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A Healthcare Plan that Millennials Want.

A Healthcare Plan That Millennials Want

Understanding What Millennials Want from Your Healthcare Plan

 

Between 1980 and 2000 some 80 million babies were born. This generation is known as the millennials. Born in the information age, millennials are far more skeptical than their counterparts, and require far more information to make concrete decisions.
For employers, this means that their benefits packages must be fully transparent and capable of handling the influx of millennials now hitting the job market. The question is, what is it that millennials are looking for? How do these needs translate into employer-based healthcare? And how can employers create a healthcare plan to meet these unique demands?

What Millennials Value

First, let’s examine the values that Millennials hold and how they guide their decision making.

Independence & Cost Control

Millennials want to shop for the best value. They are cognizant of how limiting their options can cause increased costs, and they want to pay the least amount possible for goods and services. Purchasing independence is important to them. Transparency is critical if you expect them to make a purchase.
What this means for employer-based healthcare plans:
To attract top-tier millennial talent, provide options for healthcare coverage. Plans that allow employees to adjust their costs and coverage are highly sought after.

Technology

Millennials grew up in an age where the internet emerged. They understand the value it can have and how convenient it can make their lives. 24/7 access to information that directly relates to their decisions is a must-have. Tablets, smartphones and laptops are like accessories to a millennial.
What this means for employers:
Apps, online portals, and individual profiles that provide direct access to employee benefits are non-negotiable when dealing with millennials. Setting up a system that provides quick and convenient access to these resources is essential.

Trust

When surveyed regarding what they value the most in an insurance company, millennials responded that ‘trust’ was the most important factor. Second to that was reasonable copays and premiums.
What this means for individual healthcare plans:
More important for individual insurance companies, this means that branding and image play a pivotal role in gaining the interest of millennials in their healthcare plan.
Understanding what millennials value is only half the battle. You also need to understand the healthcare plan benefits they prefer.

Top Healthcare Benefits Millennials Want

Millennials are the ‘on-demand’ generation. They know precisely what they want and aren’t afraid to ask for it.
• Employer-provided wellness programs (stress management, yoga, gamification, dietary consultations etc.)
• Cafeteria planning (employees get to pick and choose their own benefits with the money employers set aside for them)
Vision, dental and ‘extra’ health benefits (not only do they want their general checkups included in their insurance plan, they also expect benefit rich options like vision and dental)
• Short-term and long-term disability benefits (53 percent of millennials say they are interested in disability benefits especially with an employer-based health insurance plan.)
• Convenient access to their plan (online statements, apps, and clear communication are a must-have).

Meeting Millennial’s Demands

While there are already tens of millions of millennials already in the job market, there are millions more who are about to enter it. If your company is unprepared for the increase in this younger generation, then now is the time to plan.
Employer-based healthcare is a driving factor in attracting key talent to your business. Understanding how to craft an individual healthcare plan that has the benefits they want isn’t quite so easy. However, the Affordable Healthcare Act has made it easier to appeal to millennials through your healthcare plan.
By setting a dollar amount for employee benefits, they can shop for the benefits they want. The addition of HAS and FSA can add to the shop-ability of your benefits all while providing technology and financial control for employees. This in turn keeps health care costs affordable for your business.

How We Can Help

With over thirty years in the healthcare insurance field, we know how to help organizations adjust to changing market trends. Millennials represent only one change we’ve had to maneuver through. To create a plan that appeals to this latest worker generation, to keep your healthcare costs low, and to maintain a strong relationship with your networks give our team a call. We’ll walk you through the options available and how to make a smart choice that benefits all sides.

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What the Media Isn’t Telling You About President Trump’s Health Care Amendment (AHCA)

AHCA

President Trump’s Actual Health Care Amendment

You’ve probably read the headlines: “The New Study That Shows Trumpcare’s Damage,” The New York Times, “GOP Health Plan: Don’t Get Sick (Especially If You Live in a Red State)”, The Huffington Post.

Frightening, and perhaps even borderline unethical, many of these articles are written with a clearly biased tone against President Trump and the GOP’s valiant effort to create a sustainable health care plan for all Americans.

But what’s the truth? Where do we stand now that the American Health Care Act has passed the House and is moving to the Senate? Are you really going to lose all your health care coverage and be left destitute like the Dem’s and the liberal media claim?

In short, no.

To clear the air, and hopefully explain what to expect from this amendment, we’re covering the most important points of the AHCA and how they will affect you as an individual and as a business owner.

