Group Health Insurance under TrumpCare, what to expect

There will be no drastic changes for at least 2 years

When you have something as big as the ACA, Affordable Care Act, to make any changes of any consequence will take many months, even years.  The gigantic entity known as Covered California is not something that you can replace or even deal with, until you have something that you can replace it with.  I get calls daily from worried people that think their health insurance will be cancelled or taken away, or that their subsidy will stop.  Rest assured that none of that will happen.

Subsidies for health insurance are here to stay

Now that people are used to getting subsidies, to take them away would be chaos.  They will change them, most certainly, but stopping them will not happen.  How they are structured, how long you receive them, and who gets them, should change.  We have many people that have qualified to received government subsidies that are millionaires, seriously.  Someone that is able to adjust what their Gross Income shows, can potentially get their health insurance paid by the government.  There have been many people that are getting the subsidies that should not and that should stop.

Potential changes in how Group Health Insurance is delivered under Trump and TrumpCare

Trump has suggested to allow out of state insurance companies to sell Group Health Insurance to employers in California.  Not a bad idea and definitely worth a try.  Trump has suggested that health insurance premiums for employees and everyone, be tax free.  That would save people a ton of money on their taxes.  I’m confident there would be a yearly cap on what is deductible.  Under the Affordable Care Act (ACA), employers can still get a business deduction for any Employee Benefits they pay for.  Trump believes there should be a yearly limit on what employers can use as a business deduction.  The thought behind this is to encourage employers to purchase lower priced, higher deductible plans, hoping to curb Group Health Insurance utilization.  Honestly, I think its worth a try.

Bottom line….not a ton of changes coming any time soon.  Group Health Insurance, Employee Benefits, and Business Health Insurance is not going away

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I get that question several times a day.  What changes are we looking at with TrumpCare?  That’s the million dollar question.  In reality, I don’t think the Group Health Plans that we have now will change much, at least not for several years.  Trump is proposing that consumers, along with businesses, be able to purchase Group Health Insurance and Health Insurance in general across state lines.  In theory, that sounds great.  Regulation of those companies will need to be studied and we may need to go to some sort of Federal monitoring system.

Group Health Insurance, Employee Benefits probably won’t change much

What we know now is that the vast majority of people obtain their Health Insurance through work.  Employee Benefits and Group Health Plans are a great way for companies to have a business deduction, offer some fantastic Employee Benefits to their workers, and employees can have their employer pay for part of the monthly premium of those Group Health Plans.  I’m anticipating more employee choice in the marketplace as well, with the HSA concept expanding.

HSA plans will probably be expanded through TrumpCare in the 2020’s

One of the Trump concepts involves expanding HSA type Health Insurance plans….basically making it a savings vehicle for the future.  I have to tell you, when the HSAs came out in 2004, I was a brand new broker, but saw them exploding in popularity.  These days they are wildly successful.  The only downside to the HSAs of today is that the pricing is not as attractive as years ago.  Today, most HSA plans are equal to, or even more expensive than your normal PPO plan…why?  Because ObamaCare has made it illegal for insurance companies to offer a plan (Bronze, Silver, Gold) that is not within 2% in “actuarial value” of the other plans in their category (Bronze, Silver, Gold).  Basically, there is no more incentive to purchase a high deductible HSA plan.

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YOUR “CULTURE” STATEMENT: IS IT INSPIRATIONAL OR DEMOTIVATING?

Wit240_F_55079262_fgBBx7Q5ETfLObYEmAc23ls4qBtETD7yh the best of intentions many employers craft, edit and perfect culture statements full of noble principles, only to then have them ignored or used as the butt of ongoing jokes. Why?

There are a variety of reasons. Some of them include:

  • Employees know the HR consultant wrote it. Senior management hasn’t really bought in and won’t play by the same rules.
  • The values promoted don’t transfer into actual behaviors employees have seen in action.
  • Employees whose workplace behaviors fall short of the cultural ideal get rewarded with bonuses and promotions anyway.

