Federal health reform requirements effective in 2014

Federal health reform became law in March 2010 followed by the issuing of numerous regulations on details on how the new legislation will all be implemented. These requirements apply to plans at the end of their current policy year in 2014. Some of the new requirements are highlighted here:

● The new Advance Premium Tax Credit (APTC) for those who qualified based on their income and who enrolled for coverage through Access Health CT. The way this works:
+ the person pays a certain amount for their share of the premium, which is based on a percent of their income.
+ The APTC is the amount after the persons share of the premium is subtracted from the actual premium which is based on their age.
+ The APTC amount is sent each month to the health insurance company the person selected. They then bill the person each month for their share.

● Penalty for not having medical insurance: Individuals who do not enroll in a qualified individual or employer plan will have to pay a penalty at the end of 2014. It equals 1% of their income. It will increase to 2.5% in a couple years.

● Plan design requirements: Medical insurance plans can no longer have a lifetime limit and the maximum out of pocket expenses now follow the health savings account annual limits.

● How premiums are determined: The premium for a 62 year old can be no more than three times the rate for a 22 year old. Rate bands have been eliminated. The premium now goes up for each age. Rates for males and females are the same when the age is the same. The rate for a child from birth to age 20 is now .635 of the age 21 rates for the plan.

● MedicAID expansion: Connecticut has been very generous in providing medical coverage for children through the state’s Husky program. Adults whose income was around 70% of the federal poverty level (FPL) were also eligible for MedicAID coverage. Health reform increased the eligibility for adults to 138% of FPL.

● Small Business Tax Credit: Certain small businesses can quality for this tax credit if the coverage is purchased through the employer part of Access Health CT. The credit increases to 50% of the premium for 2014. An employer can qualify for the maximum credit if they have 10 or fewer employees, excluding the owner, and average salary for these employees is $25,000 or lower. Employers with up to 25 employees and whose average salary is $50,000 or lower can qualify for a lesser credit. The amount does not slope down from 25k to 50k but falls off rapidly. Many employers will not qualify for the max credit because they do not offer medical insurance.

● Taxes on medical insurance: When an person receives a quote for an individual medical plan three taxes, included in the premium are shown. A Health Insurance tax, a tax to support Access Health CT, and a reinsurance tax.
We’ve been C

● New employee waiting period. The maximum waiting period is now 90 days.

Questions on these new requirements? Call my Google voice line (860) 451-9793 for a free consultation on how federal health reform will work here in Conn.

Looking at Access Health CT plans

Individuals can look at available plans on Connecticut's Health Insurance Marketplace by going to AccessHealthCT.com and following these steps:

● On the home page select the Individual icon and then enter basic info - County & age.

Note: In working within AccessHealthCT.com always use the Next button. Do not enter info and hit enter. The Next button saves your entry and goes to the next page.

● Once basic info has been entered a page with a summary of the Qualified Health Plans (QHP) will come up. This section has several pages of info. on the available plans. This info. can be sorted by the plans Premium, whether it is a Gold, Silver, or Bronze plan, the plan's Deductible, the QHP's Insurance Co., and the QHP's Quality rating. There is a button to compare and display all or a limited number of plans.

● Within the summaries there is a link to check doctors and other providers in the QHP companies network.

Call my Google voice line (860) 451-9793 for a free consultation on these QHPs and other questions about federal health reform here in Conn.

Why can’t everyone have lower cost medical insurance?

Someone recently raised this question so I am sharing some comments.

The direct answer – federal health reform legislation does not provide a reason why the income based levels for help were selected.

BTW - if you have questions about any part of what federal health reform means to us here in Conn. Post your question.

The premium support program: Section 1401 of the law, which is entitled – Refundable Tax Credit Providing Premium Assistance For Coverage Under A Qualified Health Plan, includes details on the program. Various comments have been made about this since the law was signed in March 2010 and provide some insights. A couple points:

● It’s purpose is to lower the number of uninsured individuals.

● Another focus was to help individuals whose income is above the level for MedicAID eligibility and thus are a big part of the uninsured. The contribution or share of the premium for those with a lower income is smaller than for a person with a higher income.

Note: Perhaps the answer to the question is in the speculation of some - if additional individuals had been included, the cost to the federal government would have been too high to get the law passed. Eligibility was thus limited to people whose income is at 400% of Federal Poverty Level (FPL) and lower. Anyway 400% equals about $46,000 for a single person and $94,200 for a family of four.

The new “help to pay for coverage” program starts January 1st and has two parts:

First - federal funds will be sent each month to the person’s health insurance company. Technically this payment is an Advance Premium Tax Credit, the IRS will record it in the person’s record, and they will include it in their annual 1040 filing.

Second - the amount a person, who qualifies for help, has to pay their health insurance company each month is based on a percentage of their annual income. Their payment amount is subtracted from their plan’s age based premium to determine the amount of their premium support.

