Tag: Affordable Care Act

HSA Consulting Services Finds HSA Plans Widely Available and Attractively Priced On ACA Exchanges

Editor note: This article was originally published December 5, 2013 and can be found here.

HSA-qualified plans are widely available, attractively priced, but may be hard to identify on Federally run ACA Exchanges according to a new research report by HSA Consulting Services, a consulting firm focused on the growth of Health Savings Accounts.

HSA plans and tax-advantaged accounts have grown rapidly in their first ten years of existence and now cover more than fifteen million Americans. Many people feared that the Affordable Care Act (ACA) would dampen HSA growth or even eliminate HSA options, especially in light of the Massachusetts experience, where HSAs have not been as popular.

“Our research shows that HSAs play a prominent role in the ACA exchanges, accounting for nearly 20% of total offerings,” said Todd Berkley, President of HSA Consulting Services.

According to the research, HSA plans are 11% less expensive than non-HSA plans offered on the Federally run ACA exchanges. “This will save the typical family over $1,000 per year in premium costs on average if they choose an HSA-qualified plan,” said Roy Ramthun, Founder and Advisor to HSA Consulting Services. “In some states the savings is considerably higher,” Ramthun added.

While HSA plans are widely available and attractively priced, they may be hard to identify on Healthcare.gov, because there is no way to search for an HSA plan or to verify that a plan is HSA-Qualified while on the site.

“If the exchanges survive their slow start and grow as expected, HSAs will likely grow rapidly and be among the most affordable options in the Affordable Care Act,” added John Young, a consultant to HSA Consulting Services.

To download the white paper Health Savings Account Plan Availability On Federally-Run Affordable Care Act Exchanges, visit http://www.hsaconsultingservices.com/.

Learn more about Health Savings Accounts and Sterling Health Services.

HSA-­‐qualified
plans
are
widely
available,
attractively
priced,
but
may
be
hard
to
identify
on
Federally
run
ACA
Exchanges
according
to
new
research
report
by
HSA
Consulting
Services,
a
consulting
firm
focused
on
the
growth
of
Health
Savings
Accounts.
HSA
plans
and
tax-­‐advantaged
accounts
have
grown
rapidly
in
their
first
ten
years
of
existence
and
now
cover
more
than
fifteen
million
Americans.
Many
people
feared
that
the
Affordable
Care
Act
(ACA)
would
dampen
HSA
growth
or
even
eliminate
HSA
options,
especially
in
light
of
the
Massachusetts
experience,
where
HSAs
have
not
been
as
popular.
“Our
research
shows
that
HSAs
play
a
prominent
role
in
the
ACA
exchanges,
accounting
for
nearly
20%
of
total
offerings”,
said
Todd
Berkley,
President
of
HSA
Consulting
Services.
According
to
the
research,
HSA
plans
are
11%
less
expensive
than
non-­‐HSA
plans
offered
on
the
Federally-­‐run
ACA
exchanges.
“This
will
save
the
typical
family
over
$1,000
per
year
in
premium
costs
on
average
if
they
choose
an
HSA-­‐qualified
plan”,
said
Roy
Ramthun,
Founder
and
Advisor
to
HSA
Consulting
Services.
“In
some
states
the
savings
is
considerably
higher,”
Ramthun
added.
While
HSA
plans
are
widely
available
and
attractively
priced,
they
may
be
hard
to
identify
on
Healthcare.gov,
because
there
is
no
way
to
search
for
an
HSA
plan
or
to
verify
that
a
plan
is
HSA-­‐Qualified
while
on
the
site.
“If
the
exchanges
survive
their
slow
start
and
grow
as
expected,
HSAs
will
likely
grow
rapidly
and
be
among
the
most
affordable
options
in
the
Affordable
Care
Act”,
added
John
Young,
a
consultant
to
HSA
Consulting
Services.

Most federally run exchanges will offer more plans, lower premiums than expected, HHS report shows

Editor note: This article originally appeared here.

An eagerly awaited report by HHS released Wednesday on health plan premiums and participation in the 36 states where the federal government is fully or partly running the new insurance exchanges shows that consumers in most of those states will have many plans to choose from and that premiums will be significantly lower than expected in 2014.

