UBA Survey: Weary Families Get a Break While Singles See Out-of-Pocket Cost Increases

Below, our partner, UBA Benefits, has provided some insight from their 2017 Health Plan Survey. If you are an employer seeking customized results from the survey, we can help you. Please visit our survey page here.


While the rate impact of the regulatory environment plays out, one thing is clear from the 2017 UBA Health Plan Survey: employers continue to shift a greater share of expenses to employees through out-of-pocket cost increases. While this is just one of 7 mega trends uncovered in the survey, it is particularly interesting this year because singles were hit more heavily than families as compared to years past.

While average annual total costs per employee increased from $9,727 to $9,934, employees’ share of total costs rose 5%, from $3,378 to $3,550, while employers’ share rose less than 1%, from $6,350 to $6,401. The good news for employees is that, for a second year in a row, median in-network deductibles for singles and families held steady at $2,000 and $4,000, respectively. Similarly, some out-of-network deductibles remained unchanged, with families’ median out-of-network deductible remaining at $8,000 in 2017. Conversely, singles, who had been holding steady in 2014 and 2015 at a $3,000 median out-of-network deductible, saw a 13.3% increase to $3,400 in 2016, and another jump in 2017 to $4,000. Since deductible increases help employers avoid premium increases, we will likely see this trend continue, especially as insurance carriers are required to meet the ACA metal levels.

Both singles and families also are seeing continued increases in median in-network out-of-pocket maximums, up to $5,000 and $10,000, respectively. Families bore the brunt of the increase in median out-of-network out-of-pocket maximums between 2014 and 2016, going from $16,000 in 2014 to $18,000 in 2015, to $20,000 in 2016, but then holding steady at $20,000 in 2017. The maximum for singles, which had remained steady at $9,000 in 2015 and 2016, increased in 2017 to $10,000.

Interestingly, out-of-network expenses are not subject to ACA limitations, so it was theorized that they’d likely continue to skyrocket with more plans eliminating out-of-pocket maximums for non-network services. Perhaps to offset that, more employers adopted plans with no deductible for out-of-network services, while employees saw a massive decrease in the number of employers offering no deductible for in-network services. Looking at deductibles and out-of-pocket costs just among the ever-dominant PPO plans, in-network and out-of-network deductibles for families and singles are generally below average. However, the median in-network single deductible for PPO plans has held steady at $1,500 in 2016 and 2017, along with the family deductible at $3,000. The increases were seen in the out-of-pocket maximums, which rose in 2017 to $4,500 for single (up from $4,000 in 2016), and to $10,000 for family coverage (up $1,000 from $9,000 in 2016).

Read the original article here.

Source:
Olson B. (21 November 2017). "UBA Survey: Weary Families Get a Break While Singles See Out-of-Pocket Cost Increases" [Web blog post]. Retrieved from address http://blog.ubabenefits.com/uba-survey-weary-families-get-a-break-while-singles-see-out-of-pocket-cost-increases


OSHA Delays Electronic Reporting to Dec. 15, 2017

OVERVIEW

The Occupational Safety and Health Administration’s (OSHA) electronic reporting rule requires certain establishments to report information electronically from their OSHA Forms 300, 300A and 301. Under the rule, the first electronic reports were due on July 1, 2017.

However, on Nov. 24, 2017, OSHA issued a new final rule officially delaying the first electronic reporting deadline to Dec. 15, 2017. Affected establishments will need to submit their reports through the Injury Tracking Application (ITA) website by that time or face possible OSHA penalties.

ACTION STEPS

  • Affected establishments must create an account on the ITA website and submit information from their 2016 OSHA 300A form by December 15, 2017.
  • Other deadlines under the electronic reporting rule remain unaltered. Therefore, affected establishments should begin their preparations to submit information from all 2017 OSHA forms by July 1, 2018.

OSHA’s electronic reporting rule affects establishments that:

  • Are already required to create and maintain OSHA injury and illness records and have 250 or more employees;
  • Have between 20 and 249 employees and belong to a high-risk industry; and
  • Receive a specific request from OSHA to create, maintain and submit electronic records, even if they would otherwise be exempt from OSHA recordkeeping requirements.

The electronic reporting rule applies to establishments, not employers. An employer may have several worksites or establishments. In these situations, some establishments may be affected while others are not.

To determine whether an establishment is affected, employers must determine each establishment’s peak employment during the calendar year. During this determination, employers must count every individual that worked at that establishment, regardless of whether he or she worked full-time, part-time, or was a temporary or seasonal worker.

Finally, a firm with more than one establishment may submit establishment-specific data for multiple establishments.

Reporting Requirements


The data an employer must submit and the timeline for submitting this information to OSHA depends on the establishment size.

Establishments with 250 or more employees will be required to submit information from their OSHA Forms 300A, 300 and 301. However, in 2017, these establishments will only be required to submit data from their 300A Form. Establishments in high-risk industries with between 20 and 249 employees will be required to submit information only from their OSHA Form 300A.

For the first reporting year, the deadline has been delayed to Dec. 15, 2017. However, the final rule that delayed the first deadline did not alter subsequent deadlines, so reporting deadlines for 2018, 2019 and beyond remain as shown in the table above.

Submitting the Report

The ITA is a secure website that OSHA created specifically for the data required by the electronic reporting rule. The ITA allows employers three options to submit their reports:

  1. Manual entry;
  2. Comma-separated value (CSV) file upload; and
  3. Application programming interface (API) transmission.

The ITA offers affected establishment instructions and sample files and templates to help them complete the submission process.

OSHA-approved State Plans

The final rule required OSHA-approved State Plans to adopt the electronic rule or “substantially identical” requirements within six months of the final rule’s publication date. The final rule was published on May 12, 2016. This means that OSHA-approved State Plans have the authority to adopt reporting requirements that go above and beyond what is required by the federal rule. For this reason, establishments located in OSHA-approved State Plan jurisdictions should consult with their local OSHA offices to make sure they are satisfying all electronic reporting requirements.

However, the following OSHA-approved State Plans have not yet adopted the requirement to submit injury and illness reports electronically:

Similarly, state and local government establishments in IL, ME, NJ and NY are not currently required to submit their data through the reporting website.

More Information

Contact Hierl Insurance Inc. or visit the OSHA tracking of workplace injuries and illnesses webpage for more information regarding electronic reporting.

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Latest IRS ACA Round Up (Including 2018 Cost-of-Living Adjustments)

Recently, the Internal Revenue Service (IRS) issued the instructions for Forms 1094/1095 for the 2017 tax year, announced PCORI fees for 2017-18, and announced cost-of-living adjustments for 2018. The IRS provided additional guidance on leave-based donation programs' tax treatment and released an information letter on COBRA and Medicare. Here’s a recap of these actions for your reference.IRS Announces Cost-of-Living Adjustments for 2018

The IRS released Revenue Procedures 2017-58 and Notice 2017-64 to announce cost-of-living adjustments for 2018. For example, the dollar limit on voluntary employee salary reductions for contributions to health flexible spending accounts (FSAs) is $2,650, for taxable years beginning with 2018.

Request UBA’s 2018 desk reference card with an at-a glance summary of the various limits.

IRS Announces PCORI Fee for 2017-18

The IRS announced the Patient-Centered Outcomes Research Institute (PCORI) fee for 2017-18. The fee is $1.00 per covered life in the first year the fee is in effect. The fee is $2.00 per covered life in the second year. In the third through seventh years, the fee is $2.00, adjusted for medical inflation, per covered life.

For plan years that end on or after October 1, 2016, and before October 1, 2017, the indexed fee is $2.26. For plan years that end on or after October 1, 2017, and before October 1, 2018, the indexed fee is $2.39.

For more information, view UBA’s FAQ on the PCORI Fee.

IRS Provides Additional Guidance on Leave-Based Donation Programs' Tax Treatment

Last month, the IRS provided guidance for employers who adopt leave-based donation programs to provide charitable relief for victims of Hurricane and Tropical Storm Irma. This month, the IRS issued Notice 2017-62 which extends the guidance to employers' programs adopted for the relief of victims of Hurricane and Tropical Storm Maria.

These leave-based donation programs allow employees to forgo vacation, sick, or personal leave in exchange for cash payments that the employer will make to charitable organizations described under Internal Revenue Code Section 170(c).

The employer's cash payments will not constitute gross income or wages of the employees if paid before January 1, 2019, to the Section 170(c) charitable organizations for the relief of victims of Hurricane or Tropical Storm Maria. Employers do not need to include these payments in Box 1, 3, or 5 of an employee's Form W-2.

