Health Care Reform: What You Need to Know, Part 2
Summary of our second informative presentation on how the Affordable Care Act affects you.
Production company owners, take note: From now through December 15, 2013, due to a loophole in the small-business provision of the Affordable Care Act (ACA), you can offer health benefits to employees on a self pay basis at no cost to the production.
The specifics are sort of convoluted — not surprising when it comes to health insurance — but insurance carriers must accept all small business customers, even those who don't meet minimum participation or contribution requirements, during this open enrollment period, with coverage effective January 1, 2014. This includes companies with one to fifty employees, at least one of whom must be a non-owner W-2 full-time employee.
This information was just one of the helpful updates provided by insurance agent Scott Brandt, a certified healthcare reform specialist whose Academy Benefits Insurance Agency serves Television Academy members. After moderating an informative program on the ACA — a.k.a., Obamacare — in September, Brandt returned to the Academy December 2 for a follow-up, "Health Care Reform: What You Need to Know — Part 2," held at the Academy's Conference Centre in the NoHo Arts District.
Joining Brandt was Peter Katona, an actor and an educational associate for the Western region of The Actors Fund, which is a grantee of the State of California to provide education and outreach about individual coverage for the visual arts and entertainment communities.
Katona reiterated basics that had been covered in the first presentation. California is one of sixteen states that have established their own exchanges; the Covered California website, coveredca.com, has not experienced the problems rolling out that had hampered the federal government site, healthcare.gov .
The most significant aspects of the ACA, which goes into effect in full January 1, are that no one can be denied insurance coverage because of pre-existing conditions, and that certain health care coverage is now mandatory, such as ambulatory patient services, hospitalization, emergency room services, prescription drugs and maternity care.
"For the time ever, mental health services will be covered," Katona said. As will preventive and wellness services: "I think health insurance companies are starting to realize that when you open yourself up to preventive services, in the end it will save you money," he said.
An exception to these provisions: Existing plans that were in effect before the ACA was passed in March 2010, which have "grandfathered" status and therefore aren't required to comply.
But while the new provisions are a significant leap forward in health care, that leap is hamstrung by the lack of participating ACA insurance companies and the fact that many providers are not accepting those companies' ACA Individual and Family plans. "In the state of California, there are thirteen health insurance companies taking part," Katona noted, "but when it comes to Los Angeles County, there are a handful — five or six."
Those medical providers that do accept plans are picky: Cedars-Sinai Medical Center, for instance, is accepting only the lowest-coverage tier of the public exchange plans, Bronze, and only for Health Net rather than for Anthem Blue Cross and Blue Shield of CA. And physicians who opt in can choose to accept only one type of the three care networks offered, such as PPO (preferred provider organization) rather than the more restrictive HMO (health maintenance organization) and EPO (exclusive provider organization). On a sampler chart that Brandt provided seminar attendees, showing twenty-three hospitals and medical centers, only four accepted all four of the insurance companies listed.
Using Covered California's Shop and Compare tool is helpful; when the time comes, one can enroll online, on the phone, in person or by mail. Those qualifying for federal subsidies must remember to notify their provider if income rises significantly, or face the prospect of repaying all or part of the subsidy. "As artists, people in entertainment, our income fluctuates," Katona reminded. "It's up to us to self-report."
Brandt used a series of slides to illustrate how qualification for subsidies works. "Every decision in Covered California is income- and age-driven," he explained, the income aspect tied to a complex chart involving the percentage of one's income of the federal poverty level. "If your income is low enough to qualify for Medi-Cal and you sign up for Covered California, your only option is Medi-Cal," he cautioned. The number of Medi-Cal providers is even fewer than those for the other tiers.
Of the four metallic coverage tiers — Bronze, Silver, Gold and Platinum — Brandt recommends Silver, which has an Enhanced Silver variant in which the deductible decreases if income goes down.
The figure used to determine income is the Modified Adjusted Gross Income (MAGI). For most taxpayers, this is the same as the Adjusted Gross Income (AGI), found on line 4 of the IRS form 1040EZ, line 21 of form 1040A or line 37 of form 1040. Those who receive non-taxable Social Security benefits, earn income living abroad or earn non-exempt interest should add that income back to the AGI. And for people who take a deduction for part of their self-employment tax, calculated on Schedule SE and listed on line 27 of tax form 1040, there is a significant discrepancy about whether or not to add that figure back as well.
In his official training, Brandt was told, and therefore instructed Television Academy members, that the line 27 figure must be added back and counted for the MAGI. However, the Covered California website notes only the three elements listed above, not the self-employment tax deduction. Researching online turns up conflicting and confusing accounts; Brandt and this writer spent an hour after the seminar trying to find the correct information. "I stand by what I said," Brandt said, adding that Academy members should check with their own tax preparers.
In response to a variety of audience questions, Brandt clarified that for a family, there are a maximum of two deductibles to be met: the first, an individual's deductible and the second, cumulative among the rest of the family members. For people who travel, many insurance companies have networks out of state, but travel insurance is advisable, especially for foreign travel. One element to consider when trying to decide between companies is to check their prescription drug formularies — the list of drugs covered by each company. And though emergency room visits are covered even if the hospital doesn't take a specific plan, the hospital's definition of what constitutes an emergency may be stricter than that of a patient's, so it's a good idea to check local urgent care facilities to see what plans they take.
As for the Small Business Health Options Program (SHOP), enrollment through the federal government's website, for those in states who do not have their own exchange, has been delayed a year and instead will be via direct enrollment, through an agent, broker or insurer that offers SHOP. This does not affect businesses in California, whose Covered California website is functional.
Businesses with fifty or more employees must provide insurance. Those with twenty-five employees or less may be eligible for tax breaks. Further information is available in the original Health Care Reform article, as previously noted.
Brandt's website is academybenefits.tv . The Actors Fund's healthcare reform website is ahirc.org . The seminar was a presentation of the Television Academy's Member Rewards Committee, chaired by Robert Kurtz.