Health Reform-W2 and 2013

Many have asked what rules will apply for reporting health coverage on Form W-2 for 2013. So far, the IRS has not released any guidance for 2013. This relates to the Form W-2 provided to employees by end of January 2014. But, what will apply? According to questions and answers released by the IRS, the transition relief provided by the IRS in Notice 2012-9 for 2012 will continue to apply unless IRS publishes guidance giving at least six months of advance notice of any change to this relief. For 2013, this time period has just passed and it looks like the rules for 2012 will continue to apply for 2013.

OH Dept of Insur-41% increase coming

Press Release STATE OF OHIO DEPARTMENT OF INSURANCE COMMUNICATIONS OFFICE 8/1/2013 Health Insurance Premiums to Increase 41 Percent Due to Affordable Care Act Premiums for Federal Exchange Show Higher Costs for Ohio Consumers and Small Businesses Page Content COLUMBUS — The Ohio Department of Insurance announced today that individual consumers buying health insurance on the federal government's health insurance exchange for Ohio will pay an average of 41 percent more than they did in 2013. In addition, ODI confirmed previously-released preliminary calculations that insurance companies’ costs to provide individual health coverage will increase by 83 percent. “Ohio has traditionally had a more competitive health insurance market than other states with a wider range of prices and choices – from simple, high deductible coverage to comprehensive, full service plans,” Lieutenant Governor Mary Taylor said. “That level of diversity is essentially outlawed under Obamacare so Ohio's rates and premiums are going up significantly, and going up more than in other states where prices were already high.” Premiums Increase 41 Percent: The Department utilized a National Association of Insurance Commissioners (NAIC) report of premiums reported by Ohio companies at the end of 2012 to compare premiums. Individual exchange plan premiums are expected to increase on average by 41 percent in 2014 compared to 2013, while exchange plans for Ohio's small businesses will increase on average by 18 percent. For individual health insurance plans, a total of 12 companies offering 200 different plans have been approved by the Department for the exchange. Open enrollment for the exchange will begin on October 1, 2013. For small group health insurance plans, 6 companies offering 184 plans have been approved to sell on the exchange. Based on premiums for the current individual market, plans in Ohio today cost on average $236.29 per month compared to $332.58 in 2014. For the small group market, today’s premiums average is $341.03 per month compared to $401.99 in 2014. An example of the difference between premium and the cost to provide coverage is that premiums do not include cost sharing paid by the consumer, whereas cost includes both the cost to the company to provide the coverage and the cost sharing paid by the consumer. Insurance Companies’ Costs to Insure Increase 83 Percent: Estimates from a Society of Actuaries study released in 2013 showed Ohio’s current average cost to provide individual health insurance coverage is $223. Based on the rate filings approved by the Department, the average cost to provide coverage for individuals purchasing health insurance on the exchange in 2014 is $409 representing an increase of 83 percent when compared to the Society of Actuaries study. During the two month review process, the Department requested changes to submissions that in some cases resulted in rate adjustments. Ohio law requires all companies selling products in Ohio, including on the exchange, to justify rate submissions and any rate changes for 2014 by using sound actuarial judgment. The intense review process the Department conducted (as it does with all insurance products sold in Ohio) is to protect consumers from rates that are too high and to protect against company insolvency in which rates are too low and companies are unable to pay a consumer’s claim. Ohio is one of many states to recently release final exchange rate numbers and each state’s experience is different. Ohio’s rates are going up while some other states are seeing rates remain stable or even decrease as the ACA drives rates across the country closer together. For states where prices were already much higher and that had more coverage mandates, rates are not increasing as much. In Ohio, where rates have been among the most competitive in the country, rates are increasing significantly as consumers are faced with fewer options and a higher level of required coverage. "These kinds of significant costs increases are bad for job creation and why the governor and I continue to call for the repeal and replacement of this flawed law with reforms that improve access by lowering costs.” Taylor said. “Ohio said 'no' to running the federal government's health care exchange in our state and 'no' to federal takeovers of both our health insurance regulations and our Medicaid eligibility process. As the problems with this law continue to appear even the federal government has begun to balk, with its recent announcement to delay the employer mandate for a year. Hopefully it's just the beginning of more such news and an eventual total rethinking of this law." In 2010 the ACA, which includes sweeping changes to America’s health insurance system, became law. It includes the creation of health care exchanges in which individuals and small business owners in every state can purchase subsidized coverage. According to the federal government, initial open enrollment on the exchange is set to begin October 1, 2013 with coverage becoming effective January 1, 2014.

