Employee Healthcare Premiums Expected to Rise in 2014

Starting next year, employees may encounter a significant increase in healthcare premiums. Companies currently offering health insurance to workers are expected to add nearly $5,000 in premiums, deductibles, and co-payments to current health coverage costs.

Aon Hewitt also revealed a projected increase in average health care costs by 6.7 percent in 2014, amounting to $11,176 per employee. Despite the single-digit increase, health cost rates for employees continue to increase by double-digit percentages. Premium payments are also on the rise: employees are projected to pay 22.4 percent of this total, or $2,499. Overall, worker premiums are jumping nearly ten percent from this year’s rate of $2,303.

In addition to the increase in premium payments, employees can expect a rise in out-of-pocket costs including co-payments and deductibles. These costs will increase from this year’s rate of $2,239 to $2,470 in 2014, a projected increase of more than ten percent. As a result, many workers will get a glimpse of rising healthcare costs for the coming year whether they opt to renew current plans or choose new benefits during fall open enrollment.

Obamacare Initiative Targets 500,000 Signups in First Month

Enrollment projections for the online marketplaces were high before countless computer glitches came into play. With the rollout of new ACA provisions, the Obama administration estimated that in October alone almost 500,000 people would sign up to participate in the new health insurance marketplace.

An internal memo issued on September 5 by Health and Human Services Secretary Kathleen Sebelius listed monthly enrollment goals for Obamacare for each state, including Washington, D.C., up until March 31. Within the memo was an estimate provided by officials, stating that 494,620 people would enroll in the new healthcare initiative by the end of October.

These new health insurance markets, also known as exchanges in some states, were created to serve as accessible outlets to affordable coverage for the nearly 50 million uninsured people across the country. Four tiers of private, subsidized plans are available for middle-class individuals, while low-income consumers may be eligible for an expanded version of Medicaid that is available in states that have agreed to extend the program.

While the White House viewed the official launch of the new healthcare marketplace as a pressing priority, the October 1 rollout was quickly complicated with countless computer glitches. Consequently, several potential customers were unable to enroll for coverage. Although insurers have reported that signups have slowly been rolling through, the Obama administration still will not reveal enrollment numbers.

Aside from these glitches, other factors that may created enrollment issues were underlying problems that were bypassed in initial testing. As several users flocked online to sign up for the new coverage plans, software flaws and design mishaps that had been ignored earlier soon derailed the enrollment process. Regardless, the administration continues to work toward finding a solution to eliminating ongoing enrollment issues.

An Abbreviated Guide to the Healthcare Exchanges

The online health care marketplaces have been up and (mostly) running for nearly a month, but a lack of information in many states is leaving consumers confused about their responsibilities and the coverage available to them. Below is some basic information to help you navigate the health care exchanges, and links to more information.

Do I have to use the exchange?

Consumers who do not receive health coverage through their employer or their spouse’s employer may be required to purchase insurance on the marketplace. In addition, if employer coverage does not meet the ACA’s requirements or costs more than 9.5 percent of the consumer’s income then the consumer may purchase more affordable insurance on the exchange.

There are exemptions. You are not required to purchase insurance if you:

· Would qualify for Medicaid under the expanded income limits, whether or not your state expanded coverage;

· Are not required to file a tax return;

· Receive insurance through your employer, your spouse’s employer, or other government-provided coverage (including VA benefits)

If you are a sole proprietor with no employees, you are considered an individual and are required to purchase insurance on the exchange unless you meet one of the exemption criteria. If you have fewer than 50 employees, you can purchase coverage for your company on the Small Business Health Options (SHOP) Marketplace and may qualify for tax incentives to do so.

What coverage can I purchase?

Open enrollment continues through March 2014, and plans will take effect beginning January 1, 2014. The health plans available on the marketplaces fall into one of five categories:

· Catastrophic – only available to consumers under 30 who are looking for low-cost disaster coverage

· Bronze – the lowest level of comprehensive coverage available; plans will pay up to 60 percent of costs

· Silver – “standard” coverage, with plans paying up to 70 percent of costs

· Gold – higher-level coverage, paying up to 80 percent of costs

· Platinum – the best coverage available, paying up to 90 percent of costs

As you move up through the plan levels, premiums increase but deductibles and out-of-pocket costs decrease. In addition, higher-level plans feature wider provider networks and better pharmaceutical coverage. Every plan level offers minimum essential coverage as required by the ACA.

