Aetna, Coventry, United and Cigna have all pulled out of the Florida Marketplace. Florida Blue is the only statewide plan that is compliant with the ACA (affordable care act). These are significantly expensive plans so after reviewing the prices at the floridablue website, you may want to consider a short term plan option, as discussed in numerous pages on this site.
Finally, a law to protect my clients from balance billing as a result of not having control of surgeons and other hospital physicians billing them as out-of-network providers. This consumer protection law is long overdue…..
— Neil Primack (@NeilPrimack) April 15, 2016
Not only have health insurance premiums doubled over the past 2-3 years, deductibles keep getting higher.
Is this really a sustainable model? the article here says it’s not.
The Latest Problem under the Affordable Care Act: Deductibles via drumup.io https://t.co/Xl0KH9vfYH
— Neil Primack (@NeilPrimack) April 12, 2016
When you apply for coverage in the Health Insurance Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year, using information you provide about your family composition and projected household income. Based upon that estimate, you can decide if you want to have all, some, or none of your estimated credit paid in advance directly to your insurance company to be applied to your monthly premiums.
If you choose to have all or some of your credit paid in advance, you will be required to reconcile on your income tax return the amount of advance payments that the government sent on your behalf with the premium tax credit that you may claim based on your actual household income and family size.
If you do not opt for advance credit payments or the Marketplace determines that you were not eligible for advance payments at the time of enrollment, you may be eligible to claim the credit when you file your tax return for the year, which will either lower the amount of taxes owed on that return or increase your refund.
Learn more about the Health Insurance Premium Tax Credit at: www.healthcare.gov
Neil Primack – Your South Florida & West Palm Beach Health Insurance and Medicare Supplement Expert
WHAT HAPPENS IF MY INCOME OR FAMILY SIZE CHANGES DURING THE YEAR?
The actual premium tax credit for the year will differ from the advance credit amount estimated by the Marketplace if your family size and household income as estimated at the time of enrollment are different from the family size and household income you report on your return. The more your family size or household income differs from the Marketplace estimates used to compute your advance credit payments, the more significant the difference will be between your advance credit payments and your actual credit. If your actual allowable credit on your return is less than your advance credit payments, the difference, subject to certain caps, will be subtracted from your refund or added to your balance due. If your actual allowable credit is more than your advance credit payments, the difference will be added to your refund or subtracted from your balance due.
Notifying the Marketplace about changes in circumstances will allow the Marketplace to update the information used to determine your expected amount of the premium tax credit and adjust your advance payment amount. This adjustment will decrease the likelihood of a significant difference between your advance credit payments and your actual premium tax credit.
Changes in circumstances that can affect the amount of your actual premium tax credit include:
- Increases or decreases in your household income.
- Birth or adoption of a child.
- Other changes to your household composition.
- Gaining or losing eligibility for government sponsored or employer sponsored health care coverage.
WHO IS ELIGIBLE FOR THE PREMIUM TAX CREDIT?
You are eligible for the premium tax credit if you meet all of the following requirements:
- Purchase coverage through the Marketplace.
- Have household income that falls within a certain range (see question 6).
- Are not able to get affordable coverage through an eligible employer plan that provides minimum value (see questions 8 and 9).
- Are not eligible for coverage through a government program, like Medicaid, Medicare, CHIP or TRICARE.
- Do not file a Married Filing Separately tax return (unless you meet the criteria in section 1.36B-2T(b)(2) of the Temporary Income Tax Regulations, which allows certain victims of domestic abuse and spousal abandonment to claim the premium tax credit using the Married Filing Separately filing status (see questions 12 and 13).
- Cannot be claimed as a dependent by another person.
WHAT ARE THE INCOME LIMITS?
In general, individuals and families whose household income for the year is between 100 percent and 400 percent of the federal poverty line for their family size may be eligible for the premium tax credit. An individual who meets these income requirements must also meet the other eligibility criteria described in question 5. Thus, if you have household income between 100 percent and 400 percent of the federal poverty line, but are eligible for coverage through your state’s Medicaid program (for example, because your state provides Medicaid to individuals with household income up to 133 percent of the federal poverty line), you are not eligible for the premium tax credit.
For 2013, for residents of one of the 48 contiguous states or Washington, D.C., the following illustrates when household income would be between 100 percent and 400 percent of the federal poverty line:
- $11,490 (100%) up to $45,960 (400%) for one individual.
- $15,510 (100%) up to $62,040 (400%) for a family of two.
- $23,550 (100%) up to $94,200 (400%) for a family of four.
Note: The federal poverty guidelines — sometimes referred to as the “federal poverty line” or FPL — state an income amount considered poverty level for the year, adjusted for family size. HHS determines the federal poverty guideline amounts annually. The government adjusts the income limits annually for inflation. The Federal Register publishes a chart reflecting these amounts at the beginning of each calendar year. You can also find this information on the HHS website. HHS provides three federal poverty guidelines: one for residents of the 48 contiguous states and D.C., one for Alaska residents and one for Hawaii residents. For purposes of the premium tax credit, eligibility for a certain year is based on the most recently published set of poverty guidelines at the time of the first day of the annual open enrollment period. As a result, the tax credit for 2014 will be based on the 2013 guidelines. The tax credit for 2015 will be based on the 2014 guidelines. Use of the 2014 federal poverty guidelines (FPL) for the 2015 premium tax credit eligibility determinations will begin on the first day of the open enrollment period for 2015 coverage, which is November 15, 2014.
WHAT IS HOUSEHOLD INCOME?
For purposes of the premium tax credit, your household income is your modified adjusted gross income plus that of every other individual in your family for whom you can properly claim a personal exemption deduction and who is required to file a federal income tax return. Modified adjusted gross income is the adjusted gross income on your federal income tax return plus any excluded foreign income, nontaxable Social Security benefits (including tier 1 railroad retirement benefits), and tax-exempt interest received or accrued during the taxable year. It does not include Supplemental Security Income (SSI).
HOW DO I KNOW IF THE INSURANCE OFFERED BY MY EMPLOYER IS AFFORDABLE?
An employer-sponsored plan is affordable if the portion of the annual premium you must pay for self-only coverage does not exceed 9.5 percent of your household income (adjusted to 9.56 percent for plan years beginning in 2015 – see Revenue Procedure 2014-37. (See question 7 for what is included in household income.) The affordability test applies only to the portion of the annual premiums for self-only coverage and does not include any additional cost for family coverage. If the employer offers multiple health coverage options, the affordability test applies to the lowest-cost option available to you that also satisfies the minimum value requirement. If your employer offers any wellness programs, the affordability test is based on the premium you would pay if you received the maximum discount for any tobacco cessation programs, and did not receive any other discounts based on wellness programs.
HOW DO I KNOW IF THE INSURANCE OFFERED BY MY EMPLOYER PROVIDES MINIMUM VALUE?
An employer-sponsored plan provides minimum value if the plan covers at least 60 percent of the expected total allowed costs for covered services. Beginning in 2014, your employer will provide you with a document called a Summary of Benefits and Coverage. That document will give you information about the benefits and coverage under your employer-sponsored plan, including whether the plan provides minimum value. Also, under the Fair Labor Standards Act, most employers will provide employees with a notice about their options in the Marketplace and their potential eligibility for a premium tax credit. This one-time notice will include information about whether the employer has a plan that provides minimum value.
AM I ELIGIBLE FOR THE PREMIUM TAX CREDIT IF I ENROLL IN COVERAGE THROUGH AN EMPLOYER?
If you enroll in an employer-sponsored plan, including retiree coverage, you are not eligible for the premium tax credit even if the plan is unaffordable or fails to provide minimum value.
WILL I HAVE TO FILE A FEDERAL INCOME TAX RETURN TO GET THE PREMIUM TAX CREDIT?
For any tax year, if you receive advance credit payments in any amount or if you plan to claim the premium tax credit, you must file a Form 8962, Premium Tax Credit (PTC) and attach it to your federal income tax return for that year. If you receive any advance credit payments, you will use your return to reconcile the difference between the advance credit payments made on your behalf and the actual amount of the credit that you may claim. This filing requirement applies whether or not you would otherwise be required to file a return. If you are married and you file your tax return using the filing status Married Filing Separately, you will not be eligible for the premium tax credit unless you meet the criteria in Notice 2014-23, which allows certain victims of domestic abuse to claim the premium tax credit using the Married Filing Separately filing status for the 2014 calendar year.
WILL I BE ELIGIBLE FOR THE PREMIUM TAX CREDIT IF I’M MARRIED BUT I FILE MY TAX RETURN USING THE FILING STATUS MARRIED FILING SEPARATELY?
If you are married and you file your tax return using the filing status Married Filing Separately, you will not be eligible for the premium tax credit unless you meet the criteria in section 1.36B-2T(b)(2) of the Temporary Income Tax Regulations, which allows certain victims of domestic abuse and spousal abandonment to claim the premium tax credit using the Married Filing Separately filing status.
You can claim this relief from the joint filing requirement if you meet all of the following criteria:
- You are living apart from your spouse at the time you file your 2014 tax return.
- You are unable to file a joint return because you are a victim of domestic abuse or spousal abandonment (see question 13).
- You certify on your return that you are a victim of domestic abuse or spousal abandonment.
