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Colonial Life specializes in voluntary benefits at the worksite.  They have group and Individual product lines that are fully integrated and use the same enrollment and service platforms so they can fit the need of any size broker or business.  Currently, Colonial has more than 75,000 business accounts and 3 million policyholders nationwide with annual sales of over $345 million.

Colonial offers programs for independent brokers, captive and non captive agencies and agents.   They can support sales hierarchy structures for agencies with down line producers and provide the training and support needed to get your voluntary benefits business off the ground fast. They will also provide a territory recruiter to help recruit new reps to your sales team and access to a regional instructor to help train reps in the field and classroom.

If you are interested in learning more about a career or broker opportunity, call Edward Crowe at 203-796-5403 or email Ed at Edward.Crowe@coloniallife.com

The major changes with Health Reform will be enacted on January 1, 2014 which will create change for small and large group employers.  While small groups are not mandated to offer coverage (There is not an inadequate or unaffordable coverage penalty for small groups) they will still see changes. Health plan renewals for 2014 will be increased 30% to 50% over the normal renewal making it very difficult for many employers to offer coverage.  The individual and small group (Called Shops) exchanges will also be available.   Ultimately, small groups will have five options for health care offerings in 2014.  All five options are reviewed in depth below. Read more

Small Groups will be eligible to buy insurance on the Exchange through a SHOPs (Small Business Health Options Programs) starting in January 1, 2014.   A small group is currently defined as a group with less than 50 equivalent full time eligible employees.  This number will change to 100 full time eligible equivalent employees on a state by state basis starting in 2014 to 2016.  Each state can choose when they will move to the 100 full time equivalent rule.  There is not any information on the small group exchange currently available (As of June 2013).  We have not been told which companies will be available, types of plans or premiums.  I will update this post when the criteria has been determined.

Small groups are not subject to any penalties for not offering care or failing to meet the minimum benefit and premium guidelines.   Employees may go and purchase plans through the individual Exchange regardless of if the small group is offering benefits or not.

In order to determine the number of full time employees,  seasonal and part time workers must also be taken into consideration.  Assume an employer has 20 full time employees and 40 part time employees, each of whom averages 90 hours of service per month.  Each of the 20 employees averaging 35 hours of service per week are counted as full time employees.  To determine the part time employees take the total hours of service of the part time employees (90) multiply by the total number of part timers and then divide by 120.  (90 x 40 divided by 120 =30)  This means that the employer has 30 extra full time employees for a total of 50 employees.

Small groups with less than 25 employees are currently eligible for a 35% premium tax credit.  The credit is 35% of the monthly premium the employer contributes toward the health insurance costs.  This number will move to 50% in 2014. In order to be eligible for the tax credit, groups must fall within the following guidelines.

• Fewer than 25 full time equivalent employees
• Average employee wages of under $50,000 annually
• Employer must cover at least 50% of the cost for health insurance.

Groups will only be eligible for the tax credit when they purchase insurance through the SHOP exchange. Groups are not eligible if they purchase a plan directly from an insurance carrier. (Insurance carriers will still be offering plans)  Only small business owners and small business employees will be able to purchase insurance through a SHOP plan.

Other Options –Small groups that want to continue offering standard group employee coverage can certainly do so.  The negative is that health reform is likely to drastically increase small group rates (outside of the SHOP) in 2014.  Estimates range from 20% to 50% on top of the normal renewal.  Such increases will make it difficult for many small group employers to continue offering standard small group insurance plans.  As a result, many small group employers will use the SHOP plans or have their employees simply buy on the individual exchange.

Alternate funding methods may also come in to play in 2014.  Small groups do have the option of experience rating their groups which would circumvent many of the health reform mandate rules and avoid the drastic rate increases as a result.

Health Reform (Affordable Care Act) will have a major impact on most Connecticut residents.  The mandatory changes will be taking  place in Connecticut on January 1st, 2014. How will health reform effect you?  It mostly depends on how you access health care. Those on Individual health plans will have major changes while people on large employer plans may not notice much change.

