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Making Sense of the New ACA Lawsuit

You may have seen the news that the Department of Justice is no longer defending the Affordable Care Act against a challenge that, now that the penalty is being eliminated, the individual mandate is unconstitutional including certain protections for people with pre-existing conditions. We wanted to provide a quick explanation of what’s going on to help you better explain the developments to your clients.


If you’re a regular reader of the AHCP blog, you know that we frequently stress the importance of client communications. Whether you focus your attention on employer, individual, or Medicare products, your customers need to understand their policies and keep up to date with important changes that could affect their coverage.

To help you with your communication efforts, we thought we’d give you three short client communication pieces, one for each market segment (employers, individuals, Medicare). Please feel free to email them to your customers or include them in your monthly newsletter.

A Three-Step Process to Get More Small Group Clients

In our last couple posts, we explained that CMS has extended the transitional relief for small employers until the end of 2019, giving healthier small group clients an opportunity to save on premiums for another year and avoid some of the rules applicable to ACA metallic plans. We also explained that taking advantage of this option may require these small groups to continue renewing their same plan year after year without the option of tweaking their benefits at renewal/re-issue time. For employers looking for greater flexibility in plan design, self-funding provides a great alternative; small-business employers with self-funded plans often save money by avoiding the modified adjusted community rating rules, and they have multiple plan options to choose from.

In this post, our message is that self-funding is not only a good option for your transitional small group clients but also for a lot of small-business employers who aren’t your clients—yet. Below is a three-step process that will help you recruit new small-business employers and grow your business in this lucrative market.

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.

California Consumer Privacy