To certify that you are a victim of domestic abuse or spousal abandonment and qualify for relief from the joint return filing requirement, you should check the “Relief” box in the top right-hand corner of Form 8962, Premium Tax Credit (PTC). You should not attach documentation of the abuse or abandonment to your tax return, but should keep any documentation you may have with your tax return records. For examples of what documentation to keep, see Pub. 974. Taxpayers may claim this relief from the joint filing requirement for no more than three consecutive years.
Note: Generally, a married taxpayer who lives apart from his or her spouse for the last six months of the taxable year is considered unmarried if he or she files a separate return, maintains as the taxpayer’s home a household that is also the main home of a dependent child for more than half the year, and furnishes over half the cost of the household during the taxable year.
For purposes of the relief from the joint filing requirement for certain victims of domestic abuse and spousal abandonment, how are domestic abuse and spousal abandonment defined?
Domestic abuse includes physical, psychological, sexual, or emotional abuse, including efforts to control, isolate, humiliate, and intimidate, or to undermine the victim’s ability to reason independently. All the facts and circumstances are considered in determining whether an individual is abused, including the effects of alcohol or drug abuse by the victim’s spouse. Depending on the facts and circumstances, abuse of the victim’s child or other family member living in the household may constitute abuse of the victim.
A taxpayer is a victim of spousal abandonment for a taxable year if, taking into account all facts and circumstances, the taxpayer is unable to locate his or her spouse after reasonable diligence.
If I get insurance through the Marketplace, how will I know what to report on my federal tax return?
If you purchased coverage through the Health Insurance Marketplace you should receive Form 1095-A, Health Insurance Marketplace Statement from your Marketplace by early February. This form provides information you will need when completing Form 8962. If you have questions about the information on Form 1095-A for 2014, or about receiving Form 1095-A for 2014, you should contact your Marketplace directly. The IRS will not be able to answers questions about the information on your Form 1095-A or about missing or lost forms.
Filing electronically is the easiest way to file a complete and accurate tax return. Electronic Filing options include free Volunteer Assistance, IRS Free File, commercial software and professional assistance.
HOW IS THE AMOUNT OF THE PREMIUM TAX CREDIT DETERMINED?
The law bases the size of your premium tax credit on a sliding scale. Those who have a lower income get a larger credit to help cover the cost of their insurance. In other words, the higher your income, the lower the amount of your credit.You will figure your credit on Form 8962. You must complete this form to claim the premium tax credit and reconcile any advance credit payments with the premium tax credit you are eligible to claim on your return. Form 1095-A from your Marketplace provides information you will need when completing Form 8962.(see question 14) Filing electronically is the easiest way to file a complete and accurate tax return. Electronic Filing options include free Volunteer Assistance, IRS Free File, commercial software and professional assistance.
Additionally, the premium tax credit is a refundable tax credit. This means that if the amount of the credit is more than the amount of your tax liability, you will receive the difference as a refund. If you owe no tax, you can get the full amount of the credit as a refund. However, if you receive advance payments of the credit, you will reconcile the advance payments with the amount of the actual premium tax credit that you calculate on your tax return. If your actual allowable credit on your return is less than your advance credit payments, the difference, subject to certain caps, will be subtracted from your refund or added to your balance due. If your actual allowable credit is more than your advance credit payments, the difference will be added to your refund or subtracted from your balance due. (See question 4 for information on changes in circumstances.)
Failure to File and Reconcile
WHAT HAPPENS IF I RECEIVED ADVANCE PAYMENTS OF THE PREMIUM TAX CREDIT AND I DID NOT FILE A FEDERAL INCOME TAX RETURN?
If advance payments of the premium tax credit were paid on behalf of you or an individual in your family in 2014, and you do not file a 2014 tax return, you will not be eligible for advance payments of the premium tax credit or cost-sharing reductions to help pay for your Marketplace health insurance coverage in 2016. This means you will be responsible for the full cost of your monthly premiums and all covered services. In addition, we may contact you to pay back some or all of the 2014 advance payments of the premium tax credit.
I received a letter from the Marketplace stating that they were not able to verify that I reconciled the advance payments I received in 2014. What do I need to do?
You may receive this letter if you have not yet filed your 2014 tax return, even if you received an extension of time to file until October 15, 2015. Because Marketplaces will determine eligibility for advance tax credit payments and cost-sharing reductions for the 2016 coverage year during the fall of 2015, it will substantially increase your chances of avoiding a gap in receiving this help if you file your 2014 tax return with Form 8962 electronically as soon as possible.
For questions about information on the letter visit HealthCare.gov, or call the Marketplace Call Center at 1-800-318-2596.
I filed for an extension of time to file but I still received a letter from the Marketplace stating that they were not able to verify that I reconciled the advance payments I received in 2014. Do I need to file now or can I wait until October?
If you missed the April 15 deadline or received an extension to file until Oct. 15, you should file your return as soon as possible. You should not wait to file. File now to reconcile any advance credit payments you received in 2014 and to maintain your eligibility for future premium assistance.
Remember that filing electronically is the best and simplest way to file a complete and accurate tax return as it guides you through the process and does all the math.
The Health Insurance Marketplace is the place where you will find information about private health insurance options, purchase health insurance, and obtain help with premiums and out-of-pocket costs if you are eligible.
The initial open enrollment period to purchase health insurance for 2014 through the Marketplace began Oct. 1, 2013, and closed March 31, 2014. The next open enrollment period to purchase health insurance for 2015 through the Marketplace begins November 15, 2014 and closes February 15, 2015.
The Department of Health and Human Services (HHS) administers the requirements for the Marketplace and the health plans offered.
Learn more about the Health Insurance Marketplace at: www.healthcare.gov
Neil Primack – Your South Florida & West Palm Beach Health Insurance and Medicare Supplement Expert
The health insurance premium tax credit is an advanceable, refundable tax credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Health Insurance Marketplace, also known as the Exchange, beginning in 2014.
You can choose to have the credit paid in advance to your insurance company to lower what you pay for your monthly premiums, or you can claim all of the credit when you file your tax return for the year. If you choose to have the credit paid in advance, you will reconcile the amount paid in advance with the actual credit you compute when you file your tax return.
Neil Primack – Your Jupiter and South Florida Health Insurance and Medicare Supplement Expert!
— Neil Primack (@NeilPrimack) May 21, 2015
Florida Health Insurance Broker – Your South Florida Heath Insurance and Medicare Supplement Plan Expert!
*Savings chart comparison based on national averages for comprehensive eye exams and most commonly purchased brands.
Typical Annual Savings Example: Without Coverage With Coverage
Eye Exam $152 $15
Frame $150 $25
Single Vision Lenses $ 84 $25
Anti-Reflective Coating $108 $69
Impact-Resistant(Polycarb Lenses) $ 54 $31
Light-to-Dark Tinting (Transitions Lenses) $101 $70
TOTAL OUT-OF-POCKET EXPENSE $649 $433
Base Plan: 1 Person Plan: $12.50/mo 2 Person Plan: $23.58/mo
Family Plan: $32.33/mo
Click HERE to apply or copy and past the following link into your web browser.
Click HERE for Provider Lookup or copy and past this link you’re your web browser https://www.individualbrokervision.com/Enroll/FindADocResults.aspx
While a health insurance plan will protect you from the high costs of a lengthy hospital stay, it will not make your car or house payment if; you become ill and cannot work for a long period of time.
Even though we do our best to maintain a healthy lifestyle, the possibility of suffering a critical illness before age 65 remains a reality. While the chances of surviving a critical illness are greater than ever, living with that kind of condition can create severe financial hardships if you are not financially protected. It is important that you know the statistics…
Every day over 3,600 Americans are diagnosed with cancer, and over 3,200 Americans suffer a new or recurrent heart attack.
Each year, about 700,000 Americans experience strokes, and 70% survive!
When a critical illness such as cancer, heart attack or stroke occurs, it places a tremendous emotional strain on the family,
sometimes accompanied by an overwhelming financial burden.
Did you know………
50% of Bankruptcies in the US are due to medical problems. http://www.nerdwallet.com/blog/health/2014/03/26/medical-bankruptcy/
48% of mortgage foreclosures are the result of financial hardship due to critical Illness (only 3% due to death).
48% of businesses that fail do so because of a critical illness.
62% of bankruptcies are due to a critical illness. Of those bankruptcies, 75% of them had health insurance.
One in four cancer patients or their families said they used up all or most of their savings to pay for treatment.
One in eight people with advanced cancer turned down recommended care because of cost.
Perhaps you have already taken the first step in protecting your finances with the purchase of your Major Medical policy. If you are interested
in learning about additional coverage that will pay a single-payment benefit (from $5,000 – $100,000) directly to you upon
diagnosis of a covered critical illness or life threatening cancer, please contact me.
Click HERE to see all personal health insurance products
Cost is based on the family member with the oldest age. These are the most competitive prices available when comparing 3 highly rated Insurance companies offering these plans
Coverage to Care: No Longer Fighting Depression Alone
Posted May 12, 2015
By: Andrea Jahen, 24, Austin, Texas
I spent the last 10 years fighting depression, virtually on my own. As a part-time waitress and college student, I couldn’t afford health insurance to get the care I needed. Some days, I couldn’t get out of bed. I had a sense of despair–but I’m so glad I don’t have to feel that way anymore.
When quality health insurance that I could afford became available through the Health Insurance Marketplace, I signed up for a plan that cost me $32 a month after tax credits. My coverage for 2015 went up $19, but it’s still affordable for me and has the benefits I need.
