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Group Insurance Analysts – December 2013 Newsletter

In this issue we will discuss more on health reform (The ACA), and Home/Auto insurance.

Health Reform (The Affordable Care Act) Updates

The end of the initial enrollment period for the ACA is nearing. As of today, the deadline for 1/1/14 effective dates is 12/23/2013. If you miss that cutoff, the next effective date will be for 2/1/14. Of course, this can change at any moment.


What About Your Insurance?

The following is what you can expect based on your individual situation:

  1. If you have a grandfathered  health insurance policy, you can keep that plan if you desire. If you qualify for a premium subsidy or find a new plan for 1/1/2014 that fits your needs, you can make that switch.
  2. If your plan is non grandfathered, it will expire either 1/1/2014 or your first renewal thereafter depending on the insurance company. All non grandfathered Kaiser and Rocky Mountain Health policies are set to expire 1/1/2014.
  3. If you either need or want to enroll in a new plan for 1/1/2014 and you do not qualify for a premium subsidy, also called the advanced premium tax credit (APTC), the enrollment process is similar to what it is today. The Medicaid rejection through Colorado Peak is not required, and we can sign you up for a new plan either on or off Exchange, whichever you prefer.
  4. If you are signing up for a new plan effective 1/1/2014 and qualify for a premium subsidy but you want to take that credit on your 2014 tax return instead of in advance, we can bypass the Colorado Peak Medicaid rejection process and enroll you in a plan through the Exchange that will allow you to claim the credit when your taxes are filed.
  5. If you are signing up for a new plan for 1/1/2014 with the advance premium tax credit, we will need to go through the Medicaid rejection process through Colorado Peak before we can enroll. This is an online process that can generate a rejection immediately or take up to 45 days for a case worker to review. Upon rejection from Medicaid, you will get a seven digit case number starting with 1B. We will need this code to proceed with the enrollment process through Connect for Health Colorado

Financial Disclosures

Just to clarify, the only situation in which you need to disclose your financial information is when you are applying for a premium subsidy, also called the advance income tax credit (APTC). If you are choosing to buy a policy either “off exchange”, “on exchange” with no APTC, or “on exchange” with a tax credit when you file your tax return, you can apply without going through the Medicaid denial process.

If you apply to get the premium subsidy in advance, you will need to provide financial information to Colorado Peak, then you will need to get a case number that starts with 1B, and a notice of Medicaid denial to proceed with the application. If you do not go through this process, you will not be eligible for the APTC.

Updates on Individual and Family (non group) Health Plans

It is very important to understand how and when your existing medical plan will be affected. If you have a grandfathered medical plan, you will be allowed to keep that plan. A grandfathered plan is one that became effective prior to 3/23/2010. If you want to cancel that plan and buy a new plan for 1/1/14, we can do that starting 10/1/13.
If your health plan is not grandfathered, the following will occur depending on which insurance company you are with and what rules they are implementing:

  1. If you are with Kaiser Permanente or Rocky Mountain Health plans, your existing non grandfathered policy will terminate on 1/1/2014. To continue coverage, you must elect a new plan for 1/1/2014 otherwise you will not be covered. This election can be made beginning 10/1/2014 and we can help you with this election whether or not your policy is purchased on or off the Exchange. However, if you qualify for a premium subsidy, the plan must be bought on the Exchange, also known as Connect for Health Colorado.
  2. If you have a policy with Cigna, you will be offered an early renewal option for 12/31/2013 which will allow you to stay on that plan until 12/31/2014. This would be an attractive option if you do not qualify for a premium subsidy or if the premiums for the new plans offered in 2014 are higher than your current premiums. If you do qualify for a subsidy or if your premium is lower in 2014, you can cancel your existing plan and enroll for a new plan beginning 10/1/2013. If you do not elect the early renewal option, your policy will expire 1/1/2014.
  3. If you are with Anthem Blue Cross & Blue Shield, you will be able to keep your policy until your renewal date in 2014, at which time it will cancel and you will need to elect a new plan. It has been indicated that they will also offer an early renewal option that will allow you to extend your plan until the end of 2014.
  4. If you have a plan with Humana, that plan will end on 1/1/14 unless you elect their early renewal option. If you make that election, you can keep your plan until 12/31/2014, otherwise you will either need to elect a new plan to maintain coverage.

