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The New ABC's of Health Insurance in the Reform Era

If you haven't shopped your health insurance lately, or have been uncovered, this fall beginning October 1st will be a good time to start investigating your options again.

With the dawning of an entirely new era of health insurance, we are preparing ourselves and our clients for what's to come over the next twelve months and beyond. The Patient Protection and Affordable Care Act, PPACA is going to completely change the way most people acquire their health insurance coverage. 

It has already impacted many and the biggest changes are still on their way. Just like in the past, we became accustomed to the health insurance vernacular. Things that once seemed like foreign code words made their way into our everyday use like, HIPAA, COBRA, HMO, PPO HSA and FSA. The following is a short list of new terms that we will become more familiar with.

HIX- Health Insurance Exchange- Simply a new government operated "marketplace" where reform qualified health plans will be available. By October 1st of 2013, health insurance exchanges across the country are supposed to be online and ready to accept consumer enrollments. We as brokers will still be able to provide professional advice to our clients while helping them enroll on a plan in the HIX.

Private Exchange-A privately operated exchange that may have other advantages but not a government funded subsidy.

EHB- Essential Health Benefits- In order to be compliant with reform, health plans must meet a minimum ( and no maximum) level of coverage. These minimum standards, defined by The Department of Health & Human Services (HHS) are required by law. Another way of looking at it is, if you're health plan does not meet these standards, you will still be required to pay the "penalties".

Individual Mandate- You must have health insurance. It will be the law in about 300 days! AND it must meet certain requirements, such as the EHB above. Otherwise if you don't carry minimum essential coverage you pay the fine, which the SCOTUS has confirmed is a tax. While it is insignificant in the year 2014, it quickly escalates up in year two and three and so on.

Employer Mandate- Own a business with over 50 employees? Even if they are not all full time, you may be required to provide minimum essential coverage or pay an annual "tax" of up to $3000 per employee.

Healthcare Subsidy- Many consumers and some small businesses will qualify for subsidies by enrolling on their health plan through an exchange. Subsidies may be in the form of premiums, tax credits or supplemental coverage.

SBC- Summary Benefits of Coverage. Health coverage can be confusing, so the law now mandates that coverage descriptions be in a simplified, uniform format. These became available late last year.

MLR- Medical Loss Ratio- Ever feel like your health insurer is making big profits off of your premium dollars? Not anymore! The MLR mandates that an insurer must pay between 80% and 85% of your premium dollars on claims. If they collect to much, they must give you a rebate. When was the last time you received a rebate from an insurance company?

Community Co-Ops- This part of the law seems to be on hold right now because of the recent "fiscal cliff" legislation. However it may be a great idea. Imagine pooling yourself with your like minded neighbors, friends and family members. Much like a food co-op works right now. A co-op may be a great way to control health care premiums and costs in the future.

ACO Accountable Care Organizations- Similar to Co-ops, ACO's are health care organizations who are streamlining health care delivery methods to contain costs and increase quality of care. They may actually sell coverage to members ion the future, like AAA does for car owners. Imagine the day when you buy coverage from a health care provider system, and then receive all your care through their providers and facilities.

This is just a short list but there are many more and more to come. If you haven't shopped your health insurance lately, or have been uncovered, this fall beginning October 1st will be a good time to start investigating your options again. 

While the law and it's changes are inevitable, it is still very fluid and many things may change between now and January 1st 2014. If you have any questions, please feel free to reach out to us, http://www.emabenefits.com or call your professional adviser or insurance broker.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

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