Tax Preparers Hoping for Business Boost from ACA

Tax preparation firms like H&R Block and Liberty Tax Service are looking forward to the tax season – and they’re anticipating a boost in business from customers who are unsure about how the Affordable Care Act (ACA) might impact their taxes.

As reported by LifeHealthPro, an insurance industry newsletter, the potential challenge for taxpayers who might otherwise do their own taxes centers around whether they purchased health coverage from a qualified health plan through the public health insurance exchange. And, most importantly, whether they used the ACA premium subsidy program – the advanced premium tax credit (APTC) – to pay for their coverage.

Under the ACA, if a taxpayer doesn’t provide information about whether he or she has the required “minimum essential coverage” – and doesn’t qualify for an exemption from the mandated penalty – then he or she is supposed to add a penalty payment to the income tax payment for the year. For most taxpayers impacted by the penalty, it will amount to one percent of income.

On a conference call with securities analysts, John Hewitt, chairman of Liberty Tax, said he expects his company to get $40 for each digital ACA Form 8962 that Liberty helps its customers complete. He also expects about one-quarter of Liberty customers to file an ACA form. On the revenue side, Hewitt is predicting a 2.5 to 3.0 percent increase in fees for Liberty in 2015 and even more in 2016.

H&R Block president Bill Cobb also sees more customers in his firm’s future. “Those who received an advanced tax credit will no longer be eligible to file their returns on the 1040EZ,” he said. 

Health Care Not Top of Mind for Most Voters

With the 2014 election about four weeks away, health care may be losing some of its luster as an issue for voters. According to a Kaiser Family Foundation (KFF) tracking poll conducted in August and September, while the health care law is viewed more negatively than positively by voters, it’s not likely to be what drives turn out in November.

The KFF poll took a special look at registered voters’ views of the Affordable Care Act (ACA) and what role – if any – it might play in the upcoming midterms. As with the public at large, registered voters were more likely to view the ACA unfavorably than favorably (51 percent and 35 percent, respectively, as compared to 49 percent and 35 percent, respectively, for the general population).

But the health care law is not the dominant issue for most of those expecting to vote in November. It ranked second (at 13 percent), well behind the economy and jobs (cited by 21 percent of respondents. Health care tied with foreign policy, defense, and terrorism as a key voting issue for those taking part in the foundation’s survey. Close behind was dissatisfaction with government, which was cited by 12 percent.

While the Kaiser Family Foundation did not release state-specific information on their tracking poll, health insurance could be an important issue for California voters in November. That’s because Proposition 45, which gives increased authority to the state insurance commissioner to regulate health insurance rates, and Proposition 46, which increases the cap on damages in connection with medical negligence lawsuits, are two one of eight statewide measures on the ballot. 

ACA to Fund Expanded Primary Care Access

U.S. Department of Health & Human Services (HHS) Secretary Sylvia M. Burwell announced this month $295 million in Affordable Care Act (ACA) funding to expand primary care services nationwide.

The awards will enable 1,195 health centers in every U.S. state, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and the Pacific Basin to increase patient access to comprehensive primary health care services by hiring an estimated 4,750 primary care doctors, staying open longer, and expanding the care they provide to include oral health, behavioral health, pharmacy, and vision services. 

According to HHS, these investments will help health centers reach an estimated 1.5 million new patients nationwide, including more than 137,000 oral health patients and more than 38,000 mental and substance abuse patients.

“Health centers are a key part of how the Affordable Care Act is working to improve access to care for millions of Americans,” said Secretary Burwell. “These funds will enable health centers to provide high-quality primary health care to more people including the newly insured, many of whom may be accessing primary care for the first time.”

Approximately 1,300 health centers operate more than 9,200 service delivery sites and provide care to more than 21.7 million patients annually. Since 2009, health centers have increased the number of patients served by more than 4.5 million people according to the Health Resources and Service Administration, a division of HHS. 

The Office of Minority Health, another division of HHS, also announced this month $3.2 million in funding to help racial and ethnic minorities enroll in health coverage. Minority enrollment remains a priority as The Centers for Disease Control and Prevention previously reported two in five Latinos and one in four African Americans are uninsured. 

ACA Not Impacting Uninsured Children

While there are states where the Affordable Care Act (ACA) has had little or no impact on the number of residents without insurance – think Mississippi, Louisiana, and Texas – some health care analysts are surprised the number of uninsured children nationwide has remained steady.

