Getting All the Facts for Your Estate Planning

Estate planning laws change from one year to the next. Anyone who is doing estate planning for the first time in 2020 should especially be aware of the current laws, and it is also helpful for people who have planned before but are not sure about current rules to update their knowledge.

These are some of the most important tips to remember for 2020.

The threshold for lifetime gift and estate tax increased – In 2020, the amount has risen to $11.58 million for individuals; it is $22.8 million for couples. This is the maximum amount of gifting via money or asset transfer allowed during a person’s lifetime without tax consequences. The limit more than doubled in 2019 after tax legislation was signed into law by President Trump.

The annual gift exclusion amount is $15,000 – The annual federal gift tax exclusion allows you to give away up to $15,000 ($30,000 for couples) in 2019 to as many people as you wish, without those gifts counting against your $11.58 million lifetime exemption.

Some types of gifts are not subject to this limit. For example, gifts to a spouse, a medical fund or an education fund are not included. Also, education and medical gifts are not taxable. When making medical or education gifts, transfer the funds directly to the institution rather than sending them to an individual recipient.

Lifetime exclusion amount portability is still an option – Estate tax laws started allowing surviving spouses to use remaining lifetime exclusion amounts of their deceased spouses in 2011. In addition to simplifying estate planning, this gave couples a way to access exclusion amounts.

Couples can transfer up to $22.8 million of their taxable property to their heirs without estate tax penalties. However, transfers must be made by election in the estate.

The gift and estate tax effective rate is 40% – If your estate is under $11.8 million, congratulations: The federal estate tax will not apply to your estate. Any amounts over that threshold will be taxed at marginal tax rates that cap out at 40% for an estate worth more than $1 million over the cap.

Remember state gift tax laws – While the rules covered in the previous sections apply to federal laws, they do not apply to state laws. Many states have laws that require estate and gift taxes. If the taxes include lifetime exclusion limits, they will be lower than the federal limits.

To learn about individual state laws, discuss concerns with an agent. It is not possible to avoid these taxes in the states where they are required.

The takeaway

While estate planning is not something most people think about often, it should be considered every year – and when any major life changes happen.

A new addition to a family, a marriage, a death in the family, getting a major promotion and big health changes are just a few examples of times when estate plans should be reviewed and changed as necessary.

Neglecting these changes can cost a person’s heirs a considerable amount of time and money. Stay on top of these issues to keep plans running smoothly. Call us to learn more about optimizing estate planning.

What Everyone Needs to Know About Being Insured in 2014


The individual shared responsibility provision is part of the Affordable Care Act that includes the act itself, state governments, the federal government, employers, individuals and insurers. Each party has a shared responsibility to improve and reform the quality, affordability and availability of health coverage. In 2014, the shared responsibility provision requires every individual to carry minimum essential coverage, pay the tax penalty or qualify for an exemption.

Effective Date, Applicable Parties And Transition Relief
This provision takes effect on the first day of 2014 and is applicable for every calendar month. Both adults and children are applicable parties for this provision, and adults claiming dependent children are the responsible parties for providing coverage or paying the tax penalty if the children or individuals themselves do not have exemptions. Individuals who are eligible for employer-sponsored plans may qualify for transition relief from the shared responsibility payment. Employees or those who have relationships to employees who are eligible to enroll in employer-sponsored plans that are not based on calendar years may qualify for relief.

Minimum Essential Coverage
Minimum essential coverage does not include plans that cover only limited benefits such as dental, vision or disability. The following are considered minimum essential coverage:

– Coverage from the individual market such as qualified health plans.
– Employer-sponsored plans, retiree coverage and COBRA.
– The majority of Medicaid plans.
– Medicare Advantage plans and Medicare Part A coverage.
– Several types of VA coverage and Peace Corps insurance for volunteers.
– Children’s Health Insurance Program coverage and TRICARE.
– Refugee medical assistance from the ACF.
– State high-risk pools that fit outlined criteria.
– Self-funded coverage for university students that fit outlined criteria.

There are also several exemptions from obtaining minimum essential coverage. These include the following:

– People who are members of specific religious sects opposing insurance benefits.
– Members of recognized health care sharing ministries.
– Members of recognized Indian tribes.
– People whose income levels are below the income tax filing threshold.
– People who were without insurance for three consecutive months during one year.
– People who would have to pay more than eight percent of their income for premiums.
– People who meet the Affordable Insurance Exchange’s hardship criteria.
– Some U.S. citizens who are not physically living in the United States.
– People who are incarcerated.

