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Don’t Like Your Plan? You May Have to Keep It

Written by dreilly. Posted in Blog, health care reform, PPACA, premium costs

The President said “if you like your health plan, then you can keep it.  We heard it over and over during the health reform debate.  More recently we’ve heard it over and over again, only now it’s to point out the inaccuracy of that statement. 

Millions of individual policies are set to terminate on January 1st because they do not meet the new requirements established by the Affordable Care Act.  Millions more face the same as small businesses also learn their policies are no longer available.  We all now know the statement was false.  You really can’t keep your health plan if you like it. 

What we also now know is that millions and millions of people are forced to select new plans, not to mention the millions of uninsured the ACA is supposed to newly enroll.  Additionally, higher costs associated with the newly qualified small business plans will shift a large percentage of small business policies to the individual market over as we proceed through 2014. 

All of these members will select a new plan.  And many will select plans they don’t like.  Some will make hasty decisions due to the shortened open enrollment window created by the website difficulties.  Many won’t understand the meaning of higher deductibles and other out of pocket expenses.  Many won’t realize their access to doctors may be limited.  Many will find higher pharmacy costs.   

So that begs the question.  What if you don’t like your plan?  The ACA creates an annual open enrollment for individual policies beginning in November and ending in December of each year.  Enrollment outside this annual window is not allowed without a qualifying life status change.   This means if you decide that you don’t like your plan, then you’ll just have to keep it, at least until the next open enrollment period. 


Smartphone to be Taxed as Medical Device?

Written by dreilly. Posted in Blog, health care reform, PPACA, premium costs


ObamaCare imposed a tax on medical device manufacturers.  Items like wheelchairs, crutches, and leg braces are included.   So are things like tongue depressors, syringes, and latex gloves.  The tax, at 2.3%, increases the cost of just about every medical item you might see in a doctor’s office or emergency room, including…… your smartphone? 

That’s right.  The Food and Drug Administration is considering whether to designate smartphones, tablets, and apps as medical devices subject to the new tax!  Millions of us use apps to measure calories, track weight loss, stick to drug regimens, monitor diabetes, etc.  We might soon pay the price. 

So, should the use of an app determine whether a smartphone or tablet is subject to the 2.3% medical device tax?  Well, that’s exactly what the Committee on Energy and Commerce would like to know.  They’ve sent a letter to the FDA and requested a response by March 15th.


5 Apps to Get Back on Track

Written by April Ewaski. Posted in Blog, Health

ripe red apple with green leaf isolated on white

You’ve already called it quits with your New Year’s resolution, haven’t you?  What was it again?  Lose weight, stop smoking, get active?   Or did you forget you made one?  Well why wait until next year to try again when you can get back on track today? 

Here are 5 apps that can help you get back on track. 

  1. NCI QuitPal     This free app is designed to help you quit smoking. Once you set your quit date, you can track your daily progress.  The app includes tips, health facts and support hotlines. It even tracks how much money you are saving.
  2. MyFitnessPal     With this free app you are able to monitor your calorie intake, set goals and track your weight.  Simply input your current weight, goal weight, and age to calculate what your daily calorie intake should be.  You can even connect with other MyFitnessPal app-users for peer encouragement.
  3. Couch to 5k    Have you ever wanted to run a 5k?  This app is designed to help new runners avoid injury by doing too much, too soon. It starts with alternating walking with jogging until your endurance can handle jogging for a sustained period of time.  If you are looking to find 5ks in your area, this app can do that too.
  4. Fooducate     While you are browsing the shelves in the grocery store you can scan items using the camera on your smart phone to find healthier food options. Each product is automatically graded (A-, B+, C, etc…) by an algorithm based on its nutrition facts and ingredient list. For example, my Trader Joe’s Spring Onion Rice Noodle Bowl just received a C- because it contains too much salt.  The app recommends 10 healthier alternatives.
  5. Nike Training Club     With over 85 different workouts, the Nike Training Club app motivates you to get maximum results.  You choose the level of difficulty for each workout along with getting lean, toned, strong or focused.  You can set your music in the app and the trainer voiceover will automatically adjust the volume to provide your instruction.  Then back to your music.  There are also video workouts to pause at your convenience.

