Tuesday, August 26, 2014

ACA/Obamacare: Welcome to Form 1095A, The Health Insurance Market Place Statement

'Taxes? Who wants to think about taxes around Labor Day?

But if you count on your tax refund and you're one of the millions getting tax credits to help pay health insurance premiums under President Obama's law, it's not too early.

Here's why: If your income for 2014 is going to be higher than you estimated when you applied for health insurance, then complex connections between the health law and taxes can reduce or even eliminate your tax refund next year.’

‘The danger is that as your income grows, you don't qualify for as much of a tax credit. Any difference will come out of your tax refund, unless you have promptly reported the changes.

Nearly 7 million households have gotten health insurance tax credits, and major tax preparation companies say most of those consumers appear to be unaware of the risk.

"More than a third of tax credit recipients will owe some money back, and (that) can lead to some pretty hefty repayment liabilities," said George Brandes, vice president for health care programs at Jackson Hewitt Tax Service.

Two basic statistics bracket the potential exposure:

• The average tax credit for subsidized coverage on the new health insurance exchanges is $264 a month, or $3,168 for a full 12 months.

• The average tax refund is about $2,690.’

‘Concern about the complex connection between the health care law and taxes has increased recently, after the Internal Revenue Service released drafts of new forms to administer health insurance tax credits next filing season.

The forms set up a final accounting that ensures each household is getting the correct tax credit that the law provides. Various factors are involved, including income, family size, where you live and the premiums for a "benchmark" plan in your community.

Even experts find the forms highly complicated, requiring month-by-month computations for some taxpayers.

Note: The following is a link to the IRS draft of form 1095A:

http://www.irs.gov/pub/irs-dft/f1095a--dft.pdf

Taxpayers accustomed to filing a simplified 1040EZ will not be able to do so if they received health insurance tax credits this year.’

 
Some highlights:

—You may have heard that the IRS cannot use liens and levies to collect the law's penalty on people who remain uninsured. But there is no limitation on collection efforts in cases where consumers got too big a tax credit. If your refund isn't large enough to cover the repayment, you will have to write the IRS a check. "They are not messing around," Brandes said.

—Health insurance is expensive, and with that in mind, the repayment amount the IRS can collect is capped for most people. For individuals making less than $22,980 the IRS can only collect up to $300 in repayments. That rises to $750 for individuals making between $22,980 and $34,470. For individuals making between $34,470 and $45,960, the cap is $1,250.

For families, the cap is double the amount that individuals can be charged, but the income thresholds vary according to household size. An IRS table may help simplify computation, which is based on the federal poverty levels for 2013.

—There is no collection cap for households making more than four times the federal poverty level. They face the greatest financial risk from repayments, because they would be liable for the entire amount of the tax credit they received.

Those income thresholds are $45,960 and above for an individual, $78,120 and above for a family of three, and $94,200 for a family of four. Ciaramitaro says people facing that predicament should try to minimize their taxable income through legal means, such as putting money into an IRA. The IRS says it will work with taxpayers who can't pay in full so they understand their options.’ - Tax refunds may get hit due to health law credits, USA Today, 08/24/2014

Link to the entire article appear below:

http://www.usatoday.com/story/money/personalfinance/2014/08/24/tax-refunds-may-get-hit-due-to-health-law-credits/14529169/


 



 


 



Friday, August 22, 2014

ACA/Obamacare: The Ongoing Saga of Cyber Security and the ACA Web Site

Make special note of 3:04 to 3:39 of the video regarding the description of the pathways along which one's sensitive personal information travels.

Monday, August 18, 2014

ACA/Obamacare: Just Like Shopping at Amazon

“The insurance industry responds that critics are confusing legitimate cost-control with bias. Some state regulators, however, say there's reason to be concerned about policies that shift costs to patients and narrow their choices of hospitals and doctors.

With open enrollment for 2015 three months away, the Obama administration is being pressed to enforce the Affordable Care Act's anti-discrimination provisions. Some regulations have been issued; others are pending after more than four years.

