Experts answer Affordable Care Act questions

From the Salinas Californian

SALINAS, CA - November 15, 2013 – A number of questions were left unanswered at the Affordable Care Act Forum hosted by The Salinas Californian on Nov. 7 at the National Steinbeck Center. We worked with panelists and other experts on how the ACA is playing out in Monterey County to get the answers.

“The single biggest issue is confusion,” said George Chobany, a Spreckels-based independent insurance agent who served as a forum panelist. “You could literally see the fear in people’s eyes [at the forum]. There were a lot of seniors there, and they’re not affected.”

Medicare remains as is. Most Medicare recipients need Medigap policies to cover prescriptions and doctor’s visits, but these policies are not affected by the Affordable Care Act.

Here are other questions left with us at the forum and the answers we received. People who are uncertain whether they get a tax subsidy when they enroll in insurance may seek help from any certified insurance agent. A list is available at www.coveredca.com under “Find Help Near You.” Chobany said there is no charge to consult a certified insurance agent about your situation and options.

This first series of questions was answered by Chobany.

Q: Do all health insurance plans cover the 10 essential benefits, or is it just for Covered California plans?

A: Starting Jan. 1, all plans except grandfathered plans will have to meet those 10 essential benefits. Those benefits include: Outpatient care—the kind you get without being admitted to a hospital; trips to the emergency room; treatment in the hospital for inpatient care; care before and after your baby is born; mental health and substance use disorder services (this includes behavioral health treatment, counseling, and psychotherapy); prescription drugs; services and devices to help you recover if you are injured, or have a disability or chronic condition (this includes physical and occupational therapy, speech-language pathology, psychiatric rehabilitation, and more); lab tests; preventive services including counseling, screenings, and vaccines to keep you healthy and care for managing a chronic disease; pediatric services, including dental care and vision care for kids.

Q: If I have a property that generates my only income of $40,000 a year, am I able to get a health care subsidy? The property is worth about $1 million.

A: “Covered California does not know the answers to those kind of questions because they’re not tax people,” Chobany said. “The indirect answer to that question might be: Eligibility for subsidies will be based on modified adjusted gross income for most taxpayers. ... That’s part of the problem. Somebody would call Covered California, and they [Covered California representatives] wouldn’t know where to turn.” Chobany cited this section from the Covered California site as helping to answer this question:

“Eligibility for Medi-Cal and Covered California subsidies will be based on a household’s Modified Adjusted Gross Income (MAGI). For most taxpayers, MAGI is the same as Adjusted Gross Income (AGI) which can be found on Line 4 on a Form 1040EZ, Line 21 on a Form 1040A, or Line 37 on a Form 1040.

“Taxpayers who receive non-taxable Social Security benefits, earn income living abroad, or earn non-exempt interest should add back that income to AGI to calculate MAGI.

“Medi-Cal eligibility will be determined excluding the following types of income: scholarships, awards, or fellowship grants used for education purposes and not for living expenses, and certain American Indian and Alaska Native income derived from distributions, payments, ownership interests, real property usage rights, and student financial assistance.”

Q: Two questions came from people with 26-year-old children who were unemployed or in college, wondering what medical coverage the offspring are eligible for.

A: There are two ways for these adult offspring to get coverage: They can buy coverage and pay the full price or see if they qualify for a subsidy. But if they are just graduated and have no income, Covered California will drive them to MediCal, Chobany said. Or the kids can opt to remain uncovered and pay the annual tax penalty, which will be $95 in 2014. “Tax returns are the key” in figuring out the answer to these situations, Chobany said.

Q: Is there a monetary incentive for getting preventive care?

A: Preventive care benefits are built into every plan. Plans should offer an annual physical examination at no charge, along with immunization shots and certain types of screening tests.

Q: Would a single-payer system cost less?

A: “That’s a difficult question to answer because right now you write a check to pay the premium,” Chobany said. “In single-payer, the cost gets baked into everything. If you use Medicare as an example, the government pays doctors [for the services they provide]. The government decides what it will pay, creating the problem of less doctors wanting to be in the Medicare system. They dictate the terms and squeeze providers. Would single-payer be better? Who knows? As country we’re spoiled. We don’t like to be dictated to, told who we can see or what tests we can get.”

