Healthcare Reform

Employers have more time to comply with rules dictated by the health care reform law that will require them to revamp how they communicate and explain their health care plans.  In a noticed published recently, the Labor Department said the reporting requirements would not go into effect until after the final rules are published.

At the time the proposed rules were issued by the Health and Human Services, Labor and Treasury departments, federal regulators said they would go into effect on March 23, 2012.  However, benefit experts said such a deadline for producing the summary of benefits and coverage would have been impossible to meet, and that the proposed rules were flawed in many ways.

Among other things, the proposed rules would require employers to provide employees with an "easy to understand" summary of benefits and coverage and, upon request, a glossary of commonly used health care coverage terms, such as deductible and copay.  The summary of benefits and coverage would have to include the portion of expenses a health care plan would cover in each of three situations:  having a baby, treating breast cancer, and managing diabetes.

"It is anticipated that the...final regulations, once issued, will include an applicability date that gives group health plans and health insurance issuers sufficient time to comply," the Labor Department said.

As always, Besselman & Little Agency will keep you up-to-date on any new developments regarding health care reform mandates as they occur.

Source: www.businessinsurance.com

 

As the U.S. Supreme Court prepares to review President Barack Obama's health care reforms, more Americans want it to be repealed  than want to keep it, a poll released recently shows.

A Gallup survey of more than 1,000 U.S. adults found that 47% favor the repeal of health care reform, versus 42% who want the law kept in place.  Eleven percent had no opinion.  But the survey also showed that 50% of Americans believe the federal government has a responsibility to make sure everyone has health coverage, compared with 46% who do not.

The results, which have a 4 percentage point margin of error, suggest a sharply divided U.S. public as the Supreme Court prepares to begin hearing legal arguments next March. The arguments will be heard from 26 state and an independent business groups that want the law struck down as unconstitutional.

The Patient Protection and Affordable Care Act would extend health coverage to more than 30 million uninsured Americans by expanding Medicaid and establishing special state-run insurance markets called exchanges. 

The Gallup poll also showed a small reduction in public support for private insurance as the basis for gaining medical services in the $2.6 trillion U.S. health care system.  The finding said 56% of adults continue to prefer private insurance versus 39% who would favor a government-run system.  That compares with a 61% to 34% margin a year ago.

Source: http://ebn.benefitnews.com

 

If one thing can be said about the recent health care reform law, it's that it has generated a barrage of questions for employers.  The answers, of course, remain unknown for now.  In the meantime, you may want to consider some facts from a number of experts and recent reports about the law's possible impact on businesses and their workers.

End of Benefits? Not so fast...
While conventional wisdom holds that many employers will drop their health benefits in 2014 when the major provisions of PPACA take effect, that decision wouldn't make economic sense for most, according to a new report by the Urban Institute for the Robert Wood Johnson Foundation.  That's because "employers who drop workers' coverage but fail to increase the employees' wages in order to maintain their overall compensation will inevitably lose these employees to competitors," according to a report by National Public Radio.

The law states that employers with more than 50 workers who don't offer benefits in 2014 would have to pay a penalty (ranging between $2,000 and $3,000 per worker).  If a company drops coverage, it would need to pay the penalty in addition to boosting wages to offer a competitive overall compensation package.  For many employers, that might cost more than sticking with a robust benefit package that will recruit and retain quality employees, the researchers noted. 

Source: United Benefit Advisors, LLC

 

The Department of Health and Human Services recently issued a bulletin outlining proposed policies that will give states more flexibility and freedom to implement the Affordable Care Act. This bulletin describes a comprehensive, affordable and flexible proposal and informs the public about the approach that HHS intends to pursue in rulemaking to define essential health benefits.

