The issue of cost is one of the most controversial aspects of the Affordable Care Act (also known as Obamacare). Supporters of health reform say requiring businesses and individual to purchase insurance will drive down costs and make insurance more affordable for everyone.  Opponents say insurance offered through federal and state Marketplaces will be much more expensive than the average person can afford and requiring businesses to provide health coverage will force them to decrease staff to offset the cost of insurance.

The Health Insurance Marketplaces are intended to encourage more competition to help bring down rates. As businesses and individuals enter the insurance-buying pool, experts are concerned the insurance pool will be overwhelmed with buyers who are sicker and consume more services, which causes rates to rise.

In the meantime, to help offset the cost of insurance, you should determine if you are eligible for the Small Business Health Care Tax Credit.  If you are a small business or tax-exempt organization that provides health insurance coverage to your employee’s, you may qualify for the Small Business Health Care Tax Credit, where you can claim up to 35% of health insurance premiums (25% for tax-exempt organizations).  Use the IRS worksheet to help you see if you qualify.  www.IRS.gov/aca

Beginning in 2014, these tax credits will increase to 50% (25% for tax-exempt organizations) and are only available to qualifying employers who purchase coverage through their state or federal Marketplace.

Here is a simple way to determine if your Small Business qualifies:

Are you average employee wages less than $50,000?    Yes    or    No

Do you pay at least half of the insurance premium for your employees at the single (employee only) coverage rate?      Yes    or     No

If you answered “Yes” to both of the above you may be able to claim the Small Business Health Care Tax Credit.  Visit http:www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers, for more details.

Or call your Insurance Broker.

Another question raised for Employers is; am I required to provide my employees with health Insurance?

Beginning in 2015, employers may be subject to hefty penalties if they fail to offer coverage to full-time employees and their dependents or offer coverage that does not meet affordability or minimum value standards, and at least one full-time employee receive a premium tax credit through the Health Insurance Marketplace.  This is referred to as employer mandate or Play or Pay.

To help determine if an employer will be subject to penalties under the Affordable Care Act beginning in 2015, ask yourself these questions:

1. Do you have at least 50 full-time equivalent employees?
2. Do you offer coverage to employees?
3. Does the insurance pay for at least 60% of covered health care expenses for a typical population (minimum value)?
4. Do any employees have to pay more than 9.5% of family income for their insurance coverage?

If you answered “Yes” to questions 1 – 3 and “No” on 4, no penalty will be assessed because you offer affordable coverage.

You will want to contact your insurance broker for assistance in determining full-time employee and equivalent status.

If at least one employee received a premium tax credit or subsidy in their state Marketplace, you must pay a penalty.  The penalty is $2,000 for each full-time employee after the first 30.

If you do not pay at least 60% of the covered health care expenses, employees can choose to buy coverage in the Marketplace and may receive a tax credit or subsidy; The Employer must pay a penalty for not offering affordable coverage.

If an employee has to pay more than 9.5% of their family income for insurance coverage, the employee can choose to buy coverage in the Marketplace and may receive a tax credit or subsidy.  If this occurs, the Employer will pay a penalty for not offering affordable coverage.  The penalty is the lesser of $ 3,000 for each full-time employee who receives a government subsidy in the Marketplace or $ 2,000 for each full-time employee after the first 30.

For more information, contact Henderson Insurance & Financial Services. (909) 392-5535

 

 

Will the access to employer coverage be verified?  If you are thinking you get a free pass to subsidized exchange coverage in 2014 just because the mandate was postponed, we urge you to think again.  The IRS will have access to the information for the 2015 tax year and could possibly check your status in 2014.  Not worth the risk of trying to cheat the system.

Another question came in asking if rates will change during the year and this is what their answer was: Because the (plan, rate, network) information is going to be made available only at the time the website is going to open for business on October 1, 2013, their guess is that there is going to be quite a bit off (up or down) in their projection regarding the number of sign-ups in each bucket.  Insurance companies cannot revise their prices in the exchange or off the exchange for 2014.

Regarding pre-existing condition- If you choose to keep your current insurance plan until the renewal date rather than enrolling in an ACA-compliant plan during the open enrollment period your plan will continue to have pre-existing condition rating until its renewal date.

Child-Only plans still available:  If one parent lives in one state and is required to carry insurance on a child that lives in California, you will still be able to buy child-only Covered California coverage for the child in California.  The child may be eligible for a subsidy depending on the income of the household of which the child is a part.

COBRA question:  If your COBRA coverage ends during the year, you will receive a certificate of creditable coverage from your COBRA insurer.  That will serve as proof to qualify for a Special Enrollment Period (SEP). You will be able to coordinate the effective date of your new coverage on the first of the month at the end of COBRA coverage.  BY the way, if you are eligible for a subsidy, there is no need to wait for the expiration of you COBRA coverage.  You can enroll in the “subsidized exchange” during the initial open enrollment period.

