beginners luck............
Will Exchanges Replace the Standard Practice Today to Contact Insurance Companies Directly?
- Thread starter glazarev
- Start date
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Don't you think some folks that might qualify for subsidies from an income standpoint, but have substantial assets, might decide to buy off exchange for more benefit/network rich plans.
- 446
Seems to me that families or people who are classified as 3-400% above the poverty line will just op to
a. buy off the exchange with higher deducts
b. take the 1% penalty if their plans don't qualify.
What's your take?
a. buy off the exchange with higher deducts
b. take the 1% penalty if their plans don't qualify.
What's your take?
tony, there is no suck think as "higher deducts"... you can go down to bronze but we assume that will happen anyway
take 1% fine is not the problem.... the biggie is being locked out from purchasing insurance until the next January... that one will be the toughest for the family to swallow... gambling like that and with the article I read aboput the feds fining the chariaty hospitals for over treating uninsured clients... they are screwed
- 8,448
HEALTHGUY and anyone else who cares...An insurance company that sells plans ON the Exchange MUST offer the SAME PLANS off the exchange. The insurer can also offer ADDITIONAL plans OFF the exchange.
Source: American Health Benefit Exchanges
As far as commissions/compensation, here is wording from the HHS FINAL RULE, issued on March 11, 2013.
"4. Broker Compensation for Coverage Sold Through an FFE or FF-SHOP
In a new paragraph § 156.200(f), we proposed that QHP certification by an FFE and an FF-SHOP be conditioned on the QHP issuer paying similar broker compensation for QHPs offered through an FFE or FF-SHOP that it would pay for similar health plans offered outside an FFE and an FF-SHOP. We requested comments on whether "similar health plans" is a sufficient standard and if not, which factors should be considered in identifying "similar health plans." We also requested comments on how this standard might apply when smallgroup market product commissions are calculated on a basis other than an amount per employee or covered life or a percentage of premium.
Comment: Multiple commenters representing both consumer groups and issuers supported the compensation proposal, with several recommending that "similar" be more clearly defined. One commenter proposed that "similar" be defined by the issuer. One commenter opposed the proposal, recommending that the issuer be allowed to set different compensation on and off the Exchange.
Response: For the reasons outlined in the preamble to the proposed rule, we are finalizing these provisions as proposed. We do not at this time propose a specific definition of "similar." We expect to issue further guidance at a later date."
Source: https://www.federalregister.gov/art...benefit-and-payment-parameters-for-2014#h-144
In Summary, the government is saying that compensation has to be the same for a Bronze/Silver/Gold/Platinum plans sold outside of the exchange as inside the exchange. However, the insurer in question sells additional QHPlans outside of the exchange, the commission percentage on those plans can be whatever the insurer wants them to be.
-ac
Ohhh Chit. I just realized that my response has nothing to do with the Question that started this thread. Hate it when that happens. Sorry folks!
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Buying off exchange might be motivated by someone looking for products not offered on the exchange. What if your exchange doesn't offer a 100% HSA? What if your exchange doesn't offer a nation-wide network (a very likely proposition)? Platinum and Gold plans might, but for the price you will be paying, it might be cheaper to buy them off exchange even after subsidies.
Again, this is all speculation for most of us.
So where in the law does it say they insurance carriers cannot offer high deductible outside if the fed exchange? I assumed we would see these products arise but of course the taxpayer would pay the IRS penalty for not having a "compliant" plan. What's the difference between some association offering garbage limited benefit trash that is non compliant and BCBS offering a non compliant product that has a 10k deductible? Is that specifically in the law?
Allen, there is a reason why one person may say "Plans inside and outside the exchange must be identical, including rates and commissions", and the next person may say, "Plans outside the exchange can differ from those inside, including in rates and commissions".
In an letter to carriers April 5, 2013, CMS outlined what makes one plan different from another. Following are some of the items:
Now to be fair, the purpose of this distinction in "same plans" or "different plans" was to keep carriers from hogging shelf space on the exchange by putting up a bzillion plan designs that essentially were all the same thing. However, it is an important distinction because it sets a precedence of what makes a plan inside the exchange different from one outside the exchange.
So for instance a carrier could have Plan A in the FFE exchange and an identical one outside the exchange, with the same network, same benefits, same rates, same commission. Then they could have Plan A2 outside the exchange only, with a different network, but the rates and commissions do not have to be the same as Plan A. Also outside the exchange, that carrier might have Plan G that they do not offer inside the exchange.
As I mentioned previously, states can require more stringent standards than this, and require carriers to have only identical plans inside and outside the exchange if they want to participate in the exchange. The Federally Facilitated Exchanges do not have that strict of a standard. However, carriers participating in the exchange might just go ahead and offer identical plans in and out, because part of the rules for qualifying for the risk corridor program is to have substantially the same plans inside and out. The carriers were appealing that decision, because the decision came down after the QHP filing deadline.
In a recent colored company meeting, they announced that they will simply have identical plans and identical rates inside and outside the exchange, for IFP. It was probably due to the risk corridor qualification rule. We might see a lot of that, or we might see carriers pushing the limits.
