"Everything's going to change," said Jorge Hinojos, who has been an agent with Priority Insurance in Odessa for eight years. "Being compliant and educated enough to inform my groups when they have questions -- that's my biggest issue right now."
Hinojos answers at least two to three calls a day from his clients -- 24 small-group employers, five large-group employers and individuals -- who worry about properly counting employees, increased paperwork and possible penalties as reform starts to take shape.
Oct. 1 marks the beginning of new insurance marketplaces, where consumers can purchase different tiers of health plans based on common pricing. By Jan. 1, uninsured individuals and families must have "minimum essential coverage" or face annual penalties that increase each year until 2016, according to the Texas Association of Health Underwriters.
By Jan. 1, 2015, employers with more than 50 workers -- who technically are required to be compliant by this Jan. 1 -- will face "employer shared responsibility" payments for each worker that isn't offered affordable health insurance.
But even with the first big deadline only two days away, 51 percent of Americans still say they don't know health reform works or how it will impact them, according to a poll by the nonpartisan Kaiser Family Foundation.
The local Nation Association of Health Underwriters chapter recently hosted an "Obamacare: The Next Steps" seminar to help local agents such as Hinojos understand health reform. The Midland Texas Chamber of Commerce offered a similar seminar in August.
"Agents are feeling overwhelmed," said Danny Koch, a Lubbock Area Association of Health Underwriters board member who helped organize the Monday seminar. "It keeps people in the know because the law is so complex; it's so fluid."
Still, one aspect of health reform is clear, said Josh Wilson, vice president of sales and account management at UnitedHealthcare, at the August event.
"As you have all these folks coming into the system, with all of the laws and rules that changed, you're set up for a perfect storm," he said.
Oct. 1: Marketplace rollout
One of the first big tests of the Affordable Care Act, most of which passed constitutional scrutiny by the U.S. Supreme Court in June 2012, will be Tuesday's rollout of the health marketplaces.
Some states set up their own marketplaces or partnered with other states, but Texas defaulted to use the federally facilitated marketplace, which offers open enrollment from October 2013 to March 2014.
The marketplace will offer "Qualified Health Plans," which meet legal requirements by the U.S. Department of Health and Human Services, and fall in line with metallic coverage levels -- bronze, silver, gold and platinum -- that match percentage of costs covered, according to healthcare.gov. Bronze plans come with lower premiums and higher out-of pocket costs, while platinum plans offer the highest monthly premiums and lower out-of-pocket costs.
"They wanted to make sure that if folks shop, they have dollar comparisons," said Wilson, noting employers should make sure they know what they're buying if they shop in the marketplace because some plans might offer huge discounts and low prices but have skinny networks. Any U.S. resident can shop in the marketplace, and employers -- small and large -- were legally required to inform their workers of it by Oct.1.
If employers don't offer health insurance, or if they offer plans than don't meet certain standards or plans that cost more than 9.5 percent of a worker's income, then an individual could be eligible for premium tax credits through the marketplace, according to the U.S. Small Business Administration.
All health insurance plans -- whether in the state, partnership, federal or private marketplaces -- will be overhauled, Wilson said.
Plans must cover expanded benefits such as pediatric dental, maternity care, mental health and prescription drugs -- services typically limited by current plans -- according to the Kaiser Foundation.
New laws prevent insurance carriers from using pre-existing conditions, industry or gender to rate individuals or groups under employer plans. Carriers can use age, community and smoking status to set premiums, but they must offer insurance to all individuals and groups.
That means different premium categories and more headaches, Hinojos said.
"Usually, you get composite rates for your group. So, all your employees are paying $300 a month per employee," he said. "Now (premiums are) going to be by age: a 6-year-old might be $500, a 20-year-old might be $200. ... If you add your spouse, and if your spouse is 10 years older, he's going to have to pay a different premium."
Carriers also are capped on a 3-to-1 basis to charging premiums based on age at the benefit of the older generation.
