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New IRS Rule Allows Mid-Year Plan Changes

There are many ways you can describe the health insurance system, but when it comes to enrollment, “flexible” isn’t always one of them. Each year, you choose your company’s plan and your employees have a set enrollment period (either the ACA open enrollment period or another one of your choosing) during which they can sign up. Once they do, that’s pretty much it for the year, unless they experience a qualifying life event, like marriage or the birth of a child. But 2020 hasn’t been an ordinary year. The IRS has decided to recognize this fact and allow mid-year changes to healthcare plans, and they are leaving the decision about whether to allow these changes up to you, the employer.

What the IRS Is Allowing

cafeteria plan written on a white piece of paper — *The IRS has decided to allow mid-year changes to healthcare plans including cafeteria plans.*

If you offer your employees a healthcare plan under IRS Section 125 – otherwise known as a Cafeteria Plan – and/or a flexible spending account (FSA), then you have a decision to make this year. The normally rigid rules surrounding when and how employees can make changes to these plans have been suspended by the IRS, and you now have the option of letting them make a one-time change to their plan. This comes at a time when employees may need relief from premium payments, extra coverage, or even more time to use their FSAs. You are not required to let employees make any changes, but if you decide to, you can allow them as many options as you like, including:

Enrolling in the plan if they had previously declined coverage
Changing from a higher to a lower cost plan, or vice versa
Moving from family to individual coverage, or vice versa
Dropping coverage, but only if they have another plan in place

Again, you don’t have to allow all or any of these changes. You also have to be sure that you make the options fair and equal to everyone. The IRS even suggests that employers only offer options that would improve healthcare coverage, such as moving from an individual to a family plan or from a plan that covers very little to a more comprehensive plan, to make clear that these changes are meant to benefit your employees, not simply lower your premium contributions.

In addition to changes to their healthcare coverage, employees now also have more flexibility when it comes to their FSAs. Your employees might be finding it harder to make the most of their FSA dollars these days because they haven’t been going to the eye doctor or dentist, for example. If they use these accounts for dependent care, they may have been unable to send their children to summer camp this year. For this reason, the IRS has extended the grace period for using 2019 funds through the end of 2020. Employees will also be able to roll over more of their funds through 2021.

What Employers Need to Consider

Your employees might welcome the chance to change their insurance policies right now, but you also have to think about how it will affect your business. Consider:

How it will financially impact your business if employees drop their plans, especially if it is the healthier employees who opt out and the employees who need more care who stay in
Your plan’s requirements. If your plan is fully-insured, there may be a minimum number of participants, so having employees opt out or change plans might mean having to rethink your whole healthcare policy.
The admin! It will take a lot of time and resources to review and process all of the changes.

It’s a tough decision to make. These are crazy times, and both you and your employees have a lot on your plates. As a small business owner who may already be struggling to provide healthcare, but who also wants the best for your employees, you may want to allow changes, but limit them. Consider following the example set out by the IRS and offer your employees the ability to enroll in or upgrade their plans. You can also decide to do an emergency stock-take: throw together a mid-year employee health survey and see what is on your employees’ minds. You have until December 31, 2021 to adopt your plan (which can be retroactively implemented), so don’t stress too much!

If you find yourself completely confused, then remember, EZ’s knowledgeable agents can answer any questions you have. And if you find YOU need a change in policy for your company, then come to us for instant, accurate, free quotes. We’re ready, willing, and able to shoulder some of the burden of small business healthcare, so get started with us today. Simply enter your zip code in the bar above. Or to speak with an agent directly, call 888-350-1890. No hassle, no obligation!

Catastrophic Plans Can Be Confusing, Let Us Help

The cost of health insurance is not one size fits all. If you’re healthy, under 30, and facing financial hardship, you could have some cheaper options available to you. For people in these categories, Catastrophic health insurance plans can provide essential health benefits without breaking the bank with monthly premiums. However, you should know that, while premiums on these plans are low, they have high deductibles. If you remain healthy, then your high deductible won’t be a problem, but if you have an accident or become ill, you could end up with huge medical bills. Before you decide if a catastrophic plan is right for you let’s take a look at how they work.

