Reform In Motion What to expect in a time of change
Who is Med1 Life Insurance Brokers? Here at Med 1 Life we understand family, and we will do everything we can to protect our family. When we visit with our clients we can instantly connect with them in a way that most of our competition will never be able to. When you sit with one of our Advisers you will quickly see that they are truly hearing you. Here at Med1 Life, we have dedicated ourselves to helping Texans achieve their health, savings and retirement goals. When our clients need someone to talk to about their health, life and retirement questions that can impact their lives, we are there. We have the experience and the expertise to help our clients across an extensive range of important issues. Med1 Life’s industry leading experience helps fellow Texans plan and protect for the joys of a secure retirement. We provide real solutions for real lives by consistently offering products and services that are innovative, simple to understand and easy to use. We take a personal approach to retirement plans and programs, offering customized solutions for individual needs.
Who is Med1 Life Insurance Brokers? Here at Med1 Life we work with our clients to develop tailored strategies specific to our clients wants and need. We believe that every single one of our client's needs is unique and important, so we take a one-on-one approach to hear and understand our client’s needs. We pin-point their concerns, this allows us to accurately develop solution that give them and their families a tranquil peace of mind. Med1 Life’s Mission Statement Our purpose is to protect both our individuals and businesses clients from unforeseen health and financial risk. We provide insurance solutions and services tailored to meet the unique and ever-changing day to day risk exposures facing our clients. We build value by consistently finding industry leading solutions that will empower our client’s futures.
About Your Presenter David Smith is a well-known Insurance educator in Harris County. With over 10 years of experience working with the retirement market, savvy investing individuals have been listening to his advice to wisely on protecting and savings and reduce income taxes significantly. In fact, over 1,000 retirees including retirees of Shell Oil, the Houston Area Teachers Associations Members, and Exxon Mobil have used his counsel to invest the money into secure investments. David is an expert educator and counselor in helping retirees preserve their assets and increase income. David worked in the Real Estate Industry and created a very successful business dealing with clients and their investments. Later he shifted his focus to insurance because of his personal experience prompted by his father's unexpected hospitalization due to suffering a stroke which left his father permanently disabled.
About Your Presenter After experiencing his hardship with his father, David shifted his focus and started developing his knowledge and skills in retirement protection and planning. In 2009, David founded Med1 Life Insurance Brokers. Since then, Med1 Life has started to grow successfully, with David’s emphasis on his client’s specific needs and customer service. Currently, over a 1000 individuals and groups in the Texas market rely on David and Med1Life to consult and/ or administer their health, life, and retirement programs. David has developed a wonderful reputation among both his clients and major carriers for, Texas families and senior looking to for retirement, health, life, long-term care, and disability solutions. David is highly motivated to assist his clients in achieving their specific retirement and insurance needs. This has made him a respected specialist in retirement and insurance plans. David’s reputation to deliver the best type of customer first service has earned him high marks with many top-rated providers.
Questions to ask about health insurance: Determine why you are buying health insurance: Ask yourself these questions when comparing health insurance plans offered through your employer or when buying a plan independently. 1. Do you want to pay a nominal fee for office visits when your family members need care? If so, consider a traditional plan, such as an HMO, PPO or POS. 2. Do you just want a safety net to protect you in case of a catastrophic event? If so, consider a consumer-directed health plan with a high deductible and health savings account. 3. What do you typically spend on health care in a year? If you're really healthy and make a good salary, consider a consumer- directed health plan. 4. Do you have chronic problems that require regular care and prescriptions? If so, you should probably opt for a traditional plan.
Questions to ask about health insurance: Evaluate the Health Insurance Plan: How much are the premiums? How much if any will the employer pay? What's covered and what is out of pocket? What's the annual maximum benefit? What's the maximum lifetime policy benefit? What is the annual deductible for yourself? For your family? What's the co-payment for various services? What are the costs of services within the network? What are the costs of services out of network? Which prescriptions are covered and for how much Does it pay for all or just a portion of brand name drugs? Are the medicines that you need in the formulary (a fancy word for approved prescription drugs)? Is there an annual cap on out-of-pocket expenses in a year?
Questions to ask about health insurance: Consider any special health care needs you may have in the near future: What would you pay under the plan? What about accidents and unexpected illnesses? Consider savings plans: If the plan has any features like a health savings account or a flexible spending account, what are the rules? Do they make sense for you? As plans with HSAs have higher deductibles, they're cheaper for employers. Does your employer pass on those savings by contributing to the account?
