May Pick Your Next Health Plan

If your current insurer has left the Affordable Care Act marketplace for 2017, the federal government may very well choose your next health plan. Unless you act by either opting out of the exchange or by selecting an alternate plan, the government will choose a health plan for you under a new policy to make sure consumers maintain coverage in 2017.

Consumers in discontinued plans may very well receive a welcome kit from a new company and a bill for the January 2017 premium. They may be surprised to learn that they have been placed in a new health plan offered by a different insurance company, with different doctors and benefits.

The Administration says the assignment of plans will protect consumers from coverage lapses and it notes that consumers are free to choose another plan if they don’t like the one chosen for them. Without coverage or an exemption, consumers can face a tax penalty of $695 or more.

Click here to read the entire article from the NY Times.

To download this blog entry to PDF: May Pick Your Next Health Plan

ACA Special Enrollment Customers Destabilizing the Program

An Analysis by health consultancy firm Avalere found that people that enroll in the Affordable Care Act (ACA) during special enrollment periods have higher health-care costs than those who sign up during the open-enrollment period. In addition, these people are costing insurers more because of a measurement used to calculate their predicted health benefit is lower than the actual costs they end up using.

The ACA is designed to lower financial risks for insurers covering higher-cost customers. According to Avalere, the financial risk measurement used indicates a lower risk for special enrollment customers, when in reality the financial risk is greater. This means insurers are getting less money than they should from the program while the customers are actually costing them more.

Under the ACA risk adjustment program, health plans with low risk scores give up some of their revenue to plans with high risk scores. However, the data suggests the risk scores may not accurately predict actual costs.

Avalere’s report also indicates that special enrollment customers spend just 3.6 months enrolled in the plan, compared to 7.8 months for open-enrollment customers. The shorter time span means that insures are collecting fewer premiums from the special enrollment customers to cover their higher healthcare costs than the open-enrollment customers.

The Avalere report comes less than a month before the start of the 2017 ACA open-enrollment period. For most people enrollment is only allowed during this period that runs November 1 to January 31. However, the ACA does allow for special enrollment periods to people with certain life events, such as marriage; change in household size or to people who lose healthcare coverage.

Click here to read the entire article on CNBC.

To download this blog entry to PDF:  ACA Special Enrollment Customers Destabilizing the Program

DOL Announces 2 Month Extension on Public Comments for Form 5500 Modernization Proposals

The US Department of Labor recently announced a two-month extension on the comment period related to the Form 5500 Modernization Proposals. A Notice of Proposed Revision of Annual Information Return/Reports was published in the Federal Register of July 21, 2016. The new deadline for the public to submit comments is December 5, 2016; the original deadline was October 4, 2016.

Form 5500 is the federal government’s primary source of information about the operation, funding, assets, and investments of pensions and other employee benefit plans. The proposed revisions are intended to improve and modernize the Form. Some believe the new requirements will be too burdensome, especially for small employers. See our previous blog entry on July 29th for more details on these concerns.

Click here to download the DOL Press Release.

To download this blog entry to PDF:  DOL Announces 2 Month Extension on Public Comments for Form 5500