IRS Releases Information Letter on COBRA and Medicare

The IRS released Information Letter 2017-0022 that explains that a covered employee's spouse can receive COBRA continuation coverage for up to 36 months if the employee became entitled to Medicare benefits before employment termination. In this case, the spouse's maximum COBRA continuation period ends the later of: 36 months after the employee's Medicare entitlement, or 18 months (or 29 months if there is a disability extension) after the employment termination.

 

You can read the original article here.

Source:

Capilla D. (16 November 2017). "Latest IRS ACA Round Up (Including 2018 Cost-of-Living Adjustments)" [Web blog post]. Retrieved from address http://blog.ubabenefits.com/latest-irs-aca-round-up-including-2018-cost-of-living-adjustments


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Compliance Overview: Electronic Logging Devices

In this month's compliance overview, we're going to take a look at the final rule on electronic logging devices for commercial motor vehicles.


On Dec. 16, 2015, the Federal Motor Carrier Safety Association (FMCSA) published a final rule for electronic logging devices (ELDs) for commercial motor vehicles (CMVs). The final rule prohibits certain drivers from operating a CMV without an ELD.

The final rule also includes requirements regarding supporting documentation for hours-of-service (HOS) records and measures to prevent driver harassment that could result from the mandatory use of ELDs.

The FMCSA has released Frequently Asked Questions (FAQs) to provide plain language information regarding the ELD rule. This Compliance Bulletin contains the FAQs provided by the FMCSA.

Get the Full Compliance Overview


Trump picks former Lilly drug executive as health secretary

We're sure you've seen it trending. Here is the latest on President Trump's new hire, Alex Azar of Eli Lilly & Co - the U.S.A.'s new head of the Department of Health and Human Services.


(Bloomberg) – President Donald Trump named former Eli Lilly & Co. executive Alex Azar to lead the Department of Health and Human Services after agency’s past chief resigned amid blowback over his taxpayer-funded private jet travel.

“Happy to announce, I am nominating Alex Azar to be the next HHS Secretary. He will be a star for better healthcare and lower drug prices!” Trump tweeted Monday.

If confirmed, Azar will take over the administration’s management of the Affordable Care Act. Trump and Congressional Republicans have called to repeal the health law, and the administration has taken steps to destabilize it, such as cutting funding for some programs and refusing to pay subsidies to health insurers. He’ll also be a key figure on drug costs.

Bloomberg/file photo

Trump has been highly critical of the drug industry, saying that pharmaceutical companies are “getting away with murder” and threatening to use the federal government’s buying power to bring down prices.

Drug Costs

However he’s taken no concrete action yet to do much on prices, and the former drug executive’s appointment may continue the trend of strong talk but little action, said Spencer Perlman, director of health-care research at Veda Partners, a policy analysis firm.

“It is very unlikely the administration will take aggressive regulatory actions to control prescription drug prices,” Perlman said in a note to clients Monday. “The administration’s tepid response to drug pricing has not matched the president’s heated rhetoric.”

Dan Mendelson, president of Avalere Health, a consulting firm, also didn’t think Azar represented a change in direction on pharmaceutical policy. “His appointment will not change the president’s rhetoric,” Mendelson said in a phone interview.

Before his time at Lilly, Azar served as deputy secretary at HHS under President George W. Bush. One former Obama administration official said that experience could help him at the agency.

“While we certainly differ in a number of important policy areas, I have reason to hope he would make a good HHS secretary,” said Andy Slavitt, who ran the Centers for Medicare and Medicaid Services under the last administration and who has been a frequent critic of efforts to derail Obamacare. Slavitt said he hoped Azar would “avoid repeating this mistakes of his predecessor over-politicizing Americans’ access to health care.”

Running Obamacare

Azar, who ran Indianapolis-based Lilly’s U.S. operations until earlier this year, has been an advocate for more state flexibility under Obamacare. That matches up with what Republicans have pushed for, such as in a seemingly stalled bipartisan bill to fund insurer subsidies that help lower-income people with health costs.

As secretary, Azar would have broad authority over the program.

“I’m not one to say many good things about Obamacare, but one of the nice things in it is it does give a tremendous amount authority to the secretary,” Azar said during an interview with Bloomberg TV in June. “There are still changes that can be made to make it work a little better than it has been.”

There are signs that the law is gaining popular support despite the repeal efforts. In recent state elections in Virginia, Democrats won a competitive governors race that saw health care emerge as a top issue. In Maine, residents voted to expand Medicaid under the Affordable Care Act. Early enrollment in Obamacare plans earlier this month was also up considerably compared to last year.

Trump’s first HHS secretary, Tom Price, resigned in September after his extensive use of private and military jets at taxpayer expense was revealed. Azar must be approved by the Senate.

Senate Confirmation

Senator Orrin Hatch, who heads the Senate Finance Committee that will review Azar’s nomination, called on Trump’s pick to help “right the wrongs of this deeply flawed law.”

“For too long, hardworking, middle-class families have been forced to bear the brunt of Obamacare’s failures in the form of higher premiums and fewer choices,” Hatch said in a statement.

Ron Wyden, the senior Democrat on the panel, said he would closely scrutinize Azar’s record.

“At every turn, the president has broken his promises to American families to lower health care costs, expand access, and bring down the high price of prescription drugs,” Wyden said in a statement.

Azar left Lilly in January, several months after another senior executive was named to succeed then-CEO John Lechleiter. A lawyer by training, Azar previously clerked for Antonin Scalia on the Supreme Court.

You can read the original article here.

Source:

Employee Benefit Advisors (13 November 2017). "Trump picks former Lilly drug executive as health secretary" [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/articles/trump-picks-former-lilly-drug-executive-as-health-secretary?tag=00000151-16d0-def7-a1db-97f024b50000

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Compliance Recap - October 2017

October was a busy month in the employee benefits world. President Trump announced a new Acting Secretary for the U.S. Department of Health and Human Services (HHS). Eric Hargan fills the position vacated by Tom Price, who resigned in late September 2017.

The Internal Revenue Service (IRS) issued the instructions for Forms 1094/1095 for the 2017 tax year, announced PCORI fees for 2017-18, and announced cost-of-living adjustments for 2018. President Trump issued an Executive Order on healthcare and announced an end to the Patient Protection and Affordable Care Act's cost sharing reductions.

The IRS, Employee Benefits Security Administration (EBSA), and Centers for Medicare and Medicaid Services (CMS) issued two interim final rules to allow a greater number of employers to opt out of providing contraception to employees at no cost through their employer-sponsored health plan.

The U.S. Department of Labor (DOL) issued a proposed rule to delay a disability claims procedure regulation's applicability date. The IRS provided additional guidance on leave-based donation programs' tax treatment and released an information letter on COBRA and Medicare. HHS released its proposed rule on benefits and payment parameters for 2019. The U.S. Department of the Treasury (Treasury) issued its Priority Guidance Plan for projects it intends to complete during the first half of 2018.

UBA Updates

UBA released seven new advisors in October:

UBA updated existing guidance:

IRS Issues 2017 Instructions for Forms 1094/1095

The IRS issued the instructions for Forms 1094-C and 1095-C for the 2017 tax year. Applicable large employers use Forms 1094-C and 1095-C to report information related to their employer shared responsibility provisions under the Patient Protection and Affordable Care Act (ACA).

Read more about the instructions and forms.

IRS Announces PCORI Fee for 2017-18

The IRS announced the Patient-Centered Outcomes Research Institute (PCORI) fee for 2017-18. The fee is $1.00 per covered life in the first year the fee is in effect. The fee is $2.00 per covered life in the second year. In the third through seventh years, the fee is $2.00, adjusted for medical inflation, per covered life.

For plan years that end on or after October 1, 2016, and before October 1, 2017, the indexed fee is $2.26. For plan years that end on or after October 1, 2017, and before October 1, 2018, the indexed fee is $2.39.

Read more about the PCORI fee.

IRS Announces Cost-of-Living Adjustments for 2018

The IRS released Revenue Procedures 2017-58 and Notice 2017-64 to announce cost-of-living adjustments for 2018. For example, the dollar limit on voluntary employee salary reductions for contributions to health flexible spending accounts (FSAs) is $2,650, for taxable years beginning with 2018.

Download the chart of 2018 annual benefit plan amounts.

Executive Order on Healthcare

On October 12, 2017, the White House released the Executive Order "Promoting Healthcare Choice and Competition Across the United States," signed by President Trump, that directs various federal agencies to explore options relating to association health plans, short-term, limited-duration insurance, and health reimbursement arrangements in the next 60-120 days.

Employers should not make any changes to their group health plans based on the Executive Order until regulations are issued.

Read more about the Executive Order.

