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Self Insured Plans For Small Groups

For small businesses, being self-insured would let them avoid new requirements under the law that call for traditional small group plans to include richer benefits, such as mental-health and maternity care. Self-insured companies can also avoid changes to pricing rules that could increase costs for groups of healthy workers. 

It comes with risks: A car accident or cancer case can leave small businesses on the hook for big medical bills. That is why most large insurers have generally offered such services to companies that have 100 or more workers and can spread the costs around.

Now, the health law is changing the risk-benefit calculation for smaller businesses.  The approach is part of a growing playbook of strategies to minimize the effects—and potential costs—of the health law. Insurers are also letting small companies renew their yearlong health-benefit plans early, before the end of 2013. That would delay the impact of health-law provisions that broadly kick in on Jan. 1, but would only affect plans once they renew after that date.

There is some indication that UnitedHealth Group Inc. and Humana Inc. will begin offering smaller employers—including firms with as few as 10 members in UnitedHealth's case the option of a form of self-insurance in some markets later this year.

Officials in several states are seeking to stem the strategy by limiting so-called stop-loss insurance, which covers unexpected, large health-care bills for self-insured companies. Lawmakers in California and Rhode Island are considering bills that would impose new rules on such coverage when offered to small employers, who otherwise would find self-insurance too risky. Some states, including New York, bar stop-loss insurers from covering small groups.

Still, self-insurance by small companies "is growing because of its ability to circumvent some of the" federal health law's provisions, said Tanji Northrup, assistant insurance commissioner in the Utah Insurance Department.

Contact Heather Matias Ainesworth for group quotes and other information relating to health care reform.

 

 
Protected Growth Strategies
The MetLife Multi-Index Targeted Risk Portfolio and the Pyramis Managed Risk Portfolio have been added to Equity Advantage Variable Universal LifeSM (VUL).
Client-Approved Protected Growth Strategies Investor Guide While there's nothing clients can do about the market's ups and downs, they may be able to smooth out the rougher periods by investing in financial products designed to protect against extreme market swings and offer more consistent returns over time.
With these two new additions to Equity Advantage VUL, there are now nine Protected Growth Strategy Portfolios that seek to consistently build assets by providing better protection against extreme market swings.
Download the Client-Approved Investor Guide to show clients that, by responsively managing market risk and identifying opportunities for growth across global asset classes, Protected Growth Strategies seek to give more consistent returns over time.
Equity Advantage VUL from MetLife combines life insurance protection and an investment opportunity in one product. In addition to the death benefit, clients have the opportunity to accumulate cash value by choosing from among 69 professionally managed funding options.1
 
 
1A complete listing of all funding options can be found in the Equity Advantage VUL Options for Investing Flyer. Additional information on each of the funding options can be found in the prospectus.
PGS funds are not approved in all firms.

Contact Steve Gresso at 713.977.0611 for quotes and or information.

 

 

"SKINNY"  Plans Avoid Penalties For Larger Groups

 

US employers will be able to largely avoid penalties under the Obama-backed health care legislation, while offering very limited plans to their workforces. An article in Monday’s Wall Street Journal notes that these bare-bones plans may lack key benefits such as hospital coverage.


The WSJ article indicates that some benefits advisers and insurance brokers are offering these limited benefit plans to large employers. While these plans would cover minimal requirements such a preventive services, they do not offer full comprehensive coverage.


Government officials admit that these ‘skinny” plans appear to qualify as acceptable minimum coverage under the health care law. Companies offering these plans would dodge $2,000 per worker penalties for not offering health coverage. Although they might face other penalties if employees opt-out of the plans and choose to purchase subsidized coverage on the insurance exchanges, these fines would be far less costly.


The ACA act requires employers with 50 or more workers to offer health care coverage or face penalties. The Department of Health and Human Services (HHS) has promoted these plans as if they would cover benefits such as mental health treatment, hospitalizations and other vital services.


The WSJ however, points to a largely undetected loophole in the rules indicating that such mandates only apply to plans sponsored by insurers that are sold to small businesses and individuals. These cover only about 30 million of the 160 million people with private insurance. This leaves 130 million people—more than 40 percent of the US population—with private insurance that is not governed by these coverage mandates.


In general, larger employers, those with more than 50 workers, will only be required to cover preventive services without a lifetime or annual cost limit. Such low-benefit plans would constitute “health coverage” at a cost to employers that could be as little as $40 to $100 a month per employee—all while avoiding the ACA’s penalties for not providing coverage.


Government health officials are not pleased with the news that employers would seize on these business-friendly loopholes in the health care law. “We wouldn’t have anticipated that there’d be demand for these types of band-aid plans in 2014,” Robert Kocher, a former White House health adviser, told the Journal. “Our expectation was that employers would offer high quality insurance.”
 

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  PCORI Fee

The Patient Protection and Affordable Care Act (PPACA) established several new fees, including the Patient-Centered Outcomes Research Institute (PCORI) Fee. The annual fee, which will be assessed from 2013 through 2019, funds PCORI research that will compare different medical treatments and interventions to determine what treatments are most effective.

Here is important information you need to know about the PCORI fee:

Sponsors of self-funded health plans are responsible for filing and paying the PCORI fee. (Regulations prohibit the insurance carrier from filing this fee on your behalf.)


Sponsors with plan years ending Oct. 1, 2012, through Dec. 31, 2012, are required to pay the fee of $1 per covered person.


The deadline for paying the fee is July 31, 2013.


Employers should use IRS Form 720 for reporting purposes and send payment to the IRS.

 

For Producer or Broker/Dealer Use Only. Not for public distribution nor intended to be used as financial or tax advice.