What does “Fair Share” mean?  The ACA considers anything less than 9.5% of your income.  So let’s say you are single and earn $45,000 for a year in Los Angeles County.  The Covered California calculator says you are not eligible for a subsidy.  It means you will pay less for coverage than people living in areas with higher insurance costs or people who have higher costs due to their age.  Even though your income is less than 400% FPL, there is no subsidy available because the premiums are low enough for your fair share.  This converts to approximately $365.00 per month in premium.

Upgrading coverage during the year: You cannot upgrade your coverage either in-exchange or off-exchange, once the initial open enrollment period ends on March 31, 2014, until the next open enrollment period beginning 10/15/2014.  We urge you to carefully consider the plan you choose as you will see there is no changing it during the year.

How often can the insurance companies raise their rates?  Rate adjustments will occur once a year with the new adjustment coming in January 1 each year going forward.  Also, an adult having a birthday during the year, will see the adjustment in January as well.

1.  Pay attention to the your Liability coverage: Most policies specify the company will pay up to $300,00 in total liability coverage for an accident however only $100,000 for each person injured.  This would mean, if you are at fault in an accident this would leave you with a $200,000 lawsuit.
2. Consider buying an Umbrella policy: If you have assets or likely to have them in the future, adding to your liability protection of $1,000,000 or more is recommended and fairly cheap.
3. Have coverage for a rental after an accident: Make sure your policy covers the cost for rental in the event of an accident or covered loss.  This coverage will provide a set amount for you to rent a car while yours is in the body shop being repaired.   This is an added coverage and you must ask to have it included.
4. Your Medical Bills: If you do not have medical coverage on your auto policy the insurance company will not pay the medical bills for you or anyone in your car during an accident.  If someone else was at fault their insurance would cover you, that is, providing they have enough coverage.   Make sure you have uninsured/underinsured motorist coverage or a separate health insurance policy.
5. When you are on Business:  Your auto insurance policy provides coverage during your regular commute to and from your job.  If you use your car for work in any other way you may not be covered unless you have “business use” coverage.
6. If you have a claim:  Start a diary. Put everything in writing, makes, dates, what was said.  Save receipts and get a copy of the accident report. Know the claims process: How will the insurance company pay out? Brand name or generic parts to fix the car? Will you have to go to an approved body shop or mechanic?
7. Someone else drives your car or you drive a car you do not own: If you allow a friend or family member to drive your car, that person or even your car might not be covered, depending on the insurance company/policy. Renting a car, you may also need to purchase extra coverage and some policies will not provide protection.
8. Comprehensive Coverage: covers damage to your car in situations other than a collision with another car or a stationary object.  Provides coverage for  theft, vandalism, damaged by flood.
9. Collision Coverage: If a collision occurs with another car or a stationary object and you are at fault, your policy will provide coverage in order for you to pay for the repairs to your car.
10. Uninsured/Underinsured Coverage: If you are hit by someone who does not have enough insurance or does not have insurance, this is how this coverage would generally work:
    1. Uninsured Motorist Bodily Injury – This may pay for damages when a covered person is injured and the person at fault for the accident does not have liability insurance.
    2. Underinsured Motorist Bodily Injury – This may pay for damages when a covered person is injured and the person at fault for the accident does not have enough liability coverage.
    3. Underinsured/Uninsured – This may pay for damages when a covered vehicle is damaged and the person at fault for the accident does not have liability insurance or does not have enough liability insurance.

 

Read your policy to understand your coverage.

 

Obamacare Enrollment for 2014

Open enrollment starts October 2014.  You can enroll online, by phone, in person or by mail.  The cost is the same if you choose a Licensed Agent or Broker, or go direct to the Covered California website.  Agents and Brokers will help consumers enroll through an exchange website and assist in securing an eligibility determination and in selecting a plan.

Have the following ready before you start to enroll:

• Number of people being enrolled
• Birthdates of each person
• Home zip code
• Most recent income tax filings, including dependent tax information and head of household status (if any)
• Legal immigration information, such as your immigration number (if applicable)
• Information about your status as a member of a federally recognized tribe

Are all Insurance Companies offering the same?

If a carrier participates in Covered California, they must also offer the same plans or “mirror” those plans off-exchange.  But participating exchange carriers can also offer some alternative plans.  For example, Anthem will offer 8 Bronze plans and 4 Silver plans off-exchange that do not mirror the exchange plans.  Of course, they still have to be ACA-compliant and conform to the actuarial values for each level.  Blue Shield, on the other hand, will be offering no alternative plans off exchange, only mirrored plans.  Cigna, who does not participate in Covered California, will be offering only alternative plans off-exchange.

