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How Will the Affordable Care Act Affect Small Business Health Insurance Costs?

You would have to be living on a desert island or under a rock not to have heard of the Affordable Care Act (a.k.a. Obamacare).  But with all the partisan arguments about how wonderful or – conversely - how awful this new law is, it’s hard to separate the wheat from the chaff.  So, as Sgt. Joe Friday said, we’ll try to stick with "just the facts, ma'am."

Affordable Care Act Facts:

FACT: The Affordable Care Act (ACA) was passed by Congress and then signed into law by President Obama on March 23, 2010. 

FACT: On June 28, 2012 the Supreme Court rendered a final decision to uphold the health care law.

FACT: Open enrollment in the Health Insurance Marketplace began October 1, 2013 and ended March 31, 2014

That’s probably where the “facts” end.  The stated intent of the ACA was to offer affordable health insurance to every American.  According to the U.S. Department of Health and Human Services website, the ACA “puts consumers back in charge of their health care. Under the law, a new ‘Patient’s Bill of Rights’ gives the American people the stability and flexibility they need to make informed choices about their health.”  Few would argue with the value of the law’s stated goals, which are summarized as follows on the HHS website: “All together, these reforms mean that millions of people who were previously uninsured will gain coverage, thanks to the Affordable Care Act.”

What Impact Will the Affordable Care Act Have on Small Business Insurance Costs?

The full repercussions of the ACA on small businesses and their health insurance costs – and whether it’s truly “wonderful” or actually “awful” - won’t be known for several years; however, the Center for Medicare and Medicaid Services (CMS), which spearheaded the implementation of the law, presented a report to congress with a few predictions.  In the interest of “sticking with the facts,” CMS’s report states, “There is a rather large degree of uncertainty associated with this estimate. The impact could vary significantly depending on the mix of firms that decide to offer health insurance coverage.”

CMS: 2/3 of Small Businesses to See Increased Costs

A recent Small Business Association poll found that 96 percent of small businesses said their health insurance premiums have significantly increased over the past five years, with average monthly insurance costs increasing from $590 per employee in 2009 to $1,121 in 2014.  CMS’s research indicates those rates will continue to rise.  The CMS report states that the new rules, such as requiring that insurers offer guaranteed health coverage and insurance renewal options to small employers and preventing insurance companies from varying their rates based on a company’s industry or the age of its employees, will most likely drive up the price of insurance for many small businesses. 

The report estimates that 65 percent of small businesses are expected to experience increases in their premium rates, while only 35 percent will see a reduction. Businesses with exceptionally sick or at-risk workers will benefit most from the new provisions.  The effect on large employers is expected to be negligible, since many larger companies run their health insurance programs in house. 

What Can You Do to Control Your Business’s Health Insurance Costs?

American Insuring Group can help you navigate through the complexities of the new ACA rules and ensure that you get the best health insurance premiums available.  Contact an agent at (800) 947-1270 or (610) 775-3848 for more information about health insurance and the Affordable Care Act.

Want to learn more? Download our free report: 10 Things You Should Know About Health Insurance Under the Affordable Care Act

Do you believe that your employees are one of your most valuable assets?  Do you think of your employees as an investment rather than an expense?  

The fact is that happy, engaged, and loyal employees work harder, provide better customer service, and stay with you longer. That's why great benefits, especially health insurance, can be crucial to attracting and retaining the best employees.

Consider these facts:

• The average cost of recruiting, hiring and training a new employee is close to $4,000, according to an article in Entrepreneur Magazine.
   
• The companies listed on Fortune’s ‘100 Best Companies to Work For’ list experienced stock prices that rose an average of 14% per year from 1998-2005, compared to 6% for the market as a whole, according to a study from the Jackson Organization. That's more than double the norm, and suggests a strong link between employee satisfaction and company performance.

If you truly value your employees, it's important to do more than just say that you value them, so prove it to them via their health insurance, life insurance, and other benefits!  If you don’t show you care about their needs, they'll be less motivated to care about your company or their work, and your bottom line will suffer as a result.  If you want to stand out as an employer and attract real talent, it’s important to do what you can to ensure that your employees are healthy and happy – both physically and financially.

Start with a Good Employee Benefits Package

A good employee benefits package is a great place to start.  Unfortunately, during these rocky economic times, many companies are tempted to cut employee benefits.  This “cost-saving” measure will most likely backfire on you by creating less motivated employees and a higher turnover rate.

