Thursday, December 31, 2015
Wednesday, December 30, 2015
IRS Codes for Dummies
For individuals who purchase insurance through the Marketplaces you might use/receive the following regulations and forms:
Regulation 5000A - The rule that everyone must have minimum essential health care coverage. This also provides a listing of types of coverage that qualify under the ACA.
Section 1401 (which creates Section 36B of the Internal Revenue Code) - This authorizes tax credits for the purchase of qualifying health insurance in an exchange “established by the State under Section 1311″ of the Act. It was a vital part of the King vs. Burwell case. In final regulations under Code 36B, the Treasury Department and the IRS read the rules broadly, such that subsidized coverage are available irrespective of whether an exchange is state-based or Federally-facilitated.
1095-A - This is called the Marketplace Statement. It is provided by the Marketplace to confirm an individual has insurance that meets minimum coverage and allows that person to receive a premium tax credit. It shows what the 2nd lowest cost Silver Plan is for the state the person resides in along with the amount an individual received in advanced premium tax credits.
Form 8962 - The new tax form you complete that will provide a way to figure your tax credit and then reconciles with your advanced premium tax credit. You must submit this form to the IRS with your taxes if you qualify and receive a subsidy through the purchase of individual insurance through a marketplace.
Form 8965 - You must complete this form if you are claiming an exemption to the individual mandate. Important to note, you must have received an exemption from the Marketplace beforehand. You will provide the exemption certificate number you received on this tax form.
For insurers, Applicable Large Employers, and individuals who receive insurance through their employer you will use the following regulations and forms:
IRS Code 6055 - Provides that every fully insured and self funded plan must offer minimum essential coverage and will report this information by filing a return to the IRS and also by furnishing a statement to individuals who are offered insurance under the plan. The IRS uses this to show compliance with the individual mandate (5000A). In fully insured cases insurers are the ones providing documentation to the IRS and individuals who are covered under a group plan.
IRS Code 6056 - Only applies to Applicable Large Employers (50 or more FTE's). This section requires the employers to complete tax filing documents to the IRS and all of their employees. The IRS uses these tax forms to determine if an employer meets the Employer Mandate requirements and also determine if an employee is eligible for a premium tax credit or not.
IRS Form 1094-C - This form is generated by ALE's under IRS Code 6056 to show a summary of information for the employer who sponsors a health insurance plan. It covers eligibility methods, monthly enrollments, and minimum coverage requirements. It also asks for the total number of 1095-C forms the plan sponsor has sent.
IRS Form 1095-C - This form is given to all full-time employees and also provided to the IRS by all ALE's who offer fully insured and self funded plans. What sections to complete depend on whether an employer offers a fully insured or self funded plan. Regardless this is the most cumbersome portion of the reporting requirements for an employer. This data is used by the IRS to determine if an employer owes a penalty or if an employee is eligible for a tax credit. It also is used by the IRS to determine if someone is responsible for the individual mandate tax for not having insurance.
IRS Form 1094-B - This form is only required if an employer meets the following two requirements: 1. they offer minimum essential coverage and 2. the plan they offer is self-funded. If you don't meet these requirements then you will not have to deal with this form.
IRS Form 1095-B - This form is sent by insurers to all members who are covered under a fully insured medical plan. This includes: individual off exchange, small and large group fully insureds. Small group self funded accounts are also responsible for sending these to employees.
Tuesday, December 29, 2015
Oy Canada! (Part 2,739)
Two years ago, we noted that "Canada's Supreme Court has ruled that under the "law of the land" in Ontario, a government board, not the family or doctors, has the ultimate power to pull the plug on a patient."
On the one hand, this is pretty scary; after all, it's what will happen under the IPAB. On the other, at least one knows the score, and can (try to) plan accordingly.
On the gripping hand:
"Canadian Medical Association considering allowing doctors to LIE about patients death to cover up euthanasia."
Wait, what?!
Oh, it gets worse:
The Quebec Medical College is already doing this:
So if one has cancer, or some other fatal disease, and one is euthanized (perhaps under government orders) the cause of death won't be listed as the lethal injection, but the cancer itself.
"The deceased died of a sudden and severe influx of electrons."
Sure, go with that.
[Hat Tip: The Political Hat]
On the one hand, this is pretty scary; after all, it's what will happen under the IPAB. On the other, at least one knows the score, and can (try to) plan accordingly.
On the gripping hand:
"Canadian Medical Association considering allowing doctors to LIE about patients death to cover up euthanasia."
Wait, what?!
Oh, it gets worse:
The Quebec Medical College is already doing this:
"The physician must write as the immediate cause of death the disease or morbid condition which justified [the medical aid in dying] and caused the death. It is not a question of the manner of death (cardiac arrest), but of the disease, accident or complication that led to the death."
So if one has cancer, or some other fatal disease, and one is euthanized (perhaps under government orders) the cause of death won't be listed as the lethal injection, but the cancer itself.
"The deceased died of a sudden and severe influx of electrons."
Sure, go with that.
[Hat Tip: The Political Hat]
Understanding Another Obamacare Extension
Employers and insurers have been gearing up for a crazy month of January where they must comply with new IRS reporting requirements. Confusion and time constraints will make this month a nightmare for human resource and accounting departments.
