A couple of months ago, we joined with Aflac Inc. (NYSE:AFL) to run a webinar on the possible effects of the Patient Protection and Affordable Care Act (PPACA) on the commercial health insurance community.
Webinar attendees submitted 44 questions about topics more substantive than “How do I find a recording of the webinar?” (The answer to that question: Please click here. Fill out a registration form and you will get access to the webinar archive.)
Recently, we also answered questions about topics such as, “How do you count employees?” and “Why does the government think it can handle exchange enrollment and ordinary Medicare Advantage enrollment at the same time?”
This week, we take on questions about matters such as why employers would bother to keep their plans and how much brokers might get paid.
As we said last week, the grim reality is that, in many cases, we’re basing these answers on our understanding of wisps of tired government officials’ draft guidance letters, not on anything written with a firmly pressed pencil, let alone chiseled in stone.
Please treat these questions and answers as a tool for talking about PPACA with professional advisors, not as a substitute for competent professional advice.
1. Is a PPACA implementation timeline available?
Behold the effects of your tax dollars at work: the federal HealthCare.gov PPACA Timeline.
(To get timeline details, click on a checkmark, and you’ll see the details associated with the checkmark.)
Here’s a version of the timeline geared toward people with an interest in Medicaid.
Many states and state health insurance exchange managers have developed their own timelines. Colorado, for example, has posted an exchange timeline here.
2. Why won’t employers just pay the $2,000-per-employee penalty to be imposed on large employers that fail to provide a minimum level of insurance? Isn’t that cheaper for employers than paying for their portion of the health insurance?
3. Help me but wouldn’t it be cheaper for big employers to just pay the penalty?
Certainly, paying the $2,000 penalty would be cheaper than buying health insurance. But many employers already provide health benefits, even though they face no penalty at all for dropping coverage.
PPACA supporters are hoping that whatever forces spur employers to offer group coverage today will continue to do so after the PPACA exchange and PPACA health insurance underwriting and benefits rules take effect.
4. Will offering voluntary benefit programs help employers avoid penalties?
In theory, an employer could, if the voluntary health plan would cover 60 percent of the actuarial value of the essential health benefits (EHB) package, would provide first-dollar coverage for basic preventive services, and had premiums less than or equal to 9.5 percent of the W-2 wages of the lowest-paid employee.
5. If someone elects to not take insurance and pay the penalty (tax) to be imposed on individuals who fail to have coverage, and later wants to enroll, is there any penalty they face for waiting — like with Medicare Part D?
Not yet. HHS and state regulators have talked about using strategies such as open-enrollment periods to keep people from waiting until they are already sick to pay for health insurance.
It seems reasonable to think that regulators will follow precedents set by the traditional Medicare, Medicare Advantage and Medicare Part D programs when coming up with tools for fighting the “free rider” problem.
6. Will non-grandfathered individual business that has been ridered have those riders removed automatically in 2014?
It looks as if riders imposing coverage restrictions that conflict with PPACA, such as riders imposing extra waiting periods on plan enrollees who have heart disease or cancer, will go away once a non-grandfathered individual policy is renewed on or after Jan. 1, 2014.
7. Will non-grandfathered individual policies have maternity added?
The PPACA essential health benefits (EHB) package includes a requirement that non-grandfathered individual and small-group plans provide maternity coverage. Here’s a federal government guide to how exactly each state has defined its EHB package.
Note that a plan can have total cost-sharing amounts (deductibles, co-payments and coinsurance amounts) equal to the total maximum out-of-pocket spending limit for a high-deductible plan that’s compatible with the health savings account (HSA) program.
A carrier might be able to find a way to structure cost-sharing features in such a way that many families still pay a large share of the cost of a normal delivery out of their own pockets.
8. In your opinion, will agents be compensated for helping clients on the exchange?
Yes. The managers of most federal, state-based, and state-federal partnership exchange programs have said that agents and brokers can collect whatever commissions they can persuade insurers (and, presumably, customers) to pay.
The exception, the small business exchange in California, says it will take care of commissions and will pay commissions to what brokers are getting from the carriers in the non-exchange commercial small-group market. (The California exchange managers say they are going that route that to ease the process of offering small groups access to multi-carrier plan menus.)
9. If agents are compensated, how much?
It seems reasonable to think that the compensation might be comparable to what agents and brokers get in the Medicare Advantage plan market.
10. How are agent commissions going to be structured in and out of the exchanges?
Through mortal combat with health insurers and employers.
- PPACA: The webinar answers
- PPACA: The webinar answers, part 2
- 2013: A Look Ahead Into How Healthcare Reform Will Impact The Insurance Industry