Many people make health related resolutions but most fail within just a month or two, only to make the same resolution again next year.  So why not do things different this year?  Taking steps to improve your health now is not only good for your heart and soul, but it can reduce your medical costs.  

So resolve to start using apps like these and you’ll be able to choose a different resolution next year.


Rates to Increase for Young People, For All

Written by dreilly. Posted in Blog, health care reform, premium costs

Warning over the weekend from the National Association of Health Underwriters……

“Rates could rise significantly for small employers and younger individuals in the individual and small group markets. An Oliver Wyman study shows that rates for young participants in the individual market would increase 45% and a survey of insurers conducted by the American Action Forum shows that rates could go up for young, healthy individuals by 189%.”

The reason?  Recently published rules established by the Department of Health and Human Services limit the ability of insurance policies to charge younger members lower costs than older members. 

Under current rules, in many cases, the oldest policy-holder can be charged as much as 5 times as much the youngest policy-holder.  Effective in 2014 the new rule will limit the difference to 3 times.  This means younger members will see a significant increase to rates as the outer limits of the rate tables squeeze inward.  

With this in mind it makes sense that older members should see lower rates, but this may not necessarily materialize.  As rate shock sets in for millions of young, statistically healthy, policy-holders in 2014, it’s expected many will forego the more expensive coverage and opt instead to pay the much-lower $95 annual tax penalty.

As this occurs, the variety of State-based risk pools will see a demographic shift to an older, statistically more-unhealthy population.  This will lead to higher claim costs relative to premium dollars received, so naturally rates must rise to keep pace.

Fortunately this rate shock should be short term as the market will eventually adjust to higher costs.   Then we can get back to the normal significant increases.


IRS: Family Health Plan Cost $20K in 2016!

Written by dreilly. Posted in Blog, health care reform, PPACA, premium costs

A recently released IRS final regulation makes an assumption that the average cost for a family health insurance plan in 2016 under ObamaCare will be $20,000.  And that’s for the lowest plan benefit!   

Beginning in 2014, the individual mandate, upheld by the Supreme Court last summer, requires U.S. citizens to either carry qualified health coverage or pay a tax.  Qualified plans are established as metal options, with a bronze design offering the lowest benefit availability and platinum offering the highest.  Silver and gold fall incrementally in between. 

In an effort to help educate consumers about the potential for tax penalty under the law the regulation provides several situational examples.   Making the assumption “The annual national average bronze plan premium for a family of 5 is $20,000,” IRS goes on to explain how that same family of five (2 adults, 3 children) with household income of $120,000 would face an annual tax penalty of $2,400.  

For the uninsured, a new $20,000 health plan or a $2,400 tax….what’s a family to do? 

For those of us who are insured….The Kaiser Family Foundation showed family premiums topped $15,000 a year in 2011.  IRS now projects $5,000 more, or 25%, by 2016.  So what happened to the ObamaCare promise of  “a health care plan that would save the average family$2,500 on their premiums?”


Feds to Delay Employer PPACA Notice

Written by dreilly. Posted in Blog, compliance, employee communications, health care reform, PPACA

The Patient Protection and Affordable Care Act (PPACA) requires employers to provide notice to employees about the existence of State-based insurance exchanges.  The purpose of the notice is to provide employees necessary information to understand the availability of new health plan options and to help employees compare those options against costs and benefits available through the employment-based coverage.   PPACA requires employers to provide this notice by March 1, 2013 or, you guessed it, face potential penalties!  So what are employers to provide?

Well, we don’t quite know.  To date, neither the federal government nor the state exchanges have provided guidance regarding the layout or content of the notice.  As with several other areas of reform implementation the reality of delays in the regulatory process trump the stated deadlines.  With no guidance employers have nothing to provide. 

Fortunately, it is expected the federal government will delay the notice requirement, and employers will escape the looming deadline, at least for the time being.  A new date has not yet been issued, but it is widely anticipated the feds will enforce a new deadline in the Fall, closer to the October 1, 2013 kick-off date for open enrollment in the exchanges.   Employers should watch for an announcement soon.


Child Health Insurance Open Enrollment

Written by dreilly. Posted in Blog, education, premium costs


January 1, 2013 marks the beginning of an important open enrollment period for children’s health insurance policies in Maryland.

