A lot has happened in the past year and a lot more changes are ahead. For the first time since the Affordable Care Act (ACA) was passed, there are no real pending lawsuits trying to repeal or overturn the law. That does not mean things are not changing as it relates to health insurance in Texas. The TDA Financial Services Insurance Program is here to keep you informed and to update you on the changing dynamics of health insurance for 2022 in the individual and small group markets.
Rate Changes: Individual HMO Sees Slight Increases or Decreases, Small Groups See Slight Increases
If you have individual or small group coverage now, there are changes coming.
Filed rates are being reviewed to determine if proposed increases are based on reasonable cost assumptions and solid evidence. Final rates won’t be available until Nov. 1 when open enrollment starts, so you can’t really start comparing until then.
After 5 years where most major insurance companies (other than Blue Cross) got out of the individual market in Texas, some new options will be available—not only in the individual but also the small group markets.
Blue Cross again will be the only company offering individual plans statewide in Texas. These plans will again be HMO only.
There are no ACA-compliant individual PPO plans in Texas (at the time this article was written). There are regional or local plans available in Texas, which are mostly HMOs; and in limited areas of the state where a hospital system has several facilities and offers a plan.
United Healthcare is supposed to have new individual plans available. We anticipate these to be Exclusive Provider Organization (EPO) plans, which are like PPOs with no or limited out-of-network coverage; however plan details were not available at the time this article was written in mid-August.
There are some other companies offering plans in a few select major metropolitan areas, such as Friday Health Plan, Molina, Oscar, and Scott & White; and a few hospital-specific plans.
Keep in mind the network being offered, as it could have limited or no coverage in parts of the state. Most of the plans are incorporating tele-med, direct primary care, or concierge medicine as part of the coverage.
Tele-med allows for virtual visits with your physician that may or may not have a copay. Direct primary care and concierge arrangements typically provide certain services—such as an annual physical exam and specified treatment for a specific condition—and often don’t qualify as insurance, as essentially you’re pre-paying for a service. Virtual primary care sessions can include some prescriptions, durable medical equipment, lab tests, and diagnostic imaging. Again, it’s very important to understand the scope of the networks, the coverage, and limitations—especially if you’re seeing specialists for an ongoing medical condition.
As it stands, we expect a slight decrease or only age-based rate increase for individual plans in Texas.
Small Group Plans
Small group plans continue to be the only option for getting true PPO and HMO plan options under the ACA.
Rate changes filed for small group plans range from less than 4% to as high as 12%, depending on the company. For 2022, it appears small group:
- PPO rates will again be slightly lower than individual HMO rates.
- HMO group rates will be 5-15% lower than individual plans.
Of the major companies, we anticipate Blue Cross will have the lowest rates; followed closely by United Healthcare, Humana, and Aetna. Family Health Plan is expanding in Texas only in select metropolitan areas of the state, including DFW, Houston, Austin, and San Antonio If you’re working as an associate at a practice or several practices as a 1099 contractor, Decent is another possible health insurance option. It has a smaller network and includes direct primary care, but is not in available in all parts of the state.
Small-Group Plans: Less Expensive than Individual Plans, More Options
If you have a practice with at least one other full or part time employee, you should consider a small group plan. Depending on how your practice is structured, the other employee could be your spouse. Contact TDA Financial Services Insurance Program at (800) 677-8644 for details.
Why go through the additional paperwork and effort for a small group?
- Small group plans will be less expensive than the individual plans, and you can still get a PPO.
- If you sign up during the special enrollment for new small groups (starting Nov. 1), the mandatory employer contribution towards employee premiums (as well as other requirements) are waived. This is a good way to attract and retain high-quality employees while offering a lot of flexibility on plan designs.
- If you payroll deduct the employee premiums, it saves the practice and employees on taxes.
- You can offer more than one plan within your group—a base plan that’s less expensive for employees (perhaps an HMO with an RX and office copay), and PPO plan for you and your family.
