What Else Should Employers Know About Deductibles Resetting
Employees should approach their HR advisor to inquire about the health plan selections. This will help them determine whether or not they should go ahead and have their second knee replacement surgery before April.;
Employees might ask if the company will still be offering the same health plan that they currently have. If the answer is no, then the employees deductible will reset in April. If the answer is yes, then their deductible won’t reset until January 1.
To Make Health Insurance More Affordable
In order to make health insurance more affordable, the ACA included:
Premium tax credits
- Americans with household incomes below 400 percent of the federal poverty line qualify for premium tax credits which cap the cost of a qualifying households individual health insurance policy as a percentage of the households income.
- States have the option of expanding Medicaid eligibility to citizens with household incomes up to 138 percent of FPL.
- The individual mandate, which used to require all U.S. citizens to purchase health insurance or pay a tax penalty, was originally designed to diversify the risk pool with healthy participants in order to lower costs. This mandate has since been repealed, and today only certain states still enforce a penalty.
Hipaa And Creditable Coverage
In 1996, Congress passed the Health Insurance Portability and Accountability Act , a law that provides significant protection for you and your family members, particularly when you’re enrolling in a plan offered by an employer. These protections include:
- Limits on the use of pre-existing condition exclusions;in employer-sponsored health plans.
- Prevents employer-sponsored health plans from discriminating against you by denying you coverage or charging you more for coverage based on your or a family member’s health problems.
- Usually guarantees that if you purchase health insurance, you can renew your coverage regardless of any health conditions in your family.
Although HIPAA does not apply in all situations, the law made it easier for people to switch from one employer-sponsored health plan to another, regardless of pre-existing conditions.
And although HIPAA protections did not extend to private individual market coverage, some states had adopted regulations that allowed HIPAA-eligible individuals to purchase guaranteed issue coverage in the individual market .
But in most states, prior to 2014, if HIPAA-eligible individuals needed to buy their own health insurance and had pre-existing conditions, their only guaranteed-issue option was the state-run high-risk pool.
Although the Trump Administration and Republicans in Congress tried to repeal and replace the ACA in 2017, ACA repeal would not have affected HIPAA, which predates the ACA by nearly two decades.
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How Does Group Insurance Differ From Individual Insurance
You can purchase an individual insurance plan for yourself or one of your family members. All costs of this chosen plan are being paid by you directly. When it comes to group health benefits, your employer/company provides a plan that you and your immediate family members can partake in and pay only a small percentage as agreed on beforehand.
The pros can be considered cons, depending on your viewpoint:
- Your employer can pay some of your monthly premiums
- Your employer can help you choose an appropriate plan
- Your employer can provide plan documents
Some people want to be personally involved in all aspects of the health insurance plan they rely on, which is why all of these points might pose problems.
Note that you can always purchase an individual plan alongside your group plan.
Continue Learning About Health Insurance
Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.
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Early History Of Health Insurance
The first official documentation of insurance for health issues was in 1847 when the Massachusetts Health Insurance Company of Boston became the first company to offer insurance for illness. However, it was still several decades before the employer-based health insurance system that Americans are familiar with today began.
In the 1870s, professions that were considered more dangerous, such as the railroad fields and mining, began to offer onsite company doctors for their employees. These doctors were paid for with deductions from employees paychecks.
Through the late 19th century and early 20th century, if people had health insurance, they mostly paid for it individually. It was not until 1910 that Montgomery Ward and Company entered into one of the first group insurance contracts and 1912 was the first year that the National Convention of Insurance Commissioners developed the first models for laws that would begin to regulate the health insurance industry.
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The Future Of Employer Sponsored Healthcare Plans
Employer-based healthcare came out of a market-driven response by employers after World War II. It grew out of a strong economy, low unemployment rates, and intense competition for talent. Now, employer-based health benefits is the most common form of health coverage in America, with approximately 167 million people under 65 in 2017receiving employment based healthcare.
But what will happen now that the economy is wobbling due to Coronavirus and rising unemployment rates? As of September 2020, unemployment remains above 8%. While this is much improved from the 14.7% highthat was reached in April of 2020, its still higher than any time in recent memory.
The Families First Coronavirus Response Act , enacted March 18, and the Coronavirus Aid, Relief and Economic Security , enacted March 27, expanded coverage requirements for;all;health plans, including employer-sponsored group plans, whether self-insured or fully insured.
Most of the major health insurance carriers, including Aetna, Cigna, Humana and United HealthCare, as well as Blue Cross/Blue Shield in many states, announced they would go;beyond;the requirements of this new legislation and waive cost-sharing for hospitalizations related to COVID-19 treatment for fully insured plan members. The carriers gave self-funded plans for which they serve as third-party administrators the;option;to do the same.
