Small Business Health Insurance Reform
Are you ready for health care reform in 2014?
Today, employers are more stressed than ever. Heres why:
The business environment is uncertain,
Employer-sponsored health insurance costs increase annually, and
New fees and penalties take effect next year, and most employers dont fully understand how this will affect their financials.
It is time for employers to examine the specifics of healthcare reform, and start thinking strategically vs. emotionally. Change is hard. However, employers that educate themselves and plan ahead can avoid severe financial impacts.
The more change and disruption your business can embrace, the more cost savings you will be able to realize over the long term. In order to embrace this change, you must be familiar with the key aspects of ACA. For many small businesses, the solution to healthcare reform is simple: Offer a Business Expense Account for Healthcare. A new vehicle, called a Healthcare Reimbursement Plan , allows employers to get out of the health insurance business, and simply give select employees monthly allowances to spend on their own health insurance policy in a state health insurance exchange.
Listed below are key ACA components to consider when choosing small business health insurance.
Federal Transitional Renewal Policy
CMS announced a transitional policy and extensions to the policy that together allow issuers to continue to renew non-grandfathered policies that are not compliant with the ACA until October 1, 2021, so long as the coverage comes into compliance with applicable requirements by January 1, 2022. Is the Texas Department of Insurance allowing these transitional renewals for Texas consumers?
Yes. ACA compliance is not required under Texas law, so TDI does not object to carriers renewing noncompliant plans under the federal transitional policy.
Carriers that wish to extend transitional plan policy years beyond the usual 12 months in order to align to a January 1 renewal date should refer to the FAQ below concerning “Changing a Renewal Date.”
Accident & Critical Illness Insurance
Accidental injuries and critical illness happen when you least expect them. Those unexpected expenses can strain any budget. Accident insurance5 and critical illness insurance5 can help by paying cash benefits for covered injuries or illnesses.
The Accident Pro series of products, underwritten by Golden Rule Insurance Company, combines accident insurance with critical illness, hospitalization, and accidental death and dismemberment coverage all in one. Some plans are guaranteed issue, meaning your application wont be turned down for preexisting conditions.
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Small Business Health Insurance Tax Credits
Small businesses with up to 25 full-time equivalent employees may qualify for a tax credit for offering employee health benefits. The credit is broken in to two phases. Phase 1 includes a tax credit worth up to 35% of a small businesss health insurance costs. Phase 2 includes a tax credit up to 50% of a small businesss health insurance costs.
Texas Insurance License Exam
The next step after completing all of your pre-license coursework or self-study is to take the insurance exam.
You will take one exam for each line of insurance you wish to carry. Life & Health and Property & Casualty lines are two combined lines in Texas, so you will take two exams if you wish to attain all of these lines of authority: Property, Casualty, Life, Accident, Health.
This is a proctored test, which means that you will be in a controlled environment with a person watching over you. For people who havent tested in a situation like this should be aware of this fact, and work on taming their nerves prior to sitting for the exam. One great way to get some experience with insurance testing is taking an insurance practice exam.
The fee for each attempt of the exams is $43 . When you show up you must have a photo ID any other documents that the testing facility has asked you to bring.
The Life, Accident & Health exam and the Property & Casualty exams consist of one hundred thirty questions. There are no limits on attempts at each exam per year, but once you pass, you must apply for the license within twelve months or retake the test.
Here is a copy of the exam content outline for all the insurance lines that are being offered in Texas.
We will quote Pearson VUEs Texas Department of Insurance Licensing Candidate Handbook to explain scoring:
Check out our Insurance Exam Guide. Its extremely in-depth, and will hopefully help you pass the first time.
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What Is The Individual Mandate
The health insurance marketplacesestablished by the AffordableCare Act provide coverage to 11.41 million consumers, according to anApril 2020 report from the Centers for Medicare & Medicaid Services .
Prior to 2020, if you went without Affordable Care Act compliant health insurance for more than two consecutive months, you would pay a penalty. This requirement was commonly known as the Obamacare individual mandate. The purpose of the penalty was to encourage everyone to purchase health insurance if they werent covered through their employment or a government-sponsored program. According to Kaiser Health News, the federal ACA penalty for going without health insurance in 2018 was $695 per uninsured adult or 2.5% of your income, whichever amount was higher.
In response to concerns about the affordability of marketplace ACA plans, congress passed the Tax Cuts and Jobs Act at the end of 2017. The law reduced the individual penalty of the Obamacare individual mandate to zero dollars, starting in 2019. Now that the individual mandate tax penalty has been removed, there is not a tax penalty at the federal level.
You Have More Insurance Options For Your Health Than You Think Texas
If youre self-employed or without insurance from your employer in other words, youre looking for individual or family health insurance in Texas you might be looking for Affordable Care Act insurance, what’s often called Obamacare. However, we want to make you aware of the whole range of individual and family insurance products we have available in your state.
