Outside of the open enrollment window, there are very few options for health coverage that can be purchased before November 1 (when the next open enrollment begins in the individual/family market), unless you have a qualifying event. And as a general rule, plans that can be purchased outside of open enrollment (such as fixed indemnity… Read more about What is a qualifying event?
Search Results for: family affordable 9.5
Universal healthcare in Colorado – does one size really fit all?
Universal healthcare coverage could be a reality in Colorado a few years from now, although it admittedly has some significant hurdles to overcome in the meantime. Supporters need to gather 99,000 signatures in order to get the ColoradoCare initiative on the 2016 ballot. And then voters would need to approve the measure in order to… Read more about Universal healthcare in Colorado – does one size really fit all?
Healthcare spending is 17% of GDP; we should expect it to be a major line item in household budgets
This USA Today article by Laura Ungar and Jayne O’Donnell is well worth reading. In a nutshell, it’s all about rising deductibles, and the impact they have on consumers’ ability to pay for health care. The facts are sobering: wages have been flat for decades, with the inflation adjusted average hourly wage only increasing by… Read more about Healthcare spending is 17% of GDP; we should expect it to be a major line item in household budgets
The five improvements I’d make to the ACA and its implementation
It’s open enrollment time again, and happily, this one is certainly off to a better start than last year. The downside is that there’s only a month between the start of open enrollment and the December 15 enrollment deadline for people who need their new coverage to be effective January 1 (this is the case… Read more about The five improvements I’d make to the ACA and its implementation
Combining rating areas in Colorado to bring down mountain premiums
Even before the ACA, individual health insurance in Colorado’s mountain towns was more expensive than in most of the rest of the state. The ACA makes health insurance much more affordable for most people earning up to 400% of poverty level (especially in states like Colorado, where Medicaid has been expanded… we have no coverage gap). And… Read more about Combining rating areas in Colorado to bring down mountain premiums
ACA articles that lack details are often more spin than reality
Although I typically focus my articles on issues that directly impact the Colorado health insurance market, I recently read an article in the Jackson, MS Clarion Ledger and felt compelled to address some of the issues it presents. The article was written in late April, after the open enrollment extension for 2014 had ended. It’s… Read more about ACA articles that lack details are often more spin than reality
Exchange Subsidy Eligibility Impeded By High-Priced Group Health Insurance Access
We were talking with a client last week about her health insurance situation, and it inspired me to do a little more digging around to see how eligibility for subsidies could be impacted by the availability of employer-sponsored health insurance. In our client’s situation, she’s a homemaker and her husband makes about $20,000 per year, working for a small business. They also have a child, who is currently covered by Medicaid. Her husband can get health insurance from his employer for $75/month. But if he adds his wife, the cost goes up to $500/month. $6,000 per year for health insurance when you earn $20,000 isn’t really a viable option. Fortunately, as of January 2014, Medicaid will be available in Colorado to families with household incomes up to 133% of FPL (in 2013, that’s almost $26,000 for a family of three).
But let’s consider a hypothetical family that makes a little more – say $28,000/year – and has the same option for employer-sponsored health 
insurance. They would be above the cutoff for family Medicaid, but well below the 400% of poverty level that determines eligibility for premium assistance tax credits (subsidies) in the exchange (400% of FPL for a family of three is a little over $78,000 in 2013). And I think we can probably all agree that spending $6000 a year on health insurance would be a significant burden for a family that earns $28,000 a year.
We’ve all heard lots of talk about how subsidies are available in the exchanges for people who don’t have access to “affordable” employer-sponsored health insurance. I think most of us take that to mean that for families who earn less than 400% of FPL, subsidies are available both to those without an option to purchase employer-sponsored health insurance, and for families that have the option to do so but at a prohibitively high premium. You’ve probably also heard that the cutoff for determining whether employer-sponsored health insurance is “affordable” is 9.5% of the employee’s wages.
Unfortunately, it’s not as simple as it might sound, and the official rules might leave some families without a lot of practical options. I discussed this scenario last week with the Colorado Coalition for the Medially Underserved (CCMU). Gretchen Hammer is the Executive Director of CCMU, and she’s also the Board Chair of Connect for Health Colorado (the state’s exchange), so there’s a good flow of information between the two organizations. CCMU (and Connect for Health Colorado, via CCMU) responded to my questions quickly and thoroughly, and I highly recommend both sources if you’re in Colorado and curious to see how your specific situation will be impacted as the ACA is implemented further (here’s contact info for CCMU and Connect for Health Colorado).