During the month of January two insurance carriers, CareFirst Blue Cross Blue Shield and Kaiser Permanente of the Mid-Atlantic, will accept applications for children under the age of 19.  This is one of two scheduled open enrollments that allow application for coverage in 2013.  The other occurs in July.  New policies for children are unavailable at any other time, at least until health reform changes teh rules in 2014. 

Policies are available on a guaranteed issue basis without exclusion for pre-existing conditions.  The effective date for those who apply in January is February 1st.  The effective date for those who apply in July is August 1st.    

Health insurance is often provided through employer based coverage, and employers typically subsidize employee premiums.  But as healthcare costs continue to rise, trends show employer subsidies for family and dependent coverage continue to decline. 

If you have family coverage through your employer you may want to look at the cost to provide separate coverage for your children.  Often the total premium of separate policies is lower than that of one family policy offered at work.  Here are the reasons.  Fewer employers subsidize family premiums and employer plans are usually rated based upon the demographics of the group participants, where employee ages can have a large impact.  Rating for child policies are based on the child’s age, which is lower age than the ages of employees in an employer plan.  This means child policies are almost always lower cost.

The same strategy can be applied to spouse plans too, but the rate differences amay not be as attractive, and medical underwriting applies for adults.  

Whether separating a child or spouse policy will lower your monthly cost depends upon the level of employer subsidy.  It’s easy to determine however.  Just bookmark this page and run the rate sets for Maryland’s available child plans after January 1stRates for spouse plans are available now.  It’s free and only takes a minute.


5 Taxes to Increase Health Premiums

Written by dreilly. Posted in Blog, education, health care reform, PPACA, premium costs

You might think the goal of health reform is to make healthcare more affordable.  The bill after all is called the Patient Protection and Affordable Care Act.  

Well the truth is this.  Affordability is a key component.  But sadly for many of us who already have health insurance, we won’t reap the benefit of lower costs.  Premiums will rise for many of us to offset the massive costs of federal subsidies designed to help the uninsured, as well as many currently insured, pay for coverage.   But subsidies must be paid for. 

Back in 2009 when the politic debate raged over the legislation, Congress and the Administration realized the public would never support sweeping taxes on individuals to finance the bill.  So instead they raised taxes on the large healthcare corporations that, they argued, could more easily absorb the costs.  

Well, let’s take a look at a few financing mechanisms that begin between in 2013 and 2014 and consider how these requirements will assist in the goal of affordability.   

1)      Big Pharma will be required to kick in between $2.3 to $4.8 billion from the profits they receive from selling brand name prescriptions.  Let us not forget that U.S. pharmacy companies reap the benefit of U.S. laws that allow them to sell the same drugs to U.S. citizens at costs far above the costs they sell to citizens of other countries.  One can certainly argue they should pay the price for those protections.  However, the simple truth is that higher taxes on pharmaceuticals results in higher costs to health insurance carriers that pay claims.  Premiums will rise to cover.

2)      Medical device manufacturers will be charged a new 2.3% tax on the products they make.  So add 2.3% to the cost for things like crutches, braces, and titanium joint replacements, also items like tongue depressors and latex gloves.  Premiums will rise to cover.

3)      Health insurance companies will be required to pay a new Comparative Effectiveness Research Fee.  This is a relatively inexpensive fee, first payable as of July 2013 that is designed to fund studies to determine which types of procedures and treatments perform better than others.  Insurance carriers will pay just one dollar per participant per year to start.  The fee increases to two dollars per participant in year two and then indexes to medical inflation after that.  The fee is set to expire in 2019.  This of course assumes that a tax intended to end actually ends.  Although relatively inexpensive, it adds cost.  Premiums will rise to cover.

4)      Health insurance companies will be required to pay a new health insurance industry fee.  Fees are estimated to be between 2 to 2.5% of premiums beginning in 2014, rising to 3 to 4% of premiums in later years.   Premiums will rise to cover.

5)      Health insurance companies will be required to pay a reinsurance assessment fee.  This is which is estimated to cost between $60 to $90 per participant per year in 2014, $40 to $60 in 2015, and $25-$35 in 2016.  Premiums will rise to cover.   

