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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.

 

Countdown To Obamacare Special Report

admin-ajaxIn 100 days, the Affordable Care Act, otherwise known as Obamacare, will become law the land. Some key elements of the the bill will not take effect on January 1, 2014, and, if some Republican members of congress have their way, the law will not be funded and essentially be voided.

However, as Small Business owners know, expecting only one unlikely outcome is no way to run a business. Thus, with barely three months left until the law is in effect, Newtek, the Small Business Authority,
a health insurance broker for small businesses, recognizes there is an urgency for both employers and employees to understand what to expect and what to do.

Beginning Monday, we will be posting five blogs here to help you understand the key elements of the bill that are going to take effect.

The first blog, “Understanding the Exchanges” will cover the newest, and perhaps most critical element of the Affordable Care Act — the online marketplace created by the government to shop for health insurance plan.

The second blog, “ Understanding the Exchange Plans” explains the five different coverage options available on the Exchange.

The third blog, “ Understanding The Private Market Options” addresses the changes many health care plans will be making as ObamaCare takes effect.

The fourth blog, “ The Five Things Small Businesses Need To Know” will identify what is required of employers and employees.

The fifth blog, “ The Three Q’s of ObamaCare: Quality, Quantity, and Quitting” will cover the impact ObamaCare may have on you and your family’s healthcare.

With the end of the year fast approaching, businesses need to anticipate both their responsibilities and their employees needs in the coming year. These blogs should illuminate many of the concerns and eliminate some of the anxiety about the bill.

Fully Enacted Healthcare Reform – What to Expect

Health care reform5As the full enactment of Obamacare approaches, there are many factors that business owners know to look out for.

  • Do I need to provide health insurance to my employees?
  • Should I go to an exchange?
  • How will the mandate impact my business and profitability?
  • How much are my health insurance premiums going to go up?

These are all questions that many business owners are starting to look. Below are some points that you may not have thought of that should go into your business planning.

We all know that health insurance premiums are expected to go up, but do you know how much? Small groups (2-99 employees) can expect to see price increases between 20% and 50% upon the full enactment of reform. When factoring in medical trend, taxes and fees, carrier and product changes and the introduction of community rating, your premiums will jump significantly. As a small business owner, asking your existing broker for a quote is not going to solve this problem as it will require a new method behind providing employees with health insurance. The objective of a health insurance plan should not be to carry you over to the next year with as little pain as possible, but to address your company’s healthcare expenses for the long term. You need a road map that will allow you to offer affordable coverage to employees while keeping costs in line.

Some employers are looking to drop plans in order to remain profitable. Unfortunately, this is not the answer either and can cause more pain than gain. With the Supreme Court upholding the individual mandate, all Americans will be required to obtain health insurance or pay a penalty. The cost of obtaining coverage for individuals is expected to jump 100% – 200% with an average increase of 116%. This is going to push many employees who either have individual plans or would ordinarily look at obtaining individual plans to go to their employer to obtain coverage. By not obtaining small group coverage, you risk losing your talent to other companies who are willing to absorb the cost. This can result in the loss of business and inevitably impact the bottom line more then not offering coverage at all.

The federal funding for health care reform is already facing challenges that will impact all small business owners. In the deal that was reached in the fiscal cliff debate, an agreement was made to cut the remaining $1.9 billion dollars that was set to fund Consumer Oriented Operated Plans (CO-OP’s) through the Affordable Care Act. $1.9 billion was already spent to fund the creation of CO-OP’s. These will remain in place; however no more federal money will be used to create any additional CO-OP’s at this time. This is another example of where the Obamacare bill has been modified in order to maintain its functionality. This will lead to higher costs in term of premium and taxes for small business owners and individuals seeking health insurance in the short term, to cover the high costs of implementing the systems and covering up all other budget shortfalls that would have ordinarily paid for these costs.

The Small Business Authority is here to answer any related questions you may have. Please contact us either by commenting below, tweeting us directly@The_SBA or sending an email to info@thesba.com.

 

Am I Required To Offer Employee Health Coverage?

Employee benefitsIf you have less than 50 employees:

  • Will not be required to offer a company health plan
  • Employees will still be required to purchase insurance
  • Individual premiums can jump 100%+
  • Small group pricing is expected to jump about 20% – 50%
  • Obamacare will create a competitive advantage issue for a lot of smaller companies who may risk losing employees to companies that can provide benefits
  • Changes in health insurance options may have an impact on your property and casualty insurance policies, and should be reviewed to address of all of your risk.

