Health insurance can be confusing under the best of circumstances. But with the new Patient Protection and Affordable Care Act — the most significant change in healthcare in the U.S. since Medicare was passed into law in 1965 — there are questions aplenty. On September 30 — the eve of the launch of the program's open enrollment period — Academy members gathered at the Leonard H. Goldenson Theatre for an informative seminar about its many elements.
"Health Care Reform: What You Need to Know" was moderated by certified healthcare reform specialist Scott Brandt, president, Academy Benefits Insurance, LLC, with presentations by Daniel Kitowski, M.S.W., director of health services for the Western region of the Actors Fund, and Richard Hines, director of SHOP (Small Business Health Option Program) sales for Covered California.
"It's not a perfect law," Kitowski said of the Affordable Care Act, known informally as Obamacare. "It's not going to help everyone. But it does stand to improve the lives of millions of people in the U.S. by getting people insured, for the first time in my lifetime, in what I believe is a very affordable way." His belief counts: the Actors Fund is the grantee of the State of California to provide education and outreach about individual coverage for the visual arts and entertainment communities.
California is one of sixteen states that have established their own insurance marketplace programs, or exchanges. The California exchange is called Covered California; state residents should visit www.coveredca.com for information and enrollment. Academy members in other states should use www.healthcare.gov for information specific to their locale.
Much of the evening was devoted to individual and family coverage. While some provisions of the legislation have already taken effect, most begin January 1, 2014; enrollment for 2014 is available through March 31. Enrollment for 2015 will start October 15 and run through December 7. Numerous exceptions exist for such circumstances as job loss or the loss of COBRA coverage.
No Denial of Coverage for Pre-Existing Conditions
On January 1, a key piece of the act will take effect. "The pre-existing clause goes away," Kitowski said. "Suddenly, health insurance is guaranteed. No one can be turned down based on their medical history. That's one of the major reasons people in this country can't get insurance — the ones who need it the most can get it the least, because the insurance companies, historically, are only interested in enrolling you if you're well, and aren't going to use it."
Other highlights: There will be a standardized benefits package across the various plans; rates won't be based on health status; there are no lifetime limits on the benefits insurance companies pay out per patient; insurance coverage cannot be canceled by the companies; young adults up to age twenty-six can stay on or enroll on their parents' plan, unless they are eligible for coverage under an employer's plan; and preventative services — such as physicals, flu shots and women's GYN checkups — are included. Some existing plans, however, which are grandfathered in, do not offer preventative care.
Essential health benefits include ambulatory patient services, hospitalization, emergency room services, prescription drugs, mental health services and maternity care. A dental and vision plan is currently under discussion.
Thirteen insurance companies are participating in the Covered California exchange. Nationally, about 26 million people will be eligible for federal subsidies to help pay their premiums; the amount is determined by adjusted gross income or, for freelancers, modified adjusted gross income. (Check with your tax preparer if you have questions.)
If you qualify for a subsidy but then your income increases, notify Covered California immediately. Otherwise, come tax time, you may have to pay back the subsidy, which can be substantial. Also, the website subsidy rates are based on income for 2012, which may have changed since.
Categories of Coverage
The plans are divided into four main categories: Platinum, Gold, Silver and Bronze, plus a minimum coverage "bare-bones" plan for younger people who are unlikely to have ongoing health issues but want some coverage. Platinum offers the most coverage at the highest price; Bronze the least at the lowest. There is also Medi-Cal, with a broader set of criteria for eligibility. Medicare will be affected minimally, via two improvements: there will no longer be a co-pay for preventative visits, and Part D will gradually narrow the gap for prescription drug payments.
If you qualify for a subsidy, your premium is determined by your income. If you don't, your premium is determined by your age and geographic region, and changes each year on your birthday.
The Covered California website has all the plans' details and prices, plus a helpful shop-and-compare tool to determine which plans may be best for you and your family; children may qualify for a plan different than that of their parents. Academy members can also call the Actors Fund for assistance.
Everyone must have insurance or must pay an annual penalty. But not every carrier or health care provider must participate in the exchange: Aetna and United Healthcare have left the individual market in California, Cigna is private and Cedars-Sinai Medical Center has opted out. Companies that are both on the exchange and in the private market — Anthem Blue Cross, Blue Shield of California, Health Net and Kaiser Permanente — must offer private coverage identical to that in the exchange (but at their own rates with no subsidies). No carrier can deny coverage based on pre-existing conditions. The Covered California website will have a searchable database of which physicians participate in which plan.
Small Business Options
Turning to the Small Business Health Options Program (SHOP), Hines said there are thirteen carriers and thirteen contracts. SHOP covers businesses with up to fifty employees. At least one employee must be a W-2 wage earner, and the majority must reside in California. "This plan will evolve," Hines noted. "There are all kinds of moving parts, definitions that have not been defined." Covered California handles all administration.
One certain definition is what constitutes a small-business entity: a sole proprietorship, corporation, partnership, limited partnership (LP), limited liability partnership (LLP) and limited liability company (LLC). Employee participation must be at least 70 percent, and if the employer's contribution is 100 percent, than so must be the employee participation. The employer must contribute at least 50 percent of the lowest-cost employee premium in the selected tier (again, Platinum through Bronze). Employees can choose any of the plans within the tier selected by their employer.
There are tax credits available — 50 percent of each premium — for employers with up to twenty-five employees. That provision has been in place since 2010; employers can file retroactively for the credits.
Employers don't have to use the exchange, but do have to provide insurance. Coverage for production companies and other businesses with more than fifty employees (known as large-employer companies) won't be required until 2015, but employers must keep track of their employees' hours through 2014 to have an idea what coverage they need to offer. They must cover all full-time equivalent employees: those who work an average thirty hours a week, or 130 hours per calendar month. This includes foreign companies operating in the U.S.
There is an exception for seasonal employees, working not more than 120 days or four calendar months (not necessarily consecutive) during a calendar year. Again, employers must provide coverage, or pay what can become a stiff penalty, especially if a worker applies for individual subsidized insurance because he or she can't get workplace coverage.
In addition to Covered California's services, Academy members may wish to check out those offered by moderator Brandt, who works with the Television Academy rewards committee on matters regarding members' current insurance. Benefitter helps members decipher the new law; Medical Recovery Services helps members negotiate medical bills and Corporate Wellness 360 provides for preventative services at a Santa Monica health and wellness center. Brandt's website is www.academybenefits.tv.
Watch the video replay of the Health Care Reform event here.