Essential health benefits must include items and services within at least the following 10 categories:
1.  Ambulatory patient services
2.  Emergency services
3.  Hospitalization
4.  Maternity health and substance use disorder services, including behavioral health treatment
6.  Prescription drugs
7.  Rehabilitative and habilitative services and devices
8.  Laboratory services
9.  Preventive and wellness services and chronic disease management, and
10. Pediatric services, including oral and vision care

Under the department's intended approach, states would have the flexibility to select a benchmark plan that reflects the scope of services offered by a "typical employer plan."  States would choose one of the following benchmark health insurance plans:
-  One of the three largest small group plans in the state by enrollment;
-  One of the three largest state employee health plans by enrollment; 
-  One of the three largest federal employee health plan options by enrollment;
-  The largest HMO plan offered in the state's commercial market by enrollment

If states choose not to select a benchmark, HHS intends to propose that the default benchmark will be the small group plan with the largest enrollment in the state.  The benefits and services included in the benchmark health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage.
 
Source:  www.healthcare.gov

 

The Patient Protection and Affordable Care Act (PPACA) imposed a new $2,500 limit on the contribution or election amount for health care Flexible Spending Accounts (FSA).  The new requirement applies to all FSA plans whose taxable years begin after December 31, 2012 - even plans grandfathered under other provisions of health care reform.

The "taxable year" refers to the employee's taxable year - and in most cases this stipulation means a calendar year.  Thus, a calendar year limitation of $2,500 in salary reductions for the health care FSA will become effective January 1, 2013.

Changes to Plan Documents
Plans that currently allow a health care FSA election of more than $2,500 must amend plan documents before Jan. 1, 2013, and change employee communications.  Non-calendar plans that amend their plans as of Jan. 1, 2013, mid-plan year, may face some unique challenges or situations due to the changes required.

Be Proactive
To simplify administration of this change, sponsors of non-calendar year plans may want to adopt the new limit as of the first day of the plan year rather than waiting until Jan. 1, 2013.  For example, if the current plan year begins May 1 and ends April 30, the plan sponsor may:

• Communicate the change to employees
• Amend their plan documents to implement the new $2,500 maximum election
• Initiate the changes to the contribution effective May 1, 2012, rather than wait until the mid-plan year in January 2013

You may also discuss these changes with your FSA Plan Administrator, or feel free to give Besselman & Little a call for guidance if needed.

 

The U.S. Department of Health and Human Services (HHS) has announced new guidelines that will ensure women receive preventive health services at no additional cost. The new guidelines are in addition to the rules released last summer by HHS requiring all new private health plans to cover several evidence-based preventive services like mammograms, colonoscopies, blood pressure checks, and childhood immunizations without charging a copayment, deductible or insurance. 

The new guidelines include:

• well-woman visits
• screening for gestational diabetes
• human papillomavirus (HPV) DNA testing for women 30 years and older
• human immunodeficiency virus (HIV) screening and counseling
• FDA-approved contraception methods and contraceptive counseling
• breastfeeding support, supplies, and counseling
• domestic violence screening and counseling
   

New health plans will need to include these services without cost sharing for insurance policies with plan years beginning on or after August 1, 2012.  The rules governing coverage of preventive services will apply to women's preventative services as well.  These rules allow plans to use reasonable medical management to help define the nature of the covered service.  Plans will retain the flexibility to control costs and promote efficient delivery of care by, for example, continuing to charge cost-sharing for branded drugs if a generic version is available and is just as effective and safe for a patient to use.

Please note that benefits may vary based on grandfathered or non-grandfathered status.  Feel free to contact Besselman & Little Agency for any questions regarding your specific health plan.

For more information on the new guidelines, visit http://www.hrsa.gov/womensguidelines.
 

The IRS recently made public an advance copy of Revenue Procedure 2011-32, which sets forth the annual contribution and deductible limits for Health Savings Accounts (HSAs) and deductible limits for High Deductible Health Plans (HDHPs) effective for calendar year 2012. 

The maximum HSA contribution limits will increase for all eligible account holders.  This is great news for people who want to maximize their pre-tax savings and invest more in their healthcare needs.  Whether individuals choose to fully fund their account, or increase contributions to their HSA, this information should be of interest to both employers and employees.  The details are as follows:

2012 Annual Maximum Contribution Limits for HSAs
-  For individuals with self-only coverage under an HDHP, the annual limit on contributions will be $3,100 (up from $3,050 in 2011).
-  For individuals with family coverage under an HDHP, the annual limit on contributions will be $6,250 (up from $6,150 in 2011).

