Living Benefits Rock – let me tell you why you should get an extra $300,000 coverage for only $13.32!

By | Living Benefits

Here’s a way to increase the value and protection that you get from your Living Benefits Life Insurance…Have your cake and eat it too!

have your cake and eat it too

This year several clients have had to use their living benefit plans. The common theme among them is this: “I am very thankful – it was great to get the money – but now I wish I had purchased a larger policy so that I had still had life insurance!

Based on these clients’ experiences we’ve come up with a concept called “have your cake and eat it too……”

Here’s an example of how it works. Let’s say that you currently have a $750,000 policy that’s good for 19 more years. The preferred plus monthly rate is $245.23 with AIG.

With this policy, if you die the beneficiary gets $750,000. If you have an illness that triggers an accelerated benefit (and for this example let assume a 50% acceleration that pays $375,000) you are cashed out – with no more benefit left on the policy.

But what if…

You reduce the benefit term by 4 years and changed the policy to $750,000 for 15 years. Here’s what you could get:

  • If you pay an additional $13.32 per month you could get $300,000 more coverage for 10 years. Wow!
  • If you pass your beneficiaries would receive $1,050,000.  That’s an extra $300,000.
  • If you have an illness that triggers an accelerated benefit (assuming 50% typical benefit) you receive $525,000.

OR

  • Cash out the $300,000 increase in coverage (assuming 50% typical benefit) and get $150,000 benefit and STILL have the whole $750,000 in reserve.

An even better option: You could match the second policy to 15 years for only $33.12 more per month – making it an even better option!

Have your cake and eat it too. Act now before your exam expires or you have another birthday.

Call us 1-800-257-1723 or click here to schedule an appointment.

The Future Of Life Insurance May Depend On Your Online Presence

By | Life Insurance

life insurance and selfiesDon’t post photos of yourself smoking on social-media sites. Do post photos of yourself running.

These two suggestions appear in a recent Wall Street Journal article about New York state’s new rules for how life insurance companies can use public data to help set premiums. Such tips — under the heading “what you pay for life insurance could depend on your next Instagram post” — seem ominous, portending a surveilled future where tweeting about rock climbing could hurt your wallet and services exist to curate photos that appeal to insurance companies.

In reality, it has long been the case that what you pay for life insurance could at least be affected by your next Instagram post. It is already legal, and increasingly common, for life insurers to use so-called “nontraditional” sources of public data — including credit scores, court documents, and motor vehicle records — to inform insurance underwriting decisions, though few use actual social media data.

New York is simply the first state to release guidelines around this practice, and its ruling is that nontraditional data is okay so long as a company doesn’t discriminate by factors like race, religion, and sexual orientation. Other states are likely to watch and follow suit. (The New York State Department of Financial Services, which released the guidance, declined to make a spokesperson available for comment.)

Life insurance companies want to update their methods and make their businesses more efficient. Consumers fear their public information being misused in discriminatory ways. The nature of the industry doesn’t do anything to alleviate those fears, either, because life insurance inherently differentiates between people; different factors cause people to pay different premiums. Government regulators want to balance the interests of both customers and businesses, but it’s not going to be simple.

At its most simple, life insurance is an attempt to financially protect others in the event of an unexpected death. You pay a premium, and if you die within a certain amount of time, the insurance company pays survivors. If not, the insurance company keeps that money. The process of setting premium rates can be slow and invasive. (It also varies by company, since underwriting methods are considered trade secrets.) Typically, a client will fill out an application that includes medical history and questions about smoking and other lifestyle habits. In other situations, they will also undergo an examination that can include an electrocardiogram and analysis of blood and urine samples. Underwriters with experience in actuarial science take all of this information to calculate levels of risk and set a rate.

Algorithms speed up this process — though there aren’t many cases where a decision is entirely automated — and can make it more precise. Sometimes, the algorithm will greenlight a person so they don’t have to go through the invasive medical tests. The convenience of immediately receiving a policy is appealing to those who don’t want to wait weeks for a doctor’s appointment, and that can lead to more life insurance policies being purchased. And while life insurance sales have traditionally been face-to-face interactions with agents, that mode is quickly falling out of favor, meaning that algorithmic processes are better for online sales.