President Trump Ends ACA Cost Sharing Reductions

President Trump announced that the ACA's cost sharing reductions for low income Americans would be stopped. The Department of Health and Human Services (HHS) confirmed that the payments would stop immediately.

Because the cost sharing reductions are different than the advance premium tax credit, this payment termination will not have a direct impact on employers at this time. However, employers with fully insured health plans might see group health plan rate increases in the future as insurance companies work to make up for revenue loss.

Read more about the payment termination.

Agencies Roll Back Contraceptive Mandate

The Internal Revenue Service, Employee Benefits Security Administration, and Centers for Medicare and Medicaid Services issued two interim final rules that were effective on October 6, 2017. These rules will allow a greater number of employers to opt out of providing contraception to employees at no cost through their employer-sponsored health plan.

The expanded exemption encompasses all non-governmental plan sponsors that object based on sincerely held religious beliefs, and higher education institutions' student health plan arrangements. The exemption also now encompasses employers who object to providing contraception coverage based on sincerely held moral objections and higher education institutions' student health plan arrangements. Further, if an insurance company has sincere religious beliefs or moral objections, it would be exempt from having to sell coverage that provides contraception. The exemptions apply to both non-profit and for-profit entities.

Read more about the contraceptive mandate rollback.

DOL Proposes Delay to Final Disability Claims Procedures Regulations' Applicability Date

The DOL issued a proposed rule to delay the applicability date of its final rule that amends the claims procedure requirements applicable to ERISA-covered employee benefit plans that provide disability benefits. The DOL's Fact Sheetcontains a summary of the final rule's requirements.

The DOL is delaying the applicability date from January 1, 2018, to April 1, 2018, to consider whether to rescind, modify, or retain the regulations and to give the public an additional opportunity to submit comments and data concerning the final rule's potential impact.

IRS Provides Additional Guidance on Leave-Based Donation Programs' Tax Treatment

Last month, the IRS provided guidance for employers who adopt leave-based donation programs to provide charitable relief for victims of Hurricane and Tropical Storm Irma. This month, the IRS issued Notice 2017-62 which extends the guidance to employers' programs adopted for the relief of victims of Hurricane and Tropical Storm Maria.

These leave-based donation programs allow employees to forgo vacation, sick, or personal leave in exchange for cash payments that the employer will make to charitable organizations described under Internal Revenue Code Section 170(c).

The employer's cash payments will not constitute gross income or wages of the employees if paid before January 1, 2019, to the Section 170(c) charitable organizations for the relief of victims of Hurricane or Tropical Storm Maria. Employers do not need to include these payments in Box 1, 3, or 5 of an employee's Form W-2.

IRS Releases Information Letter on COBRA and Medicare

The IRS released Information Letter 2017-0022 that explains that a covered employee's spouse can receive COBRA continuation coverage for up to 36 months if the employee became entitled to Medicare benefits before employment termination. In this case, the spouse's maximum COBRA continuation period ends the later of: 36 months after the employee's Medicare entitlement, or 18 months (or 29 months if there is a disability extension) after the employment termination.

CMS Releases 2019 Benefits Payment and Parameters Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) released a proposed ruleand fact sheet for the 2019 Benefit Payment and Parameters. The proposed rule is intended to increase individual market flexibility, improve program integrity, and reduce regulatory burdens associated with the Patient Protection and Affordable Care Act (ACA) in many ways, including updates and annual provisions to:

  • Essential health benefits
  • Small Business Health Options Program (SHOP)
  • Special enrollment periods (SEPs)
  • Exemptions
  • Termination effective dates
  • Medical loss ratio (MLR)

CMS usually finalizes the Benefit Payment and Parameters rule in the first quarter of the year following the proposed rule's release. November 27, 2017, is the due date for public comments on the proposed rule.

Almost all the topics addressed in the proposed rule would affect the individual market and the Exchanges, particularly the Small Business Health Options Program (SHOP) Exchanges.

Of interest to small group health plans, CMS proposes to change how states will select essential health benefits benchmark plans. If CMS keeps this change in its final rule, then it will affect non-grandfathered small group health plans for benefit years 2019 and beyond.

Read more about the proposed rule.

Treasury Issues its Priority Guidance Plan

The Treasury issued its 2017-2018 Priority Guidance Plan that lists projects that it intends to complete by June 30, 2018, including:

  • Guidance on issues related to the employer shared responsibility provisions
  • Regulations regarding the excise tax on high cost employer-provided coverage ("Cadillac tax")
  • Guidance on Qualified Small Employer Health Reimbursement Arrangements (QSE HRAs)

Question of the Month

Q: Although the transitional reinsurance fee (TRF) expired, why might an employer have one TRF remittance due in November?

A: The TRF premium stabilization program was in place from 2014 to 2016. Calendar year 2016 was the last year for which the TRF was required. HHS offered employers with self-insured plans with an option to pay the TRF in one or two payments. If an employer chose to pay in two installments for the 2016 benefit year, then the employer's first payment was due by January 17, 2017, and its second payment is due by November 15, 2017.


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Critical compliance changes for next year: An open enrollment checklist

Keeping up-to-date with health care is one of our top priorities. From HR Morning, here is a comprehensive list of everything you need to know so far going into 2018.


As HR pros immerse themselves in negotiating plan changes for this year’s open enrollment, it’s critical to keep these new 2018 regulation changes front and center.

To help, here’s a checklist of changes you’ll need to be aware of when making plan-design moves:

1. Mental Health Parity reg changes enforced

Beginning January 1, 2018, plans that require “fail first” or “step therapy” could violate the Parity Act’s “non-quantitative treatment limitation” (NQTL) rules. Under the NQTL rules, plans can’t be more restrictive for mental health/substance abuse benefits than they are for medical/surgical ones.

Here’s an example of a fail-first strategy: Requiring mental health or addiction patients to try an intensive outpatient program before admission to an inpatient treatment if the same restriction doesn’t apply to medical/surgical benefits.

2. New Summary of Benefits and Coverage (SBC) template

Under the ACA, plans were required to start using the new SBC template on or after April 1, 2017.

For calendar year plans, that means this is the first enrollment with the new template, which includes new coverage examples and updates about cost-sharing. You can find more details on and instructions for the new form here: bit.ly/temp544

3. Women’s preventive care

The Women’s Preventive Services Guidelines were updated for 2018 calendar plans to include a number of items that must be covered without any cost-sharing. The list includes breast cancer screenings for average-risk women, screenings for cervical cancer, diabetes mellitus and more.

 

See the original article here.

Source:

Bilski J. (17 October 2017). "Critical compliance changes for next year: An open enrollment checklist" [Web blog post]. Retrieved from address http://www.hrmorning.com/critical-compliance-changes-for-next-year-an-open-enrollment-checklist/


Data Note: Changes in 2017 Federal Navigator Funding

Are you looking for a run-down on Navigator programs and their funding? In this article from the Kaiser Family Foundation, we are offered an informative peak of the 2017 changes in federal Navigator funding within the Affordable Care Act (ACA).


Read the original article here.

Source:

Pollitz K., Tolbert J., Diaz M. (11 October 2017). "Data Note: Changes in 2017 Federal Navigator Funding" [Web Blog Post]. Retrieved from address https://www.kff.org/health-reform/issue-brief/data-note-changes-in-2017-federal-navigator-funding/

 

The Affordable Care Act (ACA) created Navigator programs to provide outreach, education, and enrollment assistance to consumers eligible for coverage through the Marketplaces and through Medicaid and requires that they be funded by the marketplaces.  For the past two years, the Centers for Medicare and Medicaid Services (CMS) has funded Navigator programs in the 34 states that use the federal marketplace through a multi-year agreement that was expected to continue for the current budget year.  In August, CMS officials announced significant reductions to Navigator funding for the 2018 budget year.  These funding reductions coming so close to the start of the 2018 open enrollment period will affect the help many Navigators can provide to consumers seeking to enroll in coverage.

This data note analyzes funding changes and discusses the implications for Navigators and consumers.  It presents results of a Kaiser Family Foundation online survey of federal marketplace (FFM) Navigator programs conducted from September 22, 2017 – October 4, 2017 about 2017 funding awards (for the 2018 open enrollment period), the relationship between funding amounts and program performance, and the likely impact of funding changes on programs and the consumers they serve. It also includes insights from a roundtable meeting of more than 40 Navigators co-hosted by the Robert Wood Johnson Foundation and Kaiser Family Foundation held on September 15, 2017, as well as analysis of administrative data.

BACKGROUND

In 2015, CMS signed three-year agreements with Navigator organizations to provide consumer assistance to residents of federal marketplace states.  The multi-year agreements promoted continuity and experience among Navigator professionals.  Multi-year agreement also spared CMS and Navigators the time and expense involved in reissuing grants during critical weeks leading up to open enrollment.  Under the agreements, Navigator programs in the FFM states are required to set goals and report performance data throughout the year relating to specific duties and activities.

