California's Hidden Non-Dependent Tax On Health Premiums

A part of the PPACA (ObamaCare) provides that parents may add children to their employer-sponsored coverage plan up to age 26, whether a dependent student or not.

Turns out California's tax law requires the state to levy taxes on any amount of premium paid by the employer for non-dependent children of employees.

Many California workers added non-dependent children under age 26 to their group health plans in favor of paying premiums for the coverage. According the the Sacramento Bee article, the result is a bump in taxable income to reflect the employer's contribution.

See the article here.

Blue Shield CA Agrees To 60-Day Rate Hold On Individual Plans

Blue Shield of California (and Blue Shield Life & Health) announced this afternoon that the company will abide by the request of Insurance Commissioner Dave Jones and hold the March 1, 2011 rate increase for 60 days so that the rates can be reviewed.

Late last week Blue Shield stated that they were satisfied with the rate increase and would not honor the request of the CA Insurance Commissioner.

For those with Blue Shield CA individual & family health plans who are not in your initial rate guarantee period, your rates will not be increasing on March 1 as projected.

Blue Shield will notify agents as to when, if and by how much the rate increase will actually go into effect.

Anthem Blue Cross CA Finally Gets Approvals!

Just received a voicemail from Anthem Blue Cross California that the plan portfolios held up by the California Dept of Insurance have finally been approved.

These plans have been pending approval since September 22, 2010.

According to the voicemail the new plans (all PPACA-compliant) will be available for sale tomorrow (1/14/11) to the public.

I will update this post with the particulars of the plans now available as soon as I receive the written confirmation in the morning.

Health Net CA Individual Plans Approved!

Health Net CA has announced this morning that they have received regulatory approval to sell their new January 1 plans to individuals & families.

Health Net CA (not including the Farm Bureau) will only be offering 3 total individual health plans for January 2011. These include:

*HMO 40
*ValueNet PPO
*Optimum Advantage HSA PPO

That's it folks. I have the rates and paper applications available for use until the online quoting and application system goes live for these plans.

Anthem CA Quote Upload Available Today (New Plans)

The Anthem Blue Cross CA quoting and application system has been uploaded and is currently quoting the new approved individual & family health plans for 2011 (PPACA-compliant).

The new plans quoting include:

*Tonik 5000 PPO
*Premium Plus PPO (six deductible choices)
*PPO Share 3500, 5000 and 7500
*HMO plans

You can get quotes for the current plans via my link

Lumenos HSA plans will not be available for online quoting until approximately January 20, 2011. For more information on Lumenos HSA, send me an e-mail as I have the rates available at this time.

Plans still pending CDI approval are

*Core Guard PPO
*SmartSense PPO
*Clear Protection PPO
*some Lumenos PPO & HSA

Child Only Health Insurance California 2011 -Anthem Blue Cross Live Blog

I am blogging this live while attending an Anthem Blue Cross conference call. Important news concerning Child-only health insurance coverage in California beginning January 1, 2011 for children under 19.

Per CA AB 2244, children may apply for coverage without a parent being a co-applicant during certain periods. This includes both healthy children and children with pre-existing conditions who need guaranteed-issue coverage. Children receiving guaranteed-issue coverage can be rated up in premium (as of today) but cannot be declined.

The enrollment periods will be as follows:

*January 1,2011 - March 1, 2011 Open Enrollment Period
*The Birthday Month of the Child (regardless of which day in the month)

Outside of these open enrollment windows, children will not be able to apply for coverage on child-only coverage policies. Outside of the open enrollment or birthday month, children will only be allowed to apply with a parent as co-applicant (and the parent must be approved for coverage for the child to be offered coverage).

Anthem will be imposing a 15-day waiting period for effective dates on all individual health plans beginning January 1, 2011. So a child-only PPO application submitted January 1, 2011 will be eligible for a start date of January 16, 2011.

As soon as I find out how the rate-ups are going to be set up for children-only guaranteed-issue health coverage, I will post a blog.

Anthem states that the maximum cutoff age to apply is 18 3/4 years of age.

Anthem Blue Cross CA Partial Plan Release 12/10

Anthem Blue Cross has announced that a portion of the health plans held up for approval by the CDI (California Dept of Insurance) have been approved and are available for sale today.

