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The NYS 2020 Rate Requests filings were released today. The total weighted average increases were a modest 8.4% for Individual Market and 12.0% Small Group Market. Final rate approval expected early August. The past reductions averaged 10-50%.
The lower requests reflect a stabilizing ACA market. Insurers’ financial performance improved nationwide last year to its highest level since the passage of the law. The average medical-loss ratio, which represents the portion of premiums spent on medical claims and quality improvement, was 70% last year in the individual market nationwide. That led to plans paying $800 million in rebates for failing to meet requirements on medical spending, according to the Kaiser Family Foundation.
This early filing request deadline request requirement is not an Obamacare requirement. As per NY State Law carriers are required to send out notices of rate increase filings to groups and subscribers.These are simply requests and the state’s Department of Financial Services has authority to modify the final rates. But they are the first indication of what New Yorkers can expect when shopping for health insurance on the individual marketplace at the end of this year.
By contrast last year’s NYS 2019 Rate Request early filing request were higher at 7.5% small group and an astounding 24% for individuals. The NYS final August 2020 rate approval are expected to be lower. For example, the final filing rates were approved NYS 2019 Final Rates Approved at a modest 3.8% small group and 8.6% for individuals. Using these past figures one projects a 2019 Final Rates of 5% small groups and 8% individuals.
A spokeswoman for the state Health Plan Association said insurers have worked to control costs, which have been driven up by rising prescription drug prices and state mandates that require coverage of certain services.
“Our member health plans have been committed to making health care more affordable, working hard to rein in rising health care costs and contain their own costs,” she said. “The proposed premium rate requests are reasonable, reflecting the cost of care.”
In the small-group market, insurers asked for a weighted average 12% boost in 2020 after they were granted a 3.8% bump for this year. UnitedHealthcare’s Oxford, which controls more than half of the small-group market, asked for a 15.9% increase, which was the highest among all plans. Oscar, at 15.8%, was close behind. Notably, Healthfirst has requested a 5% reduction.
Defined Contribution Choice: Instead, the correct approach for a small business in keeping with simplicity is a defined contribution model using a Private Exchange. This is a true defined contribution empowering employees with the choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll. Both employee and employers still gain tax advantage benefits under the business. Also, the benefits, rates and network size are superior under a group plan as THE RISK OUTLINED ABOVE ARE HIGHER FOR INDIVIDUAL MARKETS THAN SMALL GROUP PLANS.
To be clear: These trends affect a small subset of the insurance market—non-group plans that cover less than 2 percent of the population. Many qualify for tax credits that lower their net costs and reduce or eliminate the impact of year-to-year rate increases.However, non-group customers with incomes above 400% of the poverty level ($48,560 for a single adult) get no subsidy—and feel the full brunt of any hikes.
*These averages may change based on DFS’s review of the rate applications.** Empire submitted a filing that DFS is evaluating.
NYS has approved 2019 Final Rates last Friday. Small group rates will increase 3.8% and 8.6% for individuals.
As per NY State Law, Health Insurers are required to send out early notices of rate request filings to groups and subscribers see original –NYS 2019 Rate Requests. Despite only 3 months of mature claims data experience for 2018 health insurers’ original requests were noticeably below average 7.5% for small group and 24% for individuals. Ultimately NYS reduced this request substantially by approximately 50%.
Experts are concerned over the long term effects. Example, the Individual mandate was removed last December by Presidential order. Without the Mandate anyone can drop insurance without penalty. A comparable take away for similar auto insurance industry would be something like this -Drivers ought not be mandated to buy auto insurance as its a profit scheme by Insurers. While a popular decision this will hardly bend the curve long term and reduce competition. Furthermore, the new order of Selling Across State lines makes NYS most unwelcoming.
Insurers have been filing to sell Obamacare plans that will go into effect in 2019, and in some states they appear to be pricing in for the fact that the mandate is going away next year. Other states are seeing mild increases, but that is in part because they saw significant hikes for the previous year.
Insurers have concluded that fewer people will enroll without the mandate than otherwise, so in some places they are pricing their plans higher based on the assumption that sicker people will be left behind, which will increase medical costs for those left. It is well worth pointing out that in recent years the loss federal risk reinsurance corridor funds account for 5.5 percent of the rate increase.