It’s important to note that today the amendment was passed only in the House, and that the Senate is less likely to be as accommodating to GOP interests. Nevertheless, Americans deserve to be properly informed about this significant piece of legislation.

Pre-Existing Conditions Will be Covered

One of the biggest complaints and half-truth’s being spewed by the media is that under the AHCA pre-existing conditions will be gutted. Insurers can supposedly give you any lousy coverage they deem fit.

Not so.

The AHCA has been reworked since the previous House failure, and new amendments were set in place to guarantee coverage for all Americans.

Fred Upton and Billy Long met with the president to agree to add $8 Billion over the cost of five years to help cover the costs of those with pre-existing conditions who otherwise would be priced out of insurance.

Instead of high-risk, low-income, individuals increase premiums for the entire pool, these individuals will be allocated to high-risk pools for coverage. Called the Upton Amendment, you can read the full story here.

Waivers are another feature of the amendment that holds out coverage for those with pre-existing coverage. States will be issued waivers enabling carriers in their state to set premiums based on medical backgrounds.

However, enrollees in these plans who experience an increase in their premiums will have access to high-risk pools that offset costs. States, therefore, wouldn’t be left footing the bill on their own. They would in fact get some help from the federal government.

High Risk Pools Could Lower Costs

There’s so much talk about how high-risk pools are bad for the sick and elderly. However, they’ve never been fully utilized in the American healthcare marketplace.

A revision to the AHCA provides greater coverage via the waivers we mentioned before. This allows states to rescind Obamacare requirements if they can provide explicit evidence that doing so would reduce costs to people in their state.

Called the MacArthur amendment, it creates an easy transition into high-risk pools and also opens up the way for larger reinsurance programs, all offered at lower costs than Obamacare.

Money from the government goes to insurers to help reduce premiums for the sickest in each pool. This in effect stabilizes the individual insurance market for individuals who do not have employer or government backed coverage, such as Medicare.

This MacArthur Amendment lowers costs for high-risk allocation from $20 billion, under Obamacare, to $15 billion through the AHCA. In reality, it saves both consumers and the government money.

Another area where the amendment provides cost reduction is through the community rating.

Previously, insurers were obligated to charge consumers the same price regardless of the average health, age, or gender in their specific area. This often resulted in high costs.

Under this new bill, however, states could get around the community rating in one of three ways:

  • Provide funding for people with pre-existing conditions so they too can get coverage
  • Participate in invisible high-risk pools
  • Provide incentives to appropriate entities

These options are extremely appealing to employers who foot the bill for high insurance costs based on an arbitrary community rating.

The Individual Mandate and Employer Penalties Are No More!

Almost universally, Obama’s individual and employer mandates were rejected by consumers. No one likes to be penalized for not paying for a service they may or may not need.

Obamacare penalties effected millions of Americans, over 6.5 million in 2015 alone. Individuals who didn’t have coverage through the marketplace were forced to pay a penalty of up to $695 or 2.5 percent of their yearly income—whichever was greater. This mandate did little to nothing to encourage people to purchase healthcare. In fact, there was no change in employer coverage under Obamacare.

For employers, the penalties were far steeper. Even small businesses with as few as 50 employees were subjected to the tax penalty.

Now, however, that will change.

Employers will no longer be subjected to the mandate and no tax penalties will be applied for that alone. The Senate may adjust this once the bill makes it to them, however.

In lieu of that tax, there will be penalties for lapses in coverage. Insurers, under the AHCA, can now impose a 30% surcharge on accounts that have lapsed in coverage for more than 63 days. This surcharge can be maintained for a year, but would only be applicable to insurance bought in individual or small group markets. In other words, large group insurance wouldn’t be effected.

American’s Will See Lump Tax Credits for Insurance

Another feature of the AHCA, conveniently left out of most media coverage, is tax credits for insurance.

Under Obamacare, tax credits were based strictly on income and cost of coverage. President Trump’s health care reform bill provides better credits based on age and income instead.

The new income brackets would go something like this:

  • People in their 20s will be given a $2,000 credit
  • People in their 60s will be given a $4,000 credit
  • Individuals who earn $75,000 would see tax credits start to wane
  • Individuals earning more than $215,000 aren’t eligible.
  • Families with incomes of $150,000 would see few credits
  • Families earning more than $290,000 would not qualify for tax credits

Instead of tax credits that vary with each passing year, the AHCA would provide lump tax credits across the board.

American’s Will Have More Health Care Plan Options

Obamacare has dramatically cut providers and insurer options on the market.