Nontraditional data comes into play in two different ways. First, bulk, de-identified data is used to train those algorithms so they learn, for example, that a credit score of 450 corresponds to a 20 percent higher risk of death. This data comes from the many vendors of consumer data that collect, build, and sell catalogs of this information. Then, when Jane Doe goes to buy life insurance, a separate program will search the web for her existing public records to feed to the algorithm.

However, using social media data specifically is rare, according to Aite Group senior life insurance analyst Samantha Chow. Out of 160 insurers investigated by New York state, only one used social media and other internet activities in underwriting, according to the Journal, although some vendors did pitch data based on such details as “condition or type of an applicant’s electronic devices” and “how the consumer appears in a photograph.”

And when social media is used, it’s usually to reduce fraud. Tools like Carpe Data use names, emails, and birthdays to look for information on the internet that might show whether someone lied on their application about smoking or drug use. The results won’t be used to decline an applicant, but they can be used to move someone into a riskier rating class with higher premiums, says Chow.

All this is okay, in theory, says New York state, but there is “strong potential to mask the forms of discrimination” that are prohibited by law. As a result, it’s the insurer’s job to make sure the process isn’t discriminatory, which is easier said than done.

It’s simple for an algorithm to not explicitly use racial factors like “Asian”or “black” or any of the protected classes the New York guidance mentions. But if the model includes whether someone streamed Crazy Rich Asians or Black Panther, “you have a proxy for race in your model,” says Madeleine Udell, a professor of operations research at Cornell University. Plus, when models get complicated, it can be hard to pinpoint which exact factor caused a certain outcome.

Most consumers won’t understand the technology, and there’s a limit to what transparency can achieve when it doesn’t come with power. Some bargains are what Tschider calls “adhesion contracts,” where one side has a lot more power than the other. We can’t negotiate with privacy policies (which nobody reads), and the most transparent policy in the world doesn’t help if we really need to use the service.

In New York, “everyone is doing their due diligence” to understand what it means to not be discriminatory, according to Diane Stuto, managing director for legislative and regulatory affairs at the Life Insurance Council of New York. It will be easier for some to comply than others, and the result may be that certain companies decide not to offer algorithmic underwriting in New York anymore. “We want to be able to offer these programs because we think they’re the future, so we’re grappling with details and trying to figure out what this means,” Stuto says.

One option could be to do an algorithmic impact assessment and run tests similar to the one that Udell described. Even private companies could be required to do these assessments, which means asking questions like: What kinds of data do a company use and why? What are you testing with and without? “It’s not enough to share the code,” says Selbst. “They need to be able to show that they tested for bias, and what kinds of considerations went into it.”

Both he and Swedloff agree that requiring companies to examine their practices is the first step to coming to terms with when it’s okay to charge some groups more. “The most important thing from impact assessments is understanding the rationales that companies go through and making sure they are actually thinking through and doing their homework the best they can,” Selbst continues. Part of the reason we don’t agree on when it is okay to discriminate and when it isn’t is because we don’t have full information about what’s going on. “We don’t understand what the decisions are that lead to these algorithms,” he adds. “Once the public understands that, we can have more reasoned debates.”

 

By Angela Chen@chengela  Feb 7, 2019, 11:45am EST

A new health insurance solution for the pre-Medicare individuals

By | Health Insurance

Bridge to MedicareThis plan carries you all the way to Medicare Age 65 without a rate increase!

We have a budget-conscious insurance solution for baby boomers age 62-64+ who are looking for a less expensive health insurance option before they are eligible for Medicare. It’s a great solution for:

  • Individuals who have left their employer health plan and want a less expensive solution than COBRA
  • Those who believe they cannot afford an ACA plan
  • Those who are in good health and don’t have ongoing medical expenses
  • Those seeking a temporary health plan as a result of a non-permanent need

This plan combines health insurance coverage for larger expenses with fixed first dollar benefits to supplement many routine types of medical expenses. Plans also include prescription drug benefits and additional non-insurance medical services like telemedicine, reduced-cost vision exams and eyeglasses, hearing benefits and emergency helicopter services.

