Young Adults Should Have Reasonable Plan Options On Exchanges

Source: https://www.kaiserhealthnews.org

By Michelle Andrews

As landmark dates approach in the health-care overhaul, readers are trying to figure out how the new insurance exchanges will work. Here are some recent questions:

Q. After the exchanges go live in 2014, will consumers still be able to buy individual health insurance directly from carriers, without going through those state-based marketplaces? I fear the rules of the plans operating within the exchange will make the premiums unnecessarily high for younger, healthy people.

A. Consumers will be able to buy individual health insurance next year either through the state insurance exchanges or on the private market. Regardless of where they buy a plan, however, all new individual policies will have to meet certain standards related to coverage and cost.

Under the law, premiums for older people cannot be more than three times higher than those for younger ones. Currently, the gap between how much younger, typically healthier people pay for coverage and how much older people pay is larger than that, leading some experts to predict that younger people's rates will skyrocket next year.

An analysis published last month by the Urban Institute suggests that will not happen. Although premiums will be higher for many young people under the new rules, this increase will have very little impact on their out-of-pocket costs, the study found. The reason: The vast majority of young people will be eligible for subsidized coverage -- through the exchanges, Medicaid or their parents' health plans. On the health insurance exchanges, premium subsidies will be available to people with incomes up to 400 percent of the federal poverty level -- $45,960 for an individual in 2013.

"If you're young, you do want to go on the exchanges because you'll qualify for subsidies," says Jen Mishory of Young Invincibles, an advocacy group.

In addition to enrolling in regular plans, people up to age 30 will have the option of using the exchanges to buy less expensive, high-deductible policies that protect primarily against catastrophic events. Although these policies might require large out-of-pocket payments by members -- the deductible probably will be more than $6,000, for starters -- they will be required to cover preventive care without any co-pay or cost sharing, and three primary-care visits will be covered even if the deductible has not been met.

Q. If employers stop providing coverage and employees have to purchase individual policies on or off the exchanges, do the employees lose the option to make pre-tax contributions to their health savings accounts?

A. You'll be able to make pre-tax contributions as long as you buy a policy that meets federal standards for plans that can be linked to health savings accounts.

This means a high-deductible policy. In 2013, HSA-qualified plans must have a deductible of at least $1,250 for individual coverage and $2,500 for a family plan, among other requirements.

The amount that individuals and their employers can contribute to the accounts limited to $3,250 and $6,450 for individual and family coverage, respectively. (The Internal Revenue Service makes cost-of-living adjustments to these and other limits annually.) Even if your employer no longer offers health insurance in 2014, any money in the HSA is yours to use for medical expenses.

Some of the policies offered on the exchanges may qualify as HSA plans, says Carrie McLean of eHealthInsurance.com, an online vendor. But it's too soon to know whether carriers will offer such plans or the exchanges will choose to carry them, she says.

Q. In 2014, can someone who works for a company drop his coverage and buy it through a state exchange instead?

A. Next year, most people will be able to choose to buy a health plan on the exchange. As I said above, individuals whose income is less than 400 percent of the federal poverty level may be eligible for a subsidy. This can make buying a policy on the exchange an attractive option.

But even if you meet the income requirements, you won't be eligible for a subsidized exchange plan unless your job-based coverage is considered unaffordable (because premiums for individual coverage cost more than 9.5 percent of the individual's income) or inadequate (because the plan covers less than 60 percent of allowed medical expenses).

Q. What's to stop people from just paying the individual mandate penalty and buying coverage when they need it, since insurers won't be able to turn them down because of a preexisting condition?

A. If you decide to drop coverage altogether, the penalty for not having insurance in 2014 will be either $95 or 1 percent of your taxable income, whichever is greater. To discourage people from waiting to buy insurance until they're sick, there will be an open enrollment period for buying coverage on the exchanges from October 2013 through March 2014. If you don't sign up during that time and you subsequently get sick, you won't be able to sign up until the following year in most cases.

 

by 6d-destani

3-year anniversary: Important milestones for PPACA

Source: https://eba.benefitnews.com

By Gillian Roberts

On the third anniversary of President Barack Obama signing the Patient Protection and Affordable Care Act, we take a quick look at important dates on the passage, implementation and ongoing struggles about the law that’s set to change America.