We will need to look at several factors to help you determine whether it is more cost effective to keep your existing plan for as long as possible or if you should buy a new plan for 1/1/2014. Those factors include your household size and income, your current plan, and your premiums.  We have already starting the process of reaching out to you, but feel free to call us at any time to discuss.

Help With Premiums

Households with income less than 400 percent of the Federal Poverty Level (FPL) may qualify for premium assistance through an advanced premium tax credit when purchasing health insurance through the State Insurance Exchange, called Connect for Health Colorado. However, to qualify for assistance you cannot have access to other affordable health coverage such as Medicare, Medicaid, CHIP, or affordable employer based group coverage.
Under the Affordable Care Act (ACA), states must expand Medicaid eligibility to include non-disabled childless adults.  (Prior to the passage of ACA, states could only cover this population through a Medicaid waiver or through a program that was completely state-funded.)  There is, however, confusion about the income threshold at which this new population is Medicaid-eligible, with some sources citing 133 percent of the federal poverty level (FPL) and others citing 138 percent.

The language of ACA specifies that childless adults are Medicaid-eligible with “modified adjusted gross income” (MAGI) at or below 133 percent FPL.  ACA’s MAGI calculation is based on adjusted gross income (AGI) as defined in the Internal Revenue Code, Section 36B(d)(2).  However, Section 2002(a)(14)(I)(i) of ACA adds a five percentage point deduction from the FPL– one of several ways in which the AGI is “modified.”  With this five percent disregard, the Medicaid eligibility threshold is effectively 138 percent FPL.

Going forward, states should be sure to include childless adults up to 138 percent FPL when planning and modeling Medicaid expansions.  SHADAC’s Data Center allows the calculation of insurance coverage by characteristics related to health reform, including the 138 percent FPL income category

2013 Poverty Guidelines for the 48 Contiguous States and the District of Columbia

For families/households with more than 8 persons, add $4,020 for each additional person.
Some sources state that the new minimum Medicaid eligibility threshold is 133 percent FPL; other sources state it will be 138 percent. Both are correct. The text of the ACA says 133 percent, but the law also calls for a new methodology of calculating income, which will make the effective minimum threshold 138 percent. (Either way, remember that these are minimum thresholds; states can set eligibility thresholds higher, and many already have for certain populations, which means that more people qualify.)

Currently, the system for determining whether someone meets the eligibility threshold is complicated, and varies from state to state. It involves calculations of income and assets, as well as “disregards” of income and assets that vary for different populations. (Disregarding income or assets means not counting it for the purposes of determining eligibility.)

Under the ACA, the system for determining eligibility will be streamlined and unified across the states, and it will be tied to the Modified Adjusted Gross Income (MAGI) tax rules. This system will also be used to determine eligibility for exchange subsidies.

Now, instead of a variety of different income disregards, there will be one standard disregard for most populations: 5 percent. That means that a person’s income can be up 138 percent FPL, but since 5 percentage points of her income will be ignored, she will effectively meet the 133 percent threshold. The new MAGI system is also important in terms of what sources of income it counts and doesn’t count (importantly, it doesn’t count assets), and in how family size is determined.

Small Group Health Plans

Small employer health plans will be required to comply with the requirements of the ACA effective 1/1/2014 or their first renewal thereafter. If your health plan renews May 1, 2014 then you can retain that plan until then, unless you want to switch to an ACA compliant plan for 1/1/2014. Some of the insurance companies will offer early renewal options for December 1, 2013 to allow employers to keep that plan until 12/1/2014.

