IRS Issues Guidance on Health Insurance Premium Tax Credit - Clarification

The IRS issued a final regulations on when an employer-sponsored plan is considered "affordable" for an individual related to the employee for purposes of eligibility for a premium tax credit. Under Health Care Reform, employees may be eligible for a premium tax credit to purchase health insurance through the future health insurance exchanges if, among other reasons, the employer plan is deemed unaffordable.

The final regulations clarify that for taxable years beginning before January 1, 2015, an eligible employer-sponsored plan is affordable for related individuals if the portion of the annual premium the employee must pay for self-only coverage does not exceed 9.5% of the taxpayer's household income.

An employer plan will be affordable for family members if the cost of self-only coverage does not exceed 9.5% of the employee's household income. In other words, for purposes of whether family members are eligible for tax credits, the affordability of family coverage is not taken into account; all that matters is that the cost of self-only coverage is affordable to the employee

For purposes of applying the affordability exemption from the individual mandate in the case of related individuals, the required contribution is based on the premium the employee would pay for employer-sponsored family coverage.

For an employee eligible under an employer plan, affordability (for individual mandate exemption purposes) will be based on whether the cost of self-only coverage exceeds 8% of the employee's household income. For a related individual (such as a spouse or child), however, affordability for this purpose will be based on whether the cost of family coverage exceeds 8% of household income. Under these rules, members of an employee's family may qualify for an individual mandate exemption, even though the offer of affordable employer coverage to the employee would require the employee to enroll or risk paying a penalty.

These final regulations apply to taxable years ending after December 31, 2013.

For a copy of the final regulations, please click here.

This post originally appeared on February 5, 2013, on the Robert Slayton & Associates, Inc. blog. By Larry Grudzien, Attorney-At-Law

The HHS Secretary Visits Chicago

This week, U.S. Health and Human Services Secretary Kathleen Sebelius visited Chicago to speak about the Illinois Health Insurance Marketplace, a key provision of the Affordable Care Act.

Secretary Sebelius, accompanied by Governor Pat Quinn, announced on Wednesday that the Illinois Blueprint Application for a State-Partnership health exchange had been accepted by the federal government. The exchange will run as a federal-state partnership model until 2015, when the state may take over operations, depending on the State Legislature’s ability to pass a state exchange bill. Enrollment in the partnership exchange/marketplace opens in October, only eight months (229 days!) away.

Secretary Sebelius speaks to a full house at the Chicago Cultural Center

On Thursday, Sec. Sebelius spoke at the Chicago Cultural Center. Preceding her was Bechara Choucair, Commissioner of the Chicago Department of Public Health, who presented an overview of the Healthy Chicago program and its impact thus far. Sebelius delivered a call to action to those in attendance, citing the need for affordable, accessible health insurance for all as a crucial step in the national public health strategy. With only eight months before the state health marketplace is open for enrollment, and ten months before it is fully operational, promoting awareness of the health insurance exchange is the focus of HHS. 

Navigators, Assisters, and Counselors, Oh My!

By now we know that upwards of 30 million Americans will have new, more affordable health coverage options available to them by January 1, 2014. But what many don’t realize is how incredibly difficult it can be to understand and choose the right health insurance on your own.

The Wizard of Oz’s Dorothy had guides along the way, and the Affordable Care Act (ACA) provides some as well – hopefully, with fewer pitfalls. But not everyone can counsel people about health insurance. There are complex public and private systems to navigate, and most people who will likely get insurance in the new Health Insurance Exchanges, or Marketplaces, will be more racially diverse, less educated, and earn lower income than people in private insurance now. Most will have a high school education or less, and as many as one in four speak a language other than English at home. So it matters that the people who guide consumers along the path to coverage are trusted members of the community and understand their circumstances.

Luckily, the ACA provides different options for guides along yellow brick road.

Navigators are outlined in the ACA as helpers for people to enroll in coverage through the Exchange, and refer or assist with Medicaid enrollment. Navigators are funded through Exchanges, and regulations from the Department of Health and Human Services (HHS) are clear that anyone who gets payments from insurance companies cannot be a Navigator. Navigators also must meet cultural competency standards and go through training and certification. States running their own Exchanges are developing Navigator programs now and must fund these with state Exchange dollars. For Federal Exchanges and Partnership Exchanges, HHS has said that it will fund Navigators directly through an upcoming RFP process. Be on the lookout for this announcement in the next few weeks.

To add even more help on the ground, HHS recently outlined in regulations another program,Assisters (or, In-Person Assistance). Like Navigators, Assisters must meet training and conflict of interest standards. They could fill in gaps in areas that need more enrollment assistance, or provide outreach and education about the ACA’s new options. Funding for Assisters is a key difference from Navigators. States running Exchanges or opting for the Consumer Assistance Partnership can apply for funds for Assisters through their Exchange Establishment grants. A number of states are applying now for these funds. Unfortunately, Assisters currently are not an option for Federal Exchanges.

