#1 If an officer is excluded from work comp, it means exactly that, they are excluded from any coverage it may afford. If they are injured on the job, the insuring work comp company will not pay any medical or indemnity on that particular act. What I usually hear is “I have medical insurance and I am never going to make a claim against myself, so why pay workers compensation premiums on me or my partners or shareholding officers?”.

Let me tell you why you should. California is what is known as a “Exclusive Remedy” state (California Labor Code 3602 (a)), which means that your only remedy for benefits being paid arising out of a work related injury or illness is Workers’ Compensation coverage. This is not a suggestion, it is a law. If you have your standard health insurance coverage in the state of California, please pull out your policy and go to your “Evidence of Coverage” (EOC) section of the policy. Nearly every one that I have seen states something along these lines: “We will not pay for coverage when the injury or disease is Work-Related. Work-related conditions if benefits are recovered or can be recovered, either by adjudication, settlement or otherwise, under any workers’ compensation, employers liability law or occupational disease law, even if you do not claim those benefits.” So, whether or not you claim or exclude yourself on your workers’ compensation policy, the Health carriers have the right to deny coverage based on the fact that it was a work related injury or illness.

So basically, if you are injured at work (whether driving to a vendor, bank, or client’s operation, or maybe showing an employee how a particular tool works in the shop) there is no coverage afforded for that injury under your health policy. Some would say, “Well, I’ve done this in the past and never had an issue with my health carrier paying the claims” — but in reality there are now many documented cases where health carriers are denying benefits to owners or officers that elected to exclude themselves. Most of these include large losses or burns and disfigurements that will run up millions of dollars in extended care. So why gamble?

#2 Workers’ Compensation is the cheapest form of Death and Disability Insurance that I know of. That and the fact that it has no limit on medical care, should be enough, in its own right, to make the decision to cover yourself under your workers’ compensation plan.

Owners and officers salaries are usually classified under the 8810 clerical class code, that usually runs between .50 cents and $1 per hundred of payroll. In California, for premium calculation purposes, the salaries of officers or owners are capped at (2012) $104,000. So if we do some math using say a mean of .75 cents as the clerical rate ($104,000 X .0075 = $780), you would pay a total of $780 a year for a Disability policy with unlimited medical care and a death benefit. Less if you have an experience modification below 100.

So if your broker has advised you that you will never make a claim against yourself, please take a pause, and contact me so I can outline how this and other rules effect your eligibility for coverage in this instance. This is also an excellent reason to have your workers’ compensation and health coverages with the same broker. I will outline a couple of more reasons why it is good to have both through the same provider in my next blog.

If you would like to discuss this, be sure to contact me through our website at www.vanbeurden.com or email me directly at guyt@vanbeurden.com .

Employers that are required to file fewer than 250 W-2 forms in 2011 WILL NOT be required to report the cost of health coverage under Health Care Reform. This change will continue until further guidance is issued.

However, employers that filed 250 or more W-2 forms in 2011 will be responsible for reporting to employees the total cost of their group health coverage on their 2012 W-2 form issued in January 2013.

The Court is allowing more than 5 hours and we can expect a ruling by late June. Couple this with a Presidential election in November and this is shaping up for a big year for the U.S.

If the individual mandate is struck down, what happens with the rest of the Health Care Reform Law? This is the key question the Supreme Court will be ruling on as well.

The White House has already sent a brief to the Supreme Court asking if the justices rule the mandate unconstitutional to keep other parts of the law intact. Except for the law requiring health carriers to accept everyone regardless of health conditions and applying the community rating.

Can other parts of the law operate independently if the mandate is kicked out? There many examples to where I think the answer is yes. One example is  100% coverage for preventative services. Getting individuals to proactively think about their health rather than being reactive is a positive step in the right direction.

If you’d like to know more about Health Reform Law and the individual mandate, contact me for the most current, authoritative information on the subject.

These and other findings are based on the results of the 2011 EBRI/MGA Consumer Engagement in Health Care Survey, published in the January 2012 EBRI Issue Brief, “Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006–2011,” online at www.ebri.org ]]> http://www.vanbeurden.com/blog/2800/sherndon/health-accounts-growing-in-numbers/feed/ 0 http://www.vanbeurden.com/blog/2795/sherndon/the-high-risk-of-high-risk-pools/ http://www.vanbeurden.com/blog/2795/sherndon/the-high-risk-of-high-risk-pools/#comments Tue, 17 Jan 2012 21:40:30 +0000 Sean http://www.vanbeurden.com/blog/?p=2795 High Risk Pools are a form of coverage for the medically uninsurable. Coverage is generally extended to those rejected for coverage on the individual market. Premiums are higher than rates for healthy individuals, but lower than the actual cost of most participants’ health care.

