Medicare Clients to Receive New Medicare Cards Starting April 2018

Medicare has a major change coming this year and I want to make sure you are aware. The Centers for Medicare and Medicare Services (CMS) will be replacing all members’ cards starting in April 2018. They are replacing the cards based on a provision in the Medicare and CHIP Reauthorization Act of 2015 (MACRA). MACRA section 501 requires CMS to remove Social Security numbers (SSN) from Medicare cards and to replace the use of SSNs with new, randomly generated Medicare beneficiary identifiers, or MBIs by April 2019, to protect the individual’s identity.

This massive card replacement will affect clients who use Medicare Supplement Insurance to fill in the gaps in their Medicare Part A and Part B coverage. Individuals insured with a Medicare Advantage plan will also get new original Medicare cards, but they should continue to use their Medicare Advantage plan cards when seeking medical care.

The new cards will look just like they have in the past with a red, white, and blue palette, except these cards will not include the individual’s SSN, and will instead have a Medicare number. The MBI on their Medicare card includes both numbers and letters for optimal security. See below what the new cards will look like with the new MBI number:

Starting April 2018, newly eligible beneficiaries will get a card with a unique number regardless of where they live. For those individuals who currently have a Medicare card, CMS will begin mailing new Medicare cards over a period of approximately 12 months based on geographic location and some other factors. Ohio and Kentucky will be of the last states to get the new cards. Below is a chart that shows, based on the area, when individuals will receive their new card:

Beginning in April 2018, individuals with Medicare will be able to go to Medicare.gov/newcard to sign up for emails about the card mailing and to check the card mailing status in their state. Individuals may use their card immediately upon receiving it. They will be able to use either the SSN-based or the new random alphanumeric-based numbers through December 2019. Beginning January 1, 2020, only the new cards will be accepted.

With any change in Medicare comes confusion. This is a great opportunity to reach out to your clients to explain any changes and what they can expect. Click here for a one-page flyer from CMS that outlines the details of the new Medicare card. This is a great reference for your clients.

Trump Administration Proposes Rule for Short-Term Health Plans

Under a proposed rule by the Trump administration released on Tuesday, insurers will again be able to sell short-term health insurance good for up to 12 months. This rule would allow short-term plans to add more choices to the market at a lower cost and could offer broader provider networks than ACA plans in rural areas.

Health and Human Services Secretary Alex Azar said, “We want to open up affordable alternatives to unaffordable Affordable Care Act policies.”

Here are some talking points regarding the rule:

  • 60 days to comment on the proposed rule before changes are made to the current rules
  • If approved, insurers may be able to sell short-term health insurance for up to 12 months
  • Comments also being sought to extend beyond 12 months and if there are ways to guarantee renewability of the plans
  • No changes to requirements for STM plans – subject to pre-ex and not held to ACA requirements/not ACA compliant, med questionnaire required, etc.

 

RESOURCES

Trump Administration Proposes Rule to Loosen Curbs on Short-Term Health Plans

Fact Sheet: Short-Term, Limited-Duration Insurance Proposed Rule

Click here to review the proposed rule

Proposed rule would loosen restrictions on short-term health plans

Narrowing Medicare “Doughnut Hole” Will Close In 2019

For Medicare Part D beneficiaries with high prescription drug expenses, the “Doughnut Hole” means they pay more for their medicine once costs reach a certain threshold. Narrowing each year since the Affordable Care Act was passed in 2010, the gap was scheduled to close in 2020. With the 2/16 budget deal, the doughnut hole will now close in 2019.

Read the full story here.

Amazon, Berkshire Hathaway, and JPMorgan Collaborate to Offer Health Care Services

On January 30, Amazon, Berkshire Hathaway, and JPMorgan announced their decision to form an independent health care company for their employees in the United States, hoping to offer more transparency and lower costs.

As a result of the news, many health care stocks, including Express Scripts Holding Co. and CVS Health Corp., in early trading.

“Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort,” Amazon Chief Executive Officer Jeff Bezos said in the statement. “Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”

JPMorgan Chase CEO Jamie Dimon said its possible that the initiative expands beyond the three companies in the future. “Our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans,” he said.

 

RESOURCES

Amazon, Berkshire, JPMorgan team up on health care

Amazon, Berkshire Hathaway and JPMorgan Team Up to Try to Disrupt Health Care

More Than 3 Million More Uninsured At The End of 2017 Than 2016

According to the Gallup-Sharecare Well-Being Index, 3.2 million more people are uninsured in 2017 relative to the end of 2016. The percentage of uninsured U.S. adults ended in 2017 at 12.2 percent, a 1.3 percent increase from the record low of 10.9 percent in fourth quarter 2016. Data from the index suggests that this percentage reached its peak in December of 2017 when the GOP tax bill passed with a repeal of certain parts of the individual mandate effective 2019.

There are several factors that may have contributed to this increase:

  • Lack of competition drove up costs. Some insurance companies stopped offering insurance through the exchanges, which caused costs to rise due to lack of competition.
  • Repeal of the penalty in the individual mandate. Section 5000A of the individual mandate provides the legal requirement for individuals to purchase minimum essential coverage even though the penalty for not doing so has been repealed.

The Gallup-Sharecare Well-Being Index suggests that the uninsured rate will likely increase in the years ahead because of the penalty repeal.

 

RESOURCES

U.S. Uninsured Rate Steady at 12.2% in Fourth Quarter of 2017

3.2 million more people were uninsured at the end of 2017 than at the end of 2016

Approval by Congress for Delays to Cadillac Tax and Health Insurance Tax

Congress approved delaying the 40 percent “Cadillac Tax” until 2022 and the implementation of a moratorium of the Health Insurance Tax (HIT) effective for 2019. The provisions were part of the stopgap funding bill (H.R. 195) that Congress passed and President Donald Trump signed into law on January 22. A two-year delay on the medical device tax was also implemented.