In 2016, the most limited plan options to date were introduced to consumers through the healthcare marketplace, taking a dramatic 12 percent reduction in plan options.

Customizations are all but a thing of the past under the current healthcare plan. President Trump’s health care reform bill is set to change that.

Under the amendment, consumers can choose the healthcare that is right for their family’s needs. Whether that’s maternity care, vision, dental, or something more, the options will be available to Americans.

As a result of the flood of new plans into the marketplace, lowered premiums will be a natural result. More competition typically results in lowered premiums.

Maternity and Mental Health Care Are Included in the Amendment

Contrary to what the liberal media wants to tell you, the GOP’s new bill will in fact offer coverage for maternity and mental health care.

The bill will also add $15 billion to fund maternity, mental health and substance abuse services, until 2020, with an additional $15 billion to create invisible risk pools to help with high-cost policyholders.

Also, as of yesterday, lawmakers added another $8 billion over the course of five years to support those high-risk pools as we stated earlier. The money would go to states that seek waivers to opt out of two of Obamacare’s key insurance provisions.

In other words, coverage for these important, yet specialized, facets of health care remain a part of the bill but simply take on a different form.

How It Will Affect The Greater Houston Area

For many, one of the biggest concerns over Obamacare was the inability to pick and choose which hospital you’ll use for coverage.

Obamacare limited insurers because of extreme pressure to keep premiums low. This resulted in cuts to which provider’s individuals can utilize.

Larger networks hold out potential to lower costs and include coverage for a multitude of hospitals.

The AHCA takes aim at these limitations. The goal is to open up coverage across the board, and this could include coverage in previously nixed hospitals.

For example, the MD Anderson Cancer Center in Houston was eliminated from one consumer’s health care plan leaving her to foot the bill for her $10,000 a month experimental cancer treatments. The treatment single handily saved her life, but nonetheless has created more debt than she’d like to carry.

Under the AHCA, Houston’s largest cancer center could possibly be covered under new standard healthcare plans. Other hospitals like Methodist hospitals around the greater Texas areas could also be brought back under the standard policies.

While this is yet to be seen from the new health care reform, we can be certain that the drama surrounding how awful it will be is far from reality.

Pre-existing conditions will be covered. Lowered premiums are also likely to take effect. Tax credits will still be there. But what is the next step before it’s passed?

What’s Next for the AHCA?

Should the AHCA not get bi-partisan support, House Republicans won’t be able to completely repeal the ACA. Even with a Republican majority, the bill has an uphill battle to climb in the Senate.

Republican leadership in the Senate must first agree to amend the House bill, or add to it with a reconciliation bill. A simple majority (51 votes) would then be needed to pass the Senate, which means nearly all Republicans must be in agreement (there are 52 Republican senators).

As we move forward, you can be certain Healthcare Consultants, Inc., will stay on top of changes to the bill and provide complete coverage of amendments and how they will affect you. Stay tuned for the latest information.

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How Your Broker Should Negotiate For You

 Group Health Insurance Negotiation

Does Your Health Insurance Broker Negotiate for You?

If you’re a small business owner or individual, finding the right health insurance plan within a reasonable premium can be frustrating. Confusing exemptions, benefits, and legislation makes it nearly impossible to keep up with your plan each year.

There is a solution that many small businesses and individuals utilize: Brokers.

Brokers are independent, meaning they can provide more options and more holistic view of the marketplace than you can on your own. They are highly trained and skilled at evaluating the costs that will affect you and can help design plans with major insurance carriers in your area.

For smaller accounts, brokers are typically free. Their advice is invaluable, however, if you’re planning long-term and want to reduce costs on your health insurance.

One of the best parts of hiring a health insurance broker is letting them handle the health insurance negotiation of your health plan costs. They can help your organization save thousands, if not millions depending on the size of your company, on healthcare costs. They do this through health insurance negotiation with carriers.

Here’s a few ways a broker goes about this, and what you can expect when you use one.

They Know What Questions to Ask

For example, if you have 50+ employees, it’s unlikely you know small details about each one that could potentially help you lower your group rate. Questions like, “Do you have any claimants who no longer work with you? Is the health of your company improving?” This is a great starting point for negotiating lower costs for your renewal.

They Analyze Your Plan’s Benefits and See Where Cuts Can Be Made

Instead of continuing to pay for services no one in your company uses, Brokers take a look at your plan and help guide the appropriate cuts to each one. This enables you to reduce costs right off the bat, without having to negotiate for different plans.