We can start comparing rates for small group plans beginning October.
Here are the maximum out-of-pocket amounts for coverage in 2022:
- $8,700 for an individual
- $17,400 for a family
High-deductible plans intended to be HSA-compatible are subject to these out-of-pocket maximums:
- $7,050 for individual coverage
- $14,100 for family coverage
If you have out-of-network expenses, the maximum can be double what’s listed above, or more. Or the out-of-network expenses might not even be covered. The plans with the lowest premiums will have the highest out-of-pocket expenses.
Surprise Billing Changes
Because of Texas and now federal law, surprise billing should mostly be a thing of the past. The law applies to treatment situations where insureds don’t have a choice in where to get care, such as in the following:
- Out-of-network providers are practicing at in-network hospitals, birthing centers, ambulatory surgical centers and free-standing emergency medical care facilities.
- Out-of-network physicians and facilities, including hospitals and free-standing emergency medical care facilities, provide emergency services and supplies.
- Out-of-network diagnostic imaging and laboratory services are provided in connection with a service from an in-network provider.
In Texas, the law encourages providers and insurance companies to come to an agreement on the prices for services and remove the insured from the process. The bill also ensures members are not responsible for amounts above their deductible, coinsurance and copayments in the situations listed above.
This is Important.
It’s critical you check the network of the insurance company you select for 2022 and make sure your providers and hospitals are in-network. You need to know the company name and the network name. Some providers, for instance, might take a Blue Cross PPO, but not Blue Cross HMO.
What other options do I have for health insurance in 2022?
If your practice and its employees are generally healthy and not big users of health care, you might want to consider a level-funded plan. These are underwritten based on the health of the group and can be as much as 15 to 25% lower than regular ACA small group plans.
Keep in mind only 40% of groups will qualify based on underwriting, so this will not be a fit for all practices. Also, they typically don’t qualify for the special enrollment, so the practice has to pay 50% of the employee premium and meet a participation requirement regarding the number of eligible employees that participate. Additionally, there are other considerations, such as the different PPO networks, stop loss coverage, and just understanding how the plans work and what’s covered.
Faith-Based, MediShare and Health-Share Groups
These types of plans are not insurance and should not be considered a substitute. With these types of arrangements, you join a group and pay or contribute a monthly amount to the plan. After your deductible is met, you submit your medical bills and are reimbursed from the funds available or through others making additional contributions to cover your bill.
These arrangements have stricter guidelines than traditional insurance companies on which procedures are eligible. There’s normally a lifestyle guideline where a member agrees to live a certain way (abstain from illegal drug consumption, sex outside of marriage, tobacco use, and abuse of alcohol or prescription drugs).
The payments of medical bills through these arrangements are not guaranteed in any way. Each member is always solely responsible for the payment of his or her own medical bills.
If you understand how the plans work and their limitations, these can be a less expensive option than ACA plans.
Short Term Medical
We don’t recommend you go without insurance; however short-term health insurance is an option if you’re without coverage because of a waiting period, you’re transitioning from one plan or coverage to another (e.g., in-between jobs), it’s outside the open enrollment period, or you’re close to being eligible for Medicare.
These plans are exempt from the definition of individual health insurance coverage under ACA provisions, and usually don’t pay for pre-existing conditions. They’re designed to cover a new sickness or accident (with no treatment in the previous five years).
They also have limitations on coverage (e.g., no maternity coverage) and don’t have all the same mandates, such as unlimited-benefits maximums. The good news is these plans are now available for up to 12 months of coverage and may be renewed for up to 36 months.
Limited Benefit Sickness-and-Accident Plans
These plans are sometimes called “mini-med plans,” and are marketed as an ACA alternative with a PPO.
They may offer copays and RX benefits, however, they don’t include the “essential minimum health benefits” required by the ACA.
