HSA Contribution Limit Adjusted to $6,900 for 2018

The Treasury Department and the IRS recently decided, “in the best interest of sound and efficient tax administration,” to adjust the 2018 annual HSA contribution limit to $6,900 for eligible individuals with family coverage under an HDHP, per Rev. Proc. 2017-37.

Individuals who receive a distribution from an HSA oF an excess contribution (with earnings) based on the $6,850 deduction limit published in Rev. Proc. 2018-18 may repay the distribution to the HSA and treat the distribution as the result of a mistake of fact due to reasonable cause under Q&A-37 of Notice 2004-50, 2004-2 C.B. 196.

Alternatively, individuals who receive a distribution from an HSA of an excess contribution (with earnings) based on the $6,850 deduction limit published in Rev. Proc. 2018-18 and does not repay the distribution to the HSA may treat the distribution in accordance with section 223(f)(3), which describes the treatment of excess contributions returned before the due date of return. Thus, the excess contribution generally would not be included in gross income under section 223(f)(2) or subject to the 20 percent additional tax under section 223(f)(4), provided the distribution is received on or before the last day prescribed by law (including extensions of time) for filing the individual’s 2018 tax return.

 

Click here to read Rev. Proc. 2018-27.

Client Referrals Just Got Easier!

NEW! Cornerstone’s Client Referral Forms are now online!

Electronic versions of the Individual and Medicare referral forms are now available—a new, time-saving feature from Cornerstone’s Agency Services Division!

Submit all of your Individual/Family and Medicare referrals directly with our simplified online client referral form, available on our website with 24/7 access!

For Medicare referrals, quickly access the client “Consent to Contact” form and use the upload feature to submit.

And that’s it! Cornerstone will take care of the rest!

 

Click here to access the online referral form.

 

TIP: Be sure to save the referral form page to your web favorites for quick access.

Our Agency Services Client Referral program is one of the most valuable benefits we offer to our broker partners.

Ask your Cornerstone representative about how you can get paid for your Individual, Medicare, and Employee Benefits referrals and never say “no” to a client or prospect again!

What’s Old is New Again: Recycling in the Individual Market

Luke Boemker

Luke Boemker | Director Enrollment Center/Business Development

The title of one of my favorite movies, Back to the Future, seems apropos when compared to today’s individual health insurance market. With the Affordable Care Act (ACA) being anything but affordable, many consumers are looking for alternative options to cover themselves and their families. Monthly ACA insurance premiums can cost more than an average mortgage payment so other options have to rise up from the grave to give consumers access to “affordable” health insurance.

Before ACA, we had medical underwriting, we had prescreens, we had limited coverage for maternity, and we had waiting periods on pre-ex. These are many of the reasons the ACA was created—to eliminate screening questions that were seen as unfair to a consumer with medical conditions. Granted, pre-ACA coverage was not the best either, but it was a fraction of the cost of current ACA coverage. Pre-ACA, networks were also much more extensive, with the majority of options today consisting of very limited HMO or EPO choices.

On April 2, 2018, the great state of Iowa made national news in their attempt to create Individual association-style plan offerings. The Iowa Farm Bureau is looking to recreate coverage options that consumers had before the ACA. However, according to a recent Washington Post article, such plans “sponsored by a nonprofit agricultural organization…shall be deemed not to be insurance.” Rates and coverage options have not yet been approved, but it is difficult to believe that there will not be some limitations that will make these plans available only to those on the healthier end of the spectrum.

The Back to the Future opportunity is twofold. On one hand, short-term plans are beginning to resemble pre-ACA coverage. If the laws change and allow short-term back to a nearly annual, renewable contract, this market will explode for the young, invincible, and healthy population.

However, there are tradeoffs with coverage options. Most short-term plans have PPO networks, which are significantly larger than what can be found with ACA plans. On the flip side, the coverage on the short-term plans is not as extensive as one might find in the ACA. Benefits are not as rich from a copay or medication standpoint and short-term plans do not usually cover maternity, which can be an issue for younger families. Anyone with medical conditions or significant health care needs may not qualify for short-term plan offerings, while ACA plans are guarantee issue.

Let’s look at a couple illustrations that show sample price comparisons for 21, 43, and 64-year-old non-smokers with short-term versus ACA options, using Franklin County (Columbus, OH) as the test case. These are the lowest prices available in which the out-of-pocket costs are closely aligned.

  Short Term* ACA**
Age Premium
21 $      84.73 $      355.47
43 $     106.16 $      482.38
64 $     284.53 $    1,066.41
*$2500 Deductible, 20% Co-Insurance, $7500 MOOP
**$2400 Deductible, 20% Co-Insurance, $7350 MOOP

A 21-year-old “invincible” can purchase a middle-of-the-road short-term plan for less than their monthly cell phone bill. A similar plan offering in the ACA would compare more closely to their monthly rent or car payment. The ACA plans are averaging four times more costly than short-term coverage options in nearly all age ranges. When you annualize the premium savings for a 64-year-old consumer, you see savings of over $9,000. For those on a fixed or limited income, this is necessary money in their pocket.

When looking at sample family rates of 35, 33, 6, and 4 year olds, the price difference is even more dramatic. ACA rates, without a subsidy, are approaching, and possibly even exceeding, what a family of four would pay for their monthly mortgage and escrow payment. The rate is almost five times more expensive for ACA versus short term.

