• Aged, blind or disabled;
• Infants, children and families;
• Long-term care; and
• Medicare recipients.

*Click here for the N.C. Medicaid Eligibility Chart

So what is the result?  Childless, low income adults will be impacted the most.  Individuals with household incomes between 100% and 400% of the Federal Poverty Level may be eligible for premium tax credits or cost-sharing subsidies for coverage purchased through a health insurance Marketplace if they do not have access to other minimum essential coverage.  Currently, 100% of the Federal Poverty Level for 2013 is $11,490.  A childless adult making less than $11,490 will not qualify for Medicaid because they do not meet the Medicaid eligibility requirements, at least in North Carolina.  And, because the adult’s income is less than 100% of the Federal Poverty Level, they also will not qualify for premium tax credits or cost-sharing subsidies.  An adult in this situation would be left with limited options: (1) going without coverage; (2) paying the full premium for a health plan through the Marketplace; or (3) enrolling in employer-sponsored coverage, if employed and eligible for the employer’s benefits.  Although these options are not very appealing, the U.S. Department of Health and Human Services (HHS) has made an accomodation.  In a final rule published on June 26, 2013, HHS provided an exemption from the individual mandate tax penalty for individuals ineligible for Medicaid solely because a state declined to expand Medicaid under PPACA.

Some of the states that have not expanded Medicaid may do so at a later date. Until then, this coverage gap could only be remedied by legislative action.

The post Low Income Adults Fall Into PPACA’s “Coverage Gap” appeared first on Healthcare Reform Digest.

Once available tax credits are applied, the cost of the second-lowest cost silver plan becomes the same, no matter what state you are in.  This is because of a premium cap based on income.  For example, the cost of the second-lowest cost silver plan for individuals earning between 250% and 300% of the Federal Poverty Limit is capped at no more than 9.5% of income.  The cost of the same coverage for an individual earning between 150% and 200% of the FPL is caped at 6.3% of income.  Those with income levels between 100% and 250% of the FPL will also be eligible for cost-sharing subsidies for out-of-pocket costs.

BCBSNC is offering 26 different health-insurance plans in the North Carolina Marketplace.  The plans range in price from a low of $145 for a catestrophic plan (available only to those under 30 years old or who qualify for a hardship exemption) to a high of $947 for a platinum plan.  BCBSNC is the only carrier offering plans in all 100 counties.   Coventry Health Care of the Carolinas and FirstCarolinaCare are also offering plans in the North Carolina markeptlace.  Not much is know yet about the Coventry plans, but FirstCarolinaCare has published the rates of the plans it expects to offer.  FirstCarolinaCare is offering 16 plans in 6 counties, and the prices range from a low of $80 for a catestrophic plan (for individuals age 20 and under) to a high of $1,112 for a gold plan for individuals 65 years of age and older.  FirstCarolinaCare is not offering platinum level plans.

The post The Cost of Coverage in NC appeared first on Healthcare Reform Digest.

Only Blue Cross Blue Sheild of North Carolina, Coventry Health Care and FirstCarolinaCare will offer individual plans through North Carolina’s exchange.  Since the insurers (with the apparent exception of FirstCarolinaCare) do not consider their rates final until approved by the federal government, it is unlikely that North Carolina consumers and employers will get much information about the plans being offered until the exchange opens on October 1, 2013.  The U.S. Department of Health and Human Services expects to complete approval of insurance premiums for the federally facilitated exchanges in September.

The post FirstCarolinaCare May Provide First Glimpse at NC Health Insurance Exchange Premiums appeared first on Healthcare Reform Digest.

North Carolina insurance officials have approved the health plans that will be available through the Marketplace, and the plans now await approval from the U.S. Department of Health and Human Services (HHS).  Rates, deductibles and other details of the plans are considered trade secrets and will remain under wraps until posted online by HHS sometime before October 1 when the Marketpalce opens for enrollment.

Blue Cross and Blue Shield of North Carolina plans to offer subsidized coverage through the Marketplace in all 100 counties of the state.  Coventry Health Care of the Carolinas will offer subsidized plans in some parts of the state and FirstCarolinaCare will operate in just six counties.  More than 1 million North Carolinians are expected to sign up for subsidized insurance through the Marketplace this fall.

The Affordable Care Act (ACA) requires all indivdiuals to have health insurance and provides subsidies to offset the cost of plans in the Marketpalce for individuals and families within certain income levels.  Indivdiduals with annual income up to $45,960 a year, and a family of four with household income up to $94,200, will be eligible to recieive subsidies.  In addition, individuals with pre-existing conditions will be able to get coverage and will not be charged more because of their health condition.  Premiums in the Marketplace can vary depening on age, tobacco use and county of residence, but cannot vary based on the medical history of the individual.  For more information about the Affordable Care Act visit www.HealthCare.gov.

Read the full News & Observer article by John Murawski here.