But never fear, the IRS is here!
In guidance released yesterday the IRS is providing an extension to these reporting requirements. The reporting requirements pertain to sections 6055 and 6056 and directly impact the time allowed to submit forms 1095-B, 1095-C, 1094-B, and 1094-C. They also give more time to employers so that they won't be subject to fines under codes 6722 and 6721 for failing to file these forms in a timely fashion.
These forms are then used by the IRS to help individuals who have new requirements under section 36B and 5000A. Don't mistake these above mentioned forms with form 1095-A which could also include form 8962 or 8965.
All of these forms are necessary in finalizing your 1040 or 1040EZ except for this year where it might not be possible that you have received your 1095-B or 1095-C in time for tax filing. There is no need to worry as the IRS has indicated that they will not require anyone to file an amended return should they not have their form 1095-B or 1095-C submitted with their 1040 or 1040EZ.
(COMING SOON! UNDERSTANDING THE POST ABOVE)
But never fear, the IRS is here!
In guidance released yesterday the IRS is providing an extension to these reporting requirements. The reporting requirements pertain to sections 6055 and 6056 and directly impact the time allowed to submit forms 1095-B, 1095-C, 1094-B, and 1094-C. They also give more time to employers so that they won't be subject to fines under codes 6722 and 6721 for failing to file these forms in a timely fashion.
These forms are then used by the IRS to help individuals who have new requirements under section 36B and 5000A. Don't mistake these above mentioned forms with form 1095-A which could also include form 8962 or 8965.
All of these forms are necessary in finalizing your 1040 or 1040EZ except for this year where it might not be possible that you have received your 1095-B or 1095-C in time for tax filing. There is no need to worry as the IRS has indicated that they will not require anyone to file an amended return should they not have their form 1095-B or 1095-C submitted with their 1040 or 1040EZ.
(COMING SOON! UNDERSTANDING THE POST ABOVE)
Monday, December 28, 2015
Suspend. Delay. Postpone. Repeat
By postponing the Cadillac Tax from 2018 to 2020, pausing the Medical Device Tax for 2017 and 2018, and also pausing the Health Insurance Tax for 2017 the federal government is reducing revenues to fund Obamacare by $32.1 Billion. Some are saying so what, in government world that's pennies. This is correct in the short term, but given the track record of Congress pushing things off, the long term of not letting these expire or removing them altogether will be financially irresponsible.
How financially irresponsible? In reviewing the 10 year Obamacare costs based on the December 2nd release from the Office of Management and Budget regarding H.R. 3762 and the CBO's Budget and Economic outlook for 2015 we found a significant potential for lost revenue based on these three taxes being eliminated.
The smallest of the three is the Medical Devices Tax. The two year pause that has already passed will cost $4.1 billion. Should Congress repeal this tax - which has bipartisan support - would reduce revenues by $23.9 billion over ten years.
The Cadillac Tax is the one receiving the most attention. This tax will hit more employers over time and the primary revenue generator is new tax dollars on employee compensation. The CBO can only score on the garbage in, garbage out rules. Because Congress is full of garbage, they assumed that as the tax kicked in employers would reduce benefits and therefore lower premiums. In turn they assumed that employers would replace this lower premium with a dollar for dollar match in compensation. The end result is higher income tax revenue on taxpayers. The cost of delaying this for two years is $13 billion. Many in Congress want this tax fully repealed. Doing so would reduce Obamacare revenues by $149 billion over ten years.
The sneaky one is the Health Insurance Tax - or as we refer to it - The HIT. This tax bill is sent to health insurers based on their market share. It has flown under the radar because it was sold as a tax on insurance companies. Nobody likes insurance companies so taxing them would seem to be a good thing. But if you look at your insurance bill you will see that this tax is built in to your premium. This tax being paused for a year will lower revenues by an additional $13 billion. Continuing the delay for ten years will cost $159 billion - even more than the Cadillac Tax.
The total cost over ten years of eliminating these three taxes will decrease Obamacare revenues by $331,900,000,000. This makes up more than half of the revenues Obamacare is supposed to generate over that same time period.
We already knew that Obamacare was financially unsustainable. Adding these reductions in revenue to the fold will accelerate it's death. And that might be a good thing.
Friday, December 25, 2015
Merry Christmas
For some unexplained reason it seems to be insensitive to wish others a Merry Christmas.
Forget the fact that many who celebrate Christmas do so in a decidedly secular manner. Today's commentary will diverge from the traditional Christmas post and will not explore the "true meaning" of Christmas.
And no, we are not yielding to outside pressure, political or otherwise. Those of us who make InsureBlog possible can perhaps make our voices heard above the din and say Merry Christmas without reprisal.
If a nation that includes Christians, Jews, Buddhists, Muslims, etc. plus a minority of non-believers in any religious deity can openly declare en masse that they acknowledge Christmas, then why should we be self conscious about wishing someone a Merry Christmas?
Why must the the overwhelming majority of us be relegated to the back seat and forced to substitute Merry Christmas with Happy Holidays?
My co-blogger, Henry Stern, is a devout, practicing Jew. I, on the other hand, am a Christian. We acknowledge and worship the same God but we do so in different ways.