And when you thought there were enough new health-related terms, HHS regulations added yet another helper to enroll people, Certified Application Counselors. Every Exchange must have a Certified Application Counselor program, with similar training and privacy standards as Navigators and Assisters. A difference in this program is that there is no funding mechanism. It is unclear who will serve this role – although the regulation suggests it could be community-based organizations or health care providers. Stay tuned for further clarification on this new option.

But even these multiple types of help will not be enough to spread the word about the ACA. Helping people understand and choose the right health plan, especially given the amount of misinformation in the media and elsewhere, is going to be a huge task. Nevertheless, these resources in the ACA provide a foundation to start building greater understanding of health care options to get people into the right coverage.

This post originally appeared on Health Policy Hub's the Community Catalyst Blog. 

Written by Christine Barber, Senior Policy Analyst

Why Obamacare will ignite your startup life

This post originally appeared on Crain's Chicago Business.

Written by Coco Soodek

Obamacare is going to set you free to pursue your startup dreams. Why? Because finally you won't be chained to a big company for your health insurance.

If you want affordable, reliable health insurance in America, you have had to be over 65 so you can get Medicare, work for the government or work for a big company. That's because big companies, government and Medicare have enough people in their plans to improve the insurance companies' odds of making money. Small companies and solopreneurs don't, so their insurance rates are high or they can't get coverage at all.

As a result, business owners often don't have health insurance. Only 19 percent of business owners get insurance through their own companies. And 25 percent of small-business owners don't even have health insurance, according to the Kaiser Family Foundation.

The stakes of not having health insurance are catastrophic. You may not be able to get health care if you get sick or are in an accident. That means you or your loved one could die or suffer. If you do get care, the bills may drive you into bankruptcy — half of all personal bankruptcies result from huge medical bills. We're not talking people who live above their means. We're talking people who went to the doctor to stay alive until they cry uncle.

So, leaving your big employer to start your own business can be a life-or-death decision. If you have a spouse or kids, the decision could be downright stupid. So, you stay with your big company, you follow its rules and hope for good fortune from the layoff gods. It's a terrible, ugly, stupid, myopic system and it deserves to die an unpaid-for death.

Obamacare is coming. Imperfect, complicated, rough on midsize companies, sure. But it's the grace of God for your startup hopes. For the first time in American history, your health insurance is going to get unhitched from your oversized, shuffling, bureaucratic employer. You're going to be able to visit a virtual supermarket of health insurance plans and pick the plan you want, which probably won't cover less than 60 percent of your health costs. That supermarket of health insurance is going to pool you with thousands of others to improve the odds that the insurer will make money.

If you have a company of 25 employees or fewer, and you pay half of the premiums for your employees, you can deduct 35 to 50 percent of the premiums. If you make less than $92,000-ish for a family of four, you could get government help to buy your health insurance at the supermarket. Freeloaders on the health care system have to pay up, liberating the rest of us from paying for their emergencies and lowering costs. (If you're one of those freeloaders, you have it coming.) You never have to go back to work for someone just to get insurance.

Obamacare will be the difference that creates entrepreneurs out of thousands of people like you. Scholars have known for years that the lack of affordable, reliable or even available health insurance keeps people chained to their employers. In fact, when individual states create avenues for people to get affordable health insurance, the number of entrepreneurs increases. When New Jersey reformed its health insurance laws to create markets for individual insurance and guaranteed policy renewals and limited exclusions for pre-existing conditions, entrepreneurial activity soared. And so it will in the rest of the country. Because the United States is — by history and by nature — a land of shopkeepers, not shop workers. We dream, innovate, strike out, fail, try again and prosper. The health insurance market has incentivized people to live at the mercy of someone else's vision. Obamacare is going to tilt the market back to center.

Read more here. 
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Happy 2nd Birthday IHM!

Two years ago, on February 1st, 2011, Illinois Health Matters was created to be a source for straight-forward, factual info on the progress of health care reform in Illinois. Before we head into our 3rd year, here are some highlights from the past year:

Affordable Care Act (ACA) implementation moved forward:

• The Supreme Court upheld the ACA (after a long, tense wait!)
• President Obama won the 2012 election, meaning the ACA isn’t going away
• IL submitted a blueprint application for a Federal-State Partnership Health Insurance Exchange.
• Cook County established CountyCare, which mirrors the ACA’s optional Medicaid Expansion
• And, most recently: A bill for Medicaid Expansion was submitted in the IL House & Senate.

As a communication tool, Illinois Health Matters hit some major milestones:

We released our first interactive data tool last year—the Visualizing Reform map, which displays the impact of the ACA on communities in IL, and made a big impression on policymakers, advocacy groups and health professionals from all across the nation. It also placed second in the Civic Data Challenge!

