Consumer News

New Consumer Site Provides Quality Ratings & Costs!

A new site recently released by California state officials is really a breakthrough for consumers of health insurance.  They can now look up the average costs for the most common medical procedures based on location, as well as review the quality ratings of various providers.

The consumer site can be accessed here:

The BenefitCompare tool will include a convenient link to this site for both agents and their employer groups to easily access while narrowing down their plan options.  The hardest part about choosing a health plan is understanding the true cost of premiums, treatments, and cost-sharing.  With this consumer website linked for easy access, it will help employers and their employees have simplicity and clarity as it pertains to their true overall out-of-pocket costs.

Barbara Feder Ostrov of Kaiser Health News covered the details of this new consumer site, along with links to other useful sites for quality reviews of hospitals (affiliated with Medicare), and CalQualityCare.org, "which provides information on the state’s hospitals, doctor groups, nursing homes, assisted living facilities, home health and hospice services, adult day care, and services for the developmentally disabled."  You can access the full article by clicking on the KHN logo on the right.

BenefitCompare is dedicated to making agents' lives easier, so they can provide valuable evaluation tools that aren't available through straight proposals with a general agent.  With this added consumer site, your clients will have a full picture of the true costs of medical care.

See below for a related article on this new state website in the Los Angeles Times:

If you or your client(s) have used the new website, we encourage you to comment below and share your experience.

Covered CA Mailing Regarding 2016 Subsidy Eligibility

On August 14, 2015, Covered California sent letters to members who currently receive subsidies through the Affordable Care Act.  The letter advised them that they must give their consent for Covered California to verify their income and family size to determine their subsidy eligibility for their health plan in 2016.

 
 

MEMBERS MUST PROVIDE THEIR CONSENT BY:

  • Calling Covered CA at 1-800-300-1506 or by
  • Logging into their www.CoveredCA.com account and following the instructions in their letter

If members do not provide the necessary information to Covered CA by the 9/30/15 deadline, their subsidy will end on 12/31/15.

Taxing Blue Shield of California

Back in August of 2014, Blue Shield of California lost its tax-exempt status after the Franchise Tax Board determined that it no longer qualified as a nonprofit based on its business practices.  The state's audit concluded that they "...stress profitability..." and "...are inconsistent with an organization organized as a nonprofit which desires tax-exempt status." 

Some articles from the Los Angeles Times that covered the story:

For its part, Blue Shield believes it is "a mission-driven organization that answers to members and not shareholders..." and continues to maintain that its mission is "For Care, Not Profit":

A reliable source at Blue Shield told us they do not believe their executives have any incentive to maximize profitability stating, "Since Blue Shield has a 2% net income cap, its rates reflect the cost of health care and not higher profits.  But despite its not-for-profit mission, Blue Shield faces the same market realities and rising costs as its competitors."

Blue Shield states on their website, some of the many ways it distinguishes itself from its competition:

We strive to uphold high standards of ethical business practices in our programs, products, and interactions with everyone we serve. In fact, we have been recognized as one of the World’s Most Ethical Companies in 2012 and 2013 by Ethisphere Institute.
We practice social responsibility as a company, protect the environment and volunteer in local communities. 
The Blue Shield of California Foundation is funded entirely by Blue Shield of California contributions, and has awarded more than $200M in grants since 2005 to community organizations to make healthcare effective, safe and accessible, particularly for underserved communities. The Foundation is also dedicated to ending domestic violence through a coordinated network of service, support, and education.

An article published by Southern California Public Radio, a member-supported public media network, discussed what this will mean for the carrier and the consumers: 

What do you think it means?  Was it a fair decision?  Comment below and share your thoughts!

Health Insurance Carrier Mergers

Recent billion-dollar mergers between carriers has been making news, including Aetna investing $37 billion to acquire Humana, a major player in the Medicare Advantage sector.  In light of these changes, we decided to post articles from various sources on the most recent merger between Anthem and Cigna.  We encourage agents in California to comment below with their opinions and feedback on how this will affect consumers, employers, agents, and shape the future of the industry.

UPDATE August 5, 2015 - Article in LifeHealthPRO addresses the carrier mergers and what it will mean for the health insurance industry:

Transition Relief for Small Employers Expires June 30, 2015

One of our favorite colleagues, Fred Cartier, provided some useful content regarding the relief offered to some small employer groups.