Having health coverage made seeking treatment for my depression easier. I was able to see a doctor who prescribed antidepressants, which cost me only $4 a month. Now I’m moving forward. I can get up in the morning. I can walk the dog. I can go to work.
With my insurance card in hand, I also went to the doctor for a checkup and got my first ever flu shot. Because of the Affordable Care Act, flu shots, annual checkups, depression screening for adults, and many other preventive services are covered by Marketplace insurance at no out-of-pocket cost.
And I don’t have to worry that my treatment for depression will prevent me from getting health insurance in the future. Thanks to the Affordable Care Act, insurers no longer can deny someone coverage because of a pre-existing medical condition.
But despite measures in the Affordable Care Act that have improved options for health care coverage, Latinos remain the largest uninsured population in the United States. And many Latinos and other Americans who got covered like I did through the Marketplace don’t really understand their benefits and responsibilities and how to best use their health insurance. It doesn’t help to have insurance if you don’t know how to use it. If you have questions, there is “Coverage to Care” information and resources in English and Spanish at HealthCare.gov.
While open enrollment is closed until later this year, you may still be able to enroll in coverage or change your plan if you’re eligible for a special enrollment period because of a qualifying event, such as changing jobs and no longer having coverage from your employer; getting married; or having a baby. Also, you don’t have to wait for open enrollment to apply for Medicaid and CHIP.
You can call 1-800-318-2596 (TTY: 1-855-889-4325) and get assistance in English or Spanish.
Depression for me was despair, a black hole. With affordable, quality coverage, I can move forward.
If you’re struggling with depression, you, too, can get the help you need. May is National Mental Health Awareness Month, so check out www.mentalhealth.gov, which features easy-to-understand information in English and Spanish about basic signs of mental health problems, how to talk about mental health, and how to find help before your condition worsens and becomes harder to treat.
Published: May 13, 2015
TALLAHASSEE – Two top Florida legislators today spent hours meeting behind closed doors in a last-minute push to reach a deal on health care and a new state budget.
Although no deal was reached, Sen. Tom Lee, a Brandon Republican, said that a “fair amount of progress” was made during the discussions between the House and Senate budget chiefs at the Capitol.
“It was super productive,” said Rep. Richard Corcoran, a Land O’Lakes Republican. “I think today we moved the ball down the field tremendously. We are moving to resolution.”
The pressure is mounting for legislators to reach a budget deal. State government could be shut down if a new state budget is not passed by June 30. Legislators are tentatively scheduled to hold a special session in June to pass a budget but have not reached a formal agreement.
But both sides have been at odds over health care issues, including whether or not Florida should expand health care coverage to 800,000 Floridians. The House has been adamantly opposed to expanding Medicaid, which is a key part of President Barack Obama’s health care overhaul.
This year’s legislative session concluded acrimoniously because of the stalemate, with the House abruptly adjourning 3 1/2 days before the scheduled end.
The divide between the two chambers was sparked by the likely loss of more than $1 billion in federal aid to hospitals that is to set to expire this summer. Hospitals are predicting severe cutbacks if the money is lost. But federal officials have told Florida that it wants the state to expand Medicaid insurance as part of the agreement to extend the hospital funds. But both House leaders and Gov. Rick Scott are opposed, and Scott has sued the federal government over the issue.
Lee said part of the Wednesday meetings centered on the House’s opposition to the Senate plan. The Senate proposed expanding Medicaid, but then transitioning it to a private insurance program that includes a work requirement for enrollees. Lee said Corcoran and House staff expressed “legitimate” and “reasonable” concerns about the proposal.
He added that part of the discussion was centered on a “definition” of what constitutes Medicaid expansion. In the past, House leaders have expressed concerns about relying heavily on federal money for health care coverage, as well as extending coverage to adults without children.
The meeting was not required to be open to the public or noticed. Lee defended having the lengthy closed-door session because of the threat of a government shutdown.
“We have a very serious problem with our budget deadline,” Lee said. “We have to accelerate these conversations.”
It’s not clear when the two legislators will meet again. Lee said that Gov. Rick Scott planned next week to issue a formal order that would call legislators into a June special session.
Feds Say That In Screening Colonoscopies, Anesthesia Comes With No Charge http://t.co/rev04j9qfl via @khnews
Earlier this week the federal government clarified that insurers can’t charge people for anesthesia administered during a free colonoscopy to screen for colorectal cancer. That’s good news for consumers, some of whom have been charged hundreds of dollars for anesthesia after undergoing what they thought would be a free test. But the government guidance leaves important questions unanswered.
Under the health law, most health plans have to provide care that’s recommended by the U.S. Preventive Services Task Force without charging members anything out of pocket. The only exception is for plans that have grandfathered status under the law.
That task force, a nonpartisan group of medical experts, recommends that starting at age 50 people periodically receive either a colonoscopy, sigmoidoscopy or fecal occult blood test to screen for colorectal cancer.
Most people are anesthetized during a colonoscopy, in which a flexible tube with a camera at the end is inserted into the rectum and snaked through the large intestine to look for polyps and other abnormalities.
Although the health law made it clear that the colonoscopy itself must be free for patients, it didn’t spell out how anesthesia or other charges should be handled.
That lack of clarity allowed insurers to argue at first that if polyps were identified and removed during the colonoscopy, the procedure was no longer a screening test and patients could be billed. In 2013, regulators clarified that patients couldn’t be charged for polyps removed during a screening colonoscopy because it was an integral part of the procedure.
With this week’s guidance, the government has made it clear that consumers don’t have to pick up the tab for anesthesia during a colonoscopy either.
But other questions remain. Consumers may still find themselves on the hook for facility or pathology charges related to a screening colonoscopy, according to an email from Anna Howard, a policy principal at the American Cancer Society Cancer Action Network, and Mary Doroshenk, director of the National Colorectal Cancer Roundtable.
In addition, cost sharing rules are unclear for consumers who get a positive result on a blood stool test and need to follow up with a colonoscopy. The federal government hasn’t clarified whether that procedure is considered part of the free screening process or whether insurers can charge for it as a diagnostic procedure, Howard and Doroshenk say.
In a 2012 study, researchers found that four insurers imposed patient cost sharing for colonoscopies after a positive blood stool test and three did not.
As for consumers who paid for anesthesia and now learn that they shouldn’t have been charged, it’s unclear if they can get their money back.
“Our expectation is that those who have received a bill for anesthesia this plan year may be able to appeal, but not for previous years,” Howard and Doroshenk said.
The Department of Health and Human Services didn’t respond to a request for clarification.
Preferred Provider Organization (PPO)
Preferred Provider Organization (PPO) is an insurance plan with greater freedom to policyholders in terms of choosing their doctors and health providers. There is a network of doctors and health providers covered in the plan and their services cost policyholder less than the expenses they may incur by opting for a health provider who are not covered in the plan.
Features of a PPO plan
You don’t need to opt for a primary care provider for a PPO plan and hence you don’t need referral from your primary care provider before you can see other specialists. But the cost of PPO may be more than some plans. Policyholders may have to pay an annual fee or deductible before PPO plan covers your expenses. You may also have to pay certain amount of money for some services.
Benefits of a PPO plan
With a PPO plan you have the freedom to choose your health providers. You can also file certain claims for health services that are not part of the PPO. When you buy a PPO plan, it is to your benefit to use services of health providers listed with the insurance company. But unlike other insurance plans like HMO, PPO covers expenses for health services outside of its network. But the benefits to policyholders may, of course, vary.
3 Questions to Help Sort Student Health Coverage Choices
By THE ASSOCIATED PRESSMAY 13, 2015, 10:43 A.M. E.D.T.
A key question remains for many students who’ve finally settled on a college destination: How will they or their parents handle health care coverage?
A doctor’s office visit can cost over $100 for someone without insurance. A car accident that turns into a short hospital day can quickly bury a student and his or her parents in more than $30,000 in debt. Plus those who skip coverage may face a penalty under the federal health care overhaul.
Brokers say students heading off to school in the fall can finalize their insurance plans as late as July or August. But they should start thinking about their needs long before they begin packing for a dorm.
1 — WILL THE CURRENT PLAN WORK?
Health insurance coverage comes more frequently now with a narrow network of doctors and other care providers. Patients who venture beyond those networks for care may be stuck with 50 percent of the bill or more after paying a deductible. In some cases, their plan might cover nothing.
Check with your insurer on your plan’s network or at least see if it offers a ZIP code search on its website to show how far that network extends.
Learn whether your plan’s network includes the main hospitals and some doctors in the college town. If it doesn’t, find out what out-of-network care would cost and how emergency care might be covered.
An independent health insurance broker may be helpful in sorting this out. Don’t assume care will be covered.
“That is sort of the kiss of death when it comes to health insurance,” said Nate Purpura, director of consumer communications for the online insurance marketplace eHealth.
2 — WHAT DOES THE COLLEGE OFFER?
Many schools provide access to a campus health station for a fee. That may be worth considering as a supplement to coverage a student may bring from home, said Craig Gussin, an independent broker based in San Diego.
That way, the student has a place to go on campus if a sinus infection crops up but can save major care for home in between semesters. That may be a good choice for students who will remain covered under a parent’s health insurance plan.
