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Sunday, September 22, 2013

Tennessee Health Insurance Exchange Coverage

October 1st is less than two weeks away, and on that date adult U.S. citizens will be able to purchase health insurance from the Insurance Exchanges set up under the Affordable Care Act.  If you live in Tennessee, however, it can be confusing as to how you enroll.  Here is a quick primer.

Tennessee, like most Republican-led states, opted not to participate in the Exchange program.  There is no financial advantage to non-participation; actually not participating costs the state more money in the long run.  However the "anti-Obamacare" fever whipped up by Fox News and conservative talk radio made state participation tantamount to support of Healthcare Reform.  No Republican can survive a primary election if they are seen as supporting "Obamacare".  Instead these states, Tennessee among them, choose non-participation, which then requires the federal government to set up an Exchange for them.

Since Tennesseans have to use the federal Exchange program let's look at how you do that.

The federal program is called the Insurance Marketplace and enrollment is done on-line.  If you try to Google "Tennessee Insurance Exchange" or something similar you will get a page telling you that there is no state Exchange in Tennessee.  It is unhelpful in that it does not provide you with a link to the federal site so I am not linking to it here.

As of today you cannot yet get information from the Insurance Marketplace site regarding plans and premiums.  Those are coming October 1st.  You can roam the site and get a list of local offices where you can get one-on-one help in reviewing plans and enrolling.

Finally let's take a quick look at who should, and should not, be concerned about enrollment in the Insurance Marketplace.

  • If you have health coverage through your employer and are satisfied with it then you do nothing.
  • If you are covered by benefits through the government, a retirement plan, or the military you should do nothing.
  • If you have health insurance coverage offered through your employer but can't afford it you should look into Insurance Marketplace coverage.  You may qualify, based upon income, for a tax subsidy either instantly or at tax refund time.
  • If your employer does not offer health coverage then the Insurance Marketplace is for you.
  • If you are self-employed and have no coverage, or your coverage is expensive, the Insurance Marketplace is for you.
  • If you or a dependent have a pre-existing condition and have not been able to get coverage in the past, the Insurance Marketplace has guaranteed-issue coverage with no pre-existing exclusions.

Most of the people who are critical and/or screaming about this program are not affected by it.  There are even conservative groups in some markets trying to discourage uninsured people from enrolling.  Don't get sucked up into the political and philosophical hype: we are all paying for the Affordable Care Act so that 30 million uninsured Americans can have coverage.  If you are one of them go enroll.

Tuesday, September 17, 2013

Using Travel Company Loyalty Programs

If you travel for a living one of the perks of the trade is the ability to keep you "points" from airlines, hotels and rental car companies.  These once were a lot more generous than they are now, with almost all of them cutting back on benefits or devaluing their points during the Recession.  Once you get elite status and can board early, avoid bag fees, and get free weekend leisure rentals and rooms then losing that status feels punitive.  There is always a catch so you need to know the fine print.

For instance after being Gold and then Platinum with American Airlines I took several trips on Southwest because their fare was lower.  I recently got on an American flight and found that I had dropped, without notice, all the way from Platinum to Schmuck in four months.  It didn't matter that I had been Gold with them since the 90's: you keep up your segments or board with the last group.

I had a similar "catch" with Avis.  After having a Wizard number since the 90s, and even though I am tracking towards 100-150 rental car days a year, I can't use all the free days I have accumulated to help my daughter on her vacation or for one of the charities with whom I work.  As such about half of them will expire.

So how do you use these programs?  Which ones are the best?

For airlines it depends on where you fly.  Searching the web for the best airline loyalty programs four show up at the top of every list in some order: American AAdvantage, Southwest Rapid Rewards , United/Continental Mileage Plus and  Delta Skymiles.  Since I cover coast-to-coast south of a line between Annapolis and San Francisco my city pairs match up best with American and Southwest.  Were I to go into small cities in the south Delta would be better as they are the strongest carrier out of Atlanta Hartsfield airport.  However living in Nashville it is cheaper to drive to the places where Delta is strongest. United owns the Midwest, both large and small cities.

