In the nearly 40 years that our practice has been serving the medical community, we have not experienced the kind of rate increases we have just seen through this last year and, regrettably, there doesn’t appear to be any abatement in site.
While we are to believe that we will enjoy better benefits at a decreased cost, we have already witnessed the exact opposite, Carriers have made drastic changes to their plans, particularly as it pertains to Out-of-Network coverage, forcing the consumer to essentially pay for an Out-of-Network PPO, Direct Access or POS plan that is tantamount to an HMO, due to the extraordinary expense associated with the new higher deductibles and co-insurances being imposed.
Additionally, the State of NJ has now passed further restrictions by no longer allowing the use of multiple carriers by mandating that employers maintain at least 75% participation with one carrier. Another valued freedom removed and competition reduced, resulting in obviously reduced selection and undoubtedly resulting in higher costs.
As if your practice wasn’t already overburdened with all of the rules we still haven’t learned, now comes:
PPACA (HR3590)—Patient Protection and Affordability Health Care Act which, among other things, requires several health notices to be provided to plan participants having COBRA implications. Here are just a few, along with some updates:
- Notice Regarding Adult Children 9/23/10-employers are now responsible to provide coverage for dependents up to Age 26, whether married or unmarried, no longer living with the parents, not a dependent on the parents tax return and/or no longer a student. However, NOT for the dependents spouse or children.
- Notice Material Plan Changes-regrettably, most all of the carriers have begun a systematic change of many of their current plans by offering “mapped” plans that supposedly mimic their now outdated plans. So much for, “if you like your current plan, you can keep it”.
- Notice Grandfathered Status-plans in effect prior to 3/23/10, are generally considered “grandfathered” for purposes of PPACA, Section 1251, but as mentioned above, the carriers have pre-empted many of their plans by “mapping” (closing many of their current plans). If your plan qualifies for “grandfathered” status, it is your obligation to provide notification by describing the benefits and provide contact information for questions and complaints.
- Small Business Health Care Tax Credit 1/1/10 35% to 50% in 2014-to help cover the cost of health, dental and/or vision insurance premiums for small businesses paying at least 50% of the premiums, with less than 25 full-time employees earning below a certain average wage level. Note: Non-Profits are eligible for a 25% credit in 2010, increasing to 35% in 2014.
- HIRE Act-provides for a New Hire, 6.2% Payroll Tax Credit, refer to Form W-11 for details.
- New Provisions-Ban on: existing conditions for children, rescission, annual and lifetime limits, discrimination based upon salary and the addition of coverage for preventative services.
- HRA’s-Health Reimbursement Arrangement-can now be used for dependents under age 26.
- FSA-Flex Savings Account Limitations 1/1/13-will limit employee salary reductions to $2,500.
- HSA Penalties-increased from 10% to 20% for distributions unrelated to qualified expenses.
- HSA Contributions-remain the same for 2011, Single $3,050, all other $6,150 with an additional $1,000 age 55+ catch-up and another $1,000 for an age 55 Spousal Account.
Note: 2010 Contributions still available until the taxpayers filing date, typically Corporations 3/15, others 4/15.
- HRA’s, HSA’s and FSA’s-can no longer be used to purchase OTC Rx without a prescription.
If you have any questions, or need further assistance, we would be privileged to assist, as we represent all of the carriers in the State of New Jersey.