In addition to the 3 HMO plans and PPO Share 3500 and 7500 which were previously approved for sale, the following plans are now available today for quoting and applications:

Premier Plus PPO (1000, 1500, 2500, 3500, 5000 and 6000 deductibles)
Lumenos HSA PPO 1500 (non-maternity)
Lumenos HSA 5000 (with maternity)
Tonik 5000 PPO
PPO Share 5000
PPO Share 1000

Anthem has indicated that plan online quotes and applications for the new plans will be available Saturday, 12/18 and after.

Quotes and plan summaries can be found on my Anthem Plan Finder
Click on "Get Quotes" under "individuals & families" and it will open the planfinder in a new window.

Still pending are:

SmartSense Plus
Core Guard Plus
Clear Protection Plus
Lumenos Plus

MLR and Agent Commission (and the future) California

As many of you may have heard, the health insurance carriers have begun announcing commission reductions to agents due to MLR (Medical Loss Ratio) requirements under PPACA. Blue Shield CA just left us all a nice voicemail this evening (after business hours BTW) about commission cuts. The average for an agent is approximately 50% pay cut in 2011 (starting in 3 weeks).

No doubt that is going to hurt and it is possible many agents (especially newer agents) will leave the health insurance business. Veteran agents may be able to withstand the slash on new business compensation because of a large client base of older business which will be, at least for now, uneffected by the cuts.

I have observed in the last few days an attempt by agents, insurance carriers and organizations that train, recruit or mentor agents, to justify this going forward. To the extent that reduced earnings on health insurance would allow fewer agents to achieve higher potential production at lower commission (the overall thought process), certainly there could be a place for those fewer agents to continue to succeed in this business. Except.............

What happens on 1/1/2014? Let's say a savvy agent sets up a staffed call center (the chosen model by the carriers, obviously), hires a bunch of service reps, sub-agents and telemarketers and garners a large volume of sales to achieve the highest commission payouts. That could be a lucrative business model right up to the point where the health insurance exchanges open in 2014. Then what?

Imagine an agent selling 300+ health insurance policies in 2011, 2012, and 2013 (over 900 total) and watching the 900+ clients disappear into an insurance exchange offering no compensation or virtually no compensation to the agent. All of that work for a couple of years of income at already-reduced commissions to see it all evaporate in the blink of an eye.

Now there are agents who are whistling past the graveyard saying "that's not going to happen", "repeal is on the way", "NAHU will protect our earning power." Now, they may be right.

I am inclined to believe what I see, not what I think/hope might happen. Sure changes could be made. Sure a panel could be set up to review agent compensation. Since this change has ALREADY happened (compensation and MLR), the pragmatist in me says to anticipate that the 2014 changes will occur basically unchanged and on schedule.

"Well", some might say, "there will still be a place for agents in the system". Don't be so sure. We are not specifically mentioned in PPACA. At best we are included with navigators like Dept of Fish & Game, Trade Unions, Civic Organizations and the like. It's us, community service organizations and someone spawning salmon in the pond.

The California Health Exchange is a fact. It was passed into law and signed by Gov Schwarzenegger a few months ago. It exists and regardless of what happens with PPACA (ObamaCare), the California exchanges would have to be repealed separately.

The architect of the future California Exchange is the same person who set up the Massachusetts Connector Exchange. I won't mention his name here but you can certainly Google it.

Agent compensation in Massachusetts for indivdiual & family health insurance is..........zero, nothing , nada, bupkiss, the big 'goose egg' (insert your favorite phrase here).

So, the same guy who set up 'the big goose egg' in agent compensation in Massachusetts will be very heavily involved in setting up the California Exchange. Sure, it could be different out here, but are you really willing to bank on it.

Health insurance agents in California will have to make some hard decisions going forward. Some will bury their heads in the sand and hope it all goes away. Some will swear on all that is Holy that big brother NAHU (National Assn of Health Underwriters) and Janet Trautwein will ride in on a white horse to save the day. Some will move on to other things like life insurance. And some will stick it out and try to make the best of a lousy situation over which they have no control.

The bottom line is this for agents: "Am I willing to work twice as hard for half as much with the very real risk that it could all go away anyway in three years?" I wish I had the answer, for myself and for other agents. As of today, I just don't know.

PCIP Premium Decrease (HHS)

According to recent press, the federal government has indicated that it plans to decrease the premiums for the federal PCIP (temporary risk pools) by 20% in order to encourage greater enrollments.