In NJ, not that bad. Last year the average increase were 5.5% for small groups and some popular plans such as Horizon Blue Cross Blue Shield’s OMINA increasing only 4.8% increase. This year the increase is only 5.2. Other insurers offering EPO and HMO plans in the individual market for 2019 include Oscar Health and Oxford Health Plans.
With individual mandate repeal fewer people will buy health insurance raising the prices for those who do. NJ Banking and Insurance Department officials said premium prices would have increased, on average, by 12.6 percent.
For CT market, on the other hand, things are much worse at least for the individual marketplace with average 25% rate increases last year. The 2019 proposed rate increases for both the individual and small group market are, on average lower, than last year: The proposed average small group rate increase request is a 10.22 percent and ranges from -5.0 percent to 21.1 percent. This compares to the average increase request of 18.06 percent requested last year.The proposed average individual rate increase request is 12.3 percent and ranges from -10.9 percent to 31.0 percent. This compares to the average increase request of 25.51 percent requested last year.
Final plan rates in New Jersey & CT will be finalized and released in the fall, state officials said. ACA open enrollment begins Nov. 1
A bipartisan group of congressional representatives has discussed an agreement to extend and guarantee the payments, but it’s unclear whether they could do so by the new filing deadline of Sept. 5. A lawsuit filed by Congress against the Obama administration to challenge the payments is still pending. In addition, Trump has repeatedly threatened to withhold payments to insurers that reduce cost-sharing – deductibles, copays and coinsurance – paid by low-income customers. More than half of New Jersey’s marketplace customers receive that assistance, and without it, most would be unable to afford coverage.
Finally, a tax on health insurance premiums has been reinstated in 2018 after a one-year “tax holiday” approved by Congress for 2017. That contributed 2.3 percent to the rate hikes that insurers requested for 2019 and for 2019
Importantly, small group market is still more advantageous than individual markets unless one gets a sizable low-income tax credit. Overall, about 350,000 individual plan consumers will be affected by the price hike, while more than a million users will be hit by higher small group fees. Last year, Blue Cross Blue Shield released a study showing Obamacare user costs were 22 percent higher than people with employer-sponsored health plans, while UnitedHealth plans to exit most Exchanges see – Breaking: Oxford Exits Metro Indiv & Oxford Liberty HMO 2017.
The correct approach for a small business in keeping with simplicity is a Private Exchange and with our large buying group PEO partnerships. This is a true defined contribution empowering employees with a choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll. Both employee and employers still gain tax advantage benefits under the business. Also, the benefits, rates and network size are superior under a group plan as the risk are lower for small group plans than individual markets.
A new law entitled the “New Jersey Health Insurance Market Preservation Act” was signed by Governor Phil Murphy on May 30, 2018 to reestablish the recently repealed “shared responsibility tax”. The law, which will take effect on January 1, 2019, will require every New Jersey resident to obtain health insurance with minimum essential coverage or pay a fee, essentially adopting the rules of the ACA.
This legislation will directly impact residents of NJ and indirectly affect employers with employees residing in the state.
The New Jersey Health Insurance Market Preservation Act will require all New Jersey residents to have Minimum EssentialCoverage (MEC) beginning January 1, 2019, or pay a penalty.
In light of Federal repeal on Dec 29, 2017, Tax Reform Bill Includes Repeal of Individual Mandate Beginning in 2019, NJ’s mandate is scheduled to take effect on January 1, 2019, making NJ the second state, after Massachusetts, to enactan individual mandate. The mandate includes an annual penalty of 2.5% of a household’s income or $695 per adultand $347 per child – whichever is higher. The maximum penalty is based on household income and will not exceed theaverage yearly premium of a bronze plan.If it’s based on a per-person charge, the maximum household penalty will be $2,085.
A “hardship exemption” will be available for individuals who cannot afford coverage, determined by the State Treasurer. NJ expects to collect between $90 million and $100 million in penalties. This money, along with additional federal funding, willbe used on a reinsurance program, which Murphy also signed into law.
While these bills do not directly affect employer sponsored plans, the individual mandate requirement for NJ residents will likely require education for employees. As residents in NJ will now be required to obtain health overage to avoid a state income tax penalty, employers may see an increase in plan enrollment. Unlike Massachusetts which requires specific coverage components, the NJ law only requires that coverage be MEC. Thus, most traditional employer-sponsored group health plans should meet this definition. However, coverage for only dental benefits, certain medical indemnity policies and vision benefits are likely not sufficient for purposes of avoiding the state tax. For now, employers with employees who reside in New Jersey may wish to educate employees at Open Enrollment that by January 1, 2019 health coverage will be required for NJ residents to avoid a penalty.
