Blue Cross of California has announced that they will issue all of their small group clients (i.e., employers with 2-50 employees) a one-time credit of 18% of the monthly health insurance premium. The credit will be based on active enrollment in the Blue Shield plan on July 31, 2012 and it will apply to the September 2012 bill. Unlike the MLR Rebates, this credit will be issued to employers and they can return portions of it to their employees or not. MLR rebates must be returned to employees commensurate with the employees’ contribution to the health plan premium.
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California Pre-Existing Condition Insurance Plan (PCIP) vs. California Major Risk Medical Insurance Plan (MRMIP)Monday, May 2nd, 2011
The California Pre-Existing Condition Insurance Plan (PCIP) was set up under the new Federal health insurance reform law (PPACA). It’s supposed to go until 1/1/2014 at which time there will be no medical underwriting and all insurance companies must take everyone without regard to pre-existing medical conditions – i.e., you can transition to a standard plan. For someone close to age 65, enrolling on this plan would take him/her until he/she is eligible for Medicare which is currently “Guarantee Issue.” By the way, we can help people figure out their options for Medicare when the time comes and help them enroll in a Medicare supplemental policy.
Agents can’t represent the PCIP plan so we are very hesitant to give info and advice – please keep that in mind. This is a government program. Still I’ve looked through the info and here’s what we understand:
As an example the PCIP premium will cost someone age 60-64 in Los Angeles County $638/month. The benefits seem very rich: $1500 deductible with on out-of-pocket (OOP) maximum (the most you’ll pay in a calendar year) of $2,500/calendar year. The $2,500 includes the medical deductible and the $500 brand name prescription (Rx) deductible. This is amazing. No commercial product for individual or employers with fewer than 250 employees has an OOP max that includes brand Rx deductible and very few have such a low OOP max. Here is the PCIP description of benefits.
In order to be eligible for this plan one must have been declined for individual health insurance and can not have been enrolled in a health insurance plan for the preceding 6 months. Also a California health insurance company must have declined to offer you health insurance. If someone has a surgery pending as an example, that would be reason for an automatic decline from an insurance company. If you qualify for an individual plan we can assist with that. Just click here for a quote for a California individual medical insurance plan.
Another option for people with pre-existing conditions is the State of California Major Risk Medical Insurance Plan (MRMIP). This plan is funded with taxes on tobacco. Note the big notice on their web site: if you enroll in MRMIP it will prevent you from qualifying for the PCIP plan.
Here is a comparison of the PCIP and MRMIP plans. MRMIP has a lower deductible however it also has a $75,000 annual cap on benefits and a $750,000 lifetime cap. The PCIP plan doesn’t have that limitation. MRMIP is significantly more expensive. The monthly premium for someone between the age of 60-64 in Los Angeles would be $1424.40/month, or $17,093/year – that’s the price of a new car, which is unbelievable. Compare that to the PCIP price of $638/month and the PCIP plan seems to make more sense – if one qualifies.
On April 7, 2011 California enacted Assembly Bill 36 which allows employees and the self employed to deduct the cost of health insurance premium for dependents under the age of 27. This conforms California state tax law with the Federal guidelines passed into law with the Patient Protection and Affordable Care Act (PPACA) that extend eligibility for group health insurance to adult children, regardless of student status, through age 26.
Thank goodness that California legislators fixed the discrepancy between Federal and State law regarding the deductibility of dependent health insurance premium. Allowing the deduction means that California forgoes the tax revenue on adult children’s health insurance premium. At the same time allowing the deduction removes a major head ache for employers who have been trying to comply with conflicting State and Federal guidelines.
One provision of the new Federal health insurance reform law (PPACA) that became effective on September 23, 2010 was the requirement that all health insurance companies approve children under age 19 without regard for health status. While the new law requires insurance companies to sell coverage there is no requirement for parents to buy health insurance for their children. Fearing “adverse selection” where people would wait until they got to the hospital to sign up for coverage then cancel it after they received treatment (like buying fire insurance when your house is on fire) virtually all of the insurance companies refused to sell children only health insurance.
In response, Governor Schwarzenegger signed AB 2244 into law September 20, 2010. This new law requires all California health insurance companies to offer children only individual policies on a “guarantee issue’ (GI) basis beginning January 1, 2011. Failure to comply will cause the California health insurance company to be banned from selling individual health insurance plans for 5 years. This penalty is so sever that it forces insurance companies to either accept all children under these conditions, or go out of business.
