Health Insurance Rates - What's Up?

Blog by Rob Cannon, Executive Vice President, Gorges & Company, Inc. 


You have probably heard the news that health care premiums are increasing significantly in Maryland. Generally, premiums for group insurance in Maryland that apply to most nonprofit employers are going up, but the average increase is not in the double-digits like it is in the individual market.
Some of the primary reasons for increasing health care costs include:

• Health care benefits have increased over 72% since 2000
• Population is aging
• Rise in obesity and chronic illnesses due to poor eating choices and under-exercising
• Introduction of new treatments
• More diagnostic testing
• Defensive medicine
• Higher premium tax costs of regulatory medicine
• Ads for drugs that make us feel better but aren’t a necessity

What’s Happening in the Individual Market
In the individual market, evidence suggests that more and more healthy (and therefore less costly to insure) individuals forgo insurance coverage, leaving an insured pool increasingly comprised of older and sicker subscribers who are disproportionately more costly to insure. There is a law requiring people to have health insurance but the penalties are not high enough to motivate many healthy people to buy insurance. Some reports are saying individual insurance rates are going up by 20% or more for 2016 and 2017.
Prior to the ACA, people enrolling in the individual market were medically underwritten so the healthiest people were approved and the others denied. As a result, the rate in the individual market may have been $250 and the group rate almost $400 for the same person. Under the ACA, nobody is subject to medical underwriting which means that unhealthier people could pay less in the individual market. That segment is where the large increases are occurring because the lower rates are no longer supported by the enrollment. By next year, the disparity will be almost entirely gone.

What’s Happening with Employer-Based Plans?
Group insurance rates that are employer-based are experiencing single-digit increases in line with prior years, not the huge jumps that are reported in the individual market. Since 1994, employers in Maryland with fewer than 50 employees have been subject to Small Group Health Reform. This law accomplished many of the goals of the Affordable Care Act (ACA) such as not being subject to medical underwriting. No individual in an eligible group plan could be denied or charged a higher premium than a healthy person. Age of individuals in the group can be considered. Group rates in the small group market (under 50 employees) generally have had single-digit increases for the last couple years and that is what is projected for 2017 rates.
Organizations with more than 50 employees are subject to medical underwriting in setting health insurance rates. This is why Maryland Nonprofits is now offering its members the Vital Health program that may provide lower premiums for larger organizations.
Gorges and Company has been a trusted partner with Maryland Nonprofits for over a decade. We provide free quotes on health insurance for organizations of any size and will apply all discounts available to you as a Maryland Nonprofits member. Feel free to contact me anytime at 410-561-8280 or robc@gorgesco.com
Rob Cannon

Executive Vice President
Gorges & Company, Inc.
2345 York Road
Timonium, MD 21093

Phone: (410) 561-8280
Fax: (410) 561-9728
Email: robc@gorgesco.com
Website: www.gorgesco.com

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New ACA 2015 Tax Forms

New Forms for Your 2015 Federal Income Tax Filing
When the Affordable Care Act (also known as healthcare reform, or the ACA for short) was passed, it came with a host of reporting requirements for employers and health insurance companies. In late March you may receive one or more new tax forms related to health insurance you may have had or were offered in 2015. Originally, these forms were to have been sent in January, but the IRS extended the release date to March 31. When the IRS extended the release date, it also removed the requirement for you to attach these forms to your 2015 tax filing.

Please keep in mind that while we know what form or forms we will be sending, you may receive others if you worked for another employer earlier in the year or are enrolled in our Kaiser IHM plan. Therefore, we will explain the form (or forms) you might receive, why you might receive them, and what you will do with the information they contain.

Form 1095-B

Why will I receive it?

If you receive this form, it is because you were:

• An employee who received health coverage from an employer-provided, fully-insured plan, a union-based plan, or certain other plans (including Medicare or Medicaid) for at least a day in 2015. For State of Maryland participants the only fully insured plan is the Kaiser IHM plan offered under 

Or

• A nonemployee (for example, a retiree, contractor, or COBRA recipient) who received health coverage under a type of employer-provided plan called a "self-insured plan" (these are plans under which claims are paid from employer funds and, typically, employee contributions) for at least a day in 2015. For State of Maryland participants these plans include all CareFirst and United Healthcare plans offered under the Program, including SLEOLA plans.