For the first six months of 2014, the new Urban Institute Health Reform Monitoring Survey finds the uninsured rate for those under age 18 has remained at about seven percent.

Comparatively, this number is low – especially when measured against a national Gallup number of about 13.4 percent for uninsured adults – but it appears the ACA isn’t driving a big increase in health insurance enrollments for children.

That may be, in part, because of the decision by some states not to expand Medicaid. Researchers say about 55 percent of U.S. children who are without health insurance are eligible for either Medicaid or the Children’s Health Insurance Program (CHIP). As more states consider expansion of Medicaid, more children may be covered.

In the interim, a WalletHub analysis of data from the Kaiser Family Foundation, the Centers for Medicare & Medicaid Services, the U.S. Department of Health & Human Services, and the U.S. Census Bureau finds the post-ACA uninsured rate for residents of Alaska, Nevada, New Mexico, Florida, Louisiana, and Mississippi is near or above 19 percent. The rate in Texas is 24.81 percent, which is down less than two percent from the pre-ACA uninsured rate. Just two of the seven states with the highest rate of uninsured residents in the WalletHub report have expanded Medicaid.

Covered California Launches Community Outreach

Ahead of the Affordable Care Act (ACA) 2015 Open Enrollment, which is set to begin in mid-November 2014 and continue through mid-February 2015, Covered California has launched a community outreach campaign aimed at attracting new enrollments in the state’s public health insurance exchange.

The new ad series, which started September 15th, features residents who have health insurance as a result of the ACA.

“Our campaign on the airwaves will support our community outreach campaign by making tangible the benefits of getting covered,” said Peter V. Lee, Covered California’s Executive Director. “But even more importantly, we hope these ads will foster conversations at family dinners, in churches, and in schools – where Californians will be talking about the benefits of having coverage and making sure no one who is eligible for coverage goes without it. Beyond these conversations, we will build on an expansive network of thousands of Certified Enrollment Counselors, Certified Insurance Agents, and county eligibility workers helping people learn about insurance and enroll.”

The new outreach campaign includes $46 million in advertising statewide and nearly $15 million in community outreach grant funding. Coupled with more than $33 million community outreach groups are expected to spend, the investment for 2015 outreach will reach $94 million.

Grants of $50,000 to $750,000 will be awarded based on a community group’s experience with special populations as defined by language, ethnicity, geography, and employment as well as their ability to effectively educate and enroll (or renew) residents in coverage through Covered California.

Covered California is forecasting a total enrollment of 1.7 million by the end of the 2015 Open Enrollment. That forecast represents a 43 percent increase (about 500,000 new participants) from 2014.

Brokers Complain of Commission Delays by Exchanges

A Las Vegas attorney has filed suit in Clark County District Court on behalf of six insurance brokers who say the Silver State Health Insurance Exchange and its website contractor, Xerox, have failed to pay commissions on coverage they have sold through the Nevada Health Link website.

Collectively, the six brokers are owed a “very significant amount well in excess of $200,000,” according to attorney Matt Callister as reported by the Las Vegas Journal Review. Spokespersons for the state exchange and Xerox say they do not comment on pending litigation.

Meanwhile, in Oregon, members of the Cover Oregon public health insurance exchange say they are making progress in their efforts to process agent and broker commission payments more quickly. Managers of the state exchange included a summary of their commission payment performance in a report to the Board for August.

According to the report, the Beaver State exchange received nearly $900,000 in producer commission deposits in August and it paid about $1 million in commissions. The number of agents or agencies paid increased to 746 in August, up from 698 in July.

Oregon faced considerable problems with its enrollment website this year and has announced it is moving enrollment to the federal exchange website, HealthCare.gov, for the 2015 plan year, which begins open enrollment in mid-November.

Commissioner Reduces Exchange Rate Increases

Washington State Insurance Commissioner Mike Kreidler has reduced the average increase on Affordable Care Act exchange plan rates for 2015 to 1.9 percent. Insurers had originally asked permission to increase rates in the Evergreen State by an average of 8.6 percent according to the Seattle Times.

Ninety individual health plans marketed by 10 insurers are expected to be part of the Washington Health Benefit Exchange when open enrollment for 2015 starts in two months. The state has approved two Small Business Health Options (SHOP) exchange health plans for 2015. Moda Health Plan will offer coverage statewide, while Kaiser Permanente offers coverage in two counties in southwestern Washington.

