-sponsored plans
  • Employer-sponsored plans, with respect to any employee
  • Plans in the individual market,
  • Grandfathered health plans; and
  • Any other health benefits coverage, such as a state health benefits risk pool, as
    recognized by the HHS Secretary.

Minimum essential coverage does not include health insurance coverage consisting of excepted
benefits, such as dental-only coverage.

How does “Minimum Essential Coverage” differ from “Essential Health Benefits”?

Essential health benefits are required to be offered by certain plans starting in 2014 as a component of the essential health benefit package.  They are also the benefits that are subject to the annual and lifetime dollar limit requirements.

This is different than minimum essential coverage, which refers to the coverage needed to avoid the individual mandate penalty.  Coverage does not have to include essential benefits to be minimum essential coverage.

What is the penalty for noncompliance?

The penalty is the greater of:

  • For 2014, $95 per uninsured person or 1 percent of household income over the filing threshold,
  • For 2015, $325 per uninsured person or 2 percent of household income over the filing threshold, and
  • For 2016 and beyond, $695 per uninsured person or 2.5 percent of household income over the filing threshold.

There is a family cap on the flat dollar amount (but not the percentage of income test) of 300 percent, and the overall penalty is capped at the national average premium of a bronze level plan purchases through an exchange.  For individuals under 18 years old, the applicable per person penalty is one-half of the amounts listed above.

Beginning in 2017, the penalties will be increased by the cost-of-living adjustment.

Who will be exempt from the mandate?

Individuals who have a religious exemption, those not lawfully present in the United States, and incarcerated individuals are exempt from the minimum essential coverage requirement.

Are there other exceptions to when the penalty may apply?

Yes.  A penalty will not be assessed on individuals who:

  1. cannot afford coverage based on formulas contained in the law,
  2. have income below the federal income tax filing threshold,
  3. are members of Indian tribes,
  4. were uninsured for short coverage gaps of less than three months;
  5. have received a hardship waiver from the Secretary, or are residing outside of the United States, or are bona fide residents of any possession of the United States.
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DOL Issues Guidance on Exchange Notice Requirements


The Patient Protection and Affordable Care Act (Affordable Care Act) includes a provision that requires employers to notify new hires and existing employees of certain information related to the Health Insurance Marketplace (formerly referred to as the Exchange) and subsidy eligibility in the event an employer does not offer coverage that is affordable or that has a 60 percent minimum value. The original effective date of this requirement was March 1, 2013. As reported in the Jan. 28, 2013 Health Care Reform Update, the timing of this requirement was delayed until late summer or early fall of 2013 based on guidance issued in FAQ Part XI.

On May 8, 2013, the Department of Labor (DOL) issued Technical Release 2013-02. The technical release provides temporary guidance regarding the new notice that employers are required to provide to employees, called the Notice to Inform Employees of Coverage Options. The release also addresses changes to the Model COBRA Election Notice.

Notice to Inform Employees of Coverage Options

The temporary guidance states that employers who are subject to the Fair Labor Standards Act (FLSA) are required to provide the notice beginning Oct. 1, 2013 to new employees within 14 days of an employee’s start date. The notice must also be provided to all existing employees no later than Oct. 1, 2013.

This requirement applies to all employees regardless of their eligibility for or enrollment in the medical plan. It’s also required if the employer doesn’t offer a health plan. The guidance provides various alternatives for delivering the notice.

Model language that may be used to satisfy the notice requirement is also included in the guidance. Two versions are provided based on the availability of an employer-sponsored health plan.

The temporary guidance will remain in effect until regulations or other guidance is issued.

The information contained in this article is for general use. Employers with questions regarding how to comply with the new notice requirement are urged to contact their legal counsel. The DOL provides guidance relating to the applicability of the FLSA, including an internet compliance assistance tool that is available at

Model COBRA Election Notice

The technical release also addresses changes to the model COBRA election notice. The notice is being revised to help make individuals who are eligible for COBRA aware of other coverage options available in the Marketplace.

No date was specified for implementing the revised COBRA notice. Absent regulations or guidance to the contrary, plan to implement the changes by Oct. 1, 2013. This date coincides with the beginning of the Marketplace open enrollment period.