I don't understand many of his customs and he probably doesn't understand some of mine. After all these years I still don't know which Jewish holidays allow you to feast with abandon while others require fasting.
But in the big scheme of things, does it really matter?
If you, as a reader of InsureBlog, find yourself offended by Merry Christmas do not expect an apology. It isn't forthcoming.
It's not that I do not care about your feelings. Rather it is because I refuse to be pressured into hiding my light under a basket just to keep from offending someone who has a different belief from my own.
So if the words Merry Christmas offend you, get over yourself.
Here is comes one last time. Merry Christmas to all and may you be truly blessed during this holy time of year.
#MerryChristmas
Forget the fact that many who celebrate Christmas do so in a decidedly secular manner. Today's commentary will diverge from the traditional Christmas post and will not explore the "true meaning" of Christmas.
And no, we are not yielding to outside pressure, political or otherwise. Those of us who make InsureBlog possible can perhaps make our voices heard above the din and say Merry Christmas without reprisal.
Nearly all U.S. Christians (96%) say they celebrate Christmas. No big surprise there. But a new Pew Research Center survey also finds that 81% of non-Christians in the United States celebrate Christmas, testifying to the holiday’s wide acceptance - Pew ResearchThis to me is a fairly powerful statement.
If a nation that includes Christians, Jews, Buddhists, Muslims, etc. plus a minority of non-believers in any religious deity can openly declare en masse that they acknowledge Christmas, then why should we be self conscious about wishing someone a Merry Christmas?
Why must the the overwhelming majority of us be relegated to the back seat and forced to substitute Merry Christmas with Happy Holidays?
My co-blogger, Henry Stern, is a devout, practicing Jew. I, on the other hand, am a Christian. We acknowledge and worship the same God but we do so in different ways.
I don't understand many of his customs and he probably doesn't understand some of mine. After all these years I still don't know which Jewish holidays allow you to feast with abandon while others require fasting.
But in the big scheme of things, does it really matter?
If you, as a reader of InsureBlog, find yourself offended by Merry Christmas do not expect an apology. It isn't forthcoming.
It's not that I do not care about your feelings. Rather it is because I refuse to be pressured into hiding my light under a basket just to keep from offending someone who has a different belief from my own.
So if the words Merry Christmas offend you, get over yourself.
Here is comes one last time. Merry Christmas to all and may you be truly blessed during this holy time of year.
#MerryChristmas
Tuesday, December 22, 2015
How sick is this?
This strikes me as perverse:
"In theory, if the system works, it could make insuring a patient with diabetes more attractive than insuring a similar patient without diabetes. Covering a patient who has diabetes and has had terrible medical care may look even better, because an insurer could collect extra risk adjustment cash for that patient while using good care management to reduce the patient's medical bills."
As FoIB Allison Bell notes, an immediate problem is that the implied mechanism here looks like the health care version of a credit score, and "[c]onsumers may not be thrilled to learn that insurers are assigning them risk scores."
I'd agree, if they ever even learned of its existence. But this has been kept so well under the radar that I doubt whether many non-industry folks know about it (heck, I wonder how many industry folks know!).
It actually gets worse, though:
"CMS recently began offering health insurers HHS-RADV training. The agency wants insurers to send it HHS-RADV data reports by April 30, 2016."
That's the agency's Risk Adjustment Data Validation program, which seeks to collect health care usage data from carriers. And how is this data then used? Well, carriers have an incentive to make their own insureds look as sick as possible in order to hold onto (or get more of) that sweet, sweet risk corridor cash (and BTW, rotsa ruck with that).
On the gripping hand, it's hard to feel much sympathy for carriers (thanks, AHIP!).
"In theory, if the system works, it could make insuring a patient with diabetes more attractive than insuring a similar patient without diabetes. Covering a patient who has diabetes and has had terrible medical care may look even better, because an insurer could collect extra risk adjustment cash for that patient while using good care management to reduce the patient's medical bills."
As FoIB Allison Bell notes, an immediate problem is that the implied mechanism here looks like the health care version of a credit score, and "[c]onsumers may not be thrilled to learn that insurers are assigning them risk scores."
I'd agree, if they ever even learned of its existence. But this has been kept so well under the radar that I doubt whether many non-industry folks know about it (heck, I wonder how many industry folks know!).
It actually gets worse, though:
"CMS recently began offering health insurers HHS-RADV training. The agency wants insurers to send it HHS-RADV data reports by April 30, 2016."
That's the agency's Risk Adjustment Data Validation program, which seeks to collect health care usage data from carriers. And how is this data then used? Well, carriers have an incentive to make their own insureds look as sick as possible in order to hold onto (or get more of) that sweet, sweet risk corridor cash (and BTW, rotsa ruck with that).
On the gripping hand, it's hard to feel much sympathy for carriers (thanks, AHIP!).
Monday, December 21, 2015
Major O'Care Disappointment
Now that the (disastrous) first phase of the 2016 Open Enrollment season is behind us, lets' take a look at what a huge disappointment it was. Even with the DC Rocket Surgeons© (illegally) extending the deadline a few days, they missed their mark by substantial margins::
"About 6 million people have signed up for health coverage that will take effect on Jan. 1 in the states that use the [404Care].gov enrollment."
Yikes!
