Category Archives: Health Care Reform

Blue Cross loses more money on exchange than other carriers

The nation’s Blue Cross and Blue Shield plans have fared worse than publicly traded health insurance companies on the new health insurance exchanges, with many of these plans losing hundreds of millions of dollars last year on individual policies sold under the Affordable Care Act.

A new report from Fitch Ratings, which looked at earnings ofnearly three dozen Blue Cross and Blue Shield companies, showed 23 had a decline in earnings and 16 had a net loss , largely related to losses from policies sold to newly insured Americans who bought subsidized individual policies on public exchanges. There were 23 Blue Cross companies that reported a “collective $1.9 billion decline in earnings” for the first nine months of 2015, and 16 of those companies had net losses.

It’s a significant development because these insurers are raising prices for this year to recover the losses and taking additional steps like slashing broker commissions and narrowing doctor and hospital choices to rebound in 2016.

Blue Cross plans also tend to be the dominant providers of individual policies in their states. In Illinois, for example, the Blue Cross plan owned by Health Care Service Corp. has about 80% of the customers who purchase coverage on the public exchanges.

New documentation required for SEP enrollees

The New York Times reported on 2/24 that “People who want to buy health insurance in the federal marketplace outside the annual open enrollment period will now have to provide documents to show they are eligible, the Obama administration announced on Wednesday.

In the last two years, insurers say, many people went without coverage and then signed up under the Affordable Care Act when they became sick and needed care. Insurers say that people who sign up after the deadline tend to generate more claims and more costs, raising premiums.”

This is a functional change from current procedure, where individuals signing up under the special enrollment period merely attested to it on the computer by answering a few questions.  Now, for example, you would have to provide a marriage or birth certificate, or a letter documenting your loss of coverage.

This applies only to the 38 states using the Federal Exchange ( and it is unknown what the individual state exchanges will do.

How does the ACA apply to LTD and STD recipients?

From Employee Benefits Advisor Magazine:

In order to avoid potential pay or play penalties, do employers need to make an offer of health plan coverage to individuals receiving payments from a short-term disability or long-term disability arrangement?

All large employers must offer health plan coverage to their full-time employees or potentially be subject to pay or play penalties. Under the ACA, a full-time employee is an individual that averages at least 30 hours of service per week, or 130 hours per month. When determining full-time status for purposes of making an offer of health plan coverage, you may use one of two measurement methods. Under the monthly measurement method, full-time status is determined on a monthly basis. Under the look-back measurement method, you determine full-time status by calculating the average hours of service during a look-back measurement period.

If you are using the monthly method, in order to avoid potential penalties you must offer health plan coverage to an employee for a month in which he or she received 130 hours of service. An employee is entitled to an hour of service for any hour in which they are paid or entitled to be paid. Payment includes STD and LTD pay, unless it is a STD or LTD arrangement paid for by the employee on an after tax basis. In other words, an employee who is credited with hours of service resulting from STD or LTD benefits will not be considered to be on an unpaid leave of absence. For example, if Bob is an ongoing employee and works 35 hours during each of the first two weeks of March and he receives STD payments resulting in 35 hours of credited service for each of the second two weeks of March, you must offer Bob coverage for the month of March because he was paid for more than 130

Under the look-back method the employee’s current hours of service are irrelevant to whether you must offer coverage or pay a penalty. After you determine that an individual is a full-time employee during a measurement period that determination will apply throughout the following stability period, regardless of the number of hours of service the employee receives during that period. If the employee receiving STD or LTD is considered full-time for the stability period in which his or her leave occurs, you must continue to offer coverage during the leave of absence. For example, if you determine during a twelve month measurement period that Bob is a full-time employee for 2016 and in 2016 Bob misses six months of work and is receiving STD payments during those six months, you must continue his offer of coverage during his leave in order to avoid potential penalties. You must also count his credited hours of service in the average for the measurement period in which he received the STD or LTD disability payments, which ultimately impacts whether he will be full-time in next year’s stability period

Dave and Busters class action Health Care Reform Suit

From business Insurance:


A U.S. District Court judge has refused to dismiss a putative class action lawsuit filed by a former restaurant worker who claims her employer cut her hours to part time from full time in order to avoid Affordable Care Act costs, in violation of the Employee Retirement Income Security Act.

Maria De Lourdes Parra Marin said in a lawsuit filed in May 2015 that in response to enactment of the ACA, managers at a New York restaurant operated by Dallas-based Dave & Buster’s Inc. told workers that to avoid costs totaling as much as $2 million, it would reduce its full-time employees to about 40 from more than 100, according to Tuesday’s ruling by the United States District Court for the Southern District of New York in Maria De Lourdes Parra Marin v. Dave & Busters Inc. et al.

She was then reduced from full-time to part-time status, causing a reduction in pay to a range of $150 to $375 per week from a range of $450 to $600 per week, along with the loss of eligibility for medical and vision benefits, according to the ruling.

Ms. Marin then filed suit, charging discrimination under ERISA.

U.S. District Judge Alvin K. Hellerstein denied Dave & Buster’s motion to dismiss the case in the ruling.