Qualifying For Exemptions Or Obtaining Adequate Coverage
Most people who are currently insured will not need to do anything to be considered as adequately insured in 2014. People who are uninsured should discuss their options with an agent. For those who want an exemption, an agent will be able to provide information from the Health Insurance Marketplace for several exemption categories. However, those who are already exempt due to income will not need to take any further action. It is important to remember that both children and senior citizens must also be adequately insured or qualify for an exemption. A person who has coverage through a spouse’s employer-sponsored plan is also considered to be adequately insured. However, spouses and children can be covered under a different approved plan to qualify as well.

What To Expect Without Coverage In 2014
If a person without coverage needs care, everyone else will have to pick up the bill. This is why the health care law makes it mandatory for all people who can afford coverage to obtain it or pay a fine. Those who do not have coverage will have to pay the entirety of their individual bills, which may be high enough that they lead to bankruptcy in some cases. The fee in 2014 is one percent of a person’s income or $95 for each person. However, the fee amount will increase every year. By 2016, it will be $695 per person or 2.5 percent of annual income. The fee for uninsured children starts at $47.50 with a maximum of $285 regardless of the number of children a family has. Consumers must keep in mind that these are just fees and not coverage, so they are still responsible for all medical bills. For answers to further questions, call ACBI at 203-259-7580 or visit our website by clicking here.

Private Exchanges to Transform Health Insurance Landscape


By the time 2017 rolls in, about 30 million people – or one in every five Americans – will use a health insurance exchange under the Patient Protection and Affordable Care Act (PPACA) or Obamacare. This is according to a research by global management consulting, technology services and outsourcing firm Accenture, which forecasts that such phenomenon will radically transform the country’s health insurance landscape.

More overwhelming than the number of individuals projected to use health insurance exchanges to cater to their medical and wellness needs, however, is the apparent lack of awareness and preparedness of many Americans. The study shows that the lack of awareness applies to all demographics and to both public and private exchange concepts, as shown by its survey of 20,000 consumers.


Personalized Insurance Shopping Experience

A health insurance exchange in Obamacare’s context is a marketplace with competing providers where consumers can select plans of their choice. Public health exchanges are managed by public entities, while private exchanges are maintained by private companies. As with other public transactions, using public exchanges means navigating through government channels. With private exchanges, consumers can do business through an agent with whom they feel comfortable working and sharing information.

While public exchanges may have the advantage of tax credits over private exchanges, Accenture’s study forecasts that more consumers will be using private exchanges as early as 2018. The study reveals that consumers are likely to welcome private exchanges for their flexibility, range of choices and personalized shopping experience.

A private health exchange often includes a choice among at least two major medical health plans with health insurance advice and recommendation support. Billing is automatic and support should be on-going. If a consumer works for a private company, he or she can rely on the employer to pay for the coverage. For those who are not covered under a group plan at work or who are self-employed, they will have to shoulder the payment.

Private Exchanges to Dominate the Market by 2018

Millions of Americans are expected to start enrolling in public exchanges on October 1st. Only about 1 million consumers will enroll in private exchanges within 2013, but the study anticipates this number to quickly grow to about 40 million by 2018 – even higher than the estimated 31 million consumers that will enroll in public exchanges in the same period. The rapid growth will make private exchanges the dominant option in the next five years, accounting for 56 percent of the total exchange market.

The shift in consumer behavior when it comes to using private exchanges will change the health insurance landscape, where consumers are able to “shop” for their own health benefits. This means that –  more than ever – they will need to have a full understanding of their options and decisions.

To learn more about private health insurance exchanges and their impact on your health plans, call ACBI at 203-259-7580 or visit our website by clicking here.

What Everyone Should Know about the ACA and Grandfathering Provisions


While the Patient Protection and Affordable Care Act requires certain benefits be made available by health plans, there are some grandfather provisions that protect employer-sponsored plans. If these plans were made before March 23, 2010, sponsors will not have to make significant changes. Due to this provision, there are many Americans who are covered by large employers who will not see major changes after the new law takes effect.

