We continue to stay on top of all the new legislation that is shaping how Califonrnia Insurance and other states will be affected.  Check out the new video we have prepared.

http://www.youtube.com/watch?v=soblzLmw1Zk

Thank you

Don Ariosto-President

CIF Video

877-840-0554

The California legislature quickly passed a bill to apply and be a part of the federal money available which amounts to about 800 million dollars.  The problem is the money is only slated for 3 years and will run out before new plans are available in 3 years.  This could present a major problem for California in the near future.

HHS Secretary Kathleen Sebelius says that the plan will offer people with pre-existing conditions who have been uninsured for at least six months the same kind of coverage that a healthy person would get.

The Affordable Care Act provides $5 billion in federal funding to support PCIPs in every state-including California. For more information on how the this plan will affect California Health Insurance at 877-840-0554.

Don Ariosto

You should seek advice from an accountant and attorney, but here are a few things to consider:

In an attempt to help our clients calculate how this tax credit may affect your business:

Count staff. To qualify for a credit, you must have no more than 25 full-time equivalent employees. To determine the total number of employees (not counting owners or family members) add together the number of full-time employees and the number of full-time equivalents for part-time employees (divide the annual total hours worked for part-time employees by 2,080).

Calculate Wages. Your average annual wages must be less than $50,000 and you will need to pay at least 50% of the premiums to qualify for the tax credit.  If you have uninsured employees If you do not cover your employees – the 2010 tax credit may make this the year to start. The tax credit allows you to both deduct your premium contribution as an expense and receive a credit that reduces taxes due. For example, if you qualify for the credit and you pay for $50,000 of employee health care premiums, the combined credit and deduction could reduce your tax bill by almost $23,000.1  Help your part-time employees find and enroll in new programs. You aren’t required to cover your part-time employees, but you can help them find and enroll in the new products and programs that are available this year. For example, some employees will be eligible to enroll in their parents’ health insurance plan. Some may be eligible to enroll in existing public programs. Some can find inexpensive individual coverage and even shop for small and large group plans. For additional information, you can visit the IRS Web site at

http://www.irs.gov/newsroom/article/0,,id=221511,00.html,

alternatively, contact your accountant, attorney; visit us at our web site at http://www.californiainsurancefinder.com/

This may help some of our clients that are California Small Business Owners and maybe a larger percentage not so much?   For me and many of you l I heard from the administration was “helping the small business owner” that provides health insurance for their employees and bring down the cost of health insurance.  For me and many of our clients the rhetoric matches the benefits.

May. 18: The Obama administration Monday unveiled a tax cut for small companies that provide health insurance, but business groups gave it a mixed review. Even if it amounts to free money, many small businesses won’t qualify for the tax credit.

The full benefit goes to California companies that have 10 or fewer workers with average salaries of $25,000 or less. They can get Uncle Sam to pick up 35 percent of their premiums. But sole proprietors aren’t eligible. And neither are firms with 25 or more employees, or average wages of $50,000 and above.

“We’re thinking mom-and-pop shops with one or two employees,” said James Gelfand, the U.S. Chamber of Commerce’s health policy director. “For some businesses this will be helpful, but for many it will not be helpful. You have to be so small that it will be difficult.”

Administration officials said they’re trying to target assistance to those who need it most. “The Number 1 concern of small businesses is access to affordable health care,” said Small Business Administration head Karen Mills, noting that only about half of businesses with three to ten employees offer coverage.

“People know this means money in their pockets,” Mills added. The major expansion of coverage under President Barack Obama’s health care overhaul law isn’t slated to happen until 2014. Congress included the small business tax credit as an immediate benefit partly in recognition of the political clout of small business.

Nonetheless, small business owners remain skeptical of the law. Last week the National Federation of Independent Business joined a court challenge seeking to overturn its requirement that most Americans obtain health insurance coverage.