Apparently enrollment in the new PCIP has been lackluster at best.

I do not yet know if the decrease will be applied to the CA PCIP as it is being run by the state (MRMIB) and not a direct federal risk pool.

Unless the government can find more $$$ to pump into the pools, this is going to likely create a reduced number of enrollment slots meaning less people will be able to be covered at the lower premium.

California's PCIP is scheduled to hold an average of 23,100 people at any given time with a possible increase in two years if scheduled federal funding is available. Obviously a 20% premium decrease under existing funding ($761MM) would likely lower the number of subscribers by that same percentage.

Health Net CA Blackout Coming Up

Health Net of California has announced a blackout for individual & family coverage plans (IFP) in a couple of weeks. The blackout will be lifted when the new PPACA-compliant plans are approved and available for January 1, 2011.

The blackout will occur on November 18th (online quoting), and the last day to submit applications for December 1, 2010 start dates will be November 22nd. Any applications received after 11/22 will not be processed.

Any application submitted on or before 11/22 that is not approved and enrolled by 12/10/10 will be cancelled and returned to the applicant.

Health Net CA will advise agents as to the progress of the PPACA-compliant plans and at what point applications and online quoting will be made available after the blackout.

This blackout does not effect HIPAA plans, only underwritten coverage plans.

Congratulations Rick Bronstein!

Rick Bronstein, a fellow agent and friend, ran for the office of CA Insurance Commissioner in the 2010 election.

Rick placed third in the race and garnered almost 300,000 votes. Not to shabby for a 3rd party candidate with no corporate backing nor war chest.

Congratulations, Rick. You certainly made them take notice. Now, get back to work LOL!

Anthem Blue Cross CA Update

Just wanted to update on my suspending sales with Anthem Blue Cross CA.

I have spoken with Anthem concerning my issues with their processes and am supposed to be receiving some correspondence from "on high" regarding my issues and concerns. As of today I have not yet received anything from Anthem in this regard. I understand the correspondence has to be cleared by the legal department due to technical nature (I am sure it's HIPAA-related).

I am willing to work with Anthem Blue Cross to resolve these concerns and to assist people in buying both guaranteed-issue HIPAA coverage and underwritten coverage (one the plans are actually available -- they are still blacked out pending DOI approvals).

In the meantime, I am continuing with Anthem Blue Cross small group products as they are a good carrier for the types of groups with which I specialize (spousal/family).

I just wanted to update and let you all know where things stand.

LA City Attorney Sues HealthMarkets

The Los Angeles City Attorney's Office has filed a lawsuit against HealthMarkets, Mega Life & Health, Midwest National and has included Goldman Sachs and Blackstone Group.

The lawsuit alleges, amongst other things, deceptive sales practices, inadequate insurance coverage and intentionally misleading marketing practices.

Read the story here

California Exchange Bills Signed Into Law

The Governor signed both health insurance exchange bills into law yesterday in California.

AB 1602 and SB 900 (companion bills) were signed yesterday, paving the way for the creation of the California Health Insurance Exchange.

I will update as the process moves forward with information on the exchange, how it will work, when it might be operational and so on.

Anthem Blue Cross HIPAA Enrollment Change (California)

Effective October 1, 2010, Anthem Blue Cross California will institute a new enrollment process for HIPAA applicants.

Beginning 10/1, applicants will have start dates as follows based on application submission (WITH premium):

1st-15th of the month, 1st of the next month
(ex. Apply 11/1-11/15 start date is 12/1) (one month gap)

16th-31st of the month, 1st of the second month
(ex. Apply 11/16-11/30 start date is 1/1)(two month gap)

In order to avoid gaps in coverage, I need all Anthem HIPAA applications to be submitted to my office at least 30 days PRIOR to the requested effective date.

Anthem Health Plan Blackout (California IFP)

Anthem Blue Cross of California has today suspended it's online application program for individual & family health plans. The application will be unavailable until approximately October 1. I will update when it becomes available.

For those seeking quotes for Blue Cross coverage plans (non-HIPAA), currently over 75% of the plan portfolio is not available for sale pending Dept of Insurance approval of plan designs and rate changes. The PlanFinder tool will still work via my web site (www.davefluker.com) however it is currently only quoting the DMHC registered plans that have been approved (the expensive plans). I will update as soon as I receive word as to the availability of the new DOI-registered PPO plans.

