Obamacare and Commissions-Here It Is!

[TXINSURANCE]

You can disagree, but that's exactly what I am saying. I thought they could, but after talking with United Healthcare and Anthem they have made it very clear that it's now against the law to offer a product that is "deemed" major medical off of the exchange. To comply with the new rules you can only offer those plans through the exchange or an exchange type product. It's a game changer and it's something that all agents need to understand. As we speak right now UHC is putting together beefed up Indemnity plans that will be close to a major medical, but won't be "deemed" as well. I know United Security has just released their versions and many others will follow suit. Originally it was thought you could do this, but in fact you can't.

No offense but some points are severely mixed up here.

Some companies WILL have MAJOR MEDICAL ON and OFF exchange and companies will have MAJOR MEDICAL OFF exchange only.

Consumers can ONLY get a subsidy applying ON the exchange.

When I say MAJOR MEDICAL I mean compliant plan that would not result in a tax penalty.

ON / IN are interchangeable in this post.

It should also be noted that the EXCHANGE is now called THE MARKET PLACE, which translates much better into Spanish.

 

[Ann H]

Seems we only have a confusion of terms.

First, I agree with most of what Josh said, after he explained the terminology he was using. I will just ask him to rethink his terminology, to be consistent with terms that most others are using.

He says UNSUBSIDIZED means the gross (full) premium. Usually, we just call that the gross (or "full") premium. Usually, when we say "unsubsidized" we mean the portion the member/family pays, and "subsidized" means the portion the IRS pays.

He is correctly using the term MAJOR MEDICAL, as it applies in 2014. In 2014, the term "Major Medical" can only apply to the Metal Tier plans, with all the Essential Health Benefits (EHB's) in the IFP and small group market, whether sold on the Government exchange/marketplace or in the Private Market. So everything you think about "major medical" is gone in 2014 with the exception of grandfathered plans, some large-group plans, and perhaps self-funded. EDIT TO MAKE IT CLEARER: - So in 2014, you can sell these Metal Tier EHB compliant plans on the Govt Exchange/Marketplace or in the Private Market, and you can call these plans "Major Medical".

In 2014, there will be sales of plans that are not "Major Medical" (meaning not metal tier EHB plans) off the exchange. But they cannot be called "Major Medical" anymore. The limited benefit plans are being beefed up (something I have predicted on this forum for quite some time), but they can't be called "major medical", and they will circumvent most of the PPACA laws. They must be fixed indemnity plans. By law, all fixed indemnity plans have been required to call themselves "limited benefit" plans for quite some time. That's because most of them were ridiculously low in benefits, and the govt required them to say so. Now, those fixed indemnity plans may be beefed up to provide reimbursement for services at such levels that the value is as good as most plans currently sold today. But they still must have the label "limited benefit" on them and they still must follow the fixed indemnity rules. They cannot be labeled "Major Medical" after 1/1/2014, even if the beefed-up quality of benefits is similar to what we are accustomed to seeing today.

So, other than a confusion about terminology, I think most of us are actually saying the same thing.
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Oh, and one more thing, after seeing Txinsurance's correct post above. When using the fixed indemnity or supplemental, or critical illness plans that are not compliant with the 2014 definition of "Major Medical" the person is still subject to the individual mandate penalty, unless of course an exception applies. And, the list of exceptions includes that the person or family cannot find a bronze plan that costs less than 8% of household income.

 

[SamIam]

I agree with Ann after everything I've heard from reps & read. One question I still I have is & I think where I disagree with Josh is from my understanding there will be people who have all their premiums subsidised by the gov. that will be in the Marketplace/exchange. If what I heard is true how will we get paid off of those people.

 

[houcoogster]

I agree with Ann after everything I've heard from reps & read. One question I still I have is & I think where I disagree with Josh is from my understanding there will be people who have all their premiums subsidised by the gov. that will be in the Marketplace/exchange. If what I heard is true how will we get paid off of those people.

The insurance company will send you a $5 starbucks gift card for each one of those you write.

 

[Ann H]

I agree with Ann after everything I've heard from reps & read. One question I still I have is & I think where I disagree with Josh is from my understanding there will be people who have all their premiums subsidised by the gov. that will be in the Marketplace/exchange. If what I heard is true how will we get paid off of those people.

First, what Josh was saying is that the insurance companies are going to pay commission on the gross (or "full") premium. When he said "unsubsidized" he meant the full premium, even though we usually think of the term "unsubsidized" as meaning just the portion of premium that the individual/family paid.

Second, the only way someone receives 100% subsidy is:
1 - Medicaid or CHIP
2 - They had a pretty rich subsidy to begin with. But rather than buy the 2nd lowest cost Silver plan (which the subsidy is based upon), they took that subsidy and applied it to the cost of a Bronze plan, and managed to get the entire Bronze plan premium paid for with their subsidy money.

However, understanding that pert-near all of us (including the original poster, Josh), believe that the commission will be paid on the full gross premium, it's a moot point.

 

[Quotebroker]

Oh, and one more thing, after seeing Txinsurance's correct post above. When using the fixed indemnity or supplemental, or critical illness plans that are not compliant with the 2014 definition of "Major Medical" the person is still subject to the individual mandate penalty, unless of course an exception applies. And, the list of exceptions includes that the person or family cannot find a bronze plan that costs less than 8% of household income.

