Changes at Genesis Financial & Health Care Reform Update
We are proud to announce the addition of Becky Hernandez as our commercial and personal lines account executive. Becky brings experience, professionalism and a culture of customer service consistent with our core values. Genesis Financial represents over 30 highly rated insurance companies in the area of workers compensation, property and liability as well as auto, home and other personal lines coverages. Please feel free to contact Becky at (818) 988-9880 or firstname.lastname@example.org.
We know you will really enjoy speaking with her.
As you know, Genesis Financial has been deeply engaged in health care reform, tracking and analyzing legislative and regulatory guidance and development at the state and federal level. As you may know, Sam Smith currently serves as president for the California Association of Health Underwriters. Sam also serves on the advisory council for “Covered California”, California’s health insurance exchange (marketplace). Bruce Benton now serves as immediate past president for the National Association of Health Underwriters.
Here is the information you need to know as we prepare for full implementation of the Patient Protection and Affordable Care Act (PPACA) on January 1, 2014. Today we will be focusing on the California Exchange or Marketplace; Covered California.
Health Insurance Exchange (California)
Open enrollment for Covered California will begin on October 1, 2013 for coverage effective dates of January 1, 2014. Covered California consists of two separate marketplaces, one for individual and family coverage, the other for small employers (Small Business Health Options Program, “SHOP”). At this time we are still waiting for final rates for both the individual and SHOP exchange.
Health plans offered in the exchanges will essentially be identical to those being offered outside the exchange (the private market we are accustom to). This applies to benefits and pricing. There will, however, be more options and flexibility available outside the exchange. So why would an individual or employer purchase coverage in the exchange? For individuals, the exchange is the only place one can purchase coverage and apply for federal premium assistance (subsidies). Likewise, employers eligible for the Small Business Tax Credit can only receive the tax credit in the SHOP exchange.
Employers are required to provide an exchange notice to all employees no later than October 1, 2013. This notice is intended to inform employees of the exchange as well as the criteria for enrollment and subsidies. CLICK HERE to view the notice.
Here’s what the law says – If an employer offers a health plan to its employees and dependents, and the health plan provides Minimum Value benefits, and the plan is deemed Affordable, employees are not eligible to obtain premium assistance in the exchange.
Affordability is defined as – the employee’s share of any premium contribution does not exceed 9 ½% of their adjusted gross earnings. This applies to the Employee Only premium of the lowest cost plan option. Dependent premium is not included in the calculation. Typically dependent coverage is available, but paid by the employee.
Minimum Value is defined as – the health plan is designed to pay at least 60% of the total cost of medical services for a standard population.
A report issued last fall by the U.S. Department of Health and Human Services found that approximately 98 percent of individuals currently covered by employer-sponsored plans are enrolled in plans that have an actuarial value of at least 60 percent.
In summary, it is very unlikely your health plan would not meet the Minimum Value and Affordability test. We will be contacting you to discuss this form in detail, provide assistance completing the form and establish an effective strategy for distribution to employees.
Small Business Tax Credit
The intent of the Small Business Tax Credit (mentioned above) is to incentivize employers who do not provide health insurance to their employees to do so. The credit is limited to employers under 25 employees with a total combined average compensation of $50,000 or less. The employer is also required to pay at least 50% of the premium. The tax credit is on a sliding scale with the maximum tax credit available to employers under 10 employees with average compensation of $25,000 or less. CLICK HERE for more information.
Genesis Financial will continue to monitor health care reform developments and will keep you informed.
Thank you for the opportunity to be of service!