AB 2244 creates a 60 day “initial open enrollment” period during which all children will be able to enroll in an individual health insurance plan without regard to pre-existing medical conditions. After this period, all children under age 19 will have an opportunity to enroll in an individual health insurance plan on a GI basis during the month of their birth.
Also, the responsible parent/guardian of a child will be able to enroll a child on a GI basis on a “late enrollment” basis within 63 days of one of the following situations:
“(1) The child lost dependent coverage due to termination or change
in employment status of the child or the person through whom the
child was covered; cessation of an employer’s contribution toward an
employee or dependent’s coverage; death of the person through whom
the child was covered as a dependent; legal separation; divorce; loss
of coverage under the Healthy Families Program, the Access for
Infants and Mothers Program, or the Medi-Cal program; or adoption of
(2) The child became a resident of California during a month that
was not the child’s birth month.
(3) The child is born as a resident of California and did not enroll in the month of birth.
(4) The child is mandated to be covered pursuant to a valid state
or federal court order.”
“(1) During any open enrollment period or for late enrollees, the
rate for any child due to health status shall not be more than two
times the standard risk rate for a child.
(2) The rate for a child shall be subject to a 20-percent
surcharge above the highest allowable rate on a child applying for
coverage who is not a late enrollee and who failed to maintain
coverage with any health care service plan or health insurer for the
90-day period prior to the date of the child’s application. The
surcharge shall apply for the 12-month period following the effective
date of the child’s coverage.
(3) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a health care service plan
may rate a child based on health status during any period other than
an open enrollment period if the child is not a late enrollee.
(4) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a health care service plan
may condition an offer or acceptance of coverage on any preexisting
condition or other health status-related factor for a period other
than an open enrollment period and for a child who is not a late
California health insurance companies are welcoming the second decade of the 21st Century with huge rate increases for small employers (2-50 employees). The largest rate increases are on the HSA (Health Savings Account) compatible plans. For their part, the health insurance companies blame the increases in the HSA plans on:
1) Increased utilization – meaning that many people are using a lot of medical benefits and the insurance companies are paying out more than they are taking in;
2) Improper pricing of the plan originally – Kaiser and Blue Shield of California both are having nearly 30% increases in their HSA plans and they claim that they “mispriced” the plans when they introduced them into the market place. (Skeptics might say that they intentionally priced the plans low to gain market share.)
On the HSA plans rate increases near 30% are not uncommon. Some groups will see nearly 40% increases. Small groups receiving increases less than 20% should feel lucky.
Some carriers like Anthem Blue Cross of California claim to have only single digit increases – which is true based on a comparison of rates the previous quarter. When compared to year ago rates, the increases are much higher.
Compounding the rate increases are the underwriting guidelines for many of the carriers (particularly Health Net and Kaiser) which automatically increase the Risk Adjustment Factor (RAF) to 1.1 for groups with fewer than 6 enrolled employees. Many employers have laid off employees and now fall below the 6 employee threshold and will see an additional increase in premiums.
Employers faced with these huge rate increases can change from one company to another and possibly offset the increase – there are anamolies that might work for certain groups. Call us 800-746-0045 if you would like to discuss your options.
Down grading to high deductible plans is also becoming popular – and these are HIGH deductibles. Anthem Blue Cross Solution plans with 2500, 3500 and 5000 deductibles might be an option. The HSA high deductibles may not be such a great deal.
We can only hope that the Federal health care reform will lower premiums – all indications however, are that premiums will actually INCREASE.
Aetna announced that on August 7, 2009 they will send a notice to former employees of their small business clients, terminated from employment between September 1, 2008 and May 10, 2009, advising them that they may be eligible for the Federal Subsidy for COBRA continuation of their health insurance. Aetna is using the California Department of Managed Health Care’s model COBRA Subsidy Notice as their guide.
The notice informs employees that they may be eligible for a nine-month – 65 percent subsidy of the COBRA or CalCOBRA premium for medical insurance if they were involuntarily terminated from employment between September 1, 2008 and December 31, 2009. The subsidy is as a result of the American Recovery and Reinvestment Act (ARRA) signed into law February 17, 2009. Here is advice for employers wanting more information on the COBRA subsidy. Here is advice for employees seeking information on the COBRA subsidy.
In the California small group health insurance market Health Net’s HMO plans are always well priced. Effective August 1, 2009 for groups located in Los Angeles their Elect Open Access HMO plan will be 5 percent less expensive than the Health Net Standard Option HMO.
