Companies Recommit to Smoking Cessation
While workers' waistlines remain a prime target in many employer-sponsored wellness initiatives, companies also are deploying aggressive anti-smoking programs in hopes of controlling health care costs, experts say.
Amy McAllister with Provant Heath Solutions noted in a recent Employee Benefit News report that her company has seen a strong uptick in the use of tobacco cessation initiatives.
McAllister said more employers are shifting their wellness programs to include a "total-body" approach, and that means tackling smoking among the workforce.
Provant's clients are using a mix of "carrot and stick" methods to encourage employees to participate, she said, including higher premiums for workers who refuse to quit.
Although the health benefits of kicking the habit are widely known, employers often overlook some of the legal snags that can occur with a smoking cessation program -- especially if it involves tests to make sure workers remain compliant.
"The issue of nicotine testing is complicated not only by the presence of smokers' rights laws and lifestyle statutes in certain states, which prohibit employer interference in off-duty conduct, but also by questions regarding disability and privacy," said Julie B. Ross of the law firm Lynn Ross Smith & Gannaway, according to Human Resource Executive Online.
Although no court has ruled that nicotine addiction is a disability, recent amendments of the American with Disabilities Act may make it easier for employees who are fired or penalized for failing a nicotine test to win legal battles with employers, Ross said.
Callan G. Carter, a partner at Fisher & Phillips LLP, noted that communication and test administration can further complicate programs that require testing. These challenges often convince employers to limit their scope of testing programs.
"I find that most employers allow employees to self-certify their tobacco use status and only test an employee for nicotine if the employer has a reason to believe the employee may be using tobacco after they have certified otherwise," Carter told HREO.
Still, the pressures of health care costs likely will continue to persuade employers to lean on anti-smoking programs and other initiatives that promise to drive down costs. A recent report by Adecco notes that 55 percent of executives rank health care costs as their No. 1 worry -- beating wages, taxes and talent retention.
That high concern about health care costs means companies should expect the trend of more smoking cessation programs and tobacco testing to continue, experts say.
NYC employees can set aside pay for storm relief
Source: benefitspro.com
By Associated Press
New York City employees who want to contribute to relief efforts after Superstorm Sandy will be able to do it through an automatic payroll deduction.
Mayor Michael Bloomberg and City Council Speaker Christine Quinn announced the program on Sunday.
They said city employees will be able to earmark part of their paychecks to the Mayor's Fund to Advance New York City for storm relief.
The fund has raised more than $35 million for hurricane restoration efforts.
Bloomberg says the money is used to address immediate needs including water, hot food, toiletries, baby supplies, warm clothing and blankets.
The funds will also address long-term needs including housing.
City employees' tax-deductible deductions will run for two months spread over four pay periods.
States get more time on exchanges
Source: benefitspro.com
By: Kathryn Mayer
The Obama administration is giving states extra time to decide whether they’ll work on implementing a key feature of health reform.
Health and Human Services Secretary Kathleen Sebelius told state governors in a letter Friday that they can have another three months to decide if they will split the task of running an exchange with the HHS or if they want to leave it entirely up to the government.
Sebelius said she still wants states to tell HHS their intentions by the original Nov. 16 deadline, but they now have until Dec. 14 to submit blueprints showing how they would operate the exchanges. Those who want to partner with the federal government have until Feb. 15 to tell the federal government so.
The move may be a concession to the many states who had said they were waiting until after the presidential election to comply with the PPACA mandates. Many Republicans and opponents of reform hoped that Republican Mitt Romney would win and begin work on repealing the law.
Under the Patient Protection and Affordable Care Act, exchanges would operate in every state to allow individuals to buy health insurance. Exchanges can be run by individual states, by the federal government or by a combination of the two under an arrangement known as a “state partnership exchange.” The exchanges are scheduled to begin operating on Jan. 1, 2014.
“This Administration is committed to providing significant flexibility for building a marketplace that best meets your state's needs,” Sebelius wrote in her Nov. 9 letter. “We intend to issue further guidance to assist you in the very near future.”