These types of plans may include a PPO and provide a schedule of benefits that pay a certain amount per day or treatment; and are limited to a maximum amount. A company selling these plans will often address this limitation by selling additional coverage for critical or specified illness.
These plans are underwritten based on good health and have some form of pre-existing condition limitation, which means anything you’ve previously been treated for is not covered for a period—normally 12 months. If the plan is guaranteed issue with no pre-existing condition, make sure you’re not just buying a discount plan.
These plans can be an option; however you need to really understand the limitations and coverage, as you could be responsible for tens of thousands of dollars—even though you’re covered—if you have a major accident or illness.
Additional Options and Considerations
If you’re concerned about having a high deductible, limited, or no out-of-network coverage, you might consider a supplemental product for accidents or hospital confinements. These types of plans pay you directly and in addition to your other coverage. They tend to be relatively less expensive and are a good option if you don’t want to self-insure high-deductible and out-of-pocket expenses.
When picking a plan, keep the above numbers in mind, but also consider the following. Prescription-drug and office-visit copays are convenient plan features, but you need to know the combined cost of your total out-of-pocket exposure and your plan (the premium). If you haven’t looked at HSA plans or didn’t think they made sense previously, you should revisit them.
- HSA plans offer the lowest premium and can be a great way to build up a self-funding account for current and future medical expenses. This can be especially important if you have to go out-of-network.
- Contributions are tax deductible (as much as $4,650 for an individual and $8,300 for a family).
- Earnings and interest accumulate tax-free.
- You own and control the funds.
- HSA plans are not a use-it or-lose-it vehicle.
The Coronavirus Aid, Relief and Economic Security (CARES) Act, allows you to use your HSA funds to buy over-the-counter medications; like Tylenol and other pain relievers, heartburn medications, allergy relief, and more. For the first time, you can also use your funds for feminine care products; including tampons, pads, liners, cups, sponges, etc.
The Act also allows plan members access to telehealth services with no cost-sharing to the insured—regardless of whether the deductible is met. Such members will also remain eligible to make and receive contributions to and from an HSA. However, some of these provisions were made for a temporary period and may not be renewed for 2022.
Use of Health Reimbursement Accounts (HRAs) has expanded because new regulations issued by the Departments of Labor, Treasury, and Health and Human Services, allow reimbursements for individual-market insurance premiums.
Before employers offer a benefit that includes individual HRAs, they should consider the implications related to the (ACA) employer shared-responsibility mandate, and the ability of their employees to obtain a premium tax credit (PTC) or subsidy on the ACA marketplace. Because of this indexing methodology, the maximum new-contribution amount for an excepted benefit HRA remained at $1,800 for 2021 and will do so again for the 2022 plan year.
2022 Landscape Review
If you want or need full coverage, the small group market is still the best way to get coverage with more options available at lower cost than in the individual market. However, with proposed legislation, this could definitely change in 2022—so keep your ears open!
The alternative options discussed all have a place at the table, but you need to make sure you understand plan limitations and risks before making a change to something less expensive. Stay informed and get ready to review and compare your options and make a decision as soon as possible. You’ll be able to review individual plans and rates beginning Nov. 1, and small group plans and rates in early October.
The open enrollment period for health plans offered under ACA begins Nov. 1, 2021, with the effective date of Jan. 1, 2022. For individual plans, you’ll have until Dec. 15 to pick or change to a new plan with a Jan. 1 effective date; or until Dec. 31, if your plan terminates Dec. 31.
Disclaimer: This article was submitted the first part of August, so some information may have changed by the time this article is published.
If you would like to receive more information or would like to discuss the insurance options available, please contact TDA Financial Services Insurance Program at 800-677-8644 or visit tdamemberinsure.com.
1 Bell, Allison. (2019, June 14). New final HRA regulations expand options for employers. https://www.benefitspro.com/2019/06/14/new-final-hra-regs-could-help-brokers-reach-employees-412-83590/