Mandatory Employee Benefits

While some benefits are optional, all employers are required to provide employees with the following benefits:

• Give employees time off to vote, serve on a jury and perform military service.

• Comply with all workers' compensation requirements.
   
• Withhold FICA taxes from employees' paychecks and pay your own portion of FICA taxes, providing employees with retirement and disability benefits.
   
• Pay state and federal unemployment taxes, thus providing benefits for unemployed workers.
   
• Contribute to state short-term disability programs in states where such programs exist.
   
• Comply with the Federal Family and Medical Leave Act (FMLA).

Providing additional benefits, such as health insurance, dental, vision, and life insurance plans will attract better-qualified candidates, ensure higher retention rates, and increase your bottom line. 

We Can Help You Craft a Better Employee Benefits Package

Contact American Insuring Group at (800) 947-1270 or (610) 775-3848 to discuss affordable health, life, and workers compensation insurance plans to make yours a better company that attracts and retains the high-caliber talent you need to excel in the marketplace.

There is a lot of uncertainty these days regarding what is required under the Affordable Care Act, also known as ObamaCare. Businesses and individuals alike are concerned they may be penalized or miss out on important information needed to keep their health insurance in tact and affordable.  

With that in mind, here are 10 things you should know:

1. As of January 1^st 2014, every person must be insured under a Qualified Health Insurance Plan.
    
2. If Employer Coverage is not offered, it is the responsibility of the Individual to purchase insurance independent of their Employer.
    
3. If a person is not insured in 2014, they will be faced with an Individual Tax penalty equal to $95/person or 1% of your taxable income…whichever is greater!
    
4. The Initial Open Enrollment period ends March 31^st, 2014.
    
5. Health plans sold after January 1, 2014 must include a list of 10 Essential Health Benefits such as Maternity coverage, Mental Health coverage, Prescription coverage, Pediatric Dental coverage, etc.
    
6. Health Plans will fall into 4 Metal Levels (Platinum, Gold, Silver, Bronze) and also include a catastrophic coverage option for those under 30 or for those meeting specific hardship guidelines.
    
7. There is premium assistance for people making between 100-400% of the Federal Poverty Level.
    
8. In addition to premium assistance, there are cost sharing subsidies (reduction in deductibles and out-of-pocket expenses) for those between 100-250% of the Federal Poverty Level.
    
9. The only way to claim the Premium Subsidy (Advance Premium Tax Credit) and the Cost Sharing Subsidies is to apply with the Federally Facilitated Marketplace (FFM).
    
10. Because the FFM is temperamental, the best way to apply and evaluate your coverage options is to contact a CERTIFIED Licensed Producer for assistance.

Looking for help in obtaining the right health insurance coverage for your employees or family?

Contact us today at American Insuring Group or request a free health insurance quote.

Do you want to become a burden to your family? Of course not.

Do you have homeowner’s insurance to protect your home in case of a fire?  Chances are you do.  It’s a very scary thought and – wisely - very few people think twice about protecting themselves against such a possibility. 

Less Than 8% of Adults Have Long Term Care Insurance: Why?

OK, next question… Do you have long term care insurance (LTCI)?  There’s a good chance that your answer is no.  Recent statistics show that less than 8% of U.S. adults and about 10% of seniors have long-term care insurance.  And yet, nearly 10 million people in the U.S. (37% under age 65 and 63% over age 65) needed some form of long-term care in 2000 (see http://longtermcare.gov/ for more information).  It’s estimated that almost 70% of people turning age 65 will need long-term care at some point in their lives. 

Bottom line… Your chances of needing to make a claim for long-term care are considerably higher than making a claim for a fire.

What Exactly is Long Term Care Insurance?

LTCI helps pay the cost of care for seniors or individuals with disabilities if they should ever need it over a long period of time.  It helps pay for the cost of care for individuals unable to perform the basic activities of daily living (ADLs) -- such as bathing, eating, getting in and out of bed, dressing, and going to the bathroom – over a long period of time. 

Depending on the policy, LTCI may cover home care, assisted living, adult daycare, respite care, hospice care, nursing home, and Alzheimer's facilities. Certain policies will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse.

