Submitted by Steve Needleman
NAIFA-Broward Health Chair

The last few weeks have been very busy in the health insurance arena.  In June, the Supreme Court upheld the Patient Protection and Care Act, also known as ObamaCare. The law was challenged because it requires all U.S. residents to purchase health insurance, or be subject to a tax.  The Supreme Court ruled that this is a tax, and therefore Congress can legally impose this tax. Another part of the law required all states to extend Medicaid to all persons earning less than 400% of Federal Poverty Level (FPL) or else lose Federal Medicaid funding.  This part of the law was found to be unconstitutional.  States may refuse to expand Medicaid eligibility and still keep their current Federal Medicaid funding.

Here are a few of the changes already in effect:

Most Preventive Care is covered at no cost.

No lifetime maximums

No pre-existing conditions for children under age 19

Summary of Benefits and Coverage (SBC's) required.  This will be phased in starting 9/23/12.

Woman's Health coverage at no cost

W-2's required to show cost of health care for companies issuing more than 250 W-2's.

Here are a few of the changes scheduled to for 2014:

Exchanges will be available for individuals and Small Groups (under 50 lives) to purchase health insurance.

Government subsidies will be available for individuals to purchase health insurance from the Exchange if they earn less than 400% of the Federal Poverty Level and don't have health insurance offered by their employer.

Individuals must have health insurance, or pay a tax.

No pre-existing Conditions for any one.

It is impossible to summarize 2,700 pages of legislation in a short article, so stay informed so you can be a valuable resource to your clients.
 

Submitted by Lee Gorodetsky

 
Florida Rep. Hits Citizens for 'Rushing' Surplus Loan Proposal

From InsuranceJournal.com

In a letter to Insurance Commissioner Kevin McCarty, Artiles took Citizens to task for not releasing the full details of its surplus note program until just days before the Citizens board gave its seal of approval. He also questioned whether Citizens even has the statutory authority to implement the plan.

"The legislature never delegated an unfettered right to Citizens to use its surplus in any manner it chooses to adopt," wrote Artiles.

Artiles has also launched a one-man investigation into the role the Tower Hill Group and American Integrity Insurance Co. had in developing the plan.

Under the program, qualified insurers could receive up to $50 million in the form of a 20-year surplus note. For the first year years, insurers only have to pay the interest on the notes based on the U.S. Treasury 10-year bond rate, which is currently around 1.8 percent.

American Integrity has indicated it would consider removing 50,000 policies from Citizens and the Tower Hill Group through its subsidiaries another 130,000. Between the entities, they could receive $200 million of the $350 million program, an amount that Artiles says "represents an alarming concentration of risk."

Artiles is asking Citizens and state regulators to hand over all correspondence, financial reports, and other information involving Tower Hill and American Integrity.

"At a time when Citizens is raising rates, reducing coverage, and telling Florida residents to pay more for less, Citizens has selected to deliver a $350 million gift to a few insurance companies," wrote Artiles.

Citizens President Barry Gilway has said that the surplus note program has various financial safeguards including that insurers would have to retain policies for at least 10 years and the minimum total insured value an insurer must take to qualify for the program is at least $5.5 billion.

The participating insurers must also be actively writing property insurance and have a risk based capital ratio of 300 percent and minimum surplus of $25 million. They must also have in Florida direct written premiums of at least $50 million and enough reinsurance to cover a one-in-100 year and two one-in-10-year probable maximum losses.

"We shouldn't be depopulating if we are not moving this business to financial insecure companies," Gilway has said.

Chief Financial Officer Jeff Atwater has urged Citizens to be thorough and to exercise due diligence before it hands over any money to a private insurer. "I'm glad they're pausing and they're going to come back and show this is mathematically the right thing to do and there is a marketplace interest in taking these accounts," Atwater told reporters following a Cabinet meeting last week.

While some state officials are looking to put the brakes on the surplus note depopulation programs, some of Florida's largest pro-business groups have been expressing their support. Associated Industries of Florida, Florida Tax Watch and Americans for Prosperity-Florida have all issued statements supporting Citizens and its efforts to reduce the potential assessment burden on all state policyholders.

"Our organization fully supports the depopulation of Citizens," said Abigail MacIver, Prosperity-Florida's director of policy, in a statement. "The focus needs to continue to be on ways we can help reinvigorate the private market, which is willing and able to take on insurance risks without burdening Florida taxpayers."