The Internal Revenue Service, Department of Labor and Department of Health and Human Services have each issued frequently asked questions stating that employer payment plans (sometimes referred to as premium reimbursement plans) for individual health insurance coverage fail to comply with the Affordable Care Act. Employers that violate this rule are subject to an excise tax of up to $100 per day ($36,500 per year) for each affected employee.   While small organizations are not subject to the ACA’s “shared responsibility” employer mandate to provide coverage or pay a penalty, if they do provide health coverage it must meet a range of ACA coverage requirements.

IRS Notice 2015-17   Issued on Feb 18, 2015, provides transition relief for small employers that used premium payment arrangements for 2014; small employers also will not be subject to penalties for providing payment arrangements for Jan. 1 through June 30, 2015. These employers must end their premium reimbursement plans by that time. Small employers are employers that are not Applicable Large Employers under § 4980H (generally less than 50 full time and full time equivalent employees in prior year). Relief was not given for large employers (those with 50 or more full-time employees or equivalents). Large employers are required to self-report their violation on the IRS’s excise tax form 8928 with their quarterly filings.

Higher pay in lieu of offering health insurance is permissible, as long as the money is not specifically designated (required) to be used to pay for premiums.  However, doing so increases the employees taxable income.  To offset the tax implications It may be possible that an employer can use a payroll vendor to set up post-tax payments to carriers for monthly premiums.  However, the best option may be to implement a group health plan accompanied by a Sect 125 POP plan. 

Large Group Employer Mandate IRS Compliance

If you are an employer with more than 50 employees, there are ACA compliance actions you need to take now.  These changes went into effect on January 1st, 2015 due to the Affordable Care Act (aka Obamacare).

To satisfy the IRS reporting requirements, you'll need to start tracking employee work hours, wages, and coverage in order to complete twelve months or more of reporting before the filing deadline.

Your payroll service provider should be able to help you with tracking, compliance, and filing the appropriate forms at the end of the tax year.

The new information reporting systems will be similar to the current Form W-2 reporting systems in that an information return (Form 1095-B or 1095-C) will be prepared for each applicable employee, and these returns will be filed with the IRS using a single transmittal form (Form 1094-B or 1094-C).

Employers must file these returns annually by Feb. 28 (March 31 if filed electronically).  Therefore, employers will be filing these forms for the 2015 calendar year by Feb. 28 or March 31, 2016.

A copy of the Form 1095, or a substitute statement, must be given to the employee by Jan. 31 and can be provided electronically with the employee's consent.  Employers will be subject to penalties of up to $200 per return for failing to timely file the returns or furnish statements to employees.

The filing requirements are based on an employer's health plan and number of employees.

As you can see, the reporting requirements are a bit more complex for larger employer groups so be sure to consult your payroll provider and CPA throughout the year.  If you enjoy reading the details yourself, we've included more resources above and below:

UPDATE: May 28,2015 - Midsize businesses seek relief from Federal Health Law:
Firms with 51 to 100 workers say the Affordable Care Act will significantly raise their costs, so they are pushing for an exemption.  Read more in this article from the Wall Street Journal:

Reporting A Change Of Income on Covered California

According to the Covered California Call Center on May 18th, the "Change my Income" feature is not working properly.  Their I.T. Department is working on the known issue.  They are hoping to have it fixed by next month, at the latest.  If a Covered California consumer has an income change to report, they won’t be able to do it until June.  At that time, they may be able to make it retroactive to June 1st, 2015, if applicable.

The current feature in use, that allows a consumer to “adjust” the amount of the subsidy received, is not for future adjustments, it will make the changes retroactive to January 1st, 2015.  This could likely cause the carrier to (internally) refund all premiums paid and re-charge them the “newly adjusted” premium amounts with the adjusted subsidy.  So the current feature to "adjust" the subsidy received is not the way to adjust changes in income.

Feel free to comment below if you see that the "Change my Income" feature is working properly and as always, consumers and agents are encouraged to contact Covered California with any income changes (up or down) throughout the year: #800-300-1506.

Agents can click below for a downloadable PDF of how to report any changes when site is functioning normally:

Know Your Number: New Consumer Credit Protections

In a recent blog post by our friends and colleagues at Goodsell & Co., Inc. Certified Financial Planners, they explained the importance of obtaining and understanding your consumer credit score:

Until recently, you typically had to pay to see your credit score. That’s changed as a result of an initiative by the Consumer Financial Protection Bureau (CFPB). In February, the CFPB announced that more than 50 million Americans now have free access to their credit scores through their credit-card companies, and tens of millions more should have access soon.

