Over the past couple of weeks, you may have seen in the news that many individual and family health insurance policies were set to be cancelled across the country as a result of healthcare reform. The reason that these policies were going to be cancelled was because they do not conform to new healthcare reform standards. As a result, insurance plans that do not meet certain criteria set forth in the law can no longer be offered, and those that are currently in place need to be changed. This resulted in the cancellation of millions of policies across the nation.

There are a series of newly mandated requirements that all health insurance plans must comply with by January 1st, 2014. If health insurance plans do not adhere to these new requirements, they will no-longer be considered “legal” plans (and will therefore no longer be able to be offered). Here are a couple of the important new mandates that health insurance plans must contain starting on January 1st, 2014:

  1. “10 Essential Health Benefits”: Starting on January 1st, 2014 all plans must contain the “10 Essential Health Benefits,” whether policyholders need them or not.
  2. Minimum Actuarial Value: In addition, on January 1st, 2014, all plans must meet a “minimum actuarial value” of 60%/40% (or Bronze Level Coverage). If plans do not meet this minimum value, they will be considered out of compliance. You can read about the Metallic Levels of Coverage here.

Because of these new mandates, a few things are set to happen:

  • In certain cases, because of new “minimum actuarial value” (#2 listed above)… some current plans’ deductibles, co-payments, and co-insurance are going to go down (ie: there will be less cost-sharing for the policyholder).
  • Secondly, additional benefits will be contained in new health insurance plans (#1 listed above: the “10 Essential Health Benefits) making them “richer” plans, which in most cases, will make premiums more expensive outside of the new marketplaces. Explained another way: plans that are purchased without the help of exchange subsidies (off of the exchange) could be more expensive.
  • Lastly, health insurance plans that do not meet these new requirements need to be “phased out.”

The latter of the above listed is one of the unintentional early consequences of the law. Because these “old” plans don’t contain the new mandates, and need to be phased out, many (if not all) of these “old” plans were set to be cancelled.

However, on November 14th, the Obama Administration announced that these old plans could be kept (and reinstated in certain cases) for an additional year (up until December 31st, 2014.) As a result, many people will now get to keep their “old” health insurance plan for an additional year. 

There may be additional changes to come with regard to this concept. There are currently bills being sponsored in Congress that would not only allow policyholders to keep their old plans for an additional year, but also allow insurance companies to continue selling these “old” plans (in addition to the new plans with the new mandates).

There is also speculation that there may be effects on the individual mandate as a result of the cancellation of these plans, and the other additional “hiccups” (ie: problems with the website) while rolling out the law. Some are wondering if these issues will cause the individual mandate to be delayed for an additional year. Be advised to continue to keep up with this topic over the coming weeks and months. 

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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Welcome back to another edition of “Phrases Made Easy.” This series at our blog aims to help make all of those long, drawn-out insurance phrases easier to understand. One thing we notice when talking about health insurance (and health benefits in general) is that the concepts can be “wordy” and boring. We emphasize fixing that here!

Today we’ve selected the phrase “Cost Sharing Reductions.” The primary reason we’ve selected this phrase, is because it can be a very important concept for certain people in the new Covered California state health insurance exchange. Like many other phrases in our “Phrases Made Easy” series, this one sounds difficult, but it’s really not that bad at all.

If you are shopping in the health insurance exchange, you may start to see the phrase Cost Sharing Reduction (or CSR). Here is what a Cost Sharing Reduction is:

Cost sharing reduction plans are offered through Covered California for consumers whose income is between 133% to 250% of the federal poverty level (FPL). These plans offer lower cost-sharing to reduce your clients’ out-of-pocket costs when accessing medical care. These plans are available only through Covered California.

Quite simply: Cost Sharing Reductions reduce your out-of-pocket expenses. If you purchase what is called an “Enhanced Silver Level Plan” through Covered California, and are eligible for Cost Sharing Reductions, you will get help with your co-payments, deductibles, and other out-of-pocket medical expenses.

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Question: What is the criteria for Cost Sharing Reduction eligibility?

Answer: There are two criteria:

  1. You need to purchase an “Enhanced Silver Level Plan” on the Covered California state health insurance exchange.
  2. Your yearly income must be between 100% and 250% of FPL (or approximately $11,490 per year & $28,725 per year for individuals).

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Here are the three tiers of Silver Level Plans that include Cost Sharing Reductions (or CSRs) in the new state health insurance exchange in California. A standard Silver Level Plan without Cost Sharing Reductions has 70% actuarial value:

  • Enhanced Silver 94: 100% FPL to 150% FPL (94% enhanced actuarial value)
  • Enhanced Silver 87: 150% FPL to 200% FPL (87% enhanced actuarial value)
  • Enhanced Silver 73: 200% FPL to 250% FPL (73% enhanced actuarial value)

Essentially, these are additional benefits that help people who make less, reduce their out of pocket costs. If you have additional questions about “Cost Sharing Reductions” (or CSRs), and how they may apply to you, please contact Policy Advantage Insurance Services. We are “Covered California Certified” and can help you with your questions when navigating the exchange.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: http://www.PolicyAdvantage.com

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Welcome back to another edition of “Benefits Chalk Talk.” In this series at our blog, we provide you with valuable, up-to-date, relevant information about health benefits planning so that you can put the things in place that make the most sense for yourself or your company. At Policy Advantage Insurance Services, we feel that informed consumers can make a really big difference in our industry.

The topic today is about the “10 essential health benefits” that must be included in all insurance plans starting on January 1st, 2014. The Affordable Care Act (or ACA/Obamacare), required that certain new “essential benefits” be included in all health insurance plans.

Additionally, you may have heard recently in the news that many people across the country are going to be unable to continue their current health insurance plans. The “10 Essential Health Benefits” provision is one of the reasons why. Many of today’s plans on the individual market do not conform to these minimum standards set forth in the law.

As such, any plans that were not “grandfathered in” (ie: in place before March 23rd, 2010, with certain exceptions) can no longer be offered. As a result, people in these plans will need to find a new one starting on January 1st. In many cases, because of the additional added benefits, premiums will also be more expensive.

Here is an overview of the “10 Essential Health Benefits (source: www.healthcare.gov):

  1. Ambulatory Patient Services: “Outpatient care” – the kind you get without being admitted to a hospital
  2. Emergency Care: Trips to the emergency room
  3. Hospitalization: Treatment in the hospital for inpatient care
  4. Maternity & Newborn Care: Care before and after your baby is born
  5. Mental Health Services: Mental health and substance use disorder services: This includes behavioral health treatment, counseling, and psychotherapy
  6. Prescription Drugs: Your prescription drugs
  7. Rehabilitative & Habilitative Services: Services and devices to help you recover if you are injured or have a disability or chronic condition. This includes physical and occupational therapy, speech language pathology, psychiatric rehabilitation, and more
  8. Laboratory Services: Your lab tests
  9. Preventive & Wellness Services: Preventive services including counseling, screening, and vaccines to keep you healthy and care for managing a chronic disease
  10. Pediatric Care: Pediatric services – this includes dental care and vision care for kids

The above listed are the “10 Essential Health Benefits” that must be included in all insurance plans starting on January 1st, 2014. Keep in mind that there may be minor benefits differences between states, but for the most part, all of the above must be included in new insurance policies.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: http://www.PolicyAdvantage.com

Twitter: http://www.twitter.com/PolicyAdvantage

Facebook: http://www.facebook.com/PolicyAdvantage

YouTube: http://www.youtube.com/PolicyAdvantage

Pinterest: http://www.pinterest.com/PolicyAdvantage

Word Press: http://www.policyadvantage.wordpress.com