HCR & Health Insurance Exchange Quick Answers

Below are more Q&A on HCR.  Please be sure to read my Plain Language Disclaimers.

Small Business Owners

Thou shalt officially notify employees of the Health Insurance Exchange – Regardless if you offer health insurance.  This requirement remains even though the government delayed the Pay or Play requirement for one year.  For a model notice you can use, go to DOL Model Notice and choose from the center of the page the applicable notice for your business.


Will the SHOP be useful to my business?

Only if you are eligible for the Health Care Tax Credit, i.e. you are small and pay little.  But check with your accountant first to see if the HCTC is even worth it, i.e. what do you give up in tax advantages to get it?




What is the Health Insurance Exchange called – the name keeps changing?

Uncle Sam did a study that said Marketplace is a more likable term than Exchange.  So you’ll see the original Health Insurance Exchange (HIX – how I will continue to refer to it), Federally Facilitated Exchange, and Federally Facilitated Marketplace. Some states come up with their own names, some are not set yet.

Idaho – http://www.yourhealthidaho.org/

Utah – http://www.exchange.utah.gov/

Oregon – http://www.coveroregon.com/

Washington – http://www.wahbexchange.org/


Should I use the Health Insurance Exchange?

YES  - if you anticipate your Modified Adjusted Gross Income to be less than 400% of the Federal Poverty Level, then you could be eligible for federal premium subsidies.  Here is a tool for rough estimates for subsidies.

NO - if you anticipate having an income above 400% of FPL, then the HIX is a lot of extra work for no benefit.


What is the difference between Navigators and Agents?

Navigators are supposed to help consumers navigate the maze of the HIX site. They are not licensed agents or brokers (official term is producer).  So, they are not to recommend any plan or company.


Why should I have a licensed producer help me on the HIX?

An independent licensed producer is your advocate. The producer’s services cost you nothing. The producer can provide insight that you won’t get from either a Navigator or the carrier directly.


Also, imagine for a moment you are standing on railroad tracks (please just use your imagination).  Looking straight down, the rails are as wide as two war horses.  But as you turn your gaze to the horizon, the rails converge.  This illustrates what will happen to premiums among carriers.  Initially there could be a significant difference.  There is no precedent for the rule set applied for determining rates.  Carriers will make adjustments as they gain experience.  So down the track of time, rates and plans will look more and more similar.  What will be the deciding factors, then, for choosing a carrier?  Service.  Service based on provider networks and service from your local independent producer.


What about those large web brokerages?

They have licensed producers but they are likely in a different time zone.  They won’t know the ins and outs of carriers in your home state.  These are the companies that when you “shopped online” sold your info and you got tons of unwanted calls and emails from agents you never heard of and will never meet in person.


Do agents have biases?

Every human being is biased.  Period.


So, what would bias an agent with integrity?  The long term.  There are carpet bagging companies that want market share.  They might offer agents a “better deal” on compensation.  I tell you it’s not worth it.  In the high maintenance, low appreciation world of health insurance, a couple extra bucks could never compensate me for selling a company that isn’t committed to the long term and ends up creating heartache.


How do I know who is committed to the long term?  First, those not-for-profit companies that have already been here for the long haul.  Second, they have boots on the ground.  They know the customers, the providers, and agents.  When – not if – things get sticky as this massive law and tens of thousands of pages of regulations roll out, I want a live body to run down answers.  I don’t want to be on hold at an 800 number any more than you do.


Are prices on the HIX cheaper?

No. Premiums are the same on and off the HIX.  The only advantage of the HIX is to obtain federal subsidies if you qualify.


When should I get on the HIX?

The media keep mentioning Oct 1.  Do you think it would be wise to get on a website that will eventually involve the largest data sharing HUB in human history on the very first day it goes live?  I recommend giving it a month to work through the glitches.  I recommend waiting until November.  Just shoot for finalizing your new plan prior to December 15.  So, do it in November.


How different will the coverage be?

One upside to this mess is that our society’s broken “fee for service” model will go away.  It is unsustainable.  Plans will move toward glorified HMOs, i.e. managed care.  The good/bad will be in the implementation.  This is where carriers will differentiate themselves.


Copays will now be included in the total out of pocket maxima.  These plans are actuarially based, i.e. designed to “pay” a certain percentage of total costs based on a certain population (the one you qualify within).  So, driving factors in choosing your plan will be how much out of pocket will you risk on the front end (deductible), how much on the back end (out of pocket limit) and are you willing to pay the associated net premium?

Can I just blow the whole thing off?

On the individual side, the penalty is not severe (1% of your income the first year, then 2%, then 2.5%) but if you are ok with being indebted to the healthcare providers the rest of your life when something bad happens, then blow it off.  You will not be able to get coverage whenever you want.  Eligibility is based on Open Enrollment — similar to an employer plan and for Medicare (the model for HCR).  Outside of OE you are not eligible for coverage unless you have an IRS life qualifying event — again, as for an employer plan.