Who These Plans Are For

homeless person sitting outside with a black bag full of clothes — *Catastrophic plans are ideal for people dealing with hardships such as homelessness.*

Catastrophic plans are designed for individuals who are young or struggling to afford health insurance. Not everyone qualifies for these plans. They are only available to people who are:

Under 30 or are over 30 and meet the guidelines for a hardship exemption. This includes people whose plan was canceled by their insurer or small group employer.
Dealing with hardships such as homelessness, eviction, foreclosure or bankruptcy, domestic violence, or medical debt
Considered low-income and cannot afford insurance

These plans have the lowest premiums of any plans on the ACA exchanges, but they also have the highest out-of-pocket costs.These plans do not have a copayment or coinsurance and premiums will vary depending on where you live. Generally all plans have the same high deductible: deductibles were $7,900 for 2019, and they have risen to $8,150 in 2020. Once you meet your deductible, then the insurance company will pay for all covered services.

Who They Are Not For

weekly pill container filled with pills in it with Tuesday tab open. — *If you are unhealthy with a condition, then these plans are not right for you.*

Do you see the doctor often? Do you need a lot of coverage? Do you plan on starting a family in the next year? If you answered yes to any of these questions, then a catastrophic plan is probably not the best choice for you. Because of their high deductibles, these plans are not for people who have health conditions that need constant attention. In this case, you will probably want to look for a plan with a lower deductible, even if it means a higher premium.

If you are over 30 or do not qualify for a hardship, then you can look into getting a Bronze level plan on the ACA Marketplace. These plans are very similar to Catastrophic plans, but with slightly higher premiums and without the same qualification requirements of Catastrophic plans. Even if your income isn’t low enough for a Catastrophic plan, you may still be able to get subsidies for a Bronze plan.

Just The Essentials

Catastrophic plans must include all of the ACA’s benefits, and include some free preventive care. These plans cover:

Outpatient services
Catastrophic plans cover the 10 essential benefits such as lab work.
Emergency services
Hospitalization
Pregnancy, maternity, and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Prescription drugs
Rehabilitative and habilitative services and devices
Lab work
Preventive and wellness services, and chronic disease management
Pediatric services, including oral and vision care

Catastrophic plans aren’t for everyone. If you’re unsure what plan is right for you, come to EZ.Insure for help. We understand how intricate the insurance world is, and because we have been in the industry for over 10 years, we can offer you free expert advice on which direction you should go in. To get free quotes, enter your zip code in the bar above, or to speak directly to one of our experienced agents, call 888-350-1890.

More ACA Insurance Options In 2020

2020 will bring more health insurance options for people in counties that have previously had few choices. This fall open enrollment period, people shopping in the ACA Marketplace will find about 60% of insurers adding more plans. This is great news for people who have had limited options, especially those who only had plans from a single insurance company available to them. What’s even better is that 46% of insurers say they plan to either lower their premium rates or keep them the same as last year.

the less than symbol in a black circle. — *Many insurers abandoned certain areas of the country leaving people with less options.*

The Fleeing Insurers

Prior to 2018, many health insurance companies were choosing not to participate in the federal health insurance marketplace, leaving people with few options. Many abandoned certain areas of the country because it was costing them too much to cover the poorer, sicker people who were able to get healthcare plans under the rules of the ACA. Because there was so much more demand than supply, premiums were constantly rising, making it harder for people to get insurance even when they could find a plan in their area.

Resurgence Of Insurers

After seven years of instability and decreasing involvement, some insurers began slowly re-entering the Marketplace in 2018. Oscar Health was one of the first to increase the plans they were offering in the Marketplace for 2019. Following Oscar Health was Bright Health, who expanded on venture-funded Medicare Advantage plans. Cigna joined them soon after.

“Stability has not been a major theme in the story of the Affordable Care Act marketplace, but since 2018, premium growth has slowed and issuer participation has increased,” RWJF summarized in a statement. “While enrollment has trended down somewhat in recent years, health plans seem newly interested in participating.”

The Expansion

Centene, Oscar, and Bright Health will be expanding into counties where they weren’t previously offering plans. Blue plans, Cigna, and Anthem are also choosing to expand into new areas.

Oscar will expand to cover individuals and families in six new states and a total of 12 new markets. For its individual markets, Oscar will be expanding into Florida, offering plans in Miami, Tampa, Ocala and Daytona. Oscar will also offer plans for the first time in Philadelphia, Denver, Richmond, Atlanta, and the Kansas City metropolitan area across Missouri and Kansas. In Texas, Oscar will begin with Houston and expand the plan options currently offered in Dallas-Fort Worth. Oscar will also expand to serve several counties in Western Michigan.