For hotels the top four are Marriott Rewards, Hilton HHonors, Intercontinental (IHG/Holiday Inn), and Starwood.  All are strong in major markets so it really depends on whose hotel you like.  I prefer the IHG brand for reasons I've written about before.  Being diabetic I never need to be without access to a meal or snack, so a full-service Holiday Inn is a safe choice at a price my clients won't protest. Also their hotels are almost all new or refurbished.  As a backup I use Hilton HHonors which for the same price offers the Hilton Garden Inn brand.  Many of my fellow company travelers use Marriott properties although I find them more expensive on the top-end and with ice-cream laden pantries on the low-end (not good for my dietary needs).

With rental car companies the ones that get you out the door with the least hassle are Hertz, Avis and National.  While you can get great service and great cars through the others, you can kill a half hour at a backed-up counter and who wants that?   I think you go with who has the best counter in the most places you travel. For years I had a Hertz #1 Gold membership through Thomas Nelson and Hertz does a great job overall.  However regionally I fly to DFW a lot and the Hertz counter there just stinks and has for years.  Avis/Budget are one company and are everywhere I fly, and getting elite status with them gives you benefits like swapping out for any car you like and automated check-out with no rental agreement.  You get free weekends and discount coupons along the way, but I don't like their restrictions on how you use those rewards. I have contacted Hertz and National to see if they have similar restrictions and may change companies.

In terms of credit cards I prefer to use a Gold American Express although I have purchased a Southwest Airlines  Rapid Rewards Visa.  I like my AMEX because I have had it since the 80's and their security and customer service are strong.  Most travel sites I have seen list the Southwest Visa as the best card due to the lower interest rate and the accumulation of points towards free Southwest flights.  Were I using exclusively American I would use their Citi AAdvantage Card, and were I flying with Delta I would change over to their Delta Skymiles American Express.  I use my own AMEX because the points can be used for any purpose: airline tickets, hotel rooms, rental cars, or if your toaster oven goes out.

Finally, all this assumes that you are not paying for your own travel.  Mine is charged to my employer or my clients so participating in these programs costs me very little. The points and perks are just part of my compensation.  However if you are a solopreneur paying your own way I would stay away from loyalty programs altogether for these reasons:

  1. They are no longer rewards programs.  They are marketing and alternative revenue stream programs for the benefit of the company, not you.
  2. All require your loyalty to their brand even when their price is higher.
  3. The credit cards cost money to active ($200 for Southwest Visa: $450 for AMEX Platinum) and can carry high interest rates.  Mine are 12 -18% even though my credit is excellent.
  4. With most airlines and hotels you can buy-in to their loyalty program if you like their perks. 

 If you are in business for yourself  you are better off to get the lowest interest rate credit card you can find, buy the best value-for-the-dollar airline, hotel and rental car regardless of brand, and put cash instead of points in the bank.  Greenbacks never expire and can be used for all destinations.

Friday, September 13, 2013

The Vocational Revolution: How the Best Jobs of the Next Decade Won't Require College

One way to look at the Great Recession of 2007 - 2012 is that it was one giant comeuppance for about three generations of Americans, mine included.  We have been "too good" to do blue collar work and have sent that message to our kids.  Now the Starbucks generations are facing a conundrum: long-term unemployment, long-term and low-wage under employment in fast food and retail, or a return to skilled trades.

Starting in the 1980's college became the only acceptable route to success, and the skilled trades fell out of favor.  Working in manufacturing HR during the 1990s I recall the first signs of a critical shortage in tool and die makers and machinists, as more and more people flocked to college rather than vocational schools.  We have not turned out enough skilled trades graduates to feed the demand since the 1970's, but off-shoring of manufacturing and delayed retirements reduced demand and lessened or masked the problem.  No more.

In trades all across the country retirements are quickly shrinking the ranks of electricians, plumbers, nurses, tool and die makers, auto technicians and nurses' aids.  Increased automation is causing a subsequent increase in the need for computer programmers and systems analysts.  At a time when the economy is picking up we are awash in lawyers, marketers and middle managers while factories and construction contractors can't find skilled people unless they train them post-hire.  Water, water everywhere and not a drop to drink. This has more recently been referred to as our national "skills gap".

