John Riley Insurance Services

Health Care Reform: Changes taking place in 2012

John Riley — Mon, 07 May 2012 23:09:25 +0000

The enactment of the Affordable Care Act (ACA) in 2010 is ushering in changes to the health care system that impact individual consumers and employers alike. The law includes major health insurance market reform provisions that will expand access to coverage for many more Americans beginning in 2014.

A number of important provisions, however, will have an impact on the marketplace in 2012. What follows is a brief description of the key issues we are tracking for 2012. The list is not meant to be exhaustive, and other ACA-related issues may be of equal or greater concern to different individuals and businesses:

Scheduled for 2012

W-2 Reporting: Employers must begin preparing this year to report on employees’ 2012 W-2 forms – to be issued in January 2013 – the aggregate cost of their employer-sponsored coverage. Employers, however, may have chosen to report earlier on employees’ 2011 W-2 forms issued in January 2012. For purposes of this reporting requirement, “applicable employer-sponsored coverage” includes coverage under any group health plan made available to an employee by the employer, regardless of whether the employer or the employee paid the cost. Applicable coverage as defined includes major medical and employer flex credits contributed to a health flexible spending arrangement (FSA), if the flex credits exceed the employee’s salary reduction to the FSA.

Employers are required to report the cost of coverage provided under hospital indemnity, other fixed indemnity or specified disease or illness policies only if the employers contribute to the cost of that coverage or if the coverage is purchased by employees on a pre-tax basis through a cafeteria plan. Employers do not need to report the cost of wellness programs, employee assistance programs (EAP) and on-site clinics unless the employers include the cost of these benefits when charging COBRA premiums.

Quality of Care Reporting: By March 2012, Health and Human Services (HHS) must develop annual reporting requirements for group health plans and insurers offering group and individual coverage. Reports must provide information about how the plan or coverage: 1) improve health outcomes through the plan’s quality of care provisions, 2) implement activities to prevent hospital readmissions, 3) implement activities to improve patient safety and reduce medical errors, and 4) implement wellness and health promotion activities. HHS has yet to issue regulations on this reporting requirement, and the details of what must be reported are still unclear. However, health plans and insurance issuers generally will be required to report on how health outcomes are improved through various programs and initiatives. The requirements only apply to non-grandfathered plans.

MLR Reporting: The medical loss ratio (MLR) provision requires health plan issuers to meet new minimum medical spending requirements – 85 percent in the large group market and 80 percent in the small group and individual markets. Using 2011 data, insurers in 2012 begin to face the possibility of paying rebates to policyholders if the MLR thresholds are not met. In most instances, insurers/plan issuers must issue rebates to group health policyholders rather than to subscribers. Rebate process simplification in the new final rules released in December 2011 should help employers effectively manage rebates on behalf of their plan beneficiaries. Plan issuers must issue a notice of rebate to policyholders and subscribers, and rebates must be paid by August 1, 2012 for the 2011 experience year. Reporting and payment of any rebates that are due will occur annually thereafter.

Administrative Simplification: The ACA mandates adoption of “operating rules” for the standard electronic transactions used in the administration of health plans. The new rules will improve the uniformity and utility of the existing electronic claims, remittance advice (ERA), referral certification and service authorization, premium payment, eligibility verification, and claims status inquiry transactions. The ACA also requires the adoption of two new standards, as well as associated operating rules, for electronic funds transfer (EFT) and claims attachment transactions.

The ACA required HHS to adopt standard operating rules for eligibility and claims status by July 1, 2011 and fully implement them by January 1, 2013. The adoption of operating rules for ERA, as well as the adoption of a standard and a set of operating rules for the EFT, is required by July 1, 2012 with an effective date of January 1, 2014. The adoption of operating rules for claims payment, premium payments, certification and authorization and enrollment transactions, as well as the adoption of a standard and a set of operating rules for claims attachments, is required by July 1, 2014 with an effective date of January 1, 2016.

The ACA also mandates that a new health plan identifier standard be established by Oct. 1, 2012.

