Indivual non-subsidized waivers not accepted by Blue Cross

mass connector authorityOver the past few months we have been inundated with talk about Health Insurance Exchanges.  On the local level the Commonwealth of Massachusetts did not participate in the Federal Exchange, but has their own exchange that is called the Connector Authority.

When a person calls the Connector Authority the first thing that is determined is if they qualify for a subsidy.  The line between whether or get a subsidy or not is if you earn above or below 300% of the Federal poverty level.

At the same time, you have employers that are getting health insurance for their companies and insurance companies have participation requirements; for example, insurers typically require small companies to have 100% participation to get health insurance.  It sounds worse then you think at first since people who have coverage through their spouses are not included; for example, a company has 6 employees but 2 have coverage with their spouses then the insurance company would require the remaining 4 to sign up .

Recently tried to sign up a company with Blue Cross but one of the employees had gone on their own to the Connector Authority and bought an unsubsidized individual plan. Since it was not subsidized, Blue Cross will not accept this as a valid waiver as it would, for example, if this same employee had waived for spousal coverage.

The problem is that since Blue Cross will not accept this waiver, the company is not at 100% participation and the company can not get health insurance for their company as long as this one employee keeps their individual unsubsidized coverage!

Here we have set up an exchange to make health insurance easier for everyone to get, but in this case the existence of the exchange and one person signing up has made it impossible for this subscriber’s employer to buy group health insurance!!!


Affordable Care Act, Blue Cross of Massachusetts, Massachsuetts Connector Authority

Obamacare is over

obamacare-logo_fullA few weeks backs I said that Obamacare would go the way of Section 89, legislation that was passed in 1986 to to put a tax cap on health insurance benefits.  It was so confusing and the cost for an employer to calculate whether or not they were over the cap was so expensive, Section 89 was actually repealed and never went into effect.

Last week, the WSJ Journal had a story titled Obamacare’s Secret Mandate Exemption.   The most important part that a hardship to avoid the penalty being :

Now all you need to do is fill out a form attesting that your plan was cancelled and that you “believe that the plan options available in the [ObamaCare] Marketplace in your area are more expensive than your cancelled health insurance policy” or “you consider other available policies unaffordable.”

Let me ask you this what tax-payer facing a Federal penalty for not having health insurance will not complete this form and avoid the penalty?   Not to mention anyone who had their plan cancelled can avoid the penalty through 2016.

This seven page technical bulletin just cancelled the Federal Individual Mandate penalty.  You have to understand that without a penalty, healthy people that do not have health insurance will not sign up.  Even a $100 fine this year has not convinced healthy people to enroll.

Why is that so important?  The whole key to the “success” of Obamacare is that healthy people need to sign up for health insurance.  If they do not then the only subscribers in the pool will be unhealthy people, who get immediate immediate coverage Day 1 covering all pre-existing conditions:

  • The claims ratio in comparison to premiums collected will go through the roof.
  • Premiums will sky rocket at renewal.
  • The healthier people remaining in the pool will cancel due to the high rates.  Leaving only the unhealthy who are incurring claims.
  • The claims ratio will get even worse.
  • Premiums go up even more

I have heard this referred to as the “death spiral”, but it is is true.

Not only does Obamacare need a Individual Mandate penalty to succeed, but theoretically it needs to be in the $3,000 range for singles and $9,000 range for families.  Don’t get me wrong, I am not advocating for this but that is what it needs to be for Obamacare to be a “success”.

If the penalties were this high then healthy people would actually sign up, claims to premiums loss ratio would go down and premiums would stay competitive.  We all know politically this will never happen. Instead not only are the penalties not going up, but are being cancelled.

Bottom the no Federal Mandate puts Obamacare into a death spiral that it simply can not recover from. Unlike Section 89, Obamacare has gone into effect but it will be gone in two years.   There simply is no other possibility without a penalty to not have health insurance.

Individual mandate, Obamacare

MA individual mandate predictions

mass connector authorityWe have all read about the problems that the Connector Authority has had with their website. In case you have not, here is a recent Boston Globe story.

The question is how does the Commonwealth of Massachusetts impose a penalty (individual mandate), if the site has not been working that will allow people to enroll, obtain coverage and avoid the penalty?  Personally I do not see how they can.

The first thing I see happening is that the open enrollment period beyond the end of March thru April to give people more time to enroll.

The second thing will be a move to repeal the Commonwealth of Massachusetts individual mandate altogether like they did with their employer mandate.

Individual mandate, Massachhusetts Individual penalty, Massachsuetts Connector Authority

April 1st rates are out

time to renewtime for renewalEach quarter insurance companies submit their proposed health insurance rates for the next quarter to the Division of Insurance to review.  After going back and forth, they usually get approved in the middle of the quarter.  Once that is completed, the rates have to be loaded into the insurance company systems that generate proposals for new business and renewals are generated.