Questions to ask about health insurance: Examine the health insurance company: If there's a list of preferred providers, are your doctors on the list? Which hospitals can you use? Are they close to home? How difficult is it to see a specialist or get a second opinion? 2. Would you need a referral? Does the plan cover preventative care? Does the plan cover extras such as eye care or chiropractic visits? If you've gone more than 63 days without coverage, how long would the policy exclude any existing problems? One year is the maximum.
Health Care Reform Law & what it means for you In March 2010, Congress passed and the President signed a new health care reform package into law. We understand you may have questions about the new health care reform law, and how it may affect your health plan. That’s why we’ve put together this information. We hope it will answer some of your basic questions about the new law, what to expect, and which changes may affect you and your family. Change Takes Time The health care reform law is thousands of pages, with hundreds of provisions that insurers will implement over the next several years. At first there were no immediate changes to your health plan when the new law was enacted in March 2010.
Health Care Reform Law & what it means for you Starting in late September 2010, some changes in your health plan will take effect when it renews. It’s important to keep a few things in mind. Many of the law’s provisions are general in nature. Legislative and regulatory bodies will pass additional laws and issue rules, regulations, and guidance that explain how health plans must comply. Not all of the rules and regulations have been released, so it’s difficult to understand the full impact of health care reform on any member’s specific health coverage. In the meantime, we can share what we do know.
Health Care Reform Updates Dependents The dependent is not required to have the same residence as the parent(s) to be eligible to be listed as a dependent. Keep in mind that the plan is issued based on the state of residence of the parents. This can have network impacts, particularly in Florida, so be sure the applicants are aware of network requirements. If married ‐ a dependent may still be listed on their parent’s plan as a dependent. Marital status does not impact their dependent eligibility. The spouse and/or any dependents of the dependent are not qualified dependents. Dependent includes only sons, daughters, stepchildren, adopted children (including children place for adoption), and foster children. Eligibility requirements will continue to apply in states that allow dependents age 26 and older. If dependent is age 26 and older, underwriting will use state‐specific dependent eligibility rules to determine if the applicant is an eligible dependent.
Health Care Reform Updates Dependent rate calculations: Initially when rates were filed, the dependent rate requirement was interpreted to mean that there could be only one age band for all dependents up to age 30. This means that all dependents in a zip code will have the same rate, regardless of their age or gender. So for example a 3 year old female dependent in zip code 54013 will have the same rate as a 22 year old male in zip code 77008. On 9/21/2010, we received guidance from the Department of Health and Human Services that dependent rates can vary by age and gender so long as they are not unjustifiably discriminatory. As a result, in all states that did not have rates approved prior to 9/21, we have rates that vary by age for dependentsunder 18, and vary by age and gender for dependents 18 and older. These states include CO, NV, TN, NC, SC, OH, KY, UT and VA. Over the next several months and into next year, rates will be re-filed and adjusted in the other states as well, so all states will eventually go back to dependent rate variability by age.
Health Care Reform Updates Health Reform Compliant Benefits All waiting periods still apply for preventive care and mental health. The removal of the annual limit on ambulance includes both ground and air ambulance. There are no changes to emergency services outside of the country. Emergency services obtained outside of the county will continue to be covered as they did previously. The new preventive care benefits apply before deductible – they are not subject to the deductible. On plans that have office visit copays, the copay will NOT be required and will NOT count as an office visit (as long as the office visit qualifies as a preventive service). Preventative care provided by in‐plan providers is paid at 100% prior to deductible and any in plan office copay will not be required. Preventative care provided by an out of plan provider continues to be subject to: office copays, deductible and out of network coinsurance amounts.
Health Care Reform Updates Short Term Medical Plans Short term plans (STM) are not subject to the benefit changes required under healthcare reform. Benefits will remain as is for STM. Because of this, pre‐existing conditions may be applied for applicants under age 19 when applying for a short term medical plan.
Health Care Reform Updates Specialty Benefits and Supplemental At this time, the general understanding is that stand‐alone specialty plans (vision, dental) and supplemental life and health products (HFPP) are not subject to the healthcare reform requirements. *The exception to this is in the state of Louisiana. A Louisiana regulation requires that Open Enrollment requirements and dependent age to age 26 applies to HFPP and dental/vision products. In addition to continuing to review the federal requirements, Humana is monitoring state requirements that may expand the scope beyond the federal HCR regulatory requirements. There are more examples than just Louisiana already, and the states' 2011 legislative sessions haven't even started yet. The applicability of provisions within the federal health care reform requirements must be made on a case‐by‐case basis.