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Specifically, H649 adds the term “Grandfathered health plan” to the NC Small Employer Group Health Coverage Reform Act and changes the definition of “small employer” to mean “an employer that employed an average of at least one but not more than 50 employees on business days during the preceding calendar year and that employs at least one employee on the first day of the plan year.”  Most notable about this change to the small employer definition is that the number of employees must be determined using the same method as that set forth in section 4980H(c)(2) of the Internal Revenue Code, which was added by the Affordable Care Act (ACA).  Section 4980H(c)(2) requires that the hours of service of part-time employees be considered in the employer size computation by converting the hours of all part-time employees to full-time equivalents.  There is a limited exception for hours of service provided by seasonal employees.  The new small employer definition takes effect on January 1, 2014.  The old definition will still be applicable after January 1, 2014 to grandfathered health plans.

H649 also adopts community rating provisions similar to those in the ACA.  As of January 1, 2014, carriers in the small group market are only allowed to adjust premiums based age, geographic area and tobacco use.  Like the provision in the ACA, premium adjustments for age may not vary by more than the ratio of three to one (3:1) for adults.  However, the variations permitted by the ACA for tobacco use are limited by H649.  In the ACA, premiums may vary by a ratio of one and one-half to one (1.5:1) for tobacco users.  H649 limits the permissible premium rate variation in the small group market for tobacco users to one and two-tenths to one (1.2:1).  For example, the ACA permits a carrier in the small group market to  charge a smoker $375 for the same policy a non-smoker receives for $250 (i.e., 1.5:1).  Under H649, however, a carrier in the small group market will not be permitted to charge a smoker more than $300 for the same policy a non-smoker in North Carolina recieves for $250 (i.e., 1.2:1).  Previously, rating variations based on tobacco use were not permitted in North Carolina, but were permitted in 33 other states.  (See State Health Facts from the Kaiser Family Foundation)  The community rating provisions of H649 will take effect on January 1, 2014, at the same time the community rating provisions of the ACA take effect.

Perhaps the most significant change to the small group market is in Section 3 of the bill.  Section 3 of H649 changes the prohibition on providing stop loss coverage to small employers by making the prohibition applicable only with respect to employers “who employ fewer than 26 eligible employees.”  The resulting expanded access to self-insurance arrangements for small employers requires an annual attachment point for claims incurred per individual of at least $20,000, and an annual aggregate attachment point of at least $20,000 or 120% of expected claims, whichever is greater.  The effect of permitting stop loss coverage in the small group market is to allow groups with at least 26 eligible employees to avoid the community ratings required by the ACA.  The anticipated disruption in the small group market due to community ratings has been characterized by some as “siesmic.”  The expanded availability of stop loss coverage to groups in the small group market may lessen the disruption, or at least provide an alternative to small groups dreading the change.  This section of the bill is scheduled to become effective on October 1, 2013.

Lastly, Section 4 of the bill expands the small employer definition to include employers with up to 100 employees, effective January 1, 2016, as required by the ACA.  With so many changes to the small group market set to take effect on Janaury 1, 2014, little attention has been paid to the fact that the small group market is scheduled to get much, much bigger in 2016.  Whatever disruption may result from community ratings come January 1, 2014, it will shed some light on the disruption that can be expected in 2016 when community ratings are required for all employers with 100 or less employees.

You can read the text of the ratified House Bill 649 here.

UPDATE: Governor McCrory signed House Bill 649 into law on July 25, 2013.  Session Law 2013-357, as it is now called, can be found here.

The post NC Poised to Challenge the Affordable Care Act’s Reach in the Small Group Market appeared first on Healthcare Reform Digest.

In the group health plan setting, the employer is generally the policy holder.  Once the employer receives the rebate from the insurance issuer, the employer must determine how to distribute those funds to the plan’s participants according to Department of Labor guidance.  Employer policy holders have 90 days to distribute the rebates to participants.  After 90 days, the employer must establish a trust to hold the rebate funds as they are considered ERISA plan assets.  The IRS also has a stake in the MLR rebates.  If participants paid premiums pre-tax through a Section 125 cafeteria plan, MLR rebate amounts are considered taxable wages.  There are many other determinations surrounding MLR rebate distribution an employer must make as an ERISA fiduciary.  It is  recommended that an employer consult their benefits advisor or legal counsel prior to distributing MLR rebate amounts to plan participants.

Insurers in the North Carolina small and large group markets are issuing just over $7.5 million in rebates this year.  Of the North Carolina carriers issuing rebates in the group markets, UnitedHealthcare Insurance Company will rebate the most – $2,442,898 in the NC small group market, and $3,849,214 in the NC large group market.  The other carriers issuing MLR rebates in the NC group markets are Cigna HealthCare of North Carolina, Inc., Guardian Life Insurance Company of America, John Alden Life Insurance Company, and WellPath Select, Inc.

For more information on the rebate amounts being provided by these issuers and issuers in other states, see this List of Health Insurers Owing Rebates for 2012 and this list of MLR Rebates by State and Market for 2012.