New Jersey lawmakers feared the repeal would drive healthier people out of the marketplace causing premiums to spike. They believe this law is pertinent to stabilize the marketplace, keep people insured, and prevent a death spiral of the individual market.
On Dec. 20, Congress passed the Tax Cuts and Jobs Act, which makes significant changes to individual and corporate provisions of the U.S. tax code, including a reduction in the corporate tax rate to 21%, down from 35%, beginning in 2018. The bill includes permanent effective repeal of the Affordable Care Act (ACA) individual mandate, requiring individuals to purchase and maintain health coverage, by zeroing out the penalty beginning in 2019. For 2018, most individuals are still required to maintain coverage or pay a penalty when they file their 2018 federal income tax return.
The bill was negotiated by a conference committee comprised of representatives from both the Senate and House after each chamber passed their own versions of tax reform. The final bill was passed 51-48 by the Senate and 224-201 by the House before being sent to the President. President Trump is expected to sign the bill into law soon.
The bill also changes how certain tax thresholds will be indexed for inflation. Affected provisions, including the ACA “Cadillac” Tax (scheduled to take effect in 2020), will now be indexed to the Chained Consumer Price Index (CPI) instead of the regular CPI (the previous metric). That change makes it likely that more employer-sponsored plans would trigger the Cadillac tax sooner.
We will keep our clients advised of timely developments of the Tax Cuts and Jobs Act as it relates to employee beneifts. For now, though, it appears that the biggest impactsthe next couple years are likely to be with respect to the individual mandate repeal and the Cadillac Tax changes.
Health and Human Services had released earlier this year the final version of its 2018 Individual Marketplace Guidance. Under the Affordable Care Act (ACA) this is issued annually. While the guidance is mostly related to the individual marketplace it does, however, include several items relevant to employers and group health plans.
Nov 2017- 2018 Individual Marketplace Guidance.
Nov 2017 – Emnployer Reporting 2017 Updated 1094 & 1095 Now Available
Your decision on which will depend on your Household Income and the number of people in your household applying for coverage. In the chart below, if your HOUSEHOLD income (include all members or your tax household regardless of if they are applying for coverage or not) is below the limit shown based on the number in your household applying for coverage, then it is better for you to apply via your state marketplace such as the NY State of Health.
|# of Household Members Applying for Coverage||Maximum Household Income for Subsidy|
|Each Add’l. Household Member||$16,720|
MEDICAID EXPANSION: For those with incomes less than 200% of the Federal Poverty level you should also enroll via NYSOH as you might qualify for the United Healthcare Essential Plan.
Alternatively, If you earn too much to qualify for a subsidy we will enroll you OFF EXCHANGE. The application forms can be found using the Oscar link above. Download the FULL ENROLLMENT KIT and complete the necessary forms to send to us for processing.
2018 NY State of Health Open Enrollment Runs from 11/1/17 – 1/31/18. Special enrollment period runs throughout the rest of the year for qualifying events.
The annual out of pocket limits for plan years beginning on or after January 1, 2018 are $7,350 for individual coverage and $14,700 for family coverage. These cost sharing limits apply to in-network essential health benefits offered under non-grandfathered health plans, both fully and self-insured. Annual deductibles, in-network co-insurance and other types of in-network cost sharing accumulate toward the out-of-pocket limit, including prescription drug copayments. Not included are premium payments, out-of-network cost sharing and spending on non-essential health benefits.
Beginning in 2017, the Marketplace will notify an employer as soon as possible when one of its employee’s first enrolls in subsidized Marketplace coverage. Since some employers may be liable for a penalty under the ACA’s employer mandate when an employee qualifies for a subsidized Marketplace coverage, this change to a more proactive notification process will hopefully provide employers with the opportunity to work with CMS in cases where an improper subsidy has been provided.
Open Enrollment in the Health Insurance Marketplace, Healthcare.gov, for 2018 will take place from November 1, 2017 through January 31, 2018.
Beginning in 2017, small employers electing coverage in the SHOP Exchange will have the option of “vertical choice,” offering plans across all metal levels (platinum, gold, silver and bronze) from one insurer. States who opt out of the vertical choice option will continue to offer employers the choice of selecting health plans that are available at one single metal level of coverage.