Some schools also offer health insurance coverage. Anyone considering that should make sure that the plan complies with minimum requirements laid out by the overhaul. That means the plan covers conditions that existed before the insurance began and it doesn’t cap annual benefits, among other things.
People who don’t have coverage that meets these minimum requirements may have to pay a fine for remaining uninsured.
3 — WHAT ARE SOME OTHER CHOICES?
There are several ways students can buy their own insurance plan that covers them while at school. Those who work during the semester may find coverage through an employer.
If a student is independent from his or her parents and has little or no income, Medicaid may be an option. The program is geared toward covering the poor, but it can be hard finding doctors who accept it.
A short-term insurance plan offers some protection against huge medical expenses, but the coverage is not as thorough as what a person might get through an employer or find on the overhaul’s public insurance exchanges. These plans also may not meet minimum coverage requirements.
Students who are independent from their parents may qualify for income-based subsidies to help buy a more thorough plan, if they don’t have access to affordable coverage through an employer.
Brokers can help students find an individual insurance plan. EHealth says customers ages 18 to 24 without access to help from a subsidy paid, on average, about $161 a month for a plan with a deductible topping $4,800. Such coverage protects against huge bills but leaves smaller expenses to the patient.
Paying For Long Term Care Later in Life
It’s Nursing Home Week (May 10 – 16, 2015) and in line with this event, I want to share with you how much nursing home care costs and how to prepare for long-term care. It’s natural to want to live independently in your own home for as long as possible, but as you grow older, there may come a time when you’ll need to consider living in some kind of facility. Even if you don’t need long-term care right now, it’s important to consider the costs and organize your finances accordingly.
Living in a nursing home or extended care facility can be costly
The cost of nursing home care is expensive, especially if you have complex needs. The exact cost will depend on a range of factors, but in general as a guide, the average cost of a private room in a nursing home in 2012 was $248 per day, according to a MetLife survey. In the past three years the costs have grown even higher. When you consider that the average nursing home stay is 835 days, the costs can really add up!
You may assume that Medicare will cover your long-term care costs, but it won’t provide you with coverage if you need to go into a nursing home indefinitely because you’re disabled or unable to care for yourself. Fortunately, you do have other options for covering your long-term care costs.
Covering your long-term care costs
One option is to use your personal savings or a loan, such as a reverse mortgage, to pay for your care. However, this will have an impact on the inheritance you leave your loved ones, and you may quickly run out of money.
If your money does run out, the only way you will be able to continue to receive care is to go on Medicaid. The benefits are low, and you may be forced to choose among low-cost, low-care facilities where your quality of life is not assured.
Long-term care insurance will reduce your expenses
Another option is to purchase Long Term Care Insurance, which can help you limit the effects of your care costs on your future finances. Long-term care insurance provides you with a daily or monthly benefit amount for the services you need – for example, $100 a day for nursing home care.
With long-term care insurance, you can assign a set amount of money to pay for the long-term care costs you might accumulate in the future, so that you can be sure that you will not run out of money to pay for the long-term care services you might need.
Advance planning is important
You may think that you don’t need to consider your ability to pay for care until you actually need it. However, planning ahead is important in case you ever suffer a crisis – such as a stroke or a bad fall – that prevents you from being able to make decisions about your finances.
If you have a home, savings or other assets, you should take out long-term care insurance now so you don’t risk losing everything to pay for your care. It’s never fun to think about buying something like long-term care insurance which you hope you’ll never need to use. But if you find yourself in need long-term nursing care in the future, you and your loved ones will both be relieved that you are properly prepared.
KHN Morning Briefing
As congressional Republicans move toward another vote on repealing the Affordable Care Act, new evidence was published Wednesday about the dramatic expansion of insurance coverage made possible by the law. Nearly 17 million more people in the U.S. have gained health insurance since the law’s major coverage expansion began, according to a study from the Rand Corp., a Santa Monica nonprofit research firm. (Levey, 5/6)
As a result of the landmark health-reform law known as the Affordable Care Act, nearly 17 million previously uninsured Americans now have health coverage, a new analysis reveals. (Reinberg, 5/6)
Nearly 17 million Americans got health insurance under the Affordable Care Act after the new insurance exchanges opened up, according to an independent analysis published Wednesday. (Fox, 5/6)
The Affordable Care Act has been a catalyst for a net increase of 16.9 million Americans gaining health insurance in the last two years via Medicaid expansion and subsidized private coverage with even more people accessing employer-sponsored plans. A new study by the RAND Corp., which looked at a sampling of 1,600 Americans and their “transitions” to and from forms of health coverage between September 2013 and February 2015 and found 22.8 million Americans gained coverage. There were 5.9 million people who also lost coverage, leaving a net increase of 16.9 million, according to the analysis, published in the journal Health Affairs. (Jaspen, 5/6)
Exclusive Provider Organization (EPO): An Overview
Exclusive Provider Organization (EPO) is a plan where subscribers receive care at a lower rate through a network of medical or healthcare providers (doctors, hospitals). It is not applicable if you use services that are not a part of the EPO network.
How does an EPO plan work?
The EPO is a network of medical specialists who enter into an agreement with the insurer to provide low cost services to the insured. The insured subscribers must use healthcare providers mentioned in the network to receive reimbursements from the insurance company. As such, with EPO, subscribers receive medical care at lower rates than the normal medical charges. It also helps healthcare providers as they receive steady business from EPO subscribers.
How to know if an EPO plan is right for you?
EPO is a good plan but it only works if you use healthcare providers in their network. If you use a hospital outside their network then you and not your insurer are liable to pay some or all medical bills. Some EPO plans may go for partial reimbursements for outside network services in case of emergencies. You can opt for EPO if you are okay with a restricted network of healthcare providers for your medical needs but with the benefit of reduced bills.
Buying health insurance is important. But choosing the best plan for you can become a daunting task given the options in the market. It helps to know pros and cons of each plan before buying one.
Here is a lowdown on Health Maintenance Organization (HMO).
Health Maintenance Organization (HMO)
HMO is a plan that covers your healthcare with the help of a primary care physician (PCP). Your PCP takes care of your health needs and coordinates with other doctors included in the plan. HMO requires you to pay a monthly premium for your healthcare coverage.
Advantages of HMO
- With HMO policyholders can keep healthcare costs to a minimum. Services such routine physicals are available at no extra charges.
- Policyholders can choose their treatments to include in their plan to lower the costs.
- Policyholders also don’t need to file claim forms. Just presenting their HMO card at the healthcare provider’s office is sufficient to use the insurance.
Disadvantages of HMO
- With HMO, policyholders can avail services of only doctors in their network. Consulting with other doctors not in network may mean huge medical expenses.
- Specialist visits are only covered if your PCP recommends them.
- HMO includes co-payments with every visit, which can add to your healthcare cost.
On August 27, the Internal Revenue Service (IRS) issued a final rule for the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA).
As a reminder, the individual mandate requires most individuals to have minimum essential coverage in 2014 or pay a penalty. The penalty is called a shared responsibility payment. Some individuals may qualify for an exemption from the mandate so they will not be required to have coverage or pay a penalty. An individual seeking an exemption may do so in advance through an application submitted to the Exchange/Marketplace or after the fact with the IRS through the tax filing process. An applicant can apply for multiple exemptions simultaneously.
The final rule, which is largely consistent with the proposed regulations, confirms the following:
- What qualifies as minimum essential coverage
- What wasn’t addressed in regard to minimum essential coverage
- Who is exempt from paying the penalty
- How penalties will be determined and paid
1. What Qualifies as Minimum Essential Coverage
An individual is considered to have minimum essential coverage for any month in which he or she is enrolled in one of the following types of coverage for at least one day. Changes from the proposed rule are noted in italics.
An employer-sponsored group health plan offered in a state,which is defined as the 50 states plus the District of Columbia. This includes plans offered by, or on behalf of, an employer to an employee, e.g. multiemployer plans, single employer collectively bargained plans, plans sponsored by third parties such as professional employer organizations, temporary staffing agency, etc.
An individual health insurance policy offered in the individual market in a state or through an Exchange/Marketplace in a territory.
A government plan such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE (a U.S. Department of Defense Military Health System) or veterans coverage
Insured student health coverage
Self-insured student health coverage*
Medicare Advantage plan
State high risk pool coverage*
Coverage for non-U.S. citizens provided by another country**
Refugee medical assistance provided by the Administration for Children and Families
Coverage for AmeriCorp volunteers**
*Designated as minimum essential coverage for plan/policy years beginning on or before December 31, 2014. For coverage beginning after December 31, 2014, sponsors of high risk pool or self-funded student health coverage may apply to be recognized as providing minimum essential coverage.
**Coverage provided by another country and coverage for AmeriCorps volunteers are no longer automatically deemed minimum essential coverage. However, individuals may apply to have their coverage recognized as minimum essential coverage.
2. What Wasn’t Addressed in Regard to Minimum Essential Coverage
The final rule does not specifically address arrangements in which an employer provides subsidies or funds a pre-tax arrangement (e.g., a stand-alone Health Reimbursement Account) for employees to purchase a plan in the individual market. The final rule also doesn’t address wellness incentives. These issues will be addressed in future guidance.
3. Who is Exempt from Paying the Penalty
The final rule confirmed the broad exemption categories, including a few changes in italics.