Funding amounts under the multi-year agreements have been determined annually — $60 million for the first budget year (which runs September through August), and $63 million for the second budget year.  CMS notified continuing programs of the grant amount available to them for the coming year in late spring; programs then submitted work plans, budgets, and performance goals based on that amount.  Once CMS approved these plans, final awards were made in late August.

In May 2017, continuing Navigator programs were notified of available third-year funding amounts, which totaled $60 million, with grants for most programs similar to the year-two funding amount. In June, programs submitted their work plans and budgets corresponding to these amounts. The Navigator programs expected final Notice of Awards (NOA) by September 1, 2017.

On August 31, one day prior to the end of the second budget period of the grants, CMS announced it would reduce Navigator funding by more than 40%. CMS issued a bulletin stating that funding for the third year would be based on program performance on its enrollment goals for the second budget period.  On September 13, 2017, two weeks into the third budget year of the grant, FFM Navigator programs received preliminary NOAs for third-year funding, which totaled $36.8 million, or 58% of the year-two awards. (See Appendix A for funding awards by program.)

2017 NAVIGATOR FUNDING REDUCTIONS

CMS notified Navigator program of their preliminary 2017 grant awards on September 13, 2017.  The full list of preliminary awards was obtained and released by a third party (see Appendix A). This section summarizes funding changes based on information from that list.

Funding changes at the state level for 2017 were uneven across states.  Three FFM states (Delaware, Kansas, and West Virginia) received no net reduction in year-three Navigator funding.  Among the other 31 FFM states, the funding reductions ranged from 10% in North Carolina to 80% or more in Indiana, Nebraska, and Louisiana (Table 1).

Table 1: 2016 Federal Navigator Funding Awards  and Preliminary 2017 Awards as of  September 13, 2017, by State
State 2016 Funding Award 2017 Preliminary Funding Award Percent Change
Alabama $1,338,335 $1,036,859 -23%
Alaska $600,000 $446,805 -26%
Arizona $1,629,237 $1,167,592 -28%
Delaware $600,000 $600,000 0%
Florida $9,464,668 $6,625,807 -30%
Georgia $3,682,732 $1,433,936 -61%
Hawaii $334,510 $185,143 -45%
Illinois $2,581,477 $1,792,170 -31%
Indiana $1,635,961 $296,704 -82%
Iowa $603,895 $226,323 -63%
Kansas $731,532 $731,532 0%
Louisiana $1,535,332 $307,349 -80%
Maine $600,000 $551,750 -8%
Michigan $2,228,692 $627,958 -72%
Mississippi $907,579 $382,281 -58%
Missouri $1,815,514 $729,577 -60%
Montana $495,701 $374,750 -24%
Nebraska $600,000 $115,704 -81%
New Hampshire $600,000 $456,214 -24%
New Jersey $1,905,132 $720,545 -62%
North Carolina $3,405,954 $3,061,034 -10%
North Dakota $636,648 $208,524 -67%
Ohio $1,971,421 $568,327 -71%
Oklahoma $1,162,363 $798,000 -31%
Pennsylvania $3,073,116 $1,988,501 -35%
South Carolina $1,517,783 $511,048 -66%
South Dakota $600,000 $236,947 -61%
Tennessee $1,772,618 $1,497,410 -16%
Texas $9,217,235 $6,110,535 -34%
Utah $902,681 $394,862 -56%
Virginia $2,187,871 $1,108,189 -49%
West Virginia $600,000 $600,000 0%
Wisconsin $1,338,306 $749,215 -44%
Wyoming $605,847 $183,654 -70%
Total $62,882,140 $36,825,245 -41%
Source: List of preliminary grant awards was obtained and released by a third party, not by CMS.

When the multi-year agreement was established, federal funding was allocated across FFM states based on the state’s share of the number of uninsured people, with a minimum amount ($600,000) reserved for each of the smallest states.  This allocation formula no longer seems to apply.  For example, total funding for Navigators in Indiana ($290,000) was less than that for Navigators in Alaska ($447,000) despite the fact that there are four times as many uninsured residents in Indiana compared to Alaska (422,000 vs 95,600 in 2016).  Similarly, funding for Navigators in Ohio was less than that for Navigators in Oklahoma ($568,000 vs $798,000) though there are more uninsured residents in Ohio (631,000 vs 409,000).1

Overall, the funding reductions varied widely across individual Navigator programs. The vast majority (82%) of Navigator programs experienced reductions, while 18% of programs saw their funding stay the same or increase compared to funding levels in 2016. Forty-nine percent of programs had their funding reduced by more than half and more than one-quarter experienced funding reductions of over 75% (Figure 1).

Figure 1: Changes in Navigator Program Funding, 2016-2017

NAVIGATOR PROGRAM FUNDING VERSUS PERFORMANCE

This section summarizes findings from the KFF Survey of FFM Navigators about 2017 funding changes and program performance on certain metrics during the second year of the multi-year agreement.  All Navigator programs were contacted, and 51% participated in the survey.

Navigators say the basis for 2017 funding decisions has not been clear.  Nearly half (49%) of respondents said that the rationale for the funding notice they received on September 13 was not provided at all, and another 40% said it was unclear (Figure 2).

Figure 2: Navigator Program Perception of Clarity of CMS Funding Rationale

The August 31 CMS bulletin indicated that funding for the Navigators would be based on performance against year-two “enrollment goals.” According to the bulletin, “a grantee that achieved 100 percent of its enrollment goal for plan year 2017 will receive the same level of funding as last year, while a grantee that enrolled only 70 percent of its enrollment goal would receive 70 percent of its previous year funding level, a reduction of 30 percent. The new funding formula will ensure accountability within the Navigator program.”

It is not clear what metric CMS used to determine funding levels since Navigators have been required to track a number of activities relative to goals, all of which could result in or contribute to enrollment in health coverage.  These include:

  • Number of consumers assisted with qualified health plan (QHP) selection/enrollment (including reenrollment);
  • Number of one-on-one interactions with consumers, including both general and specific inquiries; and
  • Number of consumers assisted with applying for Medicaid/CHIP, including referral of consumers in non-expansion states to the state Medicaid office;
  • Number of consumers reached through outreach and public education activities.2
NAVIGATOR-ASSISTED QUALIFIED HEALTH PLAN SELECTION METRIC

The number of consumers assisted with QHP selections is the most direct measure of marketplace enrollment tracked by Navigators, although as discussed below, it does not capture all marketplace enrollments that involved Navigator assistance.

There are two measures of Navigator-assisted QHP selections, one self-reported by the programs and one based on data collected by healthcare.gov – the Multidimensional Information and Data Analytics System, or MIDAS data.  The healthcare.gov online application includes a field where Navigator staff can enter their identification number for each consumer whom they assist. Navigators report that program staff have not been trained on this data entry and did not consistently enter it. Several weeks after the start of the fourth open enrollment period, some Navigator programs said they were encouraged by their CMS project officers to improve consistency of staff identification numbers on applications.  Some say they subsequently received reports from CMS staff during the project year comparing MIDAS and self-reported data on QHP selections that did not match – in some cases by a factor of two – and programs did not know why.  Other programs said they did not receive reports from CMS on their MIDAS data.  Navigators expressed concern about the accuracy of data counting QHP selections, especially if this will become the basis for future funding decisions.

The survey asked Navigators to provide both their goal and self-reported performance data for Navigator-assisted QHP selections as reported to CMS for the second budget period. Navigator performance relative to the goal was compared to the change in funding from 2016 to 2017.  Among programs that provided the performance data, findings include:

For 22.5% of programs, 2017 funding matches performance on the self-reported QHP selection metric (Figure 3).  Included in this group were:

  • 15.0% of programs that exceeded or met at least 95% of the goal and whose 2017 funds were not reduced; and
  • 7.5% of programs that did not meet the goal and had funding reduced by the same or similar percentage (+/- 5%).

For 77.5% of programs, 2017 funding does not reflect performance on the QHP selection metric.  Included in this group were:

  • 22.5% of programs that exceeded or met at least 95% of the goal and whose 2017 funds were reduced;
  • 27.5% of programs that did not meet the goal and had funding reduced by a greater percentage; and
  • 27.5% of programs that did not meet the goal and had funding changed by a smaller percentage.