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Foxmarble, you must have posted your question while I was writing my response (above) to Allen. All IFP and small group major medical plans must have a minimum actuarial value of 60%. The deductible cannot be higher than $2,000 ($4,000 for family) unless the carrier needs to raise the deductible in order to meet a target actuarial value. The max out-of-pocket (which includes deductible and copays) is $6,350 ($12,700 family). The plan must have the 10 essential health benefits. This true inside and outside the exchange.
There are exceptions. Exceptions are large group, self-funded plans, HIPAA Excepted plans (like short-term, dental only, etc.), and true Fixed Indemnity. It's the true Fixed Indemnity area that is a possible loophole. That would mean the dreaded "limited benefit" plans you referenced above might be reborn with a lot more quality put into them, and thereby be a viable product that circumvents the PPACA rules. Some carriers already announced they were working on these types of products. I'm sure some terrible FI products will come out before/if some quality ones are released. Of course, the individual mandate penalty would apply, unless the person had an exemption. So, one would have to ask if the premium for an FI plan plus the penalty is worth it.
In an letter to carriers April 5, 2013, CMS outlined what makes one plan different from another. Following are some of the items:
CMS anticipates implementing this review in the following manner for 2014:
• First, an issuer's plans from a given state will be organized into subgroups based on plan type, metal level and overlapping counties/service areas.
• Second, CMS will review each subgroup to determine whether the potential QHPs in that subgroup differ from each other on least any one of the following criteria:
have overlapping service areas; have the same provider network, formulary, and EHB coverage; and have less than a $50 difference in deductibles and less than a $100 difference in maximum out-of-pocket), then those QHPs will be flagged for follow-up.
• First, an issuer's plans from a given state will be organized into subgroups based on plan type, metal level and overlapping counties/service areas.
• Second, CMS will review each subgroup to determine whether the potential QHPs in that subgroup differ from each other on least any one of the following criteria:
o Different network;
o Different formulary;
o $50 or more difference in both individual and family in-network deductibles;
$100 or more difference in both individual and family in-network maximum-out-of-pocket; and
o Difference in covered EHB.
• If CMS finds that two or more plans within a subgroup do not differ based on any of the above criteria (that is, the two or more QHPs are of the same plan type and metal level; o Different formulary;
o $50 or more difference in both individual and family in-network deductibles;
$100 or more difference in both individual and family in-network maximum-out-of-pocket; and
o Difference in covered EHB.
have overlapping service areas; have the same provider network, formulary, and EHB coverage; and have less than a $50 difference in deductibles and less than a $100 difference in maximum out-of-pocket), then those QHPs will be flagged for follow-up.
Now to be fair, the purpose of this distinction in "same plans" or "different plans" was to keep carriers from hogging shelf space on the exchange by putting up a bzillion plan designs that essentially were all the same thing. However, it is an important distinction because it sets a precedence of what makes a plan inside the exchange different from one outside the exchange.
So for instance a carrier could have Plan A in the FFE exchange and an identical one outside the exchange, with the same network, same benefits, same rates, same commission. Then they could have Plan A2 outside the exchange only, with a different network, but the rates and commissions do not have to be the same as Plan A. Also outside the exchange, that carrier might have Plan G that they do not offer inside the exchange.
As I mentioned previously, states can require more stringent standards than this, and require carriers to have only identical plans inside and outside the exchange if they want to participate in the exchange. The Federally Facilitated Exchanges do not have that strict of a standard. However, carriers participating in the exchange might just go ahead and offer identical plans in and out, because part of the rules for qualifying for the risk corridor program is to have substantially the same plans inside and out. The carriers were appealing that decision, because the decision came down after the QHP filing deadline.
In a recent colored company meeting, they announced that they will simply have identical plans and identical rates inside and outside the exchange, for IFP. It was probably due to the risk corridor qualification rule. We might see a lot of that, or we might see carriers pushing the limits.
----------
Foxmarble, you must have posted your question while I was writing my response (above) to Allen. All IFP and small group major medical plans must have a minimum actuarial value of 60%. The deductible cannot be higher than $2,000 ($4,000 for family) unless the carrier needs to raise the deductible in order to meet a target actuarial value. The max out-of-pocket (which includes deductible and copays) is $6,350 ($12,700 family). The plan must have the 10 essential health benefits. This true inside and outside the exchange.
There are exceptions. Exceptions are large group, self-funded plans, HIPAA Excepted plans (like short-term, dental only, etc.), and true Fixed Indemnity. It's the true Fixed Indemnity area that is a possible loophole. That would mean the dreaded "limited benefit" plans you referenced above might be reborn with a lot more quality put into them, and thereby be a viable product that circumvents the PPACA rules. Some carriers already announced they were working on these types of products. I'm sure some terrible FI products will come out before/if some quality ones are released. Of course, the individual mandate penalty would apply, unless the person had an exemption. So, one would have to ask if the premium for an FI plan plus the penalty is worth it.
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- 8,448
Ann, thanks for sharing that April letter from CMS to the health insurance companies. It's good that you have insider access to a lot of these gold-nuggets of information! I have a large number of +400% of FPL clients with $10,000 deductible HSA plans. It's going to be hard for them to swallow being forced into these "benefit rich" expensive policies! From your explanation, I gather that the vast majority of companies on the Exchange will not carry an entire portfolio of (or hardly any) different, penalty-tax eligible HSA non-exchange plans. What a pity.
-ac
-ac