IRS rules issued Monday resolved a range of questions about the tax credit that Congress didn’t address. The agency generally worked to expand the number of companies that can qualify for the benefit.

For example, dental and vision benefits will be eligible, not just medical coverage. And companies that get state tax breaks to help pay premiums can also claim the federal assistance. Moreover, business owners’ salaries won’t be counted in figuring out the company’s average wages allowing more firms to stay under the cutoff for the federal credit. Nonprofits including churches and other religious congregations – will also be allowed to claim a partial credit.

The administration estimates that 4 million businesses are potentially eligible for the credit, but the NFIB says its own experts calculate the number is less than half that, about 1.8 million.

“It’s difficult to know how many business owners will take this up, at this point,” acknowledged Michael Mundaca, head of Treasury’s tax policy office. “It can provide a good deal of incentive for those businesses not yet providing health care to take steps to do so.”

Others expect the credit will mainly benefit companies that already provide coverage. Part of the reason is that it’s temporary, expiring after six years.

“It’s hard to imagine businesses creating health care benefits in response to this credit,” said Gelfand, the Chamber of Commerce expert. “It’s much more likely that this credit will offset the cost to businesses already providing coverage.”

John Arensmeyer, head of the advocacy group California Small Business Majority, said business owners have expressed strong interest in learning more about the credit. The IRS sent out 4 million postcards to companies that might be eligible.

“Would we have preferred a tax cut that was a lot bigger? Off course,” said Arensmeyer, whose group supported the health care overhaul. “But we think it’s a lot better than nothing – and a big piece of an overall solution. I never met a small business owner who turned their nose up at a tax credit

Q1: How does the Affordable Care Act help young adults?
Before the President signed the Affordable Care Act into law, many health plans and issuers could remove adult children from their parents’ policies because of their age, whether or not they were a student or where they lived. The Affordable Care Act requires plans and issuers that offer dependent coverage to make the coverage available until the adult child reaches the age of 26. Many parents and their children who worried about losing health insurance after they graduated from college no longer have to worry.

Q2: Right now I’m a young adult under the age of 26 and I’m on my parents plan now, but I’m scheduled to lose coverage soon. How can I keep my health insurance?
You have a number of options. First, check with your insurance company or call your local California Broker.  He/She should be well versed in the most up to date information.  In summar, private health insurance companies that cover the majority of Americans have volunteered to provide coverage for young adults losing coverage as a result of graduating from college or aging out of dependent coverage on a family policy. This stop-gap coverage, in many cases, is available now. Second, watch for open enrollment. Young adults may qualify for an open enrollment period to join their parents’ family plan or policy on or after September 23, 2010. Insurers and employers are required to provide notice for this special open enrollment period. Watch for it or ask about it. Finally, expect an offer of continued enrollment for plans that begin on or after September 23, 2010. Insurers and employers that sponsor health plans will inform young adults of continued eligibility for coverage until the age of 26. Young adults and their parents need not do anything but sign up and pay for this option.

Q3:  My situation is that I’m under the age of 26, and I used to be on my parents’ plan, but I recently lost this coverage because I graduated from college. Can I get coverage?
Yes. Check with your insurance company to see if they will provide that coverage to you now. If not, watch for the special open enrollment period and sign up then

Q4:Now that the regulation is published, are plans required to immediately enroll eligible young adults in their parents’ plan?
No. The law says that the extension of dependent coverage for children is effective for plan years beginning on or after 6 months after the enactment of the law – that means plan years beginning on or after September 23, 2010. However, the Administration has urged insurance companies and employers to prevent a gap in coverage for young adults aging off of their parents’ policy prior to this effective date. To date, over 65 insurers have volunteered to do so. You should check with your insurance company or employer to see if they are offering this coverage option.