Though the law intended that each state run its own exchange, many governors have refused to do so. Others have complained there hasn’t been enough guidance from the government on how to do so. For those that don’t intend to set up an exchange, the government will set up one for them.
Despite the looming deadline, most states haven’t told the government what their plans are for their state exchange. About 15 states are working on setting up their own.
Since last week's election, a handful of states, including Texas and Florida, have said they will not pursue a state-based exchange. Some conservative groups have been encouraging states to not take action on exchanges, telling them that resistance shows the government their dissatisfaction with health reform.
Small businesses don’t understand health reform requirements
Source: benefitspro.com
By: Kathryn Mayer
Most small businesses either incorrectly believe or aren’t sure whether they must provide health insurance to employees in 2014, according to a recent survey of small business owners by eHealth.
Beginning in 2014, the Patient Protection and Affordable Care Act requires businesses with the equivalent of 50 or more full-time employees to provide health insurance coverage for their workers. Businesses with fewer than 50 employees are exempt from this requirement, although employees may be required to purchase their own coverage.
The eHealthInsurance survey was conducted in August and received responses from 439 small businesses.
Based on their size (fewer than 50 employees), only two of the businesses surveyed would be required by the PPACA to offer health insurance coverage to employees in 2014. But one-third incorrectly believed that they were required to buy insurance for employees in 2014, while 35 percent weren’t sure. Nearly 70 percent either incorrectly believed or were not sure whether they would be required to pay a tax for not providing health insurance in 2014. Only 31 percent of respondents correctly said that the reform law does not require them to pay a tax if they don’t offer insurance.
Another main part of health reform—health insurance exchanges—isn’t factoring into employers’ strategies. Most small business owners (78 percent) said they weren’t familiar with health insurance exchanges and how they could impact their business. Exchanges, which are slated to come online by 2014, would make subsidized health insurance available to individuals who don’t have access to health insurance through an employer.
The eHealth poll is yet another survey reporting similar findings: Health reform is confusing both employees and their employers.
Though the Supreme Court upheld the PPACA in June, many employers continued their wait-and-see approach until after the presidential election. Republican Mitt Romney had promised that he would work on repeal of the law if elected.
The survey also found that nearly a third of small businesses (29 percent) said they would consider dropping coverage for their employees in 2014. The majority, at 68 percent, said they don’t have plans to do so, while 3 percent said they planned to stop offering coverage.
The survey also addressed their willingness to adopt new cost-cutting strategies.
To reduce costs, more than half (51 percent) said they would increase employees’ share of premiums. Nearly 40 percent would consider increasing employees’ deductibles. Nearly half of the employers surveyed (44 percent) felt it would be fair to impose penalties on employees who don't participate in wellness programs.
Sandy Stirs Toxic-Site Worry
(From THE WALL STREET JOURNAL)
By Rob Barry, Dionne Searcey and John Carreyrou
Hurricane Sandy's environmental impact is still being assessed, but the worries for residents of New York and New Jersey are crystallized by one fact: Of the two states' 198 Superfund toxic-waste sites, 45 are within a half-mile of coastal areas vulnerable to storm surge.
The Environmental Protection Agency, which oversees cleanup of those sites, was unable to say how many of them flooded on the night of Oct. 29. But the agency said its initial appraisals show that several "were impacted by the storm," including a site contaminated by lead near Sayreville, N.J., and the Gowanus Canal and Newtown Creek sites in New York City.
The 45 Superfund sites vulnerable to coastal flooding were identified by The Wall Street Journal using data from the EPA and the U.S. Army Corps of Engineers. Many of the sites are concentrated in northern New Jersey in a blighted industrial zone west of Manhattan, 11 flank the Delaware River and a half-dozen are scattered across New York's Long Island.
Superfund sites are generally considered the most hazardous toxic-waste sites in the country. Congress established the program in 1980 following the Love Canal environmental disaster, which ravaged a community of several hundred families that had settled over a former chemical dump in Niagara Falls, N.Y.
Once the EPA has given a site the Superfund designation, the agency has the power to force the sites' polluters to pay for its cleanup costs. Today, there are 1,313 active Superfund sites nationwide on the EPA's so-called National Priorities List. New Jersey has the most, at 111. New York is fourth, at 87.