To view all notices click on the link below


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How the Health Care Overhaul Could Affect You

The NY Times published a great tool on March 21st that will assist you in educating yourself on how the bill would


affect you and or your family.  We will continue to keep you updated as eductational material becomes available.  Please feel free to call our offi

La Magie De La Reconquête – The Magic Of Making Up French Version

ce at 615-790-0990 or email us at with any questions.

Click Here for Tool

La Magie De La Reconquête – The Magic Of Making Up French Version
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Health Law’s 8 Changes That Begin Today — And 7 Caveats

If you’ve tuned out the health care law you might want to tune back in.

A set of new consumer protections goes into effect today, the six-month anniversary of the law.

Here’s a guide to some of the changes – and some of the caveats. Keep in mind that how they affect you will depend on what kind of insurance you have.

Insurers must allow parents to keep an adult child up to age 26 on their health plan and those young adults can’t be charged more than any other dependent. Some insurers began this policy early — during the summer.
BUT: This doesn’t begin until your new plan year begins – for many, that will be Jan. 1, 2011. And, if your child has an offer of coverage from an employer, he/she might not be able to be on your plan.

Insurers can’t charge co-pays or deductibles for preventive services such as breast cancer screening and cholesterol tests.
BUT: “Grandfathered” plans – those that don’t make major changes from the previous plan year — don’t have to follow this requirement.

Insurers must cover children up to age 19 with a preexisting medical condition. New individual plans and all group plans — such as those you get at work — can’t refuse to cover a child.
BUT: “Grandfathered” individual health plans can refuse to cover a child.

Insurers cannot cancel coverage once you get sick, a practice known as “rescission.”
BUT: If you committed outright fraud and intentionally hid something, your insurer can refuse to pay.

Consumers get direct access to physicians: You – not your insurance company – decide which primary physician, gynecologist, obstetrician and pediatrician you see among your plan’s list of approved providers.
BUT: The usual obstacles remain, like whether the doctor is taking new pateints or has an appointment opening available.

No additional payments can be required for out-of-network emergency room care: Insurers cannot require higher co-payments or deductibles if you have a medical emergency and seek treatment at an emergency room that’s not in your health insurance plan.
BUT: Once again, “grandfathered” plans are exempted.

Annual limits on coverage will be going away.
BUT: First, they’ll be raised to $750,000 for all employer plans and new individual plans, rising to $1.25 million after Sept. 23 of 2011 and then to $2 million the following September.

No lifetime limits: All plans, even “grandfathered” plans will be prohibited from setting dollar limits on lifetime coverage.
NO “But” on this one!

While the following provisions of the health law have been around for a while they’re worth noting, too:

High-Risk Pools: Designed to help people who have been uninsured for six months get coverage. Each state has its own pool.

Help to Companies Paying for Early Retirees: More than 2,000 employers and unions have applied for government grants to cover up to 80 percent of retirees’ medical costs between $15,000 and $90,000 until they can qualify for Medicare coverage.

Small Business Tax Credits: Small businesses with 25 or fewer full-time employees who earn an average yearly salary of $50,000 or less will qualify for a tax credit of up to 35 percent of the cost of premiums. That credit will rise to 50 percent in 2014. To qualify, businesses must cover at least 50 percent of the cost of workers’ insurance.


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Are grandfathered health plans dead?

If we heard it once, we heard it a million times: “If you like your health plan, you can keep it.”

Throughout the 2008 presidential campaign and during the subsequent debate about the health reform bill, President Obama repeatedly said that the new change to the health care system wouldn’t affect people’s current policies; instead, they could keep their plan and keep their doctors.

The Patient Protection and Affordable Care Act, as we all know, was signed into law on March 23. And, as promised, the new legislation contains a grandfathering provision, which ensures that Americans can keep their policy. [See related: Agencies set rules on grandfathered health plans] So the administration remained true to its word, but after reading the guidelines released by the Department of Health and Human Services in mid-June, a lot of people are crying foul.

You see, when Obama signed the bill, we knew what the law said, but as with much of the mammoth health care bill, the details still needed to be worked out. So, while Kathleen Sebelius and her team at DHHS were busy figuring out what changes would be allowed, the rest of us could only speculate.