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Todays Workforce Is Highly Mobile
Employees often move from job to job, changing employers after only a couple of years, rather than staying at the same company for decades. Younger workers are statistically twice as likely to leave their jobs in search of better offers, according to data from Visier. They make these changes for a variety of reasons advancement, compensation, cultural fit, and more. Health insurance considerations may not always be top of mind when navigating job changes, however their effects on employees are more than trivial.
When employees switch jobs mid-year, even if theyve already met their health insurance deductible on their previous employers plan, they must effectively start over under their new employers plan. There are other downstream effects too, like potential changes to in-network providers and coverage. These factors may create increased, unanticipated out-of-pocket responsibilities, and sometimes may impact peoples ability to access the care that they need.
In this respect, decoupling insurance from employment may make a lot of sense, so that job changes do not disrupt healthcare consumption or create unexpected expenses for consumers particularly these younger and highly mobile demographics.
No Medical Underwriting On Small Group Plans
Prior to 2014, insurers could base a small group’s premium on the group’s overall medical history;although some states limited or prohibited this practice. The ACA has prohibited health insurance carriers from using a small group’s medical history to determine premiums. Again, in most states, this applies to employers with 50 or fewer employees.
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The 40’s: World War Ii & The Dawn Of Employer
Once America became embroiled in World War II, there was great concern that rampant inflation would threaten America’s military effort and undermine its domestic economy. The concern was valid, as Americans had witnessed what inflation had done to war-torn Germany, devastating its economy and giving rise to Hitler’s regime.
To combat inflation, the 1942 Stabilization Act was passed. Designed to limit employers’ freedom to raise wages and thus to compete on the basis of pay for scarce workers, the actual result of the act was that employers began to offer health benefits as incentives instead.
Suddenly, employers were in the health insurance business. Because health benefits could be considered part of compensation but did not count as income, workers did not have to pay income tax or payroll taxes on those benefits.
Thus, by 1943, employers had an increased incentive to make health insurance arrangements for their workers, and the modern era of employer-sponsored health insurance began, a pivotal point in the History of Healthcare in America.
All Plans Include Maternity Coverage
Since 1978, employer-sponsored health plans in the US have been required to include maternity coverage if the employer had 15 or more employees and chose to offer health insurance. And in 18 states, regulations were in place prior to the ACA that required maternity coverage on small group plans even when the employer had fewer than 15 employees.
But maternity care is one of the ACA’s essential health benefits, which means it’s been included in all new individual and small-group plans sold since 2014. That filled in the gaps in states where very small group plans didn’t have to cover maternity care prior to 2014. There’s no employer mandate for employers with fewer than 50 employees. But if small groups choose to offer coverage to their employees, the plan will now include maternity care in every state.
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The Effects Of The Death Spiral On Small Employers
Heres how the death spiral workswhen an employees cost to participate in the employer plan gets too expensive, the healthiest employees begin to drop off the employer plan in favor of more affordable individual policies. This causes the remaining small employer risk pool to become sicker, resulting in higher insurance premiums on renewal the following year.
Then, the process repeats. Again, the employer reduces benefits to maintain costs, more healthy employees drop off, and the rate goes up the following year.
This death spiral perpetuates until the small business either: cancels the plan; or gets canceled by the insurer because they cant meet the minimum contribution or participation requirements set by the insurer.
At Some Financial Institutions
Monthly payments may be made free of charge, by the due date, at some financial institutions in Ontario. You should confirm with your financial institution whether it will accept monthly payments. Employers will need the Instalment Statement to make the payment. Employers should retain the top portion, date stamped by their financial institution, as proof of payment.
NoteAnnual, final and special returns are not accepted at financial institutions.
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Accidents Of History Created Us Health System
Workers pack bullets into machine gun belts in 1942. Factories like the one these women worked for used fringe benefits, including health insurance plans, to lure new employees in response to increased demand for goods during World War II. APhide caption
Workers pack bullets into machine gun belts in 1942. Factories like the one these women worked for used fringe benefits, including health insurance plans, to lure new employees in response to increased demand for goods during World War II.
If you want to understand how to fix today’s health insurance system, you’d be smart to look first at how it was born. How did Americans end up with a system in which employers pay for our health insurance? After all, they don’t pay for our groceries or our gas.
It turns out there never was any central logic at work. The evolution of the American health care system began in the 1920s, when choices boiled down to which crazy cure you preferred.