They Negotiate to Customize Plans

By speaking directly with providers, brokers can discuss and show data from your company that shows where your employees are most in need of coverage. This can be extremely beneficial if you have a generally healthy and young workforce.

They Provide Competitive Data

A health insurance broker can provide competitive data to show that your company qualifies for certain reductions especially those in the community rating. Community ratings can climb dramatically, but with the help of a trained eye, you can see where reductions can be made. Thanks to a large network of businesses under brokers, they have more power to move the rate than an individual does on their own.

They View Claims Data

Claims data shows how much of your coverage your employees are using. A broker should scrutinize your claims data to see what your insurance company paid in comparison to your premiums paid. If the two don’t add up, then they can negotiate with the insurance company for lowered costs on your behalf.

Typically, insurers are looking for a loss ratio of 85 percent to provide renewal consistent with trends. Your broker will work hard to find that ratio so you can enjoy lowered rates giving him or her more room for negotiation.

They View Medical Conditions

Your plan is based on the overall health of your group. Because of this, a broker will take a close look at the medical conditions in the group to justify lowering costs. Limited chronic illnesses and claims can assist you in leveraging a lower premium come renewal time.

Key Takeaways

The most important thing to remember about health insurance brokers is that they provide quality insight you can’t find anywhere else. They know how to analyze your group’s health insurance plan to see where holes need to be filled or where you can leverage against higher premiums. The more individuals you have on your plan the more power a broker has to negotiate lowered costs.

Health insurance negotiation is tricky, but with the right team of diligent and up-to-date brokers on your side, you can find a way to lower costs for yourself and your employees.  Healthcare Consultants, Inc. are experts at health insurance negotiation for your company.

 

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Health Care Reform Where Does America Stand

health care reform

Health Care Reform

The moment the Affordable Care Act (ACA) was passed as law, the Republican party has fought to find a way to repeal it. With a Republican president and a Republican controlled house, they now stand the best opportunity for health care reform. And that is precisely what President Trump has vowed to do.
Repeal and replace are the focus of the Republicans, but even so their first attempt has already failed to capture the votes needed to get it passed. Even before it could be voted on, Republican leadership removed the bill due to a lack of support. The question is, where does the American Healthcare Act (AHCA) go from here? Why did the most recent repeal attempt fail to go through? What will trumpcare look like in the coming years of his administration?

Understanding Recent Repeal Attempts

The recent reform hurdle Republicans faced was far from child’s play. The Republicans attempted to form a bill that would focus primarily on reforming the ACA, but didn’t garner the support they needed to be successful. Much of this was due to the divided plight of the party itself. Moderates didn’t want to see an end to the Essential Benefits and tea partiers weren’t willing to settle for anything less than complete free market control. For most of the latter, the belief is that government involvement drives up costs of healthcare, not the market itself.
The failure to unite the party on fundamentals of the repeal was its downfall. Key provisions such as preexisting conditions, minimum essential benefits, and the ability for young people to stay on their parent’s healthcare plans until the age of 26, are favorites of the ACA and are difficult to repeal.
The primary focus of the AHCA, however, was the elimination of as much of the ACA’s taxes as possible. The health care reform was loaded with taxes and penalties for both individuals and employers who didn’t offer coverage. The employer mandate came with a tax of 4 percent over the price of insurance for employers who opted for private insurance over the exchange. Individual’s face a similar penalty for refusal to opt in to the healthcare exchange.
It is now past the point of no return for the AHCA. The bill failed to produce results. Because of this, republicans are now forced to take a harder look at where they are willing to compromise and provide real reform to the healthcare industry.

Trump Care—Where the President Stands on Healthcare Reform

After the bill went dead, President Trump publicly said that healthcare reform is at a standstill for the foreseeable future. However, there are still house republicans who wish to see more urgency in repealing the ACA.
Trump’s strict negotiating tactics have given the Republicans little choice but to follow suit or have the law remain as it stands. They now have to answer to constituents who are concerned about losing coverage.
Interestingly, house Republicans are considering reigniting trumpcare. After making a few slight changes to the bill, such as adding a $15 billion risk-sharing fund to help fund health insurers with high-cost patients, Trump has made it apparent he wants results on the healthcare bill. Speaker of the House, Paul Ryan, has said that he would happily bring members back to vote on the bill if a path towards 216 appeared. The issue trumpcare faces now is the Freedom Caucus.

What’s Next for Healthcare Under Trump’s Administration?