Plans on the marketplace are required to cover at least the ten defined essential health benefits.

How do I know what’s covered?

Each exchange is required to provide a summary of included benefits, coverage, and applicable co-pays for services and medications at the generic, brand name, and specialty levels. The plans must also provide a list of in-network providers, as some providers may not accept all plans available on the marketplace.

What if I can’t afford coverage?

There are tax credits and subsidies available to a portion of the population to make health care affordable. For other low-income individuals and families, expanded Medicaid coverage will provide a free healthcare option. Consumers who are not already insured or exempt will fall into one of four categories:

· Consumers who are eligible for Medicaid benefits, whether or not the program has been expanded in your state. If it has, you will be able to enroll; if it has not, as mentioned above, you are exempt from the individual mandate.

· Consumers who are ineligible for Medicaid but earn below 100 percent of the poverty level. Unfortunately, these consumers are ineligible for the tax credit and must purchase health care at the full cost.

· Consumers who are eligible for tax credits to reduce premiums, earning between 100 and 400 percent of the poverty level. These consumers should be aware when shopping for insurance that tax credits are calculated based on the second least expensive silver plan available.

About half of the consumers who fall into this category will also be eligible for cost-sharing reductions to help with deductibles and other out-of-pocket costs. The maximum threshold for these benefits is 250 percent of the poverty level.

· Consumers who earn above 400 of the poverty level will be required to purchase insurance without assistance.

Find out if you qualify for a subsidy using Kaiser’s interactive calculator.

How does a subsidy work?

Refundable tax credits will be immediately available to eligible consumers, who can use some or all of the money to pay for premiums.

If you are self-employed or have fluctuating income, it may be wise to reserve part of your tax credit in the beginning or to overestimate your income to compensate. If you earn more than you estimated you may be required to pay back some or all of the tax credit at filing time, though you may qualify for a higher subsidy if you earn less than you projected. This is also a great reason to report changes in employment, income, or family size to the health exchange as soon as they occur.

Where do I begin?

To explore your state’s marketplace and enroll in healthcare coverage, visit www.healthcare.gov – this is the federal portal and the safest way to avoid scammers.

If poor cash flow will make it difficult for you to purchase health care, PRN Funding’s healthcare factoring programs can give you immediate access to the cash you need. Get started today to beat enrollment deadlines and secure peace of mind.

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Workers Can Benefit From Workplace Wellness Programs

Workplace wellness has become a popular initiative for many corporations. Much like FirstEnergy Corp., based in Ohio, many companies share the belief that adopting an effective wellness program would make sense to help promote the overall well-being of employees.

However, creating the ideal program that encourages employees to make significant strides in improving their overall health can be a difficult process. Don Powell, president and CEO of the American Institute for Preventive Medicine, said that finding the proper wellness program for a corporation could soon become even more difficult, due to the advent of federal health care reforms.

Nevertheless, in 2011, FirstEnergy Corp. introduced its approach aimed toward enhancing the well-being of its employees, promoting productivity and boosting morale, and reducing overall costs. Instead of creating a disciplinary agenda focusing on shaming employees for their unhealthy eating habits, the company chose to offer comprehensive rewards to those who strive to improve their health.

As a result, employees who take the initiative to improve their overall well-being can earn $20 each month. In order to receive this incentive, workers must schedule regular doctor’s visits, undergo biometric screenings, and even consult with a health coach or participate in a wellness workshop. Additionally, for those employees who remain smoke-free and achieve other significant health milestones, ranging from maintaining healthy triglycerides to keeping cholesterol and blood pressure at recommended levels, even more money can be acquired, reaching up to $480 each year.