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Types Of Insurance Coverage In Texas
While the state minimums are fairly straightforward, more insurance means more protection in case of an accident, so it can be helpful to understand your coverage options beyond the state minimum requirements. Depending on the type and amount of insurance you have, your insurance company or the insurance company of the at-fault driver in case of an accident you didnt cause may pay not only for medical bills and car repairs, but also for a rental car, court fees, and other costs. Knowing the different types of coverage can help you decide what insurance to buy as well as help you navigate the insurance system in the event of an accident.
There are other types of insurance available as well, so its important to do plenty of research before you buy and understand your options. If you were involved in a vehicle collision and need experienced legal advice, consider speaking with an Austin car accident lawyer who can help you understand how insurance affects your legal options.
Texas And The Patient Protection And Affordable Care Act Of 2010
The Patient Protection and Affordable Care Act became law in 2010. Provisions of the law have continued to be phased in following passage. As of January 1, 2014, most U.S. citizens and legal residents are required by law to have qualifying health care coverage or pay an annual tax penalty for every month they go without insurance. This is called the individual mandate. There is a grace period through March 31, 2014. Beginning in 2014, the penalty for not having qualifying coverage is $95 per adult and $47.50 per child or 1% of your taxable income whichever is higher . The penalty increases annually through 2017 and beyond.
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Which Insurance Licenses Do You Need
The first step to getting your insurance license is choosing which licenses you need. The most common licenses new insurance agents get are the property & casualty license , life and health insurance license .
The types of insurance products and policies youll be selling will determine which licenses you need. Here are some examples of the types of policies you can market with each license:
- Life and Health Insurance License Life Insurance, Annuities, Medicare, Health Insurance, etc
Most insurance agents and producers choose to get both P& C and L& H licenses, but if you plan on specializing in only one category then you dont need every license.
Insurance adjusters require a separate license. You can find more information on becoming an insurance adjuster here: Texas Insurance Adjuster License
Why Is Health Insurance So Expensive
The price of medical care is the single biggest factor behind U.S. healthcare costs, accounting for 90% of spending. These expenditures reflect the cost of caring for those with chronic or long-term medical conditions, an aging population and the increased cost of new medicines, procedures and technologies.
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How Much Does Health Insurance Cost In Texas
The Texas health insurance marketplace offers plans that work on the metal tier system: Bronze, Silver, Gold, and Platinum. Every tier provides ACA-compliant coverage but differs in the percentage of coinsurance and deductibles, which dictate your out-of-pocket costs. Some have higher premiums some have higher deductibles. Consider a balance of an affordable monthly premium offset against your out-of-pocket expenses when you visit the doctor or have a catastrophic event.
|Average premiums in Texas|
- Bronze plans are for people with few health concerns or limited financial resources. The plans offer low monthly premiums but a high deductible. Theres also a 40% coinsurance payment for a doctors visit or other medical services. The most affordable Bronze plan in 2022 in Texas costs $306 a month.
- Youll pay a higher monthly premium for a Silver plan, but youll also have fewer out-of-pocket costs. The coinsurance fees drop to 30%. Silver plans offer cost-sharing reductions . If you qualify for a CSR, you may pay less for a Silver plan than you would for a Bronze plan. The most affordable Silver plan in Texas costs $415 a month.
- gold or platinum plan. These plans offer the lowest deductibles and coinsurance payments . However, be prepared to pay heftier monthly premiums. The most affordable gold plan in Texas goes four $429 a month.
Pass Your Texas Licensing Exam
After completing your required prelicensing course, you must pass a state licensing exam. Kaplans prelicensing content is based directly on the Texas licensing exams, so you will be prepared to pass the first time.
Certificate of Completion Requirements
Insurance Adjusters: Applicants who qualify for an Adjuster license by completing a Texas Department of Insurance approved course within 12 months prior to submitting an application, must submit to the TDI the TDI license application along with the course certificate of completion.
Exam Provider: Pearson VUE
Texas will begin offering remote proctored state exams. For most major insurance agent lines, you have a new option when you take a certification exam. You can now take an online exam at your home or office. An off-site monitor will use your computers webcam and microphone to monitor you. This is currently available for General Lines Life and Health, General Lines Property and Casualty, Personal Lines Property and Casualty, and Life Agent exams. For more information, or to schedule an exam appointment, please visit .
Frequently Asked Questions About the Texas Licensing Exam
After completing my prelicensing, how should I prepare for exam day?
Before making a reservation, candidates should have the following:
- Legal name
- The name of the examination
- The preferred examination date and test center location
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Why Buy A Texas Medicare Advantage Plan
Nearly 1.7 million Texans enrolled in Medicare Advantage, which is an alternative way to get Medicare Part A and Part B benefits.19 Here are some highlights of Medicare Advantage plans:
- Offers Extra Benefits: Medicare Advantage plans offer extra benefits Original Medicare doesnt cover. Many plans include prescription drug coverage and other benefits, such as dental, vision, and hearing care.