• Forum panelist Sharilyn Payne, an attorney with Fenton & Keller in Monterey and a specialist in employment law, answered the following workplace-related questions:

Q: Do employees need to work a minimum number of hours to be covered by an employer offered plan?

A: Employers can still choose to offer insurance to all employees, both full-time and part-time, to only full-time employees, or to no one. The question is whether the employer will be subject to a penalty if they offer no coverage or offer coverage that does not meet certain standards. Under the Affordable Care Act, certain larger employers have a choice – to “play or pay.” If an employer employs at least 50 full-time equivalent employees, it can either (1) offer its full-time employees affordable health insurance that provides a minimum value of coverage, or (2) offer no coverage, or coverage that is not affordable or not of a minimum value, and pay a penalty, known as an Employer Shared Responsibility, if any full-time employee applies for insurance on one of the insurance exchanges and qualifies for a tax credit to help pay for the premium. A “full-time” employee is defined as one who works an average of at least 30 hours a week or 130 hours a month. Those hours include paid absences such as vacation and leaves of absence. Legislation has been proposed to change the definition of a “full-time” employee to one who works an average of at least 40 hours a week, but that is not the law – at least not yet.Q: Is there a monetary incentive for getting preventive care? A: Preventive care benefits are built into every plan. Plans should offer an annual physical examination at no charge, along with immunization shots and certain types of screening tests. Q: Would a single-payer system cost less? A: “That’s a difficult question to answer because right now you write a check to pay the premium,” Chobany said. “In single-payer, the cost gets baked into everything. If you use Medicare as an example, the government pays doctors [for the services they provide]. The government decides what it will pay, creating the problem of less doctors wanting to be in the Medicare system. They dictate the terms and squeeze providers. Would single-payer be better? Who knows? As country we’re spoiled. We don’t like to be dictated to, told who we can see or what tests we can get.” • Forum panelist Sharilyn Payne, an attorney with Fenton & Keller in Monterey and a specialist in employment law, answered the following workplace-related questions: Q: Do employees need to work a minimum number of hours to be covered by an employer offered plan? A: Employers can still choose to offer insurance to all employees, both full-time and part-time, to only full-time employees, or to no one. The question is whether the employer will be subject to a penalty if they offer no coverage or offer coverage that does not meet certain standards. Under the Affordable Care Act, certain larger employers have a choice – to “play or pay.” If an employer employs at least 50 full-time equivalent employees, it can either (1) offer its full-time employees affordable health insurance that provides a minimum value of coverage, or (2) offer no coverage, or coverage that is not affordable or not of a minimum value, and pay a penalty, known as an Employer Shared Responsibility, if any full-time employee applies for insurance on one of the insurance exchanges and qualifies for a tax credit to help pay for the premium. A “full-time” employee is defined as one who works an average of at least 30 hours a week or 130 hours a month. Those hours include paid absences such as vacation and leaves of absence. Legislation has been proposed to change the definition of a “full-time” employee to one who works an average of at least 40 hours a week, but that is not the law – at least not yet.

Q: How many hours are considered part-time employment?

A: If an employee works an average of fewer than 30 hours a week, then he or she is considered a part-time employee under the Affordable Care Act.

Q: In determining if an employer has 50 full-time equivalent employees, how do you figure 50 equivalent hours from part-time employees?

A: When an employer is looking at whether it has 50 full-time equivalent employees and if the “play or pay” rules even apply to it, it has to look at its entire workforce. Multiple part-time employees can add up to one full-time equivalent employee. For example, if two part-time employees each work 15 hours a week, the two of them make one full-time equivalent employee. But the employer is only looking at those part-time employees to see if it has at least 50 full-time equivalent employees. If it finds that it does and decides it wants to “play” to avoid the penalty, it only has to offer affordable health coverage of a minimum value to its full-time employees, and not its part-time employees. The calculation of an employer’s full-time equivalent employees can be quite complicated. For example, seasonal workers who perform services on a seasonal basis, including retail workers employed only during holiday seasons, are not considered employees in counting an employer’s employees unless those workers provide services to the employer on more than 120 days during the taxable year.