If you think the high risk pool is a great idea, you may want to re analyze your support for them. Claims paid out are higher per member than premiums. Ask yourself where this money will be coming from … several states are already asking for more money from the federal government.

If there is more money going out the door than is coming, you may want to re think your fiscal budget, unless of course you are the federal government and/or you have no clue how to run a business.

When the health reform law’s high-risk insurance pools launched last summer, there was a lot worry that the new coverage option would be swamped by demand from uninsured individual. Then, there was worry about too little demand: The insurance pools saw anemic enrollment, with some states enrolling just a few dozen subscribers. And now, there’s a new worry: The high-risk pools attracted such expensive patients, with costly medical needs, that nearly a quarter are running short on cash.

Nine states have asked HHS for additional funds to continue running their Pre-Existing Condition Insurance Plans, the program meant to cover some who insurers have denied coverage between now and 2014, when insurers’ ability to discriminate on preexisting conditions ends. Two states, New Hampshire and California, have requested additional funds twice now, as their high-risk pool’s bills exceed expected costs.

Montana is among the states seeking more funds, and it points at the type of people who enrolled in the plan as the reason for it’s request. The Montana plan has 269 members, a $16 million budget and, via the Billings Gazette, not enough money:

The $16 million, issued in mid-2010 as part of the federal health reform law, was supposed to cover costs of the subsidized health insurance program through 2013 for as many as 400 people covered by the pool.

Yet initial cost estimates turned out to be too low, because the medical costs per covered customer are higher than expected, said Cecil Bykerk, executive director of Montana’s pool.

“Our numbers (for enrollment) were fairly accurate, but per-member, per-month claim costs have been much higher than the original assumptions that we used,” he said.

This isn’t exactly surprising: When the federal government created a new health insurance program catering to those who have had trouble obtaining insurance in the past, it makes sense that those who have very high medical costs would be first in line. It hasn’t helped that the premiums have proved relatively pricey: In Montana, the monthly premium for the high risk pool is as high as $681. Anyone who enrolls in a plan with that kind of premium likely expects to have relatively expensive medical costs in the near future.

More and more property owners and property managers are requesting that their tenants carry Renters insurance. When they request a certain amount — such as $300,000 — they are referring to the limit of liability. This is just one part of Renters insurance.

Renters insurance covers two main things: contents and liability. If your personal property is damaged for any covered reason, the policy will cover the losses from the contents of the home up to the amount you are insured for. Liability will take care of expenses you may be liable for if there is any damage on the property or an adjacent property.

For example, if something you were doing in your home caused a fire that damaged or destroyed the property you rent or if you caused damage or injury to another tenant or his property, the landlord would want to ensure they are not held liable. A Renters policy acts as a buffer and also protects you!

Renters insurance is typically very inexpensive and starts around $200 a year. E-mail or call me today for a quote. I look forward to helping you.

But have you prepared as well for your own future—in particular, your financial future?  What if, for example, you suddenly become disabled—through an accident…an injury…or an illness—and are unable to work? Are you fully prepared for such a scenario?

 Statistics show that disability is much more commonplace than  most people think: In recent survey more than half of employees surveyed felt they had less than a 2% chance of becoming disabled during their working years¹, but in reality more than 25% of Americans entering the workforce today (1 in 4) will become disabled before they retire.² 

Perhaps you believe that you’re fully covered by a group policy or the association coverage you may have purchased.  While group DI is often relatively inexpensive and easy to administer, it can also fall short just when you need it most—leaving you in for some unpleasant surprises when it’s too late to correct the situation.  