How will I use this information? You or your tax preparer will enter information contained on this form on your federal tax return for 2015 to demonstrate that you satisfied the ACA’s obligation to have health insurance. It is not necessary, this year, to wait until you receive either of these forms to file your income taxes. For your 2016 tax filing in 2017, you may be asked to wait until you receive the form(s) before filing your taxes.

Form 1095-C
If you receive this form, it is because you:

• Were considered "full time" for ACA purposes for at least part of 2015. Or
• Were covered for at least a day in 2015 under an employer-provided self-insured plan.

Form 1095-C, Parts I and II
If you were considered full-time for ACA purposes for at least part of 2015, these two parts of Form 1095-C will be completed on your behalf, regardless of the type of health plan under which you were covered, or regardless of whether you had or were offered any coverage at all. Full-time for the purposes of ACA means you worked 30 or more hours per week or worked an average of 130 hours per month. Contractual, temporary, variable hour, and adjunct faculty are examples of employee types who may have been considered full-time, in addition to those whose normal work week is 40 hours.

Form 1095-C, Part III
If your health insurance was through an employer-provided, self-insured plan, Part III will be completed on your behalf. (If you are enrolled in the Kaiser IHM plan this part will be left blank, and you will receive a 1095-B from Kaiser.)
How will I use this information? For filing your 2015 taxes, you will keep this information with your other tax records. When you file your 2016 taxes, you may be asked to include the forms you receive in early 2017.

Further questions? Please contact the Employee Benefits Division at either EBD.mail@maryland.gov or 410.767.4775. The IRS will receive copies of any Forms 1095-B or 1095-C provided to you so it can verify the health insurance information you report on your tax return.

Health Insurance - The Roller Coaster Ride Continues...

Here is a brief overview of what has happened.  If you know this or don’t want to read it all, make sure you read the last part. 

 

Maryland Health Care and Insurance Reform Act of 1993

• Guarantee small business access to health insurance
• Reduced premiums by about 30%
• Set consumer protection
• Eliminated medical underwriting & pre-existing condition exclusions
• Required insurance companies to offer similar plans
• Required premiums to be determined by age and geography

 

Does this sound anything like the goals of the Affordable Care Act (ACA)?

 

Why rates were going up before the ACA

• Health care benefits increased 72% since 2000
• Population is aging
• Rise in obesity and chronic illnesses
• Introduction of new treatments
• More diagnostic testing
• Defensive medicine
• Higher premium tax costs of regulatory medicine

What were the major changes with the ACA?

• Preventive services are free
• Individuals are required to have insurance or pay a fine
• An exchange must be created
• Individual subsidies based on income
• Employers with 50+ employees must offer health insurance
• Expansion of Medicaid

 

Ok, so we dealt with this.  Now what?  Most group renewals in the last half of 2015 had increases of no more than 5%.  Individual coverage for January 2015 had modest increases (maybe 15%).  Look out for 2016!  We have heard that individual increases are 10% - 55%!  What about group plans?  The rates are being promoted as lower.  In many cases, that will be true.  Pay attention or you may be shocked!  Here is an actual case for a January 1, 2016 renewal. 

 

 

 

HMO Plan $1,500 Deductible

 

                                     January 1, 2015          January 1, 2016

 

Copays                                    $30/$30                         $25/$50

Hospital Inpatient Charge       $250 per admission       $500 per DAY

Out of Pocket Maximum         $4,000/$8,000               $6,550/$13,100

Emergency Room                    $100                              $250

 

Using a simple example of someone taken to the Emergency room and then being admitted to the hospital for 10 days would look something like this. 

 

Hospital Inpatient Charge 

2015:         $250

2016:         $5,000             

 

Hopefully, it won’t impact too many people.  But if it is you or an employee, it will leave a lasting impression.  

 

 

CareFirst - Cyber Attack

CareFirst – Cyber attack 

 

CareFirst has confirmed that they have been the subject of a cyber attack.  The information that was compromised was limited (not social security numbers, medical info, etc.).  People may be more vulnerable to phishing attempts which may be more plausible. 

 

CareFirst is offering two years of free credit monitoring and identity theft protection services for those members affected. If people have been affected, they will receive letters from CareFirst.  There is additional information in the link below.

 

http://www.carefirstanswers.com/home.html

Ridesharing – Have you heard of it?

Ridesharing – Have you heard of it?

 

If not, have you heard of Uber or Lyft?  Quite simply, the mobile-phone application facilitates peer-to-peer ridesharing by connecting passengers who need a ride to drivers who have a car.  It has become one of the biggest threats to the traditional taxi and sedan services that have additional requirements. 