We aren’t a full six months into President Trump’s presidency, so it’s safe to assume that new amendments to the bill will come forward and we could very well still see health care reform within the next four years. For now, however, employers and individuals do well to adhere to the ACA as the individual mandate and employer mandate is still in effect.
While Republicans try to repeal the ACA for good, we can’t expect much in the way of changes to minimum essential benefits or other similar provisions. The penalties could be under fire, however, which many small business owners wouldn’t argue against. Still, it will take time to get a complete bill on the floor that can be supported by both sides of the aisle. Until then, Republicans are likely to turn their attention to tax reform, which could present even greater challenges.

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Reference Based Pricing and How Can Your Company Benefit From It?

Refrence based pricing

Employers are constantly on the lookout for cost containment plans for their employee benefits plans. One often overlooked option is reference based pricing for healthcare costs. Today we’re going to discuss how this method can reduce healthcare costs for your business, and what you should consider before using it for your employee plans.

What is Reference Based Pricing?

Reference based pricing is a solution employers use for cost containment on employer-sponsored healthcare plans. As healthcare costs continue to rise, employers are searching for ways to mitigate coverage costs. Reference-based pricing is a trend within self-funded benefits communities and accountable care organizations. It allows employers to eliminate high-cost providers from networks by narrowing the network itself. This in turn drives savings by way of avoiding massive insurance companies and expensive network contracts.

How Does it Work?

Spending limits are what allows reference-based pricing to cut healthcare costs. It does this within certain procedures. Employees under this plan are only covered up to the established limit and would then have to pay out of pocket for the remainder of the procedure.

It is typically recommended that limits are set on shoppable services, meaning services that aren’t urgent and are available through several providers. This allows employees to take their time finding a payable solution that works for them. Some suggestions include prescriptions, lab tests, MRI’s and similar such healthcare services. By negotiating cost reductions on standard healthcare procedures, such as these, employers have more power over cost containment.

Employers can negotiate these costs with the help of a third-party vendor. Healthcare pricing is complicated, so having an experienced team of consultants on your side positions you for the best coverage without paying large sums out-of-pocket. That vendor provides extensive market research to negotiate pricing with providers. Without assistance from this vendor, employers can be left overwhelmed by the prospect of negotiating costs. But how does this vendor negotiate costs?

Pricing is based on demographics and the fair pricing methodology. By using this method, employers gain a strong advantage, as fair pricing practices benefit both themselves and their employees. In traditional models, pricing is non-transparent, leading to unfair contracts and higher prices for employers and employees. The result is discounts that are based on already over-inflated prices. Reference-based pricing is a better way of handling cost containment.

Of course, another hurdle is getting your entire company onboard with this change. Here are a few benefits you can use to sway your organization should you decide to make the switch.

How Your Company Benefits

Referenced based pricing provides multiple benefits. One is increased transparency. Most patients are completely blind to healthcare costs, and aren’t often diligent about comparing one service to another. The healthcare system isn’t set up to help them find out, either.

With RBP, employees can see exactly where their out-of-pocket expenses will rise. This in turn motivates them to be more proactive about selecting the right provider. Understanding these costs in advance enables them to navigate the system much more easily to make smarter decisions that save themselves and their employer money.

Employers benefit by selecting high-cost healthcare coverage for price limits. Instead of paying ridiculously high fees for healthcare coverage, employers find themselves paying far less for the same services. Employees seek out those options and naturally reduce costs to employers. Experts estimate that low healthcare literacy costs the United States some $106 billion annually. By putting employees in a situation where research is required to lower costs, you not only improve the costs they incur but also those of the insurance industry.

One final benefit is lowered cost renewals at the beginning of the following plan year. That’s something all employers can get behind.

Is Reference Based Pricing Right for You?

As with all healthcare cost containment strategies, there are some downsides to RBP. These can include lack of established markets, reduced negotiation leverage for small businesses, and a slight potential for increased employee costs because of balance billing. However, overall, RBP offers a better way to cut costs and save employees and employers money.

To make the most out of RBP, you need a qualified vendor on your side. To learn how Healthcare Consultants Inc., can help reduce your healthcare costs through RBP contact our team today.

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Why Carving Out Your RX May Be a Good Idea

Why Carving Out Your RX May Be a Good Idea

Carving Out Your RX

As an employer, finding the right prescription plan is an important factor in your employee benefits offerings. If you’re looking for a way to reduce costs and give your employees better options, then carving out your RX is a good idea.

A pharmacy “carve-out” allows a plan sponsor to choose a Pharmacy Benefit Manger (PBM) to manage prescription drug benefits on their own. They are standalones from the PBM who is contracted with the health plan which administers claims. Carve-out RX plans can be either fully insured or self-funded.