Women’s Wellness: When non-grandfathered plans become effective or renew on or after August 1, 2012, they must include 100 percent coverage of women’s preventive services when performed by an in-network physician. Aetna’s plans already comply with a number of the required women’s preventive services. Adjustments will be required for non-grandfathered plans to comply with the remainder including coverage for the following with no member cost-share: 1) prenatal visits, 2) additional gestational diabetes screening tests; 3) lactation support, devices and counseling; and 4) FDA-approved contraceptive methods, including prescribed drugs, implantable devices, sterilization procedures and patient education and counseling for women with reproductive capacity (certain religious employers may qualify for an exemption). Other changes may apply.

The Patient-Centered Outcomes Research Fee: Health insurance issuers and sponsors of self-funded group health plans will be assessed an annual fee to fund patient-centered outcomes research. The fee is imposed for a limited number of years, beginning in 2012 and ending in 2019. The trust funds the Patient-Centered Outcomes Research Institute, which was created “to assist patients, clinicians, purchasers, and policy-makers in making informed health decisions by advancing the quality and relevance of evidence concerning the manner in which diseases, disorders, and other health conditions can effectively and appropriately be prevented, diagnosed, treated, monitored, and managed”.

Possible impact in 2012

Summary of Benefits and Coverage: Insurers and group health plans must provide a summary of benefits and coverage document to individuals before enrollment and re-enrollment. (The new rules also require 60-days-notice to enrollees when a health plan or issuer modifies the terms of the plan or coverage.) The requirement is effective as of March 23, 2012, but the federal agencies have not yet issued final uniform standards, which may result in a delay in the effective date. The U.S. Departments of Labor, Health and Human Services, and Treasury jointly released an FAQ on November 17, 2011 addressing implementation requirements, and it states that the departments anticipate the final rule will provide insurers and health plans with “sufficient time” to enable them to comply with the final rule requirements.

Health Insurance Exchanges: The ACA requires states to set up health insurance exchanges by 2014, opening a new marketplace for individuals and small businesses to buy health coverage. The federal government will operate a federal exchange to serve residents of states that have opted not to create their own exchanges or are unable to operate an exchange by January 2014. As of December 2011, HHS has awarded more than $220 million in grants to help a number of states create exchanges, a process that will continue in 2012. HHS also issued proposed rules and guidance in 2011 for the future operation of exchanges. Having solicited comments on the proposed rules in the fall of 2011, HHS is expected to issue additional rules and guidance in 2012.

Wellness Incentives: A five-year/$200 billion grant program will be available to small employers (less than 100 employees) that did not provide a wellness program as of March 23, 2010. The program was slated to open up in 2011, but guidance has not yet been issued that would clarify various aspects of the program, including the application process. Guidance is expected in 2012. What is known is that the grants are intended to apply to “comprehensive” wellness programs that include health awareness initiatives (including health education and preventive screenings), efforts to maximize employee engagement, initiatives to change unhealthy behaviors and lifestyle choices, and efforts to create a supportive environment. Starting in 2014, employers will be permitted to offer employees rewards of up to 30 percent of the cost of coverage for participating in a wellness program and meeting certain health-related standards (potentially increasing to 50 percent of the cost of coverage).

Essential Health Benefits: As of 2014, the ACA requires that non-grandfathered health insurance coverage offered in the individual and small group markets, both inside and outside of the health insurance exchanges, offer a “comprehensive” package of coverage known as “essential health benefits.” Guidance from HHS on what exactly should be considered an essential benefit, and what should not, has been eagerly awaited since this clarification will determine to a great extent what a compliant plan design looks like and how costly it will be. HHS issued preliminary guidance on December 9, 2011, that indicates states will have the flexibility to determine essential health benefits by selecting a benchmark plan “that reflects the scope of services offered by a typical employer plan” in their respective states. If states choose not to select a benchmark, HHS intends to propose that the default benchmark be the small group plan with the largest enrollment in the state. HHS is soliciting additional comments on essential health benefits that are due by January 31, 2012. It is unclear when final guidelines will be available.