- Expanded Benefits Starting in 2020: In 2020, Texas Medicare Advantage plans can offer even more benefits, including adult daycare, in-home caregiver support, and access to safety devices.
- Affordable: You can find many Medicare Advantage Prescription Drug Plans in the $20 monthly range for coverage effective 2020.5 There are also plans available for as low as $0 per month.*
- Many Chances to Enroll or Change Plans: You can enroll during your Initial Enrollment Period, which lasts a full seven monthsfrom three months before the month you turn 65, through your birthday month, and then three months after your birthday month. You get an opportunity each year to switch your Medicare coverage during the annual Open Enrollment Period from October 15 to December 7. You can also switch to a different Medicare Advantage plan or leave your plan and return to Original Medicare during the Medicare Advantage Open Enrollment Period from January 1 to March 31.
*You must continue to pay your Medicare Part B premium 6 when you enroll in Medicare Advantage. The Part B premium is $148.50 in 2021.7
Is It Illegal To Go Without Health Insurance
The federal government no longer requires individuals to have health insurance. However, a handful of states and the District of Columbia have instituted a health insurance coverage mandate, and most carry a penalty for not doing so. If you live in California, Massachusetts, New Jersey, Rhode Island, or Washington, D.C., you must have insurance or pay a penalty. Vermonts mandate does not include a penalty for noncompliance.
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What Is The Penalty For Not Having Health Insurance
1, 2020. People who do not have health insurance pay either 2.5% of their household income or $695 per uninsured adult and $347.50 per uninsured child, whichever is higher. If using the 2.5% of income, the maximum penalty is the cost of the annual premium for the average bronze plan sold through HealthSourceRI.
Frequently Asked Questions About Texas’ Aca Marketplace
Texas uses the federally run exchange at HealthCare.gov, and the state has taken a very hands-off approach with regards to implementing the ACA. Texas has not expanded Medicaid, and through 2021, was one of just three states that left the rate review process for ACA-compliant plans to CMS. That has changed as of 2022, however, with the implementation of a state-based rate review program .
Texas has one of the highest exchange enrollments in the country. 1,840,947 people enrolled in private plans through the Texas exchange during the open enrollment period for 2022 coverage, which far surpassed any previous year.
Rates increased sharply in 2018, and insurers started adding the cost of cost-sharing reductions to silver plan rates, resulting in particularly large premium subsidies in 2018. For 2019, however, the average rate increase was much more modest, at just over 2%. For 2020, average rates . And although the average rate increase was still in the single digits for 2021, it was a larger rate increase than we saw across most states. For 2022, the average rate increase in Texas was in the low single digits. The cost of CSR is still being added to silver plan rates, so subsidies are still disproportionately large in Texas. And the American Rescue Plan has made subsidies larger than ever for 2021 and 2022.
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Health Plan Consumer Disclosures
The ACA requires health plans to provide a Summary of Benefits and Coverage to all current and prospective policyholders. Will the SBC satisfy Texas requirements related to mandatory consumer disclosures?
No. The SBC does not satisfy Texas requirements. In addition to the SBC, Texas issuers must provide consumers with compliant PPO disclosures , 28 TAC §3.3705), EPO disclosures , or HMO disclosures , and outlines of coverage , as applicable. These disclosures should be specific to each plan an issuer markets and should include, in the order listed in the rule, a description of policy terms and conditions related to each data element listed in the rule. Disclosures should also include the notice required under 28 TAC §3.3705.
PPO and EPO disclosures must be filed with the department, consistent with 28 TAC §3.3705 and made available on an insurers website , consistent with 28 TAC §3.3705.
It has come to TDI’s attention that some carriers are not providing these mandatory consumer disclosures, or are not providing the full scope of required information. The department encourages carriers to review the rules to ensure their disclosures are fully compliant. Carriers should also review their mechanisms for providing mandatory disclosures to current and prospective enrollees and ensure disclosures are easily available to consumers shopping for health benefit plans. The department intends to monitor compliance with these requirements and take enforcement action as necessary.
Texas 2036 Health Coverage Policy Explorer
No matter our politics, increasing access to affordable health care should be a goal that all Texans share. Health insurance contributes to this goal, as Texans are more likely to access the healthcare they need when they have insurance. While increasing coverage is only one of the policy solutions to increasing access to affordable health care in Texas, it is critical because nearly 5 million Texans do not have health insurance today.
Texas 2036s Health Coverage Policy Explorer is a new online tool that allows Texans to explore the costs and benefits of more than 500 different possible policy combination scenarios available to Texas legislators during the 87th Legislative Session to address the high uninsured rate in Texas.
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