Figure 3: Change in Navigator Funding Compared to Performance on QHP Selection Metric

The QHP selection metric tends to undercount enrollment that is connected to assistance provided by Navigators. Through the survey and at the roundtable, Navigators expressed concern that the QHP selection measure does not reflect the number of consumers whom they help and who ultimately enroll in marketplace health plans.  This metric, as defined by CMS, counts only those consumers who select a plan in the Navigator’s presence, a fraction of the total number of individuals who enroll in coverage and who were helped by Navigators.  For example, if a Navigator helped a consumer complete her application and reviewed plan choices, but the consumer went home to consider her options and made a final selection that evening, that visit could not be reported as a Navigator-assisted plan selection.3 According to the Kaiser Family Foundation 2016 Survey of Health Insurance Marketplace Assister Programs and Brokers, 18% of assister programs reported that nearly all consumers they helped who were determined eligible to enroll in a QHP made their plan selection during the initial visit. Thirty-five percent said they knew the final plan selection of all or nearly all such consumers whom they helped.

OTHER NAVIGATOR PERFORMANCE METRICS

Funding changes for 2017 also do not appear to align with performance on other metrics.  Navigators reported goals and performance data on other key metrics that relate to enrollment (Figure 4). Most programs met or exceeded these goals, so these metrics do not appear to be related to the funding reductions.  Among programs that answered these questions, Eight in ten programs (83%) met their goals for one-on-one consumers interactions, 71% met their goals for helping consumers enroll in Medicaid or CHIP, and three quarters met their outreach and education event goal.

Figure 4: Most Navigators Met Other Enrollment-Related Goals

One-on-one assistance: The most comprehensive measurement required by CMS is the number of consumers provided one-on-one assistance.  A one-on-one encounter can involve helping a consumer with any step along the process that ends with enrollment:  educating consumers about the availability of plans and assistance, completing a marketplace application for financial assistance, appealing a marketplace decision, reviewing and understanding plan options, or selecting a QHP.  Navigators also provide one-on-one assistance to consumers after they enroll so that they can remain covered.  Such help includes answering tax reconciliation questions, resolving premium payment disputes, and referring consumers for help with denied claims.  Once they have resolved the problem they came in with, many consumers leave and complete the enrollment process on their own.  The one-on-one assistance metric would also count consumers who are helped but who do not enroll in coverage.  On average, the number one-on-one encounters Navigators reported was 15 times higher than the number of QHP selections.

Medicaid/CHIP enrollment assistance or referrals: The ACA requires a “no wrong door” application process through which consumers can apply through the marketplace, using a single streamlined application, for either private health insurance subsidies or Medicaid/CHIP.  Navigators are required to help all consumers with the application.  Navigators from Medicaid expansion states noted that most consumers who sought help were ultimately determined Medicaid eligible.  At the roundtable, some commented that, when the August 31 bulletin was released, they assumed CMS would base funding on enrollment under both types of coverage.

Outreach and public education: Four years after implementation, the public’s understanding of ACA benefits and requirements remains limited.  For example, many consumers continue to be unaware that signups for private non-group health insurance, generally, must take place during open enrollment.4  Turnover in marketplace plans is high, as most participants need non-group coverage only while they are between jobs or other types of coverage.  Navigators report that consumers are less likely to seek, or be receptive to, information about the marketplace until they actually need it.

IMPACT OF NAVIGATOR FUNDING REDUCTIONS

This section summarizes findings from the KFF Navigator survey as well as insights from the Navigator Roundtable meeting on program changes that may result from the funding reductions.

Most Navigator programs say they will continue to operate in 2018 despite the funding reductions.However, three programs said they will terminate work for year-three.  These include two programs – one statewide and one nearly statewide5 – that had been the only Navigator service providers for consumers in most areas of their respective states.  Their decision to withdraw was based on the level and timing of funding reductions.  The September 13 NOA directed that no more than 10% of the grantee’s award could be spent by programs pending CMS review and approval of the final budget and work plan.  Because the preliminary award was announced two weeks into the plan year with final awards scheduled to be made as late as October 28, grantees were faced with maintaining staff payroll and other expenses for as long as two months without assurances they would be reimbursed. The terminating programs, both operated by nonprofits, determined this was not feasible.

Most programs report they will likely reduce their geographic service area and limit help to rural residents. Among programs whose funding was reduced, 45% of statewide programs and two-thirds of regional programs said it is somewhat or very likely they will have to limit the territory their program will serve in year three. Programs emphasized their inability to afford the same level of travel expenses and/or the cost of satellite offices that they had previously incurred in order to offer in-person help to consumers living farther away.  Consumers living in rural communities may be the most affected.  Most (55%) statewide Navigator programs and 72% of regional programs expect to limit services to rural residents this year (Figure 5).

Figure 5: Navigator Programs Reducing Geographic Service Area and Services in Rural Areas

Nearly all programs (89%) expect to lay off staff as a result of funding reductions (Figure 6).  Some programs expect to cut Navigator staff by 75% or more.  The KFF 2016 Assister Survey found that continuity among staff has been high to date.  One advantage of the multi-year agreement was to allow staff experience to grow over time.  To fill in the gaps left by staff lay-offs, some programs plan to rely more heavily on less experienced volunteers.

Figure 6: Navigator Program Response to Funding Reductions

Most Navigator programs expect to reduce services in other ways, as well.  Nearly all programs (81%) say they will likely reduce outreach and public education activities as a result of budget reductions.  In addition, 89% of programs say they will likely reduce spending on marketing and advertising. Nearly six in ten programs (57%) said they will likely reduce the number of months in which they offer Navigator assistance.  Some programs expect to close following open enrollment, others will cut back to a skeletal staff.  As a result, consumers who need assistance at tax time, or help with special enrollments or post-enrollment problems during the year, may have difficulty finding it.

Over four in ten programs say it is likely they will curtail help to consumers related to Medicaid.  At the roundtable, some discussed a strategy of pre-screening consumers during open enrollment to identify those likely eligible for Medicaid/CHIP.  These consumers might be asked to come back at a later date, if they do not have an immediate medical or coverage need, because Medicaid and CHIP enrollment is year round.  Other expressed concern that, if CMS bases future funding on QHP plan selections, Navigators in Medicaid expansion states could be disadvantaged.

In addition, 57% of programs say they will likely limit time staff can devote to helping consumers with complex cases.  These cases include consumers experiencing identity proofing problems (for example, faced by young adults who have not previously filed income tax returns or established credit ratings).6  They also include consumers with income data-matching problems (for example, self-employed individuals who have difficulty estimating income for the coming year).  People who cannot resolve identity or other data verification problems within 90 days risk losing their marketplace coverage or subsidies.

Another 54% of programs say they will likely limit the number of limited English proficiency (LEP) consumers they can serve.  Programs often pay a premium for bi-lingual staff, an expense they may no longer be able to afford with reduced funding.

Consumers who need these kinds of assistance may have difficulty finding it elsewhere.  Many consumers seek help from other types of marketplace assister programs.  Federally qualified health centers (FQHCs) also receive funding from the federal government to provide in-person enrollment assistance, although the authorization for most federal funding expired September 30 and has yet to be extended.  In addition, Certified Application Counselor (CAC) programs provide in-person help in the marketplace, though are not paid by the marketplace.  The KFF 2016 Assister Survey found that all three types of programs play an important role in helping consumers.  They also tend to differ from Navigator programs in some key respects.  In particular, Navigator programs typically undergo a higher level of training; they are more likely to operate statewide, sponsor outreach and enrollment events, handle complex cases, and provide help throughout the year.

The KFF 2016 Assister Survey also found that agents and brokers are less likely than marketplace assister programs to serve consumers who need translation services, help with complex cases, and help with Medicaid applications. Brokers and agents are also less likely to help uninsured consumers, immigrants, and consumers who lack internet at home.

DISCUSSION

The Administration’s decision to reduce funding for Navigator programs comes at a challenging time for consumers who rely on coverage through the marketplaces. High-profile insurer exits from the marketplaces, rising premiums, and uncertainty over the federal commitment to funding the cost sharing subsidies are likely sowing confusion among consumers about whether coverage and financial assistance remain available. This confusion, coupled with a shortened open enrollment period, increases demand for the consumer education and in-person enrollment assistance Navigators provide. At a time when more help may be needed, the funding reductions are likely to reduce the level of in-person help available to consumers during this fall’s open enrollment and throughout the 2018 coverage year.

Navigator programs generally report that they do not understand the basis for the funding decisions, and our survey results suggest that there is not a clear link between funding and performance of programs relative to goals on the measures they are required to track and self-report. This ambiguity makes it difficult for programs to plan for the future.