That's a far, far cry from the 21 million people the Congressional Budget Office expected to enroll.
But Henry, you may object, Charles specifically cited that number as total 2016 sign-ups, and you're only counting Phase 1.
Reality check: who really thinks they're going to make up that 15 million person deficit in the next two months?
What I thought, too.
But why aren't more folks getting on the ObamaTax wagon?
Remember this?
You might want to sit down for this...
"State by state data show bigger 2016 exchange premium, deductible jumps"
Seems like maybe there's a clue....
"About 6 million people have signed up for health coverage that will take effect on Jan. 1 in the states that use the [404Care].gov enrollment."
Yikes!
That's a far, far cry from the 21 million people the Congressional Budget Office expected to enroll.
But Henry, you may object, Charles specifically cited that number as total 2016 sign-ups, and you're only counting Phase 1.
Reality check: who really thinks they're going to make up that 15 million person deficit in the next two months?
What I thought, too.
But why aren't more folks getting on the ObamaTax wagon?
Remember this?
You might want to sit down for this...
"State by state data show bigger 2016 exchange premium, deductible jumps"
Seems like maybe there's a clue....
About Glitches and Tinkering
Apparently (former) Gov. Lamar Alexander (now Senator Alexander) is delivering a lump of coal to his constituents this Christmas.
Coming on the tail of candidate Hillary's comment that rising premiums and out of pocket maximums are a "glitch" Senator A tells us that Obamacare will be fixed.
Sounds like Lamar is taking a page out of Obama's playbook. Wonder what he is smoking these days?
Of course the current administration is determined to shut down all the coal mines so it makes you wonder if Sen. Alexander will have to import all that coal from China.
Maybe he can pay for it by selling the Chinese government some worthless US Treasury Bonds.
#ObamacareSucks
Coming on the tail of candidate Hillary's comment that rising premiums and out of pocket maximums are a "glitch" Senator A tells us that Obamacare will be fixed.
I think over the next four or five years it’ll be changed step-by-step toward a health care system with more freedom for people to find policies, more choices and hopefully lower prices. - Erick on the RadioMore choices, lower prices.
Sounds like Lamar is taking a page out of Obama's playbook. Wonder what he is smoking these days?
Of course the current administration is determined to shut down all the coal mines so it makes you wonder if Sen. Alexander will have to import all that coal from China.
Maybe he can pay for it by selling the Chinese government some worthless US Treasury Bonds.
#ObamacareSucks
The Glitches of Eastwick
Just when you thought it was safe to venture into Obamacare waters, the glitches are back.
So says candidate Hillary.
According to candidate H, the fact that your premiums didn't drop by $2500 and your out of pocket rose to $12,000+ for a family (on top of $20,000 annual premiums) is a bug, not a feature.
Her solution to fix the glitches?
Recycle more taxpayer dollars from the wealthy and send them to the middle class.
This election may be more than just folks clinging to their guns and religion. It will be about hanging on to as much of your hard earned dollar as possible.
#Obamacare #WealthRedistribution
So says candidate Hillary.
Two years ago, the Obama administration called the near-total, initial meltdown of the Obamacare federal exchange a technical "glitch." The term was widely ridiculed at the time, especially since it took weeks to fix the exchange's website, healthcare.gov.
At Saturday night's Democratic debate, front-runner Hillary Clinton called soaring health care costs and deductibles "glitches" resulting from the Affordable Care Act. - CNN
According to candidate H, the fact that your premiums didn't drop by $2500 and your out of pocket rose to $12,000+ for a family (on top of $20,000 annual premiums) is a bug, not a feature.
Her solution to fix the glitches?
Recycle more taxpayer dollars from the wealthy and send them to the middle class.
This election may be more than just folks clinging to their guns and religion. It will be about hanging on to as much of your hard earned dollar as possible.
#Obamacare #WealthRedistribution
Friday, December 18, 2015
Management Position - No Experience Necessary
If you want to serve on the Board of Directors for an Obamacare Co-op, go ahead and reply. No experience is necessary.
In fact, Obamacare rules PROHIBIT anyone from serving that does have health insurance experience.
I suppose if one can become president of the United States without having any real world management experience you can also run a health insurance co-op (into the ground) without any real experience.
How well is that working?
#Obamacare #Co-op #ObamacareFail
In fact, Obamacare rules PROHIBIT anyone from serving that does have health insurance experience.
From its inception, the Obamacare co-op program was originally pitched by the Obama administration to appeal to the liberal love affair with non-profit groups.
Eight of the 15 federal co-op advisory board members that set the final co-op rules came from non-profits. Four others came from academia and two from government.
Also reflecting the anti-business nature of the health law, federal regulators prohibit the hiring of any co-op board member if they had past experience with commercial insurance companies.
To date, 13 of the 24 health insurance co-ops have now defaulted, costing the federal government at least $1.2 billion. - Daily CallerIn other words, if you have ACTUAL EXPERIENCE in commercial health insurance, your assistance isn't needed.
I suppose if one can become president of the United States without having any real world management experience you can also run a health insurance co-op (into the ground) without any real experience.
How well is that working?
#Obamacare #Co-op #ObamacareFail
Thursday, December 17, 2015
Turing Bus Crashes
Last time we looked, Turing Pharmaceutical honcho Martin Shkreli was busy reneging on his company's promise to drastically reduce the cost of its flagship med Daraprim.