The advantages of “carve-out” plans provide a strong case for switching gears on your plan. Here’s how to carve out your RX for the benefit of your personal budget or employee benefits plan.

How to “Carve Out” Your RX

The first step is to begin the carve-out process with an employer’s health plan for prescription drug coverage. Prescription benefits are one of the best money makers for insurance carriers and even specific PBM’s, but that doesn’t have to mean you lose money. Small employers with 50 or fewer employers can now use self-funded prescription plan options to reduce costs.

The next step is to use the right Prescription Benefit Manger. The goal is identifying one who is transparent and clearly working for you, not the pharmaceutical or insurance companies. They should only charge for prescriptions processed. With their help, you can isolate rebates that add to cost savings for you.

Another important part of this process is to do your own research. It’s a good idea to understand how the Average Wholesale Pricing (AWP) discounts work. The primary reason is to get a good handle on what pricing is acceptable and what isn’t. Discounts aren’t always the most important selling point. High discounts could in fact reveal a higher mark up on prescription costs for generic drugs than is acceptable. Higher priced drugs are particularly vulnerable to this type of ‘up-selling’. A professional PBM can isolate the correct pricing for your prescription plan reducing the overall costs.

Finally, hiring a transparent PBM not only helps you reduce costs based on a consistently lower prescription drug plan, it also enables you to reap benefits as factors change within the industry. They also guarantee compliance, disease management and advocacy for your employees. To determine how to carve-out your RX plan, hire a HCI who can do the heavy lifting for you.

3 Advantages of Carving Out Your RX

PBMs provide immediate discounts and improved clarity in your employee benefits plans. But here are three specific benefits of using them to carve out your RX.

  • Flexible Plan Designs Reduce Costs

Instead of paying for coverage on rarely used, and extremely expensive, prescription drugs, you can work with a PBM who can in turn create a detailed plan that is flexible to the needs of your employees. This allows you to adjust with the market, reducing coverage in areas where prices are higher than normal. Flexibility is always an advantage in the insurance market.

  • Pass-Through Rebates

Professional PBMs allow you to get better pricing through rebates. They will invoice you for every drug dispensed according to the PBM’s cost for the drug. This means you get prescriptions at wholesale prices after rebates. These pass-through costs are one of the greatest advantages to carve out RX plans.

  • Audit Rights

With a carved-out prescription plan, you have the right to audits. This includes claims audit, operational assessments, and rebate audits. This guarantees complete transparency on costs and expenditures. Access to pharmacy claims data also ensures you’re getting the best deal available.

Employers Benefit Greatly from Carve-Out Plans

Cost containment is the number one reason of carving out your RX plans. Prescription drug care is by far the most used healthcare coverage employee benefit. Pharmacy costs take care of about 30% of all healthcare costs. With an increase in prices for prescription drugs, it’s logical that employers will turn their attention to carve-out plans for their employees.

If you’re interested in better controlling pharmacy benefit costs, then carving out prescription drug benefits from your major-medical plan, is a good route to go.

To benefit from transparent drug pricing, auditing control, reduced costs for prescriptions, and so much more, consider carving out your prescription drug plan for your employee benefits.

For more information about carving out your RX in Texas, contact the HCI team. We’d be happy to help.

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Who is Eligible For Group Health Insurance in Texas?

group health insurance in Texas

Group Health Insurance in Texas

Obtaining insurance coverage in a business setting is a more complex process than buying insurance as an individual. Most decently sized businesses choose group health insurance for their employees. The question is, however, what are the qualifications for both individuals and businesses for group health insurance in Texas?
Let’s briefly examine how group coverage works and how companies and individuals are affected by the requirements for eligibility.

A Basic Overview of Group Coverage

There are other groups that may be included in group insurance coverage, but for this article we’re strictly referring to a business with employees. Group medical coverage is a single policy issued to a group of individuals (or employees) and their dependents. On the flip side of the coin is individual medical coverage, which is a single policy provided to single person or family.
There are specific rules and regulations that group health insurance in Texas coverage must adhere to. This is primarily because of the calculated risk associated with specific coverage. For individual coverage, unlike group health insurance, premiums are based on the market and the general cost of coverage throughout the market you live in.
However, for small business group health insurance in Texas, the insurer dictates the premium price based on risk factors throughout the entire group. The Affordable Care Act requires businesses to provide health insurance to their employees or risk a $100 a day per employee fine.