90-Day Maximum Waiting Period: Starting in 2014, waiting periods for coverage that are greater than 90 days cannot be applied by group health plans or insurers offering group coverage. Existing plans will need to be amended to reduce waiting periods that are longer than 90 days, and group health plans and insurers may need to begin preparing for this change in 2012.

Definition of a Full-Time Employee: A key definition for the employer mandate that becomes effective in 2014 is the definition of full-time employee. The number of full-time employees will determine application and cost of the employer mandate. The definition of full-time employees is also relevant to ACA’s automatic enrollment provision, which will become effective after final regulations are issued (anticipated to be 2014).

For purposes of the employer mandate, the ACA defines full-time employees as those who work an average of at least 30 hours per week. However, it is unclear how this definition is measured and over what time period it is measured. When determining the number of full-time employees relative to the employer’s affordable coverage requirement, employers will be allowed to exclude those full-time seasonal employees who work less than 120 days during the year. Part-time employees are counted as full-time equivalent employees in determining whether an employer is subject to the employer mandate, but part-time employees are excluded from the penalty calculation. The ACA does not define full-time employee for purposes of the automatic enrollment provision. The agencies have announced that they intend to coordinate the definition of full-time employees for purposes of the employer mandate with the definition for purposes of automatic enrollment.

Posted from: Aetna INsider April 2012

Health Care Reform Update

John Riley — Thu, 03 May 2012 18:34:52 +0000

This Week in Health Care Reform: May 3, 2012
The House works towards a student loan fix, while a pair of Committee reports make partisan waves, and the GOP presidential field is winnowed down to two.

We encourage you to stay involved with the implementation efforts surrounding health care reform by voicing your perspective to Members of Congress and by visiting the Health Action Network.
Health Care Reform

State of the Mandate: As the country anxiously awaits next month’s Supreme Court ruling, some states find themselves caught in a bit of a holding pattern. Should the Court rule against the individual mandate, the viability of the exchange marketplace would be severely undermined as, absent the requirement that individuals purchase coverage, healthier people could elect to avoid paying into the system, causing premiums to soar.

Costs, Confusion, and Coverage: Republicans on the House Energy & Commerce Committee released a report last week detailing the effects of the Affordable Care Act on employer-sponsored coverage. Widely attacked as partisan rhetoric, contributors to the report, nonetheless, included General Electric, American Express, and Southwest Airlines, all member companies of the President’s Council on Jobs and Competitiveness. These corporate advisers cite concerns over rising costs due to taxes, fees, and bureaucratic burdens as leading to pervasive confusion amongst the business community. And, while the response to the report has been generally dismissive, there are some that see a larger pattern emerging.

Emerging Threat: Not to be outdone, Republicans on the House Ways & Means Committee released a report of their own on Tuesday detailing how the ACA incentivizes employers to drop coverage and funnel their workers into the newly established exchange marketplace. Based on survey responses from 71 Fortune100 companies, Committee staff pegged the savings for these organizations at $28.6 billion in 2014 should they elect to pay the ACA’s employer mandate penalty. Whether or not the correlation exists, a recent study conducted by the Employee Benefit Research Institute (EBRI) highlights the downward trend in employer-sponsored coverage.

Agree to Disagree: With the Supreme Court’s decision expected next month, Republican lawmakers have begun laying the groundwork for a legislative lifeline. However, despite their ability to coalesce around some of the broader points of reform, the practical aspects of coming together on a bill that everyone can get behind remain elusive.

This weeks update from the Health Action Network at Wellpoint.com

The Future of the Individual Health Insurance Market

John Riley — Sun, 26 Sep 2010 01:17:59 +0000

A California Exchange in 2011, only 10 plans available….Don’t change your individual plan!
I thought this was not going to take place until 2014?

It’s happening already and the individual market is about to feel some major pain. That is some of you, my clients and the middle class population that is doing the right thing in owning an individual or family health insurance plan. What I am telling my clients in the under 65 market – not in group or company plans, but rather, own individual or family health insurance policies; STAY PUT! After you send your fax to Governor Schwarzenegger’s office and tell him not to sign these Bills, don’t make any changes to your plan for the moment. Let’s talk first and review your plan. Let your plan be grandfathered in, take the rate increase until the end of the year and then let see what happens. Some Insurance companies have already stopped selling plans with one year rate guarantees and gone to monthly in anticipation of Bills such as SG 900 and AB 1602 passing the Governors desk.