Health Care Reform Updates Pre-Existing Conditions (19 & older) The healthcare reform law states that starting in 2014, coverage will be guaranteed –even for those with pre‐existing conditions. The government set a transition period because this is such a large shift for the healthcare system. If a consumer wants coverage and has been declined coverage, they may be eligible through their state high‐risk health insurance pool or the Pre‐Existing Condition Insurance Plan (or PCIP). Additional information is available at www.healthcare.gov
Health Care Reform Updates Pre Existing Conditions (18 & younger) The healthcare reform law states that starting in 2014, coverage will be guaranteed –even for those with pre‐existing conditions. This coverage starts earlier for dependent children younger than 19. For plans issued on or after Sept. 23, 2010, insurers can’t: 1) Deny payment for a child’s treatment due to a pre‐ existing condition (not applicable to grandfathered individual plans in some states) or 2) Deny coverage to a child because of a pre‐existing condition during the open enrollment period Major medical insurance companies will not decline dependents younger than 19 who apply and are covered by their parent or legal guardian. When applying for individual insurance, insurers apply underwriting guidelines to each applicant, which includes dependents. One option is a rate increase as permitted by state law.
Health Care Reform Updates Med1 Life’s Position Med1 Life believes all Americans deserve affordable, quality health care coverage. Our company has said for a long time that we must enact comprehensive, bipartisan reformthat guarantees coverage, with everyone participating in the system, and that makes pre‐ existing conditions a thing of the past. The new health reform law contains many positive, important reforms that we support, but it also contains provisions that we are concerned may result in much higher costs for young adults as well as seniors and disabled Americans who get their Medicare through a Medicare Advantage plan. Med1 Life also believes that more needs to be done to control the underlying cause of our health care crisis –rising health care costs.
Health Care Reform Updates Federal High Risk Pool/ PCIP The program, referred to as the Pre‐Existing Condition Insurance Plan (or PCIP), is to provide a bridge for people with pre‐existing conditions who need coverage until the insurance exchanges (which provide for guaranteed issue) begin operating on January 1, 2014. States may choose whether they want to run the new pool, or have the federal government (through the Department of Health and Human Services) carry out the program. The Department of Health and Human Services maintains a website, www.pcip.gov that pertains specifically to the Pre‐Existing Condition Insurance Plan (PCIP). For states where the federal government is running the program, the site contains information on the plans, the application form, and instructions on completing and submitting an application. For other states, the site contains contact information for the state pool. The PCIP can also be reached by calling 1‐866‐717‐5826.
Health Care Reform Updates Eligible individuals must: Be a citizen or national of the US or lawfully present in the US, Not have had health coverage for the previous 6 months before applying for coverage, & Have a pre‐existing condition, or been denied health coverage because of a health condition.* For children under age 19, they must have been quoted a premium of 200% or more of their state’s PCIP premium. *For states that have elected for the federal government to run the program, the application requires submission of a copy of a decline letter within the past 6‐months, or offer of coverage with exclusions. Other state application requirements will vary by state.
Health Care Reform Updates Child Only Discontinuance State law allows each insurer to set guidelines as to who is eligible for their coverage. Minimum age requirements is one such guideline. For example, Humana’s current guidelines require that the primary (or spouse) applicant be 19 years of age or older. HHS launched a new website, www.healthcare.gov, providing information on available health insurance in each state Child‐only applications are no longer accepted by Major Carriers. States may mandate child only open enrollments.
Reform TIMELINE Here is a timeline of when some of the health care reform law’s provisions take effect. Remember, some details of the law are likely to change. 2010, March: • The U.S. Department of Health and Human Services (HHS) will establish a process for federal review of rate increases. 2010, July: • An Internet portal will be created for consumers and small businesses to shop for health insurance. www.healthcare.gov 2010, September: • Health plans may not impose lifetime limits on the dollar value of essential benefits.
Reform TIME LINE 2010, September continued: Annual dollar-value limits on benefits are restricted. (Does not apply to “grandfathered” individual plans.) • Insurers may not rescind (void) health insurance policies, except in cases of fraud or intentional misrepresentation. • Adult children who are currently on their parents’ policies and unable to get insurance through their jobs may stay on their parents’ policies until age 26, regardless of their marital status. • Plans may no longer impose pre-existing condition exclusions on children under 19. (Does not apply to “grandfathered” individual plans.) • New policies must cover the full cost of preventive care. (Does not apply to “grandfathered” individual plans.)