The post MLR Rebates Round 2: Employers Prepare for Rebate Distribution appeared first on Healthcare Reform Digest.

Mr. Covington reports that the range of insurance plans offered through the marketplace in North Carolina may not be as wide as originally hoped.  He reports that individuals buying health insurance coverage in the marketplace this fall will be choosing among products from only two or three carriers (BlueCross BlueShield of North Carolina, Coventry and FirstCarolinaCare Insurance Co. in Pinehurst).  That compares to about seven carriers now offering individual insurance products in North Carolina.  Small business will see products from only one carrier in the SHOP (the marketplace for small businesses), BlueCross BlueShield of North Carolina.  Read the full article here.

The post NC Health Insurance Exchange: Marketplace or Mini-Mart? appeared first on Healthcare Reform Digest.

A “most favored nation” clause guarantees prices that are at least as favorable as those provided to others (not party to the contract) for the same products and services.  These clauses have come under fire from the Federal Trade Commission (FTC) as being anti-competitive.  The U.S. Justice Department has been investigating whether these Blue Cross clauses in North Carolina and other states violate antitrust laws.  In addition, a NC lawsuit filed in early 2012 against BCBSNC alleges collusion to carve up the nations insurance market, increasing the cost of insurance.  The lawsuit, filed by businesses and residents of Mooresville, was the first of more than 20 class actions making similar allegations against Blue Cross plans nationwide.  Those cases have recently been consolidated before a federal judge in Alabama, which means that the litigation’s outcome likely would affect companies and policyholders nationwide.  Read more about the lawsuit in our earlier post here.

The General Assembly legislation cuts to the chase by specifying that no contract with a healthcare provider may “[p]rohibit, or grant a health insurance carrier an option to prohibit, the provider from contracting with another health insurance carrier to provide  health care services at a rate that is equal to or lower than the payment specified in the contract.”  The bill also prohibits a health insurer from requiring a provider to disclose, directly or indirectly, the provider’s contractual rates with another health insurance carrier.  The bill is set to become effective October 1, 2013.  Read the full text of the bill here.

The post The General Assembly Passes a Bill Challenging BCBSNCs Dominance appeared first on Healthcare Reform Digest.

Under the Affordable Care Act’s employer shared responsibility mandate, employers with 50 or more workers that don’t offer coverage face penalties if just one of their workers gets subsidized health insurance through the Exchange.  There is a window of  relief, however, where no penalties are applied to employers for not offering coverage if their workers are eligible for Medicaid.  The ACA gave the states the opportunity to open that window wider, with the expansion of Medicaid.  By refusing to take the fed’s up on the offer, McCrory didn’t close the window of relief, but he didn’t make it any bigger like the states that chose to expand Medicaid.  A recent report from Jackson Hewitt estimates that over 78,000 additional people in North Carolina could fit through that window if McCrory opened it a little wider.  These low-income workers who otherwise would have been eligible for Medicare but aren’t because of MrCrory’s decision, can still get subsidized health insurance through the Exchange….and trigger a hefty penalty for their employer in the process.  Jackson Hewitt estimates the potential penalties to North Carolina employers to be anywhere from $65.5 million to $98.3 million.  Ouch, that double-edged sword hurts.

The post Is Governor McCrory good for North Carolina business? appeared first on Healthcare Reform Digest.

It seems everyone is talking about a study released by the Robert Wood Johnson Foundation last week that analyzes state-level trends in employer-sponsored health insurance. The report finds that health insurance through work was on a steady decline nationwide well before the Affordable Care Act (aka Obamacare) became a house-hold term. In North Carolina, the decline over the last 10 years has been particularly acute, with one of the biggest double-digit drops in employees covered by employer-sponsored insurance in the nation. Workers covered by company health plans fell by more than 13% in North Carolina, worse than nearly every other state (except South Carolina, Michigan, Indiana, and Ohio).

An April 11th article in the News&Observer reported on the study, highlighting the trends in North Carolina, including the soaring healthcare costs and health insurance premium costs.  The article notes that while the average premium for a family of four rose to nearly $14,000 in 2011 (almost double the cost in 2000), the percentage of workers under the age of 65 covered by employer-sponsored insurance dropped from 69% to 56% in the same time period.  Read the article here.

Can this trend continue? Will healthcare reform make it better, or worse? There are three components of the ACA that may help to stall this trend and maybe even turn it around. (1) All employers with 50 or more full-time employees must offer affordable health insurance to their full-time employees or face hefty fines (hopefully discouraging large employers from not offering health plans). (2) Small employers (less than 50 full-time employees) that do offer health insurance to their full-time employees can receive a tax credit (hopefully incentivizing small employers to offer coverage). (3) Workers earning up to approximately $94,000 for a family of four, who are not offered health insurance by their employers, can get subsidies to purchase health insurance in the Exchange. The optimist would like to think these three provisions in action will change the trend in North Carolina. Unfortunately, only time will tell.

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