The EPA said it tested water samples from Brooklyn's Gowanus Canal and nearby flooded buildings, but found only "low levels" of potentially cancer-causing pollutants, which it said may be "related to spilled fuel and runoff from asphalt." New York state officials say they think the floodwaters probably traveled over the Gowanus and Brooklyn's other Superfund site, Newtown Creek, without disturbing the pollutants that line the bottoms of both waterways.
But Thomas Burke, a professor and associate dean at Johns Hopkins School of Public Health, said the Gowanus and Newtown Creek -- whose cleanups haven't begun in earnest yet -- are more vulnerable to flooding risks than sites in more advanced stages of remediation, where caps and liners have already been placed over bottom-lying toxic material.
"There really has to be a careful evaluation of whether there has been any disturbing of the waste," Mr. Burke said.
New Jersey officials downplayed any problems. "There was no major flooding in North Jersey. Superfund sites were not inundated by tidal surges," said Larry Ragonese, a spokesman for the state environmental agency.
In Sandy's wake, one New York neighborhood group is taking matters into its own hands. Kate Zidar, a member of the Newtown Creek Alliance, said her organization hired a consultant to do some testing after the EPA declined to take samples of the floodwater inside buildings close to the creek. "There's an information gap that we need to fill," she said.
In the Gowanus neighborhood of Brooklyn, which lies between the gentrified enclaves of Carroll Gardens and Park Slope, residents and business owners said water overran several blocks.
In New Jersey, one site may have been affected by the storm: the Raritan Bay Slag Superfund Site in Sayreville. A seawall and jetty along the bay's southern shore were contaminated with lead slag, a byproduct of metal smelting, which has tainted the surrounding area with lead and other heavy metals. On a flyover to survey damage, a U.S. Coast Guard member spotted an overturned 10,000-gallon fuel tank near the sea wall, but it didn't appear to harm it.
The EPA said it is collecting samples from the site "to determine the extent of flooding damage and its impacts on lead contamination."
Most small businesses don’t offer health coverage
Source: www.benefitspro.com
By Kathryn Mayer
A new study finds only 49 percent of workers in small businesses with fewer than 50 employees were offered and eligible for health insurance through their employer in 2010, down from 58 percent in 2003.
Larger firms are much more likely to provide health benefits. About 90 percent of workers in firms with 100 or more employees were offered and eligible for health insurance in both 2003 and 2010, according to the report from the Commonwealth Fund.
Low-wage workers in small businesses were the least likely to be offered and eligible for coverage: Just one-third of workers making less than $15 an hour in small firms were both offered and eligible to enroll in their employer’s health plan, compared to 70 percent of small firm workers making over $15 an hour.
Report coauthor and Commonwealth Fund Vice President Sara Collins says the report “highlights a nearly decade-long trend of declining health insurance coverage and rising costs for workers in small businesses, particularly those who make less than $15 an hour.”
“As a result, many people who work for small businesses can’t afford the health care they need or have medical bills they are unable to pay,” she says.
About half small business employees (45 percent) reported trouble paying medical bills in 2010, and 46 percent reported that they skipped needed medical care because of cost, the report says. That’s about ten percent higher than those workers working in larger firms.
Small business workers were also more likely to be dissatisfied with their health insurance, with 29 percent rating it fair or poor, compared to 16 percent of those at larger businesses. They also don’t have as much choice when it comes to health plan options.
But Commonwealth researchers say health reform should help address and solve some of these problems by offering premium tax credits to certain small businesses and by granting subsidies to many uninsured workers toward their purchase of health insurance beginning in 2014.
“The Affordable Care Act should mitigate this trend by improving the affordability and comprehensiveness of health insurance both for small-business owners who want to offer health benefits and for workers in small businesses who can't get coverage through their jobs.”
The Commonwealth Fund is a nonpartisan research foundation that supports PPACA. Though they argue the law will help small businesses, opponents say the law will burden small businesses while raising taxes.
Obama Now Faces New Urgent Task
President Barack Obama faces a new urgent task now that he has a second term, working with a status-quo Congress to address an impending financial crisis that economists say could plunge the country into further recession if not resolved.