Coverage is for unexpected large medical expenses up to $250,000 or $500,000 each year. Here’s how the plan works:

  • You are responsible for paying your deductible amount first, and then 20% or 30% of your medical bills up to a $10,000 coinsurance limit. After you hit the $10,000 limit, the plan will pay 100% of your covered expenses up to the 364 days maximum you have chosen for the policy
  • Your out-of-pocket expenses are capped, up to a maximum covered amount each year
  • Every 364 days a new policy begins – until age 65

Helps supplement the out-of-pocket cost of your medical expenses, giving you fixed, direct payments for when you have routine medical services like:

  • Doctor office visits
  • Preventive care
  • Testing
  • Outpatient surgery
  • Short hospital stays and more!

Plus get these extra Non-Insurance Benefits!

  • Telemedicine reimbursement for that includes low-cost doctor consultations
  • Eyewear and hearing aid discounts
  • Emergency helicopter evacuation

This plan is affordable, predictable & the LAST POLICY YOU WILL NEED until Medicare – All in ONE package – ONE Solution –

Do you need help sorting out health insurance and finding an affordable solution?  Call us 1-800-257-1723 or click here to schedule an appointment.

 

This plan is not for individuals who could qualify for an Obamacare premium tax subsidy or have $10,000 a year or more in routine, ongoing out-of-pocket medical expenses. If a health care provider has informed you that you could have significant medical expenses in the future, it is best to enroll in a plan on the federal or state health insurance exchanges.

Are your life savings at risk?

By | Health Insurance, Living Benefits

Don’t let rising Critical – Chronic Illness costs put your life savings at risk.

Call 1-800-257-1723 for a free quote now.

More than half of Americans over 65 will need Critical – Chronic Illness care at some point in their lives. Costs for this care are already high and are expected to continue rising. Neither health insurance nor Medicare typically cover all the costs of Critical – Chronic Illness. Where does that leave you?

Let us show you how we can turn your life insurance – even a term policy with no cash value – into an asset that you can spend when you suffer a Critical or Chronic Illness.

From Mark Deschenes: “I just had ANOTHER policy payout.  It was a $200,000 policy sold 10-22-2015.  The guy paid $225 a month for 3 years and 3 months – and now is cashing it out for $93,445.21 due to cancer.  He paid $8,775 premium and got $93k – they are very thankful.  Everyone says that they just wished they had a bigger policy.

Find out how simple and affordable Critical – Chronic Illness insurance can be.

GET A FREE QUOTE

Gum infection linked to Alzheimer’s disease, new study suggests

By | Health Insurance

Alzheimer’s disease could be caused by a gum infection, according to a new study.

In this file photo, the brain of an older individual shows the early stages Alzheimer's disease. A new study suggestions a gum infection might be linked to the disease. (Photo: DEPARTMENT OF ANATOMY AND NE)

In this file photo, the brain of an older individual shows the early stages of Alzheimer’s disease. New study suggestions a gum infection might be linked to the disease. (Photo: DEPARTMENT OF ANATOMY AND NE)

The study, published this week in the peer-reviewed journal Science Advances, suggests the bacteria Porphyromonas gingivalis that destroys gum tissue in the mouth is linked to dementia and Alzheimer’s.

Researchers observed the bacteria in the brains of people with Alzheimer’s disease. They also conducted tests on mice that showed the gum infection led to increased production of amyloid beta, a part of the amyloid plaques associated with Alzheimer’s disease.

“Despite significant funding and the best efforts of academic, industry, and advocacy communities, clinical progress against Alzheimer’s has been frustratingly slow,” Casey Lynch, author of the paper and CEO of pharmaceutical company Cortexyme, said in a statement. “The Science Advances publication sheds light on an unexpected driver of Alzheimer’s pathology.”

Cortexyme, which funded the research, is designing a series of therapies to treat the gum infection that plan to go to Phase 2 and 3 clinical trials.

No cure currently exists for Alzheimer’s disease, the most common type of dementia. The disease that begins with memory loss affects as many as 5 million Americans, according to the Centers for Disease Control and Prevention.

Do you need help sorting health AND dental insurance out and making the right decision for you and your family?  Call us 1-800-257-1723 or click here to schedule an appointment.