Affordability in the Affordable Care Act is going to be tough to achieve.  We’ll have to hope for patient protection.


IRS Changes HSA Eligibility

Written by dreilly. Posted in Blog, compliance, education

The IRS has changed the eligibility rules for health savings accounts (HSAs).  Effective January 1, 2013, the minimum health plan deductible rises from $1,200 per person to $1,250 per person, or for families from $2,400 to $2,500. 

This means that to continue contributing to an HSA you must have a health plan with a deductible at least equal to or above the new minimum.   Those who maintain a deductible below the new minimum will no longer be able to contribute to an HSA and will therefore lose the tax advantages associated with future savings. 

Health plans have been notifying plan participants for several months of this pending change.   A variety of notices have been released from a variety of insurance carriers and administrative vendors, much to the confusion of plan participants.  Here are three important clarifications for HSA participants to know.

1)      As an HSA holder you do not lose the value of your account regardless as to whether you change your health plan deductible.  Your HSA balance is separate from your insurance plan and remains yours to save or spend as you wish on future medical expenses.  Remember, you own and control your own savings account. 

2)      The higher deductible requirement applies to new plans or plans that renew on or after January 1, 2013.  It also applies to plans that have deductibles that start over on the calendar year beginning January 1st.  If your deductible starts over on January 1st, then you must select a health plan with a deductible equal to, or higher than, $1,250.  If you do not, then you may no longer contribute to your HSA.  Once again, your balance remains your to save or spend down.

3)      Many participants have plans with deductibles that do not start over on january 1st.  Instead the deductible may start over at a later date in 2013.  For example, consider an employer plan that began on July 1, 2012 that runs through June 30, 2013.  Even with a lower$1,200 deductible, participants in this plan could continue to fund an HSA past the January 1, 2013 date through the end of the plan year up to May 31st.  A mid-year plan need not immediately increase the deductible on January 1st for participants to maintain HSA eligibility through the end of the plan year.   However, in order to maintain the ability to contribute to an HSA after the end of the current plan year, the plan would have to increase the deductible to meet the new minimum requirements.

Also of note, in addition to the deductible changes, the IRS has increased the maximum HSA contributions for calendar year 2013.  Beginning January 1st, eligible single HSA holders may contribute a maximum of $3,250 per year.  This is an increase from $3,100 in 2012.  For families the maximum contribution increases from $6,250 to $6,450.  Those who are over the age of 55 may contribute an additional $1,000.


'We rely on the recommendations of Reilly Benefits to provide plan options for our employees in a way that controls our costs and we feel great relief knowing that they keep us abreast of health care legislation and other issues that affect the managemnent of our plans.'

Regina Anderson
Vice President
Dennis Anderson Construction
'The commitment Reilly Benefits makes to our company to ensure our benefits and claims are handled promptly and correctly goes beyond that of any agency I have seen in my 20 years of working with insurance brokers.'

Karen Siebert, CFO
Great Mills Trading Post
'Our experience with Reilly Benefits has been very positive. The courteous and friendly staff has taken care of our every need. Their knowledge and dedication have afforded us the opportunity to thoroughly explain the benefits and importance of insurance coverage to our employees. I would highly recommend this organization to any individual or business for all types of insurance or tax planning.'

Dottie Wyatt, Controller
Atlantic Cycle & Power
'The commitment Reilly Benefits makes to our company to ensure our benefits and claims are handled promptly and correctly goes beyond that of any agency I have seen in my 20 years of working with insurance brokers.'

Karen Siebert, CFO
Great Mills Trading Post

'Our experience with Reilly Benefits has been very positive. The courteous and friendly staff has taken care of our every need. Their knowledge and dedication have afforded us the opportunity to thoroughly explain the benefits and importance of insurance coverage to our employees. I would highly recommend this organization to any individual or business for all types of insurance or tax planning.'

Dottie Wyatt, Controller
Atlantic Cycle & Power


Reilly Benefits, Inc. works with employers in a wide variety of industries. This allows us to understand the uniqueness of specific benchmarks within certain industries and among different market sizes.

Our ability to help employers compare and contrast a benefit plan to these benchmarks provides our clients an advantage in the ultimate goal to attract and retain quality employees.

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5419 Deale-Churchton Rd. Churchton, Md. 20733

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