Reform TIME LINE 2011: • Health savings accounts and flexible spending accounts may no longer be used for over-the-counter purchases unless those purchases have been prescribed by a doctor. • Insurers must spend 80 percent of individual health insurance premiums on medical services or provide rebate payments to enrollees. • A national, voluntary insurance program is established for purchasing long-term care services (CLASS — Community Living Assistance Services and Supports — program). 2012: • A new fee is imposed on health insurance companies to fund comparative effectiveness research (research to determine the most effective regimens, drugs, supplies, and therapies for various diseases and conditions): $1 per participant through 2013; $2 per participant through 2019.
Reform TIME LINE 2013: • Contributions to flexible spending accounts are limited to $2,500 per year. • Medicare payroll tax increases by 0.9 percent for individuals who make more than $200,000 and couples that make more than $250,000. • A new 3.8 percent tax will be added on income from interest, dividends, annuities, royalties, and rents for those at the same income threshold. 2014: • Health insurers must accept every individual who applies for coverage. • Health plans can no longer impose pre-existing condition exclusions for any person of any age. (Does not apply to “grandfathered” individual plans.) • No annual limits on health insurance benefits. (Does not apply to “grandfathered” individual plans.)
Reform TIME LINE 2014 continued: • State health insurance exchanges introduced for individuals to buy insurance. • Rating restrictions go into effect: Insurance companies cannot charge women more than men, old people more than three times what young people pay, or smokers more than 1.5 times more than what non-smokers pay. • Essential benefit plan is created, which mandates the level of benefits that must be included in individual health insurance plans. (Does not apply to “grandfathered” individual plans.) • A temporary reinsurance program is established in the individual market and funded by individual and group health plans assessments ($25 billion in 2014 – 2016). • Families and individuals between 133 and 400 percent of the Federal Poverty Level get subsidies — on a sliding scale — to purchase insurance.
Reform TIME LINE 2014 continued: • Medicaid program is expanded to cover everyone under 65 with an income less than 133 percent of the Federal Poverty Level. • A non-deductible premium tax is imposed on insurers ($8 billion in 2014, rising to $14.3 billion in 2018, and increasing proportional to overall premium growth after that). 2016: • States can form health choice compacts to allow insurers to sell individual policies in any state participating in the compact.
Q & A Q: When will I start to see changes to my health plan because of health care reform? A: Many of the provisions in the new law will not take effect for several years. At the earliest, provisions that affect individual health plans will take effect six months from the date of enactment — in late September. Even then, most of those early provisions will not affect your plan until it renews. Med1 Life will let you know about any changes before your plan renews. Q: Do I need to do anything differently, now that health care reform is law? A: No, you can use your health plan as you normally would. Q: Will my premium change due to health care reform? Will more services be covered? A: It’s hard to say how your plan’s benefit design and premium rates might change until we know more about the law and how state and federal regulatory agencies will apply its provisions.
Q & A Q: What about “grandfathered” health plans? A: Under the new law, the plan you had as of March 23, 2010, is considered a “grandfathered” plan. Such plans are exempt from many but not all reforms. New plans, effective after March 23, 2010, are not “grandfathered” and will be subject to changes that could cause premiums to rise higher than they otherwise would. For example, the new law will eventually eliminate annual limits on certain key health benefits and require plans to include a mandatory package of “essential benefits.” While such benefits may appear attractive, they also can make premiums more expensive. You may lose your rights to a “grandfathered” plan if you make changes to your existing health plan. Carriers won’t make any changes that will affect your “grandfathered” status. However, you could make changes that cause you to lose this status, such as:
Q & A • You switch to a plan that pays a lower coinsurance percentage • You increase your deductible by more than 18 percent • You choose a plan with higher copayments • You choose a plan that eliminates all or most benefits for a particular condition • You enroll in a new plan — with the same insurance company or a different one — that has an effective date any time after March 23, 2010 Other changes, such as increasing your benefits or adding coverage for a family member, will not cause you to lose “grandfathered” status.
Q & A Q: I’ve read that reform is supposed to lower health care costs. Will Health plan members be eligible for any rebates? A: Any premium changes — up or down — due to health care reform will occur in the future. Not all of the law’s rules and regulations have been released, so it’s difficult to understand the full impact of health care reform on any member’s specific premiums. Q: Does the new health care reform law provide me with free health care coverage? A: No. The new law does not mean that you’re now covered under a free government health plan. Such a change is not part of the new health care reform law. One of the goals of health care reform is to create additional health insurance options, whether from private health insurers or expanded public programs like Medicaid.