In more good news for consumers, the three major credit-reporting agencies agreed to changes that should make it easier to correct errors and reduce the negative credit impact for late payment of medical bills.

Your credit profile can make a big difference in your financial life, not only for major purchases such as a home or car but also for college loans, credit-card terms, and insurance premiums. Your credit profile might even come into play when you apply for a job or rent an apartment. Considering the recent changes, this may be a good time to take a closer look at your credit score and your credit report.

The authors went on to explain the importance of knowing your own credit score:

Three Key Digits

The next time you receive your monthly credit-card statement, look for your score or check your online account. If you don’t see your score, ask when it will be provided. Free access to credit scores is an important benefit that could be the foundation for managing your credit. However, be sure you understand which score you are receiving and how to interpret it.

The most common credit score, and the one typically shared by credit-card companies, is your FICO®score — a three-digit number ranging from 300 to 850; this scoring model from Fair Isaac Corporation comes in several editions and variations. The VantageScore, developed by VantageScore Solutions, used a 501 to 990 scale in the past, but the newest VantageScore 3.0 uses a 300 to 850 scale. Multiple versions of these scores may be available to lenders, and scores might differ among reporting agencies. Even so, knowing at least one version of your score should provide a good clue regarding how a lender might perceive your credit risk.

What’s a good score? It can vary by situation. However, the CFPB published a report in 2013 that classified FICO scores in four categories: superprime (720 or higher), prime (660 to 719), core subprime (620 to 659), and deep subprime (under 620). At that time, it was estimated that 65% of Americans had superprime or prime scores.

New Consumer Protections

There have been recent changes resulting from a lawsuit, that should affect your own consumer rights over the coming months.  Goodsell & Co. provide the following details:

In a March 2015 settlement with the state of New York, the three major credit-reporting agencies — Experian, Equifax, and TransUnion — agreed to changes that provide more leverage and flexibility for consumers. Although the settlement is with a single state, these changes should be implemented nationally over the next 6 to 39 months.3

Reports and disputes. Since 2005, the Fair Credit Reporting Act ensured consumers the right to receive one free copy of their credit reports annually from each of the three major agencies. Under the new agreement, consumers who are disputing their reports will be able to receive a second free copy from each agency within a one-year period.

Even more important, agencies must have trained personnel examine documentation from both the consumer and the lender and make a decision based on the evidence. In the past, the agencies examined documents from the consumer but generally accepted a lender’s assertion regarding a disputed issue. A CFPB report found that, on average, only 15% of disputes were resolved by the agencies and the other 85% were referred back to the lenders.4

Medical debt. About 43 million Americans have past-due medical debt on their reports, often due to difficulties with insurance companies or the strain of paying a large lump sum.5 Credit-reporting firms now have to wait 180 days before adding medical debt to a credit report. In addition, they must remove medical debt from reports when the debt has been paid by an insurance company. Other delinquencies may remain on a report for up to seven years, even after the debt has been paid.

Improving Your Score

And finally, the best advice and what you really need to know:

If your score is lower than you expect or think you deserve, your first step should be to obtain your credit report from each agency and make sure that all versions are correct. Even if you have a high score, you should check your report on a regular basis.

You can order a free credit report annually from each of the three major credit-reporting agencies at www.annualcreditreport.com or by calling (877) 322-8228. If you find inaccurate information on your report, contact the agency in writing, provide copies of any corroborating documents, and ask for an investigation.

Whether your goal is to improve your score or maintain your current score, the following tips may help.

  • Use at least one major credit card regularly and pay accounts on time. Setting up automatic payments could help you avoid missed payments.
  • If you do miss a payment, contact the lender and bring the account up-to-date as soon as possible.
  • Keep balances low on credit cards and other revolving debt. Don’t “max out” your available credit.
  • Don’t open or close multiple accounts within a short period of time. Use older credit cards occasionally to keep them active.

For more information on obtaining and disputing your credit report, visit:

www.consumer.ftc.gov/topics/credit-and-loans

SOURCE:  Goodsell & Co., Inc. Certified Financial Planners  http://www.goodsellcpa.com/

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright 2015 Emerald Connect, LLC.