Author Archives: Reeve Conover

Oxford/United health agrees with CityMD

Highlights

We are pleased to announce that UnitedHealthcare has reached a new agreement with CityMD.

Members may continue to use CityMD on an in-network basis, with no disruption in care. We are sending letters to impacted members who got our earlier notice about the potential network disruption to let them know about this good news. Sample letters are enclosed for your reference.

Attachments

  • Broker eBulletin
  • Sample UnitedHealthcare fully insured member letter
  • Sample Oxford member letter
  • Sample UnitedHealthcare employer letter template
  • Sample Oxford employer letter template

 

New Hardship Rules…

From Associated Pension Consultants:

On November 14, 2018, the IRS released the proposed regulations on hardship distributions.  These proposed regulations provided us with insight into how the hardship distribution rules will be changing in 2019. These changes will impact 401(k) and 403(b) plans that offer hardship distributions.

  1. What are the main changes to the hardship distribution rules?
  • Elimination of the 6 month suspension of deferrals when a participant takes a hardship distribution.
  • Participant no longer has to take out a loan before applying for a hardship distribution effective 1/1/19.
  • Ability to include earnings in the hardship distribution calculations for 401(k) plans, but not in 403(b) plans.
  • Ability to include Safe Harbor Non Elective contributions, Safe Harbor Matching contributions, Qualified Automatic Contribution Arrangement (QACA), Qualified Non Elective Contribution (QNEC), Qualified Matching Contributions (QMACs) as available sources.
  • Added “primary beneficiary under the plan” as an individual for whom qualifying medical, educational, and funeral expenses may be provided (regulations had previously referenced only a spouse or dependent).
  • Added a new safe harbor expense reason of allowing participants impacted by losses to their principal residence to obtain a hardship if their residence happens to be in a federally declared disaster area.
  • Hardship distributions on account of damage to the principal residence that would qualify for a casualty deduction would continue to be allowed and not restricted to a federally declared disaster area. This was clarified in the proposed regulations.
  • The general standard for determining whether a hardship is necessary to satisfy a financial need has been simplified and this standard will apply effective 1/1/2020. The general standard is that:
  • The hardship may not exceed amount of need, adjusted for anticipated taxes and penalties.
  • The participant must have obtained all other available distributions under the plan.
  • The participant must represent that he or she has insufficient cash or liquid assets to satisfy that financial need.
  • The plan administrator may rely on this representation made by the participant.
  1. When does the 6 month suspension of deferrals go away?

The proposed regulation prohibits the use of the 6 month suspension of deferrals for hardship distributions occurring on or after January 1, 2020. However, in 2019 special rules apply.

  1. How should the 6 month suspension be handled on January 1, 2019?

The proposed regulations allow the plan sponsor to decide on any hardship distributions processed in the second half of 2018, as well as any hardships taken in 2019, whether they want to enforce the 6 month suspension.

APC recommends the following procedures to allow participants to continue to save for their retirement:

Hardship distributions processed in second half of 2018 – Should allow participants to restart deferrals on 1/1/19 and not continue the restriction until their 6 month suspension was originally set to end.  This is also subject to the rules of the fund company.  

New Hardship distributions processed in 2019 – Should not suspend deferrals of the participant for 6 months.

  1. When do the plan documents have to be amended for the new hardship changes taking into effect?

APC will notify you sometime in 2019 when we receive more guidance from the Internal Revenue Service (IRS) regarding the timeline of adopting the amendment to incorporate the new hardship provisions. Currently, we have no further information pertaining to the plan amendment.  However, the IRS will allow plans to start using the more relaxed hardship provisions on 1/1/19 in “good faith” prior to the formal amendment.

  1. Does the plan have to allow additional sources for hardship distributions?

The plan sponsor does not have to allow additional sources such as Safe Harbor contributions, Qualified Automatic Contribution Arrangement (QACA), Qualified Non Elective Contribution (QNEC), Qualified Matching Contributions (QMACs) in the calculation of the hardship distribution.

Why health care costs continue to rise?

HHS recently released an extensive report that summarized:

“The report highlights several problems that make health insurance less affordable, including:

  • Hospital and physician consolidation.
  • State “any willing provider” laws and other practices preventing health plans from establishing Centers of Excellence and encouraging enrollees to use high-performing providers.
  • States’ scope of practice laws that require a physician to perform procedures that could be delivered by other health care professionals.”

I have ObamaCare and still can afford medical care

While for those receiving a substantial subsidy, ObamaCare can be pretty good – A recent Harvard University shows the failure of ObamaCare for the masses:

“Despite the Affordable Care Act’s much-touted expansion of health coverage in the U.S., a first-ever poll of America’s seriously ill demonstrates that insurance alone isn’t enough to protect against the high cost of care.

The poll showed that though 91 percent of respondents had , 53 percent of those with insurance had trouble paying their .

“These are not stories about the uninsured, these are stories about people with an insurance card,” said Professor Robert Blendon, who discussed the poll Wednesday at the Harvard Chan School, which cooperated on the effort with The Commonwealth Fund and The New York Times.

 

For the full story click here.

 

New York Presbyterian and Empire extend contract

From Anthem Health:

 

New York-Presbyterian and Empire BlueCross BlueShield have agreed to a multiyear deal to keep the 10-hospital health system in Empire’s network. The accord ends a public fight that stoked fears that about 300,000 NYP patients would face higher out-of-network charges next year.

The agreement will also maintain Empire members’ access to New York-Presbyterian’s medical groups, including Columbia Doctors and Weill Cornell Medicines. Their current agreement was set to expire on Dec. 31 and covered people in employer-sponsored, individual, Medicare and Medicaid plans.

A spokesman for NYP declined to disclose further details of the contract. The typically private nature of managed care negotiations spilled out into the open last week when the City Council scrutinized New York-Presbyterian’s prices.

“We are pleased that this agreement will allow patients to continue to choose to receive care from NewYork-Presbyterian and its affiliated physicians,” both sides said in a joint statement.

The union 32BJ, one of the city’s most politically active unions, whose membership includes cleaners, doormen and security guards, complained at a City Council hearing last week about the cost of care at NYP compared with other city hospitals. The union uses Empire to build its network.

NYP and Empire had struggled to agree on appropriate payment rates. Self-funded clients, such as 32BJ, had pushed Empire to negotiate better rates on services. The union made public that for 13 hip replacements it had paid the health system nearly $83,000 on average, more than $25,000 above what other city facilities charged. For vaginal deliveries, the union paid nearly $24,000—about $7,000 more than its average at other city hospitals.

New York-Presbyterian said a potential $200 million cut in reimbursement would have threatened its ability to invest in patient care and support the training of future physicians.

If the two sides had not reached a deal, NYP stood to lose a major source of patients, while Empire faced the prospect of selling policies without U.S. News’ top-rated New York hospital in its network. New York-Presbyterian had begun advising patients to consider other insurers on a website set up to notify them that its contract with Empire was set to expire.

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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA.
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