And that wasn’t easy for employers with April, May, or June renewal dates, who had to make decisions about their coverage without yet knowing the rules. As a result, many groups already lost their grandfathered status.

At long last, on June 14, the wait was finally over. In a press release, DHHS let the public know what changes a “grandfathered” plan would be allowed to make. I don’t believe I was the only one surprised by what I read.

PPACA makes a number of plan changes in both the group and individual markets. In order to stay grandfathered and avoid some of the new changes, a health plan that was in effect on March 23 CANNOT:

  • Significantly cut or reduce benefits
  • Raise coinsurance charges (at all)
  • Significantly raise copayment charges (by significant they mean more than $5)
  • Significantly raise deductibles (anything more than about 20 percent)
  • Significantly lower employer contributions (more than 5 percent)
  • Add or tighten an annual limit on what the insurer pays
  • change insurance companies (even if you’re going with an identical plan)

Given that most carriers don’t allow you to raise your copayments by $5 at a time or increase your deductible in $100 increments, it looks like grandfathered plans are pretty much stuck with what they’ve got. And since most companies don’t just renew as is year after year, it does make you wonder – is grandfather dead?

By the government’s own projections, the answer to this question is probably yes. According to the DHHS fact sheet about keeping the plan you have, between 36 percent and 66 percent of large employers will still be grandfathered in 2013, a year before many of required plan changes – including the essential benefits package – go into effect. Between 20 percent and 51 percent of small businesses will still have grandfathered status as of 2013.

While many employers struggle to decide whether it makes sense to eat the renewal increases and hang on to their plan, it’s also worth mentioning that many of the changes, such as the elimination of annual and lifetime limits, prohibition on rescissions, extension of parents’ coverage to children up to age 26, and a 90 day limit on new hire waiting periods, are required whether or not a plan is grandfathered – that’s the “patient protection” part of the bill. The government thought these changes were so important that they’re making everyone do them.

So what, as an agent, should you advise your clients? That’s up to you, but my guess is that the extra amount most companies would pay to maintain their grandfathered status year after year will be more than they would pay by going with one of the new plans. The new benefits that go into effect after Sept. 23 will be factored into the carriers’ pricing, so my advice is to compare all of the options just like you’ve always done and recommend accordingly.

Two final notes: 1) Employers who made a plan change between March 23 and June 14 can return to their previous plan and remain grandfathered. 2) The credit for the title of this month’s column belongs to my company’s president, Craig Keohan. He asked the question during a recent sales meeting and I thought it was hilarious.

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Early Retiree Reinsurance Program: Tennessee

Rising health care costs have made it difficult for employers to provide quality, affordable health insurance for workers and retirees while also remaining competitive in the global marketplace. The percentage of large firms providing workers with retiree health coverage has dropped from 66 percent in 1988 to 29 percent in 2009.1 Health insurance premiums for older Americans are over four times more expensive than they are for young adults,2 and the deductible these enrollees pay is, on average, almost four times that for a typical employer-sponsored insurance plan.3

The Affordable Care Act creates a new program called the Early Retiree Program to help address this challenge that employers and older employees are facing.  The Early Retiree Reinsurance Program provides $5 billion in financial assistance to employers and unions to help them maintain coverage for early retirees age 55 and older who are not yet eligible for

Businesses, other employers, and unions that are accepted into the program will receive reimbursement for medical claims for early retirees and their spouses, surviving spouses, and dependents. Savings can be used to reduce employer health care costs, provide premium relief to workers and families, or both. Applicants who are approved into the program receive reinsurance for the claims of high-cost retirees and their families (80 percent of the costs from $15,000 to $90,000). The program ends on January 1, 2014 when State health insurance Exchanges are up and running.

HHS has approved the following sponsors from Tennessee. More applications are being approved each day.