When the exchanges open for enrollment Oct. 1, individuals and families will have an average of 53 plan choices, almost everyone will have a choice of two or more insurance issuers, and the average premium nationally for the second-cheapest silver-tier plan will be $328 a month without a federal premium subsidy—16% lower than projections based on Congressional Budget Office estimates. Counting federal tax credits, 56% of uninsured Americans may pay less than $100 per person per month for coverage, including Medicaid in states that expand Medicaid, according to the report.

The number of local plan choices available to consumers on the federally facilitated exchanges will range from six to 169. On average, there are eight different health insurers participating in each of the exchanges, ranging from one to 13. The report found that premiums tend to be lower in states with more participating insurers.

With tax credits, a 27-year-old individual in Texas could pay $83 a month for the lowest-cost bronze plan, while a family of four in that state with an income of $50,000 could pay just $57 a month. That’s only slightly more than the family would have to pay under the healthcare reform law’s tax penalty for not getting coverage in 2014.

“Prices are affordable, and tax credits will make them even more affordable,” said Gary Cohen, director of the CMS Center for Consumer Information and Insurance Oversight, which is overseeing the federally facilitated exchanges, in a conference call. “Premiums will vary from one state to another. States that have competition and rate review have lower rates.”

The new HHS report, combined with previous reports from states running their own exchanges that showed similar results, bolsters the Obama administration’s case that the Patient Protection and Affordable Care Act is achieving its goal of fostering competition in the health insurance marketplace and producing affordable premiums for consumers. The report, however, only discusses premiums, not total out-of-pocket costs including deductibles, copays and coinsurance. ACA supporters acknowledge that out-of-pocket costs may prove a barrier to care for some lower-income exchange subscribers, though households earning less than 250% of the federal poverty level will qualify for cost-sharing subsidies.

There has been widespread uncertainty and concern about how the federally facilitated exchanges were doing because HHS had kept mum about plan participation and rates until releasing the embargoed report today. Observers worried that HHS and CMS staff were overwhelmed by the unexpected task of having to operate so many exchanges, given the expectation that most states would choose to run their own. But opposition to Obamacare and the exchanges by Republican governors and state legislators around the country left the job to HHS in most states (though Democratic-led states such as Illinois and Delaware also did not establish their own exchanges for various reasons).

Another worry was that some major national insurers including UnitedHealthcare, Cigna Corp. and Aetna had announced they were limiting their exchange participation to selected states. That exacerbated concerns about whether enough insurers would participate. But the big insurers’ limited participation has been offset by the widespread participation of other types of insurers, including Blue Cross and Blue Shield plans, local and regional plans including those run by providers, plans operated by Medicaid managed-care insurers, and new consumer-governed co-op plans established by the healthcare reform law.

The HHS report provides an unprecedented look at health plan premiums within and across states, presenting weighted average premiums for all federally approved bronze- and silver-tier plans in 48 states. Under the ACA, plans in the bronze, silver, gold and platinum tiers must have actuarially equivalent benefits to other plans in the same tier; bronze plans cover 60% of subscribers’ average expected costs, silver plans cover 70%, gold plans cover 80% and platinum plans cover 90%. That allows apples-to-apples comparisons of premiums, which was one of the ACA’s goals.

For instance, the second-lowest cost silver plan premium ranges from $192 in Minnesota to $250 in Oregon to $403 in Indiana to $516 in Wyoming.

The report shows that many individuals and families will be able to pay modest amounts for bronze and silver coverage if their income is between 100% and 400% of the federal poverty level and they qualify for premium subsidies. In Jackson, Miss., a 27-year-old earning $25,000 with a subsidy will be able to pay $8 a month for the lowest-cost bronze plan, in Indianapolis, $70, in New Orleans, $74, and in Houston, $81. The cheapest bronze plan, counting the subsidy, will cost more in other places—$123 in Philadelphia, $124 in Sioux Falls, S.D., and $142 in Columbus, Ohio.

For a family of four with an income of $50,000, the price of the lowest-cost bronze plan after taking into account the tax credit will be $0 in Anchorage, Jackson, Miss., and Fairfax County, Va.; $11 in Indianapolis; $26 in Dallas; $32 in St. Louis; $134 in Wichita, Kan.; $202 in Phoenix; and $273 in Columbus, Ohio.