Health Exchange- This term is widely used when describing Health Reform.  The Health Exchange is a place where individuals (There will be a group/company exchange as well) can go to find a health care plan.  The plans in the exchange will all be similar from a benefits standpoint and companies will need to meet minimum benefit and pricing standards to have an offering.  There is a link below which provides more information on the Exchange.  There is very little information available on the group exchange.( Called SHOPs -Small Business Health Options Programs)  Small groups will be eligible for the premium credit through the group exchange only.

Each state has decided if they will administer the new program  on their own or use the Federal Government to do it.  The initial thought in congress was that most states would be running their own Exchange which turned out to not be the case  As it stands today, 50% of the states have opted to have the federal government run the Exchange.

We have broken down the changes into categories below with  a summary of changes for each group effected.  Click on the links to learn more about each section.  If you have additional questions,  you may call our office or send me an email any time.  Emails may go to Edward@Croweandassociates.com

CATEGORIES- CLICK BELOW FOR INFORMATION ON TOPICS

Health Reform for Individuals and Families Connecticut

Health Reform for Small Groups Connecticut

Health Reform for Large Groups Connecticut

Health Reform (Affordable Care Act) uses state and federal exchanges to organize health care offerings.   Each state had to choose to offer their own exchange or instead, utilize the federal governments exchange.  Connecticut decided to create their own as did about 50% of the states.

Start Date:  The Connecticut based exchange will be up and running on January 1, 2014.   The enrollment period will start on October 1, 2013 for a coverage start date of January 1, 2014.

Who Can Get A Plan?: Just about any Connecticut resident under the age of 65 can get a plan starting in January.  There are no exclusions for health conditions and pre existing conditions and not be taken into consideration.

What are the Benefits?: There will be 4 plan types offered in the exchange called Bronze, Silver, Gold and Platinum.   The Bronze has the lowest benefits and they increase by plan with the Platinum having the best benefits.  Basic benefits levels are 60% coverage Bronze, 70% Silver, 80% Gold and 90% Platinum.

Kaiser summarized the benefits in this manner:

• Households between 100 percent and 150 percent of the federal poverty level can get a plan that covers 94 percent of costs (more than a platinum-level plan would) with an out-of-pocket spending cap that’s one-third of the standard HSA level.
• Households between 150 percent and 200 percent of the federal poverty level can get a plan that covers 87 percent of costs (more than gold, less than platinum) with an out-of-pocket spending cap that’s one-third of the standard HSA level.
• Households between 200 percent and 250 percent of the federal poverty level can get a plan that covers 73 percent of costs (just above the silver level) with an out-of-pocket spending cap that’s one-half of the standard HSA level.
• Households between 250 percent and 300 percent of the federal poverty level can get a silver plan with an out-of-pocket spending cap that’s one-half of the standard HSA level.
• Households between 300 percent and 400 percent of the federal poverty level can get a silver plan with an out-of-pocket spending cap that’s two-thirds of the standard HSA level.

How Much Does It Cost?: The amount of premium that an individual or family pays is based off the federal poverty level.  The poverty level for an individual in 2012 was $11,170 and increases with each additional family member. The plan rates are reduced for those within 400% of the poverty level.  Those earning over 400% will not be eligible for a subsidy and will pay the full premium.  The subsidy is based on a percentage of income that can be paid.  NOTE:  There are examples at the bottom of this post giving examples of the actual monthly cost.

The Affordable Care Act brings major changes for large group employers in Connecticut. Employers that meet the definition of “Large Group” will need to meet thresholds for affordable care and adequate coverage.  Failure to meet the guidelines will result in penalties for the employer.  Employer groups will

In Connecticut, a large group is one with more than 50 eligible employees however, the definition of a small group will change some time between 2014 and 2016 as the number will be moved groups with 100 or more eligible employees. Full time, part time and seasonal employees count toward the total amount of employees eligible.   A portion of part time employees count toward the full time total.  This number can be determined by multiplying the average number of hours worked per month by the number of part time employees and then dividing by 120.  Example:  40 seasonal employees working an average of 90 hours a month divided by 120  40 x 90 divided by 120 = 30 extra full time employees.  Multiple companies with the same EIN number must also be combined.  If a there are multiple companies with under 50 employees under the same EIN, the employee count will be combined to determine groups size.