, USA TODAYPublished 2:20 p.m. ET Jan. 25, 2019 | Updated 12:41 p.m. ET Jan. 27, 2019

People are dying YOUNGER — New Report

By | Life Insurance

Protect your family (1)Figures from the U.S. Centers for Disease Control and Prevention show that overall U.S. life expectancy seems to have peaked.

Average U.S. life expectancy at birth fell to 78.6 years in 2017, from 78.7 years the year before, and down from an all-time high of 78.9 years two years earlier.

Life insurers use their own private mortality data, and general life insurance industry mortality data, to design and price life insurance policies and annuities. Some of the top mortality experts in the world are the life insurance and pension actuaries who work on Society of Actuary (SOA) mortality analyses.

Three SOA actuaries — R. Jerome Holman, Cynthia MacDonald and Peter Miller — recently released a new mortality report, “U.S. Population Mortality Observers: Updated with 2017 Experience.”

The report could help how life insurers design and price products such as life insurance policies and annuities. Higher death rates typically hurt the performance of life insurance policies but may improve the performance of annuities and other products with longevity-related benefits streams, such as disability insurance and long-term care insurance.

Here’s a look at five things that happened to U.S. mortality in 2017, drawn from the new SOA report.

1. 2/3 of ALL of us will pass BEFORE age 85!

In 2017, 878,035 of the 2.8 million people who died were ages 85 or older.

About 658,000 were ages 75 to 84, and about 532,000 were ages 65 to 74.

2. The “oldest old” U.S. residents looked worse in 2017.

When the CDC published mortality data for 2016, factors such as drug overdoses hurt the life expectancy of young adults and middle-aged adults.

That year, the life expectancy for people ages 65 and older, and for people ages 85 and older, continued to improve.

In 2017, the mortality rate for people ages 85 and older increased 1.4%.

The only other age groups that had a worse increase in their mortality rates were the 34-44 age group, with a 1.6% increase in its mortality rate, and the 25-34 age group, with a 2.9% increase in its mortality rate.

3. Women are controlling diabetes better than men are.

In 1999, diabetes killed about 83 women for every 100 men who died from the condition.

In 2017, female-to-male diabetes death rate ratio fell to 64 to 100.

But the female-to-male mortality ratio for Alzheimer’s and dementia increased to about 133% in 2017, from about 121% in 1999.

For a look at female-to-male death rate ratios for five common conditions, see the data cards in the slideshow above.

4. Something went wrong with efforts to control diabetes in 2017.

In 2017, the overall mortality rate from diabetes, for both men and women, went in the wrong direction: It increased 2.1%.

The overall diabetes mortality death rate fell 1.2% in 2016, and an average of 0.6% per year from 2011 through 2016.

5. Young adults in high-income counties have had problems.

The SOA team broke out separate data for age-adjusted death rates for counties in the top 15% in the United States in terms of income.

When the SOA team created a table showing how the age-adjusted death rates changed each year from 1999 through 2017, for each age group and income group, they found that people ages 25 through 34 the suffered from the worst death rate change numbers.

People ages 25 through 34 in the highest-income counties had the worst death rate change numbers of all.

The age-adjusted death rate for all causes of death, for all Americans, improved an average of 1% per year.

For all people ages 25 through 34, the age-adjusted death rate got worse: It increased an average of 1.5% per year.

For people in the 25-34 age group in the counties in the top 15% in terms of income, the death rate deteriorated even more: It increased an average of 2% per year.

life-expectancy-616x372-CDC-1

Now is the time to review and augment your family life insurance protection.

People are dying sooner rather than later & this means you should focus on having larger face amounts, include living benefits, and purchase now before life insurers raise rates.

Contact Mark Deschenes at 1-800-257-1723 or click here to schedule an appointment.

New Trump rule could help small business employees afford health insurance

By | Health Insurance
By Sally Pipes

The Trump administration recently proposed a new rule that could make health insurance more affordable, and stands to impact 10 million American workers by 2028.

