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5 Ways the New ACA Rules Will Change Health Insurance Sales

4/17/2017

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By Jeff Smedsrud
The U.S. Department of Health Human Services has just completed work on regulations that could make big changes in how the U.S. individual health insurance market.
One change will cut the open enrollment period for 2018 in half, to just 45 days. The open enrollment period will now end Dec. 15, not Jan. 31.
Another big change will set tougher rules for how the Obamacare exchange system will verify the eligibility for people trying to buy an Obamacare plan during the special enrollment period. People will have to provide documentation that they have gone through a life-changing event, such as a marriage, that gives them a chance to buy insurance after the open enrollment period deadline.

These changes might help insurers push health people to get covered during the open enrollment period, and it might help them avoid having to cover special enrollment period applicants who were intentionally trying to game the system.
It could also make getting your clients covered more complicated.

Here are five ways the new enrollment rules might force you to come up with new strategies for helping your clients.

1. Mid-Year Coverage Upgrade Problems
John pays for his own health insurance. He has a Bronze plan (less expensive, but less coverage). In January, he marries Sue and soon thereafter Sue becomes pregnant. Because they are newly married, Sue can automatically enroll in John’s plan. But they decide they want better coverage (there is a baby on the way) and so in the middle of the year they switch to a Gold plan.

Under the old rules: Switching healthcare plans in the same calendar year would be allowed.

Under the new rules: Not allowed.

2. Unpaid Health Coverage Premium Headaches

Tim has a variety of part-time jobs at tiny businesses. None of them offer him employer-sponsored health insurance so he buys his own health plan. Of the $400 a month in premium, he gets a subsidy from the government that covers all but $50 a month. Late in the year, Tim stops paying his premiums for the last three months of the year. His insurance is cancelled. A few months later, Tim decides he wants coverage again, and applies for a plan with the same company.

Under the old rules: His insurance company must cover him.

Under the new rules: They can deny coverage until he pays them the back premium for the 3 months in which he was covered but didn’t pay.

3. Moving Documentation Headaches

Sam lives in small town in western Montana. He moves south to Wyoming. His old insurance says his health care providers in Wyoming are out-of-network. Because he has moved outside of his network coverage area, Sam can apply and be accepted for health insurance after his official move date for the next 60 days.

Under the old rules: Sam tells his insurance company that he moved, and his new plan covers him immediately.

Under the new rules: Sam has to submit evidence to the government that he moved to Wyoming and that he’s no longer in his old plan’s coverage area. Sam won’t have coverage until the evidence is verified, and his pending coverage can only be backdated by up to 30 days.



4. Baby Blues

Sydney and Mary adopt a Jessica, baby with special needs, and they want Jessica to have the lowest possible out-of-pocket expenses.

Under the old rules: They simply need to verify Jessica’s birth and change their coverage.

Under the new rules: Baby Jessica must have her own insurance, with a separate deductible and co-pay. Once insured during a calendar year, consumers can’t “improve” their coverage.

5. Strict Deadlines
Natasha likes to wait until the last second. When enrolling for health insurance each year she shops around and often buys on the last day of open enrollment. This year, the last day falls in the middle of Hanukkah. The last day of Open Enrollment is on Friday, Dec. 15. In all the bustle of the season, she forgets to enroll.

Under the old rules: Jessica could still apply for coverage that starts on Feb. 1, 2018 or March 1, 2018, even if she missed the final day to apply in the prior year.

Under the new rules: Sorry, Jessica –  one strike and you’re out.

Implications of the New Rules

These changes might help insurers lower their rates about 2%.

They might also dramatically increase consumers’ confusion.

Remember the old saying: Confused people don’t buy. Some consumers (especially the healthiest) will react by not buying coverage at all. Those with health problems will plod through all the new requirements.

Many of the consumers who do still want coverage will need professional help, and, possibly, advice about major medical coverage alternatives, such as short-term health insurance, hospital indemnity insurance and health care discount cards.
 
http://www.thinkadvisor.com/2017/04/17/5-ways-the-new-aca-rules-will-change-health-insura?eNL=58fa8690150ba06253d39c68&utm_source=TA_LifeHealthWeekender&utm_medium=EMC-Email_editorial&utm_campaign=04232017&page_all=1
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Is It Better to Use Joint Ownership or a Trust to Pass Down a Home?