Wait until January. If California goes to only 10 plans (5 HMO and 5 PPO) and they all have to cover preventative care with no member copay, unlimited coverage limits, no preexisting conditions without a strong mandate to buy, we are going to wind up with really expensive plans, with the mass majority of new members getting in that are sick, and the healthy will stay out; it is going to be a mess. Believe me I know that people with pre-existing conditions need coverage, it is just not as simple as it seems, if it were, it would have been done a long time ago. With 2011 coming up quick, the first group to benefit under current reform will be those under age 19 this January, with the rest to come later in 2014. We want things to get better not worse. If 2011 starts with what is proposed in these Bills below and you combine that with the even bigger HR3590 (National Reform Law) in its current form, get ready to say HELLO to adverse selection, no choices and accelerated insurance premium increases beyond the average 15% levels.

Recently at a NAHU meeting, I was able to get caught-up on our California Legislative activity. Mr. David Benson, Vice President of Legislation on the Board for CAHU (California Association of Health Underwriters) was able to give us a very insightful update concerning some Bills that if they pass both Houses and are signed by the Governor, will become law in California. If they become law, they will have a rather devastating effect on the individual market place as mentioned above. Individuals and families with health insurance policies, especially those with high deductible and HSA compatible plans will see much higher premiums in the future unless things change. Not good news seeming how I have been working with all my clients over the years to move to higher deductible and HSA compatible plans. Pay less in premiums, get your preventative care and save the difference. Now those premiums are high but as cost or care (claims) go higher, the cost of financing goes higher. We pay twice per capita then most all other countries, yet we are the most obese country in the world with no better outcomes for the additional dollars spent. Back to the Bills at hand and why you should think twice before making any changes to your individual or family health plan.

As HR 3590 (the federal health care bill) regulations are being written, the states and the California Legislature are coming out to address some of those issues. Right now, we have SG 900 which was authored by Elaine Alquist the Senate Health Chair and Daryl Steinberg who is the Senate Pro Tem; this is an exchange Bill that will create a new exchange that will start in 2011. There is a companion Bill, AB 1602, authored by the Assembly Speaker John Perez that does the same thing. Both of the Bills have passed in their original House and its now committees in its opposite House and if these Bills are signed by the Governor, they will go into effect January, 2011, and so we will have a new exchange to deal with. The other Bill that’s of interest is SB 890, and this is a Bill that will take 138 individual plans now being offered in the individual market place, and reduce it down to 10 individual plans; 5 HMO’s and 5 PPO’s. Well in rural areas, you don’t have HMO’s, so they will go down to 5 plans, and these are very rich benefit plans, so anybody that’s on a high deductible plan or limited benefit plan could be in for a very rude awakening; very large premium increases if this Bill is signed in to law.

Below, I have listed the two Bills and the Author of each one along with Governor Arnold Schwarzenegger’s fax number. I have also included a letter that you can personalize, cut and paste, and then fax to the Governor. If these two bills go through and we don’t get things changed in the health care reform legislation, we could be looking at $1700 per month premiums for a guy in his thirties. If you don’t think so, compare our rates, or nearby these states will similar legislation. Connecticut rates for a man in his thirties are a $200 and plans with similar coverage for the same age man in New York are $1700 or try $800 in New Jersey. That is what happens when you remove private sector competition, have weak or no mandates to buy (all citizens must purchase) insurance and make it a guarantee issue market on the shoulders of insurance companies. The unhealthy get in; the healthy get out, and there are no penalties for purposely living unhealthy life styles and not changing behaviors. There must be consequences for one’s actions; people must own up to personal responsibilities and we must help those that can’t help themselves. We cannot put this on the backs of the middle class and the private sector to finance while the government and states control it, it will fail and we will pay for it again.