More than 300 patient advocacy groups recently wrote Health and Human Services Secretary Sylvia Mathews Burwell to complain about some insurer tactics that "are highly discriminatory against patients with chronic health conditions and may ... violate the (law's) nondiscrimination provisions."

Among the groups were the AIDS Institute, the American Lung Association, Easter Seals, the Epilepsy Foundation, the Leukemia & Lymphoma Society, the National Alliance on Mental Illness, the National Kidney Foundation and United Cerebral Palsy. All supported the law.

Coverage of expensive drugs tops their concerns.

The advocates also say they are disappointed by how difficult it's proved for consumers to get a full picture of plans sold on the new insurance exchanges. Digging is often required to learn crucial details such as drugs covered, exact copayments and which doctors and hospitals are in the network.”

“Much of the concern is about coverage for prescription drugs. Also worrisome are the narrow networks of hospitals and doctors that insurers are using to keep premiums down. Healthy people generally shop for lower premiums, while people with health problems look for access to specialists and the best hospitals.”

“Some plans are requiring patients to pay 30 percent or more for drugs that go for several thousand dollars a month. HIV drugs, certain cancer medications, and multiple sclerosis drugs are among them.

Although the law sets an overall annual limit on what patients are required to pay, the initial medication cost can be a shock.”

“The insurance industry trade group America's Health Insurance Plans says there's no discrimination because patients have many options on the insurance exchanges. Gold and platinum plans feature lower cost-sharing, but have higher premiums. Standard silver plans generally require patients to pay a greater share of medical bills, but some have fairly robust drug coverage.

"There are plans on the exchanges that are right for people who have these health conditions," said Brendan Buck, a spokesman for the group.” - Groups claim insurance discrimination in new forms, MSNnews, 08/17/2014


Upon further review, the purchase of health insurance upon the ACA exchanges was advertised as being much like, if not exactly like, the experience consumers have when shopping at Amazon. Implicit in the advertised mantra was consumers with great knowledge in the field of health insurance. Stated alternatively, the implicit argument is that consumers when shopping at Amazon, with great knowledge of blue jeans, shoes, toasters and microwave ovens also have the same basic knowledge in health insurance.

Price really is a signal. Yep, that platinum colored microwave seems nice, but that silver microwave is less expensive. But the bronze microwave is cheap!

Total price as a signal, that is, premium outlay, maximum out-of-pocket (MOOP), doctor office co-pay, specialist co-pay, drug co-pay, network width and breath …..that was merely a shopping experience like Amazon. Total price was considered every time, all the time: Consumer knowledge was king!

Maybe not so much, huh?


Link to the entire MSN article appears below:

http://news.msn.com/us/groups-claim-insurance-discrimination-in-new-forms

Thursday, August 14, 2014

ACA/Obamacare: And About That Association You Joined to Obtain Health Insurance -Or- For Whom the Boot Tolls, It Tolls for Thee


Long standing insurance legislation requires that one can't create an association merely to buy insurance. But one can create an association for other reasons then offer ancillary benefits to one's members e.g. buying club membership, travel discounts, insurance, etc.

For example, James and Jane Goodfellow own the firm XYZ Builders with three employees. They join the local builders association that also offers health insurance as an ancillary benefit of membership. James and Jane purchase health insurance for themselves and their employees. Meanwhile, John Q. Carpenter, a sole proprietor, joins the local builders association as well. John purchases health insurance for himself through the association.

The local builders association, with many members, of which a portion purchase health insurance, is then a "group". Hence the group of associated people, with the main association for reasons other than buying insurance, comprise the group, consequently group insurance coverage.

Enter ACA/Obamacare:
 
 


‘Businesses with fewer than 50 workers are exempt from the most stringent requirements for larger employers under the federal health-care law. But that doesn't mean they're off the hook entirely.

Smaller employers aren't required under the Affordable Care Act to offer coverage for their full-time workers—as larger firms must by 2016 or face penalties, for instance. But many owners of small ventures and startup entrepreneurs are nonetheless facing big changes to how they obtain their own health coverage, as well as to the benefits they're able to offer employees.

"It's a myth that smaller firms aren't being hit" by the health law, albeit in less obvious ways, says James Schutzer, president of the New York State Association of Health Underwriters, referring to employers with fewer than 50 workers.