These plans are currently being changed to meet PPACA guidelines including elimination of lifetime caps and addition of no-cost preventive services.

Currently Anthem is pending approvals for the following plan portfolios:

-SmartSense PPO
-Clear Protection PPO
-Core Guard PPO
-Premier PPO
-Lumenos PPO (HIA and HSA)
-3500 HSA PPO plan

These represent the lower-cost and non-maternity plans in the California market.

Should you use the PlanFinder tool, you will only be able to view the HMO plans and the two Share PPO plans (3500/7500) at this time.

Anthem Blue Cross CA Eliminates Child-Only Enrollments

Effective 9/23, Anthem Blue Cross CA will no longer offer individual coverage plans to children under 19 as a stand-alone enrollment. Children of any age may apply for coverage as long as they are applying with parents/guardians over the age of 19. However, Anthem will no longer accept applications for children-only under the age of 19.

Several carriers in many states have taken similar action in recent weeks. It appears that Anthem across the 14 states they cover will take this action in all states. Other carriers have also instituted the same policy.

PPACA requires insurers who provide child-only coverage to insure all children under 19 regardless of health conditions. HHS is supposed to provide guidance to the insurance companies regarding open enrollment periods, however such guidance has not yet been forthcoming. As such, Anthem CA (so far) has chosen to stop selling health coverage plans to children under 19 at least until HHS provides clarification on the open enrollment.

Carriers have indicated that, absent an open enrollment schedule, many people would leave children uninsured until they have a medical emergency/condition and then purchase coverage at that time to cover it. This would create severe adverse selection problems.

Anthem BC CA has indicated that the company will review this upon HHS delivery of specific open enrollment information.

As of today, Anthem's portal will no longer quote children-only coverage under 19 and as of 9/23 no children-only plans will be sold by Anthem Blue Cross.

California PCIP (Federal Risk Pool) Opens

The PCIP (Pre-existing Condition Insurance Program), also referred to as the Federal Temporary Risk Pool, is now open and accepting applications for enrollment.

The PCIP is an individuals-only enrollment with no dependents. Rates are set correspondent to the standard rate for a similar $2500 deductible PPO plan on the open market in California. PCIP will use a larger network of providers than MRMIP, approximately 65,000 should be available. The PCIP plan offers both in-network participating benefit levels and and out-of-network non-participating benefit levels.

Applications received by the 10th of the month will be enrolled for the first of the following month.

According to MRMIB, which will run the program for California, agents may assist applicants in the enrollment process for PCIP and receive a $50 fee the same as currently available on the MRMIP program.

Eligibility for the PCIP consists of the following:

1. California state residency as evidenced by applicant having a California address or other appropriate documentation as determined by MRMIB

2. US Citizenship and immigration status for applicants obtained through questions and supporting documentation

3. Applicant has a pre-existing health condition as evidenced by a denial letter from a health insurer or acceptance in a health plan which has rates in excess of PPO rates in the MRMIP (state risk program)

4. Applicant has been without creditable coverage for a least 6 months prior to applying for the PCIP

The California PCIP intends to provide enrollment to an estimated 23,000 California residents. By comparison, MRMIP, the state major risk plan, enrolls a maximum of 7,100. If the PCIP is a maximum enrollment in 2012, the federal government may grant additional funds to the CA PCIP to increase enrollments.

I will place a PCIP application on my web site as soon as it is available for download from MRMIB. It will be available here

Here is the final BROCHURE for the California PCIP including plan summary and rate guide.

California PCIP (Federal Risk Pool)

MRMIB has published the final document for PCIP (Pre-existing Condition Insurance Program) which includes both rates and plan summary of benefits.

Rates are reasonable and benefits fairly rich.

PCIP Summary

October 1 Rate Increases on Individual Health

October 1 will see major rate increases by both Anthem Blue Cross and Blue Shield of California.

Blue Shield will average 18.2% increase but some age groups may experience rate increases as high as 50%!

Anthem Blue Cross will average 14% with a max rate of 20% increase.

Interesting article from today's Sacramento Bee.

In addition, Anthem Blue Cross has currently blacked out all individual and family health plans for new enrollments on 9/23 and after to replace the current plans with newer, PPACA-compliant plans. I have heard rumors that we may see the end of lower-deductible versions of some plans in favor or high and very high deductibles to offset preventive benefits and childrens guaranteed-issue.