Friday, November 4, 2011
Friday, October 28, 2011
Federal long-term care insurance program terminated
October 27, 2011
On October 14, Health and Human Services Secretary Kathleen Sebelius sent a letter to congressional leaders about the CLASS Act – the federal long-term care insurance enacted as part of the health care reform law. Citing concerns over the solvency of the program, the HHS secretary suspended implementation of the program. However, it is important to note that the program has not been repealed.Wednesday, October 26, 2011
Grandfathering Q&A for New Healrthcare Reform
What qualifies as a grandfathered plan?
- A “Grandfathered Health Plan” is defined as a group health plan or health insurance coverage in which an individual was enrolled on March 23, 2010, regardless of whether the individual later renews coverage. Grandfathered plans are required to meet some, but not all, of the reforms contained in the Affordable Care Act.
- The Act allows for family members to be added to a current plan and for new employees (including new enrollees subject to certain anti-abuse rules) to be enrolled in a grandfathered plan.
- Beyond this, interim regulations detail what it means to be grandfathered and what benefit changes grandfathered plans can make and still retain their grandfathered status.
Which health care reform provisions apply to grandfathered plans?
Grandfathered plans will be required to meet some, but not all of the reforms.
Must grandfathered plans provide internal/external reviews under the Act?
Grandfathered plans are not required to comply with the Act’s internal and external review mandate — although plans may voluntarily comply without losing grandfathered status.
Disqualification
What disqualifies a grandfathered plan?
Can you conform benefits to reflect new state and federal laws without loss of grandfathered status?
Generally, a plan will lose grandfathered status if any of the following changes are made after March 23, 2010.* These rules apply separately to each “benefit package” offered by an employer:
- A significant cut or reduction in benefits by eliminating all or substantially all of the benefits to diagnose or treat a condition, or any necessary element to diagnose or treat a condition.
- Raising coinsurance charges
- Significantly raising fixed cost-sharing (i.e., deductibles and out-of-pocket limits) by more than medical inflation (as measured from March 23, 2010) plus 15 percentage points
- Significantly raising copayment charges by more than the greater of: (i) medical inflation (as measured from March 23, 2010) plus 15 percentage points or (ii) $5 (adjusted for medical inflation)
- Significantly lowering the rate of employer contributions by 5 percentage points for any coverage tier
- Adding or tightening an annual limit (with one exception)
- Reclassifying employees so that the reclassified employees are eligible for a different plan (even if it’s a grandfathered plan), without a bona fide employment reason
- Failing to continuously maintain at least one covered individual (not necessarily the same individual)
Note: To maintain grandfathered status, a notice must be placed in plan materials provided to a participant or beneficiary explaining the grandfathered status of the plan or coverage.
For coverage that was in effect on March 23, 2010, an amendment to interim final rules released on November 15, 2010 clarifies that employers can change health insurance coverage effective on or after November 15, 2010 (i.e., enter into a new policy, certificate, or contract of insurance) without losing grandfathered status as long as other changes are not made that cause the loss of grandfathered status. Plans entering into a new policy, certificate, or contract of insurance with a new issuer must provide documentation of plan terms to the new carrier, as detailed in the amended rule. The rules for individual market were not modified, meaning a change in carrier in the individual market would result in the loss of grandfathered status.
Maintaining grandfathered status
How does a plan maintain grandfathered status?
The regulations also provide guidance on changes which are generally acceptable and will not normally affect a plan’s grandfathered status as long as the other invalidating changes are not made. Generally, if any of the changes listed below were made to a plan after March 23, 2010, they will not, by themselves, cause a plan to lose grandfathered status:
- Changes to third-party administrators or insurers in the group market
- Changing premiums
- Changes to comply with state or federal law, including voluntary changes to implement ACA
- Agreeing to binding renewals before March 23, 2010, effective on or after March 23, 2010
- Allowing new employees or new enrollees who are not new employees and their dependents to enroll (subject to certain anti-abuse rules)
- Allowing new dependents of current subscribers to enroll.
Tuesday, October 4, 2011
Wednesday, July 27, 2011
Tuesday, July 26, 2011
Thursday, March 24, 2011
Towers Watson and National Business Group on Health Release Annual Employer Survey on Health Purchasing Decisions
Towers Watson and the National Business Group on Health recently released their 16th annual employer survey on health purchasing decisions, a survey based on 588 employers, representing 9.2 million full-time employees across all major industry sectors, and conducted between November 2010 and January 2011.
