S&S Benefits.....Opinion, Hearsay & News Review

Health care spending in the U.S. in 2014 topped $3 trillion- an average of $9,500 per person. That was an increase of 5.3%, the biggest jump since 2007, and accounted for 17.5% of economic output according to the Department of Health and Human Services. In 2014 prescription drug costs increased by 12.2%. The major jump was partly due to the introduction of Hepatitis C drugs Solvaldi and Harvoni.

As health insurer consolidations continue, Kaiser Permanente has reached an agreement to buy the Seattle non-profit Group Health Cooperative that has 600,000 members. Guardian has entered into an agreement to acquire Avesis, a national administrator of vision, dental and hearing programs.

As part of the ACA, for 2016 the penalty for not purchasing insurance is increasing to the greater of 2.5% of income above the filing thresholds of $10,300 single and $20,600 family, or $695 per adult ($347.50 per child). The penalty can be no greater than the national average premium for a bronze plan, which was $2,484 in 2015 for single coverage and $12,420 for a family of 3 or more.

The penalty for large employers who don’t offer coverage in 2016 will be $2,160 per employee (less the first 30 employees). If an employer doesn’t offer minimum value affordable coverage to a full time employee who goes on to the exchange and receives financial assistance, the penalty will be $3,240 per employee who goes to the exchange.

The only health insurance cooperative that made money in 2014 was bleeding money in 2015. Maine’s cooperative lost more than $17 million in the first 9 months of 2015 due to “higher than expected medical costs.”  What a surprise. The co-op cut off individual enrollment for 2016. An AP review of losses on 10 of the 11 remaining co-ops showed that the average loss was $21 million in the first nine months of 2015. The losses ranged from $3.9 million in Maryland to $50.7 million booked by the Land of Lincoln co-op in Illinois.

Obamacare has for once been modified legally. The Cadillac tax is now delayed until 2020 and if and when it is implemented, it will be tax deductible. The delay will save employers $3 billion in 2018 and another $6 billion in 2019. There is also a one year moratorium on the medical device taxes in 2017. The risk corridor will also be limited to the fees that the government collects from insurers who have excess profits and the IPAB “death panel” funds were also gutted.

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Health plans reimbursed customers approximately $478 million in 2014, translating to about $129 per family receiving a refund due to medical loss ratio laws. The most money was reimbursed in California ($98 million) and Florida ($60 million).

The government has also delayed the deadlines for issuing employee forms (either ) 1095 B or 1095 C from February 1, 2016 to March 31, 2016. Forms to the IRS (either) 1094 C or 1094 B have also been delayed from March 31st to June 30, 2016 for paper forms. Electronic filings have been delayed from February 29^th to May 31^st 2016.