Q: When do we get an exchange notice from our employer if we didn’t get any?

A: If your employer is covered by the Fair Labor Standards Act (FLSA), it should have provided you with an exchange notice on Oct. 1, 2013. New employees must be provided with the notice within 14 days of hire. An exchange notice sets forth information about the marketplace where employees can shop for insurance, an employee’s possible eligibility for a tax credit to help pay the premium, and the coverage provided by the employer. If you did not receive one, you should ask your supervisor or speak to someone in your employer’s Human Resources Department. The Department of Labor announced that it will not fine employers that failed to send out exchange notices on Oct. 1, 2013.Q: How many hours are considered part-time employment? A: If an employee works an average of fewer than 30 hours a week, then he or she is considered a part-time employee under the Affordable Care Act. Q: In determining if an employer has 50 full-time equivalent employees, how do you figure 50 equivalent hours from part-time employees? A: When an employer is looking at whether it has 50 full-time equivalent employees and if the “play or pay” rules even apply to it, it has to look at its entire workforce. Multiple part-time employees can add up to one full-time equivalent employee. For example, if two part-time employees each work 15 hours a week, the two of them make one full-time equivalent employee. But the employer is only looking at those part-time employees to see if it has at least 50 full-time equivalent employees. If it finds that it does and decides it wants to “play” to avoid the penalty, it only has to offer affordable health coverage of a minimum value to its full-time employees, and not its part-time employees. The calculation of an employer’s full-time equivalent employees can be quite complicated. For example, seasonal workers who perform services on a seasonal basis, including retail workers employed only during holiday seasons, are not considered employees in counting an employer’s employees unless those workers provide services to the employer on more than 120 days during the taxable year. Q: When do we get an exchange notice from our employer if we didn’t get any? A: If your employer is covered by the Fair Labor Standards Act (FLSA), it should have provided you with an exchange notice on Oct. 1, 2013. New employees must be provided with the notice within 14 days of hire. An exchange notice sets forth information about the marketplace where employees can shop for insurance, an employee’s possible eligibility for a tax credit to help pay the premium, and the coverage provided by the employer. If you did not receive one, you should ask your supervisor or speak to someone in your employer’s Human Resources Department. The Department of Labor announced that it will not fine employers that failed to send out exchange notices on Oct. 1, 2013.

Some employees may be uncertain as to whether the FLSA covers their employer. The FLSA covers businesses with workers engaged in interstate commerce, who produce goods for interstate commerce, or who handle, sell, or otherwise work on goods or materials that have been moved in or produced for interstate commerce by any person. In other words, if employees send emails or make phone calls to other states, or if they send and receive packages from other states, they are engaged in interstate commerce. Furthermore, to fall under the FLSA, businesses must have an annual gross volume of sales or business done of not less than $500,000, or must be operating an institution such as a hospital or school, or must be a public agency.

Q: If you qualify for a subsidy and you have employer-provided coverage and the deductible is high, how does the employer judge what is affordable?

