Monthly Archives

May 2016

The Employer Mandate Penalty and Employee Eligiblility for a Premium Subsidy: Increased Enforcement Is Coming

By | Group Health Insurance, Health Reform

This month, there have been two significant announcements from the Department of Health and Human Services (HHS) regarding employee eligibility for a premium subsidy under the Affordable Care Act (ACA).

Employer Mandate Penalty and Your Health Plan

First announcement: HHS has hired a third-party contractor to perform an employer verification study. Its purpose is to call employers and determine whether applicable large employers are offering an affordable, minimum value plan (AMVP) to their employees. Please note that participating in the call is voluntary; there are no consequences if you choose not to participate. In addition, calls will only be conducted from April-June and will take 10-15 minutes.

Why this is important: In order to trigger the employer mandate penalty, a full-time employee must enroll in a health plan on an Affordable Care Act Exchange and be eligible for a premium subsidy. Although Exchange regulations require that an “electronic data source” is accessed to verify eligibility for a subsidy, in reality, no such source is available. The regulations go on to note that in the event there is a not an available electronic data source, employers may be contacted and asked if they offer an affordable, minimum value plan. This process was delayed in 2014 and 2015, but HHS seems ready now to move forward with it.

Second announcement: Besides verifying whether an employee was offered an AMVP, Exchanges must also notify employers if an employee has enrolled in an Exchange and whether or not they are eligible for subsidies. On May 13, HHS published a model notice that the Federal Exchange will send to employers. Click here to view it.

Why this is important: If an employer is offering an AMVP, and the Exchange did not discover it during the enrollment process, the employer can contact the Exchange with plan details. The Exchange then would review the employee’s eligibility and stop payment on any premium subsidies. However, if the Employer is not offering an AMVP, they could incur penalties under the employer mandate.

The Internal Revenue Service is the entity tasked with enforcing the employer mandate, but there has to be cooperation between the Exchanges and the IRS to verify if the penalty tax should be applied: the IRS won’t know unless informed by the Exchanges.

In summary, it wasn’t possible for the IRS to enforce the employer mandate until the Exchanges had a verification process, including a notice sent to employers. Employers should be on the lookout for notices from the Exchanges as well as the IRS.


Source: Self Insurance Institute of America

How to Prevent the Cost of Critical Illnesses From Destroying Your Retirement Savings

By | Health Insurance, Health Reform, Supplemental Coverage

Understanding your total exposure to health care expenses is the best way to prevent the cost of critical illness from destroying your retirement savings.

Prevent Critical Illness From Destroying Your RetirementHealth care is clearly the greatest financial risk faced by retirees. The incidence of expensive chronic diseases is higher for today’s retiring baby boomers than it was for their parents. Longevity gains have added years to average life spans, but these extra years will be more of a curse than a blessing if they are spent dealing with serious illness and unaffordable medical bills.

The Employee Benefit Research Institute reports that a 65-year-old couple with median drug expenses would need $283,000 to have a 90 percent chance of covering their out-of-pocket drug expenses during the remainder of their lives. And this total does not include long-term care.

It is important to understand that basic Medicare leaves retirees on the hook for a 20 percent co-pay with no cap. Supplemental Medicare policies can close much of this gap. But they don’t cover most long-term care expenses, and neither does Medicare.

There is a solution for forward thinking couples and individuals who are interested in protecting their retirement savings:  Living Benefits Life Insurance.

Living benefits allow the insured to “accelerate” a portion of the death benefit on the policy so that the funds can be used to protect the policy holder’s financial well-being.

Insureds must qualify based on a health or medical condition to receive the cash.  Living benefit funds can be received either as one single lump sum, or they can be taken by the insured in regular installments. The funds may be used to pay off insurance deductibles, pay for medical procedures, or used in any other way the insured desires that may not be related to offsetting health insurance costs.

The amount of the cash that is accessed will be applied against the policy’s death benefit. So its important to consider how much survivors will need at the insured’s death and whether decreasing the amount of the death benefit will create a potential hardship for beneficiaries.

