As you know, state health insurance exchanges were a large part of healthcare reform (PPACA). Each individual state was required by the law to set up these new exchanges, and have them ready for enrollment by October 1st, 2013. Some states have elected not to set up an exchange (deferring administration to the federal government). Other states have set up a joint state/federal partnership to operate their exchange.

California has continued along the path to setting up a state-only administered exchange (ie: no help from the federal government, except for funding). The state has taken a more aggressive approach to setting up their exchange, and further information is continuing to roll out. The California state health insurance exchange is called “Covered California.”

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Covered California is anticipated to be the largest insurance exchange in the country. Here are some general questions and answers about the exchange:

Question: How can Covered California help me find affordable insurance?

Answer: Covered California is an online marketplace where you will able to shop for and compare health insurance coverages. If you can’t afford health insurance, and are unable to obtain it through employer, individual or other government programs, the exchange will be something you may want to look at.

Question: How can I participate in the Covered California exchange?

Answer: Eligible individuals will be able to enroll in the exchange plans online, over the phone, or in person.

Question: Can Policy Advantage Insurance Services help me enroll in the exchange?

Answer: Yes. Policy Advantage Insurance Services, and any other “exchange certified” agents/brokers can help you with your questions and enrollment in the Covered California exchange. The exchange has not rolled-out further information about “exchange certification” yet, but we (Policy Advantage Insurance Services) will be getting certified.

Question: How much will my premiums cost at Covered California? 

Answer: Depending on your income bracket (400% of FPL or less), you may received a subsidy from the exchange. Covered California has provided a premium estimation calculator here.

Question: Who will receive subsidies from the Covered California exchange?

Answer: California was one of the states that expanded Medicaid eligibility to 138% of FPL. So, individuals who make between 138% and 400% of the federal poverty level (FPL) should be eligible for subsidies. If you make less that 138% of FPL, you will be eligible for Medicaid in California.

Question: When can I enroll in the Covered California exchange?

Answer: Enrollment is set to begin on October 1st, 2013, and coverage begins on January 1st, 2014.

Question: What types of plans will be available in the Covered California exchange?

Answer: Plans inside of the exchange must contain the same benefits as those outside of the exchange (plans that are being offered within the exchange are private plans that are funded by the federal government). They are essentially identical to those that will be found outside of the exchange. Here are the levels of coverage:

  • Platinum (90% paid by health plan, 10% paid by plan member)
  • Gold (80% paid by health plan, 20% paid by plan member)
  • Silver (70% paid by health plan, 30% paid by plan member)
  • Bronze (60% paid by health plan, 40% paid by plan member)

That’s all for now about the Covered California state health insurance exchange. If you have questions, please feel free to contact us at anytime. As soon as further information is available, we’ll be getting “exchange certified” and helping our clients and potential clients enroll starting on October 1st, 2013. The Covered California website is: www.coveredca.com.

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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By now you’ve heard all about the “individual tax penalties” that apply to most Americans if they’re not carrying health insurance by January 1st, 2014. Back in June of 2012, the Supreme Court of the United States upheld the “individual mandate” based on the congressional power to regulate tax.

What does this mean? It means that nearly every American will need to be insured by 2014, or face a yearly tax penalty.

In this blog post, we’re going to briefly explain the basic structure of this individual tax penalty, and how it will be “phased in.” Keep in mind that we’re emphasizing individual tax penalties only in this blog post. There are different mandates for employers with +50 employees, but we’re not discussing those tax penalties here.

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As mentioned above, we used the phrase “phased in.” The bulk of the tax penalties will not hit right away in 2014; this will allow people to familiarize themselves with the new system. Here is how it will work, starting in 2014 if you decide not to purchase health insurance:

Uninsured Individual Tax Penalty in 2014:

  • 1% of yearly income or $95/year (whichever is higher)

Uninsured Individual Tax Penalty in 2015:

  • 2% of yearly income or $325/year (whichever is higher)

Uninsured Individual Tax Penalty in 2016:

  • 2.5% of yearly income or $695/year (whichever is higher)

Uninsured Individual Tax Penalties after 2016:

  • Increased annually by the Cost of Living Adjustment (COLA)

The penalty amounts are capped at the family level. The most that a family can pay in tax penalties is 3x the yearly individual amount listed above. In other words, if a family has five uninsured family members, only three of them will be subject to the yearly penalty.

You’ll want to discuss with your broker/insurance professional where you can find affordable health insurance by 2014, or face a new tax penalty. Again, as mentioned in this article, the tax penalties will increase over time. Our advice is to be proactive about it, and have a plan that makes the most sense for you and your personal situation. Your decisions will be most likely based on the Federal Poverty Level (or FPL). Contact us any time with questions. You can find an infographic on our Pinterest page here: PAIS Individual Tax Penalty Info

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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There are lots of questions about state health insurance exchanges, and where/how they will fit in. In this “Benefits Chalk Talk” post, we’re going to give you some 101 (simple) insight into these exchanges, what they’re about, and how they’ll work.