The level of help changes with income: The amount individuals who qualify will pay, based on different ranges of household income, is shown in the list below. The FPL percent amount is found in Section 1401 of the law in a chart which shows income ranges “expressed as a percent of poverty”. I converted the percent of annual income amount into the monthly contribution for people with this income. The first amount is what a Single person at that income level will pay each month, next is the payment for a Couple, than for a Family of 3, and the fourth amount is for a Family of 4.

● When at 133% of FPL a person pays 3% or $37 - $50 - $63 - $77

● When at 150% of FPL a person pays 4% or $56 - $76 - $95 - $115

● When at 200% of FPL a person pays 6.3% or $117 - $159 - $200 - $242

● When at 250% of FPL a person pays 8.05% or $187 - $254 - $320 - $387

● When at 300% of FPL a person pays 9.5% or $265 - $359 - $453 - $547

● When at 400% of FPL a person also pays 9.5% or $354 - $479 - $605 - $730

One other point about federal health reform. Regretfully very little in the law addresses the real problem we face today. What is that? Health insurance is expense because the rapidly growing cost of medical treatments is very expensive.

It is also important to understand another big reason medical insurance is so expensive - lifestyle choices. For example, people who smoke have higher treatment costs and big costs result from the obesity problem we face today since many adults and children do not follow an effective diet. Costs from lifestyle choices use up 70% or more of each premium dollar.

A look at Access Health CT's role in federal health reform

Access Health CT is working, under federal health reform regulations toward becoming a new option to select and enroll in a medical insurance plan. Open Enrollment for Individuals and Small Employers in Conn begins October 1st for coverage effective January 1, 2014. Some information:

● The media campaign to increase awareness of this new option is now underway.

● Residents, as part of the enrollment process on the Individual part of Access Health CT site, may qualify for premium support. This support is based on income and is technically a tax credit. Information on the income range can be seen here.

● The page on the above link includes a calculator. By entering income information it will show what your share of the monthly premium will be.

● This pdf summary highlights 10 points about the Access Health CT program.

● Small businesses will be able to go to the Small Business Health Options Program or “SHOP” part of Access Health CT. Some information can be seen here.

● Certain small employers may be eligible for a tax credit to offset part of the expense of their medical benefit plan. In 2013 any small employer can apply for a tax credit of up to a 35%. This changes to 50% in 2014 and is only available if the firm selects a plan through the SHOP part of Access Health CT.
Note: The maximum credit is only be available if an employer has 10 or fewer employees, excluding the owner, and the average salary for these employees is $25,000 or less. The credit drops quickly and is not available to firms with 25 or more employees or if the employee average salary is $50,000 or higher.

Contact me - (860) 451-9793 - if questions about Access Health CT or the medical plans for Individuals or Small Employers, which are anticipated to be available.

John C Parker, RHU, LTCP
Niantic CT

Looking around at what health reform means in Connecticut

My note is to review and comment on some of the things we do know about the impact federal health reform will have here in Connecticut. There is a lot more for employers and individuals to learn, from not yet released regulations.

● The Health Insurance Marketplace here in CT, called an Exchange in the legislation, changed it's name to Access Health CT. Individuals can go to this site and review medical insurance plan options beginning in October and select coverage, which will be effective January 1, 2014.


● Federal health reform requires various market reforms in the Individual and Small group markets:
One is - all plans available, whether through Access Health CT or direct from a company, will be placed in one of four levels. Platinum, Gold, Silver, and Bronze. The coverage must meet 10 essential benefits. One of which is preventive dental coverage for children. Individual plans will no longer be subject to a review of medical history or pre-existing conditions and will include maternity coverage. These two requirements will result in the premium being higher.

Another - The premium for a person age 21 will have a factor of 1. The factor will increase year by year up to a factor of 3 for a person age 64. A couple on the same plan will each have a different premium if their age is different and there will no longer be male and female rates. Children from birth to age 20 will have a factor of .635. Today the spread from 20s up to 60s is about 5 to 1 which tells us the change to 3 to 1 means individuals in their 20s and 30s will see an increase in premium. Connecticut will allow the premium, for a person in the Individual market who smokes, to be increased up to 50%. The smoker factor will not be applied initially in the Small group market.


● Access Health CT approved the plan designs for the Individual plan market. The Silver level, the plan premium support is based on, has a $3,000 deductible. Preventive treatments are not applied to the deductible and do not have any cost to an individual. Expenses for various diagnostic office visits will not go toward the deductible but will have co-pays. Hospitalization will be applied to the deductible and will also have co-pays for the first few days of being admitted.


● Individuals whose income is up to 400% of the federal poverty level (FPL) can qualify for premium support if the buy a plan through Access Health CT. The maximum a person at 400% FPL, which is about $45,000 for a single person, will have to pay as their share of the premium is 9.5% of their W2 income.

● Individuals with a lower income will pay a lower percentage and those at about 250% of FPL will have lower plan co-pays and other improvements. The amount a person who qualifies for premium support pays is not connected to their age. Premium support will be sent from a federal agency to the medical insurance plan the individual selected. The company will then bill the individual, at home, the balance due (the 9.5% above) each month.