EDIT- nevermind- that was awful reading comprehension on my part

 

[Post Quartermaster]

No offense but some points are severely mixed up here.

Some companies WILL have MAJOR MEDICAL ON and OFF exchange and companies will have MAJOR MEDICAL OFF exchange only.

Consumers can ONLY get a subsidy applying ON the exchange.

When I say MAJOR MEDICAL I mean compliant plan that would not result in a tax penalty.

ON / IN are interchangeable in this post.

It should also be noted that the EXCHANGE is now called THE MARKET PLACE, which translates much better into Spanish.

Thank you for posting this.


I just read thru 3 pages of derp that made my head spin and was just about to type out roughly the same thing............





ETA: How bout we use the correct term Qualified Health Plan (QHP - rather than "Major Medical")to denote coverage that will not evoke a tax penalty?

 

[TXINSURANCE]

Thank you for posting this.


I just read thru 3 pages of derp that made my head spin and was just about to type out roughly the same thing............





ETA: How bout we use the correct term Qualified Health Plan (QHP - rather than "Major Medical")to denote coverage that will not evoke a tax penalty?

The terminology is confusing for the brokers, carriers, consumers, even the government is using wrong terminology on their own websites - but they are editing pages daily.

I am sure this will be VERY easy for all consumers to understand by October.

 

[Ann H]

Thank you for posting this.

I just read thru 3 pages of derp that made my head spin and was just about to type out roughly the same thing............

ETA: How bout we use the correct term Qualified Health Plan (QHP - rather than "Major Medical")to denote coverage that will not evoke a tax penalty?

Indeed, terminology is confusing. Darn, the whole thing is confusing.

But to be clear, actually QHP (qualified health plan) is not what's needed to avoid a tax penalty. For individuals and families, they must have at least minimum essential coverage (MEC) to avoid the individual mandate tax penalty, which can be quite different than a QHP. For employers with more than 50 full-time equivalent employees, they must offer an MEC to at least 95% of their full-time eligible employees to avoid the first prong of Employer Shared Risk penalties (the $2,000 penalty for every full-time employee less 30), and they must offer affordable MV (minimum value) to avoid the 2nd penalty ($3,000 penalty for every full-time employee less 30 who receive a subsidy in the exchange/marketplace). For all 3 of these tax penalties whether or not the insurance is a QHP is irrelevant.

And, although the government has changed the name of their exchange to "marketplace", nonetheless the term "marketplace" does not exist in the law, and yet the requirement to establish "exchanges" is mentioned hundreds of times in the law. Hey, they even now call the law the Affordable Care Act instead of Patient Protection and Affordable Care Act.
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While I'm at it, let me backtrack to the term "Major Medical". HHS said that fixed indemnity plans are not "major medical" and therefore are not subject to most of the reforms required by PPACA, including the EHBs, the MLR, Guarantee Issue, no limits for EHB's or lifetime benefits, 3:1 age bands, on and on... Frankly, critical illness, accident, short-term, and other programs also are no longer able to fit under the label of "major medical" and are not subject to most of PPACA. So, plans that don't meet the standards of PPACA cannot be called Major Medical. But grandfathered plans, some large group plans, and QHB's in the govt exchange/marketplace or in the Private Market can be called Major Medical. Still, you don't have to have a Major Medical plan to avoid the individual mandate tax penalty. Just an MEC (minimum essential coverage) plan will do, as will Medicare, Tricare, VA benefits, Peace Corp, skinny plans that employers can use as MEC, on and on. So, it's possible to get yourself a skinny MEC plan, add a fixed indemnity and perhaps accident and critical illness and avoid individual mandate tax penalties. I'm not saying that approach is the wisest, just saying it's allowable.

 

[Post Quartermaster]

Indeed, terminology is confusing. Darn, the whole thing is confusing.

But to be clear, actually QHP (qualified health plan) is not what's needed to avoid a tax penalty. For individuals and families, they must have at least minimum essential coverage (MEC) to avoid the individual mandate tax penalty, which can be quite different than a QHP. For employers with more than 50 full-time equivalent employees, they must offer an MEC to at least 95% of their full-time eligible employees to avoid the first prong of Employer Shared Risk penalties (the $2,000 penalty for every full-time employee less 30), and they must offer affordable MV (minimum value) to avoid the 2nd penalty ($3,000 penalty for every full-time employee less 30 who receive a subsidy in the exchange/marketplace). For all 3 of these tax penalties whether or not the insurance is a QHP is irrelevant.

And, although the government has changed the name of their exchange to "marketplace", nonetheless the term "marketplace" does not exist in the law, and yet the requirement to establish "exchanges" is mentioned hundreds of times in the law. Hey, they even now call the law the Affordable Care Act instead of Patient Protection and Affordable Care Act.

I suppose I should have qualified QHP (in this context/discussion) to only include individual health plans, whether on or off the exchange that meet MEC.....


"Exchanges will only be open to QHPs, but QHPs may be sold off the exchange. In order to be certified, QHPs must meet minimum standards."