Both the magnitude of the reductions and the timing has caused disruption to Navigator program planning and operations.  Programs plan to adopt various strategies in response to the reductions, including reducing their geographic service area and cutting services, such as outreach and assisting with complex cases. Three programs report they will terminate operations, leaving consumers in their states with very limited access to in-person help. While consumers may be able to turn to other assister programs or brokers, less in-person assistance will be available in some areas, especially for people with complex situations or who live in remote or rural communities.

 

Read the original article here.

Source:

Pollitz K., Tolbert J., Diaz M. (11 October 2017). "Data Note: Changes in 2017 Federal Navigator Funding" [Web Blog Post]. Retrieved from address https://www.kff.org/health-reform/issue-brief/data-note-changes-in-2017-federal-navigator-funding/


An Early Look at 2018 Premium Changes and Insurer Participation on ACA Exchanges


Each year insurers submit filings to state regulators detailing their plans to participate on the Affordable Care Act marketplaces (also called exchanges). These filings include information on the premiums insurers plan to charge in the coming year and which areas they plan to serve. Each state or the federal government reviews premiums to ensure they are accurate and justifiable before the rate goes into effect, though regulators have varying types of authority and states make varying amounts of information public.

In this analysis, we look at preliminary premiums and insurer participation in the 20 states and the District of Columbia where publicly available rate filings include enough detail to be able to show the premium for a specific enrollee. As in previous years, we focus on the second-lowest cost silver plan in the major city in each state. This plan serves as the benchmark for premium tax credits. Enrollees must also enroll in a silver plan to obtain reduced cost sharing tied to their incomes. About 71% of marketplace enrollees are in silver plans this year.

States are still reviewing premiums and participation, so the data in this report are preliminary and could very well change. Rates and participation are not locked in until late summer or early fall (insurers must sign an annual contract by September 27 in states using Healthcare.gov).

Insurers in this market face new uncertainty in the current political environment and in some cases have factored this into their premium increases for the coming year. Specifically, insurers have been unsure whether the individual mandate (which brings down premiums by compelling healthy people to buy coverage) will be repealed by Congress or to what degree it will be enforced by the Trump Administration. Additionally, insurers in this market do not know whether the Trump Administration will continue to make payments to compensate insurers for cost-sharing reductions (CSRs), which are the subject of a lawsuit, or whether Congress will appropriate these funds. (More on these subsidies can be found here).

The vast majority of insurers included in this analysis cite uncertainty surrounding the individual mandate and/or cost sharing subsidies as a factor in their 2018 rates filings. Some insurers explicitly factor this uncertainty into their initial premium requests, while other companies say if they do not receive more clarity or if cost-sharing payments stop, they plan to either refile with higher premiums or withdraw from the market. We include a table in this analysis highlighting examples of companies that have factored this uncertainty into their initial premium increases and specified the amount by which the uncertainty is increasing rates.

Changes in the Second-Lowest Cost Silver Premium

The second-lowest silver plan is one of the most popular plan choices on the marketplace and is also the benchmark that is used to determine the amount of financial assistance individuals and families receive. The table below shows these premiums for a major city in each state with available data. (Our analyses from 201720162015, and 2014 examined changes in premiums and participation in these states and major cities since the exchange markets opened nearly four years ago.)

Across these 21 major cities, based on preliminary 2018 rate filings, the second-lowest silver premium for a 40-year-old non-smoker will range from $244 in Detroit, MI to $631 in Wilmington, DE, before accounting for the tax credit that most enrollees in this market receive.

Of these major cities, the steepest proposed increases in the unsubsidized second-lowest silver plan are in Wilmington, DE (up 49% from $423 to $631 per month for a 40-year-old non-smoker), Albuquerque, NM (up 34% from $258 to $346), and Richmond, VA (up 33% from $296 to $394). Meanwhile, unsubsidized premiums for the second-lowest silver premiums will decrease in Providence, RI (down -5% from $261 to $248 for a 40-year-old non-smoker) and remain essentially unchanged in Burlington, VT ($492 to $491).

As discussed in more detail below, this year’s preliminary rate requests are subject to much more uncertainty than in past years. An additional factor driving rates this year is the return of the ACA’s health insurance tax, which adds an estimated 2 to 3 percentage points to premiums.

Most enrollees in the marketplaces (84%) receive a tax credit to lower their premium and these enrollees will be protected from premium increases, though they may need to switch plans in order to take full advantage of the tax credit. The premium tax credit caps how much a person or family must spend on the benchmark plan in their area at a certain percentage of their income. For this reason, in 2017, a single adult making $30,000 per year would pay about $207 per month for the second-lowest-silver plan, regardless of the sticker price (unless their unsubsidized premium was less than $207 per month). If this person enrolls in the second lowest-cost silver plan is in 2018 as well, he or she will pay slightly less (the after-tax credit payment for a similar person in 2018 will be $201 per month, or a decrease of 2.9%). Enrollees can use their tax credits in any marketplace plan. So, because tax credits rise with the increase in benchmark premiums, enrollees are cushioned from the effect of premium hikes.

Table 1: Monthly Silver Premiums and Financial Assistance for a 40 Year Old Non-Smoker Making $30,000 / Year
State  Major City 2nd Lowest Cost Silver
Before Tax Credit
2nd Lowest Cost Silver
After Tax Credit
Amount of Premium Tax Credit
2017 2018 % Change
from 2017
2017 2018 % Change
from 2017
2017 2018 % Change
from 2017
California* Los Angeles $258 $289 12% $207 $201 -3% $51 $88 71%
Colorado Denver $313 $352 12% $207 $201 -3% $106 $150 42%
Connecticut Hartford $369 $417 13% $207 $201 -3% $162 $216 33%
DC Washington $298 $324 9% $207 $201 -3% $91 $122 35%
Delaware Wilmington $423 $631 49% $207 $201 -3% $216 $430 99%
Georgia Atlanta $286 $308 7% $207 $201 -3% $79 $106 34%
Idaho Boise $348 $442 27% $207 $201 -3% $141 $241 70%
Indiana Indianapolis $286 $337 18% $207 $201 -3% $79 $135 72%
Maine Portland $341 $397 17% $207 $201 -3% $134 $196 46%
Maryland Baltimore $313 $392 25% $207 $201 -3% $106 $191 81%
Michigan* Detroit $237 $244 3% $207 $201 -3% $29 $42 44%
Minnesota** Minneapolis $366 $383 5% $207 $201 -3% $159 $181 14%
New Mexico Albuquerque $258 $346 34% $207 $201 -3% $51 $144 183%
New York*** New York City $456 $504 10% $207 $201 -3% $249 $303 21%
Oregon Portland $312 $350 12% $207 $201 -3% $105 $149 42%
Pennsylvania Philadelphia $418 $515 23% $207 $201 -3% $211 $313 49%
Rhode Island Providence $261 $248 -5% $207 $201 -3% $54 $47 -13%
Tennessee Nashville $419 $507 21% $207 $201 -3% $212 $306 44%
Vermont Burlington $492 $491 0% $207 $201 -3% $285 $289 2%
Virginia Richmond $296 $394 33% $207 $201 -3% $89 $193 117%
Washington Seattle $238 $306 29% $207 $201 -3% $31 $105 239%
NOTES: *The 2018 premiums for MI and CA reflect the assumption that CSR payments will continue. **The 2018 premium for MN assumes no reinsurance. ***Empire has filed to offer on the individual market in New York in 2018 but has not made its rates public.
SOURCE:  Kaiser Family Foundation analysis of premium data from Healthcare.gov and insurer rate filings to state regulators.

Looking back to 2014, when changes to the individual insurance market under the ACA first took effect, reveals a wide range of premium changes. In many of these cities, average annual premium growth over the 2014-2018 period has been modest, and in two cites (Indianapolis and Providence), benchmark premiums have actually decreased. In other cities, premiums have risen rapidly over the period, though in some cases this rapid growth was because premiums were initially quite low (e.g., in Nashville and Minneapolis).