"You made your voice heard," Obama said in his acceptance speech, signaling that he believes the bulk of the country is behind his policies. It's a sticking point for House Republicans, sure to balk at that.
The same voters who gave Obama four more years in office also elected a divided Congress, sticking with the dynamic that has made it so hard for the president to advance his agenda. Democrats retained control of the Senate; Republicans kept their House majority.
House Speaker John Boehner, R-Ohio, spoke of a dual mandate. "If there is a mandate, it is a mandate for both parties to find common ground and take steps together to help our economy grow and create jobs," he said.
Senate Republican Leader Mitch McConnell of Kentucky had a more harsh assessment.
"The voters have not endorsed the failures or excesses of the president's first term," McConnell said. "They have simply given him more time to finish the job they asked him to do together" with a balanced Congress.
Obama's more narrow victory was nothing like the jubilant celebration in 2008, when his hope-and-change election as the nation's first black president captivated the world. This time, Obama ground it out with a stay-the-course pitch that essentially boiled down to a plea for more time to make things right and a hope that Congress will be more accommodating than in the past.
The most pressing challenges immediately ahead for the 44th president are all too familiar: an economy still baby-stepping its way toward full health; 23 million people out of work or in search of better jobs; civil war in Syria; a menacing standoff over Iran's nuclear program.
Sharp differences with Republicans in Congress on taxes, spending, deficit reduction, immigration and more await. While Republicans control the House, Democrats have at least 52 votes in the Senate and Republicans 45. One newly elected independent isn't saying which party he'll side with, and races in Montana and North Dakota were not yet called.
Votes also were being counted Wednesday in the Montana and Washington gubernatorial races.
Obama's list of promises to keep includes many holdovers he was unable to deliver on in his first term, such as rolling back tax cuts for upper-income people, overhauling immigration policy and reducing federal deficits. Six in 10 voters said in exit polls that taxes should be increased, and nearly half of voters said taxes should be increased on incomes over $250,000, as Obama has called for.
"It's very clear from the exit polling that a majority of Americans recognize that we need to share responsibility for reducing the deficit," Maryland Rep. Chris Van Hollen, the top Democrat on the House Budget Committee, told CNN. "That means asking higher-income earners to contribute more to reducing the deficit."
Even before Obama gets to his second inaugural on Jan. 20, he must deal with the threatened "fiscal cliff." A combination of automatic tax increases and steep across-the-board spending cuts are set to take effect in January if Washington doesn't quickly reach a budget deal. Experts have warned that the economy could tip back into recession without an agreement.
Newly elected Democrats signaled they want compromise the avoid the fiscal cliff.
Sen.-elect Tim Kaine, a former Virginia governor who defeated Republican George Allen, said on NBC's "Today" show that voters sent a message they want "cooperative government." But he also says the election results show that the public doesn't want "all the levers in one party's hands" on Capitol Hill.
From Massachusetts, Elizabeth Warren said on "CBS This Morning" that those who voted for her opponent, Republican Sen. Scott Brown, expressed a desire for lawmakers to work together. She says: "I heard that loud and clear."
Obama repeated his campaign slogan of moving "forward" repeatedly in a victory speech early Wednesday in his hometown of Chicago.
"We will disagree, sometimes fiercely, about how to get there," he said. "As it has for more than two centuries, progress will come in fits and starts. It's not always a straight line. It's not always a smooth path. By itself, the recognition that we have common hopes and dreams won't end all the gridlock, or solve all our problems, or substitute for the painstaking work of building consensus, and making the difficult compromises needed to move this country forward. But that common bond is where we must begin."
Former Obama adviser Anita Dunn told "CBS This Morning" that the president made it clear in his acceptance speech that he will be reaching out, and she warned GOP House leaders, representing Ohio, Virginia and Wisconsin, to keep in mind that their voters also wanted to keep Obama.
"Clearly there's a lot of momentum and a lot of incentive for people to work together to really find answers to the challenges," she said.
The vanquished Republican, former Massachusetts Gov. Mitt Romney, tried to set a more conciliatory tone on the way off the stage.