To determine whether you should keep your plan until renewal, early renew, or switch to a new, ACA compliant plan for 1/1/2014, we will need to consider several factors. First, are you getting the small employer tax credit. If you are and want to continue to get that tax credit, you will need to buy your plan through the new SHOP Exchange effective 1/1/2014. Enrollments for the SHOP Exchange will begin October 1, 2013 for a January 1, 2014 effective date and we will be able to assist you with that process. Other considerations will be what are your current premiums, your plan design(s), employer contribution, employee participation, and how busy you might be in the fourth quarter.

Most of our agents have begun to reach out to you already, but feel free to call or contact us whenever you are ready to discuss.

Medicare Annual Election Period

The Medicare Annual Election Period (AEP) is now over for 2014. However, there is still an SEP available until February 28, 2014 for anyone that was involuntarily cancelled off a plan for 1/1/2014. Also, the Medicare Annual Disenrollment period (ADP) from 1/1/4 through 2/14/2014 allows anyone on a Medicare Advantage plan to disenroll and go back to original Medicare and a stand alone Rx plan. It does not guarantee acceptance into a Medicare supplement.

Winterize Tips for Your Home

If you are at the Home:

  • Wrap insulation around water heater & pipes
  • Add a small amount of anti-freeze in both tank & bowl of each toilet
  • Consider purchasing a low temperature sensor & heat /freeze alarm monitor
  • Clean gutters to avoid clogging & prevent ice dams where water backs up, freezes & causes water to seep into your house

If you are Not at the Home:

  • Shut off water systems by turning off the pump or shutting the valve if on city water
  • Drain the pressure tank
  • Open all faucets
  • Break a union close to the valve so water will drain out clear to the shut-off valve
  • Drain pump & run a second or two to be sure all water is out of lines from the pump
  • Flush toilets & dip all water out of the flush tank or put in some anti-freeze
  • Be sure to drain flexible spray hoses in showers & sinks
  • Drain water heaters & softeners

Updates on Auto and Home Insurance

GIA Risk Management, LLC is considered to be one of the fastest growing, locally owned, independent P & C insurance agencies in Colorado. We do this by contracting with many different insurance companies so that we can offer our clients the choices and options they seek. Because we are not employed by one insurance company, we can truly represent the needs of our customers.

Insurance companies use many different criteria to determine rates, which is why rates can vary dramatically from one insurer to another. Some insurers have very low rates for those with exceptional credit, while other insurers might be better for teenage drivers. This is why it is so important to review and shop insurance coverage’s.

As you are probably aware already, the recent weather related events in Colorado and the rest of the United States is causing significant increases in property insurance for the first time in several years. Some large insurers are now refusing to write property insurance on a stand alone basis, but only as part of a package with an auto insurance policy. Other insurers are offering larger discounts for bundled policies, or putting restrictions on roof damage from wind and hail.

As weather related claims hit, most homeowners need to be aware that standard homeowner’s policies do not cover damage from flooding. Earthquakes are another standard exclusion. Flood insurance is a separate policy that can be purchased in addition to your homeowners insurance even if you are not in a flood plain. If you don’t have flood insurance and a severe rains storm floods your basement, that damage will not be covered. If you are interested in a quote for flood insurance, please let us know.

As independent brokers, we shop the market to help our customers find the right coverage at the best price. This is a value proposition that is difficult for a captive agent to match. We now quote the following insurance companies for our clients though a computer program that compares the rates and coverage:

  • Safeco ( A Liberty Mutual Company )
  • Progressive
  • Travelers
  • Hartford and Hartford AARP
  • Allied ( A Nationwide Insurance Company)
  • MetLife
  • GMAC
  • Electric Insurance ( A General Electric Company)
  • Pacific Specialty
  • ASI
  • And more, depending on the risk.

For a quote and/or review of your home and auto insurance, please click here. If you would like to run some online quotes on your own, please visit our web site self service center here.

We will keep you updated throughout 2013 as we continue the implementation of the ACA, and we are now assisting everyone with these changes.  If you have questions in the interim, please don’t hesitate to contact us at 303-423-0162 ext 100, or visit


Article contributed by Group Insurance Analysts.

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