What Advisors Need To Know About The ACA In 2016

Heath insurance advisors should find brokers with expertise in the Affordable Care Act (ACA) to help steer small and midsize employers clear of penalties in 2016, an ACA expert said Sunday.

Susan L. Combs, CEO of Combs & Co. in New York and president of Women in Insurance and Financial Services, said there’s “too much to know, too much to stay up on,” in the voluminous ACA for any individual advisor to go it alone. Combs spoke at a gathering of health insurance advisors during a workshop sponsored by the National Association of Insurance and Financial Advisors (NAIFA), at its annual conference in New Orleans.

Beginning next year, the government is expected to begin enforcing penalties more rigorously as software platforms and data systems operate more smoothly and uncover discrepancies and inconsistencies in applications for coverage subsidies.

“Expect those penalties to start getting enforced,” Combs said.

Combs also said advisors should prepare clients for a higher level of penalties next year for failure to comply with the Obama administration’s health care reforms.

Penalties for ACA noncompliance next year will reach as high as $695 per adult, $347.50 per child, 2,085 per household, or 2.5 percent of household yearly income, according to Combs.

Businesses will be assessed penalties of as much as $2,000 per full-time equivalent, she also said.

Advisors can also prepare clients for an increase in health insurance premiums.

Depending on where people live, the increase for a silver plan could be as high as 16 percent or more in Portland, Ore., or could drop by as much as 10.1 percent in Seattle, according to an analysis by the Kaiser Family Foundation in June.

The number of Americans with health insurance coverage has increased by nearly 17 million between September 2013 and February 2015, according to a study published earlier this year by RAND Corp.

Those gains have come from individual purchasers on the exchanges, expansion of state-based Medicaid programs and employer-sponsored group plans, according to RAND.

While the ACA has increased the number of insured Americans, several insurance advisors during the Combs workshop pointed to inconsistencies and gray areas in the law.

Advisors have questions about the coverage status of and the subsidies granted to employees who decline employer coverage but then opt to buy coverage on the exchange.

The open enrollment period for coverage under the exchanges begins Nov. 1 and runs through Jan. 31, 2016.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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