Bright Health will double their expansion of Medicare Advantage plans into 13 new markets across six states. The states include Florida, Illinois, Nebraska, Ohio, South Carolina, and Tennessee. Last year, Bright Health grew to include products in Arizona, New York, Ohio, and Tennessee.

Centene plans on expanding into ten markets, including Arizona, Florida, Georgia, Kansas, North Carolina, Ohio, South Carolina, Tennessee, Texas, and Washington.

Cigna announced they will be expanding in the federal health insurance marketplace, specifically 19 new markets (counties) in 10 states: Arizona, Colorado, Florida, Illinois, Kansas, Missouri, North Carolina, Tennessee, Utah and Virginia.They are offering $0 preventive care, free telehealth services, and low-cost options for chronic disease management. This is a pretty big deal for people that couldn’t receive this kind of care or could not afford it.

“More people who purchase health care coverage on the exchange now will have access to Cigna’s broad range of products and services that makes quality health care more accessible and affordable,” said Brian Evanko, president of Cigna’s government business. “We’ve learned from our thoughtful approach and continuous presence on the exchange how to deliver a great product with a simplified customer experience. We are proud to be able to deliver our exceptional offering to even more people throughout the U.S.”

If you would like to learn more about the new insurers in your area and what plans they are offering, EZ will help guide you through the process. We will provide you with a personal agent that will go over all the information, and compare plans so you can find a plan that meets your financial and healthcare needs for free. To see prices and shop for plans, enter your zip code in the bar above, or speak with an agent directly by calling 888-350-1890.

Could You Be Looking Forward to an Insurance Rebate?

When we pay for health insurance, we want to know that our money is going where it should be going. Contributing to premiums can be expensive, and until recently, we’ve had to trust that insurance companies were doing the right thing and putting those premium dollars towards getting the best care possible. Thankfully, insurance companies are now required by law to spend a certain percentage of premiums on medical costs as opposed to administrative costs. If they don’t, you will receive a medical loss ratio (MLR) rebate.

Background of the MLR Provision

a calculator and pen sitting on top a pile pf papers with numbers. — *Insurance companies are required by law to spend a certain percentage of premiums on medical costs. If they don’t, you will receive a medical loss ratio (MLR) rebate.*

Before the Affordable Care Act (ACA) was passed in 2010, insurance companies could decide for themselves how much of your premium dollars went towards medical costs and quality improvements, and how much went towards their administrative costs. If an insurance company had particularly high administrative costs, then you were stuck paying their bills and getting less in return. You had no recourse, and most likely, no way of knowing.

While some states had minimum standards before the ACA, there were no nationwide standards, and little review or enforcement. However, the ACA set a standard maximum percentage of premiums that insurance companies are allowed to put towards their own administration, marketing, and profits. Insurance companies are now also required to publicly report their percentages in each state where they operate. What’s more, if they don’t meet these standards, you can look forward to getting a MLR rebate.

The Standards

So how much of your premium dollars need to go towards actual healthcare? If you are a small employer (less than 50 people), then 80% must be spent on care and improvements. If you are a large employer, that number rises to 85%. That means that up to 20% of small group plan premiums still goes in the pockets of the insurers, but you can rest assured that it will never be more than that.

The Rebates

Insurers failing to meet the standards must pay a rebate based on a 3-year average of their financial data. While most seem to meet the requirements, many rebates have been paid out to policy holders since 2012. In 2019, insurers returned $312 million to the small group market, which broke down to an average of $1190 per employer. Most of that (93%) was given back as a lump sum. So if you do receive this money, what do you do with it?

What Do You Do with an MLR Rebate?

If you do find yourself with one of these MLR rebate checks, it is your responsibility as an employer to use it a certain way. There are a few steps you should follow when figuring out how to deal with this rebate:

Determine which plan the rebate applies to – generally, the rebate only applies to one plan that an employer has offered (such as a PPO or HDHP), and can only be given to employees who are participating in that plan.
Determine how much of the rebate relates to employer contributions vs employee contributions towards the plan’s premiums – if you are contributing to your employees’ premiums, then you can keep the same percentage of the rebate as the percentage you have contributed. The rest is considered “plan assets” and must benefit your employees. So, for example, if employees contribute 50% of the premium, then 50% of the rebate would need to be used for the benefit of plan participants.