What will happen if an individual is involved in an accident and does not have automobile insurance designed for transporting passengers for a fee?  Will there be coverage for anyone? 

Think about the implications if you are considering being a driver or a passenger?  See the below flyer for more information. 

Health Insurance – Who needs it?

Everybody – with few exceptions. 

The Affordable Care Act (ACA) included an individual mandate stipulating that effective January 1, 2014, people must have insurance meeting minimum essential coverage or pay a penalty at tax time.  Consumers can enroll for coverage through a special enrollment period that will run from March 15 through April 30 if they attest that they became aware of the penalty during this income tax filing season.

This is the first time that consumers will be asked to provide basic information

regarding health coverage on their federal tax returns. Because this requirement is new, some Marylanders are unaware of the requirement and the fee. 

 Please see the full press release at the following link.  http://marylandhbe.com/wp-content/uploads/2015/02/02252015-SpecialTaxEnrollment.pdf

 I have been certified to assist with enrollment through Maryland Health Connection (Exchange) if you would like help. 

 

Robert Cannon

Vice President

410-561-8280

 

Protecting Against Cybercrime

What is Cybercrime?

Cybercrime is any violation of federal, state, or local statute, or malicious or suspicious activity, in which a computer, network or device is an integral component of the violation. Examples can include: a malicious cyber criminal breaking into a computer to steal information (computer intrusion) or to change a website (website defacement); malware being placed on a computer without the owner’s permission; and that malware using that computer’s resources to send spam.

 Who Are the Actors and What Do They Want?

Cybercrime actors can generally be classified into several categories: lone hackers, script kiddies, insiders, hacktivists, terrorists, nation-states, and organized cyber criminal groups.  The motivations for committing cybercrime will vary and can include a desire for recognition or promotion of an ideology; theft of money or information for industrial espionage; or the creation of widespread disruption.  Cybercrime is big business.  Between October 1, 2013, and December 31, 2014, for example, U.S. victims lost nearly $180 million through a scam known as the Business Email Compromise.  One underground market has more than 14 million U.S. credit cards for sale.  The creators of the CryptoLocker ransomware earned approximately $300,000 profit in its first 100 days.

 How Can You Protect Yourself?

Cybercrime—whether from malware on a single computer or the recent high-profile hacks against Sony, Target, Home Depot and others—impacts everyone. Below are some key practices you can use to help minimize your risk of being a victim:

 

·         Configure Your Computer Securely

Make sure your computer, smartphones, and tablets are safe.  Use privacy and security settings in your software, email system and web browsers. New strains of malicious software are appearing all the time, so it is imperative to regularly update your anti-virus software to identify and thwart the newest threats.

 

·         Keep Software and Operating Systems Updated

Be sure to install all software updates as soon as they are offered; using the “auto update” setting is the best way to ensure timely updates.  Similarly, make sure you keep your operating system and any third-party plug-ins that you use updated.

 

·         Use Strong Passwords

Never use simple or easy-to-guess passwords like “123456” or “p@$$word” or “football.” Cybercriminals use automated programs that will try every word in the dictionary in a few minutes.  When creating a password, use at least 10 characters, with a combination of uppercase and lowercase letters, numbers, and symbols.

 

·         Be Cautious About Links and Attachments

Be cautious about all communications you receive including those purported to be from friends and family, and be careful when clicking on links in those messages. When in doubt, delete it.

 

·         Protect Your Personal Information

Be aware of financial and sensitive information you give out. Cybercriminals will look at your social networking webpage to find information about you--remember, many of the answers to website and bank security questions can be found online, like the color of your car (remember posting that picture of you standing in front of your car?) and your mother’s maiden name.  Use privacy settings to limit who can see the details of your social network pages, and be smart about what you decide to share online.

 

·         Review Your Financial Statements Regularly

Cybercriminals find loopholes and your accounts may get hacked through no fault of your own, so review your financial statements regularly. Contact your financial institution immediately if you see any suspicious looking activity.

 

What to Do If You Are a Victim?

·         If you’ve been a victim of identity theft,  notify your bank, and any other entities with which you have accounts, to inform them that someone may be using your account fraudulently. Contact all three major credit bureaus to request a credit report, and have a fraud alert and a credit freeze placed on your account.

 

·         Internet-related crime, like any other crime, should be reported to appropriate authorities at the local, state, or federal levels, depending on the scope of the crime.

 

 

Provided by:

 Center of Internet Security