Seasonal employees’ hours are included when determining applicable large employer status.  An employer will not be a large group if it employed 50 or more full-time employees for no more than 120 days in he preceding calendar year and the employees causing it to reach or exceed the 50 full-time employee threshold were seasonal for more than 120 days.

Large groups will face a penalty if they have an inadequate or unaffordable offering.  The penalty will be $2,000 per employee per year, excluding the first 30 employees.    The penalty will only be triggered if an employee goes to the individual exchange and qualifies for a subsidy.   If an employee does not qualify for a subsidy on the exchange, the employer will not be subject to a penalty.  Spousal coverage is not a requirement for employers and the will not be penalized if a spouse is able to receive a premium tax credit on the exchange.

The changes listed above will not be applicable to groups with renewals in 2013.  For example, if a groups renews the group insurance plan in October of 2013, they will not be subject to the new guidelines until October 1, 2014 when the plan renews.  It is likely that many groups will look at a late year renewal as a means to buy more time and avoid the new guidelines for another 12 months.

INTRODUCTION

The Health Reform Act (Patient Protection and Affordable Care Act) will require most U.S. and legal residents to have health insurance. Those that do not carry it will be taxed by the government. The law also requires each state to have a health insurance exchange where people can obtain coverage.  People who do not get health insurance at work or cant afford work insurance, will be able to get it through the exchange. The exchanges will be an alternative to private health insurance although it is not clear how many companies if any will continue to offer private health insurance. Read more

The Heath Care reform bill has many components being rolled out over the next 2 years.  This includes the creation of state based health exchanges, 4 levels of health plans, a base health plan “Silver” and a number of other factions to be rolled out.  Click the link for a summary of all changes.

Health reform summary document

Small groups in Connecticut have access to a method which can lower their overall insurance premiums by up to 25% and can also provide them with a reimbursement of premium at the end of the year.  They can achieve these savings without reducing benefits.

The method is called small group alternate funding.  Most brokers and employers do not even realize such a mechanism is available to groups under 50 eligible employees in CT but it is.  To read more about this topic, click on our previous blog entry which gets into much greater detail.   CLICK HERE FOR BLOG ARTICLE

Small Group health insurance is an ever increasing cost for employer groups.  Most employers and brokers use similar strategies when it comes to managing rate increases.  They lower benefits and add cost share to employees which could include higher copays,  having employees pay some or all of the rate increase or utilizing a high deductible option.  At the end of the day, there is not a great way to manage rate increases but there are alternatives.  Small group alternate funding can create substantial savings for a group without any risk.

Small group alternative funding method.   Small group (1-50 eligible employees) are community rated which reduces options for saving money.  There is no question that the best way to lower a small groups cost is to use a small group fully insured experience rated strategy.  Most brokers and group are not aware that you can even do this but it is perfectly legal and there are carriers that do it.

With this funding arrangement, group rates are determined by the groups demographics.  The renewals are determined by loss ratio.  This arrangement is something that groups over 50 are familiar with but it is relatively new in the small group circle.  The best part about this set up is the savings it can generate.  A good candidate group for this set up can expect to lower rates by 20% to 25% with eqivalent benefits.   Groups are also eligible for premium reimbursements if they run well for the year.   If  a group does not run well, there is no obligation to renew and they are not on the hook for any of the additional claims.  They simply pay the scheduled monthly premium and if the renewal comes in high, they can move on to a different carrier.

Groups often experience much lower annual renewals with this funding method.  Since the renewal is based on the groups experience, it is not uncommon to have a low single digit renewal.

This strategy is vastly underutilized due to a the fact that many do not know about it and those that are aware of it often do not understand it fully.  Feel free to call or email our office to discuss further.