Premium Subsidies-What you need to know

The Affordable Care Act (ACA) provides premium Tax Credits and Cost Sharing subsidies to help low and moderate income American afford coverage.  While subsidies will help many people purchase coverage, millions of individuals and families are not eligible for subsidies and the amount of the subsidy declines significantly as incomes rise.  Furthermore, the ACA includes a new $100 billion health insurance tax costly benefit requirements, and restrictions on age rating that will drive up the cost of coverage, increasing the likelihood that younger and healthier people will forgo purchasing insurance until they get sick or injured, further driving up costs for everyone else. 

Subsidies do not lower the underlying premium

• Subsidies will help many families pay for health Care coverage, but subsidies do nothing to bring down the actual cost of that coverage.
• Subsidies do not lower premiums any more that Pell Grants reduce the cost of college tuition.  Pell Grants are an asset to families looking to cover the high cost of education, but they do not lower tuition levels.  Meanwhile, tuition prices soar.

Millions of American are not eligible for any premium subsidies

• According to the Congressional Budget Office (CBO), more than 40% of people purchasing coverage in the individual market today would be ineligible for premium subsidies.

The amount of the subsidy declines significantly for those with higher incomes

• Individuals with incomes between 250-300% of the federal poverty line (FPL) would receive subsidies sufficient to cover 42% of the cost of the second lowers-cost "Silver" plan. Those with incomes between 350-400% of the FPL would receive subsidies sufficient to cover just 13% of the premium
• Due to how the subsidies are indexed, CBO states that over time "the shares of the premiums that the subsidies cover will decline."

Even for individuals who qualify for subsidies, their share of the premium may still be higher than the penalty for not having insurance

• The penalty for failing to carry insurance in 2014will be as low as $96 for the entire year-far below the cost of purchasing insurance, even for people eligible for subsidies.
• The ACA's new $100 billion health insurance tax, costly benefit mandates, and age rating restrictions will further add to the cost of health care coverage.
• As costs rise, many younger and healthier people may choose to pay the penalty and wait to purchase insurance until they get sick or injured.  If that happens, costs will rise for everyone else.

Subsidies-How They Work

• The ACA provides premium and cost-sharing subsidies to help low and moderate income Americans afford health care coverage n the new exchanges.  Premium subsidies are available on a sliding scale to individuals and families with incomes between 100 - 400% of the Federal Poverty Level (FPL).  Additional cost-sharing subsidies are available for those with incomes below 200% of the FPL to help reduce out-of-pocket cost, such as deductible, co-pays, and co-insurance. 

Plans filed with Dept of Insur show higher costs

Health Insurance costs to increase significantly under Affordable Care Act.

These are the headlines from the State of Ohio Department of Insurance Communications office on June 6, 2013.

COLUMBUS — The Ohio Department of Insurance today released details of health insurance plans that insurers have submitted for approval to sell on the coming federal insurance exchange for Ohio.  The Department's preliminary analysis of the proposed plans for the individual market reveal that insurers expect the cost to cover health care expenses for consumers will significantly increase.  

Based on a report released by the Society of Actuaries earlier this year, the Department estimates this increase is an average of 88 percent.  While those costs do not specifically track with the premiums insurers charge individual customers, it is expected that these increases in costs will also translate to significant premium increases for many Ohioans.

 

A total of 14 companies filed proposed rates for 214 different plans to the Department.  Projected costs from the companies for providing coverage for the required essential health benefits ranged from $282.51 to $577.40 for individual health insurance plans.