But that was then, and this is now:
"Martin Shkreli, the former hedge fund manager vilified in nearly every corner of America for buying a pharmaceutical company and jacking up the price of a life-saving drug more than fiftyfold, was arrested Thursday on securities fraud charges unrelated to the furor."
Sure, they say it's not related to the Daraprim kerfluffle, but it certainly reflects a, shall we say, blase attitude towards ethical behavior that seems to permeate his business dealings.
Of course, he's innocent until proven guilty, but who's really taking the over/under on that?
So long, Marty!
But that was then, and this is now:
"Martin Shkreli, the former hedge fund manager vilified in nearly every corner of America for buying a pharmaceutical company and jacking up the price of a life-saving drug more than fiftyfold, was arrested Thursday on securities fraud charges unrelated to the furor."
Sure, they say it's not related to the Daraprim kerfluffle, but it certainly reflects a, shall we say, blase attitude towards ethical behavior that seems to permeate his business dealings.
Of course, he's innocent until proven guilty, but who's really taking the over/under on that?
So long, Marty!
Happy, Wonky Holidays!
Heath Wonk Review co-founder and all-around enabler coordinator Julie Ferguson hosts the last edition of 2015. Be sure not to miss her wonderful, whimsical take on The Santa Index (who knew that The Big Guy was pulling in The Big Bucks?), and of course the cornucopia of terrific posts.
Wednesday, December 16, 2015
Droning on
With Christmas just around the corner, 'drones' seems to be the hot item this year. I've seen some that fit in the palm of one's hand, and others the size of large dinner plates. regardless, they look like a lot of fun, but they also represent a potential insurance risk (or three):
“Almost no one is thinking about insurance coverage when they’re opening the box,” says Jeff Antonelli, a Chicago attorney who specializes in federal regulations for unmanned aerial systems."
I reached out to Bill M (our favorite guru of all things P&C) for his take. He tells us that there seem to be two main issues:
First, if you (or your child) manages to crash that new drone into the neighbor's window or head, will your homeowner's insurance cover that damage? And second, since many of them also include video capability, there's the issue of invasion of privacy. Bill says that the property damage will likely be covered (although you may want to consider paying that out of pocket to avoid the potential hit to your rate at renewal time), but that it's unlikely they'll cover the invasion of privacy.
He suspects that the Courts will ultimately decide, and then the industry will correct forms to charge more or exclude coverage.
In the meantime, best keep a watchful eye out.
“Almost no one is thinking about insurance coverage when they’re opening the box,” says Jeff Antonelli, a Chicago attorney who specializes in federal regulations for unmanned aerial systems."
I reached out to Bill M (our favorite guru of all things P&C) for his take. He tells us that there seem to be two main issues:
First, if you (or your child) manages to crash that new drone into the neighbor's window or head, will your homeowner's insurance cover that damage? And second, since many of them also include video capability, there's the issue of invasion of privacy. Bill says that the property damage will likely be covered (although you may want to consider paying that out of pocket to avoid the potential hit to your rate at renewal time), but that it's unlikely they'll cover the invasion of privacy.
He suspects that the Courts will ultimately decide, and then the industry will correct forms to charge more or exclude coverage.
In the meantime, best keep a watchful eye out.
Creative Carrier Trick: RMD edition
Folks with IRA, 401(k) and similar plans may be familiar with the term RMD (Required Minimum Distribution):
"The amount that ... qualified plan participants must begin distributing from their retirement accounts by April 1 following the year they reach age 70.5. RMD amounts must then be distributed each subsequent year."
It's not a choice: the law says you have to start using up your retirement savings at age 70½, even if you're still working. Still, one company has come up with a unique way to turn potential lemons into lemonade:
Gleaner Life has developed a product called RMD Life. Basically, it's a single premium, whole life insurance policy with a Guaranteed Purchase Option (GPO) rider. One more often sees GPO's on disability or even Long Term Care insurance policies, where one retains the ability to increase one's protection even if in ill-health.
Every year (beginning at age 70) the GPO allows you to buy an additional amount of life insurance, regardless of your health. Each "certificate" (additional coverage amount) is paid for by the RMD, and can even be assigned to different beneficiaries. And you can even skip a year or two if you find a better use for that year's RMD (but be careful: you have to buy at least once every 3 years to keep the option available).
FoIB Jeff M also helpfully points out that, since this is a single premium plan, any withdrawals from the cash value will be taxable. One presumes that the cash value is of secondary importance to folks interested in this plan, but it's still important to be aware of any potential tax consequences.
Although it's not really clear how much demand there'll be for this product, it's nice to see a carrier think outside-the-bun. And of course, with some 10,000 "Boomers" retiring every day, this could be a pretty decent-sized market.
[Special IB Thanks to Jeff M]
"The amount that ... qualified plan participants must begin distributing from their retirement accounts by April 1 following the year they reach age 70.5. RMD amounts must then be distributed each subsequent year."
