Changes to Expect to the Affordable Care Act

There is no doubt changes are coming to the Affordable Care Act (ACA). However, many are wondering when those changes will occur and what they will look like. Like most acts of government, there will be no major modifications anytime soon. It is easy for GOP leaders to say they plan to repeal the Affordable Care Act, but this process is harder than it looks. It is also unlikely that congress will repeal the entire law, so the focus will be more on what aspects are changing and how does it affect individuals and businesses.

Changes to the ACA for 2017

So far, President Trump has not changed much of the ACA. He issued an executive order stating that federal agencies should use any means possible to delay the requirements of the ACA should it impose a fiscal burden on individuals, the health industry, or states as a whole. Due to the vague nature of the order, the only federal response from the IRS is they do not plan to enforce the requirement that most individuals must possess health insurance as strictly as they have in the past. However, it is still law.

What Happens to Those Insured via the ACA?

The biggest concern for individuals and businesses alike is what happens when congress replaces the ACA. Individuals want to know if they will be without insurance. Businesses want to know how these changes affect compliance and if they will suddenly be in violation of new regulations.

Thankfully, both President Trump and congressional leaders spearheading the initiative agree that a smooth transition is vital. They have no desire to leave individuals without insurance or cause major interruptions to businesses. Their current plan is to repeal and replace the law simultaneously.

Looking Forward

While many are concerning themselves with the coming year, 2018 holds fewer answers and more uncertainty. Because of this, more and more insurers are pulling out of the individual market. This is an issue as it is how individuals purchase insurance outside of their employer. Employers need to prepare themselves for an influx of individuals requiring insurance.

Until health care reform is complete, the best solution for employers is to invest in a Bronze level high deductible health plan (HDHP) alongside Group Supplement Health (GAP) plans. GAP insurance can provide coverage where HDHPs prove inadequate. This allows employers to offer compliant health insurance that their employees can afford. To stay up to date with the changing face of ACA as well as learn more about GAP solutions, contact Chelten Consulting.

3 GAP Strategies to Improve Your Employee Benefits Offerings

shutterstock_252811903 - CopyGroup Supplemental Health plans – called “GAP” plans – are used to fill in holes in high deductible health plans (HDHPs) offered to workers today.  They’re similar to the “Medigap” supplemental insurance plans millions of Seniors purchase each year to fill in holes in Medicare parts A&B.

These plans are considered “excepted benefits” under ACA meaning that they operate outside many of the rules of Obamacare.  They are offered only as supplements to existing major medical plans and only cover certain inpatient and outpatient deductibles and coinsurance costs.

We propose 3 GAP strategies to improve your employee benefits offerings:

“Insured HRA” strategy. Save money and duplicate or improve existing coverage. Combining a Bronze plan with GAP plan(s) can offer savings and even offer employees better coverages.

“Cadillac Tax” strategy. ACA Bronze plan base coverage, then allow employees to “pick and purchase” the right amount of GAP coverage.

“Private Exchange” strategy.  One Bronze plan base plan with multiple “buy up” GAP options. Instead of offering several major medical plans, simply give employees a strong network PPO Bronze plan and offer them several GAP plan options to “pick and purchase” the levels of GAP coverage they desire.

To learn more about gap strategies and what best fits your organization, contact Chelten Consulting.

What Is Group “GAP” Insurance?

shutterstock_174966584 - CopyGroup Supplemental Health plans – called “GAP” plans – are used to fill in holes in high deductible health plans (HDHPs) offered to workers today.  They’re similar to the “Medigap” supplemental insurance plans millions of Seniors purchase each year to fill in holes in Medicare parts A&B.

These plans are considered “excepted benefits” under ACA meaning that they operate outside many of the rules of Obamacare.  They are offered only as supplements to existing major medical plans and only cover certain inpatient and outpatient deductibles and coinsurance costs.

Most GAP plans cover neither the professional fees in a doctor’s office nor the costs of outpatient prescription drugs.  Because of this, Advisors generally recommend Employers purchase at least a Bronze major medical plan with doctors office and prescription copays to complement any GAP plan.

“1st Dollar” GAP

This GAP format offers 1st dollar benefits coverage for both inpatient and outpatient deductible and coinsurance costs.  Generally, Advisors design this format to cover up to $6500 inpatient benefits and between $2500 and $4000 of outpatient services.

In order to make 1st dollar GAP affordable, it is almost always age rated, and generally excludes certain services.  Mental illness and substance abuse are generally excluded.

Bottom line:  With 1st dollar GAP, Employees are provided full inpatient benefits.  They can also be covered on most outpatient benefits up to $4000 but are still responsible for remaining outpatient deductibles.  When paired with a Bronze plan, Employers can save money and employees can get 1st  dollar rich benefits they haven’t seen in years.

“Upfront Deductible” GAP

This GAP strategy is based on the HRA model:  Employers buy a high deductible plan (generally Bronze + Doctors OV and RX copay plans) then provide some, but not full deductible and coinsurance GAP coverage.  Example:  Employer provides a $6500 deductible major medical plan  plus $5000 Upfront Deductible GAP.  Employee pays a $1500 deductible then GAP covers the remaining $5000 deductible.

Bottom Line:  Employers save money by using a Bronze plan plus offering several upfront deductible GAP options for employees to pick and purchase. Learn more – contact us.