What to do? Start by making sure your values are framed in terms of well-defined behaviors. For example, one company has the Core Value “Embrace Change.” In behavioral terms, this could be phrased “Deals successfully with ambiguity and change.”

To be sure your values are put into action, make sure all performance feedback includes implementation of core values and behaviors. Then, don’t reward performers who aren’t walking the cultural talk.

Finally, develop your culture statement within your management team with input from a task force of employees. If you just slap standards designed by an outsider into your handbook, it is often received with skepticism—as it should be. It doesn’t take a lot of time to develop a cultural behavioral statement, so why not put in a couple of hours to have a culture your employees will respect?

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What will be the changes with Group Health Insurance, Employee Benefits

Well…that’s the million dollar question.  Since Brauer Insurance ONLY does health insurance, we are at Ground Zero for any legislation and/or changes upcoming.  All of the associations that we belong to believe that Trump will not take away the availability of health insurance for people with pre-existing conditions, or the ability for parents to keep their kids on their health insurance plan up to age 26.  There have been some talk about allowing out of state insurance companies to sell health insurance in CA.  In theory, this sounds good.  The problem may be the oversight of these out of state companies.

Out of State insurance companies selling in CA

One thing that comes to mind is that to regulate and control an insurance company out of Delaware, lets say, may not be as easy as one that has to answer to the CA Dept of Insurance, 3000 miles away.  Maybe having a Federal entity that controls and regulates these companies may be formed.  This idea has not been introduced yet, that I’m aware of, but in theory, it makes sense.

Nothing is going to happen until 2019

One thing is for sure….there will be little changes for the next 18-24 months.  You just can’t dismantle or change something of this magnitude overnight.  There is a ton of work to do, with any changes they make.  Either way, if you own a business, find yourself a broker that specializes in Group Health Insurance.  We will be the only ones that can translate what is going on, into English for business owners.  This dysfunctional industry is just too confusing for anyone to understand if you DONT specialize in it.

Group Health Insurance brokers are few and far between

When I started doing Group Health Benefits back in 2003, there were tons of us around….and it was a fairly easy industry to understand and write business.  When it imploded in 2010 with the ACA, many of the Group Health Brokers jumped ship.  Some are in the Real Estate business, others just plain retired.  Since this is my second career, I decided to immerse myself in this and I told myself…”If this fails, I’m going down with the ship”.  Best decision I’ve ever made.  Our business almost doubles each year BECAUSE we specialize in Group Health, and we’re pretty good at it.  Don’t take my word, check us out on Yelp, Google+, etc….

Brauer Insurance:  (408) 421-5555

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Employers that want to “reimburse” their employees for health insurance

In years past, employers would set up agreements with their employees where they would “reimburse” the employees for health insurance that they purchased on their own….basically bypassing the employer from obtaining a Group Health Plan as required by law.  These employers may be subject to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee) under section 4980D of the Internal Revenue Code.  I don’t write this to scare anyone into purchasing a Group Health Plan from us, but to educate them on the fairly new rules of the IRS.  I’ve known a couple of employers that have been caught doing this.  The penalties were not as stiff as the ones described here, but not cheap either.

Employers can bring on a Group Health Plan, with very little employees enrolling

Once a year, the ACA allows businesses to put together a Group Health Plan with no regard for the number of employees that enroll.  There can be 99 employees and if ONE of them wants to enroll, we’re all good!  That once a year time is during the month of November, for a January 1 effective date.  Many of our groups have taken advantage of this little secret, and are now enjoying the benefits of complying with the law AND being able to deduct this as a business expense.  Call us for more details

Other benefits to having a Group Health Plan with an employer

Another benefit to having a Group Health Plan in place is that anything that an employEE spends on Employee Benefits, can be paid for with pre-taxed money.  With the simple installation of a POP Section 125 plan, the employee saves tax money on what they spend and the employer gets to reduce his Workers Comp liability by lowering the taxable income of employees.  A win-win.  A second benefit to a Group Health Plan is that the benefits are usually much better with a Group Health Plan vs. an Individual or Personal Health Plan, and there are much more plans and carriers available to choose from.