It's not a choice: the law says you have to start using up your retirement savings at age 70½, even if you're still working. Still, one company has come up with a unique way to turn potential lemons into lemonade:
Gleaner Life has developed a product called RMD Life. Basically, it's a single premium, whole life insurance policy with a Guaranteed Purchase Option (GPO) rider. One more often sees GPO's on disability or even Long Term Care insurance policies, where one retains the ability to increase one's protection even if in ill-health.
Every year (beginning at age 70) the GPO allows you to buy an additional amount of life insurance, regardless of your health. Each "certificate" (additional coverage amount) is paid for by the RMD, and can even be assigned to different beneficiaries. And you can even skip a year or two if you find a better use for that year's RMD (but be careful: you have to buy at least once every 3 years to keep the option available).
FoIB Jeff M also helpfully points out that, since this is a single premium plan, any withdrawals from the cash value will be taxable. One presumes that the cash value is of secondary importance to folks interested in this plan, but it's still important to be aware of any potential tax consequences.
Although it's not really clear how much demand there'll be for this product, it's nice to see a carrier think outside-the-bun. And of course, with some 10,000 "Boomers" retiring every day, this could be a pretty decent-sized market.
[Special IB Thanks to Jeff M]
Tuesday, December 15, 2015
About today's deadline
As most folks know, today's the last day of Phase 1 of the 2015 Open Enrollment season. That means that, for most of us, it's the last day to lock down coverage for a January 1, 2016 effective date.
Waitaminute Henry: what do you mean "most?"
Just received in email:
Be interesting to see if other carriers follow suit.
Waitaminute Henry: what do you mean "most?"
Just received in email:
"Good news, Medical Mutual has made the decision to extend the deadline for Individual Off Exchange Application submissions to 12-31-15 in order to get a January 1st effective date."So Buckeye State procrastinators have been given a two week reprieve (at least with one carrier); but keep in mind that this is only for Off-Exchange plans (no subsidies or cost-sharing help).
Be interesting to see if other carriers follow suit.
Self-promoting Agent Tricks
No, not that kind, this kind:
I was recently asked by a friend to help her colleague with his family's health insurance needs. The catch? He lives in Indiana, and I'm not licensed in the Hoosier State. I did offer to help him find a good, professional agent, and to help him double-check that the advice he was getting was sound.
One of the most wonderful blessings that's come from blogging here at IB has been the connections to many professional, knowledgeable agents in almost all 58 states, and I was able to help Chris find one near his hometown.
Now comes the self-aggrandizement part; I just received this email from Chris:
Hello Hank. I just wanted to say thanks for connecting us with the Van Vleet Agency here locally; they were very professional and helped us navigate all this!
There may be a nationwide crisis for people who are trying to separate in their minds the professional insurance people and the scammers that have arisen in even greater numbers since we are required by law to have insurance now, and things have gotten confusing and rates have gone up for many of us, so we are looking anywhere we can to find something that is now too good to be true. Many of them are obviously scams but after we said no thanks, then they keep calling and calling even though we tell them take us off your list, we are not interested, and they use different phone numbers so you cannot block them. When we finally found one we thought was good, I was too busy to research it and my wife believed their hype but the next day we found out it wasn't even insurance at all, it was a discount program, and we would have still been faced with a penalty for not having insurance. With the other plan we had before, we kept hearing from all the doctors in our area that they did not accept marketplace insurance plans. It is so bad that there is no point in trying to find out any reliable information online, because of the overwhelming prevalence of partial or misleading information. Even within the marketplace system there is only partial information.
Well it turns out that [the carrier we chose] is accepted by the doctors and hospital here either way, whether on- or off- marketplace, but we never would have known it without Jessica's help. And going to an off-marketplace plan with them has given us the potential of some benefits if we do decide to go out of network. We are going with a Silver HSA 4000 deductible which we likely will reach in a few months due to my wife's conditions and then we are fully covered for her and soon thereafter fully covered by the family, saving on taxes too up until the HSA contribution limit.
Thanks again for your part in helping us get this figured out!
Trust me, Chris, it was my pleasure.
I was recently asked by a friend to help her colleague with his family's health insurance needs. The catch? He lives in Indiana, and I'm not licensed in the Hoosier State. I did offer to help him find a good, professional agent, and to help him double-check that the advice he was getting was sound.
One of the most wonderful blessings that's come from blogging here at IB has been the connections to many professional, knowledgeable agents in almost all 58 states, and I was able to help Chris find one near his hometown.
Now comes the self-aggrandizement part; I just received this email from Chris:
Hello Hank. I just wanted to say thanks for connecting us with the Van Vleet Agency here locally; they were very professional and helped us navigate all this!
There may be a nationwide crisis for people who are trying to separate in their minds the professional insurance people and the scammers that have arisen in even greater numbers since we are required by law to have insurance now, and things have gotten confusing and rates have gone up for many of us, so we are looking anywhere we can to find something that is now too good to be true. Many of them are obviously scams but after we said no thanks, then they keep calling and calling even though we tell them take us off your list, we are not interested, and they use different phone numbers so you cannot block them. When we finally found one we thought was good, I was too busy to research it and my wife believed their hype but the next day we found out it wasn't even insurance at all, it was a discount program, and we would have still been faced with a penalty for not having insurance. With the other plan we had before, we kept hearing from all the doctors in our area that they did not accept marketplace insurance plans. It is so bad that there is no point in trying to find out any reliable information online, because of the overwhelming prevalence of partial or misleading information. Even within the marketplace system there is only partial information.