We need responsible reform, not government control. It is a bill of goods that the public is be sold. The reality of things if not changed, will result over the next decade and it will be destructive. Please fax the letter below.

BILL NUMBER: A.B. No. 1602
AUTHOR : John A. Perez
TOPIC : California Health Benefit Exchange.

TYPE OF BILL: Active, Appropriations, Majority Vote Required, State-Mandated Local Program

BILL NUMBER: S.B. No. 890
AUTHOR : Acquits
TOPIC : Health care coverage.

TYPE OF BILL: Active, Non-Urgency, Non-Appropriations, Majority Vote Required
State-Mandated Local Program

A SIMPLE thing from you is NEEDED right now…today, please. The Governor will decide on signing or vetoing AB 1602 & SB 900 within the next week. (9-30-10 is the deadline for his decisions). Just COPY and PASTE the letter below on your Letterhead and FAX it to the Governor’s office @ 916-558-3160.

[letter to the Governor]

Dear Governor Schwarzenegger:

I am writing today to request your veto of AB 1602 (Perez) and SB 900 (Alquist) which would create a Health Benefits Exchange, a huge state bureaucracy with broad authority and no oversight or accountability. If signed, these bills could lead to increased costs for millions of Californians seeking health insurance and unnecessary costs to the state.

AB 1602 and SB 900 are totally irresponsible given California’s huge Budget Deficit!!! How could this Bills EVER be justified to Californians when the State can’t even pay its obligations and is facing a 20 Billion Dollar deficit, again!!!

There is still sufficient time for California to develop an effective Exchange by crafting a model that is accountable to all Californians.

Please Do Not Sign These Bills!!!

Restaurant Health Care Alliance

John Riley — Sat, 05 Jun 2010 22:11:04 +0000

In a Health Care Modernization News Flash – May 25, 2010, UnitedHealthCare released good news for restaurants, an industry that is gong to be especially hard hit by federal health care reform.

UnitedHealthcare and National Restaurant Association Team Up to Create
Restaurant Health Care Alliance
UnitedHealthcare and the National Restaurant Association announced the launch of the Restaurant Health Care Alliance on May 21. This new Alliance offers a suite of products that will help restaurant employees gain easier access to health care coverage and related products and services. Today, 4 million to 6 million of the nation’s nearly 13 million food service industry employees are uninsured at any given time.
The Alliance will be available initially to state restaurant associations in Colorado and Pennsylvania , as well as insurance agents and advisers representing restaurant clients in those states. The Alliance will expand to additional states throughout 2010.
Qualified small business member restaurants will be introduced to innovative health plan options offered by UnitedHealthcare that provide significant annual premium savings compared to traditional health plans. Individual employees who do not have employer-sponsored coverage can choose from a wide range of UnitedHealthcare’s cost-effective individual and family plans, some of which start under $100 per month. Other products, including dental plans and discount health cards, will be available.
Pennsylvania Governor Ed Rendell called the initiative a critical “gap-filler” in a Los Angeles Times story. “At a time when we have one million uninsured Pennsylvanians, a program like this is very welcome,” Rendell said.

The resources and tools developed by the Alliance will be available online at www.restauranthealthcare.org.

Small Business Tax Credit Update – Family Members?

John Riley — Sat, 05 Jun 2010 21:45:36 +0000

Seeming how small business in America seems to take the brunt of new tax burdens and costly state and federal legislative regulations, a tax break or subsidy for small business sounded real good for a change. As a broker, I have yet to find a small business that actually qualifies for this tax credit to help them with their health care premiums.

NAHU Washington Update

In related news, many small businesses are taking issue with some of the fine print requirements that make it difficult for them to qualify for the small business health insurance premium tax credit program. In particular, there is confusion about language that prohibits business owners from counting employees who are also family members when calculating their credit. Small Business Resource

COBRA Subsidy Expires with Congress Still Debating an Extension

John Riley — Sat, 05 Jun 2010 21:30:24 +0000

On June 1, Congress allowed the federal subsidy program for COBRA recipients to expire. The program provided individuals who involuntarily lost their employer-sponsored health insurance benefits through a layoff or a reduction of hours during this economic downturn with a 15-month 65% subsidy of their COBRA health insurance premiums. To learn more, click on the link or visit the NAHU.org website for the Washington Update. COBRA recipients to expire.