Determine who will get the rebate – distribution of the rebate only needs to be “fair” and “reasonable.” You don’t need to spend all your time figuring out exactly how much each employee contributed and give them each an exact percentage. You can make it easy on yourself and give a flat amount to everyone. You can also decide to only give the money to current plan participants if it will cost you too much to distribute it to everyone who ever participated in the plan.
Determine how to distribute the rebate – you have four choices of ways to give the rebate to your employees:
- Cash
- Premium reductions
- An added benefit
- A premium holiday

Thanks to provisions in the ACA, you can now feel a little bit more comfortable knowing that your premium dollars are being put towards the health of you and your employees.

Anything that adds transparency to the insurance market is definitely a good thing. And so is a little bit of money back in your pocket!

Can Your Bottom Line Benefit From A Workplace Wellness Program?

Looking out for your employees’ health can mean looking out for your bottom line. You’ve probably heard how huge companies like Google and Microsoft offer unbelievable employee perks, including wellness programs with everything from on-site gyms, to chiropractors, and massages. You may not be able to provide your employees with “nap rooms” and in-house chefs, but you can still offer a smaller-scale version of a workplace wellness program. These programs may help you reduce healthcare costs and create a happier, more productive workplace, as long as you follow the rules laid out by the Affordable Care Act.

cigarettes on a table with a redcircle with line through it — *Workplace wellness programs help employees get healthier and offer programs to quit smoking.*

What Is a Workplace Wellness Program?

A workplace wellness program encourages employees to live healthier, fitter lives. Some insurance companies offer them, and some are completely designed by employers. It’s no secret that our country is dealing with multiple health issues like diabetes and obesity epidemics. Offering incentives for employees to look after themselves can help to keep rising healthcare costs down. These programs combine things like:

Health screenings
Programs to quit smoking
Diet and weight loss programs
Diabetes management programs
Monthly seminars

Employers can reimburse employees for gym memberships or even offer rewards like cash or reductions in their health insurance premiums.

Types of Workplace Wellness Programs

There are lots of different ways you can implement a wellness program, but generally there are two types. These are:

Participatory wellness programs – these programs are the ones that generally include seminars and health screenings offered at work, or reimbursements for gym memberships. They might not offer a reward for participation, or, if they do, employees will not have to meet any goals or conditions to get the rewards.
Health-contingent wellness programs – employees who participate in these need to meet specific goals to get their reward. They can either be activity-based or outcome-based. For example, employees could commit to walking a certain amount per week (activity-based), or employees could reach a goal of quitting smoking or reducing their BMI (outcome-based).

The second type of program is a little more controversial since they could exclude some employees who have physical limitations that would make it hard to participate. So are there rules for these programs? Yes. The Affordable Care Act (ACA) lays out guidelines for how they can be used.

Wellness Programs and the ACA

The ACA is on board with the use of workplace wellness programs: it actually created incentives for employers to use them. If an employer decides to offer a health-contingent program, employers can offer a reward that is equal to up to 30% of the total cost of medical coverage (including both employee and employer contributions). That amount goes up to 50% for programs that help employees quit smoking.

This 30% limit is one of the rules put in place by the ACA. There are other regulations, as well. For example, employers need to give an opportunity to get a reward at least once a year, and the full reward needs to be offered to everyone fairly.

This brings us to one of the main rules. In order to be fair and not discriminatory, “reasonable alternatives” have to be offered to employees who cannot participate in the same way as others because of a medical condition. Employees in an activity-based program need to be offered an alternative activity if, say, they are pregnant, ill, or have recently had surgery. And, if an employee in an outcome-based program doesn’t meet their goal, they need to be offered a way to still get their reward, perhaps by working with a health coach.

