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New Healthcare Reform Mandate Delays

NEW-OBAMACARE-DELAYAs you have likely heard, the Healthcare Reform Act requires that all large employers (50 or more workers) provide insurance to their employees. And not unlike several other addendums, this mandate has been pushed back – again. The administration is basically scaling back completely for medium sized businesses and less so, but still significantly, for the largest. Here are the keys to understanding the changes:

  • Businesses with 50 to 99 employees receive what amounts to a full year’s pass. For these companies (which affects the business segment that employs around 7 percent of the entire workforce), they will not have to worry about the mandate until 2016.
  • Business who employ 100+ workers no longer have to cover 95 percent of employees, as the new addendum say only 70 percent. Of course, like the aforementioned addendum, this only holds true until 2016 when it will revert back to the original policy of 95 percent. Incidentally, this directly affects businesses that account for the employment of 66 percent of today’s total workforce.
  • Volunteers (like volunteer firefighters) will NOT count as employees inasmuch as health care is concerned. This effort was to eliminate considerations to remove such volunteer positions.

 

While in another world, such mandate delays could have political ramifications. However, when it comes to the Healthcare Reform Act, one of the most polarizing topics in the national spotlight, most have already taken their position so this latest maneuver is not likely to move the needle. And as far as what it means for those covered, numbers show that the delay will likely amount to a relatively small, if not completely insignificant change.

Health Care Reform: How Will I Be Affected?

Click for image for larger version.

Click for image for larger version.

While it is certainly impossible to live in this Country without having heard about the Health Care Reform Act – it is not uncommon to be unclear as to how it may affect you personally (or with regard to your business.) For your convenience, we have taken the liberty of posting a graphic that excellently illustrates the impact of Health Care Reform on a National level to better illustrate its scope and reach:

5 Important Questions for SMBs Regarding Cyber Liability & Data Breach

cyber-securityCyber criminals do not discriminate and often target small entities. In fact, “31% of all breaches in 2012 occurred at organizations with 100 or fewer employees,”1  spanning across diverse industries including finance, retail, manufacturing, technology, government, and more.

While some business owners may understand the dangers of  hackers infiltrating their network and stealing private information (i.e. credit card/checking account numbers), most believe their IT systems are secure with passwords and firewalls. Moreover, most seem comfortable that even if their network were penetrated, a privacy breach is covered under their existing business insurance. Unfortunately, that’s not the case at all.

Here are some questions that SMB owners should be asking about their coverage in today’s tech-heavy world:

1. “I have a general liability policy, doesn’t it cover me against cybercrime?”

No. The property policy protects the computers but not the data that is stored on them. The general liability policy specifically excludes claims of copyright, trademark and trade secret infringement. Although there have been limited instances of coverage for privacy breach under Liability Policies, relying on this for coverage is not in your best interest.

Business Interruption coverage, an essential part of any businesses risk management plan, will not respond to outages caused by computer viruses or hackers. In addition, 47 U.S. states now have laws requiring notification in the event of a potential loss of PII (personally identifiable information), as well as fines and penalties for not reporting the breach. Many carriers offer policies that can cover regulatory fines or penalties incurred because of a data breach.

2. “How much does Breach Insurance cost?”

Cyber liability insurance is still a fairly new concept, so there’s a lot of variation among policies, and a lot of room for negotiation. We have seen policies starting as low as $995 for a small business and premium rises as the business gets larger.

3. “We have an IT department and we have firewalls. Isn’t that enough?”

Not usually. Many data breaches occur because of an employee error or an “inside job” from rogue employees. From passwords tacked on computer screens in plain sight and employees opening suspicious email and downloading malware to lost laptops and smart phones, a large portion of security breaches occur because of employee actions. Also, keep in mind that a data breach can occur from paper records and a properly written policy will provide protection for a breach of paper files. Outdated customer information, old credit card receipts and employee files that have been thrown into the Dumpster are just as vulnerable as if a hacker logged into your network.

4. “We use a third party vendors. Do we still need this coverage?”

Are you taking online reservations? Are you processing credit card payments online? Even if you utilizing a third-party vendor and your network is not storing the data, your customers’ personal information, in case of a data breach, is still your responsibility.

5. “What are the state’s privacy notification laws, fines and penalties?”

When it comes to the unauthorized release of personally identifiable information (PII), there is no federal mandate governing privacy notification, so each state has its own law, so you must be aware of your responsibility at the state level.

In California, for example, S.B. 24 requires the inclusion of certain content in data breach notifications including a description of the incident, the type of PII breached, the time of the breach, the toll-free numbers and the addresses of credit-reporting agencies. In addition, S.B. 24 requires the breached business to send an electronic copy of the notification to the California Attorney General if a single breach affects more than 500 residents. (California already requires notice to the Department of Public Health for breaches involving patient medical information).