2012 Annual Minimum Deductible Limits for HDHPs to Qualify for an HSA
-  For individuals with self-only coverage, the annual minimum deductible is $1,200 and the annual out-of-pocket expense is $6,050.
-  For individuals with family coverage, the annual minimum deductible is $2,400 and the annual maximum out-of-pocket expense is $12,100.
 

It's no secret that making healthy lifestyle choices can improve your physical and mental wellbeing, raise your productivity, and lower your long-term health costs.  Now, taking active steps toward a healthier lifestyle is easier with preventive health services that may be covered under your health insurance plan.

Routine doctor visits such as annual checkups and well baby/ child visits may now be covered under preventive care.  Other items that may be covered with no deductible, co-payment, or coinsurance are vaccinations, certain blood tests, blood pressure and cancer screenings. Find a full list of preventive services at www.healthcare.gov.  

Health care reform includes provisions to reward good health behaviors, such as fitness, weight loss, and regular preventive screenings.  One way people are rewarded for healthy behaviors is through employer-sponsored wellness programs. Common wellness programs offered by employers include smoking cessation, nutrition, disease counseling, and stress management.  Check with your employer to find out if wellness programs and incentives are offered at your workplace.

 

A new bill introduced in the Senate last week could help consumers keep their employer-sponsored flexible spending account funds at the end of the year.  Sens. Ben Cardin (D-Md.) and Mike Enzi (R-Wyo.) introduced the Medical Flexible Spending Account Improvement Act, S. 1404, that would allow consumers to pay taxes on and withdraw their remaining funds from their FSAs.

During his introduction of the bill, Sen. Cardin said, "It is time to modernize FSAs to eliminate this burdensome 'use it or lose it' rule.  It is both fair and sound health policy to allow FSA participants to cash-out remaining funds at the end of the plan year rather than forfeiting the balance to their employer."

"FSAs help millions of Americans manage and reduce their out-of-pocket health care costs," said Joe Jackson, chairman of Save Flexible Spending Plans and CEO of WageWorks, Inc.  "However, the 'use it or lose it' rule creates an unnecessary risk for FSA participants and a deterrent for non-participants.  Changing this rule will ensure that participants don't lose their hard-earned money if their out-of-pocket health care costs don't match their prediction for the year."

In addition, the bill's sponsors noted that the original reason for adopting the "use it or lose it" provision is no longer relevant.  The IRS adopted the provision to prevent FSAs from being misused as tax shelters.  But according to Sen. Cardin, "with the enactment of the Patient Protection and Affordable Care Act in 2010, annual contributions to FSAs will be capped at $2,500 beginning in 2013, which makes the 'use it or lose it' rule unnecessary."

Save Flexible Spending Plans, an advocacy group that hopes to make FSAs more accessible to consumers, commended Sens. Cardin and Enzi for their introduction of the bill.

Source: www.news.yahoo.com

 

U.S. health insurers will have to justify big premium hikes under new rules issued recently by the U.S. Health and Human Service Department.  Starting in September, insurers will have to publicly post proposed rate increases for the small group and individual markets.  Any increase of 10% or more will have to undergo review by independent experts at the state or federal level, the agency said.

The rules were called for under the health care overhaul signed into law last year.  HHS Secretary Kathleen Sebelius said HHS will provide greater scrutiny of health insurance premium rises at a time when insurers are demanding premium increases, even as they enjoy lower costs and huge profits.

While federal regulators cannot set health insurance rates, Sebelius said a growing number of states have this authority.  Sebelieus said her agency is working closely with states to undertake the review process.  HHS will take over in cases where a state does not take up the responsibility.  The 10% threshold will be replaced in September 2012 by a state-specific threshold that takes into account trends in a state's health care market.