There are some true victims in this transition:

  • Greying unskilled assembly workers whose factories have moved on and who lack the technical knowledge to get hired in today's higher-tech trades.  
  • Similarly greying middle managers whose income levels make it difficult to re-tool
  • "College" graduates from on-line programs who have run up as much as $200,000 in student loans for jobs paying in the 30's and 40's.  
  • New college graduates with white collar degrees that don't qualify them to do anything but be trained post-hire and for whom management track jobs (see middle managers above) no longer exist.
Two venerable business and finance organizations have recently noted this need for more skilled trades. Kiplinger's list of the best jobs includes almost completely hands-on, value added positions; many of which may or may not require a college degree.  Forbes went one step further, listing the fastest growing jobs from the bureau of labor statistics and noting, "These are only unskilled jobs if by unskilled you mean they don't require a college degree."  

So mamas, its okay to let your babies grow up to be cowboys...and electricians...and sonogram operators...and physical therapists...and elementary school teachers.  We've spent the last years trying to raise little Alex P. Keaton's and for our trouble we got high unemployment and two and half generations of people who can't change their own oil.  That sound you hear off in the distance is the pendulum swinging back this way.

Friday, September 06, 2013

Obamacare 2013 and 2014: What You Need to Know Now

Earlier this year the Department of Health and Human Services announced a one-year delay in the implementation of key provision of the Affordable Care Act. Because of the highly politicized nature of this law there has been much said about the law "falling apart" and similar comments that would lead some to think that the whole act is on hold. Nothing could be farther from the actual situation so employers and employees must know what to do to keep in compliance. This law is already partially implemented and key provisions roll out this year and next. Here is where your company should be and what it should be preparing to do if it has 50 or more employees.
2013 Changes

For the current benefits plan year, or for any plan year beginning during calendar 2013, health plans must execute the following changes:
· Healthcare Flexible Spending Account (FSA) deductions are now capped at $2,500.

· Women’s preventative health services now must be covered at 100%.

· Comparative Research Effectiveness (CRE/PCROI) fees of $1 per covered employee are due.

· Employees must be notified 60 days in advance if their coverage changes significantly.

In addition to these plan changes, state Insurance Exchanges will be up and running in all 50 states by January 1, 2014. Open Enrollment for Exchange coverage starts October 1, 2013 for coverage beginning January 1, 2014. It is the employer’s obligation to notify all employees of the option of Exchange coverage before October 1. A sample notice or notice template is available from HHS or your broker.

2014 Changes

Prior to 2014 plans were able to designate themselves as “Grandfathered” or “Non-Grandfathered” for purposes of the Act. Beginning in 2014 plan changes must be implemented regardless of this status. These include:
· Annual dollar limits on essential health benefits must be removed from your plan.

· Pre-existing condition exclusions are also prohibited and must be removed.

· Child eligibility for coverage up to age 26 must be included in all plans.

· Eligibility waiting periods of more than 90 days post-hire are prohibited.

· Co-payments must be counted toward the calculation of out-of-pocket maximums.

· Clinical trials must be covered.

· CER/PCROI fees increase to $2 per covered employee.

· Employees must be provided a Summary of Benefits in plain language

 Starting in 2014 and extending through 2016 a Reinsurance Fee will be assessed to all plans of roughly $63 per covered life (including dependents) to establish the insurance exchanges and stabilize the private insurance marketplace. Insured plans will most likely see this cost, paid by their insurer, passed on in their premiums. Self-insured plans must pay this fee directly.

In addition, with the state Exchanges up and running, the Individual (Employee) Shared Responsibility Mandate takes effective. The impact will be that all adult citizens must have health insurance. If your employer-provided insurance is less expensive than Exchange coverage you may experience higher enrollment in your health plan.

In 2014 some individuals purchasing Exchange coverage become eligible for tax credits. These would be given after filing 2014 taxes (during tax season in calendar year 2015). Employees are eligible for credits if (1) they make less than 400% of the Federal Poverty Level and (2) the coverage offered by their employer’s health plan is not affordable as defined by the Act.

As I travel around I hear conservative talk radio claiming the law is "falling apart". Some states have it almost fully implemented such as California, New York and Oregon. There are benefits to employees and employers, and consequences for non-compliance, so know what you need to do next. I welcome questions about the ACA on this blog.