What is a Grandfathered Plan?
A grandfathered plan is one that has existed since the date mentioned in the last paragraph, and it must have at least one person who is covered at all times. In addition to this, it cannot be changed except as permitted. These types of plans are not exempt from all health reform rules, but they are exempt from many of them as long as they maintain their grandfather status. Insured group plans, self-insured group plans and individual coverage may be grandfathered. These plans may also allow workers to enroll their family members. Although new employees may be able to join the plans, there are restrictions that apply to employers transferring plans without endangering their grandfather status.

How to Determine if a Plan is Grandfathered
As mentioned before, a plan must qualify by its active date. If some individuals cease to be covered after the active date, that does not automatically take away a plan’s grandfather status. However, one or more people must continuously be covered. Plans that change from self insured to fully insured can keep their grandfather status. Plans that eliminate all or most of the benefits to treat and diagnose certain conditions do not qualify. If a plan increases the percentage cost sharing, it will not qualify. Plans that increase cost-sharing amounts that are otherwise fixed other than copay amounts to make the total percentage increase will not qualify. If a plan increases a copay amount that is otherwise fixed, it might not qualify. This is true if it exceeds the greater of an amount equal to inflation plus $5 or the maximum percentage increase. If the employer’s contribution rate decreased toward any tier of coverage for any class of individuals at a rate of more than five percentage points below the contribution rate, it will not qualify.

If a group plan changes from self insured to fully insured, it must properly notify all members to keep its grandfather status. In addition to this, any plan claiming grandfather status must include a statement that it believes it is grandfathered, and this must be distributed to plan participants. The plan must maintain records showing the terms and connections with coverage effective after the cutoff date. These records must be available to participants upon request. Some plans that switched companies after the effective date may still qualify for grandfathering. Self-insured plans can change third-party administrators without losing their status, and they can also change stop-loss coverage without losing status. Some enhancements and additions can be made to a grandfather plan also.

New hires, family members and some enrollees can be added to health plans without them losing their status. However, only family members of people who were enrolled at the time of the effective date qualify for this provision. If employees are not enrolled in a grandfathered plan, they may move into it during the open enrollment period. In addition to this, employees can transfer from one grandfathered plan to another. To learn more about grandfather status for plans, how to keep it or for further information about applicable dates, call ACBI at 203-259-7580 or visit our website by clicking here.

How Obamacare Could Affect Property Casualty Insurance

The key changes in federal health care reform remain months away but property/casualty actuaries are already trying to determine what impact they will have on their own lines of business, particularly workers’ compensation and medical malpractice.

Elements of the Affordable Care Act have been phased in since the law’s 2010 passage but many key reforms begin January 1, 2014. Property/casualty actuaries need to consider the potential impact of these effects so they can adjust rates and reserves when changes occur.

At the recent Casualty Actuarial Society’s (CAS) Ratemaking and Product Management Seminar, two fellows of the CAS led a discussion of the health care law’s major changes and how the reforms may affect property-casualty lines.

Many of the law’s measures have already been enacted But, according to Laura N. Cali, chief actuary and manager of product regulation for the Oregon Insurance Division, the biggest changes remain, including requiring everyone to buy insurance and eliminating health insurers’ ability to deny coverage.

Key questions include:

  • How effective will the individual mandate be?
  • Will the uninsured population entering the market be healthier or less healthy than current insureds?
  • How much pressure will fall upon primary care givers like physicians, as millions of new insureds seek treatment? Will more treatment be handled by non-physicians, such as nurse practitioners, and what impact will that have?
  • How will medical specialists be affected? They may not face an instant influx of patients, the way primary care physicians will, but demand for specialists’ services will increase as new insureds work their way through the system.

The law is creating “a lot of new regulations,” Cali said, “and it’s happening quickly.”

The changes could significantly affect property/casualty insurance, said Anne M. Petrides, a director and consulting actuary with Towers Watson, although as of now it is hard to tell what impact the reforms will have on liability and costs.

The changes could either increase or decrease liability and costs in medical malpractice and workers’ compensation but the impact will differ by state as both lines are sensitive to state laws and regulations, Petrides said.

Health care reform will increase the number of people who have health insurance, which could reduce medical malpractice liabilities if new insureds are able to visit doctors earlier than they would have without insurance and receive earlier treatment.

Early treatment could lead to better medical outcomes and thus help prevent the adverse outcomes that can trigger malpractice lawsuits.

But the increase in the insured population could raise liabilities, as more patients per unit exposure would imply more potential risk. Also a physician shortage could impact the frequency of medical errors.