Q5: Can plans or issuers who offer dependent coverage continue to impose limits on who qualifies based upon financial dependency, marital status, enrollment in school, residency or other factors?
No.  With Califoria Group Plans and issuers that offer dependent coverage must provide coverage until a child reaches the age of 26. There is one exception for group plans in existence on March 23, 2010. Those group plans may exclude adult children who are eligible to enroll in an employer-sponsored health plan, unless it is the group health plan of their parent. This exception is no longer applicable for plan years beginning on or after January 1, 2014.

President Signs the “Patient Protection and Affordable Care Act”

On Sunday March 21^st, the U.S. House of Representatives passed the “Patient Protection and Affordable Care Act” by a vote of 219 to 212.  This is the same bill that the Senate passed on December 24, 2009. The bill was signed into law by the President on March 23^rd. The House also passed the “Health Care and Education Affordability Reconciliation Act” by a vote of 220 to 211 that makes changes to the Senate “Patient Protection and Affordable Care Act” passed by the House and signed into law by the President. Changes in the reconciliation bill increase the cost of health reform from $875 billion to $938 billion over ten years and reduce the number of people uninsured by 32 million instead of 31 million as under the Senate bill. The reconciliation bill will now be considered by the Senate under the budget reconciliation process that requires a 51 vote majority to pass a bill. Senate leadership has stated that their goal is to pass the reconciliation bill and get it to President Obama before a two week Congressional recess starts on March 26^th. The reconciliation bill makes the following changes to the “Patient Protection and Affordable Care Act” signed by the President:  How this will affect Health Insurance in California is to be determined.

Financing of Health Reform: The 40% excise tax on “high value” employer-based health plans is delayed from 2013 to 2018 and the definition of a “high value” plan is increased to $10,200 for single coverage and $27,500 for family coverage, with higher levels and adjustments for the age and gender of workers and for high risk occupations. The reconciliation bill includes the Senate increase in the Medicare FICA tax of 0.9% on income over $200,000 for singles and $250,000 for couples and adds a new 2.9% assessment on unearned income for these income earners. The annual fee on health insurers is delayed from 2011 to 2014 when the insurance market reforms become effective and exemptions from the fee for not-for-profit health plans are replaced with an exemption only for certain non-profit Medicaid and Medicare plans. The reconciliation bill increases the annual fee on pharmaceutical manufacturers and delays the fee by one year to 2011. The annual fee on medical device manufacturers is changed to a sales tax of 2.2% on the price of a device, excluding eyeglasses, hearing aids, and other “general goods” purchased over-the-counter. The reconciliation bill also delays the effective date of a new $2,500 limit on FSA contributions from 2011 to 2013.

Insurance Market:  Within six months of enactment, all health plans are prohibited from rescinding coverage except for acts of fraud or intentional misrepresentation, required to provide dependent coverage until the age of 26, and prohibited from imposing lifetime benefit limits under the reconciliation bill. Annual benefit limits are prohibited starting in 2014, but restrictions are placed on the use of annual limits by all group plans within six months of enactment. The reconciliation bill clarifies that all plans, including grandfathered plans, are prohibited from applying pre-existing condition exclusions starting in 2014. 

Coverage Mandates, Penalties, and Subsidies:  Individuals are required to have coverage or pay a penalty starting in 2014. The penalty is the greater of a flat dollar amount ($95 in 2014 phased-in to $695 by 2016) or a percent of income (1.0% in 2014 phased-in to 2.5% by 2016). Individuals up to 400% of the federal poverty level ($88,000 for a family of four) are eligible for premium and cost-sharing subsidies. The subsidies under the reconciliation bill are slightly higher than the Senate bill. Employers are not required to offer coverage, but those with 50 or more employees must pay $2,000 per employee obtaining a subsidized plan through an Exchange (employers may exempt 30 employees from this payment calculation). Employers are no longer assessed a fee for imposing a waiting period exceeding 60 days, but waiting periods exceeding 90 days are prohibited.

