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IPS / Lighthouse Insurance Group Blog: affordable care act

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As an independent insurance agency we strive to provide our clients with the solutions and plans to bring you low cost, innovative health insurance plans. We have recently added HealthPlus to our portfolio of insurance carriers. Whether you are an individual looking for your own coverage, an employer looking for coverage for employees or you are looking for a plan for your family HealthPlus can help. HealthPlus is consistently ranked among America’s best insurance carriers by providing exceptional service, unsurpassed clinical and service quality and has earned consistently high marks from the National Committee on Quality Assurance rating #1 in overall rating of health plans, doctors, specialists and the ability of providing care quickly.  All HealthPlus Signature individual plans are health care reform compliant which includes essential health benefits with no medical underwriter or pre-existing condition exclusions.   HealthPlus has always been the right plan for a healthier you and has had to make very few changes to plans and policies to comply with changing regulations.  All plans are sold off the healthcare marketplace exchange to consumers through independent insurance agents. 

Call Bobbie Ajamy at 1-800-220-5582 or contact us online with your health insurance questions or to get a quote.

PPACAWhile the PPACA (Patient Protection and Affordable Care Act, aka "Obamacare") has many positive attributes, the new law's complexity and countless rules are certain to cause a degree of angst to many employers.  Remember, the PPACA law fills more than 2,700 pages and has various components that will phase in between the time it was passed in March, 2010 and 2020.  

Many new responsibilities are placed on employers regardless of whether or not the business offers health insurance to its employees.  One example is the requirement to provide a notice to employees by October 1, 2013 that provides information about the Health Insurance Marketplace Coverage Options.  The Department of Labor has two sample forms that can be used, one for employers that do not offer health insurance, and the other for employers that do offer health insurance.  The samples can be found in the Employee Security Benefits Administration' s section of the Department of Labor's website:  

Employers need to be diligent in learning all they can about the PPACA and how it affects their business.  The law affects nearly all businesses - both for-profit and non-profit.  There are even requirements for small businesses that fall below "50 full time equivalent" threshold that mandates an employer to offer "affordable" health insurance that meets "minimum value" standards to its "full time employees and their dependents".   Businesses should consult their insurance professional, attorney and accountant to begin planning for 2014.

With respect to insurance, the PPACA may affect more than just the health insurance a business provides for its employees, such as Errors & Omissions (E&O), Employment Practices Liability (EPL), Employee Benefits Liability (EBL) and Directors' & Officers Liability (D&O).  Now would be a good time to review these policies with your insurance professional to determine if coverage may need to be adjusted.  

The professionals at INSURANCE PLANNING SERVICE are here to answer questions you may have regarding your health insurance or other lines of your business insurance.  Contact us on the web or call us at 800-220-5582 today!

image of health care reform signPosted with permission of the author:
Karl W. Albrecht, CEBS, President - Action Benefits

For the most part, Michigan finally dislodged itself from the on-again/off-again battle with winter in May. Spring reminds us of all the promises of the summer to come, and those unfinished to-dos we abandoned in the fall. Each May brings fleeting glimpses of beautiful ghosts from times and places long since gone. Scattered in massive clutches along country roads, flowering lilacs mark the corners where a home or farm once stood.

This spring, America is waking up and paying attention to things many had ignored. The specific details and impact of the 2010 health reform legislation will soon be felt by Joe Average, and the rhetoric of what the law will or will not do is becoming progressively irrelevant. People are nervous. Nervous people make nervous voters, and nervous voters make for nervous (and very testy) politicians. Reform is taking shape all around us and what actually occurs, not what was promised, is how America will judge the Affordable Care Act (ACA).

In a perfect world, rearranging 20 percent of the U.S. economy would be a massive and daunting task—incredible challenges, inevitable surprises, and political difficulties would be a given—yet, with the solid popular support of the people and thoughtful bipartisan cooperation, America could handle a challenge of such magnitude with a minimum of pain. We have none of that with the ACA.

The ACA is Supreme Court tested and, as the law of the land, it's moving forward at the fastest speed it can muster. Do not lose sight of this fact. As would be expected with any legislation this large, the sailing is anything but smooth. One key area where the law will progressively struggle is on the financial side. Any financial miscalculations or errors (something of a given with federal budgets) run straight into a purse tightly held by a cynical and fairly sour-minded Congress. The ACA was sold to America with firm assurances as to its total cost, and Congress clearly intends to hold Washington to its word.

Sensing Danger

In 1996, 53-year-old Michigan native Lou Kasischke set out to climb Mount Everest. Prior to his climb, Lou spoke to a large group of Blue Cross agents about the challenges he was training for. His training turned out to be a critical factor in the battle he would face for his life on Mount Everest. On that terrible day in May of 1996, eight climbers from his group perished on Everest. Lou shared the post-climb story of the tragedy with a second group of agents two years later, and it is a gripping one. This story was also told in great detail by Lou’s climbing companion, Jon Krakauer, in his famous book “Into Thin Air.”