Dr. John Brinkley, for instance, was a huge hit in American radio with his health advice shows. For whatever problem folks had, Brinkley had one fabulous solution: transplant a goat gland into your body. He pitched it as being perfect for everything from dementia to impotence to flatulence. But if, somehow, a goat gland didn’t cure your ills, you could always use Bonnore’s Electro Magnetic Bathing Fluid or Clark Stanley’s Snake Oil Liniment.
The Social Safety Net
The social safety net refers to those providers that organize and deliver a significant level of health care and other needed services to the uninsured, Medicaid, and other vulnerable patients. This is important given that the uninsured rate for Americans is still high after the advent of the Affordable Care Act, with a rate of 10.9%, or 28.9 million people in 2019. Not only is this because the ACA does not address gaps for undocumented or homeless populations, but higher insurance premiums, political factors, failure to expand Medicaid in some states, and ineligibility for financial assistance for coverage are just some of the reasons that the social safety net is required for the uninsured. Most people who are uninsured are non-elderly adults in working families, low income families, and minorities. Social safety net hospitals primarily provide services to these populations of uninsured. For example, California’s Public Health Care Systems are only 6% of the hospitals in the state, yet provide care for 38% of all hospital care of uninsured in California- 123,000 of which are homeless, and 3.6 million of which live below the federal poverty line.
A study at Johns Hopkins Hospital found that heart transplant complications occurred most often amongst the uninsured, and that patients who had private health plans fared better than those covered by Medicaid or Medicare.
Repeal of the Individual Mandate
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The Birth Of Employer
During World War II, the federal government was wary of post-war inflation. The administration wanted to avoid the hyperinflation Germany experienced after World War I, so they instituted wage and price controls to manage the economy.
However, these wage controls didnt sit well with many labor groups, and they threatened to go on strike. In response, the War Labor Board exempted employer-paid health benefits from wage controls and income tax.
This historical accident created a tax advantage that drove enormous demand for employer-provided health insurance plans over the previously more-common individual health insurance. Employers received a 100% tax deduction while the benefits employees received were exempt from federal, state, and city taxation.
Private Health Care Coverage
Private health insurance may be purchased on a group basis or purchased by individual consumers. Most Americans with private health insurance receive it through an employer-sponsored program. According to the United States Census Bureau, some 60% of Americans are covered through an employer, while about 9% purchase health insurance directly. Private insurance was billed for 12.2 million inpatient hospital stays in 2011, incurring approximately 29% of the total aggregate inpatient hospital costs in the United States.
The US has a joint federal and state system for regulating insurance, with the federal government ceding primary responsibility to the states under the McCarran-Ferguson Act. States regulate the content of health insurance policies and often require coverage of specific types of medical services or health care providers. State mandates generally do not apply to the health plans offered by large employers, because of the preemption clause of the Employee Retirement Income Security Act.
As of 2018, there were 953 health insurance companies in the United States, although the top 10 account for about 53% of revenue and the top 100 account for 95% of revenue.:70
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Benefits Of A Group Health Insurance Plan
The primary advantage of a group plan is that it spreads risk across a pool of insured individuals. This benefits the group members by keeping premiums low, and insurers can better manage risk when they have a clearer idea of who they are covering. Insurers can exert even greater control over costs through health maintenance organizations , in which providers contract with insurers to provide care to members.
The HMO model tends to keep costs low, at the cost of restrictions on the flexibility of care afforded to individuals. Preferred provider organizations offer the patient a greater choice of doctors and easier access to specialists but tend to charge higher premiums than HMOs.
Employer Health Tax Overview
The employer health tax is an annual tax on an employer’s B.C. remuneration paid to employees and former employees in a calendar year beginning on January 1, 2019.
Find out how the employer health tax applies to:
Note: The employer health tax is separate and distinct from remitting source deductions or MSP premiums.;
B.C. increased employment incentive
Find out about the B.C. increased employment incentive, a tax credit for B.C. employers who create new jobs for B.C. workers or increase the payroll for existing low- or medium-income employees in the last quarter ending December 31, 2020.
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The Truth About Who The Employer Mandate Affects
96% of all firms in the United States or 5.8 million out of 6 million total firms have under 50 employees, and will not be penalized for choosing not to provide health coverage to their employees. 96% of firms with 50 more full-time employees already offered coverage for full-time workers before the ACA. Less than .2% of;small businesses; will actually have to provide insurance;to full-time employees or pay the shared responsibility fee due to ObamaCare. The caveat, of course, is that some of those companies are some of Americas largest employers, and thus we are talking millions of folks getting covered through the mandate.
More than half of all Americans have health coverage through an employer, including nearly two-thirds of the adult workers who are too young to qualify for Medicare.