Medicaid:  Medicaid eligibility is expanded to 133% of the federal poverty level for all individuals in 2014 with full federal funding of the expansion until 2017 for states that have not expanded Medicaid eligibility to this population (95% federal funding in 2018 and 2019, and 90% federal funding thereafter). For states that have already implemented a Medicaid expansion for childless adults and parents, the reconciliation bill reduces state spending on the adult expansion population by 50% in 2013 and over time phases in cost-sharing for these states to equal that of non-expansion states in 2019, so that all states receive the same federal funding match after 2019 for childless adults. The reconciliation bill also sets a minimum Medicaid payment level for primary care that increases payment rates for a two year period

Medicare:  The payment structure for Medicare Advantage is changed by freezing 2011 Medicare Advantage payments at 2010 levels and phasing-in new payment benchmarks ranging from 95% of fee-for-service Medicare payments in high-cost areas and 115% of fee-for-service Medicare payments in low-cost areas starting in 2012. Medicare Advantage plans with high quality or an improvement in quality are eligible for payment bonuses. By 2014, Medicare Advantage plans are required have an 85% medical loss ratio. The Part D “donut hole” or coverage gap is closed by 2020 by reducing the gap by $250 in 2010 and reducing coinsurance to 25%. The proposal also delays the elimination of the income subsidy exclusion for employers who maintain prescription drug plans for Part D eligible retirees until 2013.   Additionally, Medicare Advantage Plans, which enroll approximately 33% of all Medicare Enrollees, will be greatly affected-negatively. Many Californians enroll in Medicare Advantage Plans-including my parents.

Your comments are greatly appreciated.

Let’s wait and see what the version of “health care reform” brings us and how it will affect the California Health Insurance Market-both individual, family and group health insurance.

Your comments are appreciated and welcome.

        Reform will be paid with fees on insurance companies, pharmaceutical companies and medical device manufacturers.  In addition, there will be a Medicare payroll tax increase to 1.95 percent on income over $200,000 a year for individuals, $250,000 for couples.  A new 5% tax on elective cosmetic surgery will be implemented as well as additional cuts to Medicare and Medicaid.  An excise tax on insurance companies for “Cadillac” plans, fees on employers whose workers receive government subsidies to help them pay premiums and fines on people who fail to purchase coverage.   
Employer Mandate –      Employers with a payroll of less than $500,00 are exempt; others are required to provide coverage or pay a penalty of 8% (phased in for employers with payrolls of between $500,000 and $850,000.)      This Bill requires groups of 50+ to provide “qualified” coverage or pay a $750 fine for non-covered employees. 
Subsidies       Affordability credits would be offered to individuals with incomes of less than $43,320 or $88,200 for a family of four. Tax credits of up to 50 percent of insurance costs would be offered to small businesses.       Same as House  
Medicare and Medicare Advantage – 
        Reduces funding for both Medicare and Medicare Advantage. Begins to close the “doughnut hole,” the gap in prescription drug coverage for seniors.       Payment reforms would reduce Medicare Advantage funding by an estimated $120 billion over ten years, beginning in 2011. Special Needs Plans would be extended through 2013 and Cost Plans would be extended through 2012.      
Government Run Plan -   A government-run plan would be one of the options offered on the Exchange to compete with private insurance.    States could opt out of a government-run plan, which would be one of the options on the Exchange.  The HHS would determine the payment rates for medical providers with a cap at the average rate of private plans.  If this option does not survive debate, it may be replaced with the “trigger” option.  States will be allowed to offer their own public programs for people between 133% and 200% of FPL. 
Abortion
        No federal subsidies would be used to buy policies with abortion coverage, but private funding could be used to buy abortion coverage through a rider. No public or private funds could be used to buy abortion coverage in the public plan.    Every state must offer one insurance plan with abortion coverage and one without. No federal subsidies would be used to buy policies with abortion coverage, but abortion coverage could be offered in the public plan if public and private funding are segregated.   
Illegal immigrants
        No federal subsidies could be provided to help illegal immigrants buy insurance, but those here illegally could use their own money to buy policies on the new health insurance exchange.       No federal subsidies could be provided to help illegal immigrants buy insurance, and those here illegally would not be allowed to use their own money to buy policies on the health insurance exchange.

