10-1-09

WHAT IS GOING ON WITH THIS GOVERN

HCC Healthcare Newsletter Health Reform Impact/Medicare-Eligible Employees/New HSA Limits In This Issue Impact of Health Reform Medicare Eligible Employees 2010 HSA Contribution Maximums PHCCare Plus Brochure Click on the link above to download the PHCCare Plus Health Plan Brochure Quick Links PHCCare Website Quote Request Form Participating PPO Networks PHCC National Website NEW MEDICAL PROGRAMS! Don't have enough employees to qualify for a group health plan? Have Part-Time Employees or 1099 Contractors that are not eligible for your group health plan? Contact the PHCC Benefit Office to learn more about individual/family medical plans for these situations. CLICK HERE to learn more or to get an instant quote for individual and family medical coverage. Issue: #6 October 2009 Welcome to the October 2009 Edition of the PHCC Quarterly Healthcare Newsletter. In this edition, learn more about the potential impact on your business of the health reform legislation proposed by Senator Max Baucus (the most likely bill to be passed). In addition, learn more about how Medicare-eligible employees may impact your benefit costs, as well as an update of new federal limits and deductions for those with Health Savings Account (HSA) contributions. For those PHCC members with November, December, and January health plan renewal dates, now is the time to begin evaluating alternative plan quotes. Make sure you obtain a quote for coverage through the non-profit PHCCare Plus Health Plan --- many PHCC members are SAVING 10%-15% compared to rates they were paying through commercial health plans. Contact us now at (866) 641-8982 for more information or a quote form. Likely Impact of Federal Health Reform You have likely heard much about President Obama's signature domestic initiative - reforming the American healthcare system. There are several different proposals being circulated in both the U. S. House of Representatives and the U.S. Senate. The bill most likely to be passed was drafted by the Senate Finance Committee, chaired by Max Baucus (D-MT). While this bill has a long way to go before it is voted upon, there are several provisions that both Republicans and Democrats agree upon and therefore will likely survive to the finished product: 1. An individual mandate of health coverage. Most agree there needs to be a requirement that every American participate in the healthcare system by obtaining health coverage, either through an employer plan, a government program, or by purchasing coverage on their own. This will only work if there are subsidies to help the poor and near poor pay for coverage, and there are changes to the individual insurance marketplace to offer guaranteed coverage for those with pre-existing illnesses. The bill includes steep financial penalties for individuals and families that do not obtain health coverage. 2. Guaranteed health insurance. As noted above, for an individual mandate to work the health insurers must offer guaranteed coverage to all applicants with no limitations on pre-existing conditions, with rate variations based only on age. The insurance industry has offered this up in exchange for an individual mandate, which will greatly expand the market size. Expect limitations on pre-existing conditions for those that do not have prior coverage or drop out of the system for a period of time. 3. Employer Responsibilities. As currently written, the legislation would not require employers to offer health coverage. However, employers with over 50 employees that do NOT offer health coverage must pay a fee for each employee who receives the tax credit for purchasing their own health coverage. 4. Small Business Tax Credits. The Federal government will provide tax credits to firms with fewer than 25 employees to help them pay for health coverage - the maximum tax credit available would be 50% of the cost of the coverage. Amount of tax credit available would likely be based on firm profitability and/or average wage of the workers. 5. Reform to the Small Group Health Market. New rules for the small group market would require minimum plan benefits, and prohibit exclusions for pre-existing conditions in most situations. Limited medical plans and lifetime benefit limits would be prohibited. 6. Establishment of Health Cooperatives and Exchanges. The proposal authorizes the creation and funding of non-profit member owned and operated CO-OP health plans that serve small businesses and individuals in one or more states, with state-based "exchanges" to help compare plans and purchase coverage. TIMING Most of the provisions of the proposed legislation referenced above would not become effective until January 1, 2013 --- some phase in even later. Consequently, don't expect any significant changes to your health insurance plans or benefits for the next several years. If you have any questions, please feel free a PHCCare Benefit Consultant at (866) 641-8982. Health Coverage for Medicare Eligible Employees You may have a valued employee that reaches Medicare eligibility (typically 65 years old) but who wants to continue working full time. This can have an impact on your group health plan, so here are the facts. All U.S. citizens (and certain legal aliens) become eligible for Medicare at age 65 --- they should receive information from the U.S. Centers for Medicare and Medicaid Services about six months prior to their 65th birthday. Most will be automatically enrolled in Medicare Part A, which is free to the participant. Medicare Part A primarily covers hospital services. As long as the employee continues to work full time (usually defined as 30 or more hours per week), s/he is eligible to stay on your group health plan, while also receiving supplemental benefits from Medicare. If your company has less than 20 full-time employees, in general Medicare will be the primary (first) payor, and your group health plan will be the secondary payor for services that are not covered by Medicare Part A. This situation can be positive as it may decrease the employer's cost of coverage. For most groups of over 20 full-time employees, the group health plan is the primary payor for Medicare-eligible employees, and Medicare Part A becomes the secondary payor for expenses not covered by the group health plan. In this situation an employee with expensive medical conditions may increase the cost of the group health plan for the other participants. In many situations, Medicare-eligible employees may find that it is more cost-effective to purchase Medicare Part B along with a Medicare Supplement Policy, rather than stay on the group health plan. New 2010 HSA Contribution Maximums The Internal Revenue Service (IRS) has published its 2010 Health Savings Account (HSA) contribution maximums. They are: Individual: $3,050 (up from $3,000 in 2009) Family: $6,150 (up from $5,900 in 2009) Catch-up: $1,000 (same as in 2009) For the 2010 calendar year, an HSA plan is defined by the IRS as a health plan with an annual deductible of at least $1,200 for self-only coverage or $2,400 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $5,950 for self-only coverage or $11,900 for family coverage. We hope this newsletter has been informative and useful. For more information about any of the topics featured here, or to learn more about the PHCCare Plus Health Plan, please feel free to contact a PHCC Benefit Consultant toll free at (866) 641-8982. Sincerely, Bob Jones Account Executive PHCCare Plus Health Plan bjones@abs-benefits.com

MENT