Eligibility for Companies

Regardless of their health status, individual employees are guaranteed group coverage by their employee if they choose to purchase it. Both small and large companies are required to offer coverage. Businesses with more than 50 full-time employees, or full-time equivalent, fall under the Employer Shared Responsibility Payment. Small businesses with fewer than 50 full time or full-time equivalent employees, are not required to pay no penalty for not offering health insurance.
However, regardless of the size of the company, all employers are required to provide specific information about coverage options available on the marketplace.

Plan Requirements

Employers also have to adhere to strict group health insurance requirements. These include:
• Plans with No More than a 90 Day Wait Period
• Employers must provide a Summary of Benefits and Coverage (SBC) to employees
• Dependent Coverage Extension
These rules and regulations vary depending on the group health insurance plan. For more information about the requirements, Minimum Essential Coverage, and more, talk to our experienced HCI team.

Eligibility for Individuals

For individuals, group health coverage extends to any employee who works 30 or more hours per week on average. Coverage also extends to their dependents, including children, spouses and anyone they may be required to take care of physically or financially. Employers are required to share their coverage options with employees upon hiring. Additionally, dependent children may be covered until age 26. However, they’re employer must not offer health care coverage for the rule to apply.
Employees cannot be denied coverage for pre-existing conditions or because of previous medical conditions. Employees must be enrolled to ensure coverage for all of their dependents. If an employee does not enroll, dependents do not have coverage through the employer.

Conclusion

Group health insurance is one of the primary benefits of the Affordable Care Act. It is designed to provide coverage to all employees who fall under the full-time law. However, understanding how eligibility works and what coverage options are available, is critical to pursuing the best possible coverage available. Employers too need to fully understand the requirements for their group health insurance before committing to single plan.
For more information about group health insurance in Texas, contact the HCI team. We’d be happy to help.

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Top 401(k) Questions

401k Questions

10 Common 401k Questions

401(k) plans are the most common defined contribution retirement plans in the U.S. The problem is, not every worker fully understands how they work. To aid in clarifying how they work and how they can serve as a powerful retirement savings tool, here are a few commonly asked questions and answers.
1. Is it possible to spend some of my 401(k) before retirement?
Using funds from your 401(k) isn’t cut and dry. There are variables. Common exemptions to early-withdrawal penalties including first-time home buying and college expenses, apply strictly to IRAs not 401(k)s. Some cases where it is possible to withdraw funds from your 401(k) include withdrawing money for medical bills that go beyond 10% of your adjusted gross income. Individuals with permanent disabilities may also withdraw from the account with no penalties.
2. What happens if I retire early?
If you decide to retire before 59 1/2, you can withdraw funds from your 401(k) without penalties under certain circumstances. These include if the “separation from service” rule allows you to stop working for your employer after you turn 55 and receive your funds. Regardless if you’re fired, laid off or retire. You may be able to tap into the IRS’ substantially equal periodic payment known as (SEPP), wherein you agree to withdraw funds based on your life expectancy as calculated by the IRS.
3. What is the maximum amount I can contribute to my 401(k)?
In regards to the 2017 tax year, the IRS’ elective deferral limit for 401(k)s is $18,000, with each payment of $6,000 beyond that only being accepted by individuals 50 years and older. This amount doesn’t include employer contributions, automatic contributions, or other types of 401(k) contributions. The maximum amount for all source contributions is $54,000 for individuals under 50 and $60,000 for those over age 50
4. What is a good amount to contribute to my 401(k)?
There is no hard and fast rule to how much you should contribute. However, at the very least you want to contribute enough to take advantage of your employer’s matching program. Putting in less than that is like throwing away free money. Calculate how much you’ll earn by retirement and if it isn’t enough, start contributing more.
5. What does “vested” mean?
Vesting means that you own the money you put into your 401(k). While you 100% own your elective contributions, your employer’s contributions could be supervised by certain rules. Check with your employer to see what rules may be governing your contributions.
6. Is it possible to borrow from my 401(k)?
In cases where your employer allows you to borrow money from your 401(k) you may certainly do so, but you will likely have to pay yourself back with interest. You may borrow up to half of your balance or $50,000 whichever is less. However, it is generally recommended to avoid borrowing from your 401(k) because of compound growth and hefty penalties.
7. What about my 401(k) through my previous employer?
There are multiple options for your old 401(k) account. You may choose to leave it as is, only if it has a minimum threshold of $5,000. Another option is to roll it into an IRA. Finally, you may have the option to put it into your current employer plan. Cashing out is another option, but it’s generally recommended against.
8. What is the best way to invest my 401(k)?
While there is no clear way to tell you how to invest in your 401(k)s, you should be able to set up a primer on asset allocation. This allows you to dictate how much money should be in cash, bonds and stocks. Research what type of investments are available through your plan to learn more.
9. Is it possible to contribute to both an IRA and a 401(k)?
Yes, you can contribute to both. However, your income will dictate if you can take a tax deduction for traditional IRA contributions or if it’s possible to contribute to a Roth IRA at all. If your adjusted gross income is less than $62,000, and you’re single, you can deduct all of your IRA contributions.
10. Can I get a tax reduction for my 401(k) contributions?
Absolutely! 401(k) contributions are excluded from federally taxable income. They don’t come off your Social Security or Medicare taxes, but nonetheless this is still an excellent deduction. Additionally, you don’t have to itemize deductions to enjoy the perks. Your W-2 will show your 401(k) contributions automatically.
Have more questions that aren’t answered here? Then please contact our team. We’re happy to help you make the best retirement decisions.

