The Department of Health and Human Services (HHS) recently finalized rules defining Essential Health Benefits which must be introduced into all health plans beginning January 2014.
The final ruling expanded coverage to include rehabilitative care, mental health and substance use disorder services, pediatric vision and dental care, which was not previously offered in most plans. These benefits must be included in plans offered both inside and outside of the exchanges.
A “metal rating” will be used to assist with the comparison of similar plans, premiums, and other costs within the exchange. The law also places an annual limit on the amount an individual will pay, which will prevent those insured from facing high costs, associated with an injury or illness.
More plan details should be released by early summer. Gray & Troy will continue to provide updates as they are released. To learn more about Essential Health Benefits, contact Gray & Troy Insurances Services, Inc.
In 2012, the American Taxpayer Relief Act was signed, putting important changes in effect, to the estate tax and gift tax laws, for 2013. The maximum estate and gift tax rate is now 40% (5% increase from 2012), with exemptions remaining at $5 million, and an inflation adjustment of $5.25 million.
With the America Taxpayer Relief Act, a married couple may shield up to $10.5 million, from federal estate tax, and make lifetime gifts of $10.5 million, without being subjected to the federal gift tax. In 2013, the annual gift tax exclusion is $14,000 ($10,000 increase from 2012).
The act also extends “portability”, allowing a spouse to gift their unused federal estate and gift tax exemption to the surviving spouse. California will continue to have a no inheritance tax in 2013.
For more information about the American Taxpayer Relief Act, visit The National Law Review, or contact Gray & Troy Insurance Services, Inc.
The requirement to provide Notice of Exchanges to Employees has been extended from March 2013, to late summer or early fall of 2013, in order to provide a smoother implementation. In a recent release from the Department of Labor (DOL), this extension will ensure that employers receive proper information and guidelines, as well as provide employers with additional time to prepare. The timing will coincide with the open enrollment period for the Exchanges.
The notice must be provided to all current employees and new hires. The information that must be included in the notices as stated in the Fair Labor Standards Act (FLSA) is as follows:
- To inform employees of the existence of their local exchange, the services provided and the contact information;
- Purchasing insurance through the exchange, may cause the employee to lose the employer contribution of the premium; And
- The employee may be eligible for a premium tax credit or a cost sharing reduction if the employer plan does not meet certain requirements.
With the additional guidelines that are to be provided by the DOL, they may also provide a sample Notice of Exchange.
Gray & Troy will continue to keep you informed of updates to these guidelines as they become available. If you have any questions, call us at (805) 540-7010.
When the Affordable Care Act (ACA) is fully implemented in 2014, one provision will significantly impact young adults, ages 21-29; age band compression. The premise of age band compression is that young adults pay more for their premiums, allowing for older adults to pay less. A recent Contingencies study found that premiums for the 21-29 age group could rise as much as 42%. Those in the 30–39 age groups could see a premium increase averaging 31%.
Another provision of the ACA taking effect in 2014 is the availability of catastrophic coverage for adults under the age of 30, a plan that may become a viable affordable option. Young adults will also be considering the individual mandate. Starting in 2014, there will be a penalty for being without health insurance. The penalty will be $95 per adult and $47.50 per child with a maximum of $285 per family, or, 1% of family income; whichever is greater.
There are several options to consider and understand while preparing for the ACA 2014 changes. Gray & Troy Insurance is available for assistance, to help evaluate all options, for each individual’s specific needs. As 2014 draws near, please contact Gray & Troy Insurance at (805)540-7010 to review.
To read the complete Contingencies article and study, visit: Age Band Compression Under Health Care Reform.
The Affordable Care Act initiative brought several changes in 2012, for both employers and individuals alike. Changes in 2012 ranged from provisions on how employers manage W2-Reporting, to an increase in free preventative services for women. Although the most significant changes will not take place until January 1, 2014, the following is a summary of significant changes that occurred in 2012.
- Government issued final regulations on Summary of Benefits and Coverage (SBC), and Medical loss Ratio [MLR].
Summary of Benefits and Coverage and Uniform Glossary
Medical Loss Ratio
- W-2 reporting requirements suspended for groups under250.
- Health Reform Goes Before the Supreme Court.
- Blue Shield Announced its Medical Loss Ratio for 2011.
- Blue Shield met the medical threshold for fully insured employer groups, and individual and family plans, regulated by the California Department of Managed Health Care (DHMHC). Over $10 million in rebates were returned to approximately 240,000 Blue Shield Life IFP plan subscribers (average rebate: $45).
- Supreme Court Upholds the Affordable Care Act.
- Preventative services at no additional cost for women.
Women’s Preventative Services
- Blue Shield begins issuing SBCs.
More changes and actions will take place in 2013, especially to prepare for major changes in 2014.
