If you took a look at your calendar lately, you’d notice that 2016 is plainly in sight, and the “Open Enrollment” period for 2016 insurance coverage has already begun. If you are enrolled in an individual health insurance policy, stay tuned.
Under new ACA-inspired regulations, individual health insurance plans work exclusively on the calendar year. Your current insurance plan ends, and your next insurance plan begins, when the ball drops in Times Square. It does not matter what day this year your current plan commenced.
Parenthetically, it’s important to note that group plans still work based on the contract year. We field calls every day from panicked business owners and employees wondering what they should be doing during the Open Enrollment period. The answer is, “You have nothing to worry about until we get close to the 12 months point since your current plan year commenced.”
Catering to the Individual
In case you haven’t noticed by now, there is something that happens in the healthcare industry every year. It’s that terrifying, if not unexpected, knowledge that—yes—healthcare premiums rose yet again.
Individuals can expect their premiums to be 10 percent to 20 percent higher in 2016 than in 2015, for the same plan. So if you’re looking to get a better deal than that – don’t you deserve to?—the time to get moving is now.
Contact a competent health insurance agency. At Cosmo Insurance you’ll actually hear some good news. While the individual market is more expensive than ever, it is also more saturated than ever with different options—some of them more cost efficient than ever.
One fresh option for 2016 is Tier One/Tier Two insurance plans from the same insurer. The Tier One plan offers you lower premiums and out-of-pocket expenses than the Tier Two plan simply by virtue of the different physician/medical facility network you can use. The Tier One plans find physicians and medical facilities that were willing to negotiate lower reimbursement rates than the conventional Tier Two network.
We understand that you may get worried when you think about a “cheaper doctor,” but it’s important to realize that Tier One providers are mostly not lower quality than Tier Two. Providers that have busy practices—seeing many patients a day—are often willing to offer care at lower reimbursement rates because they make up for it with volume. Even less-busy quality physicians are often ready to negotiate lower reimbursement in order to gain patient volume. As always, you can browse the provider roster of any plan you’re looking into.
One major pioneer in this two-tier system is Horizon Blue Cross Blue Shield of New Jersey, which is widely touting its new OMNIA Health Alliance affordable provider network.
Uncle Sam Wants More Information
Another thing you can be sure as we head towards the New Year, is that Uncle Sam is getting even more intrusive and demanding. You’re not shocked, we suppose. This could affect you regardless of whether you’re insured with an individual policy, a group policy or are uninsured.
Here’s how:
– Beginning in 2016, health insurers will begin reporting to the IRS all of its enrollees that have coverage that meets the minimum essential coverage required by the ACA. The reporting will be done based on enrollees’ social security numbers, similar to the way companies issue W2s and 1099s to the IRS to inform them of your income.
Individuals who are not reported as having the required coverage are subject to IRS penalty under the individual mandate. This applies both to the uninsured and those whose insurers are missing their social security number or other vital information. Your insurer should reach out to you if they require any additional information. Make sure to respond promptly.
– The government is upping the ante in verifying the exact group size of all entities with group insurance plans; the information will be collected by insurers. This will also affect companies with under 50 full-time employees, or those who are otherwise exempt from the ACA employer mandate. The primary reason why the feds want this information is to calculate the medical loss ratio (MLR) of the premiums you paid for your group coverage, versus what was paid out.
Under ACA rules, if your insurer uses less than 80 percent of the premiums to pay claims or otherwise “improve healthcare quality” for enrollees, they must offer the group a rebate. Yes, for once, Uncle Sam’s information collecting may actually mean more money in your pocket.
– Another change for 2016 that may benefit you is the new calculations of the maximum out of pocket (MOOP) limit. This applies to both individual and group plans, other than plans that were “grandfathered” in from previous years. Under the new regulations, there is a maximum amount that individual enrollees can pay out of pocket per year on medical expenses. It is not only calculated for the entire household covered under the plan. For most plans, the maximum per household is $13,100 a year, and $6,550 per individual household member. Once medical expenses surpass that, the insurer is required to offer 100 percent coverage, regardless of the plan.
Yes, 2016 brings some new challenges in health care, but lots of bright spots too. The doors of enrollment are open now. It’s time to take advantage of that.
For more information or for a free, no-obligation quote, please call (201) 817-1388 or email [email protected].
Mark Herschlag is the founder and CEO of Cosmo Insurance Agency, which is based in Ocean County. Cosmo Insurance Agency offers personalized solutions for individuals and businesses looking to obtain health, life, dental, long-term care or disability insurance.
By Mark Herschlag