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How the New Stand Alone HRA Law Will Affect Small Employers

stand alone hra houston

Stand Alone HRA

On December 13, 2016, President Barack Obama signed the 21st Century Cures Act into law. This law allows small businesses the opportunity to sponsor a stand alone HRA (health reimbursement arrangements ) to fund employees who wish to purchase individual health plans through the free marketplace. While the larger bill focuses on improving the speed with which drugs are approved by the FDA, a provision within the bill has a direct effect on employer-provided health benefits. Small employers will now be able to pay for nongroup plan premiums using HRAs.

Who’s Eligible?

Before small employers deviate from the ACA law, clarification is needed.
Small employers with fewer than 50 full-time employees or full-time employee equivalents without a group health plan may now fund their employee HRAs to pay for out-of-pocket qualified medical expenses along with nongroup plan health insurance premiums.
Previously, the ACA restricted employers from providing money on a pretax basis for employees to buy their own health insurance through an open market. This new 21st Century Cures Act, integrates important components of the Small Business Healthcare Relief Act to breed a new form of HRA—a qualified small employer health reimbursement arrangement (QSEHRA).

What is the QSEHRA?

This new form of HRA provides specific benefits and regulations for small employers. These include:

  • A maximum reimbursement of health expenses of $4,950 for single coverage and up to $10,000 for family coverage, and a provision for inflation adjustment.
  • Employees are not allowed to contribute to the HRA either directly or indirectly through salary reductions.
  • Maximum dollar amounts are prorated for those who are not covered by their QSEHRA throughout the entire year.
  • Employees who have not yet worked for their employer for 90 days, are younger than 25, or who are covered by collective bargaining agreements for health benefits and accidents, part-time and seasonal workers are not covered under the QSEHRA.

How Small Employers Benefit

While the law goes into effect for coverage staring Jan. 1, 2017, it can prove beneficial for employers in the coming years. Small employers who are eligible under the new law can expect multiple benefits.
Employers no longer have to worry about penalties from the Internal Revenue Service or Department of Labor when using a stand alone HRA to fund their employee’s health care. This naturally leads to more flexibility in terms of benefit offerings while simultaneously allowing employers to help employees find and purchase affordable insurance plans that fit their needs.
Instead of being locked into one group or another, small employers can now provide either group market insurance or individual market insurance, with both providing tax advantages. With some 40 million Americans employed through small businesses, this will undoubtedly play a major role in keeping health care affordable.

Important Facts to Remember:

  1. Notice of the availability of a QSEHRA must be offered to employees some 90 days before the start of the new year, or the beginning of their eligibility. Issuing a notice in 2017 may be done as late as March, 13, 2017.
  2. Contribution amounts must be set according to the following:
    Terms must be the same for each employee. Employers that offer 50 percent of premiums for employees and dependents, employees with a spouse and children could receive more reimbursement than one without dependents—this is legal. Employers cannot, however, pay 100 percent of premiums for their managers and 50 percent for their lower-earning employees.
    The entire cost of the QSEHRA benefit must be covered by employers. It is illegal to reduce the pay of employee’s if they accept the QSEHRA benefit.
    Maximum annual benefit caps must be kept. Prorated annual maximums must be kept up with, and monthly contributions cannot be exceeded or increased based on when an employee began working.
  3. Large employers are excluded from the law. Any company with more than 50 full-time employees or equivalents may not benefit from the QSEHRA law.
    For further information about the 21st Century Cures Act, please contact the HCI team today.
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