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Department of Labor: Insurance Exchange Notice to Employees

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Today’s blog post is about the insurance exchange notices that need to go out to employees of nearly all employer groups in the United States. The Department of Labor is calling this correspondence the “model notice.” It contains information about the upcoming health insurance marketplaces.

There are provisions in the healthcare reform bill that were designed to expand coverage and access beginning in 2014. Some of these provisions included the establishment of what are called state health insurance exchanges (or marketplaces). With these exchanges, premium tax-credits may assist qualified individuals or families in the payment of their health insurance premiums. As such, employers need to distribute notices to their employees about the coverage options available through the new marketplaces.

On January 1st, 2014 individuals and employees of small businesses will have access to a new individual private competitive health insurance market – the Health Insurance Marketplace. This marketplace will provide a “one stop shop” to find and compare private health insurance options. Open enrollment for the new health insurance exchanges begins on October 1st, 2013.

Section 1512 of the Affordable Care Act creates a new Fair Labor Standards Act (FLSA) section 18B requiring a notice to employees of coverage options available through the Marketplace. You can find copies of the approved “model notices” here:

  1. Department of Labor “model notice” for employers that are currently offering health insurance coverage.
  2. Department of Labor “model notice” for employers that are not currently offering health insurance coverage.

Which employers must provide notice?

The FLSA section 18B requirement to provide a notice to employees of coverage options applies to employers to which the FLSA applies. In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. The FLSA also specifically covers the following entities: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state and local government agencies.

Which employees do I provide notice to?

Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.

When does the notice need to go out to employees?

With respect to employees who are current employees before October 1, 2013, employers are required to provide the notice no later than October 1, 2013. The notice is required to be provided automatically, free of charge. Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the Department of Labor will consider a notice to be provided at the time of hiring, if the notice is provided within 14 days of an employee’s start date.

Again, you can find copies of the approved “model notices” here. There are two of them. One is for employers that are currently offering health insurance coverage, and one is for employers that are not currently providing health insurance coverage:

  1. Department of Labor “model notice” for employers that are currently offering health insurance coverage.
  2. Department of Labor “model notice” for employers that are not currently offering health insurance coverage.

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: https://policyadvantage.com

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Insurance Alphabet: Letter E

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E is for:

“Exchange”

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Exchange: When used as a noun, an exchange is a place where goods or services are bought or sold. In this blog post, we’re specifically referring to exchanges that sell major-medical health insurance policies. These are otherwise known as health insurance exchanges.

The reason that we’ve selected this topic is because you’re going to hear a lot about “exchanges” over the next few years (and into the future in general), when it comes to health insurance. There are two types of health insurance exchanges:

  1. Public Health Insurance Exchanges
  2. Private Health Insurance Exchanges

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A Public Health Insurance Exchange is an exchange that is set up, funded, and administered by the government. There are a combination of ways that this takes place:

  • A) State-only administered exchanges.
  • B) Joint state/federally administered exchanges.
  • and C) Exchanges administered by the federal government only.

Public Health Insurance Exchanges were a large part of healthcare reform (ACA/Obamacare). These are the new exchanges that are mandated by the law. The purpose of these exchanges is to help expand affordable coverage to the uninsured. The state exchange in California is called “Covered California.”

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A Private Health Insurance Exchange is an exchange that is set up, funded, and administered by private parties. In other words, the government is not involved (examples of private parties: employers and their employees).

There are a number of different strategies when setting up a Private Health Insurance Exchange. Most of these strategies revolve around the “defined contribution” health planning concept that we’ve discussed in past blog posts. This concept (defined contribution) is gaining importance as we move forward in health benefits planning. Third party administrators (or TPAs) facilitate the administration of Private Health Insurance Exchanges.

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: https://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

State Health Insurance Exchange: “Covered California”

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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:

Home Page: https://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

Benefits Chalk Talk: Individual Tax Penalties Starting in 2014

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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: https://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

Benefits Chalk Talk: State Health Insurance Exchanges

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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.

HealthBenefitsChalkTalk1

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

Word Press (you are here): www.policyadvantage.wordpress.com