A: Individuals with employer-provided coverage that is “affordable” and of “minimum value” according to government guidelines can decide to instead purchase insurance on the exchange. But because their employer is offering them the affordable coverage of minimum value, they will not qualify for a subsidy to help pay the premium for insurance they buy on the exchange. Employer-provided coverage is “affordable” if the employee’s share of the premium costs for employee-only coverage under the employer’s plan is no more than 9.5 percent of the employee’s Form W-2 wages reported in Box 1 (total taxable wages). For example, if an employee’s total taxable wages are $40,000, the employee’s share of the premium costs for employee-only coverage under the employer’s plan cannot be more than $3,800. “Minimum value” means the employer’s plan picks up at least 60 percent of the overall cost of the benefits being covered by the plan. If employer-provided coverage is not “affordable” or is not of “minimum value,” an employee may qualify for a subsidy to help pay for the premium for insurance purchased on the exchange, depending on the employee’s income.Some employees may be uncertain as to whether the FLSA covers their employer. The FLSA covers businesses with workers engaged in interstate commerce, who produce goods for interstate commerce, or who handle, sell, or otherwise work on goods or materials that have been moved in or produced for interstate commerce by any person. In other words, if employees send emails or make phone calls to other states, or if they send and receive packages from other states, they are engaged in interstate commerce. Furthermore, to fall under the FLSA, businesses must have an annual gross volume of sales or business done of not less than $500,000, or must be operating an institution such as a hospital or school, or must be a public agency. Q: If you qualify for a subsidy and you have employer-provided coverage and the deductible is high, how does the employer judge what is affordable? A: Individuals with employer-provided coverage that is “affordable” and of “minimum value” according to government guidelines can decide to instead purchase insurance on the exchange. But because their employer is offering them the affordable coverage of minimum value, they will not qualify for a subsidy to help pay the premium for insurance they buy on the exchange. Employer-provided coverage is “affordable” if the employee’s share of the premium costs for employee-only coverage under the employer’s plan is no more than 9.5 percent of the employee’s Form W-2 wages reported in Box 1 (total taxable wages). For example, if an employee’s total taxable wages are $40,000, the employee’s share of the premium costs for employee-only coverage under the employer’s plan cannot be more than $3,800. “Minimum value” means the employer’s plan picks up at least 60 percent of the overall cost of the benefits being covered by the plan. If employer-provided coverage is not “affordable” or is not of “minimum value,” an employee may qualify for a subsidy to help pay for the premium for insurance purchased on the exchange, depending on the employee’s income.

Q: I’ve heard the employer-provided health insurance will be negatively affected by the Affordable Care Act. Is this true?

A: The Affordable Care Act requires policies to offer minimum levels of coverage. As a result, some employers with plans that do not offer those minimum levels of coverage have had to cancel their existing plans. However, both employer-provided and individual plans that existed on March 23, 2010, may be “grandfathered,” meaning they do not have to meet all of the requirements of the Act, as long as they have not been changed in ways that significantly change benefits or increase what members pay through premiums, copays or deductibles. Employees should contact their employer’s Human Resource Department to find out if the employer’s plan is grandfathered. It is important to remember that plans can still lose that grandfather status if benefits are reduced or costs are increased.

Q: If my spouse is offered health benefits through his employer, but I enroll in Covered CA because insurance is not offered to his dependents, will I qualify for a subsidy? Or is the subsidy not offered when your spouse’s employer offers health benefits?

A: The question of whether an employee or dependents of an employee qualify for a subsidy for insurance on the exchange depends on the employer-provided health coverage, and on the income of the individuals applying for insurance on the exchange. Since your spouse’s employer-provided health coverage is not offered to dependents, you and your dependents may qualify for subsidies through Covered California depending on your family income.

• Here are answers to three Medi-Cal related questions from Nancy Majewski, managed care operations manager for Natividad Medical Center:

Q: If you’re unemployed and haven’t worked since 2011, could you get help with health care? I’m single and 55 years old. Also, I have no income. My unemployment ran out in March 2013.

A: If you are a resident of Monterey County you may be eligible for the Monterey County Low Income Health Program called ViaCare. ViaCare is a program available through Dec. 31. After that, most ViaCare members will convert to Medi-Cal. Contact the ViaCare hotline at 831-783-2400 for additional information. People, including childless adults 19-64 years old, can apply for Medi-Cal, which will be effective Jan. 1, through the Covered California website at www.coveredca.com

Q: Will there be enough doctors to handle all the extra millions of people that are going to be eligible for MediCal now when there was already a shortage of doctors who accept MediCal?

A: Natividad Medical Center currently has 230 physicians. It is anticipated that more primary care physicians will be needed over the next several years. Natividad Medical Center is planning to increase the size of the Family Medicine Residency Program over the next few years, which will assist with the shortage of primary care physicians.

Q: Please explain MediCal share of cost vs. full scope.

A: If a person has Medi-Cal with a Share of Cost, they must pay the Share of Cost amount each month towards their medical care before they are eligible for Medi-Cal assistance. A person with full scope Medi-Cal does not have a monthly Share of Cost amount and is eligible to receive assistance through Medi-Cal whenever necessary.

 
 
 

Natividad Medical Center • 1441 Constitution Blvd. • Salinas, CA 93906 • (831) 755-4111