One of Hinojos' older female clients, who currently pays higher prices because she is a woman, likely will pay less -- after enrolling in a new plan -- than his group of young construction workers, who typically pay low premiums and must now pay more to make up for the new ratio, he said.
"It's going to anger all my employers. They'll say, 'I'm not used to this,'" he said. "I'm not used to this, either. But it's something we're going to have to work with."
Jan. 1: Individual mandate
One of Hinojos' biggest concerns is the emergence of navigators, who are given about 20 hours of training and federal money to introduce new consumers to the health marketplace.
The divide became clear at the West Texas Association of Health Underwriters conference when one local agent voiced her concerns about the role of navigators, who only are allowed to discuss the differences between the marketplace plans -- they can't negotiate a deal or offer their advice on which plan to buy.
Hinojos, who has had some clients for as long as he's been an agent, said selling health insurance is a personal experience.
"All of my employers depend on me and my experience," he said.
Still, Stacey Pogue, senior policy analyst with the Center for Public Policy Priorities, said at the Monday seminar that navigators are not meant to replace agents but to work with nonprofits to introduce uninsured individuals and families to the marketplace and facilitate paperwork.
"We have real access issues, especially with our low-income population," Pogue said. "Getting them to the marketplace is important."
That's because all individuals are required to have a health insurance plan with "essential health benefits" beginning Jan. 1. But low-income populations are at a disadvantage because Texas opted not to expand Medicaid, which created a coverage gap without many options, according to Blake Hutson, senior associate for health reform campaigns in the Consumers Union's southwest office.
To qualify for Medicaid, individuals or families must make less than 100 percent of the federal poverty level. That's $11,490 a year for individuals or $23,550 for a family of four, according to U.S. 2013 poverty guidelines.
But because of their Medicaid eligibility, they are not qualified for health insurance tax credits in the new marketplace. And after Texas Gov. Rick Perry declined to accept federal funds to expand Medicaid after last year's Supreme Court ruling, the Center for Public Policy Priorities expects about 1 million Texans below the poverty line to be at a disadvantage in the new marketplace.
"It means that if you live below the poverty level, there's not going to be an option for coverage," Hutson said at the Monday seminar. "If you're above the poverty level, you're going to get a bunch of money to help you buy coverage. You're going to get a subsidy in the market to buy coverage; you're going to get a private insurance plan from a private insurance company. People below the poverty level, there's no new options for you in Texas."
Creating health insurance options for low-income populations is important from a moral and economic perspective, Pogue said.
U.S. Census Bureau shows Texas has the highest rate of uninsured in the nation. In Midland County, the Kaiser Foundation estimates one quarter of the population is uninsured.
"The economic security of a family is really closely linked to access to health care, especially when somebody gets sick," she said.
And if an uninsured individual ends up in the emergency room, it's the insured that end up paying in higher taxes and premiums.
"It's not like we don't pay for their health care. We do. We pay for their health care in the most expensive, least rational way," she said.
That's why Pogue supports navigators, such as the nonprofit Project Amistad, which will help agencies in 23 West Texas counties offer marketplace enrollment services.
"We are going to be targeting populations in West Texas that may not have access to computers. Those individuals not as proficient in the English language," said Roy Ortega, Project Amistad community relations manager. "We want to make sure they understand we are there to help guide them through the market but not make any decisions for them."
Ortega noted a Spanish version of health reform's main online portal -- healthcare.gov -- is available at cuidadodesalud.gov.
Bringing the message of health care reform to the Hispanic community will be a challenge, said Hinojos, who has non-native English-speaking relatives ask him questions about insurance all the time. Some of their questions show how little they know about the upcoming changes, he said.
"How do you get the message to them? It's something we have to work on," said Hinojos, noting the large population of Hispanics working for oil, gas and trucking companies in the area.
Another group of Texans -- who used to qualify for the Texas Health Insurance Pool because of pre-existing medical conditions -- might also be at a disadvantage now that health reform is underway.
An overhaul of the insurance rating system prevents insurance carriers from using pre-existing conditions to set premiums, but Midlander Sharon Humphreys, who relied on the insurance pool, doesn't know what to expect from private insurance or the public marketplace.