It’s sorely needed. Many firms are dropping coverage because the premiums are just too expensive. They may want to help their workers with the cost of health insurance. But federal law effectively gives them two choices: offer expensive, comprehensive benefits that adhere to Obamacare’s cost-inflating mandates or do nothing.

The new rule would provide a third option. It would permit employers to give their employees monthly tax-free cash allowances to help them pay for coverage in the individual market.

Your health insurance dollars

The rule could prove revolutionary. In the short term, it will help millions gain coverage. But in the long run, it could give individuals, rather than employers, control over health insurance dollars. Such a change would spur competition in the insurance market — and ultimately lead to higher quality, greater choice, and lower costs.

Sponsoring health insurance is becoming cost-prohibitive for many employers. The average premium for a family plan at firms with between three and 199 workers has nearly tripled since the turn of the century — from $6,500 in 2000 to $19,000 today.

Some firms have responded by dropping coverage. In 2000, nearly all firms with 50 to 99 employees offered insurance. Now, 89 percent provide coverage.

Even if employees at small and medium-sized companies receive health benefits, they’re unlikely to have a wide range of plans to choose from. Among companies with fewer than 200 employees that provide coverage, eight in ten offer just one plan.

The new rule would help reverse this trend by easing regulations on “health reimbursement arrangements.” HRAs allow employers to set aside a fixed amount of money tax-free each month to reimburse employees for healthcare expenses.

The Obama administration severely restricted the use of HRAs. Companies were barred from using HRAs to reimburse workers for health plans they had purchased on their own in the individual market.

The new rule will get rid of that restriction. The Treasury Department estimates that by 2028, 800,000 employers will take advantage of expanded HRA options — and thereby help more than 10 million workers pay for individual-market insurance.

More competition = more options

The increase in the number of customers in the individual market could result in more competition and a wider variety of insurance options.

Consider a pizza analogy. Right now, some businesses are catering pizza — health insurance — for their employees. The employer chooses the size and the toppings. If workers want pepperoni but the employer only offers cheese, they’re out of luck. And some firms can’t afford to provide pizza at all. So employees have to pay for it out of pocket, if they want it.

Soon, businesses will have the option of giving workers cash to help them cover the cost of whatever pizza they’d like to order. Budding restaurateurs will surely launch new pizzerias and types of pizza to compete for the dollars of this new stream of customers — inexpensive pies, pies with all sorts of toppings, and more.

This is exactly what will happen in the individual health insurance market. Sending millions of new people into the individual market will encourage insurers to find ways to provide better, more individually tailored health plans at lower cost. And it will build on the Trump administration’s other recent reforms, which have made a wider range of coverage options available to consumers — such as Association Health Plans and Short-Term Limited Duration plans — who don’t like or can’t afford what’s available on Obamacare’s exchanges.

The administration’s proposed rule would give businesses a new way to offer health benefits and make it easier for millions of workers to purchase coverage that suits their needs and budget. It’s time to finalize it.

Do you need help sorting health insurance out and making the right decision for you and your family?  Call us 1-800-257-1723 or click here to schedule an appointment.

Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The False Promise of Single-Payer Health Care(Encounter 2018). Follow her on Twitter @sallypipes.

Affordable Care Act is unconstitutional

By | Health Insurance

U.S. District Judge Reed O’Connor overturns all of the Obamacare law nationwide.

Based on articles in the Washington Post and Bloomberg News

District-Judge-Reed-OConnorO’Connor is a conservative judge on the U.S. District Court for the Northern District of Texas. He was appointed by President George W. Bush.

In June, the administration took the unusual step of telling the court that it will not defend the ACA against this latest challenge. Typically, the executive branches argues to uphold existing statutes in court cases.

The lawsuit was initiated by Texas’s attorney general Ken Paxton, who describes himself as a tea party conservative, with support from 18 GOP counterparts and a governor. The plaintiffs argue that the entire ACA is invalid. They trace their argument to the Supreme Court’s 2012 ruling in which Chief Justice John Roberts Jr. wrote for the majority that the penalty the law created for Americans who do not carry health insurance is constitutional because Congress “does have the power to impose a tax on those without health insurance.”