Huge Medicare Cuts – AMA & Seniors Affected

John Riley — Sat, 05 Jun 2010 04:52:45 +0000

“House Democrats Say CBO Projects $500 Billion in Gross Savings from Medicare”, remember this headline?

As you may recall from an earlier article on how the federal government plans to fund “their” health care reform initiative, $500 Billion was going to come from cutting health care payments to Medicare recipients across the whole system. In September of last year, The Wall Street Journal did a short article covering what we are starting to experience today.
GovernmentCare’s Assault on Seniors. – WSJ.com

The first plan to get our country to a single payer system (government run health care) was the “Public Option”. Although that option has been put on the sidelines for now, there are loop holes written in to the current reform law that will allow them to activate that option later if necessary. However, it no longer seems as if it will be necessary as their current plan seems to be achieving the same outcome. The Washington Post said it best when describing the road our government was taking to achieve a single payer system through the then toted “Public Option”.

The Public Plan
“Medicare keeps costs under control in part because of its 800 pound gorilla capacity to dictate prices- in effect to force the private sector to subsidize it. Such power, if exercised in a public health option, eventually would produce a single payer system; if that’s where the country wants to go, it should do it explicitly, not by default.”
The Washington Post, Reforming Health Care 4-27-09

You see, the government no longer needs a public plan to default our system to a single payer, it needs only to destroy the current system. Medicare is the largest payer to physicians, hospitals and all your services surrounding health care. Step one, cut cash flow to all those serving our communities; starve the system. Second, increase taxes and regulations to the entire economy. Hit the insurance companies, pharmaceutical and medical equipment manufacturers the hardest. Increase regulation to the other payers in the system (health insurance companies) so that eventually they will have to get out of the business or can simply become a supplemental company on the side removing all competitors leaving just the government. Then, the stage will be set for the government to step in and be our hero and rescue (bail-out) us all from ourselves, right?

Lack Of Permanent “Doc Fix” Could Undermine Health Reform.
The AP (5/27, Alonso-Zaldivar) reports, “For the third time this year, Congress is scrambling to stave off a hefty pay cut to doctors treating Medicare patients — even as the Obama administration mails out a glossy brochure to reassure seniors the health care program is on solid ground.” Notably, the “21.3 percent cut will take effect June 1 unless Congress intervenes in the next few days.” The AMA and other physician groups say they want a permanent solution to the problem, and many doctors say they may no longer accept Medicare patients. The AP points out that this issue “could undermine key goals of President Barack Obama’s health care overhaul, which envisions using Medicare to test ideas for improving the quality of care for all Americans.”

Democrats Defend CMS Brochure Explaining New Medicare Benefits.
Politico (5/27, Haberkorn) reports, “Top House Democrats on Wednesday said they support a taxpayer-funded brochure outlining the changes in Medicare under the health care overhaul, amid growing Republican cries of propaganda.” Earlier this week, CMS “mailed the four-page brochure to over 40 million Americans who use Medicare to explain how the program will change under the reform law. Critics say the mailing is overtly partisan and contains inaccuracies about what the overhaul will do.” But, House Speaker Nancy Pelosi (D-CA), House Majority Leader Steny Hoyer (D-MD), and HHS Secretary Kathleen Sebelius “said they have a responsibility to educate people about what’s in the overhaul and what’s not.” Sebelius added, “We want to inform America’s seniors about what the act actually contains.”

The Hill (5/27, Pecquet) notes that the brochure discusses “closing the Part D ‘doughnut hole’ that requires seniors to pay full price for their drugs above a certain threshold, free preventive care, and increased efforts to combat fraud and abuse that endanger the program’s solvency.” Nevertheless, Senate Minority Leader Mitch McConnell (R-KY) “blasted the outreach efforts on the Senate floor Tuesday, pointing out that Sebelius had objected to private Medicare Advantage plans using its communications to seniors to raise concerns with the health reform law when it was being debated.” In addition, Sen. Pat Roberts (R-KS) said, “The ‘mailer is misleading, at best. … At worst, I fear it could represent taxpayer-financed government propaganda.’”

