DataRaptor Is Coming......

DataRaptor Is Coming......

 This summer will bring an evolutionary way to market and sell insurance.
See the preview at:
http://www.youtube.com/watch?v=8-DGQ3Qg7dQ

ACA Health Care Subsidies

ACA Health Care Subsidies

In our continuing review of the impact on our industry and our clients due to the implementation of the ACA heath care act this article discusses individuals buying private health insurance and receiving subsidies to help pay for it.

 

These subsidies are based upon your income and since no one knows what they will make in 2014 when individuals apply the amount they receive will be based upon their reported income in 2012.

 

A sample draft of the application for insurance that runs 15 pages for a three person family asks people to project their 2014 income if their current income is not steady or if they expect it to change.

 

Most taxpayers won't actually receive the subsidies. Instead, the money will be paid directly to insurance companies resulting in reduced premiums.

 

The subsidies are tax credits because they are administered through the tax code and will help low and middle income families buy health insurance through the state-based exchanges. According to an estimate by the congressional budget office, 18 million individuals will qualify for assistance. A family with an income up to 400 percent of the poverty level is eligible. This year, four times the poverty level is about $62,000 for a two-person family. For a family of four, it's $94,200.

 

If the income reported on the application is less than what is actually earned for 2014, the individual (or family) would have to repay the excess received according to the following guidelines. 

 If families get bigger subsidies than they are entitled to under the law, the amount they have to repay is capped, based on income and family size. If they get less than they qualify for under the law, the government will pay them the difference in the form of a tax refund.

There are also special rules that protect people who marry or divorce from being required to pay back subsidies just because their marital status changes.

 

There are four thresholds for repaying the subsidies:

 

A family of four making less than $47,000 would have to repay a maximum of $600.

 

If the same family makes between $47,000 and $70,000, the amount they have to repay is capped at $1,500.

 

If the same family makes between $70,000 and $94,200, the amount is capped at $2,500.

 

Families making more than four times the poverty level have to repay the entire subsidy.

These levels of repayment are not set in stone. Twice since the health care law was passed Congress has increased the caps for how much people will have to repay. Combined, the current two measures are expected to raise more than $40 billion over the next decade, according to Congress' Joint Committee on Taxation.

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Smokers And The ACA Health Care Reform Act

Millions of smokers could find themselves unable to afford health insurance because of tobacco penalties in the ACA health care law according to experts who are beginning to understand the potential impact of a little-noted provision in the massive legislation.

The Affordable Care Act allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting Jan. 1, 2014.

Younger smokers could be charged lower penalties but older smokers could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge.
A 55-year-old smoker could pay a penalty of nearly $4,250 a year. A 60-year-old could wind up paying nearly $5,100 in addition to their base premiums.

Workers covered on the job would be able to avoid tobacco penalties by joining smoking cessation programs, because employer plans operate under different rules. But experts say that option is not guaranteed to smokers trying to purchase coverage individually.

Nearly one of every five U.S. adults smokes. That share is higher among lower-income people, who also are more likely to have jobs that don't offer health insurance and would depend on the new federal health care law.

Insurers won't be allowed to charge more under the overhaul for people who are overweight, or have a health condition like a bad back or a heart that skips beats — but they can charge more if a person smokes.

Starting next Jan. 1, the federal health care law will make it possible for people who can't get coverage now to buy private policies, providing tax credits to keep the premiums affordable. Although the law prohibits insurance companies from turning away the sick, the penalties for smokers could have the same effect in many cases, keeping out potentially costly patients.

The law allows insurers to charge older adults up to three times as much as their youngest customers.  The law also allows insurers to levy a 50% penalty on older smokers while charging less to younger ones. Although government tax credits that will be available to help pay premiums, they cannot be used to offset the cost of penalties for smokers.

Take a hypothetical 60-year-old smoker making $35,000 a year. Estimated premiums for coverage in the new private health insurance markets would total $10,172. That person would be eligible for a tax credit that lowers the cost to $3,325.  The smoking penalty could add $5,086 to the cost. Since federal tax credits can't be used to offset the penalty, the smoker's total cost would be $8,411, or 24 percent of income. That's considered unaffordable under the federal law. The numbers were estimated using the online Kaiser Health Reform Subsidy Calculator. 