The cost of an LTCI policy is based on:

• Your age when you purchase the policy
• The maximum amount that a policy will pay per day
• The maximum number of days/years that a policy will pay
• Any optional benefits you choose, such as benefits that are adjusted for inflation

What is the Cost of Long-Term Care and Who Pays for it if You Don’t Have LTCI?

According to the U.S. Department of Health and Human Services, in 2010 the average cost for long-term care was more than $6,000 per month in a nursing home, more than $3,000 per month in an assisted living facility, or $19-$21 per hour for a homemaker or home health aide. 

One of the biggest misconceptions about long-term care is that it’s covered by Medicare.  Medicare only pays for a maximum of 100 days if you need skilled services or rehabilitative care in a nursing home.  It does not pay for non-skilled assistance with Activities of Daily Living (ADL), which make up the majority of long-term care services. 

Medicaid pays the largest share of long-term care services, but only applies if your income is below a certain level and you meet minimum state eligibility requirements.

Other federal programs such as the Older Americans Act and the Department of Veterans Affairs pay for long-term care services, but only for specific populations and in certain circumstances

Benefits of Long-Term Care Insurance

More and more people are purchasing LTCI to protect themselves in the event that they need long-term care.  Some of the benefits include:

• Ensuring that you will be taken care of should you need long-term care
• Allowing you to live as independently as possible without burdening your family 
• Allowing you to spend family time with your children rather than caregiver time
• Protecting your savings
• Premiums paid on a long-term care insurance product may be eligible for an income tax deduction

Learn More about LTCI

If you want to ensure that you can live independently and not become a burden to your family and friends in the event that you need care over a long period of time, give us a call at (800) 947-1270 or (610) 775-3848 or contact us by email.  The sooner the better!

Considering the millions of dollars spent daily on TV commercials for single-brand insurance offerings, you would think that the independent insurance agent is a thing of the past. It's tough to go an hour on TV without seeing at least one commercial for AllState, Nationwide, GEICO, State Farm, or other single brand ("captive") insurance solution. That's because with few exceptions, only the big brands can afford to run national TV ads.

Bigger May Not be Better When it Comes to Insurance

Most people realize that big budget advertising does not necessarily equate with the best solution for all kinds of things in life. That's why, for example, many people avoid the pay-per-click ads found on search engines and instead click on the unpaid search results: they seek a high-quality answer to their search instead of one paid for by the competitor with the deepest pockets. In plain English, they don't want to be "spun" by the marketing machines behind the ads.

Let's apply the same thinking to an independent insurance agent vs. the mega-brands. Here are 4 reasons why an independent agent is likely to provide a superior personal or business insurance solution to satisfy your needs.

#1. Your Needs are Unique and Your Insurance Policy Should Fully Meet Your Needs

Insurance is complicated. It is difficult, if not impossible, for those outside the insurance industry to understand all the insurance options for meeting their needs. Only an independent insurance agent understands the pros and cons of each insurance company and their policy offerings as it pertains to protecting you against your unique combination of risks and liabilities.

#2. Independent Insurance Agents are a Valuable Advocate, and They Cost You Nothing

Your independent insurance agent will check multiple companies and insurance solutions in detail to arrive at the best combination of value, price, and insurance protection to properly and fully address your individual or business insurance needs. That can be very time-consuming, but that service typically costs you nothing.

#3. Your Independent Agent is a Single Source for All Your Insurance Needs

Insurance companies typically handle only certain types of insurance. However, your independent insurance agent handles insurance from multiple companies, thereby covering virtually any need, including business insurance, homeowners and car insurance, boat, RV, and motorcycle insurance, life and health insurance, umbrella insurance, pet and vacation insurance, workers compensation insurance, disability insurance, and virtually every kind of liability insurance to protect any type of business need. Being a single source with access to multiple insurance companies and solutions, your agent can create the best blend of policies to provide the right protection with minimal overlap and waste between and among your insurance policies.

#4. Unparalled Service

When you have an insurance question or need, your independent agent is there for you. You are not relegated to a faceless, nameless individual connected to an 800 number. Instead, you have the comfort and confidence of dealing with someone who you know, like, and trust for all your insurance needs. Think about it. Doesn't that kind of service and flexibility mean more to you than putting yourself in the hands of someone you don't know, and who offers only one solution or brand? 