In October, IHM participated in the Escape Fire movie premiere, hosted by our parent organization, Health & Disability Advocates. The premiere was a fundraising success, the movie was impactful and informative, and we had a great time seeing many of our Chicago-area supporters and collaborators.

IHM content has reached close to 20,000 people (many of whom use it on an ongoing basis) and this blog has reached almost 33,000 more. With 2014 as a pivotal year for the Affordable Care Act implementation, we have more exciting, groundbreaking and informative plans in store for the next 12 months.

In lieu of birthday gifts, please sign up for our monthly e-newsletter or connect with us via Twitter, Facebook or LinkedIN.

Illinois Health Matters Staff

Illinois Essential Health Benefits Benchmark Plan

The State of Illinois has selected its Essential Health Benefits benchmark plan - the Blue Cross Blue Shield of Illinois BlueAdvantage Entrepreneur plan.

This plan sets the bar for 10 categories of health care benefits (called "Essential Health Benefits" by the Affordable Care Act), and all non-grandfathered individual and small group health plans sold in Illinois must measure up to this plan in "actuarial value." Actuarial value is an estimate of the overall financial protection provided by a health plan. (For a great explanation of Actuarial Value, check out this recent Consumers' Union report).
 
The Blue Cross Blue Shield of Illinois BlueAdvantage Entrepreneur plan is the largest small group plan in Illinois, making it the default plan if Illinois failed to select a plan, as stated in the Affordable Care Act. According to this Illinois Department of Insurance report, the plan was the third leanest plan out of the 10 options considered. It is a PPO and it covers all of the services that Illinois law mandates, such as treatment for autism and infertility. But it doesn't cover extra services such as massage or acupuncture. The plan is supplemented by All Kids for pediatric dental and the Federal Vision Insurance Plan for children’s vision.
 
We have been following the establishment of an EHB benchmark in the state closely; you can read up on the EHB selection process in Illinois here and here.

Illinois Medicaid Redetermination -- What It is & What To Tell Your Clients

In 2012, the Illinois Legislature passed the Save Medicaid and Resources Together (SMART) Act. One portion of this Act aimed to address the backlog of Medicaid redeterminations that has accumulated over the years. From this Act came the 'Illinois Medicaid Redetermination Project' (ILRP), more informally known as "Enhanced Eligibility Verification" (EEV).

The goal of EEV is to determine the eligibility status of current Medicaid recipients and adjust or eliminate benefits accordingly. This will be the system that redetermines Medicaid eligibility annually for current and newly enrolled recipients. The circumstances under which individuals may be removed from Medicaid include death, relocation out of state, or excess income, amongst many others.

The State has contracted with MAXIMUS Health Services Inc. and developed a case review system that categorizes Medicaid cases as those most likely eligible and those potentially ineligible for medical services. To this end, MAXIMUS has begun its operation and as early as this week will be reaching out to current Medicaid recipients who they believe are no longer eligible for Medicaid benefits.

As early as this week, these enrollees will receive a letter in the mail from the Illinois Medicaid Redetermination Project requesting they submit the appropriate eligibility verification documents.

PLEASE NOTE:

• The envelope that the redetermination letter will arrive in is non-descript with nothing distinguishing it from junk mail. Advocates have made HFS aware of this issue and they have said they will be changing it.
• Current Medicaid enrollees will have only 10 business days to submit the proper eligibility verifying documents.

Once Medicaid enrollees submit the necessary verifying information, the file will be sent back to their case manager in the local office. At this time, the case manager will have 20 days to review the information provided and make a determination of eligibility. To be clear, MAXIMUS will not make final decisions related to Medicaid eligibility, but will collect all necessary and relevant information for the Department of Human Services who will use that to make a final decision.

If Medicaid enrollees fail to provide the proper documentation after receiving a letter of notice in the mail, their file will also be sent back to a case manager and their benefits likely eliminated. Although the state has implemented a new system to redetermine Medicaid eligibility, the appeal rights of applicants remains intact.

As Medicaid enrollees will only have 10 business days to submit the required verifying documentation, it's extremely important that advocates and providers provide support to their participants who receive Medicaid benefits that may need to submit such additional documents. With such a short turn-around time and in order to ensure continuity of care, it's imperative that Medicaid enrollees understand what they must provide and submit that information within the allotted time frame.

Contact information for the Illinois Medicaid Redetermination Project can be found below and summary of the program can be found here.

Illinois Medicaid Redetermination Program Hotline Information
Hours of Operation: Monday - Friday, 7:00 am - 9:00 pm, Central Time
Saturday, 8:00 am - 1:00 pm, Central Time
Phone Number: 1-855-HLTHYIL (1-855-458-4945)
TTY: 1-855-694-5458

Mailing Address: Illinois Medicaid Redetermination, PO Box 1242, Chicago, IL 60690-9992
FAX: 1-855-394-8066

Nadeen Israel & Molly McAndrew
Heartland Alliance for Human Needs & Human Rights