The survey found that average total health care costs per active employee amounted to $10,387 in 2010, and that this amount is expected to rise to $11,176 per employee in 2011. Both employees and employers will bear the additional cost burden; employees’ share of total premium is expected to increase from an average of 22.9% in 2010 to 23.8% in 2011. To control spending growth, many employers have implemented new tactics in 2011, including rewarding employees for enrollment in healthy lifestyle activities and participating in community-based pilot programs, such as patient-centered medical homes. Survey data indicates that employers’ interest in quality and wellness initiatives is expected to continue into 2012.
Survey responses also indicate that emerging health reform requirements are causing significant changes in employers’ operations. When asked about changes due to the health care reform law, 81% responded that health reform has increased the administrative burden on their HR departments, 11% stated that health reform has decreased their ability to offer competitive pay increases, and 23% stated that they are less committed to offer health care benefits to retirees.
Wednesday, February 23, 2011
Salary-based Premiums Catching On
Although the practice isn't widespread, it could become more common because of health care reform. Effective in 2014, companies will pay a penalty if their employees seek a federal subsidy to buy outside health insurance because the cost of employer coverage exceeds a certain percentage of the employees’ income.
Companies have switched to salary-based premiums partly to help lower-paid employees keep up with rising premiums. Employers also want workers to join the company health plan so they will seek medical care when they need it and won’t miss work because of health-related issues.
Some employers have tied premiums to salaries for as long as 10 years. BCBSNE started the practice seven years ago, and 1,300 employees participate in the company's health plan.
Some experts like basing premiums on salary because it helps lower-paid employees afford coverage. Those experts also say some higher-paid workers might resent paying a bigger share. BCBSNE has not heard any complaints. Varying the share employees pay is similar to an employer paying some workers more and some less based on their position.
Information from Omaha World-Herald, 2/9/11.
Wednesday, February 2, 2011
Thursday, January 20, 2011
Virginia Federal Judge Rules Individual Mandate Unconstitutional
December 13, 2010
Appeal to Supreme Court Likely
On Dec. 13, 2010, a Virginia federal judge declared the “individual mandate” of the Patient Protection and
Affordable Care Act (PPACA) unconstitutional, ruling that the government cannot require Americans to
purchase health insurance starting in 2014. The case is expected to be heard by the Supreme Court, a
sentiment echoed by the ruling judge. "…this will certainly not be the final word,” said U.S. District Judge
Henry Hudson.
This is the first federal district court decision against the individual mandate. Two earlier decisions in Virginia
and Michigan found the mandate constitutional. Other cases are pending including one in Florida filed by
20 states. Several other lawsuits have been dismissed.
Incoming House Majority Leader Eric Cantor, R-Virginia, has urged President Obama and Attorney General
Eric Holder to request that the Supreme Court hear the appeal directly, bypassing the appellate court.
Under the PPACA, starting in 2014, individuals must be enrolled in a health insurance plan that meets basic
minimum standards. Health care exchanges, also starting in 2014, will provide a new insurance marketplace
where individuals and small businesses can buy qualified health benefit plans.
As the individual mandate is not effective until 2014, the Dec. 13 Virginia ruling has no immediate impact.
Appeal to Supreme Court Likely
On Dec. 13, 2010, a Virginia federal judge declared the “individual mandate” of the Patient Protection and
Affordable Care Act (PPACA) unconstitutional, ruling that the government cannot require Americans to
purchase health insurance starting in 2014. The case is expected to be heard by the Supreme Court, a
sentiment echoed by the ruling judge. "…this will certainly not be the final word,” said U.S. District Judge
Henry Hudson.
This is the first federal district court decision against the individual mandate. Two earlier decisions in Virginia
and Michigan found the mandate constitutional. Other cases are pending including one in Florida filed by
20 states. Several other lawsuits have been dismissed.
Incoming House Majority Leader Eric Cantor, R-Virginia, has urged President Obama and Attorney General
Eric Holder to request that the Supreme Court hear the appeal directly, bypassing the appellate court.
Under the PPACA, starting in 2014, individuals must be enrolled in a health insurance plan that meets basic
minimum standards. Health care exchanges, also starting in 2014, will provide a new insurance marketplace
where individuals and small businesses can buy qualified health benefit plans.
As the individual mandate is not effective until 2014, the Dec. 13 Virginia ruling has no immediate impact.
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