My concern in the case of our hypothetical family was that the employee’s contribution for his own health insurance is $75/month, which works out to only 3.2% of his income – well under the threshold for “affordable,” based on the 9.5% rule. And as […]
Delaying the Employer Mandate Has Minimal Impact on ACA
Much has been said about the employer mandate over the past few weeks. It’s been in the news a lot because of the delay of its implementation to 2015, and it’s been a popular for politicians – who are opposed to the ACA – to take the position that the obvious next course of action should be a similar delay of the individual mandate. I’ve explained why that doesn’t make sense – just because they’re both referred to as a mandate doesn’t make them comparable elements of the ACA. The employer mandate will help to provide the ACA with financial strength, but the individual health insurance mandate is a much more crucial leg of the legislation – without it, other aspects of the law (like guaranteed issue coverage in the individual market) would topple.
So what is the employer mandate and what does it involve? Rather than relying on articles and talking points that can be easily biased for or against the ACA, let’s take a look at what’s actually written in the legislation. The ACA is a very long document, so here are the three pages that 
contain the wording about the employer shared responsibility for health coverage. And since the ACA wording is rather convoluted and full of legalese, here’s an excellent summary from Cigna that explains it in more clear language.
contain the wording about the employer shared responsibility for health coverage. And since the ACA wording is rather convoluted and full of legalese, here’s an excellent summary from Cigna that explains it in more clear language.As I explained in a post last week, the employer mandate will impact a very small percentage of businesses in the US. That’s because 96% of businesses with 50 or more employees already offer health insurance. And businesses with fewer than 50 employees aren’t required to offer health insurance under the employer mandate. The vast majority of companies in the US have fewer than 50 employees. Out of the roughly 5.9 million US firms that have employees, only 635,162 have 20 or more employees (many of these – the ones that have more than 20 employees but fewer than 50 – are not impacted by the employer mandate). So for most American companies, the employer mandate is a non-issue (on the other hand, the ACA-created tax credits that help small businesses pay for health insurance should be of interest to a lot of those small business owners who are not required to provide health insurance but might want to anyway).
So the employer mandate really only becomes an issue for large employers who are not already offering health insurance to their employees. But what does it mean? What exactly do they have to provide in order to avoid a penalty? And how much is the penalty? Here are the highlights:
- The employer shared responsibility mandate applies to employers with 50 or more full time or full time equivalent employees. “Full time equivalent” applies when a business has part time employees: The total amount of hours worked per month by all of the part-time employees is added up and then divided by 120 to get the number of “full time equivalent” workers. So if you have 100 workers who each work 80 hours per month, you have 67 full-time equivalent workers (8000/120).
- The requirement to offer coverage applies to all full-time workers, which is defined as 30 or more hours per week.
- The coverage has to cover at least 60% of total allowed costs, which is comparable to the bronze level of coverage in the individual market.
- The coverage has to be “affordable”, which means that the employee contribution cannot be more than 9.5% of the employee’s wages.
- Coverage has to be offered for the employee and any dependent children up to age 26, with total employee contributions not exceeding 9.5% of the employee’s wages (employees are not required to keep their children on their policies until age 26, but they have to be given the option to do so if they want).
- Employers are not required to pay for coverage for a spouse. Employees can choose to add their spouse to their plan if they want (this is no different from the way employer coverage currently works), but the employee is not required to contribute financially towards the spouse’s premium.
- If a large employer does not offer 60%+ actuarial value, “affordable” health insurance to eligible workers and at least one worker ends up getting individual health insurance through a state exchange and getting premium subsidies or a cost-sharing reduction on their policy, the penalty will be applied to the business.
- The details of the penalty assessment are explained on the first page here, but they’re much more clearly illustrated in the example that Cigna put together (see page 3). The amount of the penalty depends on whether the employer isn’t offering coverage at all, or if they’re offering coverage that isn’t up to the minimum standards and/or affordability requirements. For the purpose of penalty calculation, the first 30 employees are subtracted from the equation (so if you have 150 employees, the penalty is calculated based on 120 instead).
I’ve heard some people say that the employer mandate requires employers to pick up the entire tab for employees’ health insurance, and this is incorrect. I’ve also heard […]