 

“We have warned of these increases since a state-specific study in 2011 indicated Ohio would be significantly impacted by the ACA,” Lieutenant Governor Mary Taylor said.  “The Department’s initial analysis of the proposed rates show consumers will have fewer choices and pay much higher premiums for their health insurance starting in 2014.”  

 

Estimates from a Society of Actuaries study released in 2013 showed Ohio’s current average cost to cover medical expenses for an individual health insurance plan is $223.  Based on the proposals submitted to the Department, the average to cover those costs in 2014 is $420 representing an increase of 88 percent when compared to the Society of Actuaries study.  The proposed rates are not effective and are currently undergoing the Department’s review process. During this process, rates may change before becoming effective.

 

The Department released the information today to help health insurance consumers continue to prepare for the expected price increases.  Specific premium information varies widely and can be unique to each individual or employer, but it is hoped that the information on proposed costs and rates can help consumers and health insurance consultants determine how their particular situations will be impacted.

 

With the large employer mandates being pushed back till 2015, it is important to remember that the individual mandate is still effective Jan 1, 2014. 

 

 

 

 

When I Die......

Life Insurance is a simple answer to a very difficult question:

How will my family manage financially when I Die ? ?

It is a subject no one really wants to think about.  But if someone depends on you financially, it's one you cannot avoid.

There are many types of Life Insurance, but for all of them the bottom line is the same:
They pay cash to your family after you die, allowing loved ones to remain financially secure.  Life Insurance payments can be used to cover daily living expenses, mortgage payments, outstanding loans, college tuition and other essential expenses. 
And, importantly, the death-benefit proceeds of a Life Insurance policy are almost never subject to Federal Income Taxes. 

If you've worked hard to establish a solid financial framework for your family-investments, home equity, a savings plan, retirement accounts-Life Insurance is the foundation upon which it all rests.  It can guard against the need for your loved ones to make drastic changes to future plans when you Die.  Certain types of Life Insurance even have a built-in cash-accumulation feature that can help you reach savings goals.

Most Americans need Life Insurance, and many who already have it may need to update their coverage. 

 

Employer Mandate Delayed

On July 2, 2014, the Obama administration delayed part of the Affordable Care Act (ACA or health care reform law) that affects employers. The parts of the law listed below will now go into effect in 2015 instead of 2014:

1.        Employers will not have to report certain information to the IRS. This has been referred to as “employer reporting requirements.” We are waiting for the IRS to give details on what requirements this includes.

2.        The rule that says large employers have to offer coverage to full-time workers or pay a penalty. “Large employer” in this case is a business that has 50 or more full-time or full-time equivalent employees (that work an average of 30 hours a week).

3.        The rule that says coverage offered by large employers cannot be more than 9.5% of a worker’s pay for self-only coverage.

The delay notice changes the employer mandate part of the law only. The individual mandate and other parts of the law are unchanged. We are evaluating the impact and waiting for more information. The IRS has said it will release more details about the delay soon. We will share more information as soon as possible.

Marketplaces Enrollment-Phase I and II

Phase I:
Open enrollment for the Federal Marketplaces, or Exchanges, will begin October 1, 2013 and will run through December 15th, 2013.  This enrollment for the Marketplaces will coincide with the AEP or the "Over 65" Annual Enrollment Period.  For those who enroll during this period, their coverage will be effective January 1, 2014.  If you miss this enrollment period, there will be a Phase II enrollment period.
Phase II:
This enrollment will begin December 16, 2013 and run through March 31, 2014.  The effective date of coverage for this phase will be either the first of the month following enrollment, or the first of the 2nd month following enrollment depending on the time of the month enrolled.
If you miss both of these enrollment periods, you will not be eligible for coverage until enrollment opens up again on October 1st 2014. 

There will be help on these premiums. It will be based on a percentage of the FPL or Federal Poverty Level.  Help with premiums isn't just for low income.  For example based on a family of 4, incomes below $94,000 per year will be eligible some kind of help with premiums.

If your plan is currently considered "Grandfathered" you may be exempted from some of the other changes. 

Best to reach out to me and we can talk about the changes you will be seeing with your heathcare.
As a certified and licensed Agent, I can help steer you to the best possible options.