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Expiration of BCBS Non-Grandfathered Plans

If your health insurance plan is about to expire, you will lose medical coverage and be in violation of the recently adopted Affordable Care Act (ACA). This will lead to a tax penalty in 2015 that is $325 for each person ($162.50 per child under 18) or 2% of your yearly household income. There are several options for those with expiring Blue Cross Blue Shield (BCBS) plans including short-term health insurance, health savings accounts (HSAs), and ACA-compliant individual & family health plans.

What is Happening?

Soon, Non-Grandfathered Health Plans will expire. These are individual health insurance policies or group health plans that are not exempt from the recent health regulations of the ACA. These plans were purchased after March 23, 2010. Texas has several health insurers that will cancel policies on December 31, 2014 including BCBS. Over 700,000 people in Texas purchased new policies under the ACA and most of these individuals may see a cost increase in premiums when it comes time to renew their insurance policies.

Who is Affected?

Both individuals and families are affected by this. Rick Monello, CEO of Custom Health Plans predicts that many businesses will opt to drop group plans: “I feel that many businesses will begin to drop their group plans and dump their employees onto the exchange.” Texas has the highest percentage of uninsured people in the U.S. at 22.1%. Texas also has the most number of uninsured children with families that make less than two times the federal poverty line. This is approximately 600,000 uninsured children. If families with soon-to-expire ACA plans don’t find an alternative before the December 31, 2014 deadline, many more children and adults will become uninsured.

Options Available

Short term health plans are available to keep people insured until the next enrollment period. These are generally cheaper and are perfect for individuals without pre-existing conditions. Individuals with short-term health plans are subject to the tax penalty, just like the uninsured.

HSAs are still available, although there are a few changes due to the ACA. Only prescribed medicines, including OTC drugs, and insulin, whether purchased with a prescription or not, will be considered qualifying medical expenses. Another change is the penalty for withdrawing funds from HSAs before age 65 for unqualified expenses. It is now 20% instead of 10%, and the funds are considered taxable income. Individuals with HSAs aren’t subject to the uninsured tax penalty.

HSAs can be combined with an ACA-compliant plan that has a high deductible. These ACA-compliant plans cover 60% of expenses and are labeled Bronze plans in the health insurance marketplace. There are four levels of coverage to choose from:

Bronze: 60% Coverage
Silver: 70% Coverage
Gold: 80% Coverage
Platinum: 90% Coverage

All ACA-compliant plans include 10 essential benefits including:

-Ambulatory patient services – Expenses incurred as an outpatient, without being admitted are covered.
-Emergency services
-Hospitalization for various procedures including surgery
-Pregnancy, maternity, and newborn care
-Mental health and substance use disorder services – This includes psychotherapy and counseling as part of overall behavioral health
-Prescription drugs
-Rehab services and devices – Covers costs to recover physical and mental skills for people with injuries, disabilities, and chronic conditions
-Lab services
-Preventive and wellness services and chronic disease management
-Pediatric services

Many health plans have additional benefits including coverage for birth control, breastfeeding, and dental. Under the ACA, you can select any primary care doctor within a specific health plan’s network, as long as he or she is accepting new patients. You can even select an OB/GYN or pediatrician as you primary care physician. This was prohibited in the past.

Under the ACA, you have more options. Now, you can get an affordable health insurance plan by shopping on state-run exchanges, which is the place where private insurers compete for your membership. It is similar to the national health insurance marketplace. There are also private exchanges like the one created by Blue Cross and Blue Shield of Texas (BCBSTX).

On November 15, 2014, the 2015 plan rates will be released. Compare rates during the open enrollment in the health insurance marketplace. If you still prefer to buy directly from an insurance company or maintain coverage with the insurance plan offered by your employer, do so.

Act Now

Enroll online via the Custom Health Plans portal. It is available to all Texas residents and includes access to a trusted advisor that will help them navigate through the health insurance landscape. Custom Health Plans provide a detailed description of the different types of health plans that are available. Get quotes, compare plans, and apply online. Submit applications between November 15 and December 15 to get a January 1 start date for medical coverage. If the application for health insurance is submitted after December 15, the effective coverage date is February 1. Custom Health Plans can help all Texas residents.

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