At Brauer Insurance, use us as a resource.  I will answer any of your Employee Benefit questions with NO expectation of doing business.

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If you are one of the unlucky employers that are looking at a huge increase in your Kaiser Group Health Insurance for this year, or even Anthem Blue Cross Group Health Insurance, CalChoice Group Health Insurance or any of the other ones, you are not alone.  The rating system has changed for employers with between 50-99 employees and how they are charged.  Kaiser Group Health Insurance for these groups used to be a composite rating, meaning there was one price for a single employee regardless of age.  Now everything is age rated, so a 20 something is cheap and a 50+ is super expensive.  So what do you do now?  That depends on how strategic you want to be.

Group Health Insurance strategies for Kaiser, Anthem, HealthNet, CalChoice, Aetna, Blue Shield groups

To be strategic in the Group Health Insurance marketplace you have to be willing to be a little flexible and think outside the box.  There are Self Funded plans, Partially Self funded plans and even strategies you can put together for you and your employees with a normal Kaiser Group Health Plan.  Education for these, for the employees, is the key.  If you are used to a very robust and/or expensive, all inclusive plan, moving to something else may be a problem.  It sometimes feels like a take away by the employees.  Not exactly what you’re looking for, I get it.

When you are strategic with Anthem, Kaiser, Blue Shield Group Health Insurance plans, you must be careful

The last thing you want to do with your Group Health Plan is for your employees to feel like you’re taking something away from them, or they’re being cheated.  That’s why the education portion of doing all of this is very important.  The employees MAY have to spend a little more than they’re used to.  That happens all the time, but educating them about the changes is crucial.  At Brauer Insurance, we are a very hands on agency.  We personally come out to our groups and explain the plans, changes and how it can benefit employees.  It seems simple, but you’d be surprised at how many brokers only email their renewals over once a year and make no effort to speak about Kaiser Group Health Insurance plans with employers

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Did your head explode when you saw your renewal for 2016?

If you are an employer with over 50 employees you will, or probably just got, a huge increase in your premium for the renewal this year.  Your rating method just changed as part of ObamaCare and I’m sure you took a big hit.  We’ve had groups with 50-70% increases for just this year.  Well…there is a way to battle that….maybe.  More importantly, how are you doing with all of the compliance mandates starting this year?  Between the ERISA documents you MUST have on file now, WRAP documents, SBC paperwork and more, its almost a full time job just getting compliant.  Oh yeah, the waiting period for many groups have changed too and they may or may not have informed you.   Hey, if you have a broker on top of it, keep them, there are not many around that know what they are doing.

Having a broker that is dialed in to the ACA mandates is critical to your business

Like I said…if your broker has you set straight with your WRAP document and SBCs, you’re in good shape.  If you are reading this and thinking what the hell is a WRAP….there’s a problem.  Call us, we are open to talking about it with NO expectation of doing business.  I’ve only been in the dysfunctional insurance industry for about 12 years now.  After 25 years of Police Work…I’d had enough.  I will say that there are a ton of clowns that do insurance.  They are either lazy, dumb or don’t know what they are doing.  Don’t get me wrong…there are really good people in this industry, but too many of us should be doing something else, not meddling with something this important.

Brokers come in all shapes and sizes and capabilities

I’ve said this a million times..if your broker has you compliant with the DOL and IRS, is showing you a strategy for your maximum savings, and meets with you periodically to keep you updated, keep them, we have nothing to talk about.  If not, maybe we should have a conversation.  Our services are free, so why not have an expert working with you.  At Brauer Insurance we ONLY do Employee Benefits and Health Insurance for businesses. When we started, I tried to do various lines of insurance.  I quickly realized that I would never become an expert at anything if I didn’t specialize, so here we are.

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With the best of intentions many employers craft, edit and perfect culture statements full of noble principles, only to then have them ignored or used as the butt of ongoing jokes. Why?

There are a variety of reasons. Some of them include:

Employees know the HR consultant wrote it. Senior management hasn’t really bought in and won’t play by the same rules.
The values promoted don’t transfer into actual behaviors employees have seen in action.
Employees whose workplace behaviors fall short of the cultural ideal get rewarded with bonuses and promotions anyway.