A state health insurance exchange may or may not be the right option for your personal (or business) situation, but it’s a good idea to understand them. Consider them another “tool in your belt” to fund healthcare.

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First off, here are some basic facts and information about these new exchanges:

  • State-based health insurance exchanges (or marketplaces) are a key component of the Affordable Care Act (ACA)
  • States have the option of running their own exchange, or partnering w/ the federal government to run an exchange (or choosing neither, and a federally facilitated exchange will be set up)
  • All exchanges must be ready to enroll customers by 10/1/2013, and be fully operational by 1/1/2014

State health insurance exchanges may be an important part of an individual or business benefits planning strategy. Although some businesses and individuals may make the decision to completely steer clear of the exchanges, others who are open to the idea of utilizing government options will want to learn more.

When it comes to healthcare reform (love it or hate it), it’s important to understand that Policy Advantage Insurance Services takes an unbiased (non-political) approach to these concepts. Our goal is to deliver fact-based information to our clients, so they can put the things in place that make the most sense.  

Health Insurance Exchange

Here is some additional information about the exchanges:

  • Plans offered within the exchange must be the same (contain the same benefits), as those offered outside of the exchange
  • Enrollment in plans will take place predominantly online
  • Plans in the exchange will be “guaranteed issue,” meaning you must be accepted for coverage if you apply
  • An “exchange certified” agent or broker can assist you with enrolling in a state health insurance exchange plan (for more details, ask your current agent/broker, or find an agent/broker)
  • There are provisions to lower premiums (through massive subsides), for Americans with household incomes under 400% of the Federal Poverty Level (that’s most Americans)

Here are the early 2012 Federal Poverty Level guidelines. If your yearly earnings fall within 100% to 400% of the FPL, you may be eligible for a tiered subsidy through the exchange:

  • 100% of the Federal Poverty Level (FPL) was $11,170 for an individual and $23,050 for a family of four through early 2012
  • 400% of the Federal Poverty Level was ~$44,680 for an individual and ~$92,200 for a family of four through early 2012

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: www.policyadvantage.com

Twitter: www.twitter.com/policyadvantage

Facebook: www.facebook.com/policyadvantage

YouTube: www.youtube.com/policyadvantage

Pinterest: www.pinterest.com/policyadvantage

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Note: **this is the fourth (4) of a series of four (4) blog posts that require some knowledge of previous posts to be understood. We recommend that you read them in order. Here is the suggested order of reading:

  1. Healthcare Reform: The Major Players
  2. Phrases Made Easy: “Defined Benefit” and “Defined Contribution”
  3. The Great Transition: Healthcare Benefits & Defined Contribution
  4. Health Reimbursement Arrangements (HRAs): The Employee Benefits Home Run

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When we talk about an employee benefits “home run,” we’re talking about a concept that is really “clutch” in many different aspects. HRAs are that clutch concept… especially in the post-healthcare reform environment. Here’s why:

  • Flexibility, Freedom of Choice, and Quality of Coverage: HRAs are flexible in the sense that they can help in just about any employee benefits setting. They’re really a “universal key.” It doesn’t matter what you currently have in place, they can be very beneficial in your planning strategy. In many cases, HRAs also allow an employee to choose the plan that fits them best, and “consumer direct” their program.
  • Budgetability and Ease of Administration:  We have talked about the “defined contribution” concept w/ respect to employee benefits in past posts. This is that concept: the HRA allows an employer to make decisions based on how much money he/she would like to contribute to each employee’s HRA (it’s much like a monthly allowance, tax free). Employees then make their own purchasing decisions. That’s the defined contribution… and it’s budgetable. With the help of a third party administrator (TPA), administration is easy. 5 minutes a month. 
  • Tax Incentives: “Qualified Medical Expenses” can be reimbursed tax-free through payroll with the help of Section 105 HRAs (this includes individual insurance premiums).

Home Run

As you can see, Health Reimbursement arrangements hit every base. That’s why we refer to them as an employee benefits “home run.”

Employers can utilize the tax incentives, flexibility, budgetability, and simple administration to tailor a program that fits the exact needs of each business. Employees also have freedom of choice (to pick any plan); they will become involved in their own decision-making.

We will get into further detail about how an HRA goes in to place, step-by-step, in future posts. Keep in mind that these are an important concept w/ regard to healthcare reform. They’re a valuable employee benefit, regardless of your future strategy when it comes to navigating the new legislation (ie: whether you decide to utilize private or public options).