"At a time like this, we can't risk partisan bickering," Romney said after a campaign filled with it. "Our leaders have to reach across the aisle to do the people's work."
Obama won at least 303 electoral votes to 206 for Romney, with 270 needed for victory, and had a near-sweep of the nine most hotly contested states.
But the close breakdown in the popular vote showed Americans' differences over how best to meet the nation's challenges. With more than 90 percent of precincts reporting, the popular vote went 50 percent for Obama to 48.4 percent for Romney, a businessman-turned-politician. Romney had argued that Obama failed to turn around the economy and he said it was time for a new approach that combined lower taxes and a less intrusive government.
Obama's re-election means his signature health care overhaul will endure, as will the Wall Street overhaul enacted after the economic meltdown. The drawdown of troops in Afghanistan will continue apace. With an aging roster of justices, the president probably will have at least one more nomination to the Supreme Court.
A second term is sure to produce turnover in his Cabinet. Treasury Secretary Timothy Geithner has made it clear he wants to leave at the end of Obama's first term but is expected to remain in the post until a successor is confirmed. Secretary of State Hillary Rodham Clinton, Obama's rival for the presidency four years ago, is ready to leave. Defense Secretary Leon Panetta isn't expected to stay on.
Obama won even though exit polls showed that only about 4 in 10 voters thought the economy is getting better, just one-quarter thought they're better off financially than four years ago and a little more than half think the country is on the wrong track.
But even now, four years after George W. Bush left office, voters were more likely to blame Bush than Obama for the fix they're in.
Some Americans were hopeful for progress in Obama's second term.
"He may not have done a great job in my mind but I kinda trust him," Jerry Shul said Wednesday morning in Times Square. "And I feel like he's gonna keep trying and I feel like when people keep trying in you favor things work out. I have faith in him, I have faith he will get with the Republicans and get something done."
Elsewhere on the ballot, voters in Maine and Maryland became the first to approve same-sex marriage by popular vote while Washington state and Colorado legalized recreational use of marijuana.
The most expensive presidential campaign in history, at $2 billion plus, targeted people in the nine states that determined the outcome, and the two sides drenched voters there with more than a million ads, the overwhelming share of them negative.
Obama claimed at least seven of those states, most notably Ohio, seen as the big prize. He also prevailed in Iowa, New Hampshire, Colorado, Nevada, Virginia and Wisconsin. Romney got North Carolina.
Florida was too close to call Wednesday morning. The unofficial count had Obama with a 46,000-vote lead, but Florida historically has left as many as 5 percent of its votes uncounted until after Election Day.
Overall, Obama won 25 states and the District of Columbia. Romney won 24 states.
It was a more measured victory than four years ago, when Obama claimed 365 electoral votes to Arizona Sen. John McCain's 173, and won 53 percent of the popular vote.
Preliminary figures indicate fewer people participated this time. Associated Press figures showed that about 118 million people had voted in the White House race, but that number will rise as more votes are counted. In 2008, 131 million people voted, according to the Federal Election Commission.
What Does the Election Mean for Employers and PPACA
Maintenance of the status quo in Washington, D.C. (the re-election of Barack Obama, with a Republican majority in the House of Representatives and a Democratic majority in the Senate) means that implementation of the Patient Protection and Affordable Care Act (PPACA) will move forward largely as the law was passed in 2010.
The law left the task of working out many of the details to the regulatory agencies (the Department of Labor, the IRS and the Department of Health and Human Services), and with many questions remaining unanswered, employers can expect that an enormous number of regulations and other types of guidance will be issued between now and the end of 2013.
Of greatest interest to many employers is the employer shared-responsibility ("play or pay") requirement. As of Jan. 1, 2014, employers who have 50 or more full-time or full-time equivalent employees must offer "minimum essential" (basic) medical coverage for their full-time (30 or more hours per week) employees or pay a penalty of $2,000 per full-time employee, excluding the first 30 employees. Employers who offer some coverage but whose coverage is either not "affordable" or fails to provide "minimum value" must pay a penalty of $3,000 for each employee who receives a premium tax credit. (Coverage is not "affordable" if the employee's cost of single coverage is more than 9.5 percent of income. Coverage does not provide minimum value if it is expected to pay less than 60 percent of anticipated claims. Regulations are still needed to provide details on how the penalty will be determined and collected for employers who do not provide health coverage to their full-time employees, what exactly is the "minimum value" coverage that must be provided to avoid the penalties, and when dependent coverage is "affordable.")