FirstEnergy Corp. is certainly not alone in its efforts to promote a healthier workplace. In a 2013 survey conducted by Aon Hewitt, 84 percent of employers reported that they also offer incentives to employees who engage in workplace wellness programs. Although 16 percent of those employers said they provide both rewards and penalties in their initiatives, 58 percent admitted that they plan to place penalties on employees who fail to participate in these programs within the next three to five years.

Consequently, research has alluded to the fact that not every workplace wellness program is successful in achieving its goals. Nevertheless, the way each program is designed can be crucial to the overall effectiveness of each initiative. Many experts share the belief that in order to craft an effective program, the plan must be created to cater to the specific needs and goals of the company.

California Nurses Union Defeats Effort to Eliminate Paid Sick Leave

No sick days for California nurses? Luckily, that won’t become a reality any time soon.

Sutter Health, one of the largest and most profitable hospitals chains in the US, attempted to eliminate paid sick days as one of nearly 200 concessions during negotiations over union contracts. After a long fight and nine strikes within the past two years, the California Nurses Association (CAN) defeated the effort.

“The nurses would’ve come to work sick, and the patients’ health would’ve declined,” said California Nurses Association Executive Director.

The union defeated almost all of the concessions in the new contracts. Other concessions included ending health insurance coverage for nurses working under 30 hours per week, as well as reducing the minimum time off between nursing shifts to six hours.

According to the deal, Sutter Health has agreed to retract disciplinary actions against nurses that appear to have been done in retaliation for going on strike. Last July, the healthcare giant was found to have illegally attempted to enact the non-paid sick days rule on certain workers during an investigation by the National Labor Relations Board.

Obamacare Costs Result in Sticker Shock for Some Americans

As a result of the advent of Obamacare, many Americans were filled with high hopes that they would encounter more affordable health insurance rates. However, for some, optimism quickly diminished after discovering the healthcare coverage options under Obamacare..

A small business owner in California recently found out that she earned a bit too much to be considered for federal subsidies, which would help with her purchase to participate in Covered California, the state’s new healthcare exchange. Furthermore, her current rates have shot up almost 10 percent, due to the fact that policies are required to undergo an upgrade in accordance with the new law.

This small business owner is among many other Americans who currently purchase coverage on their own terms, but will now be forced to find new coverage as a result of their current policies being rendered outdated by the health law. Consequently, millions of Americans are finding that the new plans offered through the Affordable Care Act are not exactly affordable.

Covered California was created to aid more than 5 million Californians who were uninsured or purchased healthcare on their own terms. However, although federal tax credits are readily available to help reduce coverage costs incurred in the new healthcare marketplace, more than half of the consumers served by the initiative won’t even qualify for coverage.

Lastly, individuals enrolled under Covered California may see an increase in the cost of premiums. This would be due to two influential factors: a prohibition enacted on denying coverage to people with pre-existing medical conditions beginning Jan. 1, and the new requirement for policies sold next year to cover a minimum number of benefits.

Hospitals Shed Light on the ACA Blame Game

Following Cleveland Clinic’s announcement last month of more than $300 million in budget cuts, we addressed the ongoing blame game over the Affordable Care Act in the mainstream media. Members of the mainstream media have been slow to take up the question, but this week the Plain Dealer asked the question: Is Obamacare really to blame for cuts at the Cleveland Clinic and other hospitals?

Frustrated business person overloaded with work.

The Cleveland Clinic has previously attributed their budget decision to “a number of factors”, as have other hospital systems considering or implementing similar cuts. Now, hospitals spokespersons and health care analysts have provided a more in-depth explanation of exactly how the Affordable Care Act will affect hospital systems going forward.

Medicare

Hospitals already handle a large annual gap between the health care they provide to Medicare recipients and the reimbursement limits that the Centers for Medicare and Medicaid Services place on various services. The ACA includes an additional Medicare spending reduction of $716 billion over the next ten years. Some of the cuts are specifically directed at hospitals, such as the Hospital Readmissions Reduction Program.