Well it turns out that [the carrier we chose] is accepted by the doctors and hospital here either way, whether on- or off- marketplace, but we never would have known it without Jessica's help. And going to an off-marketplace plan with them has given us the potential of some benefits if we do decide to go out of network. We are going with a Silver HSA 4000 deductible which we likely will reach in a few months due to my wife's conditions and then we are fully covered for her and soon thereafter fully covered by the family, saving on taxes too up until the HSA contribution limit.
Thanks again for your part in helping us get this figured out!
Trust me, Chris, it was my pleasure.
Monday, December 14, 2015
40 years and Pfft! The HealthSpan Story
"We’ve been helping Ohio families be healthier for more than 40 years"
That's the claim of small-time health insurer HealthSpan (located in scenic Cleveland, Ohio). The carrier offers (well, offered, bear with me) Medicare supplements, and individual and group health insurance plans.
That is, until it ran into the ObamaTax buzzsaw.
From email a few minutes ago:
Some questions arise, of course:
■ Since it will no longer be paying commissions, will HealthSpan now refund the portion of its clients' premiums that represent that cost?
■ How are agents already on the hook (ie with HealthSpan clients) supposed to be paid for their service work? Or are they required to provide this for free?
■ How long will HealthSpan survive?
Inquiring minds want to know.
[Hat Tip: Cornerstone]
That's the claim of small-time health insurer HealthSpan (located in scenic Cleveland, Ohio). The carrier offers (well, offered, bear with me) Medicare supplements, and individual and group health insurance plans.
That is, until it ran into the ObamaTax buzzsaw.
From email a few minutes ago:
After carefully assessing
its Small Group business and its volatility, it is adjusting broker commissions
for its 2016 Small Group Plan policies on and off the exchange.
- New Small Group business:
- No Broker commissions will be paid effective February 1, 2016.
- Existing Small Group business:
- No Broker Commissions will be paid after the contract renewal date. This is effective starting February 1, 2016.
- No Renewal Plan Options will be made available for renewing small groups. There will be no options or changes allowed for renewal, only the existing plan will be presented.
Some questions arise, of course:
■ Since it will no longer be paying commissions, will HealthSpan now refund the portion of its clients' premiums that represent that cost?
■ How are agents already on the hook (ie with HealthSpan clients) supposed to be paid for their service work? Or are they required to provide this for free?
■ How long will HealthSpan survive?
Inquiring minds want to know.
[Hat Tip: Cornerstone]
Spending Half Your Income for Affordable Health Care
Did you ever imagine a day when you would be considered the upper end of middle class and yet be expected to commit half your income for health insurance and health care?
Well thanks to Obamacare, that day has arrived.
Welcome to Amerika!
#Obamacarefail
Well thanks to Obamacare, that day has arrived.
if you’re a married couple, say, in your early 60s, and your annual income is anything above $62,000, you can get health insurance for as “low” as $1,655 a month, with deductibles of $5,000 per person and out of pocket maximums (basically just deductibles by another name) 0f $6,850 per person. In other words, if your income is $63,000 and you’re unfortunate enough to max out your “out of pockets” ($6850 x 2 = $13,700), and combine that with your premiums ($1,655 x 12 = $19,860), you could wind up paying $33,560 of your $63,000 income on health insurance. - ForbesJust to make it real, this is the LOW COST option.
Welcome to Amerika!
#Obamacarefail
Friday, December 11, 2015
Would You Like Fries With That?
And then further complicate it by allowing(?) lawyers in DC, most of whom have never held a real job, much less in the insurance field, draft new rules for designing, rating and distributing this product.
As if that isn't bad enough, you allow someone who completely botched the state workers comp program software overhaul, to oversee the implementation of a completely new software build. The new build is the Marketplace, originally named the Exchange.
For the piece de resistance you hire "navigators" with no prior health insurance experience to explain how coverage works and help consumers make wise choices.
Well, you decide. This is from a colleague:
I got a call from a client I enrolled in 2015. She tells me she had major issues with the carrier she had this year and wanted to go with a different carrier for 2016. She also told me she called HC.gov and the rep told her she could switch to a different carrier for about the same price as she is paying now. Client is a heavy usage consumer (many claims) and will be having neck surgery in January.
Did the Navigator look up her doctor and scripts?
No, should that have been done?
Would you mind if I reviewed the carrier and application on HC.gov?
Sure, go ahead.
In reviewing her application the Navigator failed to set her as smoking status. Also they didn't look up Dr.'s or scripts.
When I told her that her plan was going to be $221 per month vs. the $96 she was quoted by the Navigator she hit the roof accusing me of trying to put the screws to her. I tried to explain the error but this woman just flipped out. I tried to move on to the Dr. search part which I eventually was able to do. In searching for her Neurologist I found he was out of network for the new carrier chosen by the navigator at HC.gov.
Her upcoming surgery had been planned for a year and everything was in place to move forward.
Everything except her doctors were not in the new carrier network.
I tried to explain it to her and I realized I had more intelligent conversations with walls.