Want to be better prepared? Consider the following: 

Learn to speak the lingo

The right disability income policy can help you keep your household going if you suffer a long-term disability.  But before you go shopping for a DI policy, you need to know what features to look for—and the language the insurance uses to describe them.  The following terms are part of the language describing high-quality policies, and are what you should look for to get coverage you can count on:

• Non-cancellable and Guaranteed Renewable: To avoid the possibility of losing your coverage just when you need it most, choose a policy that’s non- cancellable and guaranteed renewable to age 65.  This will also guarantee premiums until age 65.  With a group policy, you run the risk of being dropped and left unprotected at a time in your life when, due to your age or to a change in your medical condition, it could be very difficult to qualify for coverage with another provider.  The premiums for your classification can also be increased at anytime. 
• Conditionally renewable for life: Although premiums may increase after age 65, your policy should be guaranteed renewable for life, as long as you are at work full time.
• Own-Occupation definition of disability: Own occupation coverage defines “totally disabled” — and therefore eligible for benefits — as not able to work in your own occupation even if you are at work in some other capacity.  As a highly skilled professional who has invested much into your education and training, you want to make sure you have a genuine own-occupation coverage…say that even if you can teach, for example, in your field—but cannot practice dentistry—you are still eligible for benefits.  A few companies even consider you ADA-recognized specialty your own occupation.   
• Residual Disability coverage:  Through a rider, a good individual DI plan can provide you with a benefit when you suffer a loss of income as a result of partial disability—even if you have never suffered a period of total disability.  This kind of residual coverage is not available with most group plans. 
• A choice of Riders:  Riders offer optional additional coverage such as annual Future Increase Option, Automatic Increase and Cost of Living Adjustments, or “COLA.” 

Protecting your practice, as well as yourself

As a dental professional, you must also protect the source of your income: the practice you’ve worked too hard to establish and grow.  Special business DI policies, available from the same DI providers who offer high-quality individual coverage, offer your practice protection while you recover from a disability. 

For example, to help meet the expenses of running the office while you are disabled, consider a separate type of disability coverage known as Overhead Expense (OE).  OE benefits reimburse your practice for expenses such as rent for your office, electricity, heat, telephone, and utilities, as well as interest on debts and lease payments on furniture and equipment. 

Overhead expense insurance specifically designed for professionals reimburses some additional costs not included in regular business overhead expense policies—including the salaries of all regular employees who are not members of your profession.  In a practice such as yours for example, salaries for your receptionist and assistant would be covered, but not the salary of your dental professional partner(s) or employee(s).  However, high-quality professional overhead policies will cover at least part of the salary of a professional temporary replacement for you, such as a dentist retained to fill in during your total disability.  

In addition…

Dentists who are partners in a group practice will want to consider a policy known as a Disability Buy-Out (DBO).  In much the same way that life insurance benefits can be set aside to fund a buy-out of the remaining partner if the other partner dies, this type of policy is designed to fund the healthy partner’s purchase of the disabled partner’s share of the practice.  With the proper agreement in place before a disability occurs, hard feelings and the conflicts of interest that can result from a partner’s disability can avoided.  The fact is, as part of your overall planning, you owe it to yourself to look into protection for the one thing that makes all the other planning possible: your ability to earn an income.

¹ CDA 2010 Consumer Disability Awareness Survey.

² Social Security Administration Fact Sheet, January 2011

“The idea is: Pay better for quality medical groups and doctors who have low infection rates (and) high scores on quality measures for care of diabetes, asthma, heart failure, low hospital readmission rates,” he says. “We should be paying for quality — meaning value — as opposed to just volume.”

Recently I have been made aware of a couple of burgeoning Self Insured Groups (SIGs) that are active in the Central San Joaquin Valley. One of them is Agriculture specific, and has had success in the Farm Labor Contractor market locally.

When premiums start to rise (as they are doing right now), these SIGs pop up with promises of lower rates and “profit-sharing” opportunities that always sound attractive to the unsuspecting or unaware employer. This is where the terms Joint and Several come in. Virtually every SIG contract has what is known as a Joint and Several Clause in the contract that pertains to the Liability each party to the contract assumes when they sign it. In Legalese, it looks like this:

“The obligations of the Companies (and of any successor to any of the Companies) to Executive under this Agreement shall be joint and several.”

The Companies it is referring to are the member companies of the group, and the executive in this case would be the SIG Manager, and then the California Self-Insurers’ Security Fund. What its states is that all members of the groups are Joint and Severally liable for the losses of any and all the other members of the SIG. So you are in a big pool and you are cross insuring each other, no matter how the SIG manager explains it to you.

Many bad things can happen in these contracts, here is a list.