Another portion of the pending cuts to hospitals is $22 billion over ten years from the Disproportionate Share Payments (DSH), which cover charity care in hospitals with large numbers of uninsured patients. Hospitals expect to compensate for this particular cut with insurance payments from previously uninsured patients who will have access to coverage through the federal health exchange. These cuts come in addition to other reductions approved by Congress since the ACA passed in 2010.

Medicaid

The ACA expanded Medicaid coverage to include patients earning up to 138 percent of the federal poverty level, in an attempt to provide an affordable health care option to parts of the population too poor to pay a monthly premium even with tax subsidies to help. To ease state concerns about the costs of expansion, the federal government will pay all new Medicaid costs through 2016, when they will scale back their coverage to 90 percent.

However, when the Supreme Court upheld the ACA’s individual mandate they failed to uphold the obligation of the states to expand their individual Medicaid programs. In states such as Ohio and North Carolina where the government has chosen not to expand, hospitals will not be able to recoup the loss of Medicaid DSH funds cut through the ACA. With fewer newly eligible Medicaid patients than projected, hospitals are forced to contain their costs through other means.

Bad debt

Hospitals must already contend with bad debt from patients who do not cover the portion of their invoices beyond coverage limits, as well as costs they swallow from providing charity care. The Medicare and Medicaid restrictions described above will contribute to this ongoing problem but interestingly enough, so will the health plans available to patients in the online marketplaces.

The affordability of health care is a complex matter that goes beyond the cost of the monthly premium. Insurers balance low premiums such as those available in Bronze or Silver plans with higher deductibles and out-of-pocket costs, meaning that a patient who seeks care at the hospital will end up with a higher portion of the bill once that care is provided. As much as a third of uncollectible hospital bills are estimated to belong to patients with health care.

Still, hospitals are optimistic that higher numbers of insured patients will create a net gain, as they will be able to reduce their bad debt expenses for uninsured patients and will instead receive payment for at least part of services provided directly from the insurer.

The Cleveland Clinic is one large example of how the Affordable Care Act may affect hospital operations, yet they also offer an important caveat against framing the discussion of other facilities’ budget decisions solely within the context of the ACA.

If you provide services to a hospital or medical facility, healthcare factoring can help you maintain a positive cash flow without falling victim to uncertain hospital payment terms. PRN Funding offers a variety of healthcare factoring programs designed to meet the unique needs of healthcare vendors. The application process is fast and easy – contact us to start today.

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Obamacare: Coverage Costs Widely Vary by State

How much will individuals pay for health insurance through Obamacare? Although Obamacare is a nationwide healthcare initiative, the coverage costs will vary depending on each state.

According to data recently released by the Department of Health and Human Services, Americans under the age of 65 who purchase coverage through the new healthcare act will end up paying the highest rates in Wyoming, while those who opt into the program in Minnesota will end up spending the least. Meanwhile, the states of Kentucky and Massachusetts have not yet released their coverage rates.

When it comes to unsubsidized costs, Minnesota comes in with the lowest rates, and is the sole state offering middle-tier “silver” plans for less than $200 a month. Furthermore, the lowest tier of ACA coverage, also called the “bronze” plan, calls for average monthly premiums of $144. In comparison, the state of Wyoming offers the bronze plan at an average of $425, while its silver plans begin at $489.

Meanwhile, in all other states across the U.S., bronze plans are offered at an average of $249, while silver plans begin at $310. Aside from the fact that silver plans, on average, are priced at 16 percent less than the projected $392 per month, government officials report that 56 percent of uninsured participants will be able to pay $100 or less each month. Nevertheless, the monthly cost exceeds the prior projected price tag of $392 in seven states.

Another influential factor for determining coverage rates under Obamacare is age. The Department of Health and Human Services reports that the average cost for younger Americans will likely be lower than what older people will be required to pay. As a general rule of thumb, states with more competing insurers will be charged lower rates than those states with fewer participating insurers.

With the help of an online subsidy calculator, individuals can get a better idea as to how much they can afford to spend on health insurance. By inputting various factors such as income level, age, and family size, an estimate will be calculated to help determine an individual’s eligibility for subsidies.