“Plaintiff has put forward factual allegations supporting her claim that the employer had the specific intent to interfere with her right to health insurance,” said the ruling. “The reduction in plaintiff’s hours affected her employment status, her pay, and the benefits she had and to which she would be entitled.”

Commenting on the ruling, Kevin LaCroix, attorney and executive vice president of RT ProExec, a division of R-T Specialty L.L.C. in Beachwood, Ohio, said the ruling illustrates “how employers that try to restructure to find a way to evade the mandates of the ACA could wind up, potentially at least, facing litigation” under ERISA.

The Affordable Plumber Act

I normally do not pass on “internet” stories like this – but it is reasonably accurate, humorous – and if you don’t understand the law now, you might after reading this!



Chicago Plumber … Affordable Plumber Act (Explained)…

Only weeks after leaving office on January 20, 2017, former President Barack Obama discovered a leak under his sink, so he called Troy the Plumber to come out and fix it.  Troy drove to President Obama’s new house, which is located in a very exclusive, gated community near Chicago, where all the residents have a net income of way more than $250,000 per year.

Troy arrived and took his tools into the house.  He was led to the guest bathroom that contained the leaky pipe under the sink.  Troy assessed the problem and told Obama that it was an easy repair & that will take less than 10 minutes.  Obama asked Troy how much it will cost. Troy checked his rate chart and said, “$9,500.”

“What?!  $9,500?!” Obama asked, stunned, “But you said it’s an easy repair.  Michelle will whip me if I pay a plumber that much!”

Troy said, “Yes, but what I do is charge those who make more than $250,000 per year a much higher amount so I can fix the plumbing of poorer people for free.  This has always been my philosophy.  As a matter of fact, I lobbied the Democrat Congress, who passed this philosophy into law.  Now all plumbers must do business this way.  It’s known as the ‘Affordable Plumbing Act of 2014’.  I’m surprised you haven’t heard of it.”

In spite of that, Obama told Troy there’s no way he’s paying that much for a small plumbing repair, so Troy left.  Obama spent the next hour flipping through the phone book calling for another plumber, but he found that all other plumbing businesses in the area have gone out of business.  Not wanting to pay Troy’s price, Obama does nothing and the leak goes un-repaired for several more days.  A week later the leak is so bad President Obama has had to put a bucket under the sink.

Michelle is not happy as she had Oprah and guests arriving the next morning.  The bucket filled up quickly and had to be emptied every hour, and there was a risk the room will flood, so Obama called Troy and pleaded with him to return.

Troy went back to Obama’s house, looked at the leaky pipe, checked his new rate chart and said, “Let’s see, this will now cost you $21,000.”

Obama quickly fired back, “What?  A few days ago you told me it would cost $9,500!”

Troy explained, “Well, because of the ‘Affordable Plumbing Act,’ a lot of wealthier people are learning how to maintain and take care of their own plumbing, so there are fewer payers in the plumbing exchanges.  As a result, the price I have to charge wealthy people like you keeps rising.  Not only that, but for some reason the demand for plumbing work by those who get it for free has  skyrocketed!  There’s a long waiting list of those who need repairs, but the amount we get doesn’t cover our costs, especially paperwork and record-keeping.  This unfortunately has put a lot of my fellow plumbers out of business, they’re not being replaced, and nobody is going into the plumbing business because they know they can’t make any money at it. I’m hurting too, all thanks to greedy rich people like you who won’t pay their ‘fair share’.  On the other hand, why didn’t you buy plumbing insurance last December?  If you had bought plumbing insurance available under the ‘Affordable Plumbing Act,’ all this would have been covered by your policy.”

“You mean I wouldn’t have to pay anything to have you fix my plumbing problem?” asks Obama.

“Well, not exactly,” replied Troy. “You would have had to buy the insurance before the deadline, which has passed now.  And, because you’re rich, you would have had to pay $34,000 in premiums, which would have given you a ‘silver’ plan, and then, since this would have been your first repair, you would have to pay up to the $21,000 deductible, and anything over that would have a $7,500 co-pay, and then there’s the mandatory maintenance program, which is covered up to 17.5%, so there are some costs involved.  Nothing is for free.”

“WHAT?!” exclaimed Obama.  “Why so much for a puny sink leak?!”
With a bland look, Troy replied, “Well, paperwork, mostly, like I said.  And the internal cost of the program itself.  You don’t think a program of this complexity and scope can run itself, do you?  Besides, there are millions of folks with lower incomes than you, even many in the ‘middle class’, who qualify for subsidies that people like you must support.  That’s why they call it the ‘Affordable Plumbing Act’!  Only people who don’t make much money can afford it.  If you want affordable plumbing, you’ll have to give away most of what you have accumulated and cut your and Michelle’s income by about 90%.  Then you can qualify to GET your ‘Fair Share’ instead of GIVING it.”

“But who would pass a crazy act like the ‘Affordable Plumbing Act’?!” exclaimed the exasperated Obama.

After a sigh, Troy replied, “Congress … because they didn’t read it.”

This will help you understand Obamacare …. And here you have it, the ‘Affordable Plumbing Act of 2014’.  What a marvelous explanation this is, although somebody spent an awful lot of time thinking this one up!!!

Blog Archives

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. - SIPC - Brokercheck