1. Bankruptcy is declared by one or more large members of the group, leaving the balance of the group to pay for the bankrupt companies claims.
2. Losses far exceed expected loss rates and the SIG fails and the total of those losses are divided between the members on top of the premium that they paid for “coverage”.
3. Claims handling costs are so high that it is impossible for the group to realize underwriting profit or any profit sharing.
4. Rates charged are so unrealistically low that #3 is a sure thing.
5. Rates charged are so unrealistically low that #2 is a sure thing.
6. SIG fails and claims are parted out to another third party claims administrator who often does not have the members’ interest in mind.

You need to go no further than the 2010/11 failure of the Contractors Access Program SIG to see the finished product of one or all of these things. The 250 Members are going to split up $38,000,000 in claims after the groups failure. That is an average of $152,000 per member company, and many of these were small contractors who had already paid premium for “coverage” and will have to come out of pocket for the liability they assumed under the joint and several clause.

Many SIG insureds have stated that they were unaware of the consequences when they entered into the agreement with their SIG. I believe that, as a recent poll financed by Employers Insurance (an insurer of small businesses) and done by ORC International (polling company) showed that “among current and former SIG members, however, 41% do not realize that they are responsible for the claims generated by employees of other companies within their SIGs”. I find that amazing.

I also find this amazing, “In 2008, 32% of all respondents believed SIG members are not financially responsible for claims of all companies in the SIG. But in 2011, that number had risen to 41%”. So from all the business owners polled, the current or former SIG members actually knew less about the product that they were buying than 3 years ago.

In an age where nearly everything can be made transparent with the help of the internet in a fraction of a second, why is this not known about Self Insured Groups? If you have any questions or comments about SIG’s, please feel free to contact me at guyt@vanbeurden.com and we can discuss.

NEWS RELEASE

INSURANCE COMMISSIONER DAVE JONES ANNOUNCES JOINT EFFORT IN BATTLE TO FIGHT CALIFORNIA’S UNDERGROUND ECONOMY

Department of Insurance part of Labor Enforcement Task Force

Insurance Commissioner Dave Jones today announced that the California Department of Insurance (CDI) is joining with the Department of Industrial Relations (DIR) and other allied agencies to fight labor law and insurance related violations that exist in an underground economy.

The newly created Labor Enforcement Task Force (LETF), which will be headed by the DIR, will launch on January 1, 2012 and will be a collaborative effort along with the Attorney General, Employment Development Department, Contractor’s State Licensing Board, Board of Equalization, the Bureau of Automotive Repair and local district attorneys.

“I am pleased to join this collaborative effort to protect California workers,” said Insurance Commissioner Dave Jones. “I am committed to fair competition for honest business owners.”

The Department’s focus in this collaboration will be on those unscrupulous employers who under report payroll or mis-classify employees in order to obtain a lower rate for workers’ compensation coverage, thus committing premium fraud. This gives business owners, operating illegally in the underground economy, an unfair advantage over honest and law abiding employers when competing for business.

Since Commissioner Jones took office on January 1, the Department has pursued businesses operating illegally in the underground economy. Investigations have been conducted which have led to the arrest of 47 business owners for premium fraud involving approximately $41 million in unpaid premiums.

Even working-age adults may need long term care due to accident or an individual being chronically ill.¹ Also the need for long term care may not only impact an individual, it may also affect his/ her family.  A situation may occur where an individual has a long term care need, cannot afford care on their own, and then relies on his/her family for support.

Unfortunately, you may not plan for long term care until it’s too late.  And, since long term care may become a major expense that private insurance, Medicare, Medicare supplements and HMOs may have limited or no coverage for, the results of neglecting to plan can be devastating—both to your assets and to your dignity.

But there’s hope…

Long-term Care Insurance premiums paid by a C-corporation are, under current tax code, 100% deductible as a business expense².

What does this mean to you, the business owner?

• Provides a great benefit to you and your family.
• Long-term care insurance is not yet become subject to ERISA, so you can offer to pay for coverage on business officer or key employee, as well, without having to offer it to everyone.

Not a C-corp?

S-corps, sole proprietorships, LLCs, and LLPs do not get the same tax treatment for their premium payments.  But, can take the annually-adjusted formula deduction on their Schedule C instead of under “medical expenses” on Schedule A.

