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Freelancers Need Health Insurance

The world is changing. More and more people are working from home, doing side jobs, and trying desperately not to spend their lives “working for the man.” How much is the freelance workforce growing? A lot. According to a recent report by Fiverr, an online marketplace for freelance services, there are “approximately 57.3 million freelancers in the US currently contributing $1.4 trillion to the economy,” and “it is anticipated that freelancers and independent workers will make up the majority of the workforce in the US within 10 years.”

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Smooth Sailing for the Next Three Years

A presidential election year can seem like a time of uncertainty. The current President is trying to hang on to his job while other candidates—in this case, a couple dozen other candidates—are busy explaining all the things that they will change if they are able to unseat him. Other elected officials are up for re-election as well, so there are plenty of proposals and promises and criticisms and sound bites. With all of the noise, it’s easy to understand why people are unsure about what will happen in the months and years ahead.

Interestingly, though, the period we’re in right now, about 15 months before the 2020 election, is actually a time of stability in the health insurance industry. Why? Because very few major changes are likely to happen between now and the election. Everyone is talking about what they want to do, but in the meantime they’re not doing much of anything at all. We have a divided Congress that can’t agree on most issues and certainly not on health care, so there’s almost no chance that a bill expanding or repealing the ACA will make it to the President’s desk.

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Multi-Part Health Plans

Back in the good old days—just a few short years ago—it was possible to sell clients a health plan that checked all of the boxes:

  • a low deductible and low out-of-pocket exposure,
  • low up-front copayments for doctor visits and prescriptions, and
  • a reasonable monthly premium.

No more. Nowadays, it’s difficult to find a plan that meets even one of these criteria that are important to clients; meeting all three is nearly impossible.

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Employees love Flexible Spending Accounts, or FSAs. These tax-advantaged accounts give them the ability to set aside tax-free dollars to pay for qualified medical expenses, similar to an HSA. Unlike an HSA, though, an FSA can be paired with any type of health plan, including plans with up-front copayments for doctor visits and prescriptions. The drawback, of course, is the “use it or lose it” rule; employees whose FSA contributions exceed their annual medical costs must either go on a spending spree at the end of the year or risk losing any unspent funds.

In 2013, to help reduce this risk and encourage more workers to participate in their company’s Flexible Spending Account, the IRS issued Notice 2013-71, which “permits § 125 cafeteria plans to be amended to allow up to $500 of unused amounts remaining at the end of a plan year in a health FSA to be paid or reimbursed to plan participants for qualified medical expenses incurred during the following plan year, provided that the plan does not also incorporate the grace period rule.”

That’s a long sentence, but here are the three most important points.

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Medicare for All and the 2020 Election

Back in 2007, three years before the Affordable Care Act was signed into law, Michael Moore released his film “Sicko” to highlight what he saw as the flaws in our for-profit healthcare system and advocate for a single-payer, Medicare-for-All solution in the United States. Moore was a supporter of H.R. 676, the Medicare-for-All bill introduced by Senator John Conyers (D-MI) that was picking up some steam at the time.

Medicare for All was embraced by then presidential candidate Dennis Kucinich, who at the time was a senator from Ohio. Kucinich was a fringe candidate who ended up with about one percent of the vote in the 2008 election, but he never waivered from his calls for a single-payer health care system in this country.

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President Trump’s Executive Order to Expand HSAs

On June 24, 2019, President Trump signed an executive order that would, among other things, make it easier for consumers to choose an HSA-compatible High Deductible Health Plan, expand the definition of preventive care under this type of plan, and expand the list of HSA-eligible expenses.

While the order, officially called the “Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First,” is focused primarily on increasing transparency in health care, HSA expansion could prove to be a big and positive change for consumers.

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New Tool Compares Medicare-for-All Proposals

One of the problems in DC is that, instead of working together to develop a plan to fix our broken health care system, nearly everyone develops their own plan so that they can take credit for it. That certainly seems to be the case among the nearly two dozen Democrats running for President. Most, but not all, support some version of Medicare expansion, but those who do support the idea are far from being on the same page.

Whether you personally agree with the idea of a single-payer healthcare system, an optional buy-in to Medicare, or some public health insurance program, you’re probably interested in the proposals that are being discussed. And even if you’re not, your clients are certainly interested, so it’s a good idea to figure out what’s going on.

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In an August 15, 2019 news release, the Centers for Medicare & Medicaid Services announced that, beginning with the 2020 Open Enrollment Period, CMS “will require the display of the five-star Quality Rating System (or star ratings) available nationwide for health plans offered on the Health Insurance Exchanges.”

Similar to the star ratings CMS currently uses on the Medicare.gov website and the Nursing Home Compare website, “consumers will be able to compare health coverage choices using a five-star quality rating of each plan on Exchange websites, including HealthCare.gov.”

CMS Administrator Seem Verma explains that this new feature is “part of the Trump Administration’s broader quality initiative” and says that the increased transparency will benefit consumers by providing them with the tools they need to make better healthcare decisions:

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How to Determine When Medicare is Primary

About a year ago, we posted an article about Medicare Premium Reimbursement Arrangements, which allow small employers to pay for the Medicare Part B, Part D, and supplement premiums for their active employees. As explained in the article, the employer cannot force older employees off of the group plan (they have the same enrollment rights as all other full-time employees), but it can often be a win-win solution for both the employer and the employee.

The one caveat mentioned in the article is that this strategy only works when Medicare is primary. The Medicare Secondary Payer (MSP) rules kick in when a group has 20 or more employees (full- and part-time), and the MSP rules prohibit an employer from incentivizing an employee to drop off the group plan and sign up for Medicare.

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A Quick Update on All the Health Insurance Lawsuits

This is a weird time in the United States. Republicans and Democrats are at an impasse on healthcare; they can’t seem to agree on anything. But it’s worse than that. Each side seems to hate anything the other side proposes, and with a divided Congress, it’s pretty clear that we aren’t going to see any major bills to fix the current system anytime soon. None that have a chance at passing, anyway.

With their hopes of repealing and replacing the Affordable Care Act put on hold, Republicans are utilizing the other two branches of government—the executive and judicial branches—to dismantle the law.

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