In the end I get another call from her telling me that she contacted the new carrier and they stated that the Neurologist was in network. She told me to cancel everything that I had done to keep her with her current coverage. I asked for the number so I could call. When I called the customer service agent stated the doctor was in network for some plans, but not for exchange-based plans.
I tried to call her back last night to re-explain things to her for her own well-being.
Then I realized something....I've given enough to try to help this person who clearly was going to be an on-going problem and in the end a loss to having to be heavily involved.
This is not my client, but one that I would have fired a long time ago. The situation above was relayed by an agent I know and is his account of the challenges consumers face when dealing with yo-yo's that answer the phones at hc.gov.
Two weeks ago they were asking if you would like fries with your order.
Today they are giving health insurance advice.
#Obamacarefail
Another CO-OP foundering
As the list of failing CO-OPs continues to grow, it's beginning to seem like the model may, in fact, be fatally flawed. When the only such example to actually turn a profit make money* starts faltering, well then perhaps it's time to re-think the whole concept:
"Maine's Community Health Options lost more than $17 million in the first nine months of this year, after making $10.9 million in the same period last year."
There's now less than a dozen of these organizations left, just under half of the total number of them started.
On the other hand, how many new carriers of any model actually break even (let alone make a profit) in their first years of operation?
So, will they still be standing this time next year? Uber-wonk Bob Laszewski is skeptical, and he's got a pretty good track record on these kinds of things. I've actually been pretty impressed with the local one (InHealth): strong network, good plan designs, decent rates.
Time will tell, of course.
*These are, after all, non-profits, so....
"Maine's Community Health Options lost more than $17 million in the first nine months of this year, after making $10.9 million in the same period last year."
There's now less than a dozen of these organizations left, just under half of the total number of them started.
On the other hand, how many new carriers of any model actually break even (let alone make a profit) in their first years of operation?
So, will they still be standing this time next year? Uber-wonk Bob Laszewski is skeptical, and he's got a pretty good track record on these kinds of things. I've actually been pretty impressed with the local one (InHealth): strong network, good plan designs, decent rates.
Time will tell, of course.
*These are, after all, non-profits, so....
Some additional thoughts on the ObamaTax
Yesterday, we discussed the utter futility of the penalty/tax/fine/pumpkin as an inducement for folks to buy over-priced ObamaPlans vice paying a basically nominal amount for failure to "comply."
It occurs to me, though, that there's an inherent flaw in how the ObamaTax is actually calculated and applied:
One's premium and subsidy (if applicable) are based in part of where one lives (zip code, county), but the penalty is simply a flat percentage of income regardless of one's location. This seems completely capricious and unjust: that percentage of income is going to have a much bigger effect on folks in certain areas where the cost of living is higher.
So how come no one's taken up this battle (yet)?
It occurs to me, though, that there's an inherent flaw in how the ObamaTax is actually calculated and applied:
One's premium and subsidy (if applicable) are based in part of where one lives (zip code, county), but the penalty is simply a flat percentage of income regardless of one's location. This seems completely capricious and unjust: that percentage of income is going to have a much bigger effect on folks in certain areas where the cost of living is higher.
So how come no one's taken up this battle (yet)?
Thursday, December 10, 2015
Mysterious Carrier Tricks: UHC edition
What the heck?
From email just now:
"As of the end of today,12/10/15, the option to quote Bronze plans will no longer be available on E-Store!
Please go on to E-Store and print off any saved quotes you have as they will no longer appear as of the end of today."
But never fear:
"You can still earn commissions selling Off Exchange"
In this market (Southwest Ohio) there are no non-Bronze level plans available on- or off-Exchange.
What game are they playing here?
[Hat Tip: Cornerstone]
From email just now:
"As of the end of today,12/10/15, the option to quote Bronze plans will no longer be available on E-Store!
Please go on to E-Store and print off any saved quotes you have as they will no longer appear as of the end of today."
But never fear:
"You can still earn commissions selling Off Exchange"
In this market (Southwest Ohio) there are no non-Bronze level plans available on- or off-Exchange.
What game are they playing here?
[Hat Tip: Cornerstone]
Still sexist after all these years
So, Ms Burntwell and her minions have released the new guidelines on first-dollar preventive care services. These include:
■ Lactation services, including breastfeeding devices and counseling
■ Enhanced breast cancer detection coverage, including genetic screening (for women only)
■ Anorexia (overwhelmingly female)
Notice anything (still) missing?
Here's a clue.
On the plus side, one of the major "glitches" in colonoscopy coverage has been resolved:
"After colonoscopy is performed as a screening procedure based on USPSTF recommendation, the plan or issuer must cover any pathology exam on a polyp biopsy without cost-sharing."
That's nice.
[Hat Tip: United Healthcare]
■ Lactation services, including breastfeeding devices and counseling
■ Enhanced breast cancer detection coverage, including genetic screening (for women only)
■ Anorexia (overwhelmingly female)
Notice anything (still) missing?
Here's a clue.
On the plus side, one of the major "glitches" in colonoscopy coverage has been resolved:
"After colonoscopy is performed as a screening procedure based on USPSTF recommendation, the plan or issuer must cover any pathology exam on a polyp biopsy without cost-sharing."
That's nice.
[Hat Tip: United Healthcare]
Subscribe to:
Posts (Atom)
Posts