Over 50 employees:

  • Will be required to offer benefits
  • Not all states will have full exchange capabilities
  • Common ownership will be enforced, which means that companies that break employees up into different LLC’s will still be required to offer benefits
  • Small group pricing is expected to jump about 20% – 50%

What does this mean for me?

As a business owner, you need to understand your current health insurance program, and make sure that all benefits are being administered as efficiently and effectively as possible. By integrating your processes (payroll, employee benefits and commercial insurance) you have the ability to streamline the underwriting and administration process, while ensuring the best price and coverage.

Questions? Concerns?

Leave a comment here or call Newtek Insurance Agency at 855-2thesba to review your options, compare your pricing, and determine the option that is best for your business.

5 Health Care Exchange Mandates and What They Are Missing

health-insurance-reform-prep-staff-changes1There are many questions about the health care exchanges: What will they look like, how will they operate, and is there a benefit in going to the exchange for health insurance? Below is some key information to educate you in how they work, and what they don’t have to determine if they are the option for you.

  1. What are the exchanges? Exchanges, originally scheduled to launch as early as October 1, 2013, are online marketplaces where consumers can go to shop for health insurance and compare plan coverages and costs to see which plans are going to work best for them.
  2. Who are the exchanges targeted to? The exchanges will be available to both small business owners and individuals. Any individual / business owner will have the opportunity to choose to either buy from the exchange in their state (whether it is a state or federal exchange) or to continue to buy health insurance from a private health insurance carrier.
  3. What exactly does the exchange offer?  – The exchanges will offer health insurance plans in 4 tiers (Bronze, Silver, Gold, and Platinum). The object of the exchanges is to offer health insurance plans that are easily comparable in terms of coverage, services, and price.
  4. Do exchanges help address the cost of health insurance? Exchanges will offer tax credits to individuals and small businesses to purchase health insurance, but they do not help to fundamentally lower the cost of health insurance today. All available tax credits do lower the amount of money that an individual or small business owner may pay for health insurance, but premiums are still expected to increase at a rate of at least 20% for small business and may exceed 100% for individuals.
  5. Do I have to purchase insurance through the exchanges? No, health care exchanges are being created as another avenue to purchase health insurance, and will not be the only way to purchase health insurance. The private market place will still be available to all consumers and will offer qualified health plans to make sure you are in compliance with reform legislation.

Given this information, many are trying to decide as to whether the exchanges are going to be the right option for them. The exchanges are another avenue to price out coverage; however, there are a number of important points to consider why they may not be right for you:

  1. Experience - The exchanges are brand new and do not have the management experience that the private health insurance carriers do. Individuals do not yet know how to navigate them, what the customer service experiences will be like, and how their renewals will be serviced. All of these are vital to policy holders in terms of offering coverage and managing cost.
  2. Loss History – Being that there is no loss history, there is no indication as to what future pricing may look like. Most carriers are able to forecast pricing and change plans based on previous history. Without this information, it is difficult to say what pricing will look like in future years.
  3. Ancillary Services – Most small group carriers offer dental, vision, disability and life insurance in addition to medical coverage. These are popular affordable coverages that many business owners offer to their staff in one complete affordable package, but would be unable to do so through the exchange.
  4. Broker Relationship – Many small business owners value the relationship with their broker or business services providers. While select brokers will be able to access state exchanges, small business owners still need a trusted advisor to break down the differences between plans offered on the exchanges and their private market plans to see what is the best option for the business owner.
  5. Multi State Plan Implementation – Any small business owner that has a multi-state health insurance plan knows that obtaining coverage for employees and sub contractor’s in multiple states can be complicated. Keeping in mind participation requirements, carrier networks, and the ability for carriers to write in the required states, there is a lot of confusion as to how exchanges will be able to write plans for small groups with multi-state businesses.

Health Insurance for Startup Businesses

646178wmgz269y0“I’m thinking about getting a first time health insurance policy, where do I start?”

Purchasing a health insurance policy for the first time can appear to be very overwhelming, especially in today’s marketplace. Below are some key points to keep in mind to help you simplify and better manage the process to ensure the best results possible in today’s market.