The former elementary school teacher received a letter in the mail last week that said her insurance pool coverage was ending in December, leaving her with only a few months to enroll in a new plan.
"I'm leery of buying through the marketplace," Humphreys said. "The biggest challenge is, how do you know what you're getting?"
Humphreys has worked with her current doctors for the past five years and worries they won't be covered under a new plan.
"I don't really know what the reimbursement is going to be or if my physician is going to accept it," she said. "It just raises a lot of concerns."
Jan. 1, 2015: Pay or play division
Small employers are not required by law to offer health insurance, but because they pay on average 18 percent more than bigger businesses for health costs, the government is encouraging them with tax breaks and a marketplace called the Small Business Health Options Program, or SHOP.
Large employers must offer insurance with a minimum set of requirements or pay "employer shared responsibility" assessments to subsidize care for the uninsured, according to the Kaiser Foundation.
One of the first steps to developing an employer strategy for health reform is properly counting the number of workers, Wilson said.
Employers with more than 50 full-time employees -- who work at least 30 average hours or 130 hours in a calendar month -- are subject to laws and penalties of the "pay or play" provision, which was established to broaden coverage and create a shared responsibility, he said.
To determine whether a business falls in that category, the number of full-time employees is added to the total number of part-time hours worked by employees divided by 120. The result is the full-time equivalent.
Although implementation of "pay or play" was delayed until Jan. 1, 2015, employers should start determining as soon as possible how many part-time hours are worked, said Heather Garcia, partner at HRC Consulting LLC.
Garcia recommends tracking nine to 12 months of data on part-time workers, especially if the business has a lot of turnover, to know if they get to 30 hours.
"On the day this goes into effect, you need to know what your workforce is," she said.
Marcy Buckner, National Association of Health Underwriters director of state affairs for regions 5 and 6, said employers should take advantage of not having to pay the penalties this year but remain in compliance.
"Yes, there was a delay of the employer mandate, so there's a delay of the tax penalties and fines," she said at the seminar. "But there wasn't a delay of compliance. That part was not delayed. This is your practice year. Make sure you're in compliance."
But that's easier said than done, said Mary Taylor, one of Hinojos' clients who attended the event with him Monday.
"It's just so much information. It's overwhelming," said Taylor, who works for O'Ryan Drilling in Odessa.
Compliance is the No. 1 concern for both Taylor and Rosa Richert, of O'Ryan Heavy Haul, a sister company in Odessa. The parent company qualifies as a large employer and already offers insurance to its workers.
"In this economy, you have to offer insurance to be competitive," Taylor said.
Deborah Faltus, a client of Hinojos and part of the human resources personnel for Bowen Construction, worries about paperwork and waivers because her Odessa-based company has a transient workforce and high turnover.
"I'm going to say 95 to 96 percent of the people who come to work for us don't even come into our main office.
They're hired in the field, and we never see them," she said. "How do you classify them?"
Faltus said it's unfair that the burden and penalties fall on the employer.
That's why Alicia Haff, president of Haff Consulting, said the Affordable Care Act is not an insurance law.
"Mandates are employer-driven, not carrier-driven," she said at the West Texas Association of Health Underwriters seminar. "At the end of the day, it's the employers who are on the hook."
Haff mirrored warnings shared by Garcia at the August seminar, who covered regulatory and compliance implications for employers and their workers. Garcia said health reform is driving agencies such as the IRS, Homeland Security, Social Security Administration, Veterans Administration, Department of Defense and the Peace Corps to develop a Federal Data Services Hub and predicts more regulation to be the result of increased information sharing.
Both Garcia and Haff warned employers to protect themselves.
"The bottom line is, this is an opportunity. Adversity breeds opportunities," Haff said. "You as brokers, you as employers have the opportunity and need today more than ever before to look under your virtual hood. Figure out where you're right and where you're wrong and get started on making sure you're in compliance."
(c)2013 the Midland Reporter-Telegram (Midland, Texas)
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