Several thousand of the nation's smallest business owners—sole proprietors and the self-employed—were kicked off their small-business plans by carriers earlier this year. That is because new guidelines define "employers" as having at least two full-time employees, not including a spouse, in order to be eligible for group plans.

In all, more than 78% of the estimated 28 million small businesses in the U.S. have no employees, according to the Small Business Administration. These business owners must now seek coverage as individuals, or face fines.

Many consumers and small-business owners are finding affordable plans on the individual market, according to government health officials and insurance brokers. But at least some of the business owners who were excluded from group plans as a result of the health law are struggling with higher premiums, less robust benefits or uncertainty within a new, unfamiliar network, says Scott Lyon, vice president of the Small Business Association of Michigan.

In December, the association's own group plan, which currently has 4,000 small-business members and covers about 40,000 workers and their families, was forced to kick out 700 sole proprietors, he says.- Small Firms Hit by Big Changes in Health Coverage, WSJ, 08/06/2014

Link to the entire article appears below:

http://online.wsj.com/articles/kicked-off-group-health-plans-some-owners-face-a-tough-choice-1407367372

 

Thursday, August 7, 2014

ACA/Obamacare: And About that Claim of the Typical Family Saving an Average of $2,500 Per Year on Health Insurance…Maybe Not So Much

‘Floridians who buy health insurance on the individual market for next year will face an average increase of 13.2 percent in their monthly premiums, according to rate proposals unveiled Monday by the state’s Office of Insurance Regulation.

The rate proposals affect all Affordable Care Act-compliant health plans on the individual market, whether they’re sold through the federally-run exchange or not. Small and large group health plans typically offered by employers were not included in the data released by the state.

Fourteen companies filed ACA-compliant plans for Florida’s 2015 individual market, including three new companies that did not participate on the federally-run exchange last year.

Of the 11 returning plans, eight filed average rate increases ranging from 11 to 23 percent, and three filed rate decreases ranging from 5 to 12 percent, the state’s insurance regulator reported.’

‘About 893,000 people or 91 percent of Floridians who bought coverage on the exchange also receive a federal subsidy to lower their share of the premium, according to federal data.

According to the state report released Monday, most insurers propose double-digit premium increases, including the state's largest health insurer, Florida Blue, which announced last week that premiums would increase by an average of 17.6 percent for its exchange plans.

Health First Insurance, which sold 15 types of plans on the ACA exchange in 2014, proposed an average increase of 23 percent for its PPOs plans next year — the highest jump of all companies offering coverage on the individual market, according to the state.

Humana, which offers 35 plans on the ACA exchange, proposed increasing average monthly premiums for its HMO by about 14 percent.


Nancy Hanewinckel, a Humana spokeswoman, said in a written statement that the proposed increases were “primarily driven by underlying cost of services, including physician and provider fees; health care utilization; and increased prescription drug costs, particularly the fast-growing use of high-cost specialty medications, such as Sovaldi for Hepatitis C.’’

Joe Mondy, a spokesman for Cigna, said the company’s proposed 17 percent rate increase was “based on our customers’ 2014 early clinical experience and claims payments, expected medical trend, along with other factors such as the phase out of the government reinsurance program and expectations on the changing risk pool in 2015.’’
 

Most insurers echoed the explanations from Cigna and Humana — attributing increases to higher-than-expected health costs as a result of attracting customers who previously lacked coverage and are using more services than expected.

They also blamed regulations mandated under the health law, which forbids insurance companies from denying people with pre-existing conditions, limits the amount that they can charge their oldest members, and no longer allows them to charge more for women than men.

A dearth of young and healthy enrollees also has contributed to the increases, Florida Blue officials said last week. About 30 percent of the 984,000 Floridians who signed up for a plan on the exchange is younger than 35, according to federal data.’ - Proposed prices for health plans in 2015 unveiled, Miamiherald.com, 08/04/2014

Link to the entire article appears below:

http://www.miamiherald.com/2014/08/04/4271376/proposed-prices-for-health-plans.html