Both climbers spoke of the incredible dangers and challenges they faced every moment on the mountain. When a sudden storm trapped them near the summit, Krakauer ended up lost in pitch blackness as night fell and temperatures plunged. Fearful he would freeze to death, he attempted to make his way to base camp by inching along the ice in total darkness. Part way down, he reflexively came to a sudden stop. Even though he could not see anything, he could “feel” a massive void in front of him and he didn't dare move. He survived the bitter night, and dawn confirmed that his instincts had saved his life. He was perched at the edge of an immense drop-off down the side of Everest, and certain death. The void he could only feel was, in fact, very real.

We all know that perception can be reality, but eventually reality will exert its rightful place. A CNN poll from May corroborates a long line of previous polls showing a lack of popular support for the ACA, with 54 percent of respondents opposing it. Politically speaking, this doesn’t generate soaring optimism. When it comes to the ACA, Americans are feeling a void, and time will soon tell whether this fear is justified or not.

The Messaging Onslaught

ACA proponents strongly contend that a lack of understanding is driving the poor public support. Funding to promote the law was not included in the legislation, and requests to Congress for additional monies for this purpose didn’t get far. This financial challenge has led the Department of Health and Human Services (HHS) to find private entities to promote the law, and to raise money for them.

HHS Secretary Kathleen Sebelius is both a cheerleader and fundraiser for Enroll America, whose purpose is to educate and sell Americans on the details of the ACA. Enroll America is a private organization launched by Families USA Executive Director Ron Pollack, and was approved as a nonpartisan 501(C)3 organization by the IRS in late 2011. (No, I don’t know if they received enhanced IRS scrutiny.) In early 2013, Anne Filipic left the White House Office of Public Engagement and replaced Pollack as its president. Enroll America’s Managing Director, Chris Wyant, directed the President’s 2012 election efforts, as head of eastern Ohio field operations. Impeccably connected politically, they also have a broad-based Board of Directors and an Advisory Board, which includes the National Association of Health Underwriters (NAHU).

A government official coordinating donations to a private entity, while concurrently quarterbacking that private entity's focus, is not a violation of any law. However, should donations be culled from those directly regulated by the same governmental entity, then there’s an issue. Discussing the “opportunity” to donate to a regulated organization creates the perception of a shakedown. Some are suggesting this is precisely what is happening now, and Congress is probing.

Raising money to fill gaps not addressed in the law is not a sign of strength. Efforts like this are likely to grow as more gaps are exposed, and Congress is not likely to suddenly warm to the idea of writing large checks beyond what the law requires.

Selling Reform to a Wary, and Frequently Weary, Public

The Democratic Steering and Policy Committee has developed an extensive guide for members to bone up on ACA talking points. Timelines, key information, sound bites and other analysis are all organized to give political leaders what they need to drive support and defend the ACA, but will politicians running for office actively support it? As more leaders of the reform effort speak up and call it a “train wreck,” or “beyond comprehension” (and then proceed to retire), legislators left behind are becoming progressively more worried. How will they react should large numbers of constituents speak out against the impact of the ACA?

Washington’s Credibility and Trust

Whether the issues with the IRS remain as low-level distractions or bloom into a full-blown scandal, it hurts the overall message. The public’s perception and trust in government institutions, like the IRS, is critical. The intimate role government plays handling confidential personal information and the sensitive functions they perform with the ACA, demand a high level of trust. Should the IRS appear to be less the impartial revenue collector and more a political operative, the challenges will grow enormously!

Will the messaging convince America that the ACA is a good thing? Not on its own. The rhetoric is becoming less effective, and actual consumer experiences will take center stage very soon. A smooth, surprise-free implementation is the only cure for the remarkably steady and negative polling numbers since the passage of the ACA. Provided that overall participation, functionality and “user experience” on the new marketplaces go well, and the rates are competitive, America will embrace the ACA. The spin from both sides about Armageddon or Rapture will be settled over the next few months!

Insurance Planning Service is a Trusted Choice agency.  We can help answer the questions you have or help you find the right insurance for your home, auto, business, life or health.  Contact us on the web or call us today at 800-220-5582.


Health InsuranceThe Affordable Care Act (aka Obamacare) expands the Medicaid system and provides income-based subsidies for individuals purchasing insurance on the Health Insurance Marketplace.  It raises government revenue to pay for these expansions and subsidies through new taxes and fees.  Several new taxes were discussed in our recent blog article posted on January 8, 2013.  But there are even more sources of revenue that are about to hit your wallet.  These are intended to raise additional funds over the next 10 years and will likely begin to appear as increased costs to your health insurance.