Nothing here should be construed as tax advice as that should come from a qualified tax accountant, CPA, or tax attorney

¹Long-term care insurance eligibility typically involves substantial assistance due to the inability to perform two or more activities of daily living (eating, bathing, dressing, toileting, continence, or transferring), or supervision with the severely cognitively impaired (such as those with Alzheimer’s)

²Needs to be verified by your corporation’s tax adivisor and/or business attorney to make sure your type of C-corp qualifies for this deduction.

The first challenge is to determine what part of your unit and building is your responsibility to insure. This task can take a bit of detective work. The Home Owners Association (HOA) and state statues give us most of the information we need to understand how much of the building you need to insure (boundaries of your unit), the common areas you may be jointly responsible for, and the deductible for the association’s master policy.

Often times people assume that since the HOA carriers a master insurance policy that they do not need to obtain a separate insurance policy as the lender may not require it to fund the loan. Failure to maintain a condo insurance policy will leave you very exposed to the potential of a large loss not only to the unit but also your contents, loss of use and liability.

A qualified insurance agent can customize an insurance policy to fit your needs. Some of the available coverages include: Replacement Cost Coverage for your contents, Loss of Use, Loss Assessment, Personal Injury and Earthquake.

For more help,contact me today via e-mail or phone. I look forward to hearing from you.

The bad news is that most Americans don’t have enough. More than a third don’t have any life insurance at all, and those who are insured have coverage equal to less than four times their annual income.² Most experts believe that coverage equal to 10 times one’s annual income is a more reasonable rule of thumb.

Do you really need $250,000, $500,000, $1 million or more? Sounds like a lot of money, but imagine if one of those amounts had to pay for a funeral, retire credit card balances and other debts, support your loved ones for many years to come, and help cover college costs.  Would it be enough?

Doing the Math

To start, estimate what your family members would need after you’re gone to meet immediate (i.e. funeral), ongoing (i.e. rent or mortgage, other everyday bills) and future financial obligations (i.e. college and retirement).  Then, add up the resources your surviving family members could draw upon to support themselves.  These would include things like a spouse’s income, accumulated savings, life insurance you may already own, etc.  The difference between the two is your need for additional life insurance.  This mathematical equation may seem simple enough, but coming up with all the inputs can get tricky.

Call or e-mail me today for a thorough analysis of your needs and help in determining the right amount and type of life insurance for your specific goals and situation.

¹LIMRA and Life Foundation 2011 Insurance Barometer Study

²LIMRA International, Trends in Life Insurance Ownership, 2011

Credit to LIFE a nonprofit organization www.lifehappens.org

The Work Law Network is an international network of more than 350 management-side labor and employment attorneys dedicated to providing quality service to employers.  This service is offered through our affiliation with HR That Works! and the Ellarbee Thompson legal firm.

The NLRB has already delayed the implementation date to April 30th 2012 due to uncertainty regarding which businesses fall under the requirement.

To sign up for the free webinar please visit https://www3.gotomeeting.com/register/625037526 . For FAQ’s regarding the NLRB requirements please visit https://www.nlrb.gov/faq/poster .

At most companies, employee health insurance premiums vary only by family size and type of plan. At a small percentage of firms, however, another variable is taken into account: salary. At these companies, workers’ premiums are pegged to how much they earn. Workers who earn less, pay less.

Now, as employers look toward 2014 – when companies that don’t offer affordable coverage to their workers may begin to face penalties – experts say more are considering this strategy.

General Electric adopted this salary-based premium model more than 20 years ago. With employees in a wide variety of jobs on a wide pay scale, the company wanted to offer a single health plan that would appeal across the board, says Ginny Proestakes, GE’s director of health benefits. “It was a recognition that ability to pay made a difference,” she says.

The company divides its 140,000 U.S. employees into those paid by the hour and those on salary, then sets employee premium contributions based on seven salary ranges, with lower-wage employees paying relatively less than higher-wage employees. Hourly employees pay 24.5 percent of the premium, on average, while salaried employees pay an average of 35 percent, says Proestakes.
In one GE option, a worker making less than $25,000 a year pays $631 annually for individual coverage while someone who earned $150,000 or more would pay $2,151.

Planning ahead

Only one in 10 employers with 500 or more employees uses a salary-based premium model, according to human resources consultant Mercer’s 2011 national survey of employer-sponsored health plans. That figure has hardly budged since 2006, when 9 percent of such companies reported using that model. The practice is most common in the financial services industry.