· Individuals who cannot afford coverage
· Taxpayers with income below the tax filing threshold. A taxpayer is not required to file a federal income tax return solely to claim the exemption, and may apply for exemption via the Exchange/Marketplace.
· Individuals who qualify for a hardship exemption
· Individuals who have a gap in minimum essential coverage of less than three consecutive months in a calendar year, with the continuous period beginning no earlier than January 1, 2014
· Members of religious groups that object to coverage on religious principles
· Members of health care sharing ministries
· Individuals in prison
· Individuals who are not U.S. citizens and not lawfully present in the United States as defined by Health and Human Services
· U.S. citizens residing in a foreign country who meet certain IRS tests
· Individuals who are not members of a federally recognized Native American tribe, but who are eligible for services from the federal Indian Health Service
4. How Penalties will be Determined and Paid
The first penalties will be due when individuals file their 2014 tax returns in 2015. A penalty is the greater of either a specified dollar amount or percentage of income. The annual penalties for 2014 through 2016 are noted below. Beginning in 2017, penalties will increase based on the cost of living.
· 2014: Greater of $95 per adult and $47.50 per child under age 18, maximum of $285 per family, or 1% of income over the tax-filing threshold
· 2015: Greater of $325 per adult and $162.50 per child under age 18, maximum of $975 per family, or 2% over the tax-filing threshold
· 2016: Greater of $695 per adult and $347.50 per child under age 18, maximum of $2,085 per family, or 2.5% over the tax-filing threshold
If the penalty applies for less than a full calendar year, the penalty will be 1/12 of the annual amount per month without coverage.
PPACA’s Impact on Insurance Premiums: Actuarial Study Predicts 32% Increase in Costs Over Next Five Years
A recent report by the Independent Society of Actuaries predicts that individual market health insurers could experience as much as a 32% increase on average in health care costs from 2014 through 2017 due to changes brought on by the Patient Protection and Affordable Care Act (PPACA). This would result in higher premiums as the increased costs are passed on to those who purchase health insurance in the individual markets.
The report refers to an “average” increase in costs, but the actual increase in “per member per month” (pmpm) claims expenses will vary from state to state.
According to the report, some states could experience dramatic increases. By 2017, the study estimates the pmpm increases will be 62% for California, 67% for Maryland and over 80% for Ohio and Wisconsin. Other states will see less dramatic increases. Colorado, for example, could experience a 39.6% higher pmpm; Florida 26.5%; and Texas 33.8%. The higher claims costs would primarily be due to the increased level of health care services required by new entries to the insurance market.
However, some states that already have imposed extensive mandated benefits and community rating provisions could see a decrease in pmpm anticipated average claims, including Massachusetts (-12.8%), New Jersey (-1.4%), New York, (-13.9%), and Rhode Island (-6.6%).
The report also includes two other major findings:
After three years of Exchanges and insurer restrictions, the percentage of uninsured nationally will decrease from 16.6% to between 6.8 and 6.6%, compared to pre-ACA projections.
Under PPACA , the individual non-group market will grow 115%, from11.9 million to 25.6 million lives; 80% of that enrollment will be in the Exchanges. (See report at http://cdn-files.soa.org/web/research-cost-aca-report.pdf, page 6.)
The report does not address PPACA’s impact on large employer group health plans as the most affected will be individual and small employer group health benefits during this period.
The study immediately drew fire from the Obama Administration regarding the projected premium increases. The administration claims the analysis fails to consider cost relief strategies in the law, such as federal premium tax credits to make premiums more affordable, and the risk adjustment pools that would help subsidize health insurance carriers that attract a disproportionately higher share of those with expensive health conditions.
However, insurance experts countered that neither of these mechanisms actually will cut the cost of the claims’ pmpm. These mechanisms will simply transfer funds from the federal budget to individuals, or shift funds generated by a premium tax on individual health insurance companies to plans with a disproportionate share of adverse actuarial risks.
Rick Foster, former Medicare chief Actuary, says the report does “a credible job” of estimating potential enrollment and costs under the law “without trying to tilt the answers in any particular direction.” He further notes that “actuaries tend to be financially conservative, so the various assumptions might be more inclined to consider what might go wrong than to anticipate that everything will work beautifully.”
On a positive note, clearly PPACA will expand insurance coverage for many. However, the Democratic leadership promised that the passage of PPACA would save the country money. This Society of Actuaries study reminds us that this last promise is unlikely unless the Administration makes some modifications to the current reforms.
The views expressed in this post do not necessarily reflect the official policy, position, or opinions of Neil Primack, Neil Primack Inc or Florida Health Insurance Broker. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.
The Keystone of the Patient Protection and Affordable Care Act (PPACA) is an unprecedented Individual Mandate tax requiring virtually all U.S. Citizens and legal residents to either have health insurance or pay a tax for not doing so, beginning in 2014.
Insurance Or Tax.
The individual mandate tax is unprecedented. As written, PPACA established an individual mandate to buy health insurance and a penalty for not doing so. This was the first time in American history that the federal government ordered the general population to purchase a commercial product. Responding to the lawsuit by NFIB and 26 states, the Supreme Court refashioned the mandate and penalty into a choice between two options: buy insurance or pay a tax for failing to do so.
Beginning in 2014, PPACA requires most U.S. citizens and legal residents to have qualifying health insurance coverage (public or private) or pay a tax for not carrying insurance. “Qualifying” is broadly defined by the law, with specific definitions left to current and future regulators.
A relatively small number of Americans will be exempt from the tax. Those exempted include: (1) people with religious objections; (2) American Indians with coverage through the Indian Health Service; (3) undocumented immigrants; (4) those without coverage for less than three months; (5) those serving prison sentences; (6) those for whom the lowest-cost plan option exceeds 8% of annual income; and (7) those with incomes below the tax filing threshold ($9,500 for singles and $19,000 for couples under 65 in 2011.)
The individual mandate tax rests on a legal definition of insurance, and PPACA’s definitions differ across markets. Government programs like Medicare, Medicaid, and CHIP automatically qualify, as do self-insured ERISA policies (mostly for larger employers). Small group and individual policies (except for grandfathered plans) must cover services comprising an “essential health benefits” (EHB) package – though the definition of that package is now clouded by uncertainty.
The essential health benefits (EHB) package is a menu of health care services that must be covered by all qualifying insurance plans in the fully-insured small-group market (“small” here means fewer than 100 employees); EHB also applies to the individual market. Self-insured groups (mostly big businesses, labor unions, and governments), fully-insured plans covering 100 or more employees, and government-provided insurance, in contrast, are exempt from most of the EHB’s costly requirements.
In late 2011, the Secretary of Health and Human Services (HHS) temporarily changed the EHB rules, adding new uncertainty. As written, the law specifies a process in which the Secretary solicits advice on EHB components, after which the Secretary unilaterally selects and revises a uniform national package. In December, the Secretary upended this scheme by authorizing each state to compile its own list of EHB coverage mandates. In the near term, this change makes it harder to predict future health insurance costs. Over the longer term, the change introduces new state and federal vagaries.
Taxes begin in 2014 and rise in years following. In each year, the tax consists of the higher of a dollar amount or a percentage of household income. For a given household, the tax applies to each individual, up to a maximum of three. Following is the schedule of taxes:
2014: The higher of $95 per person (up to 3 people, or $285) OR 1.0% of taxable income.
2015: The higher of $325 per person (up to 3 people, or $975) OR 2.0% of taxable income.
2016: The higher of $695 per person (up to 3 people, or $2,085) OR 2.5% of taxable income.
After 2016: The same as 2016, but adjusted annually for cost-of-living increases.
2014; family of 2; taxable income=$26,000; tax=$260
because $260 (=$26,000×1%) is higher than $190 (=$95×2).
2014; family of 3; taxable income=$26,000; tax=$285
because $285 (=$95×3) is higher than $260 (=$26,000×1%).
2016; family of 3; taxable income=$26,000; tax=$2,085
because $2,085 (=$695×3) is higher than $650 (=$26,000×2.5%).
2016; family of 3; taxable income=$85,000; tax=$2,125
because $2,125 (=$85,000×2.5%) is higher than $2,085 (=$695×3).
2016; family of 8; taxable income=$85,000; tax=$2,125
because $2,125 (=$85,000×2.5%) is higher than $2,085 (=$695×3).
2016; family of 8; taxable income=$300,000; tax=$7,500
because $7,500 (=$300,000×2.5%) is higher than $2,085 (=$695×3).
The individual mandate tax forces households to purchase an expensive product or to pay a tax in lieu of that purchase. The law softens this blow for some households by providing subsidies, called “health insurance premium tax credits.” To be eligible for the subsidies, a household must meet two conditions: (1) Household income must be less than 400% of the Federal Poverty Level (FPL), which varies with family size. For a family of four in 2012, 400% FPL = $92,200. (2) The household’s portion of the employer-sponsored health insurance premium must exceed 9.5% of household income.
Most individual health insurance isn’t good enough for Obamacare
Just over half of the individual plans currently on the market do not meet the standards to be sold next year, when many key provisions of President Obama’s Affordable Care Act kick in, according to a University of Chicago study. That’s because the law sets new minimums for the basic coverage every individual health care plan must provide.
“They will offer a lot more financial protection,” Jon Gabel, the report’s lead author, said of the individual plans that will be available next year. His team drew its conclusions from 2010 data supplied by health insurers.