  • Aerospace Contractors’ Trust
  • Aerospace Testing Alliance
  • Alabama Laborers Health and Welfare Fund
  • Arlington County School Board
  • Babcock & Wilcox Technical Services Y-12, LLC
  • BlueCross BlueShield of Tennessee
  • City of Morristown
  • Cleveland Utilities, Dept. of City of Cleveland
  • County of Rutherford, Office of the Budget Director
  • Eastman Chemical Company
  • Electric Power Board of Metropolitan Nashville & Davidson County
  • Federal Express Corporation
  • First Horizon Natonal Corporation
  • General Shale Brick, Inc.
  • Hamilton County Department of Education
  • IBEW 915 Health and Welfare Fund
  • IBEW Local 666 Benefit Trust Fund
  • International Paper Company
  • Johnson City Power Board
  • Knoxville Utilities Board
  • Louisiana Electrical Heath and Welfare Fund
  • Louisiana Laborers Health and Welfare Fund
  • Louisiana-Pacific Corporation
  • MAHLE Industries, Incorporated
  • NGK Metals Corporation
  • Nissan North America, Inc.
  • Operating Engineers Local 474 Health and Welfare Fund
  • Pirelli Armstrong Tire Retiree Medical Benefits Trust
  • Plumbers and Steamfitters Local 150 Health and Welfare Fund
  • Sheet Metal Workers Local 15 Medical
  • Sheet Metal Workers Local 177 Health and Welfare Fund
  • Sheet Metal Workers’ Local 4 Health and Welfare Fund
  • Sheet Metal Workers’ National Health Fund
  • Southeast Laborers Health Fund
  • Southeastern Carpenters and Milwrights Health Fund
  • Southeastern Pipetrades Health and Welfare Fund
  • Southern Operators Health Fund
  • State of Tennessee
  • Tennessee Valley Operating Engineers Health
  • UA Local 614 Health and Welfare Fund

[1] Kaiser / HRET. Employer Health: 2009 Survey.
[2] Center for Policy and Research. Individual Health Insurance 2009.
[3] Kaiser Family Foundation. 2010. Survey of People Who Purchase Their Own Insurance.

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W-2 Reporting Requirements

Under the Patient Protection and Affordable Care Act (“PPACA”), employers will be required to calculate and report the aggregate cost of applicable employer-sponsored health insurance coverage on employees’ Form W-2s for taxable years beginning Jan. 1, 2011.  However, because the Internal Revenue Code allows employees to request their Form W-2s earlier than required if they terminate employment during the year, employers should be ready to implement this change in early 2011.  This reporting requirement is for informational purposes only; the amount reported does not affect the employer or employee’s tax liability.

The Internal Revenue Service has yet to issue regulations or guidance regarding this new requirement.  As such, this information is subject to possible change or clarification.

The coverage costs that must be reported under the new requirement include medical plans – including vision or dental benefits to the extent they are integrated into the medical plan – and pharmacy plans.

The following employer-provided benefits are not required to be reported on Form W-2 under PPACA:

  • Long-term care, accident or disability income benefits
  • Liability insurance
  • Workers compensation insurance
  • Specific disease or illness policies (such as cancer policies) and hospital (or other) indemnity insurance policies where the full premium is paid by the employee on an after-tax basis
  • Archer medical savings account (“MSA”) or health savings account “(”HSA”) contributions of the employee or the employee’s spouse
  • Salary reduction contributions to a health flexible spending account (“FSA”)
  • Stand-alone fully insured vision or dental plans[1]

In determining the value of health insurance coverage, the employer must calculate the applicable premiums for the taxable year for such health coverage for the employee under the rules for COBRA continuation coverage under IRC Sec. 4980B(f)(4) and accompanying Treasury regulations. The value that the employer is required to report is the aggregate COBRA premium excluding the administrative fee (2 percent maximum), not just the portion of the premium that the employee or employer pays.

Employers should contact their tax or payroll professionals for answers to specific questions about implementing this IRS requirement.

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Employer Mandates and New Penalties Under PPACA

The U.S. Chamber of Commerce has released a white paper to serve as a guide for the business community on understanding and complying with the Patient Protection and Affordable Care Act (“PPACA”). This paper, Critical Employer Issues in the Patient Protection and Affordable Care Act, identifies several taxes and penalties that can be levied against employers if they are unable to provide minimum health care coverage levels that have yet to be determined. While this paper is an attempt to shed light on pieces of the new law, it is not intended to be a substitute for the legal counsel, benefits consultants or in-depth analysis that individual businesses will need to ensure compliance.

The full text of the white paper can be found on our site by clicking here.

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