We're Independent Insurance Agents, and We're Ready to Serve You

At American Insuring Group we pride ourselves in helping our customers not only save on insurance, but also in finding the right insurance protection. We'll put together a plan that will meet your needs, and we'll review your needs on a regular basis to see if it may be time to adjust your insurance to meet your changing needs, or to take advantage of better pricing that may become available as your needs change. Contact us today for a free consultation.

According to a May 2013 report by the non-profit Council for Disability Awareness (CDA), there is a sharp mismatch between the high value employees place on their ability to earn a living vs. their financial preparedness to handle a disability that would threaten their income as evidenced by having adequate levels of disability insurance.

Most are Ignorant of the Real Need for Disability Insurance

The report titled “Disability Divide: Employer Study” is based on a 2012 survey of over 500 human resources professionals. The key findings, as reported by the Insurance Word Blog, are as follows: 

• ¾ of HR professionals surveyed said employees viewed their income-earning ability as their most valuable financial resource, ahead of medical insurance, their homes, and retirement savings. However, only ¼ said employees considered it “very important” to prepare for potential disability, and a similar portion felt their employees were prepared to handle the financial hardships of the loss of income due to illness or injury.

• A prior CDA survey of over 1,000 wage earners yielded similar results, with most respondents stating they are most likely to agree with the statement, “I never really thought about” preparing for a potential disability.
   
• The HR experts surveyed generally felt that employees should begin planning for disability early in their careers even though most don’t begin until age 40 or older, if ever. According to statistics, approximately 100 million members of the US civilian workforce have no private disability insurance.
   
• Most of the HR experts as well as the wage earners dramatically underestimated the likelihood of incurring a disability during their careers.

Surprising Disability Insurance Statistics

The post goes on to quote some surprising statistics from the CDA’s Personal Disability Quotient calculator:

• An average 35-year old male office worker who is a non-smoker and has no health history issues has a 13% risk of incurring a long-term disability prior to retirement.
  
  
• For women with the same profile the risk is higher: 18% or nearly 1 in 5. Those surveyed had estimated their risk at only 1-2%.
   
• The 35-year olds noted above, if earning an average of $50,000 per year, are likely to earn approximately $2.4 million on average by the end of their careers.
  
  
• Clearly, the contrast between the risk of losing millions in income and the lack of disability insurance is striking!

Key Takeaways

Americans are much less protected against income loss than in the past due to several factors, including:

• The relative lack of solid pension plans
• Much lower savings rates
• Home mortgages with higher balances
• Rising college education costs
• Given the poor economy, the much greater likelihood of the need to continue to support children beyond their college years

What to do About Disability Insurance

Given these facts, the only wise course of action is to acquire the proper level of disability insurance to cover the gap between your current savings and the funding that would be needed to cover your financial needs during a long-term disability. If you are a business owner, the risks of inadequate disability insurance may be even greater due to the financial consequences of being unable to work.

We’re Here to Help if Needed

If you have questions on how to determine the right level of disability insurance you need to protect both you and your loved ones, then please contact us at 610-947-1270, or Contact Us online.

Get the Most from Your Employer Health Care Program

With the end of the year fast approaching, many employees are starting to become anxious. It’s that time of year again, the time when they get to tweak their health insurance benefits. While this may be exciting to some, the responsibility to choose the right health insurance plan can be a source of tension for others.

There are many reasons for this. Personal circumstance comes into play, including additions to family. Since the days when employers offered either a low-cost HMO or an expensive PPO, the maze of health insurance options has increased significantly. With health insurance costs on the rise, it’s more important than ever to make sure you are getting the most coverage for your money. 

Here are 5 mistakes to avoid in an open enrollment benefit session: 

Mistake #1- Saying No to Health Savings Accounts

Less than 20% of those given the option of opening a Health Savings Account choose to take advantage of this potentially valuable opportunity. If you break it down, these turn out to be the equivalent of free money, and can really give you a leg up towards paying for medical expenses. 

Mistake #2- Picking the Cheapest Health Insurance Premium

It’s easy to look at a low cost and choose the cheapest health insurance plan because we may think it's all we can afford. What many fail to realize, however, is that low-cost health insurance premiums often offer significantly less coverage. This could lead to big trouble in the long run if your health care needs outweigh the coverage available. 

Mistake #3- Not Doing Your Health Insurance Research 

Nine out of ten people renew their old health insurance plans for the upcoming year. This isn’t always a bad thing, such as when your needs haven’t changed and you’ve researched the available options. However, even if your health insurance needs are the same as they were last year, review the plans available to make sure that nothing has been changed on their end. Benefits and premiums may not be the same as last year, so make sure that you know exactly what you’re signing up for. 