Before you even pick up the phone to call a broker, you must make sure to gather the following information:

  • Census of your current employees – This means collecting the name, home zip code, date of birth, and coverage status of the employee (employee only, employee spouse, employee children, and family). All brokers will need this information in order to get back rates from the carriers.
  • Know your budget – Figure out how much money you are looking to spend on a health insurance policy for your business. Knowing how much you want to send allows you to work with the broker to find a policy and/or supplemental health products that can help you meet your objectives.
  • Familiarize yourself with plan options – Have an idea of what types of plans you would like to offer your employees. Even if these plans may not be feasible, they will allow you to frame the conversation with your broker. Make sure to check out our blog post on which plan options may be best for your business.
  • Pull your benefit summaries – If you are looking to match benefits or to an existing or previous plan, make sure to provide this to your broker as well. This will help streamline the options that your broker brings back streamlined options that look to meet your objectives.
  • Identify your long term goals – You expect your clients, and employees to work with you for a long time, and you should make sure to lay out a comparable plan for your benefits. Figure out the average age of your group, what you want to offer them in future years, and what information you think you will need to provide them in order to understand your vision.

Comment or tweet us @The_SBA with any questions.

Obamacare Employer Mandate Delayed Until 2015

news-delayed-1211pgOur recent blogs and Small Business Authority Market Sentiment Survey have depicted a sense of uncertainty and lack of clarity amongst business owners as to what to do to prepare for the PPAHCA. This uncertainty has continued to exist with a persistent stubbornness. The administration, in its wisdom, has delayed a key provision in ObamaCare, the “Employer Mandate.” Allbusinesses with over 50 employees must provide health insurance to their staff  or face fines up to $3,000 per employee.

The consumer mandate, which Chief Justice Roberts refers to as a tax, is not delaying its start date of 2015, so individuals not covered under an employer plan must obtain health coverage or face fines beginning in 2014. This announcement came yesterday from the Treasury Department, right before the July 4th holiday is to begin for many businesses and Americans.

Our clients, small independent business owners, could argue the merits of the PPACA ad nauseum, but could not really argue the concern over the rush to implement it quickly. As Nancy Pelosi once said, you have to “pass the act to know what’s in it.” This message and confusion has created great pushback by taxpayers, citizens and even government administrators, who know that this 2000+ page act requires a huge cost and administrative burden to implement and manage. Rules are being perpetually rewritten and updated and a January 2014 start date for employers was just unrealistic.

Now, with the consumer mandate still out there, does this shift an economic burden to uninsured workers or consumers for a year? Or just expand our deficit further? Both? Probably both.

The benefits of ObamaCare, such as insuring all, even those with pre-existing conditions, still are on track for January of 2014. Exchanges are planning on being launched on or before January 2015. Most of the act, so far, is in motion. Our clientele still fears government becoming larger in many areas, including healthcare. Our clientele still fears an ever-expanding deficit. Our clientele is also happy that this provision is getting delayed so that they will have more time to plan and make wiser choices given the new uncertainty and changes being brought in by the act.

Newtek Lending a Hand in Sandy Recovery

At Newtek, The Small Business Authority, we just announced several special programs to help small businesses devastated by Hurricane Sandy. Newtek Chairman and CEO Barry Sloane says, “We are here to help small businesses and even moreso, any individuals affected by Hurricane Sandy’s devastation. Newtek, “The Small Business Authority” helps independent business owners in good times and bad, both our clients as well as others. We are a business located in both Manhattan and Long Island and clearly understand the problems these local businesses face. We are here every day, around-the-clock to help with all major causes of concern for small businesses.”

Mr. Sloane offers, “All it takes is a phone call to the 1-855-2-THESBA phone line for help with:

* SBA Disaster Loan Funding

Examining Insurance Policies for wind, flood, and business interruption coverage.

Data Back-up Planning

Cloud Computing Solutions for immediate cost-savings and future disaster protection.

Additionally, it is important to know that The United States has declared several states (and many counties within them) Federal disaster areas. These include areas within Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and West Virginia.

Newtek understands both individuals as well as small business leaders have myriad assistance questions. Answers may be found at FEMA, U.S. Department of Homeland Security’s Website. Assistance can include grants for temporary housing, home repairs, and other programs to help individuals and business owners recover from the Hurricane Sandy disaster. Moreover, this site also provides helpful programs for medical and other serious disaster-related needs not covered by insurance.

U.S. Small Business Administration (SBA) Disaster Loans are available for businesses located in affected counties and States which include loans up to $2MM for certain property losses and/or fiscal damage.

Business owners’ first step should be to register the affected business by calling 1-800-621-FEMA(3362) or by Internet at www.disasterassistance.gov.

Remember that you can call any time, 24/7/365 at 1-855-2-THESBA or, visit us online at www.thesba.com.

 



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