HR 5447 is the Small Business Health Care Relief Act of 2016. It passed the House earlier this month, and is with the Senate now. This bill would allow employers to contribute to their employees’ individual health insurance premiums, up to a maximum of $5,130 for a single employee, or $10,260 if the reimbursement also includes… Read more about HR 5447 – Should employers be allowed to reimburse individual health insurance premiums?
One of our all-time favorite bloggers, Julie Ferguson of Workers’ Comp Insider, hosted the most recent Health Wonk Review – the “why hasn’t spring sprung?” edition. Maybe Julie just needs to move to Colorado… here on the Front Range, we’re definitely starting to see signs of spring – today was a beautiful sunny day,… Read more about Most Americans Might Not See Big Premium Hikes, But The Individual Market Is Different
For the first couple years after the Affordable Care Act was signed into law, everything seemed to be a bit up in the air. There was almost constant bickering about the subtle nuances of the legislation, along with uncertainty from both sides of the political spectrum insofar as whether or not the law would stand the test of time. The Supreme Court had to weigh in, and we also had a major election cycle midway between the signing of the law and the enactment of many of its main provisions.
Most of that has settled down now. SCOTUS upheld the law. And there was no election upheaval in Congress to tilt the legislative body towards a crowd that would be likely to repeal it. States – like Colorado – that had been working towards setting up a health benefits exchange can continue to do so without as much worry that their work might be in vain (there had been some concern that the law would be tossed after states had invested a lot of time and money in the exchange-creation process). We are just over a year out now from January 2014, when many of the major provisions of the ACA will go into effect; it seems relatively certain at this point that the ACA will continue to move forward now that some of the potential roadblocks are in the rearview mirror.
Several provisions of the Affordable Care Act – ACA have already been implemented over the past two years: Young adults can remain on their parents’ health insurance policy until […]
[…] But although there are differences between group and individual coverage that can account for some of the price variation, by far the biggest factor is medical underwriting. The Zane Benefits article points out that 80% of healthcare costs come from 20% of the population – individuals with serious, ongoing health conditions. Group health insurance is required to accept all eligible employees, but individual health insurance carriers use medical underwriting to eliminate the sickest applicants from the pool of insured members (70 % – 90% of applicants in the individual market are accepted and offered a policy – there is quite a bit of variation in underwriting guidelines from one carrier to another and from one state to another). This mean that individual policies are covering people who are generally healthier than the average of the entire population. And that translates to lower healthcare costs in the individual market. […]
[…] SB12-134 will result in some significant changes in terms of how uninsured patients are billed when they receive treatment in a hospital (note that the bill only applies to hospitals – outpatient clinics, medical offices, and other non-hospital providers will not be impacted). Most people are aware that private health insurance carriers have negotiated rates that are lower than the “retail” price for medical services. Medicare and Medicaid have even lower negotiated prices. The reason SB12-134 is so important is that uninsured patients (usually those who have the least ability to pay medical bills) typically get charged the retail price. There is usually a cash discount available, but most uninsured patients typically don’t have enough cash sitting around to pay the whole bill up front. So – assuming they are able to pay the bill at all – they often end up on a payment plan (sometimes through a third party where interest rates can rival those of credit cards) and ultimately pay far more than any insurance carrier would pay.
SB12-134 applies to medically necessary care provided to uninsured patients who have a family income of not more than 250% of the federal poverty level ($57,625 for a family of four in 2012). And SB12-134 applies only if the care is not eligible for coverage through the Colorado Indigent Care Program (CICP). For those patients, hospitals may not charge more than the lowest rate they have negotiated with a private health insurance plan. This is a huge change from the status quo.
SB12-134 also requires hospitals to clearly state their financial assistance, charity care, and payment plan information on their website, in patient waiting areas, directly to patients before they are discharged, and in writing on the patients’ billing statements. Hospitals will also have to allow a patient’s bill to go at least 30 days past due before initiating collections procedures. […]
Over the past several months, I’ve written a few articles about the legality of employer reimbursement of individual health insurance premiums in Colorado. Our friend and fellow blogger Hank Stern (writing at InsureBlog) found the changes interesting, and noted that the laws surrounding employer reimbursement of premiums vary quite a bit from one state to another (he’s in OH).
Hank and I wrote a joint post about the topic, which he published last week on InsureBlog. Here’s Hank’s description of how the law works in OH (regular readers will note that it’s similar to how things used to be here in Colorado, before HRAs became a major issue, and of course before SB19 passed earlier this year). […]
[…] Because of the new law, employers can now use wage adjustments to reimburse employees for individual policies (as long as they haven’t had a group policy in the past twelve months), which wasn’t allowed at all in the past. But the use of HRAs to fund individual policies can now only be done if the employer hasn’t had a group policy in the past twelve months, and that restriction wasn’t found in the DOI final agency order regarding HRAs. […]
The Colorado Division of Insurance recently released the 2010 small group market report. The number of employers in Colorado offering small group health insurance dropped by 10% compared with 2009, and the number of Colorado residents with small group health insurance coverage dropped by 7%. The report contains comprehensive data on the availability of coverage, carriers in the small group market, pricing, and how the rating flexibility laws have impacted the market. […]
[…] However, it appears that the Colorado Division of Insurance has repealed its 2009 order regarding the use of HRA funds to purchase individual health insurance. Final Agency Order O-11-064 details the questions involved (including issues regarding eligibility for CoverColorado) and concludes that “Self-funded employee benefit plans sponsored by a private company such as an HRA, are employee benefit plans under ERISA and are not subject to the jurisdiction of the Commissioner.” […]
The 2011 Colorado legislative session is now underway, and Senate Bill 19 will be particularly interesting to watch. Since 1994, Colorado has had a law that bans employers from reimbursing employees for individual health insurance premiums. If any portion of the premiums for such plans are paid or reimbursed by the employer, the Colorado Division of Insurance considers the employer to have created a small group health insurance plan, and the plan must adhere to small group regulations (this impacts things like underwriting, and also has tax implications for the employer). […]
A survey conducted by the Lockton Benefit Group found that premiums for employer-sponsored group health insurance policies in Colorado were increasing by an average of 14.4% for 2011, which was “significantly higher than reported nationally.” This was the tenth year in a row that premiums saw double digit increases, but the current increase is the largest in five years, and most employers surveyed (more than 73%) plan to make plan changes or increase employee contributions to offset the large rate increases. […]
[…] The extra $1000 per worker that Wal-Mart is planning to contribute to the HRAs will definitely help employees to offset routine costs, and will hopefully encourage more of them to enroll in the company’s health insurance policy. But it will still be a struggle for many families to come up with the rest of the high deductible in the event of a serious illness or injury, if the family relies on wages from Wal-Mart to cover all of their living expenses.
I like a system that rewards people who put aside money to pay for medical bills. We encourage our clients in Colorado to apply for high deductible health insurance and set up HSAs if they are able to do so. But tax breaks for health care shouldn’t be limited to those who have the means to fund an HSA, or to people with very high medical bills relative to their income. […]