Table 2: Monthly Benchmark Silver Premiums
for a 40 Year Old Non-Smoker, 2014-2018
State Major City 2014 2015 2016 2017 2018 Average Annual % Change from 2014 to 2018 Average Annual % Change After Tax Credit, $30K Income
California Los Angeles $255 $257 $245 $258 $289 3% -1%
Colorado Denver $250 $211 $278 $313 $352 9%  -1%
Connecticut Hartford $328 $312 $318 $369 $417 6%  -1%
DC Washington $242 $242 $244 $298 $324 8%  -1%
Delaware Wilmington $289 $301 $356 $423 $631 22%  -1%
Georgia Atlanta $250 $255 $254 $286 $308 5%  -1%
Idaho Boise $231 $210 $273 $348 $442 18%  -1%
Indiana Indianapolis $341 $329 $298 $286 $337 0%  -1%
Maine Portland $295 $282 $288 $341 $397 8%  -1%
Maryland Baltimore $228 $235 $249 $313 $392 15%  -1%
Michigan* Detroit $224 $230 $226 $237 $244 2%  -1%
Minnesota** Minneapolis $162 $183 $235 $366 $383 24%  6%
New Mexico Albuquerque $194 $171 $186 $258 $346 16%  1%
New York*** New York City $365 $372 $369 $456 $504 8%  -1%
Oregon Portland $213 $213 $261 $312 $350 13%  -1%
Pennsylvania Philadelphia $300 $268 $276 $418 $515 14%  -1%
Rhode Island Providence $293 $260 $263 $261 $248 -4%  -1%
Tennessee Nashville $188 $203 $281 $419 $507 28%  2%
Vermont Burlington $413 $436 $468 $492 $491 4%  -1%
Virginia Richmond $253 $260 $276 $296 $394 12%  -1%
Washington Seattle $281 $254 $227 $238 $306 2% -1%
NOTES: *The 2018 premiums for MI and CA reflect the assumption that CSR payments will continue. **The 2018 premium for MN assumes no reinsurance. ***Empire has filed to offer on the individual market in New York in 2018 but has not made its rates public.
SOURCE:  Kaiser Family Foundation analysis of premium data from Healthcare.gov and insurer rate filings to state regulators.

Changes in Insurer Participation

Across these 20 states and DC, an average of 4.6 insurers have indicated they intend to participate in 2018, compared to an average of 5.1 insurers per state in 2017, 6.2 in 2016, 6.7 in 2015, and 5.7 in 2014. In states using Healthcare.gov, insurers have until September 27 to sign final contracts to participate in 2018. Insurers often do not serve an entire state, so the number of choices available to consumers in a particular area will typically be less than these figures.

Table 3: Total Number of Insurers by State, 2014 – 2018
State Total Number of Issuers in the Marketplace
2014 2015 2016 2017 2018 (Preliminary)
California 11 10 12 11 11
Colorado 10 10 8 7 7
Connecticut 3 4 4 2 2
DC 3 3 2 2 2
Delaware 2 2 2 2 1 (Aetna exiting)
Georgia 5 9 8 5 4 (Humana exiting)
Idaho 4 5 5 5 4 (Cambia exiting)
Indiana 4 8 7 4 2 (Anthem and MDwise exiting)
Maine 2 3 3 3 3
Maryland 4 5 5 3 3 (Cigna exiting, Evergreen1 filed to reenter)
Michigan 9 13 11 9 8 (Humana exiting)
Minnesota 5 4 4 4 4
New Mexico 4 5 4 4 4
New York 16 16 15 14 14
Oregon 11 10 10 6 5 (Atrio exiting)
Pennsylvania 7 8 7 5 5
Rhode Island 2 3 3 2 2
Tennessee 4 5 4 3 3 (Humana exiting, Oscar entering)
Vermont 2 2 2 2 2
Virginia 5 6 7 8 6 (UnitedHealthcare and Aetna exiting)
Washington 7 9 8 6 5 (Community Health Plan of WA exiting)
Average (20 states + DC) 5.7 6.7 6.2 5.1 4.6
NOTES: Insurers are grouped by parent company or group affiliation, which we obtained from HHS Medical Loss Ratio public use files and supplemented with additional research.
1The number of preliminary 2018 insurers in Maryland includes Evergreen, which submitted a filing but has been placed in receivership.
SOURCE:  Kaiser Family Foundation analysis of premium data from Healthcare.gov and insurer rate filings to state regulators.

Uncertainty Surrounding ACA Provisions

Insurers in the individual market must submit filings with their premiums and service areas to states and/or the federal government for review well in advance of these rates going into effect. States vary in their deadlines and processes, but generally, insurers were required to submit their initial rate requests in May or June of 2017 for products that go into effect in January 2018. Once insurers set their premiums for 2018 and sign final contacts at the end of September, those premiums are locked in for the entire calendar year and insurers do not have an opportunity to revise their rates or service areas until the following year.

Meanwhile, over the course of this summer, the debate in Congress over repealing and replacing the Affordable Care Act has carried on as insurers set their rates for next year. Both the House and Senate bills included provisions that would have made significant changes to the law effective in 2018 or even retroactively, including repeal of the individual mandate penalty. Additionally, the Trump administration has sent mixed signals over whether it would continue to enforce the individual mandate or make payments to insurers to reimburse them for the cost of providing legally required cost-sharing assistance to low-income enrollees.

Because this policy uncertainty is far outside the norm, insurers are making varying assumptions about how this uncertainty will play out and affect premiums. Some states have attempted to standardize the process by requesting rate submissions under multiple scenarios, while other states appear to have left the decision up to each individual company. There is no standard place in the filings where insurers across all states can explain this type of assumption, and some states do not post complete filings to allow the public to examine which assumptions insurers are making.

In the 20 states and DC with detailed rate filings included in the previous sections of this analysis, the vast majority of insurers cite policy uncertainty in their rate filings. Some insurers make an explicit assumption about the individual mandate not being enforced or cost-sharing subsidies not being paid and specify how much each assumption contributes to the overall rate increase. Other insurers state that if they do not get clarity by the time final rates must be submitted – which has now been delayed to September 5 for the federal marketplace – they may either increase their premiums further or withdraw from the market.

Table 4 highlights examples of insurers that have explicitly factored into their premiums an assumption that either the individual mandate will not be enforced or cost-sharing subsidy payments will not be made and have specified the degree to which that assumption is influencing their initial rate request. As mentioned above, the vast majority of companies in states with detailed rate filings have included some language around the uncertainty, so it is likely that more companies will revise their premiums to reflect uncertainty in the absence of clear answers from Congress or the Administration.

Insurers assuming the individual mandate will not be enforced have factored in to their rate increases an additional 1.2% to 20%. Those assuming cost-sharing subsidy payments will not continue and factoring this into their initial rate requests have applied an additional rate increase ranging from 2% to 23%. Because cost-sharing reductions are only available in silver plans, insurers may seek to raise premiums just in those plans if the payments end. We estimate that silver premiums would have to increase by 19% on average to compensate for the loss of CSR payments, with the amount varying substantially by state.

Several insurers assumed in their initial rate filing that payment of the cost-sharing subsidies would continue, but indicated the degree to which rates would increase if they are discontinued. These insurers are not included in the Table 4. If CSR payments end or there is continued uncertainty, these insurers say they would raise their rates an additional 3% to 10% beyond their initial request – or ranging from 9% to 38% in cases when the rate increases would only apply to silver plans. Some states have instructed insurers to submit two sets of rates to account for the possibility of discontinued cost-sharing subsidies. In California, for example, a surcharge would be added to silver plans on the exchange, increasing proposed rates an additional 12.4% on average across all 11 carriers, ranging from 8% to 27%.