Mistake #4- Under-Buying

Under-insuring is one of the worst mistakes you can make, as once you’ve signed into a health insurance plan, you’re locked into it either until there is a change in family demographics or open enrollment comes up again. That’s it. There’s no in between. It would be nice to think that by the time you need it, you’ll have thrown enough money into your Health Savings Account to cover the cost of the premium, but there’s no guarantee. You could find yourself paying a large sum out of pocket.

Mistake #5- Over-Buying Health Insurance Coverage 

Throwing a high premium at the possibility of a life altering health-related disaster may provide you with quite a safety net, but financially it could turn out to be an unwise move. This is not to say that choosing the cheapest health insurance plan is always the best option for an individual with a clean bill of health, as we are all at risk for accident or unexpected illness. Finding something in the middle is ofen sufficient. Consider a high deductible with a limited network to keep premium costs low while providing coverage against a major health care expense.

Yes, open enrollment can be a source of tension, but if you play it right, as most people don’t, you’ll find that next year’s open enrollment isn’t the confusing maze that some make it out to be. Open enrollment for health insurance coverage is there to give you options that can help you. Don’t pass up a good opportunity to make a smart move. 

Do you need personal health insurance, or better health insurance for your employees?

We can help. Please contact us today: 800-947-1270

Is Affordable Care Affordable, or an Incentive to Raise Health Insurance Premiums?

A section of The Affordable Care Act requires health insurance providers to spend at least 80 percent of dollars they receive from premiums on patient care, or be forced to send a rebate to patients. This may seem like a good deal for patients, but health economists say the provision can only lead to more expensive insurance.

Economists reason that the provision merely provides an incentive to raise premiums, instead of encouraging companies to control costs. While patients may be thrilled to receive a rebate in the mail, this rebate will be a small consolation for the inflated premiums patients will have to pay as insurers let spending balloon.

Health Insurance Rebates Lead to Higher Premiums

According to Peter Suderman's Hit and Run blogpost "ObamaCare's Health Insurance Rebates May Make Insurance More Expensive," insurers rebated slightly over $1 billion this year, at an average of $151 per customer, in letters that clearly stated the rebates were coming as a result of reforms made under the Obama administration. This politically sound move lets patients know exactly where their rebates are coming from. What it doesn't tell them is that the rebates might cause premiums to rise.

"It's easier to cover someone's health costs on 80 percent of $1,000 than it is on 80 percent of $100," Suderman writes, "and because insurer profits and other administrative costs must come from the remaining 20 percent, there's a larger pool from which to draw profits and business expenses." In other words, insurers will be motivated to raise their premiums in an attempt to cover expenses.

Economists Doubtful of Benefits

NPR's Planet Money reported on the likely outcomes of the insurance rebates provision. Reporter David Kestenbaum interviewed six health economists. "No one thought the provision would do much good," he said, "and several thought it could be harmful." Among the economists interviewed by Kestenbaum was Jonathan Gruber, an ObamaCare architect and supporter.

Skewed Coverage? NPR Story Differs from ABC, CBS, USA Today

The press has widely lauded the health insurance rebates. ABC News reported that the law is "aimed at holding health insurance companies accountable for how they spend the money collected through premiums." CBS and USA Today ran similar stories, equally positive about the program that would force insurance companies to spend more on patient care or send out rebates. None of the articles mentioned that premiums would likely rise as a result of the provision. NPR's Planet Money was the first news platform to explore the potential pitfalls of the rebate program, and stumbled on a major flaw: more money spent on patient care will logically result in higher premiums.

Need help in acquiring a sensible health insurance plan for yourself, your family, or your employees? Click below to learn more about your health insurance policy options.

Insurance Savings & News You Can Use is being launched to help educate our customers and potential clients with insurance information you can use, including advice on how to save on car insurance, homeowner's insurance, life and health insurance, and business / commercial insurance. 

Our agency, which is located near Reading, PA, will go in-depth to analyze insurance topics and make the confusing understandable.  We'll do our best to make insurance coverage and terminology clear and concise, so you can make informed decisions on the coverage you need and get the savings you deserve.  We hope to educate, inform, and engage you with our new blog, and we are eager to hear your questions and feedback. 

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