1 [source: Travelers]

4 Things We Know About ObamaCare: One Week In

WeiStock_000026178272XSmall knew the ObamaCare launch was going to be a rough road. And over the past week, things seemed to grow evermore complicated resultant of numerous factors – all of which could have and should have been addressed by the federal government prior to implementation.

 Consumer Confusion

  • With the opening of the exchanges, consumers are more frustrated than ever. Consumers (making up individuals and business owners) are still unsure of the benefits of accessing the exchanges, what kinds of tax credits they will be eligible for, and where to turn for the answers. In many cases, consumers are confused by the fact that while you can purchase health insurance now, coverage does not begin until January 1, 2014.

 

Enrollment Glitches

  • It has been all over the news that state and federal websites have been crashing as consumers flock to dedicated sites to purchase coverage. Some tout this as an example of the need for uninsured individuals to purchase health insurance, which was not previously available to them. In reality, it is nothing more than tire kicking/comparison shopping that is stalling a system that was promised as, “electronic and seamless,” demonstrating a gross mismanagement of launch exchanges. What was supposed to be, “as simple as buying airline tickets on website,” better compares to finding ones way out of an evergreen forest in the throws of a midnight blizzard.

 

Administrative Burdens

  • Once consumers have the ability to access the sites, they are required to provide multiple forms of documentation that were not typically requested with an insurance purchase. This has been reported as being slightly overwhelming to burdensome and in some cases, paralyzing. At the very least, most would agree that the copious amounts of paperwork and documentation necessary to complete a purchase is burdensome.

 

Systematic Frustration

  • Between the shaky launch of the exchanges and the government shutdown, consumers are frustrated and confused. Government workers are being furloughed, yet federal healthcare exchanges are able to still be funded, and are opening. The confusion in the health insurance marketplace, coupled with the government stalemate over the budget and inevitably the debt limit are frustrating, excessive, and unfair to both individuals and small business owners who are doing their best to provide for clients, employees, and their own families. In the meantime, it seems the federal government is tripping over itself to do its basic job function. But, if we take a look at the the opening of the Health Care Exchanges, such futility should not come as such a shock.

 

Newtek CEO Featured in Daily News Article

Barry-SloaneCEO Barry Sloane of Newtek Business Services was quoted in the September 30, 2013 Daily News article “Your guide to Obamacare: Young entrepreneur sees value of New York’s insurance marketplace firsthand.

Mr. Sloane said, ”Although the exchanges are opening, and do provide another way for you to purchase insurance, they are not necessarily the best way to go. Look at the pricing, network size, and the administration costs to make sure that you are making the best decision.”

Click here to read the article in its entirety.

The Three Q’s Of ObamaCare: Quality, Quantity, and Quitting

iStock_000011181067XSmallIt’s important to understand the impact Obamacare will have on your family’s healthcare. The most important effects can be covered with 3 Q’s: Quality, Quantity, and Quitting.

Quality: The Affordable Healthcare Act may change the quality of healthcare in the United States forever. There was time in the United States that the sacrifice of going to Medical School and studying for 8 total years, as well as interning, was well worth the wait of being awarded into one of the most noble professions in society. Doctors were honored, well paid, and well respected. The stresses on the healthcare system, with tort litigation soaring and the lack of accountability in the private and public sector for healthcare, has taxed the profession severely. Our medical clientele representing small businesses are seriously concerned about the quality of care for patients in the new environment, where 11 million or so new patients will have access to care with the same pool of physicians. The Affordable Healthcare Act may take away the freedom of good practice and end up overworking and overtaxing medical professionals.

Quantity: The supply of new physicians entering the market may be limited. The best and brightest from all over the world used to want to be in America to practice medicine. In the new highly regulated environment, the best and brightest minds may opt out for other professions in less regulated careers where they can let their talents and creativity provide a valuable resource to society. This potential effect can dramatically reduce the quantity of physicians in the United States.

Quitting: There may be an increased number of quitters that includes doctors, hospitals, and private health insurance  - providers who can no longer make a living or a profit by practicing under these ACA rules. Many private insurers are reducing plans, leaving states, raising deductibles, and altogether leaving the system, as they can no longer provide a return on investment, on their capital or their time, by providing healthcare to American society within the current framework. Quitting the system, obviously, will grossly affect our other 2 Q’s (Quality and Quantity). Some have called this “Quazy.”

5 Things Small Businesses Need to Know About Healthcare Reform

Counting handsThe implementation of the Affordable Care Act is rapidly approaching and it is important that small businesses have a place to turn to for feedback, advice, and execution. Below are five points that we believe all business owners should take into consideration to help business owners increase their sales, reduce their costs and minimize their risks.