Table 4: Examples of Preliminary Insurer Assumptions Regarding Individual Mandate Enforcement and
Cost-Sharing Reduction (CSR) Payments
State Insurer Average Rate Increase  Requested Individual Mandate Assumption CSR Payments Assumption Requested Rate Increase Due to Mandate or CSR Uncertainty
CT ConnectiCare 17.5% Weakly enforced1 Not specified Mandate: 2.4%
DE Highmark BCBSD 33.6% Not enforced Not paid Mandate and CSR: 12.8% combined impact
GA Alliant Health Plans 34.5% Not enforced Not paid Mandate: 5.0%
CSR: Unspecified
ID Mountain Health CO-OP 25.0% Not specified Not paid CSR: 17.0%
ID PacificSource Health Plans 45.6% Not specified Not paid CSR: 23.2%
ID SelectHealth 45.0% Not specified Not paid CSR: 20.0%
MD CareFirst BlueChoice 45.6% Not enforced Potentially not paid Mandate: 20.0%
ME Harvard PilgrimHealth Care 39.7% Weakly enforced Potentially not paid Mandate: 15.9%
MI BCBS of MI 26.9% Weakly enforced Potentially not paid (two rate submissions) Mandate: 5.0%
MI Blue Care Network of MI 13.8% Weakly enforced Potentially not paid (two rate submissions) Mandate: 5.0%
MI Molina Healthcare of MI 19.3% Weakly enforced Potentially not paid (two rate submissions) Mandate: 9.5%
NM CHRISTUS Health Plan 49.2% Not enforced Potentially not paid Mandate: 9.0%, combined impact of individual mandate non-enforcement and reduced advertising and outreach
NM Molina Healthcare of NM 21.2% Weakly enforced Paid Mandate: 11.0%
NM New Mexico Health Connections 32.8% Not enforced Potentially not paid Mandate: 20.0%
OR* BridgeSpan 17.2% Weakly enforced Potentially not paid Mandate: 11.0%
OR* Moda Health 13.1% Not enforced Potentially not paid Mandate: 1.2%
OR* Providence Health Plan 20.7% Not enforced Potentially not paid Mandate: 9.7%, largely due to individual mandate non-enforcement
TN BCBS of TN 21.4% Not enforced Not paid Mandate: 7.0%
CSR:  14.0%
TN Cigna 42.1% Weakly enforced Not paid CSR: 14.1%
TN Oscar Insurance  NA (New to state) Not enforced Not paid Mandate: 0%, despite non-enforcement
CSR: 17.0%, applied only to silver plans
VA CareFirst BlueChoice 21.5% Not enforced Potentially not paid Mandate: 20.0%
VA CareFirst GHMSI 54.3% Not enforced Potentially not paid Mandate: 20.0%
WA LifeWise Health Plan of Washington 21.6% Weakly enforced Not paid Mandate: 5.2%
CSR: 2.3%
WA Premera Blue Cross 27.7% Weakly enforced Not paid Mandate: 4.0%
CSR: 3.1%
WA Molina Healthcare of WA 38.5% Weakly enforced Paid Mandate: 5.4%
NOTES: The CSR assumption “Potentially not paid” refers to insurers that filed initial rates assuming CSR payments are made and indicated that uncertainty over CSR funding would change their initial rate requests. In Michigan, insurers were instructed to submit a second set of filings showing rate increases without CSR payments; the rates shown above assume continued CSR payments. *The Oregon Division of Financial Regulation reviewed insurer filings and advised adjustment of the impact of individual mandate uncertainty to between 2.4% and 5.1%. Although rates have since been finalized, the increases shown here are based on initial insurer requests. 1Connecticare assumes a public perception that the mandate will not be enforced.
SOURCE:  Kaiser Family Foundation analysis of premium data from Healthcare.gov and insurer rate filings to state regulators.

Discussion

A number of insurers have requested double-digit premium increases for 2018. Based on initial filings, the change in benchmark silver premiums will likely range from -5% to 49% across these 21 major cities. These rates are still being reviewed by regulators and may change.

In the past, requested premiums have been similar, if not equal to, the rates insurers ultimately charge. This year, because of the uncertainty insurers face over whether the individual mandate will be enforced or cost-sharing subsidy payments will be made, some companies have included an additional rate increase in their initial rate requests, while other companies have said they may revise their premiums late in the process. It is therefore quite possible that the requested rates in this analysis will change between now and open enrollment.

Insurers attempting to price their plans and determine which states and counties they will service next year face a great deal of uncertainty. They must soon sign contracts locking in their premiums for the entire year of 2018, yet Congress or the Administration could make significant changes in the coming months to the law – or its implementation – that could lead to significant losses if companies have not appropriately priced for these changes. Insurers vary in the assumptions they make regarding the individual mandate and cost-sharing subsidies and the degree to which they are factoring this uncertainty into their rate requests.

Because most enrollees on the exchange receive subsidies, they will generally be protected from premium increases. Ultimately, most of the burden of higher premiums on exchanges falls on taxpayers. Middle and upper-middle income people purchasing their own coverage off-exchange, however, are not protected by subsidies and will pay the full premium increase, switch to a lower level plan, or drop their coverage. Although the individual market on average has been stabilizing, the concern remains that another year of steep premium increases could cause healthy people (particularly those buying off-exchange) to drop their coverage, potentially leading to further rate hikes or insurer exits.

Methods

Data were collected from health insurer rate filing submitted to state regulators. These submissions are publicly available for the states we analyzed. Most rate information is available in the form of a SERFF filing (System for Electronic Rate and Form Filing) that includes a base rate and other factors that build up to an individual rate. In states where filings were unavailable, we gathered data from tables released by state insurance departments. Premium data are current as of August 7, 2017; however, filings in most states are still preliminary and will likely change before open enrollment. All premiums in this analysis are at the rating area level, and some plans may not be available in all cities or counties within the rating area. Rating areas are typically groups of neighboring counties, so a major city in the area was chosen for identification purposes.


Employer Premiums Rise Nearly 7% in 2017; Employees Absorb More of the Health Insurance Cost

On October 26th, UBA released the following press release on the UBA Health Plan Survey:


Increased prescription drug costs for employees with 5- and 6-tier plans; increased out-of-network deductibles and out-of-pocket maximums, especially for singles; self-funding on the rise

Premium renewal rates (the comparison of similar plan rates year over year) for employer sponsored health insurance rose an average of 6.6%—a significant increase from the five-year average increase of 5.6%, according to the 2017 United Benefit Advisors (UBA) Health Plan Survey, released today. Two states saw record premium increases: Connecticut saw a 24% increase in premiums in 2017, up to $655 from $530; New York also saw a large increase of 14%, up to $712 in 2017 over $624 in 2016.

On the other side, some states saw decreases in premiums, such as Arizona and Washington which saw 2% and 10% decreases, respectively.

Percent Premium Increase Over Time

Average employee premiums for all employer-sponsored plans rose from $509 in 2016 for single coverage to $532 in 2017 and from $1,236 to $1,272 for family coverage (a 4.5% and 3% increase respectively). Average annual total costs per employee increased from $9,727 to $9,935. However, the employee share of total costs rose 5% from $3,378 to $3,550, while the employer’s share rose less than 1%, from $6,350 to $6,401.

“Premiums have been holding relatively steady the last few years. And while this year’s increases are not astronomical, their departure from the trend does warrant attention. To mitigate these rising costs, employers are shifting more premium onto employees, offering more lower-cost consumer directed health plans (CDHPs) and health maintenance organization (HMO) plans, increasing out-of-network deductibles and out-of-pocket maximums, and leveraging continued extensions on the ability to “grandmother,” says Peter Weber, President of UBA. “We’ve also seen reductions in prescription drug coverage to defray increasing costs even further.”

Prescription Drug Plans—For a second year, prescription drug plans with four or more tiers are exceeding the number of plans with one to three tiers. Almost three-quarters (72.6%) of prescription drug plans have four or more tiers, while 27.4% have three or fewer tiers. Even more surprising is that the number of six-tier plans has surged, accounting for 32% of all plans, when only 2% of plans were using this design only a year ago.

“While employers chose to hold contributions, copays and in-network benefits steady, they dramatically shifted prescription drug costs to employees. By increasing tiering and adding coinsurance (vs. copays), employers were able to contain costs,” says Weber.

Out-of-Pocket Costs—Median in-network deductibles for singles and families across all plans remain steady at $2,000 and $4,000, respectively. Single out-of-network median deductibles saw a 13% increase in 2016, and a 17.6% increase in 2017, from $3,400 to $4,000. Both singles and families are facing continued increases in median in-network out-of-pocket maximums (up by $560 and $1,000, respectively, to $5,000 and $10,000).

Self-Funding—The number of employers using self-funding grew 48% for employers with 25 to 49 employees in 2017 (5.8% of plans), and 13.4% for employers with 50 to 99 employees (9.3% of plans).

Overall, 12.8% of all plans are self-funded, up from 12.5% in 2016, while almost two-thirds (60.9%) of all large employer (1,000+ employees) plans are self-funded.

“Self-funding has always been an attractive option for large groups, but we see self-funding becoming increasingly desirable to all employers as a way to avoid various cost and compliance aspects of health care reform,” says Weber. “For small employers with healthy populations, self-funding may be particularly attractive since fully insured community-rated plans under the ACA don’t give them any credit for a healthy group.”

The 2017 UBA Health Plan Survey Executive Summary is available now at http://bit.ly/2017UBASurvey. For interviews, contact Carina Sammartino, Media Relations, csammartino (at) hrmarketer.com or 760-331-3547.

About the 2017 UBA Health Plan Survey
The 2017 UBA Health Plan Survey contains the validated responses of 20,099 health plans and 11,221 employers, who cumulatively employ over two and a half million employees and insure more than five million total lives. While other surveys primarily target large employers, the focus of the UBA survey is to report results that are applicable to the small and mid-size companies that represent the overwhelming majority of the nation’s employers, while also including a mix of large companies in rough proportion to their actual prevalence, nationally. This is an important distinction compared to other national surveys.

You can read the original article here.

Source:

Mukhtar G. (26 October 2017). "Employer Premiums Rise Nearly 7% in 2017; Employees Absorb More of the Health Insurance Cost" [Web Blog Post]. Retrieved from address http://blog.ubabenefits.com/news/employer-premiums-rise-nearly-7-in-2017-employees-absorb-more-of-the-health-insurance-cost