Short Term* ACA**
Ages Premium
35, 33, 6, 4 $    333.00 $        1,592.04
*$4000 Family Deductible, 20% Co-Insurance, $12,000 Family MOOP
**$4000 Family Deductible, 20% Co-Insurance, $14,700 Family MOOP

With all things being equal, it is difficult to pass up the significant monthly savings of $1,259 dollars for the family of four. Annualized savings amount to more than $15,000.

With short-term medical and association-style options potentially becoming en vogue again, one has to wonder what will become of the ACA. With many national carriers having exited the Marketplace in a majority of states, and many states with only one or two carrier options, it appears the death spiral for ACA is in full effect. Limited competition creates higher rates; higher rates drive the healthy population into alternative options. When the healthy leave the Marketplace, all that remains are those with medical conditions or those who are receiving a substantial subsidy that offsets the majority of their ACA premium.

Consumers will make health care decisions based on how it impacts them the most: their pocket book. If they can qualify medically and achieve premium savings like what is outlined in the above illustrations, more and more will flock to short-term or association-style options, like those being proposed in Iowa and potentially other states in the near future.

Like the late, great Yankee’s catcher Yogi Berra once said, “It’s like deja vu all over again.”

Questions about short-term plans? Contact your Cornerstone representative today to learn more.

SAVE THE DATE: CE Opportunity Available in Dayton, OH

Join Cornerstone and Principal’s Michael Broderick for a CE class in Dayton, Ohio, discussing provisional basic and long-term disability design consideration for unique groups.

May 1, 2018 | 10:00 am–12:00 pm

Yankee Trace

10000 Yankee Street

Centerville, OH 45458

Click here to register.

 

Contact your Cornerstone representative with any questions!

Win Big With Cornerstone’s Kentucky Derby Choice Challenge!

Right from the horse’s mouth, it’s the Cornerstone Kentucky Derby Choice Challenge!

Are you chomping at the bit to start your Medicare direct mail marketing this year?

Enter the Cornerstone “Kentucky Derby Choice Challenge” for a chance to increase your Medicare direct mail marketing and be in the Winners’ Circle!

Brokers who are contracted with a Medicare Advantage or Medicare Supplement carrier through Cornerstone are eligible to play.

Kentucky Derby — May 5, 2018… “The Greatest Two Minutes in Sports”

Registration closes at 6:00 pm on May 5!

Click here to enter.

Call your Cornerstone Senior Marketing representative today for contracting information!

Judge Grants Class-Action Lawsuit Regarding CSRs

In October 2017, the Trump administration announced they would no longer make Cost-Sharing Reduction (CSR) payments to insurers. On April 23, BenefitsPro reported that, in a win for insurers, Judge Margaret Sweeney of the U.S. Court of Federal Claims has granted a Wisconsin-based insurer’s request for class-action status.

The government has challenged the request and is expected to appeal the class action status to avoid billions in CSRs if it loses in court.

Click here for more information.

The Health Plan Provides 2018 Quick Links

The Health Plan recently sent out a notice that all of their Medicare Services links have been combined into one easily accessible link. The links will continually update whenever THP updates their website.

To access the link, click here.

Transitional Policies for Non-ACA Compliant Plans to be Extended Through 2019

The Center for Consumer Information and Insurance Oversight (CCIIO) recently issued an Insurance Standards Bulletin that extends the CCIIO’s transitional policy through 2019, provided that all policies begin on or before October 1, 2019, and end by December 31, 2019.

As with previous transitional policies, this policy applies to non-grandfathered health insurance plans in the individual and small group markets that would otherwise terminate or require modification as a result of the federal health insurance market reforms required under the Patient Protection and Affordable Care Act (ACA).

For more information, click here.

UnitedHealthcare Bonuses for 51+ Groups!

UnitedHealthcare is offering a bonus to agents in Ohio who sell new UnitedHealthcare fully insured medical groups with 51 to 3,000 eligible employees, and at least 40 enrolled employees, from July 1, 2018, through October 31, 2018. To receive a bonus, agents must have a combined total of at least 100 enrolled employees in eligible groups.

Eligible groups are new UnitedHealthcare fully insured medical groups that have:

  • 51 to 3,000 eligible employees;
  • At least 40 employees enrolled for medical coverage;
  • Effective dates from July 1, 2018, through October 31, 2018.

Agents who meet the qualifying requirements will earn a bonus of up to $3,000 for selling eligible medical groups. An additional bonus will be paid if at least two employer-sponsored Specialty Benefits lines of coverage are sold with a qualifying medical group. The bonus amount for each qualifying group is based on the number of enrolled employees for medical coverage, as indicated in the following table:

Bonus Example: An eligible agent sells three eligible fully insured medical cases: one with 45 enrolled medical employees; a second with 125 enrolled medical employees; and a third with 250 enrolled medical employees, for a combined total of 420 enrolled employees in eligible cases. The agent also sells employer-sponsored group life insurance and group dental insurance with all three cases. The agent has met the qualifying requirement of a combined total of at least 100 enrolled employees in eligible groups, and therefore receives a bonus of $550 for the first group ($500 for the medical and $50 for the Specialty Benefits coverages), $1,700 for the second group and $3,300 for the third group, for a total bonus of $5,550.

Please see the attached flyer for additional details. Let me know if you have questions about the new bonus program.

 

Click here for more information.

Medical Mutual Changes How Commissions Are Accessed

Effective April 16, 2018, Medical Mutual commission statements will be accessible only through MyBrokerLink and will no longer require a separate registration or log-in. The first commission statements available on MyBrokerLink will be for the March 2018 commission payment.

Click here to learn more.