Steve Larsen, director of HHS's Center for Consumer Information and Insurance Oversight, said the current rule applies only to the individual and small group market but that the agency was seeking comment on applying the rules to groups that purchase coverage through associations.

Source:  http://ebn.benefitnews.com

 

WASHINGTON - The Internal Revenue Service said Tuesday that it will give smaller employers even more time to comply with a health care reform law requirement that employers report the cost of coverage on employees' W-2 wage and income statements.  In addition, the IRS also clarified that the reporting requirement does not apply to retirees receiving health care coverage.

Under the reform law, employers were required to provide health care cost information on 2011 W-2 statements that are distributed to employees in 2012.  But last year, the IRS waived that requirement for 2011 and said the health care cost reporting requirement would apply to 2012 W-2s, which are issued in 2013.

Under Tuesday's guidance, detailed in Notice 2011-28, employers that issue fewer than 250 W-2s in 2011 will not be required to provide the cost of coverage on the 2012 W-2s.  Those employers "will not be required to report he cost of health coverage...prior to January 2014. This transition relief will continue until the issuance of further guidance," the IRS said.

In addition, the IRS made clear that employers will not have to issue W-2s to retirees who receive health care coverage but no longer receive wages or salary.  "An employer is not required to issue Form W-2 including the aggregate reportable cost to an individual to whom the employer is not otherwise required to issue a Form W-2," the IRS said.

The IRS guidance resolves a key question raised by employers with retiree health care plans, said Andy Anderson, a partner with law firm Morgan, Lewis & Bockius L.L.P. in Chicago.

Source:  www.businessinsurance.com 

Just as the health care reform law encompasses thousands of pages, so do the regulations and guidance that have been issued to help employers comply with the Patient Protection and Affordable Care Act.

The summary below outlines the key details of the most significant regulations affecting employers that have been issued to date.  Updated information will be released as new regulations and guidance are issued and existing ones are revamped.

Coverage of employees' adult children up to age 26

• Extension of coverage must begin on the first day of the plan year that starts on or after Sept. 23, 2010.
• Conditioning coverage on student status, residency, marital status, or parental financial support not permitted.
• Special surcharges for coverage not allowed.
• Coverage must be extended through the day before a child turns 26 and can be continued on a tax-favored basis through end of the year in which the child turns 26.
• Employees must be informed of the coverage extension and given 30 days to enroll eligible older children.
• Children who lose coverage when they turn 26 can enroll in COBRA.
• Employers that voluntarily extend coverage to employees' grandchildren, nieces and nephews can continue to impose eligibility restrictions, such as age, financial support and residency, on such individuals.  Eligibility restrictions can be imposed on employees' relatives who are not sons, daughters, stepchildren, adopted children or foster children.

Grandfathered Status
Health care plans can qualify for "grandfathered" status, which exempts them from certain health care reform law requirements, such as providing full coverage for preventive services, so long as they do not make any one of several changes.  Those changes are:

• Impose or raise coinsurance requirements.
• Increase a deductible by an amount that exceeds medical inflation plus 15 percentage points.
• Increase employee premium contributions by more than five percentage points.
• Eliminate coverage for a specific medical condition.
• Boost copayments by more than $5 - adjusted annually for medical inflation - or a percentage equal to medical inflation plus 15 percentage points, whichever is greater.
• Changes to one type of health care plan, such as a preferred provider organization plan, will not affect the grandfathered status of other plans any employer offers.

Retiree-only plans
Health care plans offered only to retirees are considered "excepted" plans and exempt from health care reform law requirements.  As a result, such plans do not, for example, have to extend coverage to retirees' adult children up to age 26 and can continue to impose lifetime dollar limits.

Dental and vision care plans
Dental and vision care plans generally are exempt from the law's requirements when they are offered under a separate policy or if employees have the right not to receive coverage or are required to pay an additional premium for the coverage.

