Tagged Insuring Your Health

Want An IUD? Take Note Of Trump’s New Birth Control Policy.

The Trump administration’s recently announced changes to health insurance rules have raised concerns among people wondering how they’ll be affected. This week, I address some of the questions likely on people’s minds.

Q: IUDS are expensive. Will they be unaffordable under the new contraceptive rules announced by the Trump administration? Should people make an appointment to get one now before employers change their minds about coverage?   

There’s probably no need to rush out to your doctor’s office to get an IUD, but you should keep an eye on this issue.

Under the Affordable Care Act, most health plans are required to cover all methods of birth control approved by the Food and Drug Administration without charging women anything for them. Religious employers and some private employers with strong religious objections are exempt from the requirement, but it’s a pretty limited group. Or it was until the Trump administration issued new rules during the first week of October that open the door for many companies or nonprofit organizations with religious or moral objections to contraception to stop offering it.

Michelle AndrewsInsuring Your Health

“These new exemptions are sweeping,” said Adam Sonfield, a senior policy manager at the Guttmacher Institute, a reproductive health research organization. Essentially any employer will be able to claim an exemption from the birth control coverage requirement, he said, and there are no provisions to appeal it.

What’s not at all clear, however, is how many employers will take advantage of the new rules. The administration said it expected the number to be small, probably just the companies that had brought suit against the old rules.

Even before the ACA passed, women’s health experts note, many plans covered contraception. They didn’t necessarily cover all FDA-approved methods, however, and women typically had to pay a share of the cost.

Several states have laws that protect birth control coverage, said Mara Gandal-Powers, senior counsel at the National Women’s Law Center. Some require that if a plan offers prescription drug coverage, for example, it must cover contraceptives. Others have adopted the ACA rules that require coverage of all FDA-approved methods without cost sharing. But those laws would not apply to employers that pay their employees’ health care claims directly rather than buy state-regulated insurance.

The protection from cost sharing is key, experts say, especially for highly effective methods like the IUD, which might cost $1,000 upfront.

“Even if you’ve met your deductible, if you have 20 percent coinsurance, that’s $200, and for many people that’s not feasible,” Gandal-Powers said.

If your employer does decide to stop providing insurance coverage for contraception, in most cases plans have to give workers 60 days’ notice of the benefit change, giving you time to get that IUD if you decide to.

Q: Association health plans, which the Trump administration is encouraging, seem like kind of a good idea. If more small companies band together, won’t that make coverage cheaper? 

President Donald Trump signed an executive order last week that directs several federal agencies to consider proposing rules that, among other things, would allow more employers to buy health insurance through associations.

If you’re young and healthy, getting coverage through an association health plan might indeed be cheaper. But you’ll likely forgo consumer protections that are required for plans sold on the individual and small-group markets, said Kevin Lucia, a research professor at Georgetown University’s Center on Health Insurance Reforms.

Plans currently sold in those markets have to cover 10 so-called essential health benefits. Association health plans would likely sidestep that requirement. (However, implementing federal rules for these plans will take the administration some time, so it’s not clear if or when they might be expanded.)

“If you don’t cover maternity, mental health or hospitalization, the premiums are going to be lower,” Lucia said.

The administration’s press release about the executive order said that employers couldn’t exclude any employees from joining association health plans or “develop premiums based on health conditions.”

But association health plans have been known to use many strategies to cherry-pick employers with healthy workforces, Lucia said.

“The risk is that each individual small-employer’s rates would be separately determined based on its employees’ medical claims, potentially splitting the market into employers with sicker workers and those whose workers are healthier,” he said.

Q: Short-term plans are cheaper than Obamacare plans. If people don’t have preexisting conditions and are willing to pay the penalty under the law for not having minimum coverage, what’s the downside?

Trump’s executive order that encouraged the expansion of association health plans, discussed above, also aims to expand the availability of short-term plans. Under Obama administration rules, the coverage period of short-term plans was limited to less than three months. This executive order proposes to expand that, perhaps to just under a year.

In addition to not covering preexisting conditions, short-term plans often exclude certain types of coverage, such as prescription drugs and maternity care, and impose dollar limits on coverage. The maximum out-of-pocket spending limits are often higher than coverage in a marketplace plan too.

The potential downside is the possibility that you may develop a medical condition or have an accident that requires expensive medical care while you’re covered under this plan, experts say.