Why Have a Workplace Wellness Program?

money floating in the air. — *Insurers will offer discounts on premiums if you offer employees a wellness program.*

According to the Centers for Disease Control (CDC), almost half of all companies in the U.S. offer some type of health promotion or wellness program. There must be a reason why so many employers, large and small, are giving employees access to these programs. And there are studies that show the benefits go beyond employee satisfaction. Wellness programs can make sense financially for employers, even those running small businesses. Some of the reasons to consider one include:

Some insurance companies offer discounts on premiums for employers and employees that participate in wellness programs
Some studies claim that these programs can actually change employee behavior surrounding their health. While it’s hard to fundamentally change people, offering them education, motivation and social support (as well as concrete things like gym memberships) might help them to live healthier lives. They might quit smoking, lose weight or lower their cholesterol, all of which would lower their risks of serious health problems. And being healthier obviously means lower healthcare costs. In fact, the journal Health Affairs found that medical costs fell by $3.27 for every dollar spent on wellness programs.
Healthier employees not only have fewer costly health problems, but they may also be more productive. A study by the journal Popular Health Management found that smokers, people with unhealthy diets, people who don’t exercise, and those with chronic pain are actually less “present” at work, which could be costing employers money.
Other studies show that healthier employees miss fewer days of work. The study by Health Affairs found that absenteeism costs fell by $2.73 for each wellness dollar spent.
A workplace wellness program could help you to attract more employees, and might help you keep the ones you have. Offering extras like gym memberships or lower insurance premiums can differentiate you from other employers.

Workplace wellness programs can boost your employees’ health, make your business more productive, and help reduce your healthcare costs. Provisions in the ACA allow you to give rewards to your employees for looking out for their health, but you need to be careful about how you offer those incentives.

COVID-19 Crisis: Health Insurance Options If You’ve Lost Your Job

As millions of Americans lose their jobs due to the coronavirus crisis, they also find themselves without health insurance coverage. According to a report by FOX Business unemployment claims have hit a record 3.3 million. Because many Americans get health insurance through their employers, a pandemic is an especially scary time for people who have lost their jobs. However, if you do find yourself without health insurance, there are a couple of options you can look into.

A pair of shoes stanfing in front of three white arrows on asphalt pointing in different directions. — *Even though you have lost your job and health benefits due to the coronavirus pandemic, you still have options for health insurance coverage.*

Marketplace

Normally a person can only sign up for Marketplace health insurance, or the Affordable Care Act (ACA) exchange, during the open enrollment period from November 1 to December 15. However, under certain circumstances, people can qualify for a special enrollment period, which would allow them to enroll in a plan outside of open enrollment. Losing your job is considered a qualification for a special enrollment period.

There is only a 60 day window to apply for an ACA plan after you lose your job. These plans can be costly, but if you fall into a low-income bracket, then you may qualify for a subsidy.

Recently, the Trump administration decided to not create a special coronavirus-related re- enrollment period for the uninsured in 38 states. Only 11 states and the District of Columbia run their own exchanges, and have opened enrollment to allow laid-off workers to get subsidized health insurance. These 11 states are:

California
Colorado
Connecticut
Maryland
Massachusetts
Minnesota
Nevada
New York
Rhode Island
Vermont
Washington

It is important to note that just because these 38 states will not re-open enrollment for everyone, does not mean that you do not qualify for special enrollment. If you were laid off from your job, you can enroll into the ACA exchange because that is one of the qualifications for a special enrollment period.

COBRA

health insurance words in a blue box with a green check in a box next to a yes — *You can choose to extend your employer’s health insurance for up to 18 months following unemployment.*

There is also a way to keep your employer-based coverage even if you lose your job. Under the Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, you can extend your coverage for up to 18 months. However, it is important to note that COBRA can be quite expensive, because you are required to pay your entire premium. For example, if individual health insurance coverage costs roughly about $600 monthly, then normally your employer would pay for about $500 of that. Without an employer contributing to the cost of monthly premiums, you will be left to pay for it all.

Medicaid

If you lose your source of income, you may qualify for Medicaid. Medicaid is government sponsored, and offers coverage for low-income individuals and people with disabilities. States look at your current income when deciding if you qualify for assistance from the program. Eligibility varies by state, but the monthly income limits are about $1,470 for an individual, and $3,000 for a family of four. You can apply online, or call your state’s Medicaid office, and will usually receive a response within 24 hours.

If you have recently lost your job due to the coronavirus pandemic, EZ will help you find an affordable plan to cover your health needs. We will provide you with a personal agent who will compare all the available plans in your area, and find one that fits your needs. To get started, enter your zip code in the bar above, or to speak with an agent, call 888-350-1890. Our promise to you is to help you find a plan, so you can remain healthy and safe during these hard times. EZ’s services are free of charge, because our service is focused on making sure that you feel supported throughout your health plan shopping journey, not on making money off of you.

Tag: ACA