Saturday, August 30, 2014

The Not Ready For Primetime Players


It was another one of those meetings. The regional manager of some insurance company spoke for two hours. No handouts. No collateral. Two hours of power point. The important stuff was glazed over or skipped entirely. He returned to the irrelevant again and again. I was in a room full of agents desperate for the news that this company, or any company, had found a clear path through the Patient Protection and Affordable Care Act (PPACA). Would this insurer solve our clients’ problems, provide access to the best doctors, and be reasonably priced?

Yes and No.

This particular insurer will be a great answer for a limited number of people in our market. But it won’t be just the people well served by this insurer and its products who will be carrying that card next year. For some the coverage and the medical providers will be OK, at best. And some Ohioans will make a bad decision based on their familiarity with the company’s name or the price on the government’s website.

Unprepared. Rushed by a timetable that neither the insurers nor the government seem capable of meeting, we emerge from our summer stupor to confront the upcoming open enrollment and renewal season. In fact, even the insurance company executive noted that this year, 2014, was going to be a bigger mess than last year’s initial debacle.

Insurance agents are people who have figured out how to monetize empathy and problem solving. The following are some of the pressure points, issues, and concerns that we have as of the end of August 2014.
  1. We haven’t solved last year’s problems!, which appears to default to Medicaid, is still incorrectly blocking Ohio women from regular, subsidized, health policies. It has been less than a week since I last encountered this issue. Women who have recently given birth seem to fight this more frequently.
  2. Speaking of babies… I noted in April the difficulty I was having adding a newborn to an exchange policy. The problem was solved in May’s Climb Into The Ring. NO IT WASN’T. The baby has yet to be added to the policy. The client is frustrated. I’m beside myself. Our senator’s office doesn’t understand why the Centers for Medicare and Medicaid Services (CMS) can’t resolve this and can’t seem to provide any of us with an answer or the courtesy of a returned call. We’ve all given up hope. To the shock of my peers. I was forced to write a short term major medical policy for the baby this week. The child will have coverage if he suffers, G-d forbid, a major accident or illness. I mailed the application to the insurance company and mailed a check for the $25 I made on the sale to a charity. I can’t keep that money. I’m embarrassed that I was forced by the government’s incompetence to write the application.
  3. Perfect Storm… My peers are justifiably concerned about the 24 hour day. There just isn’t enough time. Senior citizen (65+) Medicare Open Enrollment is October 15th through December 7th. A large percentage of our group health policies renew January 1st. Client meetings will be held during the months of October and November with everything finalized, if we’re lucky, by the first week of December. AND, all individual PPACA compliant policies renew January 1st. The Open Enrollment Period for individuals and families (under 65) is November 15th through February 15th. Because of the subsidies and changes, most people should resolve their 2015 coverage prior to December 15th. 30 Days. The overlap of all of our senior business, most of our group clients, and every single individual policyholder under age 65 converging on our offices in time for Thanksgiving dinner has more than a few of us nervous.
  4. Lack of concern… At least one of our insurers has, effectively, eliminated the reinstatement of lapsed policies. All of our new individual policies are due on the first of the month. This particular insurer sends a late notice on the 3rd if payment wasn’t received on time. Policies not sold on the exchange have a 30 day grace period and only have to be eligible for reinstatement to the 30th day after the first late notice. Yes, you are seeing that correctly. If the policy was due September 1st it would be permanently terminated by October 3rd. Once terminated for non-payment, the individual or family is not eligible for comprehensive major medical coverage until the next Open Enrollment Period in November. Have they met their clients? This has already had a big impact on some of my clients. And this will get worse as the premiums rise.
  5. Subsidies and tax returns… Christmas comes twice a year for some retailers. There is the traditional excitement of December and there is the joy of March and April, when W-2 wage earners receive their income tax refunds. That money is immediately plowed back into the economy. Jewelry! Clothing! Appliances! New and Used Cars! We have no idea what is going to happen this coming spring as many people will be receiving smaller tax refunds due to adjustments from the subsidies.
  6. Deductibles… As the deductibles for individuals on our new policies rise to $6,000+ and families face out of pocket liabilities well in excess of $10,000, we will soon face a new reality. How many families can afford both the premiums and the deductibles of the PPACA? This is not about health. Never has been. This entire enterprise is designed to (efficiently?) transfer money to doctors and hospitals. The current system implodes if they don’t get paid. Sure, your insurer may cover $88,000 of that $100,000 hospital bill, but what about the $12,000 that you failed to pay? Will you be forced to provide your MasterCard in the emergency room? Copy of the deed to the house? This is going to get ugly.

There’s more, but there is a limit to how stressed any of us should be on Labor Day weekend. In the end it is about faith. Our faith in our systems, our government, and our leaders will be tested. And they will disappoint us, but this will get resolved. It has to be. Healthcare is almost 20% of our economy. And though health is seldom a consideration, there are real impacts from decisions made in Washington and our state capitals. We just need to remind them every now and then.

The Not Ready For Primetime Players became legends at what they did best. Who knows? One day we may look back in appreciation at some of our current politicians and bureaucrats. It could happen…


Monday, August 25, 2014

The CPA Enrichment Act of 2010

The Patient Protection and Affordable Care Act (PPACA) requires most Americans to have health insurance.  This is the Individual Mandate.  Failing to purchase coverage without a good excuse will cost you a fine, the Shared Responsibility Payment.  How will the federal government assess that fee?  Your annual income tax return! 