“I take the increased interest from health insurers this year as a clear sign that health reform is working,” Kreidler said in a statement. “Consumers will have two more insurers to choose from next year, nearly double the number of health plans, and a record low rate change.”

For 2014, the Washington Healthplanfinder exchange included eight insurers offering 46 approved health plans. The Times reports just eight businesses purchased SHOP insurance in the first year of the exchange.

Two insurers, Health Alliance Northwest Health Plan and UnitedHealthcare, continue to work with Washington authorities to be approved for 2015. Five other health plans applied to market individual health insurance only outside of the state exchange. They include Asuris Northwest Health, Group Health Options, Regence BlueShield, Regence BlueCross BlueShield of Oregon, and Time Insurance.

Network Controversy Sparks New Rules in California

Legislation passed by the California legislature this month would require health plans to ensure they offer adequate provider networks and to produce annual reports for the Department of Managed Health Care (DMHC) on those networks.

Under the bill, SB 964 (Hernandez), which awaits a review by Governor Jerry Brown, the DMHC would also be required to post annual reviews regarding compliance with the new regulation by Medi-Cal managed plans and insurers offering individual health plans through Covered California, the state health insurance exchange.

The legislation was introduced in response to lawsuits against Anthem Blue Cross and Blue Shield of California in which consumers allege they were misled about their health plan provider networks. The two insurers account for nearly 60 percent of sign-ups through the state health insurance exchange.

Anthony Wright, executive director of Health Access California, the consumer advocacy group that sponsored the legislation, told Modern Healthcare there have been long-standing questions about network adequacy. “We thought it was crucial that people, once covered, have access to the care that they were promised. The conversation around Covered California narrow networks only made that more urgent.”

The bill is supported by many health care and consumer groups, including AARP, the California Medical Association, and the National Health Law Program. Health insurers oppose the measure and argue it is redundant and unnecessary because of existing surveys by state regulators. It is uncertain whether Governor Brown will sign the bill. 

UnitedHealthcare Expanding into More Exchanges

UnitedHealth Group, already one of the nation’s largest health insurers, has plans to become even bigger – as it enters a dozen new consumer marketplaces in 2015, including major markets in the southwestern, southern, and northeastern U.S.

The parent of UnitedHealthcare, which offers employer-sponsored coverage, and UnitedHealthOne, which offers individual and family plans, said previously it expected to add “as many as two dozen” state exchanges when open enrollment begins for the new year in mid-November.

Jeff Lucht, a senior vice president responsible for public exchange strategy at UnitedHealthcare, told the Wall Street Journal the exchange coverage expansion is expected to include Alabama, Florida, Louisiana, Mississippi, North Carolina, Pennsylvania, and Texas. An analyst at Deutsche Bank is forecasting entry into Georgia, Indiana, Michigan, and Ohio. The other states remain unnamed so far.

Lucht said the new market entry decision is based on “a combination of the growth opportunity . . . and the extent to which we thought we could offer a competitive product” according to the Journal’s Anne Wilde Mathews.

For the 2014 plan year, the company offered coverage in the Colorado, Maryland, Nevada, and New York exchanges.

Word & Brown Alum to Lead ACA Exchange System

U.S. Department of Health & Human Services (HHS) Secretary Sylvia M. Burwell has announced that Kevin Counihan is joining the Centers for Medicare & Medicaid Services (CMS) team as Marketplace Chief Executive Officer. 

In his new role, Counihan will be responsible and accountable for leading the federal health insurance exchange marketplace, managing relationships with state marketplaces, and running the Center for Consumer Information and Insurance Oversight, which regulates health insurance at the federal level. He will report to CMS Administrator Marilyn Tavenner.

Counihan is the former head of CHOICE Administrators Exchange Solutions, a Word & Brown Company, and most recently served as Connecticut’s Health Insurance Exchange CEO, a role he was chosen for by Connecticut Governor Daniel P. Malloy. Connecticut was the first state to surpass its goal for Affordable Care Act (ACA) enrollees, and the state’s uninsured rate has been cut nearly in half – from 7.9 percent in 2012 to four percent in 2014.

In related ACA news, CMS has extended its technology agreement with Accenture through July 2015. The extension allows Accenture to continue its operation of the HealthCare.gov website for the federal exchange. The original agreement with CMS was scheduled to end in January 2015, and there was some speculation a new contractor could be named to take over in advance of the start of open enrollment in mid-November. However, CMS decided to extend the current agreement and plans to award a new contract next year.