“If the reader has a car accident, the insurer wouldn’t renew the policy,” said Timothy Jost, an emeritus professor of law at Washington and Lee University in Virginia who is an expert on health law. “If coverage is terminated, you’re not eligible for a special enrollment period [on the exchange]. So you could just get marooned.”

Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.

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Long-Term Disability Insurance Gets Little Attention But Can Pay Off Big Time

“It won’t happen to me.” Maybe that sentiment explains consumers’ attitude toward long-term disability insurance, which pays a portion of your income if you are unable to work.

Sixty-five percent of respondents surveyed this year by LIMRA, an association of financial services and insurance companies, said that most people need disability insurance. But the figure shrank to 48 percent when people were asked if they believe they personally need it. The proportion shriveled to 20 percent when people were asked if they actually have disability insurance.

As the annual benefits enrollment season gets underway at many companies, disability coverage may be one option worth your attention.

Michelle AndrewsInsuring Your Health

Some employers may be asking you to pay a bigger share or even the full cost. That can have a hidden advantage later, if you use the policy. Or you may find that your employer has automatically enrolled you — or plans to — unless you opt out. A growing number of employers are going that route to boost coverage that they feel is in their employees’ best interests, not to mention their own, since insurers usually require a minimum level of employee participation in order to offer a plan.

Benefits consultants agree that although long-term disability coverage lacks the novelty appeal of some other benefits that companies are offering these days — hello, pet insurance — it can prove much more valuable in the long run.

“This is a really critical safety-net benefit,” said Rich Fuerstenberg, a senior partner at human resources consultant Mercer.

If you become disabled because of accident, injury or illness, long-term disability insurance typically pays 50 to 60 percent of your income, while you’re unable to work. The length of time the policy pays varies; some policies pay until you reach age 65.

Long-term disability generally has a waiting period of three or six months before benefits kick in. That period would be covered by short-term disability insurance, if you have it.

Many long-term disability claims are for chronic problems such as cancer and musculoskeletal conditions. According to the Council for Disability Awareness, the average duration of a claim is nearly three years — 34.6 months.

Not everyone has savings to support them through that time. When the Federal Reserve Board surveyed adults about household economics in 2015, 53 percent said they don’t have a rainy day fund that could cover them even for three months. More troubling, nearly half of respondents — 46 percent — said that faced with a hypothetical $400 emergency expense, they didn’t have the cash to cover it.

According to the Social Security Administration, 1 in 4 people who are 20 years old now will be disabled before they reach age 67.

Overall, 41 percent of employers offer long-term disability insurance, according to LIMRA, though the proportion of larger employers who offer it is generally much higher. Compared with health insurance, premiums cost a pittance — $256 annually in 2016 on average for group plans, LIMRA says. Many employers pick up the whole tab or charge workers a small amount.

However, as employers continue to shift benefit costs onto employee shoulders, long-term disability is no exception. Increasingly, they’re offering the coverage as a “voluntary” benefit, meaning employees pay the entire premium.

The upside is that if employees pay for the coverage themselves with after-tax dollars and they ever become disabled and need to use the coverage, the benefits will be tax-free.

“If an employee can choose to pay for coverage on a post-tax basis, or is paying on a voluntary basis, it’s better for them,” said Jackie Reinberg, national practice leader for absence, disability management and life at benefits consultant Willis Towers Watson.

Some employers may pay for a core basic benefit that replaces 40 or 50 percent of income and offer workers the opportunity to “buy up” to more generous income replacement of 60 or 70 percent.

Although voluntary coverage has a tax advantage, disability consultants are concerned that leaving it up to employees, especially if they’re choosing among several other voluntary coverage options like cancer insurance, critical illness coverage and yes, pet insurance, increases the odds they’ll skip buying long-term disability coverage.

“These coverages all feel the same, and if you’re going to choose one at all you tend to go with the one that’s cheapest and the one that you think you might use,” said Carol Harnett, president of the Council for Disability Awareness, a membership group of disability insurers that does education and outreach about disability issues.

Auto-enrollment can make a big difference. Employers that auto-enroll employees in voluntary long-term disability plans may get 75 percent of employees to participate, compared with 30 percent for employers that leave it completely up to workers, said Mike Simonds, CEO of disability insurer Unum US.

If you were offered long-term disability coverage when you were hired and didn’t sign up, it may be tougher to do so during the open enrollment period, said Fuerstenberg. A growing number of health plans require employees to show “evidence of insurability,” meaning they must answer a series of health-related questions before they’re approved. Some long-term disability policies may also have preexisting condition provisions that won’t pay benefits for a condition for up to a year, for example.

Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.

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