The truth can be very discouraging today and I try not to get stuck in the quicksand, however, it does remind me as a business person and an individual taxpayer, that change is needed in November. We need to stop the bad reform and start on the track of right reform. The upside to things is that we are resilient. In the last two years, I have attended meetings and have seen insurance carriers, hospitals and physicians all in one room discussing positive reform; unthinkable just a few years ago.

We need to be accountable for our life styles and behaviors (which generate over 70% of all insurance claims (health care bills)), take reform and wellness serious and get back to doing for ourselves. We have crossed the line and we need to take action. And, if you want a little more incentive, you need only to click on this site and look at the bottom line; Medicare Liabilities in REAL TIME. U.S. National Debt Clock : Real Time

What are your fellow Americans thinking; repeal it while we still can!

Public Opinion
Americans Want Repeal of Health Care Reform: A recently released Rasmussen report suggests that Americans are strongly in favor of repealing President Barack Obama’s health care reform law. Sixty percent of those polled favor repeal, while 62% believe the new legislation will increase the budget deficit.

Majority of Americans Unhappy with Reform: According to a new Quinnipiac University poll, 51% of Americans are unhappy with the new health care reform legislation and 70% are “dissatisfied” or “very dissatisfied” with the way things are going for the nation.

Tax Free Money to Pay for Long Term Care Premiums?

John Riley — Thu, 20 May 2010 00:44:18 +0000

Recently, I had an opportunity to get together with some gentlemen from Genworth Financial. It was an exciting meeting on many fronts, as it was all good news. It was refreshing to hear something good in light of all the health care and economic changes.

On January 1, 2010, there were some provisions to the Pension Protection Act (PPA) of 2006 that went into effect that will have a large impact on how you plan and pay for a long term care insurance. I think most people see the increasing need for long term care, but who can afford (especially today) to pay for it? Or, what if the care is never needed, then what? Does all that money go down the drain? Not necessarily. There are some good solutions now and with an excellent company.

I think most people today would agree that having a plan to protect family members from a long term care event is important and essential. With advancing technology, procedures and medications, people that might have died or been permanently disabled from a cardiovascular event or stroke, now can be treated and go on to live a full life. So the fact is that people today are living longer, and as we live longer, our bodies naturally begin to break down. The possibilities of needing some sort of part time care leading to full time care sometime in the future are strong. And let’s face it, if and when care is needed, you will want to have a plan and options.

Simply having the control, a professional care manager that can step in, talk to family members, show you all your different options, make recommendations and then make all the arrangements for you, is huge. Whether you need professional or non professional care at home, a combination of the two, and/or eventually around-the-clock care, life stops. Not for the one that needs the care, but for mom, dad, son, daughter, sister, brother; the rest of the family. You might think when a family member has a life changing event you can help them, but I can tell you first hand that you really can’t. You think you can and you feel you should know everything to do, but you don’t and you won’t. When you have a plan, the family member needing care gets the care they need and the family members get to keep their life (in a sense) and are able and ready to give that extra loving care and attention that is now needed.

I know that all of us would do everything within our power and call on God above, to get the help our family members need, but it does not make us stronger in fact, we get run down. Some of us can bounce back, but for other family members like the affected spouse, it can just make situations even more desperate. If you would like to get a better understanding of long term care insurance and how it works, please click General Info and that can get you started. We use many vendors for long term care and there is not one size that fits all, however, there are some great new ways to pay for it using tax free money. Tax free money that is probably sitting on the sidelines these days earning next to nothing that could be paying for your long term care premiums. Also, there is an excellent solution to the second scenario, “what if we don’t need it after-all?” Now there are some products that solve that as well; how about getting your premiums less any claims back or perhaps a built-in life policy that pays a death benefit which could be used by your children to pay the estate taxes and burial. Now that makes sense, having a long term care policy that can also act as a life insurance policy if you do use your long term care benefits; that makes the decision much easier.