As part of a tax overhaul a year ago, congressional Republicans pushed through a change in which that ACA penalty will be eliminated, starting in January. The lawsuit argues that, with the enforcement of the insurance requirement gone, there is no longer a tax, so the law is not constitutional anymore.

“Once the heart of the ACA – the individual mandate – is declared unconstitutional, the remainder of the ACA must also fall,” the lawsuit said.

Texas and an alliance of 19 states argued to the judge that they’ve been harmed by an increase in the number of people on state-supported insurance rolls. They claimed that when Congress last year repealed the tax penalty for the so-called individual mandate, it eliminated the U.S. Supreme Court’s rationale for finding the ACA constitutional in 2012.

The Texas judge agreed. He likened the debate over which provisions of the law should stand or fail to “watching a slow game of Jenga, each party poking at a different provision to see if the ACA falls.” He also wrote that it’s clear the individual mandate is the linchpin of the law “without marching through every nook and cranny of the ACA’s 900-plus pages.”

“The court must find the individual mandate inseverable from the ACA,” he said. “To find otherwise would be to introduce an entirely new regulatory scheme never intended by Congress or signed by the president.”

President Donald Trump and Texas Attorney General Ken Paxton praised the ruling. The White House said the ruling will be put on hold during an appeals process that’s destined to go all the way to the U.S. Supreme Court.

The Texas case is Texas v. U.S., 4:18-cv-00167-O, U.S. District Court, Northern District of Texas (Fort Worth). Frosh’s case is State of Maryland v. United States, 1:18-cv-02849, U.S. District Court, District of Maryland (Baltimore).

In today’s healthcare environment you need a trusted student of the industry as your agent – why our clients love us.

By | Health Insurance

Every time I talk to a client the first thing that pops into my mind is, “how do I make a meaningful contribution to this person’s current and future well-being?”  I learned that from my Dad – who was always working to help people secure their future through appropriate insurance products.

In today’s complicated health insurance environment “helping a client” means being a student of the industry….knowing the best products, steering people around those that are not a good value, and explaining what products are right for my clients and why – so that they can make good decisions.

Recently I was speaking to a client that knew my father – and that I met when I was a kid riding along with Dad.  The trust runs so deep between us that she calls just to share life stories.  During one of the calls, we started exploring the cost of her medications – which I’m delighted to report that I could guide her to sites where she could reduce her out-of-pocket costs – and her gratitude for her having survived a freak health emergency.

Chest painHere’s Her Story:

During the stressful holiday period, my client was working hard to ensure that all the guests were enjoying a fabulous family experience at her home – when the pressure overwhelmed her and she found her chest throbbing.  Her first thoughts were. “Get to the hospital, take a baby aspirin, and thank goodness I have the right insurance to cover this so I won’t have the added pressure of paying an insane deductible!”

WOW! Imagine knowing that there is something wrong and having one of your first thoughts be, “Can I afford to get this checked out!”  That’s what too many people in our healthcare world have to deal with – overwhelming deductibles that cause them to question if they should even dare to get medical treatment.

My client ended up being diagnosed with heart failure – and thanks to her rapid and cool-headed response to the pain she got herself to the hospital in enough time for the medical team to save her life.  According to here, her recovery has been made easier because she does not have to struggle with a deductible that could be financially insurmountable.

The Right Health Care Insurance Is Just The Start

Our clients have the right insurance and learn the best ways to purchase prescriptions, services, and resources because we are DEDICATED students of the healthcare delivery and insurance industries.  We work to understand our clients’ situation, assess their needs, and provide the best solutions given their life and health circumstance.  Insurance is only a part of the value I bring to my clients.

Knowing the industry, how to purchase pharmacy and medical services, and understanding all the resources available is a full-time job – and my clients get that information from our team so they don’t have to try to figure it all out on their own…freeing them up to spend their time living their life!

Why our clients love us:

Our services are free – but save them thousands of dollars.

We make it easy to understand your options. In the insurance industry, it’s not always easy to understand what you’re seeing when comparing health insurance options. We live and breathe this stuff every day, and we’re specially trained to help you understand how plans differ from one another and how your coverage will actually work in the real world.

We’re your advocates even after you enroll. We’re there for you even after you buy a new health insurance plan…plus we offer advice and guidance on where to buy health-related products, services, and pharmacy.