The health insurance exchanges are also scheduled to begin operation in January 2014. (While PPACA is a federal law, the health insurance exchanges were designed to be operated by the states.) A number of states have delayed work on the exchanges pending the outcome of this election, while a few have affirmatively decided not to create a state exchange. If a state is unable or chooses not to create an exchange, the federal government will run the exchange on the state's behalf.
According to the Kaiser Family Foundation, as of Sept. 27, 2012, the following have established exchanges: California, Colorado, Connecticut, District of Columbia, Hawaii, Kentucky, Maryland, Massachusetts, Nevada, New York, Oregon, Rhode Island, Utah, Vermont, Washington and West Virginia. Arkansas, Delaware and Illinois were planning for a partnership exchange with the federal government. Alaska, Florida, Louisiana, Maine, New Hampshire, South Carolina and South Dakota have stated that they will not create an exchange (meaning the federal government will run the exchange on the state's behalf). The remaining states are studying their options but could well end up with a federally run exchange at least for 2014 as the deadline to submit the state's plan for implementing an exchange is next week (Nov. 16).
It remains to be seen whether the federal government will be able implement so many exchanges on behalf of the states by the 2014 target date. It also remains to be seen whether a change of governor, insurance commissioner or control of a state legislature or political realities, will change a state's stance on the exchanges. Because employees may choose to obtain coverage through the exchange even if they have access to coverage through their employer and because the exchanges likely will request information from employers when determining eligibility for premium tax credits, all employers will want to have an understanding of the status of their state's exchange.
In addition to deciding whether to "play" (provide health coverage) or "pay" (the penalties), employers (including those with fewer than 50 employees) have a number of compliance obligations between now and 2014, including:
- Expanding first-dollar preventive care to include a number of women's services, including contraception, unless the plan is grandfathered
- Distributing medical loss ratio rebates if any were received from the insurer
- Issuance of summaries of benefits and coverage (SBCs) to all enrollees
- Reducing the maximum employee contribution to $2,500, if the employer sponsors a health flexible spending account (FSA), beginning with the 2013 plan year
- Withholding an extra 0.9 percent FICA on those earning more than $200,000 beginning in 2013
- Providing information on the cost of coverage on each employee's 2012 W-2 if the employer issued 250 or more W-2s in 2011
- Providing a notice about the upcoming exchanges to all eligible employees in March 2013
- Calculating and paying the Patient Centered Outcomes Fee in July 2013 if the plan is self-funded (insurers are responsible for calculating and paying the fee for insured plans but will likely pass the cost on)
- Working with the exchanges to identify those employees eligible for premium tax credits
- Removing annual limits on essential health benefits and pre-existing condition limitations for all individuals, beginning with the 2014 plan year
- Limiting eligibility waiting periods to 90 days, beginning with the 2014 plan year
- Reporting to the IRS on coverage offered and available (the first reports are actually due in 2015 based on 2014 benefits)
If you have questions or would like additional information about your options and obligations under PPACA, please contact us.
The Future of Health Care in Obama’s Second Term
Source: thehealthcareblog.com
By: JOANNE CONROY, MD
Although members of the Obama team are now celebrating their election victory, the next four years will not be smooth sailing. Ignoring the campaign rhetoric, there is still much more work to be done in order to reshape our health care system; the effect on academic medical centers and teaching hospitals will be significant.
The political conscience is still being driven by the fear of the fiscal cliff, which dominates most Washington conversations. Both political parties agree that health care is a significant contributor to our present and future deficit and that we have to figure out how to deliver more care at a lower cost. But, they argue about what to call it, who gets credit, and whether the solution is bigger government involvement or a dominant private market?The potential cuts to NIH funding and graduate medical education support do not go away with another four Obama years. We anticipate that the president will reform the tax code and transform how we deliver health care. The latter will be his lasting legacy.