The Summary of Benefits and Coverage (SBC) document is a requirement of the Affordable Care Act, to provide to consumers any time it is requested (for plan years after 9/23/12) and at specific trigger times. For example, an SBC must be provided during open enrollment, or 30 days prior to a renewal date, if there’s no open enrollment. If the renewal is automatic, the SBC must be provided within 7 days of the determination of benefits. For New Group business, the SBC is not provided during the shopping process, however, once a plan is selected, it will be provided within 7 days. Fully insured Anthem plans can access the SBC at find-sbc.com, when shopping for plans, during renewal, and anytime there are plan changes.
For more information please visit Anthem Blue Cross: Essentials of SBCs.
Long-Term-Care insurance (LTC or LTCI) helps pay for assisted living expenses, skilled and custodial care, and nursing home costs. According to a recent article in the Wall Street Journal, since 2004, purchasers of this type of insurance have decreased by 38%, and LTCI policy holders have experienced premiums increasing as much as 17%, in the past year alone. Additionally, large insurance companies such as Prudential and Met Life have stopped offering LTC policies, citing the increase in claims, as well as a decrease in interest revenue, relating to their investments.
As a result, some families are turning to self-insurance, by increasing their retirement savings, while others are seeking alternatives, such as the new hybrid policy of “Life combination”, where life insurance is combined with LTC benefits.
With soaring costs associated with LTCI, most experts agree that some sort of policy is better than none, as the need for this care could easily exhaust retirement savings, as well as other assets.
To learn more about Long-Term-Care policy options, contact Gray & Troy Insurance Services.
The Women’s Preventive Health Care Amendment, a provision of the Affordable Care Act, became effective August 1, 2012. The new rules require insurance companies to offer specific benefits free of charge.
Specific benefits now provided:
- Well woman visits [annual]
- Screen for gestational diabetes [with each pregnancy]
- Human papillomavirus testing
- Counseling for sexually transmitted infections
- Counseling and screening for HIV
- Contraceptive methods and counseling
- Breastfeeding support, supplies, and counseling [with each pregnancy]
- Screening and counseling for interpersonal and domestic violence
Although the amendment became effective August 1, 2012, the associated benefits are being added to policies upon a group’s first renewal, subsequent to the amendments effective date. For individual policies, please check with your specific carrier or contact Gray & Troy as the effective dates vary between carriers.
Gray & Troy Insurance Services, Inc. invites you to our upcoming Health Care Reform Seminar
Thursday, August 23, 2012
Check in 8:30am
8:45am – 11:00am
A buffet breakfast will be served
Location: San Luis Obispo Country Club
255 Country Club Drive
San Luis Obispo, CA
This seminar, sponsored by Gray & Troy Insurance Services, Inc., will help employers understand and plan for compliance with the new responsibilities resulting from Health Care Reform.
Although some elements of Health Care Reform have already taken effect, other provisions will continue to be implemented in stages through 2018. Some provisions directly govern insurers, others govern (or impose tax impacts) on employers and individuals and many provisions impact the Medicare and Medicaid systems. This presentation will focus on provisions affecting employer-provided, insured group health plans for small to mid-sized businesses.
Christine P. Roberts
Christine P. Roberts is a partner in the Santa Barbara law firm of Mullen & Henzell L.L.P and has been with the firm since 1997. Ms. Roberts received her Bachelor of Arts Degree in 1985 from Wellesley College, where she graduated with highest honors. Ms. Roberts received the Juris Doctorate Degree in 1988 from the University of California at Los Angeles. In January 1989 she was admitted to the California Bar.
Since 1994 Ms. Roberts has limited her practice to the employment benefits and employment law area, with particular emphasis on pension and health plans under the Employee Retirement Income Security Act of 1974 (“ERISA”). In addition, she has worked extensively with “non-qualified” executive compensation arrangements as
governed by Section 409A of the Internal Revenue Code. Christine also advises clients on the benefit plan due-diligence aspects of business mergers and acquisitions. She has written chapters on IRS and Department of Labor voluntary compliance programs for correction of retirement plan errors in The Adviser’s Guide to Retirement Plans for Small Businesses, published by the AICPA (3rd. Ed. 2010), the Simple, SEP, and SARSEP Answer Book (17th Ed. 2012) and the Quick Reference to IR As (2012), both published by Aspen Publishers.
Ms. Roberts is a member of the Santa Barbara County Bar Association, the Santa Barbara Human Resources Association, and the Society for Human Resources Management. She currently serves on the board of trustees of the Santa Barbara Public Library.
In Attendance: Steven Vincent, Director of Sales, Anthem Blue Cross
Please RSVP by Thursday, August 16th to:
After battling over payment issues for more than a year, Walgreens agreed on Thursday, July 19th, to renew its relationship with the prescription benefit manager, Express Scripts (Anthem Blue Cross).
The disagreement over payments began in June 2011, and led to a separation in January 2012. Anthem Blue Cross members had to switch to another pharmacy, or pay more for prescriptions if they continued to use Walgreens (LA Times).
On September 15th, 2012, hundreds of thousands of Anthem Blue Cross members will have the choice to return to Walgreens for discounts and related benefits from their Express Scripts cards.
The dispute cost Walgreens an estimated $4 billion in annual revenue (New York Times).