We care.  That’s why we are service and guidance superstars.

Do you need help sorting health insurance out and making the right decision for you and your family?  Call us 1-800-257-1723 or click here to schedule an appointment.

Administration Releases New Guidance on Health Reimbursement Arrangements (HRAs) and Section 1332 Waivers

By | Group Health Insurance, Health Insurance

Proposed rule would allow HRAs to be used with individual coverage

Earlier this week, federal agencies released a proposed rule for Health Reimbursement Arrangements (HRAs) and updated guidance for Section 1332 State Innovation Waivers (now called State Relief and Empowerment Waivers).

The Administration had indicated these changes are part of its ongoing efforts to increase choice and flexibility in the insurance market.HRA Victory

On Oct. 23, 2018, the Departments of Treasury, Labor, and Health and Human Services (HHS) issued proposed rules that would allow employees to use the dollars in employer-funded Health Reimbursement Arrangements (HRAs, also called Health Reimbursement Accounts) to purchase individual coverage both on and off the public Marketplace (or Exchange). These proposed rules were released in response to the Oct. 2017 Executive Order, in which the Administration directed the tri-agencies to consider ways to expand the flexibility of HRAs.

Currently, employer-funded HRAs are used exclusively with employer-sponsored coverage to reimburse employees for health care expenses not reimbursed under their base medical plan (e.g., deductibles or coinsurance). Under the proposed rule:

  • Employees would be able to use HRA funds to pay the premium for individual insurance coverage purchased either on or off the public Marketplace.
  • Employers would be required to make the HRA available to entire “classes” of employees (e.g., full-time, part-time, or seasonal workers).
  • Employers could offer eithera group health plan or an HRA that could be used to purchase individual coverage, but not both.
    • If an employer offers the HRA, employees would be able to opt out if they are eligible for premium tax credits on the public Marketplace.

In addition to offering HRAs that could be used to pay for individual coverage, the proposed rule would also allow employers that offer traditional group health coverage to offer HRAs of up to $1,800 per year to reimburse employees for certain medical expenses, including stand-alone dental or vision benefits or premiums for Short-Term Limited Duration Insurance (STLDI), which is short-term individual insurance that doesn’t have to comply with all Affordable Care Act (ACA) rules.

Tax treatment of HRAs would remain unchanged and the offering of an HRA for individual coverage would satisfy the employer mandate if it is considered “affordable.” The Treasury Department and Internal Revenue Service (IRS) are expected to release guidance in the near future on the employer mandate affordability test and potential safe harbors.

The proposed rule can be read in detail here. The tri-agencies are requesting comments by Dec. 28, 2018.

Updated Section 1332 guidance increases state flexibility

On Oct. 22, 2018, the Centers for Medicare & Medicaid Services (CMS) issued updated guidance on Section 1332 waivers, which replaces guidance published in 2015. Under the ACA, states can apply to waive key ACA provisions in order to implement innovative, alternate health coverage rules or programs while retaining basic consumer protections. The five-year waivers were available beginning in 2017 and to date, eight states have received waivers.

The new guidance makes changes to the principles that CMS will use when reviewing and approving applications. While the original “guardrails” of ensuring comprehensiveness, affordability, scope of coverage, and deficit neutrality remain in place, CMS will interpret some of them differently to loosen restrictions. For example:

  • 2015 guidance: Focused on the number of individuals estimated toreceivecomprehensive and affordable coverage
  • 2018 guidance: Focuses on the availabilityof comprehensive and affordable coverage

Beyond the basic guardrails, CMS has identified five new principles that future waiver requests should aim to achieve:

  • Provide increased access to affordable private health plan coverage (including Association Health Plansand STLDI)
  • Limit cost increases for consumers and the federal government
  • Foster state innovation
  • Support and empower those in need
  • Promote consumer-driven health care

Changes were also made to streamline the state waiver application process. This guidance is effective for waivers submitted after Oct. 24, 2018, and has a 60-day comment period. Review the complete guidance or fact sheet for more information.

Need help sorting this out and making the right decision for you and your family?  Call us 1-800-257-1723 or click here to schedule an appointment.