However, in all this chaos, there are opportunities. While we no longer hope for a bipartisan middle ground on health care — and rancor will certainly escalate if President Obama is reelected — to many people, the Affordable Care Act is starting to look like a tangible business opportunity. Every insurer is looking at the 30 million uninsured people who will receive coverage through a mix of subsidized private insurance for middle-class households and expanded Medicaid for low-income people. These new markets could be worth $50 billion to $60 billion in premiums in 2014, and as much as $230 billion annually within seven years. The structure and implementation of these programs present specific challenges for AMCs.
Medicaid:
Academic medical centers currently deliver 28 percent of inpatient care for Medicaid recipients and 40 percent of uninsured care in the United States — in only 6 percent of the acute care facilities. We have the Medicaid specialty care market cornered — because no one else will accept these patients. The expansion of Medicaid will create stress in our historical access points: emergency rooms and primary care offices. We will be overwhelmed if we do not dramatically reengineer where we deliver care and rethink who should deliver care for what conditions. We will experience costs that quickly spiral out of control if we just expand our current system.
Obama’s re-election removes the indecision about whether to opt in or opt out for many state governors. Most insurers are betting on the fact that dual eligibles (patients who are disabled or poor enough to qualify for both Medicaid and Medicare) will be moved into the managed Medicaid plans. This will require active care management, better EHRs, geomapping of resource utilization, and a greater understanding of the impact of social determinants of health on this population. It will be interesting to see if the role of the insurer really expands to manage the outcome instead of just the cost.
Health Exchanges:
The implementation of the exchanges poses challenges for states, because they are supposed to be self-sustaining by 2015. Their ability to achieve this comes down to demographics and the size of their insured pool. Small high-risk pools will need to be intensively managed (like the District of Columbia), in contrast to larger populations that can be more loosely managed as they develop state-wide infrastructure. For academic medicine, the exchanges will present specific challenges. Our services could be subject to higher deductibles, copays and even co-insurance if the exchanges choose to tier providers according to cost. As a result, our care could be inaccessible to many patients without means.
There has also been very little discussion about how to transition graduate medical education support into the exchange market. Currently Medicare, Medicaid, and other insurers support the educational mission through explicit or implicit support. Supporting the training of the health care workforce has been considered a public good that increases access and quality for patients. Medicare Advantage programs use a “carve out” to preserve this support, but this option has not yet been part of the exchange discussions.
Physician Shortages:
The Center for Workforce Studies at the AAMC estimates that the nation will face significant physician shortages by 2020. As the newly insured begin to seek care in 2014, and as we anticipate these shortages, one must wonder who will care for these patients? By 2017, the number of physician retirees will be close to the number of new medical school graduates. While medical schools as a whole have been expanding the number of students they admit, there may not be enough residency positions to accommodate them. The Obama team can ignore the growing physician shortage — but at their peril. Unfortunately, we also continue to debate within specialty societies about who should provide the services, rather than talking about how we can deliver care as a team more efficiently. Use of interprofessional teams holds great promise for improving the efficiency of the physician workforce, and we anticipate that the administration will continue to support innovative reforms in health care delivery.
Health care reform will continue to move forward, imperfect as it may be. I have great hopes for bipartisan solutions, but I won’t hold my breath. The really hard work is not over; it has just begun.
Obama Wins Re-election: Health Care Reform Law Here to Stay
After hard-fought campaigns by both candidates, President Barack Obama has been re-elected for a second term in office. Obama’s victory in the election, along with last summer’s Supreme Court decision upholding the health care reform law, cements the Democratic Party’s dedication to the legislation.
While opponents of the law have called for its repeal, health care reform’s supporters consider the legislation to be the major achievement of Obama’s first term. Obama’s re-election, along with continued Democratic control of the Senate, means that implementation of the law will now continue without additional roadblocks.
WHAT DO EMPLOYERS HAVE TO DO NEXT?