  • March 23, 2010: The day Obama signed PPACA into effect. He reflects on that day in a statement released Saturday, “Three years ago today, I signed into law the principle that in the wealthiest nation on Earth, no one should go broke just because they get sick.”
  • June, 2013: Kathleen Sebelius, Secretary of the Department of Health and Human Services, made multiple media appearances at the end of last week around the anniversary. She authored a blog on the Huffington Post, discussing another step to come: “In June, the site will be unveiling the new Marketplace. You'll be able to learn everything you need to know about the Marketplace, including how it works, the benefits of health insurance, how to choose a plan based on your needs and lifestyle, and more. Then in the fall, you can use this site to enroll in a plan from home, or from any place you can access the Web.”
  • Oct. 1, 2013: The day the state, federal and partnership exchanges are scheduled to begin open enrollment for those who are currently uninsured or looking to switch to the exchanges. There has been growing speculation growing over the amount of work HHS has yet to do to meet this deadline. Earlier in March the executive director of the National Governors Association, Dan Crippen, told a crowd of carriers at AHIP’s policy conference that there is a chance some of the exchanges won’t be ready by Oct. 1, but HHS will continue to work hard towards the deadline.
  • Jan. 1, 2014: The day coverage begins for those who have enrolled on the public exchanges. The Congressional Budget Office released updated predictions in February of this year that 6 - 7 million people will gain coverage on the exchange in the first year. This is a decrease of 13 million people from CBO’s initial projections about health reform in March 2010.

by 6d-destani

The Affordable Care Act Three Years Post-Enactment

Source: https://www.kff.org

Three years ago, on March 23, 2010, the Affordable Care Act (ACA) was signed into law. Although the date for full implementation of most provisions of the law is January 1, 2014, the ACA has already had an impact on the goals of expanded coverage of the uninsured, improved access and better care delivery models, broader access to community-based long-term care, and more integrated care and financing for beneficiaries who are dually eligible for Medicare and Medicaid. Although the ACA remains controversial, with many debates about its future as well as provisions already implemented, implementation is proceeding.

Much remains to be put in place leading up to 2014. This brief summarizes ACA-related activities to date in terms of tangible benefits and policy changes on the ground with respect to private insurance and Exchanges, Medicaid coverage, access to primary care, preventive care, Medicare, and Medicare and Medicaid dual eligible beneficiaries.

Private Insurance and Exchanges

  • Young adults up to age 26 can stay on their parents’ insurance policies. Young adults can qualify for this coverage even if they are no longer living with a parent, are not a dependent on a parent’s tax return, or are no longer a student. Census data show that over two million young adults have gained coverage, contributing to the decline of 1.3 million in the number of uninsured Americans in 2011.
  • Many states are moving forward with building new health insurance marketplaces. To date, 17 states and the District of Columbia are establishing state-based health insurance exchanges while another seven states will partner with the federal government to run their exchanges. These states are making critical decisions about how insurers will participate in the exchanges, what types and how many plans will be offered, and what types of consumer assistance will be available to help people enroll in coverage. States are also building the IT infrastructure for the exchanges to be ready when open enrollment begins on October 1. In the remaining 26 states, the federal government will operate a federally-facilitated exchange, and residents will get the same benefits and tax subsidies as in states operating their own Exchanges.
  • Coverage exclusions for children with pre-existing conditions were prohibited as of September 23, 2010. Insurers are no longer permitted to deny coverage to children due to their health status, or exclude coverage for pre-existing conditions. Protections for adults will take effect in 2014. In addition, lifetime limits on coverage in private insurance have been eliminated and annual limits are being phased out.
  • Medical loss ratio and rate review requirements are improving value and lowering premium growth for consumers. Medical loss ratio standards require insurers to spend 80-85% of premium dollars on direct medical care instead of on administrative costs, marketing, or profits, or pay rebates back to consumers. Failure to meet these standards has resulted in insurer payments of over $1 billion in rebates to consumers. In addition, expanded review of insurance premium increases by states and the federal government has led to some rate increases requested by insurers being denied, withdrawn, or lowered, which has slowed overall premium growth.
  • All health plans must provide a standardized, easy-to-read Summary of benefits and Coverage (SBC). The SBC gives consumers consistent information about what health plans cover and what limits, exclusions, and cost-sharing apply. It includes illustrations of how coverage works by estimating what a plan would pay and what consumers would be left to pay for common health care needs such as an uncomplicated pregnancy or management of diabetes. Kaiser Family Foundation tracking polls indicate the SBC is one of the most popular provisions in the ACA.