Right now we are in the stage where the  insurance companies have their approved rates back, have uploaded the approved rates and are generating their proposals for businesses.  If your renewal is April 1st, keep an eye on your e-mail and mail.

Better yet, contact your rep and have it sent out today.  You  need time to get alternative rates and make any changes, if needed, now to be effective for April 1st!

Health Insurance Quotes, Health Insurance rates

GoLocalWorcester column-Health Insurance Corner (HIC)

health insuranceI have alot of fun writing a column for GoLocalWorcester on the Worcester Airport, FlyORH.  Last week, I proposed a column, Health Insurance Corner (HIC), that I would write about health insurance.

Not from a national or state level that you read about every day but from the standpoint of a broker helping business in Central Massachusetts find the right health insurance.  Stay tuned!!!

Health Insurance Quotes, Health Insurance rates, Health New England

Number of dependents =big difference in rates

family portratiAs of January 1st, we need to get dates of birth on all dependents.   In the past, it made no difference.  A family with an employee, spouse and one child was rated the same as another family with an employee, spouse and ten children.

Let me give you an example. I have a client with 8 total employees of which 6 are part-time and 1 full timer other then himself.  The one other full-time employee gets his health insurance through his spouse.  My client is the only one on the health plan.

For years he has been with Blue Cross until this year when he got a 50% rate increase from $1,500 per month to $2,500.  Why the big increase? My client’s family plan has 6 people (himself, spouse and 4 children).

In the end, we were able to place him with Health New England but he still got a rate increase at $1,725 per month.




Health Insurance rates

MCC requires prescriptions??

walmartAll the politicians says they want to provide relief for small businesses and their health insurance premium.  We are a small business and we have to buy health insurance for ourselves.  Neither my wife, myself or daughter are on any prescriptions, but I have to prescription coverage (PCS).

Why? The Commonwealth of Massachusetts says that in order to avoid paying a penalty you need to have Minimum Credible Coverage (MCC).  Imagine if you had to have boat insurance on your homeowner’s insurance, even if you did not own a boat?

Conservatively I have heard that if the PCS coverage was removed, my premiums would drop 8-10%.  The Commonwealth of Massachusetts should not require PCS coverage in order to meet MCC.  This especially makes sense when companies like Walmart have a list of prescriptions that grows every day.

Minimum Credible Coverage, walmart prescriptions

Section 89 was never enacted

red tapeIn 1986 Congress passed the Tax Reform Act of 1986, which included Section 89.   It was intended to put a tax cap on health benefits.  The company that I worked for spent thousands of dollars on computer software that would help employers figure out Section 89.

For a year we would have meetings to discuss Section 89 and and remember vividly more confusion building as we had more meetings.  Why have you never heard of a Section 89?

In November, 1989, it was repealed, Why?  As said in this Wall Street Journal Editorial:

The regulations created an unwieldy and very expensive burden for employers trying to comply with the law. Once the details and the costs of Sec. 89 became clear, employers forced Congress to reverse itself and repeal the new rules

We can very easily see Obamacare going the way of Section 89

Affordable Care Act, Obamacare

Employer mandate delayed again

sebeliusReview time.


Groups in Massachusetts with 10 or more employees were subject to the Commonwealth of Massachusetts employer mandate.  This was the last year since the Federal employer mandate was to start in 2014 under ACA or Obamacare for employers with 50 or more employees.


The employer mandate was delayed for one year until 2014. No employers of any size subject to anything.

Changes approved yesterday

  • In 2015, Obamacare will still start for employers with 100 or more employees, but they will only need to health insurance to 70% of employees increasing to 95% in 2016.
  • In 2016, Obamacare will start for employers with 50or more employees.


  • expect more changes and delays to these changes and delays.


Affordable Care Act, Employer mandate

April 1st–big renewal date

health insurance renewalApril1st is either the biggest or second biggest renewal date other then January 1st for businesses in Massachusetts.  Small businesses mainly obtain their health insurance through an intermediary to obtain their health insurance.  They do not go direct to the carrier. All the intermediaries we are aware of renew April 1st.

Typically, there businesses will get a letter in the mail March 1st letting them know what there renewal rate will be April 1st with a grid showing plan alternatives.  The grid is very confusing and when a client tries to call the intermediary there are long hold times, since everyone else that the intermediary handles renews April 1st.

  • Why wait until you get the renewal letter in the mail?
  • Why are you paying an annual or monthly administration fee to buy your health insurance?

This year be pro-active, do not wait until you get your renewal letter to start reviewing your health insurance options.  Send us an e-mail today and we will get you alternative quotes now to compare to your renewal when it comes in.


Health Insurance rates, massachusetts health insurance rates