Here are the deals:

* The American Medical Association (AMA) was facing a 21 percent cut in physicians’ reimbursements under the current law. Obama promised to kill the cut if they backed his bill. The cuts are the fruit of a law requiring annual 5-6 percent reductions in doctor reimbursements for treating Medicare patients. Bravely, each year Congress has rolled the cuts over, suspending them but not repealing them. So each year, the accumulated cuts threaten doctors. By now, they have risen to 21 percent. With this blackmail leverage, Obama compelled the AMA to support his bill…or else!

* The AARP got a financial windfall in return for its support of the health care bill. Over the past decade, the AARP has morphed from an advocacy group to an insurance company (through its subsidiary company). It is one of the main suppliers of Medi-gap insurance, a high-cost, privately purchased coverage that picks up where Medicare leaves off. But President Bush-43 passed the Medicare Advantage program, which offered a subsidized, lower-cost alternative to Medi-gap. Under Medicare Advantage, the elderly get all the extra coverage they need plus coordinated, well-managed care, usually by the same physician. So more than 10 million seniors went with Medicare Advantage, cutting into AARP Medi-gap revenues.

Presto! Obama solved their problem. He eliminates subsidies for Medicare Advantage. The elderly will have to pay more for coverage under Medigap, but the AARP — which supposedly represents them — will make more money. (If this galls you, join the American Seniors Association, the alternative group)

* The drug industry backed ObamaCare and, in return, got a 10-year limit of $80 billion on cuts in prescription drug costs. (A drop in the bucket of their almost $3 trillion projected cost over the next decade.) They also got administration assurances that it will continue to bar lower-cost Canadian drugs from coming into the U.S. All it had to do was put its formidable advertising budget at the disposal of the administration.

* Insurance companies got access to 40 million potential new customers. But when the Senate Finance Committee lowered the fine that would be imposed on those who don’t buy insurance from $3,500 to $1,500, the insurance companies jumped ship and now oppose the bill, albeit for the worst of motives.

The only industry that refused to knuckle under was the medical device makers. They stood for principle and wouldn’t go along with Obama’s blackmail. So the Senate Finance Committee retaliated by imposing a tax on medical devices such as automated wheelchairs, pacemakers, arterial stints, prosthetic limbs, artificial knees and hips and other necessary devises.

So these endorsements are not freely given, but bought and paid for by an administration that is intent on passing its program at any cost.  How and to what extent this will affect the California Health Insurance Individual and Small Group Market is to be determined.  However,  deep cuts to Medicare are guarenteed and our health premiums are going to go up.  So, in the end are we any better off with ObamaCare?

Your commnents are apperciated.

Medicare failed to investigate frauds and in many cases where the members (who received their explanation of coverage and never received the services or devises) called Medicare and reported the fraud.  Additionally, Medicare continues to be one of the slowest “payees”-according to the Athena Health Payers View report.  North Carolina is the fastest state at 40 days.  Among the top payees it ranks 8th and in some states takes 77-89 days to pay providers.

Additionally, Medicare also ranked among the highest payees in rejecting claims.  In California Health Insurance Medicare and Medicaid rejected 19.5% while NY rejected 34% and Florida 38%.

Last year even the Post Office lost 2.5 billion dollars.

Folks as the 2000 page healthcare bill makes it’s way through the Senate we need to be aware that if this bill passes it will be more costly than budgeted, will be filled with administrativered-tape, be stifled with delays and problems and surely have a tremendous amount of waste and fraud.

Why do I say this?  Because the government can’t run their existing programs efficiently and on budget.

Your comments are appreciated.