The Standard and the Elect Open Access (EOA) plans have exactly the same benefits in terms of doctor office visit charges, hospitalization charges and prescription medicine benefits. In fact, the EOA plans have the additional benefit of allowing members to self-refer to any Health Net PPO provider for a consultation. The member pays $15 more than the primary care doctor office visit when seeing a PPO provider, but the member has the freedom to access this care.
So, the obvious question is how can the plan that allows access to PPO doctors for consultations cost less than the standard HMO? More benefits (almost)always means higher cost. There are two reasons the EOA plan costs less than the Standard HMO in Los Angeles:
1) Health Net filed the plan as a “POS” or Point-Of-Service plan which allows some cost sharing with the medical groups. This results in lower payments or “capitation” to the medical groups. The medical groups share in money from a reserve fund set aside to cover the out-of-network PPO services. If few people see PPO doctors for consultations part of the left over money goes back to the medical group and to Health Net. The members also benefit because they’ve paid a lower premium.
2) UCLA Medical Center does not participate in the Elect Open Access plan. UCLA Medical Center is a high-cost facility and apparently refused to accept the lower reimbursement rates.
So, if your Los Angeles based small business (2 – 50 employees) doesn’t need to use UCLA Medical Center and you want a rich benefit HMO, Health Net’s Elect Open Access HMO may be a very good choice. Click here to get a California Small Group Health Insurance Quote.
With summer and graduation upon us, we wanted to help people understand issues related to college health insurance.
Incoming freshmen have different concerns than recent grads; who have different needs than graduate students and we’ve written an article for each situation. Parents of these students will also find these articles helpful.
In addition, we’ve written an introduction to health insurance and an overview of college health plans – including specific steps to determine if enrolling in your college’s health plan is a wise decision.
The learning curve to understand health insurance is often steep. We hope these articles will flatten the curve a bit.
Anthem Blue Cross of California announced that they will be making major changes to their small group health insurance plans effective July 1, 2009. Specifically, they will be adding 14 new plans. Beginning January 1, 2010, Anthem Blue Cross will discontinue 9 plans.
Anthem calls their entire portfolio of small business medical plans Employee Elect with additional portfolios referred to as Employee Choice and BeneFits. During the past 10 years the Employee Elect portfolio has grown from 12 plans to 29. With these changes Anthem Blue Cross will offer 34 plans in their Employee Elect portfolio, including 10 HMO plans. For many years Anthem Blue Cross only offered 3 HMOs: the 100%; Classic $250; and the Saver HMO.
According to Anthem Blue Cross, their research about consumer preferences indicates that people want many choices. The large selection of plans addresses this preference. A small business in California (2-50 employees) can offer all 34 plans to their employees at one time.
To help make sense of the many plans, Anthem Blue Cross has grouped the plans into “families” or “suites” of plans. The plans in each family function the same way but have different deductibles, copayments, and out-of-pocket limits. Here are the families of plans in the new Employee Elect portfolio:
* Premier PPO - rich benefit plans that pay “reasonable & customary” out of network;
* Copay PPO - Moderate deductible plans with Dr. Office visits before the deductible;
* Gen Rx PPO - comprehensive benefits but no brand medicine;
* Solution - High deductible PPO plans with Dr. Office visits & Rx before the deductible;
* Lumenos HIA+ – HRA style plans with first dollar coverage then a deductible, Rx after the medical deductible;
* Lumenos HSA (100/70) – plans pay 100% after the deductible with new 3-tier Rx benefits (previously there was no copayment for Rx after the deductible – but non-formulary medicine was not covered);
* Lumenos HSA (80/70) – lower premium HSA plans with co-insurance after the deductible;
* Elements Hospital - these are basic hospital only plans with very limited – if any out of hospital benefits and Rx benefits;
* EPO - in network only benefits suitable for “wrap products” that are like an HRA and pay expenses prior to the deductible; and,
* HMO - there are 10 HMO plans grouped in 4 categories: 100% hospital; Classic; Saver and Select.
You can obtain quotes for all of the new Anthem Blue Cross small group health insurance plans by clicking here. Don’t hesitate to call us if you have any questions.
July 1, 2009 – Blue Shield of California is introducing two new, innovative individual and family health insurance plans that are Health Savings Account (HSA) compatible. The truly innovative feature of these plans is that they offer enrollees an opportunity to also enroll in a “rider” (extra feature at an additional cost) that will pay them money should they have a qualifying stay in the hospital during the first 12 months of coverage.
Read the full article about Blue Shield Savings 3500 and 5200 HSA compatible plans.