Some 15 million Americans, or about 6% of non-elderly adults, currently buy coverage on the individual market. Starting this fall, they’ll be able to shop for and enroll in health insurance through state-based exchanges, with coverage taking effect in January. By 2016, some 24 million people will get insurance through the exchanges, while another 12 million will continue to get individual coverage outside of them, the Congressional Budget Office estimates.
Both groups will be affected by the new Obamacare rules. Starting next year, nearly all individual plans — both in and out of the exchanges — will be required to cover an array of “essential” services, including medication, maternity and mental health care. Many plans don’t currently offer those benefits.
So what happens to the plans that don’t meet the new minimum standards? They will likely disappear. A handful of existing plans will be grandfathered in, but the qualifying criteria for that, is hard to meet: Members have to have been enrolled in the plan before the ACA passed in 2010, and the plan has to have maintained fairly steady co-pay, deductible and coverage rates until now.
The insurers in the Blue Cross Blue Shield Association are major players in the individual market. They are readying new product lineups for 2014, according to Kim Holland, the trade group’s executive director of state affairs. She expects most existing Blue Cross individual plans to be discontinued.
“They are going by the wayside,” she said. “Plans will have to conform to the higher level of benefits.”
Consumers buying individual plans will be able to choose between four levels of coverage next year: platinum, gold, silver and bronze.
Platinum plans will carry the highest premiums but offer the lowest out-of-pocket expenses, with enrollees paying no more than 10%, on average. At the other end of the spectrum are bronze plans, which will have the lowest monthly premiums but higher deductibles and co-payments totaling up to 40% of out-of-pocket costs, on average. Starting in 2014, all Americans will be required to carry coverage or face fines. Those penalties start at $95 per adult or 1% of adjusted family income, whichever is greater, and escalate in later years.
People with annual income of up to 400% of the poverty line — or roughly $45,000 for an individual and about $92,000 for a family of four — will get federal subsidies to help defray the premium costs.
Most individual plans sold next year, even the lowest-level “bronze” plans, are likely to charge higher premiums than today’s most bare-bones individual insurance. For many customers, though, those costs will be offset by lower out-of-pocket costs and more comprehensive coverage, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation.
“Now, they buy a policy and when they get sick, they may go broke anyway because the policy leaves them with so much to pay,” she said, noting that deductibles of $10,000 are not uncommon.
The insurance industry’s trade group counters that some people may wind up with more coverage — and higher monthly costs — than they want. Some individuals may choose to simply pay the fine instead, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.
“Now, people can choose the plan that best meets their needs,” Zirkelback said. Next year, “they may choose not to buy any coverage.”
The Patient Protection and Affordable Care Act (PPACA) contains’ provisions to lower individual health insurance premiums for those with household incomes below 400% of the federal poverty line (FPL). Starting in 2014 there will be significant health insurance subsidies provided under PPACA for people purchasing individual health insurance coverage through the new public health insurance exchanges.
New rules give states the option of extending coverage in Medicaid to most people with incomes under 133% of the FPL. For households with higher incomes (up to 400% of the FPL), PPACA will provide tax subsidies, reducing premium costs. These tax subsidies will begin in 2014.
Households with income between 100% and 400% of the FPL who purchase coverage through a state health insurance exchange are eligible for a tax subsidy to reduce the cost of their coverage. In states without expanded Medicaid coverage, people with incomes less than 100% of poverty will not be eligible for exchange subsidies, while those with incomes at or above the FPL will be.
Households offered coverage through an employer are also not eligible for premium tax subsidies unless the employer plan does not offer “qualified” coverage or unless a household’s share of the premium for their employer’s group health insurance plan exceeds 9.5% of their income.
The amount of the premium subsidy that a household will receive is based on the premium for the second lowest cost “silver plan” in the individual state health insurance exchange. The silver plan provides the essential benefits as defined by the PPACA. The amount of the subsidy varies with income where the premium a household would have to pay for the second lowest cost silver plan is capped as a percentage of their income as follows:
Income Level Premium as a Percent of Income
Min Income Max Income Min Premium Cap Max Premium
(% of FPL) (% of FPL) (% of Income) (% of Income)
0% 133% 0% 2%
133% 150% 3% 4%
150% 200% 4% 6.3%
200% 250% 6.3% 8.05%
250% 300% 8.05% 9.5%
300% 400% 9.5% 9.5%
The Federal Poverty Level (FPL) was $11,170 for an individual and $23,050 for a family of four through early 2012.
For a single person, here’s actual income levels and premiums based on the 2012 FPL:
Min Income Max Incom Min Premium Cap Max Premium Cap
(Annual) (Annual) (Monthly) (Monthly)
$11,170.00 $14,856.10 $0.00 $24.76
$14,856.10 $16,755.00 $37.14 $55.85
$16,755.00 $22,340.00 $55.85 $117.29
$22,340.00 $27,925.00 $117.29 $187.33
$27,925.00 $33,510.00 $187.33 $265.29
$33,510.00 $44,680.00 $265.29 $353.72
For a family of 4, here’s the actual income levels and premiums based on the 2012 FPL:
Min Income Max Income Min Premium Cap Max Premium Cap
(Annual) (Annual) (Monthly) (Monthly)
$23,050.00 $30,656.50 $0.00 $51.09
$30,656.50 $34,575.00 $76.64 $115.25
$34,575.00 $46,100.00 $115.25 $242.03
$46,100.00 $57,625.00 $242.03 $386.57
$57,625.00 $69,150.00 $386.57 $547.44
$69,150.00 $92,200.00 $547.44 $729.92
A person or household that wants to purchase a plan more expensive (than the second lowest cost silver plan) would have to pay the full difference between the cost of the second lowest cost silver plan and the plan that they wish to purchase.
Example – Steve, a 45-Year-Old Single: He has as an annual income that is 250% of the FPL ($27,925 in 2012). Let’s assume the cost of the second lowest cost silver plan in Steve’s state individual health insurance exchange is $5,733 per year (or $477.75 per month). Since Steve is purchasing coverage in the individual health insurance exchange, Steve would not be required to pay more than 8.05% of income, or $2,248 per year (that’s $187.33 per month), to enroll in the second lowest cost silver plan. The tax subsidy available to Steve would be $3,485 ($5,733 premium minus the $2,248 cap on what Steve is required to pay).
Premium tax subsidies are both refundable and advanceable. A refundable tax subsidy is one that is available to a person even if he or she has no tax liability. An advanceable tax subsidy allows a person to receive assistance at the time that they purchase insurance (i.e. in advance) rather than waiting to be reimbursed after they file their annual income tax return.
Whether you are uninsured, or just want to explore new options, the new health insurance marketplace will give you and your family choices. Starting October 1st, 2013, you will be eligible to enroll in health insurance via the new health insurance marketplaces (for coverage starting January 1st, 2014). Here’s step-by-step check list to ensure you are prepared for the October 1st, 2013 open enrollment.
Step 1 – Find out whether your employer will offer group health insurance post-2014!
There are two primary categories of health insurance to choose from:
- Individual health insurance,
- Group health insurance.
1) Individual Health Insurance
Individual health insurance plans are purchased by individuals to cover themselves or their families. Anyone can apply for individual health insurance. In 2014, insurance companies will no longer be able to decline individuals for health insurance based on a pre-existing medical condition. Also, in 2014, there will be new special tax incentives available to businesses and employees when employees purchase individual health insurance.
2) Group Health Insurance
Group health insurance plans are a form of employer-sponsored health coverage. Costs are usually shared between the employer and the employee. Coverage can also be extended to dependents.
Many small businesses (those under 50 employees) are expected to terminate group health insurance (in favor of individual health insurance) in 2014.
Step 2 – Learn about different types of health insurance!
Whether you’re looking at individual health insurance or group health insurance, there are several different types of health plans available. The three you should know are:
- PPO Health Insurance Plans,
- HMO Health Insurance Plans,
- HSA-Qualified Health Insurance Plans, and
The plan type that is best for you and your employees depends on what you and your employees want, and how much you are willing to spend. Here’s a brief review of these popular types of health insurance plans:
1) PPO Health Insurance Plans
PPO or “Preferred Provider Organization” plans are the most common. Employees covered under a PPO plan need to get their medical care from doctors or hospitals on the insurance company’s list of preferred providers (in-network providers) in order for claims to be paid at the optimal level.
2) HMO Health Insurance Plans
HMO stands for “Health Maintenance Organization.” These plans offer health care services through a network of providers that contract exclusively with the HMO. Employees participating in HMO plans will typically need to select a primary care physician (“PCP”) to provide most of their health care and refer them on to HMO specialists as the need arises.
3) HSA-Qualified Health Insurance Plans
HSA-qualified plans are a unique type of PPO plan that is designed specifically for use with Health Savings Accounts (HSAs). An HSA is a special bank account that allows participants to save money pre-tax, and can be used specifically for medical expenses in the future. Health Reimbursement Arrangements (HRAs) can also be used by employers in place of HSAs due to their tax advantages for employers.
Step 3 – Familiarize yourself with health insurance terminology!
When shopping for a health insurance plan, one of the challenges people face is understanding health insurance terminology. Here are five key health insurance terms you and your employees need to understand:
- “Premium” – The amount you pay to the health insurance company each month to maintain your health insurance.
- “Copayment” – Your copayment, or “co-pay,” is the specific dollar amount you may be required to pay up front for a specific type of service, such as doctor or specialist visits.