The package also includes renewing funding over six years for the Children’s Health Insurance Program (CHIP), which lapsed at the end of September.

As a supporter of NAHU, Cornerstone recognizes its efforts in advocating for Congress to include further delays or permanent repeals of the Cadillac Tax and the Health Insurance Tax both today and as a leading advocate for earlier delays in 2015.

Questions? Contact your Cornerstone representative today.

IRS Postpones 1095 Form Delivery Deadline

The information reporting deadlines for the 2017 coverage year has been released by the IRS in IRS Notice 2018-06.

For 2018, the health coverage notice delivery deadlines for employers and insurers will be similar to the 2017 deadlines, according to the IRS. Insurers and self-insured employer health plans will have 30 extra days to get Form 1095-B and Form 1095-C coverage notices to the enrollees, former enrollees, and others that need to receive the forms.

Though insurers and employer plans were originally supposed to get the 1095 notices for 2017 coverage to enrollees and former enrollees by Jan. 31, 2018, the deadline is now extended to March 2, 2018. For organizations that file their returns on paper, the deadline for filing the Form 1094-C transmittal (and copies of related Forms 1095-C) with the IRS is by Feb. 28, 2018. The electronic filing deadline is April 2, 2018.

March 2, 2018: Deadline to submit a written statement (Form 1095-C) to full-time employees.

February 28, 2018: Deadline to file the Form 1094-C transmittal (and copies of related Forms 1095-C) with the IRS, if you are filing on paper.

April 2, 2018: Deadline for filing the Form 1094-C transmittal (and copies of related Forms 1095-C) with the IRS, if you are filing electronically. Electronic filing is mandatory if you are required to file 250 or more Forms 1095-C for the 2017 calendar year; otherwise, electronic filing is encouraged, but not required. Note that in 2018, the normal deadline of March 31 falls on a Saturday, so the deadline moves to the next business day.

 

RESOURCES

IRS postpones 1095 delivery deadline

What Are the Deadlines for Forms 1094-C and 1095-C in 2018?

Talking Points for Addressing the Tax Bill and the Individual Mandate

Senate Republicans recently approved the repeal of Obamacare’s individual shared responsibility penalty as part of the 2017 reconciliation act. While the tax cut does not repeal the individual mandate itself, it zeros out both the dollar amount and percentage of income penalties imposed by the mandate.

The details of the repeal may be confusing for your clients, so we have put together a resource of talking points to simplify the repeal and what it means, sourced from a recent article from Health Affairs:

  • Both houses of Congress have now voted to repeal the Affordable Care Act’s (ACA) individual shared responsibility penalty, effective for 2019, as part of the 2017 tax reconciliation act.
  • Individuals remain responsible for having insurance or paying the penalty for the 2017 filing season and for 2018.
  • The IRS announced it will reject electronic filings of 2017 tax returns that do not claim coverage or an exemption or include payment of the penalty.
  • Important:  the individual mandate was not repealed.  Section 5000A of the individual mandate provides the legal requirement for individuals to purchase minimum essential coverage even though the penalty for not doing so has been repealed.
  • Employers providing “minimum essential coverage” must still report info to the IRS for the covered individuals and provide evidence of coverage to the individual or be subject to penalties if they fail to report.
  • Provisions for individuals to apply for exemptions from the mandate (to exchanges or the IRS) are still in place but it’s unlikely that individuals will apply for exemptions after the penalty is repealed in 2019.
  • There are two employer mandate penalties that remain in place:
    • a penalty imposed on employers who fail to offer minimum essential coverage to full-time employees if any employee receives premium tax credits to enroll in coverage through an exchange, calculated on a per-employee basis for all full-time employees; and
    • a larger penalty imposed on employers who offer minimum essential coverage but fail to offer “minimum value” coverage, which applies to each full-time employee who in fact receives premium tax credits for exchange coverage.
  • Premium tax credits will continue to keep coverage affordable for consumers with incomes below 400 percent of the poverty level.
  • Coverage will continue to be available to all consumers regardless of preexisting conditions.
  • Premiums will not depend on health status, and a risk adjustment system will penalize insurers who attract primarily healthy enrollees.
  • The remaining eight titles of the ACA remain operative, including provisions closing the Medicare donut hole.

 

Read the full article from Health Affairs here.

CMS Extends SEP For Individuals Affected By Hurricanes

CMS recently released a memo to announce that individuals affected by the recent hurricanes in Puerto Rico and the U.S. Virgin Islands, as well as the California wildfires, would have additional opportunities to join, drop, or switch Medicare health and prescription drug plans. These individuals will be eligible for an SEP through March 31, 2018.

Click here to view the full memo.

Premiums Hike For Children Under 2018 ACA Policies

Premiums increased across the board this year and not insignificantly. Fourth quarter hit harder than ever, a telling glimpse into next year if nothing changes in our legislature. One major change that didn’t get much press was the change in factors for children age 15 to 20 on group and individual plans. You may have seen it on ACA quotes without giving it a second thought.

But as December 2nd article from the LA Times explains, this is a “complicated new rule, approved last year by the Obama administration, that allows insurance companies to assign more of a family’s overall premium cost to children in individual and small group policies, starting in 2018.” It goes on to say, “It also allows insurers to charge higher rates for teens than for younger children beginning at age 15, because teenagers typically rack up bigger medical bills. Up until now, the ACA has not allowed any difference in the amount charged for children from birth to age 20.”

Click here for the full article.