Q & A The new law includes additional provisions designed to help low- and moderate-income people afford health care coverage. Under the new law, in 2014 premium assistance for uninsured individuals with incomes between 133 – 400 percent of the federal poverty level will be available for plans purchased through new, state-run exchanges. The amount of assistance will depend on your income. The lower your income, the more assistance you can expect. Also in 2014, Medicaid will expand to cover people with annual incomes at or below 133 percent of the federal poverty level. That’s $29,327 for a family of four. If you think you qualify, the agency that oversees Medicaid in your state can likely give you more information. As always, you should carefully evaluate your personal situation and insurance options before making any decisions about your health care coverage. Only you can make sure you have the health insurance coverage that you and your family need and want.
Q & A Q: I currently have a health plan and would like to continue coverage for my child who is over 21. Can I do that? A: A provision of the new health care reform law allows adult children to remain on their parents’ plan until their 26th birthday. Although this provision takes effect on September 23, 2010, most carriers agreed to make this change earlier to eliminate what otherwise could have produced a gap in coverage for adult children who are already on their parents’ current medical plan. Beginning in July 2010, adult children may stay on their parents’ current medical plan until age 31 if coverage isn’t available through their work and they are not married. If the adult child is married, coverage will be available until they reach at least their 26th birthday. In some states, married dependents can remain on their parents’ policy beyond their 26th birthday. If you have questions or want information about your specific state, call your carrier’s customer service line.
Q & A Remember that this change only applies to adult children who are currently covered by their parents’ current health care plan. Q: I currently have a health plan and I’d like to add my 21-year-old child to my plan. Can I do that? A: Yes. Carriers’ offers coverage for adult children until their 25th birthday in most states, and beginning September 23, 2010, most carriers will cover adult children up until they reach at least their 26th birthday, as required by the new health care reform law. In some states, adult children can be covered by their parents’ current policy beyond their 26th birthday. Like all applicants for a new policy, the adult child’s health history would be reviewed by your current carrier to determine if they qualify for coverage.
Q & A Q: I do not currently have a health plan, but I’m interested in purchasing a new health care policy. Would I be able to cover my child who is older than 21 on my plan? A: Yes. Most carriers offer coverage for adult children until their 25th birthday in most states, and beginning September 23, 2010, most carriers will cover adult children up until they reach at least their 26th birthday, as required by the new health care reform law. In some states, adult children can be covered by their parents’ current medical policy beyond their 26th birthday. Like all applicants for a new policy, the adult child’s health history would be reviewed by carriers to determine if they qualify for coverage. Q: My family member has a pre-existing condition and isn’t eligible for coverage right now. When will they be able to get coverage? A: We know that many people are eager to obtain coverage. The new law says that starting in 2014; health plans cannot have pre-existing condition limits and will be guaranteed. The new law also ends pre-existing condition limits
Q & A for dependent children under the age of 19 under certain plans sooner than 2014. When this goes into effect, insurance companies won’t be able to: • Deny coverage to a child because of a pre-existing condition • Deny payment for a child’s treatment because the treatment is related to a pre-existing condition These rules will apply to all types of health insurance, except for individual policies that are “grandfathered.” Not all of the rules and regulations have been released, so it’s difficult to understand the full impact of health care reform on any specific person’s coverage.
Small Business Tax Advantages Here at Med1 Life Insurance Brokers we know what it is like have a family and we also know what it is like to be a Texas business owner. So that is why we take an open ear consulting approach and listen to our clients. We build protective custom designed solutions for our clients in the Texas health and life insurance arena. Our area of specialty is in individual and group: Health, Life (Term and fixed index Universal Life, & Whole Life), Disability, Accident Protection, Long-term Care, Dental, Vision, and Fixed index Annuities. Med1 Life is an Insurance Brokerage working with industry leading insurance carriers. We specialize on designing and implementing customized Texas Family Individual health and life insurance packages to protect our Texas families in moments of uncertainty.Every Texas family insurance situation is different and unique so we work with our clients to help them choose the best insurance solution for their current situation.
Small Business Tax Advantages Med1 Life also works with small and medium size businesses in the development and implementation of Texas companies group benefits packages: We have been saving Texas businesses thousands of dollars a year with our Gemini/ Endeavor program. The Gemini/ Endeavor program is a Texas company's answer to post-health care insurance reform. The Gemini/ Endeavor program uses a section IRS 125 Cafeteria plan and a IRS 105 defined benefits plan to maximize an employer and employee's pre-taxed health care related deductions. The money that is freed up creates a benefit bank that is used to fund extra benefits such as: life, disability, critical illness, etc. This allows small and medium size businesses the ability to increase their company benefits package for free. By using this program, small and medium size organizations now are able to take part in the same type of healthcare tax savings that have been enjoyed by corporate America for decades.