ACA: Updates, Delays, and Deadlines You Should Know

A number of delays have plagued the implementation of the Affordable Care Act, and new deadlines have been established. Following is a brief rundown of delays and deadlines to keep your understanding of the ACA up to date.

Deadlines

Reporting employee status: Employers must begin to collect information about their employees’ status over a 12-month period of their choosing in order to estimate their tax liability when the employer mandate takes effect next year (see Delays, below). Beginning in 2015, employers subject to the mandate will be required to offer coverage to employees who work full-time or pay the corresponding penalty.

Marketplace notification: Employers subject to the FLSA should have notified their employees of available health care options on the health insurance exchanges by October 1, the enrollment start date. If you haven’t yet notified your employees, do so ASAP.

Summary of Benefits: Employees must receive a summary of their provided benefits no later than 30 days before the beginning of the plan year. The summary must indicate whether coverage meets the minimum essential standard established by the ACA.

Delays

Small Business Health Options Program (SHOP) marketplaces: Originally slated to roll out with the individual marketplaces on October 1, the federal government delayed the launch of the SHOP marketplaces to November 1. Plans purchased on the exchange will still begin January 1, and small businesses that purchase their plans through brokers or other means will not be affected.

In addition, the marketplaces will have an additional year to offer a la carte plan options, in which businesses may choose individual coverage for their employees within an overall package.

Employer Mandate: Companies employing more than 50 full-time employees now have until 2015 to provide minimum essential coverage before they are subject to the $2,000-$3,000 per employee tax penalty for noncompliance.

Out-of-Pocket Limits: Some insurance plans will not be subject to consumer out-of-pocket limits ($6,350 for an individual/$12,700 for a family) until 2015. During the delay period, employers who offer separate plans for care and pharmacy benefits will be allowed to maintain separate limits for each plan, and plans that do not have a limit will not be required to implement one.

Update on the Individual Marketplaces

Technological issues that crippled several state exchanges soon after their launch have been resolved, leading to tens of thousands of new enrollments during the first week of operations nationwide. In the meantime, federal officials have acknowledged the need for design and server updates to the federal exchange at healthcare.gov to handle the high levels of traffic and make the experience more user-friendly.

PRN Funding’s healthcare factoring programs can provide the cash flow for your company to effectively fulfill its healthcare responsibilities under the ACA. Contact us to learn more.

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ACA: Healthcare Coverage in the Online Marketplace

Now that federal and state online healthcare exchanges are live, questions are swirling about the available coverage for eligible consumers. How much will it cost? What will it cover? What if I don’t sign up?

The marketplaces will vary from state to state, even those run by the federal government at healthcare.gov. Variations include plan availability and pricing, Medicaid eligibility, and how the exchange itself is run.

However, there are consistent policies that will apply to consumers in all fifty states and the District of Columbia:

  • All plans will cover, at a minimum, ten benefits defined by the ACA as “essential.”
  • Five levels of coverage will be available with sliding price scales, from Catastrophic (only the most basic disaster coverage) to Platinum (plan pays 90 percent of costs)
  • No plan’s availability or price can be affected by pre-existing conditions
  • If you are not otherwise exempt, you will face an increasing annual fine for not having insurance…
  • BUT you may be eligible for tax credits or rebates to lower premiums and out-of-pocket costs, in some states by as much as half

Young people will absorb higher premiums than are currently available in every state on the federal exchange, though this goes hand-in-hand with the more comprehensive plans that will replace currently available coverage. In addition, older and sicker consumers who purchase coverage through the marketplace will benefit from lower premiums that are unaffected by pre-existing conditions or a dodgy medical history, as noted above. In all, healthcare pricing will depend on where you live, your age, and current tobacco use.

Tax subsidies for purchasing insurance are dependent on household income and the availability and cost of qualifying employer-provided insurance.

PRN Funding can help small to mid-sized healthcare vendors who do not qualify for tax subsidies to purchase insurance through their state’s marketplace. Healthcare factoring gives vendors immediate access to cash through the sale of their receivables, which they can then use to cover premiums and other expenses. Read more about PRN Funding’s factoring services.

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