New Fee For ACA

Continuing our review of the impact of the  ACA healthcare law, it has recently been announced that there will be an additional tax placed on all policies beginning in January 2014.  Health & Human Services has released additional directives that include a $63 annual per person fee to help offset the cost to insurance companies for providing coverage to those who were previously considered uninsurable. 

The fee will be assessed on all "major medical" insurance plans, including those provided by employers and those purchased individually by consumers.  Many employers already offering coverage to their workers don't see why they have to pay into a stabilization fund which mainly helps the individual insurance market. This tax puts the large companies on the hook for tens of millions of dollars and adds significant additional cost to mid-size and small employers.

Beyond the impact of the cost to agents on a personal basis, this fee may also push more employers to either not offer health coverage through their companies or to reduce the number of employees that are eligible for coverage by making them "part-time".

The fee will reduce each year and will total $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016.  It will phase out completely in 2017 — unless Congress decides to extend it.
 

Agent or Navigator?

With the re-election of President Obama and with the Democrat controlled Senate, the Affordable Care Act (sometimes referred to as Obamacare) will become the law of the land. 

Today we will address the role of Navigators:

The ACA requires all state Exchanges to fund what will be called Navigators.  The Navigator’s job is to provide individuals and families with the information necessary to determine which health insurance option best fits their needs and then help them enroll in their plan of choice.

The ACA recognizes that different types of Navigators will be needed to help people access coverage through the Exchanges. In Section 1311(i), the ACA lists a variety of groups that could serve the functions of Navigators and suggests that multiple Navigators will be needed to ensure success. According to the ACA, Navigators may be community and consumer-focused non-profit groups; trade, industry, professional associations; commercial fishing industry organizations; ranching and farming organizations; chambers of commerce; unions; partners of the Small Business Administration (SBA); licensed insurance agents and brokers; and other entities capable of carrying out the required duties.

It would seem that the traditional role of an insurance agent/broker will be replaced by this new position. 

To become a Navigator the individual or group must have an existing relationship, or could establish relationships, with employers and employees, uninsured and underinsured consumers, or self-employed individuals likely to qualify to enroll through the Exchange.
 Navigators may not receive any direct or indirect payments from health insurers and insurers are explicitly prohibited from being Navigators. Navigators are funded through grants provided by state Exchange funds.   This is to avoid a conflict of interest, but no directive has been issued to clarify if this applies to new business being written through the exchange or all business including any that may already exist in an agent or brokers practice.

We will post new information on the role of Navigators as it becomes available.  Subscribe to this blog to receive updates.



 

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Assurant Upgrades Benefits

Assurant Health Access^SM is upgrading benefits — at no extra cost — for new Fundamentals and Enhanced clients. For plans effective December 1 and later, new policyholders will receive upgraded benefits on the medical services they'll use most!

EZ Life - The Best Term Sales Tool In The Industry

EZ Life is our proprietary one page application (paper or paperless) that is the same for all of our life carriers.  Using either a customized link on your website, an emailed link to your client or through AMG you and or your client can obtain term quotes from 17 major insurance carriers and submit our one page application in less than 15 minutes.  It is the easiest system available for writing term life and best of all, you retain control of your case, have 24/7 status updates available and there is no reduction in commissions. 

 

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You can also see a short demo of the EZ Life System at 

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Business Transition - Your Clients Want It

Business transition is on the mind of 70% of small-business owners, but they are not taking action. Do your business-owner clients have a plan in place to help ensure a smooth continuation of their business after a potentially disruptive event, such as the death of a business partner? A buy-sell agreement can be a potential solution. It allows a business entity, shareholder, or partner to purchase an interest in the business when the owner leaves or dies. Contact Steve Gresso at 713.977.0611 or steve@affiliatedmarketing.com for assistance in developing a transition plan for your clients.

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