The money received by the insured is typically not subject to federal income tax, provided that the distribution meets certain criteria. This criteria includes the insured being classified as terminally ill when filing an income tax return.

Also, living benefits from life insurance policies aren’t subject to state income tax in most U.S. states. (There may still be some instances where taxes are due, though, so it is always best to check with a tax advisor in this situation).

Living benefits should be an integral part of everyone’s retirement planning.  For more information contact us at 800-257-1723 or click here to schedule an appointment.


Texans Go Naked, Pay Obamacare Tax as Obamacare Rates Rise

By | Health Insurance, Health Reform

Higher insurance premiums are pummeling Texans in the age of Obamacare, and health-care analysts say ever-bigger increases are inevitable.

Obamacare TaxTexans are opting to pay the Obamacare tax penalty instead of digging deeper for coverage. Here’s the dirty little secret: Obamacare insurance premiums don’t buy the kind of coverage that protects most consumers – because insurers shift more and more health care costs onto their customers in the form of high deductibles.

“The law was never going to work. It’s actuarily unstable. Now the logical consequences are playing out,” said John Davidson, director of the Center of Health Care Policy at the market-oriented Texas Public Policy Foundation in Austin.

Premium costs for Texas’ giant Blue Cross/Blue Shield HMO are going up 18.7 percent plus deductibles are increasing. With 700,000 customers, the plan is one of the biggest in the state. In 2014, the HMO collected $2.1 billion in premiums, but claims were $2.5 billion under Obamacare.

“This is the transfer cost of a mandate onto individual policyholders,” Davidson told

Meantime, Humana’s Texas HMO jacked up its rate 23 percent when the federal Centers for Medicare and Medicaid Services required higher reserves for the 1,000-customer plan. Other plans in the state are charting increases of 20 percent to 30 percent.

As premiums and deductibles rise, so do the number of people dropping their health insurance and taking their chances.

With 19 percent still uncovered by health insurance—the most in the nation—more Texans are canceling policies. Individuals can opt out of the insurance mandate by paying a fine—$695 per adult or 2.5 percent of household income in 2016, whichever is higher.

“The more premiums go up, the more affordable it is to pay the penalty,” Davidson notes, even as Washington keeps ratcheting up the tax. The fine was 2 percent of income this year and 1 percent the year before.

Want to learn how you can buy health insurance that meets meets your needs and will keep you from having to pay the Obamacare Tax Penalty?  Call us at 1-800-257-1723 or click here to schedule an appointment

Based on an article by Kenric Ward who writes for the Texas Bureau of

Living Benefits Protect Against Affordable Care Act Drug Access Restrictions

By | Health Insurance, Health Reform, Supplemental Coverage

 The Affordable Care Act covers preexisting conditions except when it comes to prescription drugs.

Perscription DrugsAdvancements in specialty drugs have the potential to significantly improve the lives of patients suffering from serious, chronic and life-threatening conditions – from cancer to heart disease to rheumatoid arthritis. But, because these new pharmaceuticals often come from the latest breakthroughs in biotechnology are more expensive. Many Affordable Care Act insurance providers and pharmacy benefit managers, protective of their bottom line, are finding ways to restrict coverage despite the drugs’ effectiveness.

Two tactics are used.  The first, called step therapy, requires that an existing, cheaper drug be prescribed, rather than the new, potentially more effective drug. The second, called prior authorization requirements, involves subjecting the patient to onerous, bureaucratic red tape which makes it much harder for patients to access new drugs.

For critically ill patients these bureaucratic maneuvers create added stress on the patient and their family…not to mention the harmful effects the stress  of fighting the insurance company has on the patient’s recovery.

So how can you protect yourself and your family from this Affordable Care Act insurance provider health care rationing protocol?  By having a living benefits life insurance policy that pays in the event of a critical illness.  Living Benefits life insurance allows you to accelerate your death benefit while you’re still living if you suffer a heart attack, cancer diagnosis, stroke, or any other critical, chronic, or terminal illness.  Those funds can then be used to cover high deductibles, purchase premium pharmacology treatment or supplement your income while you recover.


Video: Living Benefits – HLD

Living Benefits Life Insurance available through Health Life Dental Insurance