4/8/2017

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When leaving a home to your children, you can avoid probate by using either joint ownership or a revocable trust, but which is the better method? 
If you add your child as a joint tenant on your house, you will each have an equal ownership interest in the property. If one joint tenant dies, his or her interest immediately ceases to exist and the other joint tenant owns the entire property. This has the advantage of avoiding probate.
A disadvantage of joint tenancy is that creditors can attach the tenant's property to satisfy a debt. So, for example, if a co-tenant defaults on debts, his or her creditors can sue in a "partition proceeding" to have the property interests divided and the property sold, even over the other owners' objections. In addition, even without an issue with a creditor, one co-owner of the property can sue to partition the property, so one owner can force another owner to move out.
Joint tenancy also has a capital gains impact for the child. When you give property to a child, the tax basis for the property is the same price that you purchased the property for. However, inherited property receives a "step up" in basis, which means the basis is the current value of the property. When you die, your child inherits your half of the property, so half of the property will receive a "step up" in basis. But the tax basis of the gifted half of the property will remain the original purchase price. If your child sells the house after you die, he or she would have to pay capital gains taxes on the difference between the tax basis and the selling price. The only way to avoid the tax is for the child to live in the house for at least two years before selling it. In that case, the child can exclude up to $250,000 ($500,000 for a couple) of capital gains from taxes.
If you put your property in a revocable trust with yourself as beneficiary and your child as beneficiary after you die, the property will go to your child without going through probate. A trust is also beneficial because it can guarantee you the right to live in the house and take into account changes in circumstances, such as your child passing away before you.
Another benefit of a trust is with capital gains taxes. The tax basis of property in a revocable trust is stepped up when you die, which means the basis would be the current value of the property. Therefore, if your child sells the property soon after inheriting it, the value of the property would likely not have changed much and the capital gains taxes would be low.
In general, a trust is more flexible and provides more options to protect you and your child, but circumstances always vary. You should talk to your attorney about how to pass down your property.
Michael J. Millonig, LLC
7929 Washington Woods Dr. | Dayton, OH 45459
Phone: (937) 438-3977
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CMS Sets 2018 Medicare Advantage Subsidy

4/4/2017

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The Centers for Medicare & Medicaid Services said Monday it expects its payments to Medicare Advantage plan issuers to increase an average of 0.45% over 2017 levels in 2018.
CMS put that figure in its final call letter announcement for 2018.
The expected change in the per-enrollee subsidy is up from an increase of 0.25% included in a draft program proposal for 2018 posted in February, according to a 2018 call letter summary sheet.
(Related on ThinkAdvisor: 10 counties where Medicare Advantage looks like a wimp)
CMS assumes that typical 2018 enrollees will be somewhat older and sicker than 2017 enrollees, giving those enrollees higher average diagnostic intensity codes. The combination of the underlying subsidy level increase and the increasing intensity in diagnostic codes should increase overall 2018 per-enrollee revenue an average of 2.95%, CMS said.
That's up from an overall increase of 2.75% in the draft proposal.
The Medicare Part C Medicare Advantage program gives insurers the ability to sell plans that serve as an alternative to traditional Medicare A hospitalization coverage and Medicare Part B physician and outpatient services coverage.
Another program included in the final call letter announcement, the Medicare Part D prescription drug program, gives insurers the ability to sell prescription drug coverage to Medicare enrollees.
Seema Verma, President Donald Trump's newly confirmed CMS administrator, said in a statement accompanying the call letter announcement that Medicare program managers want to strengthen the Medicare Advantage and Medicare drug plan programs by "supporting flexibility and efficiency."
"These programs have been successful in allowing innovative approaches that give Medicare enrollees options that best fit their individual health needs," Verma said.
Although CMS calls the new document a "final call letter," the true final terms of the Medicare Advantage bidding process could still be subject to change, depending on the reaction of insurers and consumers.
Margaret Murray, the chief executive officer of the Association for Community Affiliated Plans, a group for nonprofit plans, put out a statement saying CMS has done a good job of trying to help member plans serve the low-income Medicare enrollees who also qualify for Medicaid.
Marilyn Tavenner, the president of America's Health Insurance Plans, who previously was the CMS administrator, said in a statement from AHIP that CMS had made some adjustments in policies.
"We believe more must be done to ensure beneficiaries are well supported in achieving their best health," Tavenner said. "We look forward to working with the agency to reduce unnecessary regulatory burdens, enhance program flexibility and innovation, and promote delivery system reform and patient engagement."
Anthem, the biggest insurer still in AHIP, is based in Indianapolis. Before Verma went to work for CMS, she ran a health coverage program consulting firm in Indiana for years.
www.thinkadvisor.com/2017/04/04/cms-sets-2018-medicare-advantage-subsidy?eNL=58e39c3a150ba09f7839616c&utm_source=TA_LifeHealthDaily&utm_medium=EMC-Email_editorial&utm_campaign=04042017


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