You may not be able to afford it now and maybe the best you can do is have a plan; that’s ok. However, maybe, you or family members have it available in different products, stuck at a low rate of interest but you did not realize you could transfer part of it out without a tax event. It’s worth looking into. Let me know if I can help and/or if you would like to attend a seminar we will be having soon.

Small business Health Care Tax Credits – Guidelines & Clarification

John Riley — Sat, 17 Apr 2010 19:33:54 +0000

Guidelines & Clarification

In an effort to help my clients and other small businesses with less than 25 full-time employees or, 50 half-time employees or, a mix that when added together totals less than 25 full-time employees, please read on.

The following will provide everything you need to know to see if your company qualifies and then also how you can apply for these credits. The information provided comes directly from the California Association of Health Underwriters (CAHU) and the IRS website. Some of you receiving this will qualify, however, many of you will not due to the low annual salary ceiling. It may help to know however, that many of the high income earners (owners and partners) are not used in determining average annual salaries (see Q&A #13). Overall, it only takes a few minutes to go through the calculation and then view the example scenarios and the Q&A section.

CAHU

Small business Health Care Tax Credits went into effect retroactive to January 1, 2010. The IRS has several documents on their website explaining in detail what is required for small employers to qualify for and get the tax credit. As mentioned, this page contains an FAQ, a chart to help determine ER eligibility, a page of basic info also, plus more articles to help employers.

Let’s make the most of every opportunity and get the best of what is available for your company. It’s important that we plan and work together to get the regulations implemented as they come up and bless your employees with the resources that are available to us. Healthier employees make better performing companies! I am excited and looking forward to doing all I can to improve lives, aren’t you?

Thanks everyone for your business and trusting in me to always do what is in your company’s best interests. Let me know how I can help and have a great day!

Now Law – Health Care Reform

John Riley — Fri, 09 Apr 2010 03:25:57 +0000

From Reform, to Law, to Implementation - Last Friday, I received two very informative updates that include some very easy to follow briefs on the new health care reform laws. Please view the detailed timeline and simplified format as well as the short new issue brief on the Small Business Tax Credit program. These briefs were prepared by NAHU. For more information on NAHU and all these issues, please visit nahu.org/leg and/or I can fill you in when we meet. Basically, it is our association that supports us so that we can support you the consumer.

With that said, I have taken only the main paragraphs out with a couple links. These links will provide you with what you need to know; one detailed and one simplified. The two links in the NAHU Update are their for your reference however, and I would recommend that you just stick with those two links for now as they will provide you with the timelines and how the law will affect us all. Two quick news flash paragraphs as they are definitely interesting.

Health Action Network Reported
Approved over unanimous Republican opposition in both chambers of Congress, this reconciliation bill increases the overall cost of the health care reform legislation by $65 billion, bringing the new total to $940 billion over the next 10 years.

NAHU Washington Update Reported
On Tuesday, President Obama signed into law the Health Care and Education Affordability Reconciliation Act of 2010, a companion package of “fixes” to the comprehensive Patient Protection and Affordable Care Act that was enacted last week. Taken together, the two measures make the most profound changes to our country’s private-market health care system in 50 years and levy nearly $438 billion over 10 years in new taxes targeted at high-income individuals, selected health care-related industries and corporate taxpayers.

At first read, I thought the number from above ($940 Billion) and the number from below ($438 Billion) were a contradiction until I realized that the $438 Billion they were referring to was that portion of the $940 billion that would be raised from new taxes.

Here is What You Need to Know!
During the past week, NAHU has updated our detailed timeline on reform provisions as well as our simplified timeline. NAHU has also prepared a new issue brief on the Small Business Tax Credit program. These two briefs along with the new issue brief on tax credits should be very helpful as a resource and will provide you with an outline of what is to come.

I plan on meeting with each of you over the next month to review these changes and discuss how they will affect you and your business. Also, I think this can provide a solid foundation upon which we can build as these updates come in and implementation deadlines are reached. As always, if you have any questions, please contact me at 310-414-9524 or by e-mail at John@Johnrileyins.com.