The same change could lower costs in workers’ compensation if greater access to health care created a healthier workplace. But it could increase costs if a doctor shortage delayed treatment and a return to work.

Also for workers’ compensation, costs could go down if research created greater agreement on what are now questionable treatments. But costs would go up if the research indicated more treatment, or more expensive treatment, is warranted.

Reform’s attempt to create financial incentives for improved care and patient safety could lower medical malpractice liability if the incentives work as intended. But liability could increase if failure to qualify for an incentive becomes considered as evidence of negligence.

Other lines will be affected, too. If reform triggers a wave of mergers and acquisitions, directors and officers coverage could be at risk. Auto liability could be affected by any changes in how medical care is provided. For both workers’ compensation and auto liability coverages, uncertainty exists if decreases to provider fees in the health care system will require the providers to shift shortfalls to third party payors so as to remain financially sound.

Cali and Petrides agreed that while it’s impossible to know right now how this will all shake out, property/casualty actuaries can begin gathering and analyzing data that will help them respond when changes do occur.

Source: The Casualty Actuarial Society

Applying for Obama Health Care Plan Daunting Task

Applying for benefits under President Barack Obama’s health care overhaul could be as daunting as doing taxes.

The government’s draft application runs 15 pages for a three-person family. An outline of the online version has 21 steps, some with additional questions.

Seven months before the Oct. 1 start of enrollment season for millions of uninsured Americans, the idea that getting health insurance could be as easy as shopping online at Amazon or Travelocity is starting to look like wishful thinking.

At least three major federal agencies, including the IRS, will scrutinize an application. Checking the identity, income and citizenship is supposed to happen in real time, for those applying online.

That’s just the first part of the process, which lets applicants know if they qualify for financial help. The government asks to see what they’re making because Obama’s Affordable Care Act is means-tested, with lower-income people getting the most generous help to pay premiums.

Once an applicant is finished with the money part, actually picking a health plan will require additional steps, plus a basic understanding of insurance jargon.

And it’s a mandate, not a suggestion. The law says virtually all Americans must carry health insurance starting next year, although most will just keep the coverage they now have through their jobs, Medicare or Medicaid.

Some are concerned that a lot of uninsured people will be overwhelmed and simply give up.

“This lengthy draft application will take a considerable amount of time to fill out and will be difficult for many people to be able to complete,” said Ron Pollack, executive director of Families USA, an advocacy group supporting the health care law. “It does not get you to the selection of a plan.”

“When you combine those two processes, it is enormously time consuming and complex,” added Pollack.

He’s calling for the government to simplify the form and, more important, for an army of counselors to help uninsured people navigate the new system. It’s unclear who would pay for these navigators.

Drafts of the paper application and a 60-page description of the online version were quietly posted online by the Health and Human Services Department, seeking feedback from industry and consumer groups. Those materials, along with a recent HHS presentation to insurers, run counter to the vision of simplicity promoted by administration officials.

“We are not just signing up for a dating service here,” said Sam Karp, a vice president of the California HealthCare Foundation, who nonetheless gives the administration high marks for distilling it all into a workable form. Karp was part of an independent group that separately designed a model application.

The government estimates its online application will take a half hour to complete, on average. If you need a break, or have to gather supporting documents, you can save your work and come back later. The paper application is estimated to take an average of 45 minutes.

The new coverage starts next Jan. 1. Uninsured people will apply through new state-based markets, also called exchanges.

Middle-class people will be eligible for tax credits to help pay for private insurance plans, while low-income people will be steered to safety-net programs like Medicaid.

Because of opposition to the health care law in some states, the federal government will run the new insurance markets in about half the states. And states that reject the law’s Medicaid expansion will be left with large numbers of poor people uninsured.

HHS estimates it will receive more than 4.3 million applications for financial assistance in 2014, with online applications accounting for about 80 percent of them. Because families can apply together, the government estimates 16 million people will be served.

Here are some pros and cons on how the system is shaping up:

Pro: Those who apply online are supposed to be able to get near-instantaneous verification of their identity, income, and citizenship or immigration status. An online government clearinghouse called the Data Services Hub will ping Social Security for birth records, IRS for income data and Homeland Security for immigration status. `”That is a brand new thing in the world,” said Karp.

Con: If an applicant’s household income has changed in the past year or so and they want help paying their premiums, they should be prepared to do some extra work. They’re applying for help based on their expected income in 2014. But the latest tax return the IRS would have is for 2012. If they landed a better-paying job, got laid off, or their spouse went back to work, they’ll have to provide added documentation.

