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Self-Funding Can Provide Relief for Small-Business Employers

On April 9, 2018, the Centers for Medicare and Medicaid Services (CMS) announced that individuals and small employers can continue their transitional policies to the end of 2019; previously, these “grandmothered” plans were set to expire at the end of this year.

Groups with a transitional plan continue to play by the old rules: they can still be rated based on industry, number of employees, gender, wider age bands, and health status. Employers who have chosen to maintain their old health plans are, on average, younger and healthier than groups with ACA-compliant metallic plans.

The extended transition relief is good news for these healthier small employers, but in order to avoid the new modified adjusted community rating rules they must continue to renew their existing plans year after year. For companies that in the past may have tweaked their plan designs every year or two at renewal time, the transitional plan option can be quite limiting.

Differences in A & B Effective Dates when Medicare Enrollment is Delayed

A weird situation came up the other day that we wanted to tell you about. One of the agents we work with received a call from a 68-year-old client who had not signed up for Medicare when he was first eligible. He was not yet receiving Social Security checks, so he was not automatically enrolled in Medicare Part A when he turned 65. Instead, the client kept the individual health plan that covered himself, his wife (who is under 65), and his eight-year-old granddaughter who he has custody of.

When the client received another double-digit renewal increase on his individual plan, the agent convinced him that it was time to go ahead and sign up for Medicare, warning him that there would be a penalty since he didn’t take Part B when he was first eligible.

The gentleman went to the Social Security office at the beginning of January to sign up for Medicare Parts A and B. When his card arrived in the mail, he noticed that his effective date for Medicare Part A was July 1, 2017 while his effective date for Medicare Part B was July 1, 2018. “Is this a mistake?” he asked the agent. It was not.

IRS Lowers HSA Family Contribution Limit

For the first time since HSAs were introduced nearly 15 years ago, the Internal Revenue Service has retroactively reduced the HSA contribution limit. In a recent press release, the IRS announced that it is lowering the maximum family contribution to a Health Savings Account for 2018 from $6,900 to $6,850. The change comes as a result of the new tax bill. The self-only contribution amount remains $3,450.

What employers need to do

While this may seem like a minor change, it can cause headaches for your individual and group clients.

Transitional Plans Extended One More Year

On Monday, April 9, the Centers for Medicare and Medicaid Services announced that the transitional plans in the individual and small group markets, also known as “grandmothered” plans, will be extended one more year through the end of 2019. This is welcome news for clients who currently have a transitional policy, but it does feel a bit like the government is crying wolf. Every year, clients worry that they will need to search for another solution since they are likely to see their rates increase if they are forced to move to an ACA-compliant metallic plan, and every year they learn that they can hang on to their current coverage a little longer. This year is no different.

4 Great Reasons to Help People (even if you won’t receive commission)

We all work for a paycheck, and most of us can’t afford to do a lot of pro-bono work. That said, there can be some real benefits to helping people even when you won’t be paid for the sale. Below are just a few examples, and all point to the fact that when you focus on taking care of the client, the money will take care of itself.

Short Term Plans May Soon Be Longer

On February 20, 2018, the Department of Health and Human Services issued proposed regulations that would extend the maximum coverage period for short-term plans from three months to twelve months. The rule change comes at the request of President Trump, whose October 12 executive order encouraged the Secretaries of the Treasury, Labor, and Health and Human Services to “consider proposing regulations or revising guidance, consistent with law, to expand the availability of STLDI” (short-term, limited-duration insurance).

Overcoming Consumer Apathy when Selling Health Insurance

Here’s a question: How much time should agents spend trying to convince people that they need health insurance?

As an insurance professional, you no doubt recognize the importance of having health coverage for yourself and your family. The primary reason to purchase insurance, of course, is to protect against potentially catastrophic claims in the event of a serious and unexpected injury or illness. While a fortunate few are able to pay tens of thousands of dollars for medical care, a big hospital bill would create financial hardship for the majority of Americans.

New Medicare Cards are Coming Soon!

Have you heard the news? Medicare beneficiaries will soon be receiving new Medicare cards with a new Medicare number. A 2015 law requires CMS to remove Social Security Numbers (SSNs) from all Medicare cards by April 2019 and replace them with a new Medicare Beneficiary Identifier (MBI). The new cards will be sent out over a 12-month period beginning this April.

CHIP FINALLY Gets Reauthorized

The Children’s Health Insurance Program, or CHIP, has been in the news recently as lawmakers debate the future of this popular safety net program for children of lower-income families. The program, which has been around since 1997, has enjoyed nearly universal bipartisan support from the beginning, but that support has come into question recently as Congress allowed funding for CHIP to expire four months ago and seemed to be in no hurry to reauthorize it. As worried parents waited to see what our lawmakers would do, CHIP reauthorization took a back seat to tax reform.

CHIP is a federally funded program with state oversight and administration. While eligibility and benefits vary by state, families with incomes up to 200% and in some states 400% of the federal poverty level may qualify, and a single low monthly premium usually covers all children in the household.

Medicare Premiums Vary By Income

If you sell Medicare supplements, Medicare Advantage plans, or Medicare Part D prescription drug plans, you’ve probably been asked on multiple occasions how much Medicare Part B costs. If you’re like a lot of agents, you may have answered with the standard Part B premium amount, which is $134 per month in 2018. This can be dangerous.

It turns out that the amount people pay for both Medicare Part B and Medicare Part D can vary wildly by income, so before giving a generic answer with the cost that applies to most Medicare recipients, you should ask a couple questions. Better yet, you can simply provide your clients with the information about how Part B and Part D premiums are determined and then let them answer the question themselves.