What to do? Start by making sure your values are framed in terms of well-defined behaviors. For example one company has the Core Value “Embrace Change.” In behavioral terms this could be phrased “Deals successfully with ambiguity and change.”

To be sure your values are put into action, make sure all performance feedback includes implementation of core values and behaviors. Then, don’t reward performers who aren’t walking the cultural talk.

Finally, develop your culture statement within your management team with input from a task force of employees. If you just slap standards designed by an outsider into your handbook, it is often received with skepticism—as it should be. It doesn’t take a lot of time to develop a cultural behavioral statement, so why not put in a couple of hours to have a culture your employees will respect?

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Offering Company Benefits can be a daunting task for an employer.  Company Benefits are expensive and very confusing.  Employers don’t know who to believe when they’re looking for sound advice on Company Benefits or Employee Benefits for Companies.  Having a broker that knows Health Insurance and Company Benefits is golden.  There are tons of brokers and agents that can sell you Health Insurance, but only a few that specialize in Company Benefits and Employee Benefits.  Good advice: Get a specialist, not a generalist.  Benefit brokers get paid by the insurance company….the price is the same for the employer, no matter who your Company Benefits broker is.  Its like getting the services of a Cardiologist, when you have a heart issue and not seeing a General Practitioner.

Company Benefits are a big deal when it comes to the employee’s health care

Not only are Company Benefits expensive, but if they are not done right, your employees suffer.  When I started this back in 2003, I never realized how important Company Benefits are.  If you screw something up, its a huge deal.  We are a family agency, with my kids and I making up the brokers in the office.  We take things personally.  When you are a Health Insurance Broker, you have all of the employee’s healthcare in your hands, if you make a mistake it could mean someone’s child doesn’t get care, or could cost the employee a ton of money.

Check the broker’s website, reviews, etc, to make sure they are the right fit for your Company Benefits

When you are thinking about your Company Benefits, I would do some due diligence and check out the broker and their agency.  That means looking at their reviews on Google, Yelp and other sources.  If there’s nothing there or you have some issues, you’ll see it pretty clearly…AND you’ll also see if they are a Specialist or a Generalist.  It makes a huge difference.  Make sure you get the representation you deserve.  Hey, you’re paying a ton of money each month for Company Benefits, you should expect the best.

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If you are an employer struggling with figuring out Group Health Insurance for companies, you are not alone.  Group Health Insurance is confusing, frustrating and expensive.  Having a broker that knows what they are doing is critical.  Even more critical is finding a broker that specializes in Group Health Insurance.  Anyone can be a “jack of all trades” and a Generalist.  It takes some skill and knowledge to be a Specialist.  Group Health Insurance is a niche product.  I can’t even begin to tell you all of the mistakes I’ve made in the last 13 years figuring out what I did not know.  There is NO way that a broker can advise people on Group Health Insurance, and do it part time, or even alongside other lines of insurance.  There is just not enough hours in the day to learn this industry.

Having a Group Health Insurance expert is the key

Many brokers claim they know Group Health and Health Insurance.  I recommend people do their homework…Yelp them, check out their website.  How are their Google reviews?  You’ll get a sense of what they are all about pretty quick.  Being an expert in the Group Health industry means making sure each group is compliant with all of the mandates of the Affordable Care Act.  Are they supplying your group with all of the ERISA documents that you will need in case the Dept of Labor comes knocking.  Do you have a WRAP document or the SBC’s for your Group Health Plans?  If not, there’s a problem

Compliance is the name of the game with Group Health Insurance

It’s not hard to get compliant.  You just have to know how to do it.  Your broker should know.  If they don’t…..call us, we do.  Whether it’s Federal Cobra or any ERISA documents, the responsibility to have those documents in order and administered belongs solely to the EMPLOYER.  Any penalties associated with not having them will be paid by the employer.  The question I always ask employers is, “would you send a relative (that you like) with a heart problem to a General Practitioner or a Cardiologist”.  Kind of an extreme example, but you get the point.  Our services are free, not matter who represents you.

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