The PPACA also provides tax credit subsidies to help Americans earning less than 400% of the Federal Poverty Level pay their premiums if the policy is purchased through a state or federal insurance exchange.  The final calculations are supposed to be recorded on your tax return. 

Our friends in Washington are trying to create the form to record your compliance with the new law.  As a patriotic American, I thought that I might be able to help.  Below is a Schedule I (Insurance) Form. 


                                Health Insurance Compliance    
Section I
(Form 1040)                                                                             2014


Name as shown on Form 1040, Line 6a____________________________ 
Social Security Number____-__-____ 

Name of Individual, Spouse, or Dependent ____________________________ 
One Schedule I per person. 

This form will determine whether or not you had qualified health insurance for 2014.  Complete a separate Schedule I for each person listed on Form 1040, Lines 6a through 6c. 

A. Insurance
            1. Did the above named individual have comprehensive major medical
                coverage through an Employer sponsored group health policy for all
                of 2014?
                        ___ YES    Return to Form 1040, Line 29 and check YES
                        ___  NO     Continue

            2. Did the above named individual have a qualified individual health
                policy for all of 2014?
                        ___ YES    Not purchased through a state or federal exchange
                        ___ YES    Grandfathered policy (purchased prior to March
                        ___ YES    Grandmothered policy (purchased March 2010
                                           to December 31, 2013)
                If YES, Return to Form 1040, Line 29 and check YES
                        ___ YES    Purchased through a state or federal exchange.  
                                           Proceed to Section B
                        ___  NO     Continue

            3. Did the above named individual have a qualified health policy
                during 2014?
                        ___ 9 – 12 months   Return to Form 1040, Line 29 check YES
                        ___ 0 – 9 months     Continue

            4. Was the above named individual granted a Hardship Exemption?
                        ___ YES    Return to Form 1040, Line 29 and check YES
                        ___  NO     Return to Form 1040, Line 29 and check NO.

   The Shared Responsibility Payment is computed on Form 1040, Line 65

B. Tax Credit Subsidy
The above named individual purchased health insurance through a state or federal exchange.
            1. Was an employer sponsored group health policy available through
                 personal employment, a spouse, or parent?
                        ___ YES    Return to Form 1040, Line 29 check YES, Line 29a
                                          check NO
                        ___  NO     Continue

            2. Was the above named individual incarcerated during 2014?
                        ___ YES    Return to Form 1040, Line 29 check YES, Line 29a
                                          check NO
                        ___  NO     Continue

            3. Insert income from Form 1040, Line 23 ___________________

            4. Determine tax credit subsidy from Table I.

            5. Did the above named individual qualify for a tax credit subsidy?
                        ___ YES    Return to Form 1040, Line 29 check YES, Line 29a
                                          check YES
                                          Enter earned subsidy here _____________ and
                                          on Form 1040, Line 65a.
                        ___  NO     Continue

            6. Does the above name person want to dance?
                        ___ YES    Under the moonlight
                        ___  NO     Don’t ask me

            7. Did the above named individual receive a tax credit subsidy?
                        ___ YES    Return to Form 1040, Line 29 check YES, Line 29a
                                          check NO and enter subsidy received on Form 1040,
                                           Line 65b
                        ___  NO     Return to Form 1040, Line 29 check YES, Line 29a
                                          check NO and leave Form 1040, Line 65b blank. 

The above is my initial stab at this.  The Internal Revenue Service may, or may not, be even this far along in the process.  CPA’s are gearing up for forms that may not be available until mid or late February.  Tax preparation software will be updated, and updated again before April 15th. 

My advice is to make friends with an accountant.  You’re going to need one.

Saturday, August 9, 2014

Nope, Not Today

.Mayfield Heights-20140809-00361 (2)

Juan (name changed) used to have health insurance. Over the years Juan had been covered by his employer, his wife’s employer, and for the last several years he had been insured through an individual health plan that he had paid for himself. Juan dropped his policy in March 2013. It doesn’t matter why. He just did. And he has been uninsured since.

On Wednesday, August 6, 2014, Juan decided to buy a policy. He called his agent (me!) and asked to get a policy like the one he used to have. And I was forced to say, “Nope, not today”.

Four years since the passage of The Patient Protection and Affordable Care Act (PPACA) and eight months into 2014 and all of this year’s changes and we still have a large number of Americans unaware of the law’s basics. Here are a few of the most important:
  • It’s all Obamacare. The good. The bad. On or off the government’s online sale’s portal. Whether you are celebrating the success of Kentucky’s Kynect or flailing about with, it is all Obamacare.
  • You no longer have to answer health questions.
  • Preexisting conditions are now covered.
  • The premium is determined solely by your age, your address, and whether or not you smoke.
  • We now fully cover annual physicals and preventive care.
  • Maternity is covered the same as any other medical condition.
  • Since we don’t ask questions, the only time most of us can buy a policy is during the Annual Open Enrollment Period.
  • If you lose your policy or have a major life event, you are granted a Special Enrollment Period and allowed to buy a policy.
  • Medicaid was expanded to help the working poor acquire needed coverage.
  • There are tax credit subsidies to help a surprisingly large portion of our country pay for their policies.
  • You will be fined if you don’t have coverage.
There’s more. Of course there’s more, but the above hits the high points and covers most of what you really need to know. What Juan needed to know was that he couldn’t simply wake up one morning, dig out my card, and buy a comprehensive major medical policy.

Nope, not today

Juan was able to purchase a short term policy to cover himself for the rest of 2014. He and I will talk again in the middle of November during the Annual Open Enrollment Period.

Everyday used to be a great day to buy insurance. Those days are gone