Important Editor’s Note 11/22/2013: Since these original blog posts, federal guidance regarding “Stand-Alone HRAs” (which are addressed in-depth throughout these articles) has undergone significant changes. In order to stay in full compliance, please be advised that there are now many additional considerations when adopting this type of benefits planning strategy. Consult with a proper broker or insurance professional before utilizing employer dollars to purchase individual health insurance policies. 

Thanks for stopping by. We hope you found this information to be useful and valuable to yourself or your organization. Please check back weekly, as we add posts that help empower our clients to make sound health benefits decisions. Also, feel free to follow along at our other outlets:

Twitter: www.twitter.com/policyadvantage

Facebook: PAIS Facebook Page

Google+: PAIS Google+ Page

Blog: www.policyadvantage.wordpress.com

Blog2: www.policyadvantage.blogspot.com

Note: **this is the first (1) of a series of four (4) blog posts that are related to healthcare reform. We recommend that you read them in order. Here is the suggested order of reading:

  1. Healthcare Reform: The Major Players
  2. Phrases Made Easy: “Defined Benefit” and “Defined Contribution”
  3. The Great Transition: Healthcare Benefits & Defined Contribution
  4. Health Reimbursement Arrangements (HRAs): The Employee Benefits Home Run

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Now that healthcare reform has made it through Congress, been signed by the President, was upheld by the Supreme Court, and survived an additional presidential election… we’re assuming the law is here to stay.

So with that… we need to introduce to our clients, potential clients, and colleagues the “cast of characters” that are important as this legislation sets in. ie: some of the major players. Here’s the scouting report:

#1) State Health Insurance Exchanges: In California, the exchange is called “Covered California” (www.coveredca.com). There is still much to be announced (because these exchanges have not yet completely taken shape). As information becomes available, we’ll roll it out. Begin to understand State Health Insurance Exchanges: they’re set to start January 1st, 2014.

#2) “Guaranteed Issue” Mandate: The phrase “Guaranteed Issue” is an insurance term. It means a policy must be offered to any eligible applicant without regard to health status. In other words, if you apply for coverage, you must be accepted. Starting on January 1st, 2014… all health insurance policies must be guaranteed issue.

#3) Health Insurance Mandate: The law imposes a health insurance mandate (for nearly all Americans) to take effect starting in 2014, based on the Congressional power to regulate tax. Know where (and how) you can obtain affordable coverage.

#4) Individual & Family Plans (IFP): Currently there are only two segments of health insurance: A) Individual and Family Plans and B) Group Health Insurance.

The Individual and Family Plan (or IFP) segment is set to expand considerably starting in 2014. The reason: preexisting conditions must be covered at that time.

#5) Large Employer Mandate (+50 employees): Starting in 2014, the Act requires employers with 50 or more equivalent full-time employees to offer health insurance that is “affordable, minimum essential coverage” (and if not, face tax penalties). Specific questions about tax penalties should be directed to your tax advisor.

 #6) Account-Based & Defined Contribution Health Planning: Health Savings Accounts (or HSAs), and Health Reimbursement Arrangements (or HRAs) will be an important tool for employers in the post healthcare reform environment. Look for health benefits planning strategies to continue to move in this direction. “Equity-based” health planning involves pairing-up health insurance policies with tax-advantaged reimbursement accounts.

#7) Medicare & Medicaid: There were significant portions of the law that were relevant to Medicare and Medicaid. You’ll want to stay up-to-date on those topics. If you have questions, we’re currently referring them to our Medicare and Medicaid affiliates.

#8) Changes: This was large and far-reaching legislation… over time, legislation of this magnitude has a tendency to go through changes. Know and understand this may occur (most likely if/when things don’t go as planned). Some of these changes may be as important as the above mentioned topics. In the years to come, there may be additions and subtractions to portions of the law. Simply: you’ll want to stay up-to-date with changes.

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That concludes our introduction of healthcare reform’s major players. The above “cast of characters” will give our clients, potential clients, and colleagues a good place to start when trying to understand this large (and sometimes complicated) piece of legislation.

Over the coming weeks and months, we’ll continue to roll out information that is pertinent to these subjects. We invite you to follow along as we continue to move forward. We like sharing great information. We’ll be your resource in one place.

Thanks for stopping by, we hope our information was valuable to you. 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

Important Editor’s Note 11/22/2013: Since posting these original blog posts, federal guidance regarding “Stand-Alone HRAs” (which are addressed in some places throughout these articles) has undergone significant changes. In order to stay in full IRS/ERISA compliance, please be advised that there are now many additional considerations when adopting this type of benefits planning strategy. Consult with a proper broker or insurance professional before utilizing employer dollars to purchase individual health insurance policies. 

At Policy Advantage Insurance Services… we’re all set to keep-up with the political climate.

Begin to check our various outlets over the next few weeks after tomorrow’s election. We’ll share some great information that’s relevant to the results.

Thanks for stopping by, we hope our information was valuable to you. 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 (you are here): http://www.policyadvantage.wordpress.com