Pro: Even with all the complexity, the new system could still end up being simpler than what some people go through now to buy their own insurance. Applicants won’t have to fill out a medical questionnaire, although they do have to answer whether they have a disability. Even if they are disabled, they can still get coverage for the same premium a healthy person of their same age would pay.

Con: If anyone in an applicant’s household is offered health insurance on the job but does not take it, they should be prepared for some particularly head-scratching questions. For example: “What’s the name of the lowest cost self-only health plan the employee listed above could enroll in at this job?”

HHS spokeswoman Erin Shields Britt said in a statement the application is a work in progress, “being refined thanks to public input.”

It will “help people make apples-to-apples comparisons of costs and coverage between health insurance plans and learn whether they can get a break in costs,” she added.

But what if someone just wants to buy health insurance in their state’s exchange, and they’re not interested in getting any help from the government? They’ll still have to fill out an application, but it will be shorter.

By Ricardo Alonso-Zaldivar & Jennifer Agiesta from Insurance Journal.

Administration Issues Final Rule on Minimum Benefits Under Obamacare

Reprinted from Reuters via Insurance Journal

The Obama administration on Wednesday issued its long-awaited final rule on what states and insurers must do to provide the essential health benefits required in the individual and small-group market beginning in 2014 under the healthcare reform law.

A cornerstone of President Barack Obama’s plan to enhance the breadth of healthcare coverage in the United States, the mandate allows the 50 states a role in identifying benefit requirements and grants insurers a phased-in accreditation process for plans sold on federal healthcare exchanges.

Wednesday’s rule included few changes from previous administration proposals, a fact that could help states and insurers as they prepare for new online state health insurance marketplaces, known as healthcare exchanges, scheduled to begin enrolling beneficiaries for federally subsidized coverage on Oct. 1.

“The administration has been consistent in its approach to essential health benefits for more than a year, and that continued today. It’s good news for states and insurers because it means they don’t have to make any changes,” said Ian Spatz, a senior healthcare adviser at the consulting firm Manatt Health Solutions.

The exchanges are expected to cover as many as 26 million people within 10 years and seem likely to dominate individual and small-group insurance markets. Another 12 million people are expected to receive healthcare coverage through an expansion of the Medicaid program for the poor, according to the nonpartisan Congressional Budget Office.

Obama’s Patient Protection and Affordable Care Act sets out 10 benefit categories that must be covered by most plans at the same level as a typical employer plan. The categories range from hospitalization, prescription drugs and maternity and newborn care.

The American Cancer Society Cancer Action Network was cautious in its praise, describing the rule’s prescription drug mandate as an improvement but warning that it was unclear whether patients would have timely access to drugs needed to treat and survive serious illnesses including cancer.


The rule got a cool reception from insurance and employer groups, which warned that higher costs could result from the new coverage requirements.

“The minimum essential health benefits standard will still require many individuals and small businesses to purchase coverage that is more comprehensive and more expensive than they choose to purchase today,” said America’s Health Insurance Plans President Karen Ignagni.

Neil Trautwein, National Retail Federation vice president, said the ultimate impact of the regulation will not be felt until plans are priced and sold on the market. “The administration has tried hard to navigate between the competing concerns,” he said. “But I’m worried that people won’t be able to afford coverage.”

Insurers including UnitedHealth Group Inc., Aetna Inc. and Cigna Corp. will use the government’s final word on these required benefits as they design plans and set premium prices ahead of the exchange launches. They have each said they will sell plans on some of the exchanges, but have not yet committed to which ones.

UnitedHealth, the largest insurer, said it is still reviewing the new rule. The company said the exchange insurance plans will essentially be a new type of coverage.

“In the long term, we are expecting and preparing for an ‘exchange’ category of coverage to become established as a new benefit category between Medicaid and the traditional commercial benefits markets,” spokesman Daryl Richard said.

The U.S. Department of Health and Human Services said the rule would mean greater access to mental health and substance abuse services by requiring parity with other healthcare benefits. HHS estimated that 62 million Americans would gain mental health coverage, an issue that has risen in importance after a string of mass shootings including last year’s elementary school massacre in Newtown, Connecticut.

The final rule preserved the state role in determining how the requirements are met by selecting their own benchmarks from plans sold within their respective borders. Most states opted for their home market’s largest small-group plan.