But as companies begin to strategize for 2014, when the health insurance exchanges mandated by the 2010 health-care overhaul start operating, more are beginning to consider this option, says Steve Raetzman, a partner in Mercer’s health and benefits consulting practice.

Under that law, employers with at least 50 employees must offer their workers affordable health coverage or pay penalties. A plan is considered affordable if the employee’s share of the premium for individual coverage doesn’t exceed 9.5 percent of his household income.

If the premium costs more than that, an employee can choose to buy subsidized coverage on his state’s health insurance exchange. But the employer will be penalized – up to $3,000 for each employee who chooses the exchange.
Varying employee premium contributions by salary can keep lower-wage workers’ costs under that 9.5 percent threshold. It’s a good solution for some companies, says Raetzman, but it may not be workable for firms that employ predominantly lower-wage employees, such as retailers, restaurants and grocery stores. “Ideally, you need enough higher-wage workers to pay a little bit more so they can make a meaningful dent in the contributions of lower-wage workers,” he says.

Getting workers to opt in

At Pitney Bowes, the majority of workers are hourly employees, many of them young men in their first office jobs, says Mary Bradley, director of health-care planning. “It’s the type of workforce where you might expect they’d opt out of health insurance if they’re healthy,” she says. But that won’t be an option beginning in 2014 because of the new law.

For more than a decade the company has provided subsidies that make coverage more affordable for lower-wage workers. It seems to work: 78 percent of U.S. employees opt for health coverage at Pitney Bowes. Starting this year, the company took a step that ties health coverage costs even more closely to pay. In its consumer-directed health plan, the company sets the deductible, out-of-pocket maximum and company contribution based on salary. Hourly workers, for example, have a $1,500 deductible and $3,000 out-of-pocket maximum, while employees at the director level or higher have a $2,500 deductible and $5,000 out-of-pocket maximum.

“That $2,500 deductible, for someone making $25,000, is a big hit,” says Bradley, “whereas for someone earning $200,000 a year it’s not such a big deal.”

Individuals may not realize that their health plan payment is different from that of the co-worker in the next cubicle. Adina Ba, 31, who oversees employee volunteer programs in the United States and abroad, described the company gym and on-site medical clinic as two health benefits she appreciated having access to at the company’s Stamford, Conn., headquarters. But until a reporter asked, she had no idea the company varied health insurance coverage based on what each person earns.

“I wasn’t aware of any difference until now,” she says.

This column is produced through a collaboration between The Post and Kaiser Health News. KHN, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health-care-policy organization that is not affiliated with Kaiser Permanente. E-mail questions@kaiserhealthnews.org. ]]> http://www.vanbeurden.com/blog/2707/sherndon/the-future-for-employers-may-include-a-salary-based-premium-model/feed/ 0 http://www.vanbeurden.com/blog/2702/sherndon/private-medical-plans-increased-52-since-2003/ http://www.vanbeurden.com/blog/2702/sherndon/private-medical-plans-increased-52-since-2003/#comments Mon, 05 Dec 2011 21:37:28 +0000 Sean http://www.vanbeurden.com/blog/?p=2702 California Healthline – Nov. 18: Premium costs for family health insurance in California increased by 52% from 2003 to 2010 and consume a larger share of residents’ income, according to a study by the Commonwealth Fund, the San Francisco Chronicle reports. For the state-by-state analysis, researchers examined employer data from a federal survey and calculated the average premiums for private group plans.

Researchers compared the insurance costs with U.S. Census household income data. California-Specific Findings: According to the study, the average annual family health insurance premium cost in California rose from $9,091 in 2003 to $13,891 in 2010. Last year, premium costs amounted to 21.5% of income for Californians, up from 14.9% in 2003. The study also found that between 2003 and 2010, the annual amount California workers contribute toward their health insurance rose by 121% for individuals and 68% for families. Nationwide Findings: Between 2003 and 2010, premiums for employer-sponsored health insurance increased by a nationwide average of 50%. The report found that annual premiums increased in every state during that time period from 33% in Idaho to 70% in Mississippi. Average annual premiums for family coverage were $13,871, with the average annual employee share at $3,721 in 2010, up from $2,283 in 2003.