H S A’s and the Subsidies

We have not seen anything definitive as to how the H S A plans will qualify for a subsidy for the premiums.  We doubt the IRS will allow for a double tax benefit and they may come to some accommodation for a partial reduction of the H S A contribution.

How soon can you get a quote for the ACA compliant plans?

Insurance Companies are taking steps to handle this.  Blue Shield announced recently that they will stop accepting online applications for their current portfolio of plans on September 25^th and will begin displaying and quoting ACA-complaint metal plans on September 26, 2013 with October 1st the first day to submit applications for ACA-complaint plans.  Only paper applications for the existing portfolio will be used between 9/26/13 through 11/15/2013 with the last effective date of 12/1/2013.

Husband and Wife with 2 children in college.

The husband is on Medicare and the wife is not.  The children live at home and currently have student health insurance through the college.  The household income is about $ 50,000.  The household income is used regardless of the number of members to be covered and you can enter only one person to be covered.  The children can stay on their college insurance because it qualifies as minimum essential coverage.

Pediatric dental coverage in 2014

Covered California announced today that insurance companies will be offering pediatric dental coverage in 2014 in both the Exchange’s individual and the small-group employer markets. They offer stand-alone plans for children’s dental coverage in the first year of the new health benefit exchange, which will open for enrollment Oct. 1.

Dependent in Another State

Covered California has yet to publish comprehensive guidelines for “household” determinations, but we will go out on a limb for you.  If you child is a full-time resident of another state, he or she may apply for that state’s exchange coverage and be eligible for premium assistance.  You would not count this childe as part of the household in California regardless of tax status.  Your child must be a full time student or disabled to be claimed as a dependent over the age 18 and that expires in the year he or she turns 24.

If your income changes after you get a Subsidy-

You can avoid advance tax credit repayments by reporting income changes as soon as possible.  The government figures if no families report income changes during a single year, 30% of those receiving subsidies would owe the government a median of $857.00 each.  If families report income changes in a timely manner, only 23% would owe money to the government and those that do would pay a median of $ 343 each.

Can we see the Provider Networks being offered in Covered California plans?

The provider networks are not expected to be published prior to the start of open enrollment.

 

1.  What it covers:  A homeowners insurance policy will cover damage to your property and your personal property in the event of certain storms, fire, theft or vandalism.  Provides liability coverage if someone is injured on your property and decides to sue.  It will also provide coverage in the event you need to rent a hotel if you are temporarily displaced from your home due to a covered loss.  It can also protect your personal belongings outside of your home too.  If your car is broken into and your personal items were taken, your homeowners insurance will most likely provide coverage.  Most homeowner’s policies will cover your belongings when you are traveling as well.
2. What is does not cover:  Earth movements such as, earthquakes, landslides, sinkholes, power failure, war, nuclear hazard, government action, faulty zoning, bad repair or workmanship, defective maintenance and flooding.   In some high risk areas, windstorms damage such as tornadoes or hurricanes will be excluded.
3. Water damage can be confusing; as a rule, water from above, such as rainwater, burst pipe in an upstairs floor is normally covered however, water from below such as backed-up sewer or ground flooding generally is not. If you live in an area prone to earthquakes or floods you should consider supplement coverage.
4. Get Replacement Cost Value:  You want to be able to replace everything you lost with similar new items.  Make sure your policy spells out that both your home and its contents are covered by replacement-value insurance.  Look for extended or guaranteed-replacement-value coverage.  This will cover rebuilding no matter what the cost.
5. Understand the claims process: Insurance companies are vastly different when it comes to making you whole again after a loss.  Know the timetable on replacing and how and when claims are paid.
6. Take inventory:  Take photos or video of your home, walking through each room.  Don’t forget storage areas also. Keep the photos or video in a safe place, one for your home and another in a fireproof safe or safety deposit box.
7. Buy Floaters: Typically your homeowner’s policy limits the amount they will pay in high-valued items, things like computer equipment, jewelry, furs, collectibles, sound equipment, etc.   You may want to consider purchasing a special “floater” policy.
8. Purchase Inflation Guard protection: This will cover the increasing cost of rebuilding to meet the current cost to replace your home.   When making improvements to your home, this is an important factor to consider and your policy needs to be updated.
9. Consider Flood and Earthquake Insurance: Maybe not everyone needs it, however if you live in an area prone to floods or earthquakes these are highly recommended.
10. Think about purchasing an Umbrella Policy: Your Liability coverage will payout if someone sues you however, most lawsuits will be in the millions.  If you have assets, purchase an umbrella policy which will add the extra liability coverage to your home and auto policies.  These are relatively cheap, normally around $ 200 – $ 400.00 per year.