Preventive services

• While full coverage, except for grandfathered plans, has to be provided for preventive services, that requirement does not apply to preventive services delivered by out-of-network providers.
• Treatment resulting from a preventive service can be subject to regular cost-sharing requirements if the treatment itself is not a preventive service.
• No cost-sharing is allowed for tests and screenings recommended by the United States Preventive Services Task Force, an independent panel of health care experts.
• No cost-sharing is allowed for, among other things, blood pressure, diabetes and cholesterol tests, annual physicals, vaccinations, age-appropriate colonoscopies, and obesity and smoking cessation counseling.

Annual limits

• Starting in 2014, annual dollar limits on essential benefits, which have yet to be defined, are banned. In 2011, the annual limit can be no less than $750,000 per enrollee, with the limit rising to $1.25 million in 2012 and $2 million in 2013.
• Annual limits do not apply to flexible spending accounts and health savings accounts. Annual limits also do not apply to health reimbursement arrangements linked to health care plans or stand-alone retiree-only HRAs.
• Health care plan sponsors can seek - through 2013 - one-year waivers from the annual limit requirements by proving to Department of Health and Human Services regulators that meet the requirements would result in a significant decrease in access to benefits or a significant increase in premiums.
• As a condition of receiving a waiver, a plan sponsor must provide written notification to enrollees that the plan does not meet the annual limit requirements and that a waiver has been approved. The notice also has to give the dollar amount of the annual limit requirement and state that the waiver is only for one year.

Early-retiree reinsurance program

• Reimburses employers and other sponsors of health care plans offered to retirees at least age 55 but not eligible for Medicare and their covered dependents for 80% of an enrollee's health care claims during a plan year up to a $90,000 limit after $15,000 in claims have been incurred.
• Services not covered by Medicare are ineligible for reimbursement. Examples include custodial care, hearing aids and auditory implants, and cosmetic surgery, except when required for prompt repair of accidental injury or the improvement of the functioning of a malformed body part. Also ineligible are claims for in-vitro fertilization, artificial insemination or abortion, except if the pregnancy results from rape or incest or endangers the woman's life.
• Reimbursement received must be used to offset future cost increases, plan enrollees' costs, or a combination of the two.
• Employers that use reimbursement to reduce participants' costs, must extend that relief to all enrollees, not just early retirees.
• Employers that use the reimbursement to offset their premium or health benefit costs must abide by a "maintenance of effort" requirement that they spend the same amount of money on their early retiree health care plan as they did the prior year.

Over-the-counter medications

• Effective Jan. 1, 2011, except for insulin, reimbursement from health care FSAs in son permitted for OTC medications without a prescription.
• The Jan. 1, 2011 effective date also applies to grace-period FSAs. Such FSAs allow unused money contributed during the prior year to be used for expenses incurred during the first 2 1/2 months of the next year.

Emergency room services
Health care plans - except grandfathered plans - cannot impose higher cost-sharing requirements for out-of-network emergency room services than for emergency room services delivered in-network.
 

 

WASHINGTON (AP) -- One year after President Barack Obama signed his historic health care overhaul, the law is taking root in the land.  Whether it bears lasting fruit is still in question.

The legislation established health insurance as a right and a responsibility.  Thousands of families, businesses and seniors have benefited from its early provisions.

But worries about affordability and complexity point to problems ahead.  And that's assuming it withstands a make-or-break challenge to its constitutionality that the Supreme Court is expected to decide.

Public divisions over the law are still so sharp that Americans can't even agree what to call it.  Supporters call it the Affordable Care Act, a shorter form of its unwieldy official title.  It's also known as "Obamacare," the epithet used by Republicans seeking its demise.

While Obama returns from Latin America on the signing anniversary Wednesday, administration officials will fan out across the country.  Community commemorations started Monday, underscoring that the health care battle has moved to the states.  Even states suing to nullify the law's requirement that most Americans carry health insurance are proceeding with at least some of the building blocks.

Polls show that about one in eight people believe they have been personally helped already, well before the provision kicks in in 2014 to cover millions of uninsured. Interviews with people affected reveal it's not always clear-cut.