Medicaid coverage

  • More than half the Governors have announced support for the Medicaid expansion. Twenty-seven Governors intend to implement the Medicaid expansion. Another seven are still weighing their options. Seventeen Governors have stated their opposition to the expansion.
  • Seven states have expanded Medicaid to adults since the enactment of the ACA, helping to build on the very limited base of coverage available to low-income adults today. While the enhanced federal funding for the ACA Medicaid expansion to low-income adults does not take effect until January 1, 2014, seven states – CA, CO, CT, DC, MN, NJ, and WA – have used the ACA option to expand Medicaid earlier at their regular match rate, or used Section 1115 waiver authority to do so. Nearly all these states previously covered low-income adults using state-only dollars, but transitioning that coverage to Medicaid enabled them to preserve and, in some cases, expand adult coverage by securing federal matching funds.
  • Medicaid and CHIP have remained primary sources of coverage for low-income children and pregnant women. To help preserve the existing base of coverage in the period leading up to the coverage expansions in 2014, the ACA required states to maintain the Medicaid and CHIP eligibility, enrollment, and renewal policies they had in place when the ACA was enacted. Notwithstanding the recent recession and state budget pressures, eligibility for these programs has remained largely stable, and the programs have remained primary sources of coverage for low-income children and pregnant women. The preservation of Medicaid and CHIP coverage has been important to progress in reducing the number of uninsured Americans – which declined by 1.3 million in 2011.
  • Nearly all states are modernizing and streamlining their Medicaid enrollment systems. Taking advantage of a time-limited 90% federal match rate available for systems development, almost all states are already moving forward with major improvements to their information technology (IT) infrastructure to prepare for the ACA’s new streamlined, coordinated enrollment system. In addition, an increasing number of states – now totaling 37 – have implemented an electronic online application in Medicaid or CHIP, and the number of states with an online renewal process rose from 20 in 2011 to 28 in 2012. Over two-thirds of states now provide online accounts.
  • Ten states have adopted the ACA’s new Medicaid option to provide health homes for those with chronic conditions or serious mental illness. Another five states plan to implement health homes. Health homes are among the ACA’s broader set of initiatives to improve care and better manage spending for people with complex and high-cost needs. Building on patient-centered medical homes, health homes incorporate comprehensive care management, health promotion, transitional care, and other services and supports to provide more integrated, “whole person” care for Medicaid beneficiaries with multiple chronic conditions or a serious and persistent mental illness.
  • States are taking advantage of new and expanded opportunities to provide home and community-based long-term services. Many people with long-term care needs prefer to receive services at home or in the community rather than in institutional settings, and home and community-based services (HCBS) are often less expensive. The ACA expands states’ opportunities to rebalance their long-term care programs toward community-based care and provides new federal funding for this purpose. A total of 46 states, including DC, have received federal grant money to transition Medicaid beneficiaries from institutions back to their homes or community-based settings through the “Money Follows the Person” demonstration program, which the ACA extended. Sixteen of these states first undertook a demonstration this past year. A growing number of states – 25 currently – are responding to other new flexibility and federal financial incentives the ACA provided to increase access to HCBS.

Access to Primary care

  • Primary care providers get increased Medicare and Medicaid payment rates under the ACA. The ACA provides for a 10% bonus payment on top of the regular Medicare fee schedule amount for many primary care services provided by primary care physicians (and other practitioners) from 2011 through 2015. The law also requires states to raise their Medicaid payment rates in 2013 and 2014 to Medicare payment levels for many primary care physician services. As a result, Medicaid primary care fees will increase by 73%, on average, in 2013 although the size of the increase will vary by state. The Medicaid increase is fully federally funded up to the difference between states’ July 1, 2009 fees and Medicare fees in 2013 and 2014.
  • Because of new ACA investments in the health center program, health centers’ patient capacity has expanded. The ACA created a five-year $11 billion Health Center Trust Fund to support health center growth in preparation for the coverage expansion beginning in 2014. Drawing on this fund, health centers are serving an additional 1.5 million patients, and they have been able to maintain their capacity to serve another 2.2 million patients whom they were earlier able to reach only because of a (now-expired) temporary increase in federal funding when the recession was at its deepest. In addition, over 700 health centers received grants for capital improvements from funds provided by the ACA for this purpose.
  • Thousands of new primary care providers have been added to the ranks of the national health Service Corps (nhSC), bolstering the health care workforce in medically under served communities. The ACA provided increased funding of $1.5 billion for the NHSC, which provides loan repayment to medical students and others in exchange for service in low-income under served communities. Health centers, which serve millions of people in these communities, rely heavily on the NHSC to recruit their physicians, dentists, and other health care professionals. As a result of the ACA investment and earlier investments by the American Reinvestment and Recovery Act of 2009, the number of NHSC clinicians is at an all-time high – triple the number in 2008.Today nearly 10,000 NHSC providers are providing primary care to approximately 10.4 million people at nearly 14,000 health care sites in urban, rural, and frontier areas.
  • Additional efforts to expand the primary care workforce are also underway. New training and retention programs have also been created to develop and strengthen the primary care workforce. The ACA has increased the number of graduate medical education residency programs, including establishing 11 Teaching Health Centers to support primary care training in ambulatory care settings. Other efforts include investments in training for nurses and physician assistants, and financial support for nurse-managed clinics.