But after two years, HHS said it would review the situation and determine whether a new approach might be necessary.

The administration kept to the benchmark rule despite objections from consumer groups who claimed that some of the selected plans were not comprehensive enough and argued for a single, uniform federal package.

But HHS officials found that maintaining states as primary regulators of state insurance markets would keep benefit offerings more in line with services typically offered through employer-sponsored plans in each state.

“The states continue to maintain their traditional role in defining the scope of insurance benefits and may exercise that authority by selecting a plan that reflects the benefit priorities of that state,” HHS said in the rule.

The administration also gave insurers the chance to phase-in requirements for plans sold on federally facilitated exchanges and denied requests from groups that wanted to exempt low-cost community health plans and Medicaid managed-care plans from the accreditation process.

If you have questions about benefits and how the new laws will affect you, call ACBI at 203-259-7580.

Exchange Notice Requirements Delayed

The Affordable Care Act (ACA) requires employers to provide all new hires and current employees with a written notice about ACA’s health insurance exchanges (Exchanges), effective March 1, 2013.

On Jan. 24, 2013, the Department of Labor (DOL) announced that employers will not be held to the March 1, 2013, deadline. They will not have to comply until final regulations are issued and a final effective date is specified.

This Associated Community Brokers, Inc. Legislative Brief details the expected timeline for the exchange notice requirements.

Exchange Notice Requirements

In general, the notice must:

  • Inform employees about the existence of the Exchange and give a description of the services provided by the Exchange;
  • Explain how employees may be eligible for a premium tax credit or a cost-sharing reduction if the employer’s plan does not meet certain requirements;
  • Inform employees that if they purchase coverage through the Exchange, they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of this employer contribution may be excludable for federal income tax purposes; and
  • Include contact information for the Exchange and an explanation of appeal rights.

This requirement is found in Section 18B of the Fair Labor Standards Act (FLSA), which was created by the ACA. The DOL has not yet issued a model notice or regulations about the employer notice requirement.

When do Employers have to Comply with the Exchange Notice Requirements?

Section 18B provides that employer compliance with the notice requirements must be carried out “[i]n accordance with regulations promulgated by the Secretary [of Labor].” Accordingly, the DOL has announced that, until regulations are issued and become applicable, employers are not required to comply with the exchange notice requirements.

The DOL has concluded that the notice requirement will not take effect on March 1, 2013, for several reasons. First, this notice should be coordinated with HHS’s educational efforts and IRS guidance on minimum value. Second, the DOL is committed to a smooth implementation process, including:

  • Providing employers with sufficient time to comply; and
  • Selecting an applicability date that ensures that employees receive the information at a meaningful time.

The DOL expects that the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges.


The DOL is considering providing model, generic language that could be used to satisfy the notice requirement. As a compliance alternative, the DOL is also considering allowing employers to satisfy the notice requirement by providing employees with information using the employer coverage template as discussed in the preamble to the Proposed Rule on Medicaid, Children’s Health Insurance Programs and Exchanges.

Future guidance on complying with the notice requirement under FLSA section 18B is expected to provide flexibility and adequate time to comply.

If you have any questions about health care reform or your current benefits program, call ACBI at 203-259-7580.

Only 15 States Plan to Operate Own Health Insurance Exchanges

Only 15 U.S. states plan to operate health insurance exchanges under President Barack Obama’s reform law, leaving Washington with the daunting prospect of creating and operating the new online marketplaces in at least two-thirds of the country.

On the eve of a federal deadline for states to say whether they will run their own exchanges, 11 other states have informed the administration that it should plan to be heavily involved in setting up private health insurance markets within their borders, said Gary Cohen, director of the Center for Consumer Information and Insurance Oversight, on Thursday.

Experts say the number of states planning to operate their own exchanges could reach 18 and the District of Columbia by the time the deadline expires on Friday. But the administration would still be left to set up exchanges in at least 30 states, a challenge that is raising questions about how successfully U.S. officials can implement a key provision of the health care reform law known to advocates and opponents alike as “Obamacare”.

But the Obama administration insists that exchanges will be operating in all 50 states and the District of Columbia as required by the law.

“All exchanges will be open for enrollment in October 2013,” Cohen, who is overseeing implementation of the exchanges, said in written testimony to a health oversight panel in the U.S. House of Representatives.