The report found little correlation between a state’s cost of living and its average premium rates. Premiums in New Mexico and West Virginia were among the highest, despite those states’ lower-than-average cost of living. The District of Columbia had the highest average annual premiums, with families paying $15,206 and individuals paying $5,644, an increase of 41% and 51%, respectively. The report found insurance premiums are taking up a larger share of individuals’ and families’ incomes. In 2010, no states had average premiums that totaled less than 14% of median income, compared with 13 states in 2003. Further, health insurance premiums in 2010 accounted for 20% or more of median income for 62% of U.S. residents under age 65.

Health Reform Law Helps Slow Premium Increases: The report estimates that the federal health reform law will help reduce premium costs by an average of 1% to 1.5% annually over the next 10 years through “a combination of insurance market reforms, payment incentives and delivery-system changes”. Slowing premium increases by just 1% would save the average family $2,161 annually, according to the report. Further, the report found that without implementation of the federal health reform law, average annual family premiums would reach about $24,000 by 2020.

Under Obama’s health care law, the gap will be gradually phased down by 2020. ]]> http://www.vanbeurden.com/blog/2698/sherndon/drug-coverage-gap-in-medicare-gets-smaller/feed/ 0 http://www.vanbeurden.com/blog/2681/sherndon/supreme-court-will-hear-health-care-reform-arguments-march-2012/ http://www.vanbeurden.com/blog/2681/sherndon/supreme-court-will-hear-health-care-reform-arguments-march-2012/#comments Tue, 15 Nov 2011 20:46:41 +0000 Sean http://www.vanbeurden.com/blog/?p=2681 quote.blue{ font-size: x-small; color: #0054a6; font-family: Verdana, Arial, Helvetica, sans-serif;margin:0;font-size: 1em; }

The Associated Press - Nov. 14: Washington – The Supreme Court said Monday it will hear arguments next March over President Barack Obama’s health care overhaul a case that could shake the political landscape as voters are deciding if Obama deserves another term. This decision to hear arguments in the spring sets up an election-year showdown over the White House’s main domestic policy achievement. And it allows plenty of time for a decision in late June, just over four months before Election Day. The justices announced they will hear an extraordinary five-and-a-half hours of arguments from lawyers on the constitutionality of a provision at the heart of the law and three other related questions about the act. The central provision in question is the requirement that individuals buy health insurance starting in 2014 or pay a penalty. In the modern era, the last time the court allotted anywhere near this much time for arguments was in 2003 for consideration of the McCain-Feingold campaign finance reform. That case consumed four hours of argument. This argument may spread over two days, as the justices rarely hear more than two or three hours a day. The 2010 health care overhaul law aims to extend insurance coverage to more than 30 million Americans, through an expansion of Medicaid, the requirement that individuals buy health insurance starting in 2014 or pay a penalty and other measures. The court’s ruling could decide the law’s fate, but the justices left themselves an opening to defer a decision if they choose, by requesting arguments on one lower court’s ruling that a decision must wait until 2015, when one of the law’s many deferred provisions takes effect. A White House spokesman said, “We are pleased that the court has agreed to hear this case.” “We know the Affordable Care Act is constitutional and are confident the Supreme Court will agree,” communications direct Dan Pfeiffer said in a statement. Senate Republican Leader Mitch McConnell of Kentucky called the law an “unprecedented and unconstitutional expansion of the federal government into the daily lives of every American.” “In both public surveys and at the ballot box, Americans have rejected the law’s mandate that they must buy government-approved health insurance, and I hope the Supreme Court will do the same,” McConnell said. Republicans have called the Patient Protection and Affordable Care Act unconstitutional since before Obama signed it into law in March 2010. But only one of the four federal appeals courts that have considered the health care overhaul has struck down even a part of the law. The federal appeals court in Atlanta said Congress exceeded its power under the Constitution when it adopted the mandate. The federal appeals court in Cincinnati upheld the entire law, as did appellate judges in Washington, DC, in recent days. The case could become the high court’s most significant and political ruling since its 5-4 decision in the Bush v. Gore case nearly 11 years ago effectively sealed George W. Bush’s 2000 presidential election victory.

In addition to deciding whether the law’s central mandate is constitutional, the justices will also determine whether the rest of the law can take effect even if that central mandate is held unconstitutional. The law’s opponents say the whole thing should fall if the individual mandate falls.