1. Exchanges are not necessarily the answer.

As discussed in our blog posted earlier in the week, Root Of All Evil Or The Holy Grail? Private Market Options In The Age of Obamacare  although the exchanges are opening, and do provide another way for you to purchase insurance, they are not necessarily the best way to go. The private market options can still hold a lot of value and it is best to look at the pricing, network size, and the administration costs of administering the plans to make sure that you are making the best decision.

2. Make sure your broker is appointed on the exchange.

Since the exchanges may be a viable option for some businesses and individuals, it is important to work with a broker. As a broker appointed on the state exchanges, we have the ability to present the private market options and exchange options while helping you decide which is best, as well as a game plan that you can execute. By choosing to go to the exchanges directly you assume a lot of responsibility, and risk making the wrong benefit choice for you and/or your employees.

3. U.S.E  your broker – Understand the coverage, Streamline the services, Execute your strategy.

We encourage business owners to USE our game plan to navigate health care reform.

Understand the coverage -It is key that you understand the plan that you purchase, and how it compares to the other plans in the marketplace. This is vital to understand the price and competitiveness of your plan. It is also important to understand how changes to your staff and health insuranceenrollment can impact your property and casualty policies.

Streamline your services – By streamlining your insurance program, you can more closely monitor your employee benefits to ensure proper compliance, while also cutting the cost. Employee addition and attrition can be administered with dedicated contacts from one company which saves you time and money. Also look at including payroll into the offering to make sure that you can more efficiently manage enrollment to worker’s compensation, health insurance and payroll while making sure that you are compliant with local and federal rules and regulations.

Execute your strategy – Your broker needs to be able to demonstrate the value in working with you and help you execute the goals. Laying out your game plan, and being able to follow through in this turbulent environment is key. If you goal is to improve the quality of your benefits, confirm how you want to do that affordably and sustainably. If your goal is to lower costs, how do you plan on doing that over the long term? Will you do it through cutting benefits, changing your plan structure, or instituting a wellness program? Execution is key, and without the right partner you won’t be able to do it successfully.

4. Ensure you are compliant.

Compliance is key as we look at healthcare reform. By offering health plans that are not compliant, improperly notifying employees of healthcare options, or not following any one of the dozens of other reforms, compliance is key. You can subject yourself to substantial fines or penalties, even potential lawsuits from employees if you do not stay in compliance. Make sure you broker and payroll company provides you with the tools to notify you of deadlines, get free resources, and stay compliant at a reasonable cost

5. Analyze your full insurance program.

While you are looking at managing your compliance, you and your broker need to look at your full insurance program and see how they work with one another. Employees on your health insurance should match the employees and payroll on your package policy, and your worker’s compensation. Your contact information on all policies should be checked to make sure they are consistent. Furthermore, you take inventory of policies and coverages to make sure you understand what insurance coverages you have in place, where you are deficient of coverage, and how you can continue to protect your business.

Root of All Evil or the Holy Grail? Health Insurance in the Age of Obamacare

girl-reaching-appleMany believe that the private health insurance market has been the “root of all evil” when it comes to offering affordable health care in the United States today. Ironically, these same companies that many consumers dislike may end up being the same companies that consumers turn to with the implementation of Health Care Reform.

With the implementation of health care reform, companies will have the option to sell their plans on the exchange, off the exchange or have a plan offering in both markets. Some carriers will choose to sell their plans on theexchange in an effort to enroll more consumers that ordinarily would not be able to purchase coverage without the help of government subsidies. Although these plans may be more affordable and purchasing them will come with help from the US government through subsidies, their networks are not appearing to be as expansive as those of a private market carrier. This is vital to obtaining the value and service that you will need as a consumer. If you are out of network or do not have an adequate number of health care providers in network, you may be left with an insurance plan that does not cover some major healthcare expenses.

The private market plan networks are expected to remain as expansive as they are now, and for many consumers are the reason why they pick a certain plan. Their plan option may cost more than another option they may be looking at, however, if that network has more doctors available, or nationwide coverage for an individual that travels a lot, then a higher premium may be a small cost to ensure coverage.

The private market options will also be able to offer the package pricing on the ancillary lines of coverage that are not available through the exchangecurrently. United Healthcare, Aetna, and Humana, and others that offer dental, vision, disability, and group life products, will be able to integrate many of these products and services into existing group health offerings. Pricing discounts, streamlined and consistent billing, as well as consistent online user access are all benefits of implementing a group health insurance policy through the private market. By going through the exchange, these services need to be placed in addition to exchange plans, which can create duplicate processes which can be timely and expensive for a small business owner.

Carriers like Aetna and United Healthcare have been very vocal lately, issuing press releases in some of the largest markets for healthcare, stating that they will not be participating in the state based exchanges. Aetna has advised that they will not be participating in the New York or Connecticut exchange, and United Healthcare will not participate in the New Jersey, or Pennsylvania exchanges. This is catching many off guard as these titans of the private market believe that they can offer coverage that is more reasonably priced and more accessible by consumers by not participating in the exchange. This news will definitely disappoint many as they are looking to enroll in exchanges with a more established and reliable partner in the healthcare space. This also provides some insight into the eyes of the carriers to the strength of the exchanges in terms of cost and plan offering of healthcare as opposed to what they can deliver to consumers outside of these marketplaces.