States that don’t run their own exchanges would opt for one of two alternatives: a federally facilitated exchange that requires minimal state participation, and a federal partnership exchange in which states help by performing certain duties.

States have until Feb. 15 to say whether they intend to seek a federal partnership exchange. Four have done so already, Cohen said.

The Patient Protection and Affordable Care Act, which Obama signed into law more than 2-1/2 years ago, is expected to extend health coverage to more than 30 million uninsured Americans after it comes fully into force on Jan. 1, 2014.

About half of those newly insured would purchase private coverage from online exchanges at federally subsidized rates. Ultimately, the number of people expected to find coverage through exchanges is expected to reach 26 million, according to the nonpartisan Congressional Budget Office.

The remainder would be covered by expanding the Medicaid program for the poor to cover all adults earning up to 133 percent of the federal poverty level, or about $15,000 for individuals and $30,600 for a family of four.

To provide exchange coverage in multiple states, the administration will have to erect an information technology system capable of processing marketplace operations in a manner customized to meet the needs of healthcare consumers in different states.

Experts say the biggest challenge will likely be providing adequate customer service to handle enrollment and fielding a technology system capable of interfacing seamlessly with the system of each state government.

Cohen told the House Energy and Commerce Subcommittee on Health that the administration is building a website with interactive capabilities and a call center and has begun testing a data services hub designed to determine eligibility.

If you need advice about the changing landscape of health insurance and how to tailor your benefits program, contact Sean Rabinowitz at ACBI. 

Reprinted from Reuters, via Insurance Journal.

Health Care Reform: 2013 Compliance Checklist

In light of the Supreme Court’s June 28, 2012, decision to uphold the health care reform law, or Affordable Care Act (ACA), employers must continue to comply with ACA mandates that are currently in effect. Employers must also prepare to comply with ACA changes that will go into effect in the future. To prepare for upcoming changes, employers need to be aware of the ACA mandates that will go into effect in 2013.  

This Associated Community Brokers, Inc. Legislative Brief provides a compliance checklist for employers for 2013. Please contact our office if you have questions about changes that were required in previous years.


A grandfathered plan is one that was in existence when health care reform was enacted on March 23, 2010. If you make certain changes to your plan that go beyond permitted guidelines, your plan is no longer grandfathered. Contact your Associated Community Brokers, Inc. representative if you have questions about changes you have made, or are considering making, to your plan.

□    If you have a grandfathered plan, determine whether it will maintain its grandfathered status for the 2013 plan year. Grandfathered plans are exempt from some of the health care reform requirements. A grandfathered plan’s status will affect its compliance obligations from year-to-year. 

□    If you move to a non-grandfathered plan, confirm that the plan has all of the additional patient rights and benefits required by ACA. This includes, for example, coverage of preventive care without cost-sharing requirements.


Effective for plan years beginning on or after Jan. 1, 2014, health plans will be prohibited from placing annual limits on essential health benefits. Until then, however, restricted annual limits are permitted.

□    Unless a health plan received an annual limit waiver, its annual limit on essential health benefits for the 2013 plan year cannot be less than $2 million. (This limit applies to plan years beginning on or after Sept. 23, 2012, but before Jan. 1, 2014.)


Health plans and health insurance issuers must provide a Summary of Benefits and Coverage (SBC) to participants and beneficiaries. The SBC is a relatively short document that provides simple and consistent information about health plan benefits and coverage in plain language. A template for the SBC is available, along with instructions and examples, and a uniform glossary of terms.

Plans and issuers must provide the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period beginning with the first open enrollment period that begins on or after Sept. 23, 2012. The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) effective for plan years beginning on or after Sept. 23, 2012.

□    If your plan has an open enrollment period beginning on or after Sept. 23, 2012, confirm that the SBC is included with the open enrollment package. For participants and beneficiaries who enroll outside of the open enrollment period, confirm that the SBC will be provided to these individuals beginning with the plan year starting on or after Sept. 23, 2012.

  • If you have a self-funded plan, the plan administrator is responsible for providing the SBC.
  • If you have an insured plan, both the plan and the issuer are obligated to provide the SBC, although this obligation is satisfied for both parties if either one provides the SBC. Thus, if you have an insured plan, you should work with your health insurance issuer to determine which entity will assume responsibility for providing the SBC. Please contact Associated Community Brokers, Inc. for assistance or for more information on this important topic.