In small-town Circleville, N.Y., Patti Schley says one of the dozens of new insurance regulations made a dramatic difference for her family.  Her daughter Megan, 23, was out of college, going without insurance as she tried to launch a wedding photography business.  Last summer Megan started getting sick and rapidly lost weight. Doctors diagnosed a serious digestive system disorder that would make her uninsurable.  But her parents were able to get her into a high-risk insurance pool created under the law, and this year Megan signed up for her father's workplace plan, under a provision extending coverage for adult children up to age 26.

"As a mother of a sick child, you are concerned whether your kid is 4 or 24," said Schley, an office administrator.  "We couldn't wait for this to kick in."

Things are working out for the Schleys, but the high-risk pools that provided the initial lifeline for Megan are faltering.  Nationally, the latest count shows fewer than 12,500 people signed up, mainly because of waiting periods and high premiums.

Another mom with an uninsured daughter ran into a Catch-22 that illustrates the law's complexity.  Mary Thompson of Overland Park, Kan., was sure the law would finally get 11-year-old Emily on the family's health insurance.  Insurers had repeatedly rejected Emily due to a birth defect of the spine, surgically corrected when she was an infant.  The law requires insurers to accept children regardless of pre-existing health problems, a safeguard that will extend to people of all ages in 2014.  But because Emily's father is self-employed and the family buys its own coverage, things didn't work out as expected.

Certain "grandfathered" plans selling individual coverage are exempt from the law's requirement to cover kids.  The Thompsons' plan was one.  That meant they would have to apply for a whole new policy, and the mother, a breast cancer survivor, was unlikely to be accepted.

"We would have to start over with me - and I can't start over," said Thompson.  A social worker helped get Emily into Medicaid.

In neighboring Missouri, an insurance company's campaign to get small businesses to sign up by taking advantage of new tax breaks has yielded mixed results.  One of the chief promoters of the idea is Ron Rowe, an executive of Blue Cross and Blue Shield of Kansas City.  With some 150 previously uninsured businesses offering new coverage, his company's efforts earned the praise of Obama administration officials.  But Rowe says many business owners found the math didn't work for them.

"The longer this has been out in the marketplace, the less appealing it's been to small-business owners," he said.  A typical employer with 10 workers would have to pay about $31,000 a year for health insurance and recover only 10 percent to 15 percent of that through the new tax credit.

Rowe says his company is getting more interest from business owners by offering a cap on rate increases.

No group is more sensitive to medical costs than senior citizens, whose votes are also critical to Democrats' chances in the 2012 presidential election.  So far, alarms that Medicare cuts would compromise their care have not been borne out.  But Democratic lawmakers engineered the cuts to take effect gradually, while new Medicare benefits are being provided now.

Topping the list this year is a 50 percent price cut on brand-name prescriptions for Medicare recipients who fall into the coverage gap called the "doughnut hole."  Daniel Wisniewski, a retired truck driver from Staten Island, N.Y., reckons that will reduce the price of one of his heart drugs from $234.99 a month to around $117.

"I'm not much on politics, but I feel that that's got to help me," said Wisniewski, 69. "I worked and paid into Social Security for 55 years.  When I was a kid I used to wash dishes in a bakery after school."

Republicans say such gains will be temporary.  For families, "any marginal benefits from this law are far outweighed by the heavy-handed intervention in their health care by Washington bureaucrats," said Sen. Orrin Hatch, R-Utah.

Affordability is the main worry for critics. A recent poll by the nonpartisan Kaiser Family Foundation found that one in five Americans said they had been negatively affected by the law, and about half of those cited costs.  Some blamed the law for this year's premium hikes, although many experts say the impact was marginal.

"If they have a bad experience in the marketplace, it's very possible they're going to attribute that to the law," said Mollyann Brodie, Kaiser polling director.  "It certainly presents a challenge for the proponents."

A lead author of the bill, Democratic Sen. Max Baucus of Montana, remains a strong supporter but laments not devoting more attention up front to cost control.  "It gave detractors an opening," he said.

Source:  Associated Press