But there are states and local markets that will have limited plan competition, and that is associated with higher premiums. While Arizona has an average number of 106 plans available and Florida has an average number of 102, Alabama has 7, New Hampshire and West Virginia have 12, and Mississippi has 22.

Katrina Reynolds, administrator at the University of Mississippi Medical Center, said the state insurance commissioner found that residents in most counties of that state will have few plans to choose from. She’s not sure how many uninsured Mississippi residents will buy exchange coverage, though she hopes takeup is high, both to improve the health of the population and to lessen the uncompensated care burden on her hospital.

“Today we just don’t have a read on it,” she said. “The only thing we can do is participate and teach people about their plans.”

But in a talk yesterday at the Clinton Global Initiative in New York City, President Barack Obama expressed confidence that a lot of Americans would enroll. “When people look and see that they can get high-quality healthcare for less than their cellphone bill,” he said, “they’re going to sign up.”

New: PCORI Fee Calculation Service from Sterling – Required Under the Affordable Care Act

In late May we notified you of a requirement under the Affordable Care Act (ACA) called the PCORI fee. Due to demand from our clients and broker partners, Sterling now offers the PCORI Fee Calculation service.

We’ve notified our Health Reimbursement Arrangement (HRA) clients, but Sterling can also help employers who don’t administer their HRA with us. The deadline for calendar-year plans is July 31.

Under ACA, the nonprofit Patient-Centered Outcome Research Institute (PCORI) was formed. PCORI was created to research and evaluate clinical effectiveness of medical treatments. The ACA stipulates that this entity will be funded in part by the PCORI fee. The fee is imposed on insurers issuing health insurance policies and on employers sponsoring self-insured health plans. The rule applies to policy and plan years ending on or after October 1, 2012 and before October 1, 2019. The fee is $2 ($1 in the case of policy years ending before October 1, 2013) multiplied by the average number of lives covered under the policy or plan. For policy or plan years ending on or after October 1, 2014, the fee is increased based on increases in the projected per capita amount of national health expenditures.

The final regulation requires insurers and plan sponsors to report and pay the fee for a policy year or plan year no later than July 31 of the year following the last day of the policy or plan year. Again, for calendar-year plans, the first PCORI fee is due July 31, 2013.

Sterling’s PCORI Fee Calculation service includes:

  • Calculation of the average number of lives subject to the fee for the HRA plan year.
  • Calculation of the PCORI fee due based on the average number of lives times $1 or $2 per employee, depending on the plan year end date.
  • Sterling will then provide to the employer the total fee due, the IRS Form 720 that the employer must complete when submitting payment to the IRS, and instructions on how to complete the filing and make payment. We cannot complete Form 720 or process the payment to the IRS.

Our fees for non-Sterling clients are:

Number of Covered Employees Sterling Price for PCORI Fee Calculation
1 – 250 $200
251 – 500 $300
501 – 1,000 $400
1,001+ $500

To take advantage of this service

To take advantage of this service, download the PCORI Fee Calculation application here, complete it and return it to Sterling at 475 14th St., Suite 650, Oakland, CA 94612 or email it to customer.service@sterlinghsa.com. Payment via ACH electronic transfer must be made before we can complete the PCORI Fee calculation. Questions? Call Sterling at 800-617-4729 Monday – Friday from 8 am to 6 pm Pacific.

Why Twentysomethings May Reject the ACA

Editor Note: This article originally appeared here.

Not many twentysomethings spend a great deal of time thinking about health insurance.

In fact, many are woefully uninformed – lacking even a basic understanding of how health insurance works or of health insurance terminology such as “deductible,” “premium” or “co-pay.”

But come January 2014, that will have to change.

That’s when the bulk of the federal Affordable Care Act takes effect, under which young adults face new requirements for having health insurance – including being slapped with penalties for not having it.

“Right now this generation has very low levels of insurance literacy, precisely because there were so few good options before,” explains Tamika Butler, California director of Washington, D.C.-based Young Invincibles, an organization that seeks to expand opportunity for Americans between the ages of 18 and 34.

According to Young Invincibles, young adults remain the most uninsured age group in the country. Here’s a snapshot of the statistics:

  • 29% of 18- to 24-year-olds and 26% of 25- to 34-year-olds are uninsured.
  • By gender, 29% of men and 26% of women in these age groups lack insurance.
  • In California, the numbers are far higher than the national average – with 31% in this age group lacking health insurance. In Los Angeles County, the figure jumps to 39%.