With the landscape of employer-provided health care potentially changing over the next few years, employers should consider their future plans related to their role in employee health care. They may have to make some big decisions about whether to continue providing coverage to their employees. The “pay or play” penalties provide some incentive for employers to continue coverage, since they will be at risk for significant penalties if they do not. However, employers may decide that paying the penalty is more cost-effective than continuing to pay the ever-increasing costs of health care for employees and their families.
On the other hand, uncertainty among employees about the quality and cost of individual health coverage continues to make employer-provided health coverage an attractive recruiting and retention tool. Because of these advantages, most employers plan to continue offering coverage for now. The additional uncertainty for employers, with compliance obligations hinging on court decisions and the political process, has made many companies hesitant to make any large-scale changes.
Whatever their future decisions may be, employers that will continue to sponsor group health plans for the near future must prepare for upcoming deadlines. Significant health care reform provisions with looming effective dates include:
Summary of Benefits and Coverage
Health plans and issuers must provide an SBC to participants and beneficiaries that includes information about health plan benefits and coverage in plain language. The deadline for providing the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period is the first open enrollment period that begins on or after Sept. 23, 2012. The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) effective for plan years beginning on or after Sept. 23, 2012.
60-Days’ Notice of Plan Changes
A health plan or issuer must provide 60 days’ advance notice of any material modifications to the plan that are not related to renewals of coverage. Notice can be provided in an updated SBC or a separate summary of material modifications. This 60-day notice requirement becomes effective when the SBC requirement goes into effect for a health plan.
$2,500 Limit on Health FSA Contributions
The health care law will limit the amount of salary reduction contributions to health flexible spending accounts to $2,500 per year for plan years beginning on or after Jan. 1, 2013.
W-2 Reporting
Beginning with the 2012 tax year, employers that are required to issue 250 or more W-2 Forms must report the aggregate cost of employer-sponsored group health coverage on employees’ W-2 Forms. The cost must be reported beginning with the 2012 W-2 Forms, which are issued in January 2013.
Preventive Care for Women
Effective for plan years beginning on or after Aug. 1, 2012, non- grandfathered health plans must cover specific preventive care services for women without cost-sharing requirements. Calendar year plans must comply effective Jan. 1, 2013.
Employee Notice of Exchanges
Effective March 1, 2013, employers must provide a notice to employees regarding the availability of the health care reform insurance exchanges. HHS has indicated that it plans on issuing model exchange notices in the future for employers to use.
Additional Medicare Tax for High-wage Workers
In 2013, health care reform increases the hospital insurance tax rate by 0.9 percentage points on wages over $200,000 for an individual ($250,000 for married couples filing jointly). Employers will have to withhold additional amounts once employees earn over $200,000 in a year.
WHAT GUIDANCE WILL WE SEE?
Regulations on a number of issues remain outstanding. The regulatory agencies responsible for implementation and enforcement of the health care reform law—the Departments of Labor, Treasury and Health and Human Services— began issuing additional guidance once the Supreme Court upheld the law. Additional guidance is expected now that the election is over.
Issues that will likely be addressed in future guidance include:
Employer Pay or Play Mandate
The agencies are expected to, and have indicated that they will, issue more guidance for employers to help them determine how to comply with the shared responsibility provisions of the law.
Automatic Enrollment
The Department of Labor is required to issue regulations implementing the rule requiring large employers that offer health coverage to automatically enroll new employees in the health plan (and re-enroll current participants).
Nondiscrimination Rules for Fully-insured Plans
Under health care reform, non-grandfathered fully- insured plans will not be able to discriminate in favor of highly-compensated employees with respect to their health benefits. The IRS delayed the effective date of this rule for additional regulations, which have yet to be issued.
State governments may also take further steps to establish the health insurance exchanges required by the health care reform law. The federal government will step in and set up exchanges for states that fail to establish their own exchanges. Many states have delayed implementation and will need to accelerate their efforts if they want to run their own exchanges.
CHALLENGES FOR IMPLEMENTATION
As we get closer to full implementation of the health care reform law, questions linger about whether the framework is in place for all pieces to be operational by their deadlines. Insufficient staffing of the responsible agencies is one potential issue, along with employer and state government hesitation or inability to implement certain parts of the law. Compliance efforts are likely to pick up now that the election is over.