- “Deductible” – Your annual deductible is the amount you may be required to pay out-of-pocket before the insurance company will begin paying for your covered medical claims.
- “Coinsurance” – The amount that you are obliged to pay for medical services after you’ve satisfied any copayment or deductible required by your health insurance plan.
- “Max Out-of-Pocket (OOP) Costs” – sets a limit to your annual financial liability for any given year.
Some questions you might want to ask include:
- Can I stay with my current doctor?
- Will this plan cover my health costs when I’m traveling?
- Will I be eligible to contribution to an HSA ?
- How will this cover my pre-existing condition?
Step 4 – Gather basic information about your household income!
Beginning 2014, individuals will have access to tax subsidies to purchase private health insurance through the public health insurance exchange. The subsidy caps the cost of individual health insurance at 2% – 9.5% of their household income if their household income is less than 400% above the federal poverty line. This equates to roughly $90,000 per year for a family of four.
Starting in October 2013, you will be able to get information about all the plans available in your area.
IRS and HHS Issue Proposed Regulations on Individual Mandate
On January 30, 2013, the Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) issued two sets of proposed regulations related to the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA).
The individual mandate requires most individuals to have minimum essential coverage or pay a penalty beginning in 2014. The penalty is now called a “shared responsibility payment.” Some individuals may qualify for an exemption so they will not be required to have coverage or pay a penalty.
The proposed regulations confirm the individual mandate requirements and outline the process for requesting an exemption. The proposed regulations cover:
· What qualifies as minimum essential coverage
· How penalties will be determined and paid
· Who is exempt from paying the penalty
· When individuals can apply for an exemption
1. What Qualifies as Minimum Essential Coverage
An individual is considered to have minimum essential coverage for any month in which he or she is enrolled in one of the following types of coverage for at least one day:
· An employer group health plan
· An individual health insurance policy
· A government plan such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE or veterans coverage
· Student health coverage
· Medicare Advantage plan
· State high risk pool coverage
· Coverage for non-U.S. citizens provided by another country
· Refugee medical assistance provided by the Administration for Children and Families
· Coverage for AmeriCorp volunteers
All these types of plans qualify as minimum essential coverage, and there are no additional coverage requirements that must be met.
2. How Penalties will be Determined and Paid
The first penalties will be due when individuals file their 2014 tax returns in 2015. A penalty is determined by calculating the greater amount of either a flat dollar amount or set percentage of income. The annual penalties for 2014 through 2016 are noted below. Beginning in 2017, penalties will increase based on the cost of living.
· 2014: Greater of $95 per adult and $47.50 per child under age 18 (maximum of $285 per family) or 1% of income over the tax-filing threshold
· 2015: Greater of $325 per adult and $162.50 per child under age 18 (maximum of $975 per family) or 2% over the tax-filing threshold
· 2016: Greater of $695 per adult and $347.50 per child under age 18 (maximum of $2,085 per family) or 2.5% over the tax-filing threshold
If the penalty applies for less than a full calendar year, the penalty will be 1/12 of the annual amount per month without coverage.
3. Who is Exempt from Paying the Penalty for Not Having Coverage
Individuals who meet the following criteria will not pay a penalty if they do not have minimum essential coverage:
· Individuals who cannot afford coverage. Coverage is considered unaffordable if an individual’s contribution toward minimum essential coverage is more than 8% of the annual household income. The monthly contributions are calculated at 1/12 the annual household income to determine if they exceed the 8%.
· Taxpayers with income below the tax filing threshold, which is the amount required to file a federal tax return
· Individuals who qualify for a hardship exemption. This exemption is available to individuals who are not eligible for Medicaid because their state chose not to expand Medicaid, or to individuals who have a personal or financial hardship that keeps them from being able to afford coverage.
· Individuals who have a gap in minimum essential coverage of less than three consecutive months in a calendar year
· Members of religious groups that object to coverage on religious principles
· Members of health care sharing ministries. These are non-profit religious organizations where members share medical costs.
· Individuals in prison
· Individuals who are not U.S. citizens
· Members of Native American tribes
U.S. citizens residing in a foreign country are typically exempt from having minimum essential coverage if they meet certain requirements, such as residing abroad for an entire calendar year. And, residents of U.S. territories (Guam, American Samoa, Northern Mariana Islands, Puerto Rico, and Virgin Islands) are automatically deemed to have minimum essential coverage.
4. When Individuals Can Apply for an Exemption
There are times when a person may request exemption. The Exchange will review the application, issue a certificate of exemption and notify the IRS. Other types of exemptions are claimed when individuals file their federal income tax returns.
· Religious and hardship exemptions are only available when applying through an Exchange.
· Individuals who cannot afford coverage, who experience short coverage gaps, who are not U.S. citizens and who have household incomes below the filing threshold may apply for an exemption through the IRS.
· Members of a health care sharing ministry, individuals in prison and members of Native American tribes may apply for an exemption through either an Exchange or through the IRS when filing a federal tax return.
Comments regarding the HHS regulations are due by March 18, 2013. Comments regarding the IRS regulations are due by May 2, 2013 and a public hearing is scheduled for May 29, 2013.
For more details:
The Centers for Medicare and Medicaid Services (CMS) has an online Fact Sheet.
If you have not already done so, I encourage you to opt in on the form below to stay informed on all the changes that are taking place in the health insurance and medicare markets.
This document is for general informational purposes only. While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and Neil Primack makes no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind. External users should seek professional advice from their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.
High Deductible Plan F Medicare Supplement Insurance Rates
High deductible Plan F Medicare supplement insurance is a good choice for those who desire lower monthly premiums. Insurance companies are not required to offer HD Plan F, so consumers won’t have quite as many choices when it comes to providers.
Conversely, traditional supplemental Plan F is offered by all providers and can be a better choice for those who do not wish to meet a deductible each year. Monthly premiums will be higher for these traditional plans.
How Does High Deductible Plan F Work?
The plan itself is fairly straightforward and works like all other Medicare supplemental insurance coverages. The only difference is there is a one-time deductible that must be met each year before the Medigap insurance company will begin paying benefits.
In 2013, the amount that must be met for high deductible Plan F is $2,110. The amount in 2012 was $2,070 per year and in 2010 & 2011 it was $2000. As you can see, the deductible can increase year over year, but it is determined by the Centers for Medicare and Medicaid Services – not the insurance companies.
While it is very unlikely that the deductible would increase to $5,000 for example, it is possible that the amount could increase by a few hundred dollars over the next few years. Currently, there are no other Medigap policy offering a high deductible option other than Plan F.
Disadvantages of a High Deductible Plan F
One disadvantage will be if the insured decided later on that he or she did not want a high deductible Plan F supplement. Often when the insured does not like less comprehensive coverage, it is because they are paying more out of pocket than they had originally anticipated.
Someone who was once in good health, but later finds that the $2,000 + deductible must be met each year as his or her health has changed might not like the coverage any longer. The issue then would be that it can be difficult to change plans if the insured is in poor health. Medicare beneficiaries cannot change coverage without undergoing medical underwriting with most providers in most states.
Thus, if the high deductible Plan F is chosen, it may be hard to switch to something more comprehensive later on. Contrary to popular belief, there is not an open enrollment period each year when Medicare supplement owners can switch to any new plan they want.
Medicare Annual Election Periods and Underwriting
The time period from October to December each year (collectively known as the Annual Election Period or AEP) is for changing Part D plans and/or Medicare Advantage coverage, but it does not allow the insured to choose any new supplement without undergoing medical underwriting.
The insured cannot increase his or her coverage during their yearly anniversary without undergoing medical underwriting. That is to say that, the insured cannot switch from a high deductible to traditional Plan F (or most other plans for that matter) without first answering several health history questions.
Who Might Purchase A High Deductible F Medigap Plan?
Typically those who purchase a High Deductible Plan F fit into a couple of categories. Generally speaking, they are in good health, have enough savings to cover the deductible year over year, and do not like the hassle associated with network driven coverage, like Medicare Advantage plans.
The primary advantage to the high deductible Plan F is lower monthly premiums. Many consumers do not worry about potentially paying a $2,000 + deductible each year as they are often times leaving group health insurance plans with similar or higher deductibles.
Additionally, Medicare supplements do not have network restrictions like most other types of health insurance or Medicare Advantage plans. The insured is still free to choose any doctor or hospital accepting Medicare and does not need to worry about higher costs associated with referrals to an out-of-network physician or facility.
Seniors who travel often or who have a residence in more than one state will likely choose a traditional Medigap plan like High Deductible F knowing that they can receive routine care both in and out of their primary resident state.
Request Medigap Quotes (Medicare Supplemental Insurance quotes) and Information or call Neil Primack at: 561-935-3907
Health Care Reform Definitions for the Consumer: In 2014, significant portions of health care reform take effect. As a result, individuals and small business owners will want to understand the following terms:
Affordable Care Act (ACA) is the administration’s preferred name for the health care law. The actual title is the Patient Protection and Affordable Care Act, or PPACA.
Employer mandate refers to the new federal requirement, effective January 1, 2014, that companies with 50 or more full-time equivalent workers’, pay a tax penalty to the government if
1) the company does not offer coverage and/or
2) one or more of the company’s employees obtain subsidized coverage through a health insurance exchange.