Comparative Effectiveness Research Fee.  This fee will fund the “Patient-Centered Outcomes Research Institute”, or PCORI, which is a nonprofit center created by the ACA.  It is a new government-sponsored organization that will research the effectiveness, risks and benefits of various medical treatments.  IRS will charge health insurance companies $1 per insured member per year during 2013 and $2 per member per year from 2014 to 2019.

Federal Insurance Premium Tax.  This is a tax that will begin to be charged to health insurance companies in 2014.  Based on premiums written in the preceding year, the new Federal Premium Tax is intended to raise $8 billion in revenue for the government in 2014 with that amount increasing in subsequent years.

Reinsurance Fee / Contribution.  Beginning in 2014 and running through 2016, health insurance companies will be required to pay an annual $63 fee to the US Department of Health and Human Services for each covered member.  This is intended to fund insurers that incur excessive claims costs for enrollees who purchase individual coverage, either through or outside of the Health Insurance Marketplace.

Marketplace Fee.  A tax equal to 3.5% of the monthly premium on individual and small group health plans will be paid by health insurance companies participating in the state or federal Health Insurance Marketplace beginning in 2014.  This fee is intended to make the Marketplace self-supporting by January 2015. (Michigan is one of 31 states that have opted out of a state-run Marketplace.)

Risk Adjustment Fee.  Beginning in January 2014 an annual fee of $0.96 per insured member will be collected from health insurance companies on their individual and small group plans.  It is intended to pay for administrative expenses and to pay carriers that insure more members who are likely to have high-claim costs.

High Cost Health Plan Excise Tax.  40%!  You read that correctly!  A 40% tax will be assessed on the value of employer-provided health benefits that exceed certain thresholds – the so-called “Cadillac” plans.  The tax will lower the tax exclusion for employer-provided benefits and will be an incentive for employers to offer cheaper, less generous health insurance policies. 

Each of these fees or taxes may sound like small amounts when viewed individually.  But, collectively, they add up big – to the tune of $540 billion over the next decade to help offset the huge costs associated with the Affordable Care Act.  One could reasonably guess that these fees and taxes will be passed down from the insurance companies to the policyholders in the form of higher premiums.  We understand that some insurance companies will be displaying these fees and taxes as separate items on their premium invoice.

Each year since 2010, when the Patient Protection and Affordable Care Act (“Obamacare”) was passed into law, incremental changes have been implemented.  Perhaps the largest and most sweeping of all will take effect in 2014.  But there are some “behind the scenes” things set to kick in in 2013 that will most certainly impact the pocketbook of many Americans because of changes the new law makes to the tax code.

1.       Itemized deduction for Medical Expenses.  If you itemize tax deductions, you are aware that you are allowed to deduct medical expenses that exceed 7.5% of your adjusted gross income.  Beginning in 2013, the threshold increases from 7.5% to 10.0%.  At first glance, this may seem like minor change.  But this change will affect mostly middle-class Americans and is expected to raise an additional $15.2 billion in tax revenue.

2.       Flexible Spending Accounts.  A Flexible Spending Account (FSA) has been a good way to help individuals and families reduce the cost of some out-of-pocket medical expenses by allowing them to be paid from pre-tax contributions into the account.  Through 2012, the IRS has not had a limit on the amount of money that could be put into and FSA.  However, beginning in 2013, Obamacare will limit the pre-tax contribution amount to $2,500.  Those who are accustomed to contributing more than $2,500 will see a tax increase.

3.       Medicare Tax.  One of the payroll taxes withheld from your paycheck goes to fund Medicare.  The amount has been 1.45% of your gross pay.  Often, this amount is shown as part of the Social Security tax, or FICA.  Beginning in 2013, this amount will increase by 0.90% (from 1.45% to 2.35%) on wages exceeding $200,000 for individuals or $250,000 for married couples filing jointly.

4.       Unearned Income Tax.  There will be a new 3.8% assessment on unearned income (interest, dividends, capital gains, and gain from the sale of a home) for higher-income taxpayers.

5.       Tax on Medical Devices.  $20 billion is expected to be raised from a new 2.4% excise tax on the sale of any taxable medical devices.  This is, in effect, a Federal sales tax on certain medical goods. 


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Lighthouse Group Main Office in Grand Rapids, MI
Mailing Address | P.O. Box 530009, Livonia, MI 48153

Phone: 734.421.9900 | Toll Free: 800.220.5582 | Fax: 734.421.9911

Also serving these Detroit area communities in Michigan: Livonia, Farmington Hills, Ann Arbor, Southfield, Plymouth, Canton, Westland, Northville, Novi, Dearborn, South Lyon & Walled Lake