Statistics like these have organizations like Young Invincibles, as well as the insurance industry, and federal and state officials, all focused on young men and women this year in an attempt to get them signed up for health insurance.

Young Invincibles recently launched a nationwide campaign called Healthy Young America, under which its been holding grass roots events across the country to educate twentysomethings about the Affordable Care Act and the various low cost insurance options that will be available come January.

The organization has also developed an app for mobile phones that both helps find doctors and helps twentysomethings understand healthcare terminology.

“We really feel like getting young people insured is going to help everyone,” Butler says. “You need young folks in the insurance pool to bring costs down for everyone. And young folks are really leaders. So we know young people are going to be this gateway to other folks in their community getting health insurance.”

There are three primary options available for twentysomethings when it comes to health insurance under the Affordable Care Act:

  • Stay on their parents’ health insurance if they are under 26
  • Access a health plan through their employer
  • Purchase health insurance through the health insurance “marketplace” created under the Affordable Care Act. The marketplace is the new, website-based mechanism to find insurance. Each state may set up its own version of the marketplace or use the federal version, or customize the federal version for state use. Applicants won’t have to worry about being denied because of health problems. The Affordable Care Act guarantees coverage to anyone who applies for a policy.

But here’s where economic reality sets in.

For the first few years under the Affordable Care Act, the penalty for remaining uninsured is not that steep. In 2014, for example, the penalty is just 1% of annual income or $95 dollars, whichever is greater. (The penalty is paid when filing taxes in April.)

In 2015, the penalty increases slightly – to 2%.

And in 2016, the penalty becomes 2.5%.

When weighing these options, many insurance industry experts say, the choice to forgo insurance is often much cheaper and therefore may be far more attractive to twentysomethings.

“What I anticipate will happen is someone will say ‘I’m healthy and young. I’d rather pay the $95 or 1%,’ ” explains Susan Rider, a broker with Gregory & Appel Insurance in Indianapolis. “Think of someone who is young, single, and only making $35,000. Their penalty is only $350, versus insurance premiums that can be $7,000 or $8,000 a year.”

Rider, an insurance industry veteran with 11 years experience, does two to three presentations each week in an attempt to educate the public about the Affordable Care Act. She too sees a lack of understanding about insurance among twentysomethings.

“It’s not really on their radar screen yet,” she says. “But consumers themselves are not fully educated on what the ramifications are going to be starting in January. It’s not just the young people. It’s everybody.”

The cost of insurance under the Affordable Care Act will vary by state, making it hard for any expert or industry insider to provide a price quote that applies nationwide for a twentysomething or for any age group.

But California is one of the few states that has already unveiled some of the prices it will be charging for health plans. California has established a state-based health insurance marketplace called Covered California. Insurance will be available through this website starting October 1.

There will be four plan levels, – bronze, silver, gold and platinum, explains Craig Gussin with Auerbach & Gussin Insurance San Diego.

California recently revealed prices for the bronze plan (lowest level plan), for people who are 25 years old, Gussin says.

If an individual earns between $11,490 and $17,235 annually, the cost of the silver plan will be between $19 and $57 per month.

If an individual earns between $17,235 and $22,980 annually, the cost of the silver plan will be $57 to $121 per month.

For those earning between $22,980 and $28,725 annually, the premium will be $121,to $193 a month.

And finally, if one earns between $28,725 and $45,960, the monthly insurance bill will be $193 to $364.

The Covered California website also has a cost calculator that can be used to help determine what the approximate cost of health insurance will be.

Gussin, who has been fielding more and more phone calls from twentysomethings with insurance questions these days, has also been doing interviews regularly to help educate the public. Slowly, he says, the message is starting to permeate the consciousness of younger people.

“They know about it more now because they are hearing about it on television and mom and dad saying you’re going to have to get health insurance,” Gussin says. “It’s slowly getting out there.”

Still he says, it may very well be an uphill battle to sign young people up for insurance right away, given the economics.

“If you have a choice of $200 of month or a $300 fine, most people will just wait until 2015 to buy insurance,” Gussin says. “Unfortunately there’s not enough penalty to really make someone run out and buy it today.”

Look for more information on healthcare reform from Sterling in the coming months, as well as new compliance services required under the law.