Individual mandate refers to the new federal requirement, effective January 1, 2014, that American citizens pay a tax penalty to the government if they fail to purchase health insurance through an employer, a government program or the individual market. There are special exemptions for financial hardship and religious objections.
Essential health benefits represent 10 categories of benefits that health insurance plans must cover starting in 2014. They include office visits, emergency services, hospitalization, rehab care, mental health and substance abuse treatment, prescriptions, lab tests, prevention, maternal and newborn care, and pediatric care.
A health insurance exchange is an online health insurance marketplace in each state where consumers can obtain private health insurance, subsidized by the government. Open enrollment starts October 1st, 2013 for coverage taking effect January 1, 2014.
Medicaid Expansion: New rules give states the option of extending coverage in Medicaid to most people with incomes under 133% of poverty.
Metal Levels: bronze, silver, gold, and platinum, represent four levels of coverage available through exchange plans. Bronze plans feature the lowest monthly premiums, but cover only 60 percent of average costs. Platinum plans cover 90 percent of average costs.
A pre-existing condition is a condition or diagnosis which existed (or for which treatment was received) before coverage begins. Starting January 1, 2014, insurers will no longer be able to use pre-existing conditions to deny, restrict, or up-rate coverage.
Tax Subsidies: For households with incomes up to 400% of the federal poverty level (FPL), The Affordable Care Act provides tax subsidies that reduce premium costs. These premium tax subsidies will begin in 2014. Households with income between 100% and 400% of FPL who purchase coverage through a state (individual) health insurance exchange, are eligible for a premium tax subsidy to reduce the cost of coverage.
The Proper Way For Employers To Reimburse Employees’ Individual Health Insurance
Employers are allowed to use a Health Reimbursment Arrangements (HRAs) to reimburse employees, tax free, for individual health insurance premiums, similar to the way employers contribute on a tax free basis to group premiums. This has been clarified with the release of numerous U.S. Treasury and State publications spelling out how employers can use HRAs for tax-free reimbursement of the premiums paid for personal health insurance policies. See “Insurance Premiums” in IRS Publication 502and IRS Publication 969.
Specific HIPAA and ERISA regulations govern the distribution of individual health insurance plans at the workplace– restricting employer involvement with the sale or administration of those policies. The administrative platform used must ensure employer compliance with these regulations.
Today, in 2013, less than 50% of small employers offer any employee health benefits. Every year, 2 million fewer employees will receive group health insurance coverage because of rising cost.
Health Reimbursement Arrangements
A Health Reimbursement Arrangement, or HRA, is a type of Medical Expense Reimbursement Plan that allows the employer to use tax-free dollars to reimburse designated employees for out-of-pocket medical expenses (including insurance premiums and deductibles). Eligible medical expenses are approved and reimbursed either by the employer or a third party administrator that the employer designates.
Advantages of HRAs
- Employees are not taxed on the value of their HRA coverage or on reimbursements they receive from the HRA.
- An HRA is only funded as reimburesements are recorded.
- HRAs may allow unused funds to be carried over to subsequent years.
- HRAs are not subject to HSA rules thus allowing greater flexibility in the plan design of the high deductible health plan.
Some Types of HRAs
INTEGRATED HRAs: an HRA that is integrated with a high deductible major medical plan, whereby the HRA is offered only to those who take the major medical coverage.
STAND-ALONE HRAs: an HRA that is not linked to a major medical plan and has separate eligibility rules.
Trying to find the right Medicare insurance product can be a difficult task. It can be plain confusing. You want to make the right decision, but you don’t want to pay more than is necessary. In this current economy you have to save money wherever possible, and one of those places is insurance. You may have a memory of your parents talking about their Medicare supplement insurance. You probably have a few friends that are on Medicare now and have talked about what insurance plan they chose. Now it’s your turn to go through the process and it’s a decision you don’t want to guess on. Education is the best way to approach the buying process when in the market for Medicare supplement insurance. It can be a confusing subject, but with just a little research and time, you can educate yourself on the basics of Medicare and the insurance products related to Medicare. Once you learn the fundamentals, you can make a decision on your insurance, and feel great about getting the best product for the best price. Let’s start with the different “parts” to Medicare. There are four “parts” to Medicare: Part A, Part B, Part C, and Part D. You have probably heard of all those except for Part C. Let’s define those “parts” of Medicare right now so you can quickly understand what they do.
Medicare Supplement Insurance
The most common type of Medicare insurance is the Medicare Supplement. A Medicare supplement helps to pay the gaps in Medicare Parts A and B. The Plan F Medicare supplement (the most popular) pays all the gaps in Medicare, while other plans pay some of the gaps. The network for Medicare supplements is the Medicare network. Regardless of the insurance company you choose, they all utilize the Medicare network. Doctors and facilities that accept Medicare, have to accept your Medicare supplement. The billing process for Medicare supplements is also standardized. Medicare supplements utilize the “medicare crossover” billing system, which allows billing departments to review payment for claims without having to manually bill the insurance companies. All Medicare supplements have standardized benefits as well. This makes the shopping process much easier. For example, you may see quotes like this: AARP Plan F $254 per month, Mutual of Omaha Plan F is $275 per month, Gerber Life Plan F is $249 per month. The prices vary, but the benefits are identical from one insurance company to the next. Given this information, you should choose the Gerber Life Plan F as it has the best premium. However, also consider that Gerber is also new in the Medicare market and is more likely to raise the rates as they begin to establish a book of business. That is why it is helpful to have an experienced broker to help you sort through the puzzle of insurance carriers and their rate history.
This part of Medicare covers hospitalization. You become eligible for Medicare Part A on your 65th birth month. You cannot defer Part A even if you are working. As long as you or your spouse worked at least 10 years in the United States, you are eligible for Part A. There is no premium for Part A.
This part of Medicare covers physician/outpatient charges. Basically Part B covers any charge that is not considered hospitalization. In 2013 the premium for Part B is $105.40 per month. If you are drawing your social security check now, this amount will be deducted from your social security check. If you are not drawing social security yet, this amount will be billed to your quarterly. You become eligible for Part B on your 65th birth month, but can defer Part B if you are working and have creditable coverage, and can later enroll in Part B when you have retired (you will not pay any penalty as long as your prior coverage was “creditable”).
This part of Medicare was put into law in 2005 and is the privatization of Medicare. Part C, referred to as Medicare Advantage, is a private Medicare type plan. When you select a Medicare Advantage plan, you are no longer covered by Medicare’s Part A and Part B, but by a private insurance company solely. Medicare Advantage plans can have drug coverage rolled into the plan as well as other benefits such as dental & vision. These plans are not a Medicare supplement, but are a stand-alone plan. If you are interested in a Medicare Advantage plan, do your due diligence and make sure you have checked to see if your doctors will accept the plan you are considering. These plans can be very confusing as the benefits and the providers who accept them can change from year to year.
This part of Medicare refers to the drug coverage side of Medicare. When looking for a Medicare prescription drug plan, you should visit www.medicare.gov and utilize their prescription drug calculator. This tool is pretty accurate and will help you find the drug plan that best suits you, based on the medications you take. Hopefully this brief but informative article has helped you to understand the basics of Medicare and Medigap insurance.
If you have any questions or would like additional information or quotes regarding the Medicare insurance available in your area, we can help! Call us at: 561-935-3907 You can speak with someone who can help you with any questions you may have.
Medicare supplemental Insurance west palm beach florida
THE MOST OUTRAGEOUS MEDICARE COST
If you’re a baby boomer about to turn 65 and ready to enroll in Medicare, you may be surprised when you start looking at what health care can cost after you sign up for Medicare. What’s the most outrageous expense?
It may be the Part A deductible you have to meet if you need to go to the hospital. In 2013, that deductible is $1,184. To add insult to injury, this is not an annual deductible. If you fall and break your hip, for example, you’ll need to spend that much before your hospital care will be covered.
Then, you might need a little recovery time in a nursing home before you’re up to independent living as that heals. Up to 20 days in a skilled nursing facility is covered by Medicare after you’ve been an inpatient for at least three days at the hospital.
There’s a catch, though. You can be in the hospital without being officially admitted. If you’re held for observation, even overnight, you are not covered by Part A. You’ll be covered by Part B, which is very different.
For starters, with Medicare Part B, there’s no big deductible. The Part B deductible for 2013 is only $147, and it’s annual. That may sound better, but Part B does not pay for 100-percent of the bills after you’ve met the deductible like Part A. It’s pays for 80 percent, which leaves you with 20 percent of the cost. And, hospital rooms aren’t cheap.
But, let’s look at what happens if you are admitted and Part A covers 100 percent of the cost after you meet its deductible. Once you’ve been at home for 60 straight days, the Part A deductible resets to $0. So, if you get hurt or sick badly enough to need hospital care in the same year, you owe the $1,184 deductible again.
Not only does Medicare not limit the number of times that happens, but it also has no limit on your annual out-of-pocket costs for deductibles, co-pays and co-insurance.
Purchase a Medigap or Medicare Supplemental insurance plan to Fill in Medicare holes
So, it should be obvious that with Medicare alone, there are plenty of gaps that need to be filled. A MEDIGAP PLAN can help with co-insurance, co-pays, and deductibles. Take a look how a FLORIDA MEDIGAP INSURANCE plan can significantly cut your out-of-pocket expenses.
Call me today and learn more….Neil Primack, Independent Florida Medicare Supplement Broker 561-935-3907