Understanding The Healthcare Exchange Plan Offering

healthtech600x400*304An exchange is an online market place where individuals will have the option purchase health insurance
starting on October 1. These exchanges are new to most health care consumers and may confuse many who are not familiar with the differences in coverage options, and why an exchange plan may or may not be right for them. Below, we have broken down what the health exchange plans will look like and how they compare to some private market options.

The health care exchange plans were created with five different coverage options, all of which have been broken down below:

  • Catastrophic plans offer limited physician’s visits, and higher copays, deductibles, and lower monthly payments. Only individuals under the age of 30, or that qualify for the “hardship exemption” are eligible the purchase a catastrophic health plan.
  • Bronze plans will have coinsurance levels of 60%.
  • Silver plans will have coinsurance levels of 70%.
  • Gold plans will have coinsurance levels of 80%.
  • Platinum plans will have coinsurance levels of 90%.

The copays, deductibles and coinsurance will be the highest for the consumer with the bronze plan given that the carrier will only be responsible for 60% of the healthcare costs. The copays, deductibles and coinsurance will be less for the silver, gold and platinum plans, with the platinum plan having the lowest copays, deductibles and coinsurance. With the lower out of pocket costs for the consumer however, come the higher monthly premiums.

  • Copays are a fixed amount (for example, $15) you pay for a covered health care service, usually when you receive the service.  The amount can vary by the type of covered health care service.
  • Deductibles are the amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. For example, if your deductible is $1000, your plan won’t pay anything until you’ve met your $1000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.
  • Coinsurance is your share of the costs of a covered health care service, calculated as a percent (for example, 20%) of the allowed amount for the service. You pay co-insurance plus any deductibles you owe. For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your co-insurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.

In addition to plans being categorized under a metallic system for easier comparisons, all health insurance plans will need to provide specific benefits to consumers. The following is a list of the benefits to be covered under all of these qualified health plans.

  • ambulatory patient services
  • emergency services hospitalization
  • maternity and newborn care
  • mental health and substance use disorder services including behavioral health treatment
  • prescription drugs
  • rehabilitative and habilitative services and devices
  • laboratory services
  • preventive and wellness services and chronic disease management
  • pediatric services (including oral and vision care)

It is important to note that for small business owners and individuals alike, that dental, vision, disability, life and critical illness policies are not covered under exchange plan options. These coverages are going to remain in the private market, and will not be required under the Affordable Care Act. Given the importance of these coverages to many consumers, these coverages will still need to be obtained in the private market, and can be double work for many if they need to go somewhere else to purchase these coverages.

The opening of the exchanges provides even more value for the broker to consumers, and solidifies their role in the health insurance process more than ever before. Make sure to check out our blog on “Understanding the Healthcare Exchanges” to understand the 5 developments that you need to consider when the exchanges are rolled out October 1.

 

Understanding The Healthcare Exchanges

The health care exchanges are being rolled out on October 1st and 50 million people will be encouraged to go to the exchanges to obtain coverage. Upon the roll out of the exchanges there are 5 developments that you need to consider:

  • What is an exchange? Where do you purchase coverage?

An exchange is an online marketplace where individual and small group consumers will be able to go online to shop for and purchase health insurance  plans. Individuals and small business owners can access the exchanges through navigators, government websites, or independent brokers. Many brokers, like Newtek Insurance Agency, are appointed on the exchange and with private markets. This will help line up the coverage options and differences between the exchanges options, and what is available in the private market.

  • How do the subsidies work?

If you do not meet certain income requirements then the federal government will give you a tax break / subsidy to purchase health insurance. As a consumer, you can choose one of two ways to accept your tax credits:

  • You can accept an estimated credit that will lower your health insurance premiums by a set amount each month. The actual amount of the credit will be settled out when the individual’s taxes are filed.
  • You can pay the monthly premium in full, and then deduct the amount of the coverage from your yearend tax return.
  • What will the coverage look like?

The plans available on the exchange will have metallic coverage levels consisting of catastrophic, bronze, silver, gold, and platinum. Please see our next blog post “Understanding Exchange Plan Options” to be posted tomorrow.

  • What is not included?   

Ancillary lines of coverages are not included. Many people are used to having the option to buy dental, vision, life and disability coverages with their health insurance. These coverages will not be available through the exchange.

  • Is there a benefit to the exchange plan?

If you are unable to afford coverage in the private market then the exchange options are a great value. They will provide individuals, the opportunity to purchase some form of health insurance coverage, whom would otherwise not be able to due to cost.

 



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