Archive for January, 2013

The Media has started its daily drum beat criticizing rate increases as carriers work to implement the Affordable Care Act. Don’t be fooled!!

January 16, 2013

January 16, 2013

Beginning just after the façade known as the “fiscal cliff”  lost its media luster the national media began its blitz of stories concerning health insurance carrier’s request for rate actions across the US. Actions that are needed, by the way, as the american health insurance carriers prepare for 2014 and the final stages of ACA implementation. As I say above, do not be fooled by this.

This is the media’s collusive effort, with supportive Democrats, to demonize the insurance carriers and thus push our citizens into giving state legislators and state insurance commissioners absolute rate authority. Media stories will criticize insurance carriers as being greedy and try to make the case that the premiums asked for by carriers are not necessary.

What other industry on the planet is told what to produce, how to offer it, what must be covered including experimental treatment, threatened about their product, then restricted to what the company needs to charge for the product. None.  No other industry except the american health insurance company.

Two things to remember:

  1. Carriers are mandated to accept individuals guaranteed issue with no pre-existing condition limitation, with mandated benefits for maternity, preventive, and lifetime limits. But citizens are not forced to buy the product until they get sick and will then be willing to buy the coverage. No, I did not forget about the Mandate Tax Penalty but get real…is $95 per year tax going to encourage any person to buy insurance before they need it?
  2. Also, because of the massive mandated benefits, restrictive pricing, no underwriting, etc, the carriers really have few options to consider when pricing their product. They are not allowed to give too many options and of course if they misprice their product and run out of money then who will be there to bail out an “evil and now mismanaged” insurance carrier. Answer…NO ONE.

So, do not be fooled by the daily flow of news flashes coming across your email that paint a picture which makes the carriers look like they are being excessive. Also, just as in 2009, when the infamous Anthem increase of 39% pushed HCR forward, the news flashes are spotlighting carrier request for their individual products not group. The ACA restrictions on individual plans are the scariest to price because of  what I said above regarding mandated benefits and people not forced to buy.

Group products will certainly see increases because the regulations and restrictions coming in 2014 force it but the media is trying to fool the American public into thinking the double digit increases about which it is reporting also pertain to group.

Don’t be fooled and don’t miss an opportunity to challenge what you read.

Finally, if given the slightest chance, we should defend the  american health insurance companies which are being forced to do what no other industry in the world is forced to do.

The ACA is real and it is going to be implemented. But, that does not mean that the battle to do what is right is over. Don’t give up and don’t give in!

Thanks for listening.

Mark Reynolds, RHU

HRAs Are Not Affected by the ACA’s $63 per EE per year Reinsurance Fee

January 16, 2013

January 9, 2013

HRAs are, and have been, misunderstood by many people for years and that continues to be the case regarding ACA’s $5.25 PEPM Reinsurance Fee. The point of this message is to inform you and confirm for you that HRAs integrated, or “wrapped” with a group health plan are not affected and will not pay this fee.


Many have not heard of the Three Rs (3Rs).  The ACA established three risk-spreading programs (hence 3Rs) to provide payments to health insurance issuers that cover higher-risk populations.  These three programs which will be effective in 2014 are:

  • Transitional Reinsurance Program
  • Temporary Risk corridor Program
  • Risk Adjustment Program

These three programs, one of which is temporary, are intended to help spread the risk created by the ACA and the newly insured for the issuers of coverage.

This story hit the news a few weeks ago as another fee with in ACA. You may recall the headlines “ACA has hidden $63 per year fee for employers”.

Once again…

This $63/yr, $5.25/month per employee fee does not apply to HRAs that are integrated with a group health plan.

So, the employers providing their group health plan through BEN-E-LECT’s EDHP™ Plans do not need to worry about this fee.

However, there will be other fees to worry about so watch for that information throughout the coming weeks.

Mark Reynolds, RHU

Employers are required to give members 60 day notice of any material plan modification (Mod). Here’s the fine print…only for mid-year modifications.

January 16, 2013

January 3, 2013

In my opinion, one of the biggest issues to face brokers and employers in 2013 will be ACA’s rule that employers must give members at least 60 day written notice of any material plan modification. We say this because this rule is unknown to many, misunderstood by most, and interpreted differently by some.

First, let’s clarify that this 60 day rule does not apply to modifications made at time of renewal on the group’s plan anniversary.

So, having clarified that it applies to mid-year mods only, let’s bullet a couple items.

  • Material mods include both increases and decreases in benefits
  • Change in premium is a material mod
  • Small employers may be impacted more than large employers
  • Changing from one carrier to another mid year is a material mod
  • Some carriers are defining a mid-year carrier change differently than others

We state that this will be a big issue because history tells us that people, and by that I mean employers, particularly small employers, don’t usually make their health plan decisions 75-90 days in advance of the desired affective date. I have heard many people state that small employers will just have to change their ways about making timely decisions. I agree but I am not sure that it will happen that way.

As brokers counsel small employers about new plans it may become common for brokers, carriers, and TPAs to let employers assume the responsibility and therefore liability of complying with this rule. Let’s face reality, if a small employer can comply with Essential Benefits and reduce its cost 25% by enrolling on one of BEN-E-LECT’s EDHPs™ how are brokers going to stop that.

BEN-E-LECT will comply with the carrier’s guidelines, as it always has, but do what the employer requests. The employer can simply sign BEN-E-LECT’s newly created enrollment form called the Statement of 60 day Notice Compliance and away the group goes.

One final note, this notice was/is intended to benefit our citizens who are usually uniformed or disinterested. So the result of this form actually makes it harder for employers to improve benefits and do the right and moral thing for their employees. Watch in the coming days for more information about how carriers are applying this 60 day rule. We have already witnessed two large carriers handle a mid-year new enrollment in a diametrically different way.

More to come, but don’t worry because we will keep you abreast of the goings and comings of these rules.

Mark Reynolds, RHU

Some Thoughts About Healthcare Financing And It’s Reform

January 16, 2013

October 15, 2012

Summary of Coverage and Benefits (SBC): makes one feel so comfortable and informed, doesn’t it…It may be well intended but misses the target by a longshot for HRA or MERP plans.

If I told you that I would send you a federally regulated, PPACA required outline of what your benefit plan covered to be called your Summary of Benefits and Coverage, you might expect to receive a document which would clearly and easily inform you of the benefits provided by your medical plan. Well….upon receipt you would be sorely disappointed.

PPACA’s intent of providing a document to help members understand their benefits and compare against other plans was well intended. The fact is that this document does just the opposite. For a society that gets its information from “Live with Kelly and Regis” and “Entertainment Tonight” the SBC is to long and too confusing, and in most instances…inaccurate.

Members are used to seeing a two, possibly three page HRA/MERP Schedule of Benefits with three columns on it. First column identifies the benefit i.e.: Office Visit, the second column states what the member pays, and the third column states what the plan pays. There are variations, of course, and RX, out of pocket, and out of network may be illustrated differently but members can easily identify their benefits and what their costs might be if they use their plan.

Since October 1st, our office has created several thousand SBC formulas and distributed hundreds of finalized SBCs to our web portal, EMPOWR™, to help our clients meet their PPACA SBC requirements.

Members require an easy to read and understandable outline of their benefits, which is why BEN-E-LECT will continue to create and distribute our standard Schedule of Benefits in addition to the SBCs.

Our advice to our Broker Partners is: don’t use the SBCs to explain the member’s plan and encourage the employers to not use the SBC as well.

Health insurance and medical plans always have and always will confuse folks so, while being compliant, we all still need to do what we can do to help members understand and access the benefits their employer provides.