Access to Preventive Services

  • Preventive benefits with no patient cost-sharing are now required in Medicare and private insurance (except for grandfathered plans). The benefits that must be covered include services found to be effective by the USPSTF, immunizations for adults and children endorsed by the CDC Advisory Committee on Immunization Practices, and pediatric services recommend by HRSA’s Bright Futures for Children. Private plans must cover additional preventive services for women without cost-sharing, including all FDA-approved contraceptive methods (non-profit, religious employers that object to that requirement are exempt) and at least one annual well-woman visit. HHS estimates that, as a result of the ACA, 71 million children and adults with private insurance, and 34 million Medicare beneficiaries have received no-cost preventive care. Enhanced federal matching funds in Medicaid are available to states providing all USPSTF-recommended preventive benefits without cost-sharing, but, to date, few states have made the changes required to gain the higher match rate.
  • The ACA supports population-based prevention activities through a new Prevention and Public health fund. This Fund has been used to make over $1 billion in critical investments in programs aimed at reducing the burden of chronic disease and improving the overall health of communities. Funding has supported Community Transformation Grants in 36 states to reduce the incidence of heart attacks, strokes, cancer, and other diseases; rebuilding the immunization infrastructure; tobacco cessation programs; and substance abuse and suicide prevention activities.

Medicare 

  • Medicare beneficiaries enrolled in Part d drug plans are receiving additional help with their “doughnut hole” prescription drug costs. The ACA required drug manufacturers to offer a 50% discount on brand-name drugs in the coverage gap phase of the Medicare drug benefit, known as the “doughnut hole,” beginning in 2011. It also required Part D plans to offer additional coverage for brand-name and generic drugs for enrollees who reach the coverage gap, and phases out the gap by 2020. In 2013, plans pay for 21% of the cost of generic drugs and 2.5% of the cost of brands, on top of the 50% manufacturer discount. According to HHS, as of March 2013, 6.3 million Medicare beneficiaries have saved over $6.1 billion on prescription drugs in the Medicare Part D doughnut hole since the ACA was enacted.
  • New initiatives testing delivery system and payment reforms are being developed and implemented rapidly around the country, including Accountable Care organizations (ACos) and bundled payments. The ACA established a new Center on Medicare and Medicaid Innovation charged with reducing costs in Medicare, Medicaid, and CHIP while preserving or enhancing quality of care. The Innovation Center develops, tests, and supports new delivery models to increase coordination of care and improve quality, along with new payment systems to encourage more value-based care and move away from fee-for-service payment. For example, the Innovation Center has approved more than 250 ACOs to participate in the Medicare Shared Savings Program in 47 states and territories; these ACOs cover more than four million beneficiaries in traditional Medicare.
  • Medicare savings in the ACA have helped extend the solvency of the Medicare Part A trust fund. The ACA included Medicare savings measures that were projected to reduce growth in Medicare spending over time. The measures included reduced payments to Medicare Advantage plans, smaller updates in payment levels to hospitals and other providers, and increased premiums for higher-income beneficiaries. These changes, along with a payroll tax increase for higher-income taxpayers, contributed to the extended solvency of the Medicare Part A trust fund. Medicare spending per beneficiary is projected to grow more slowly than private health insurance spending per capita over the next decade, and premiums and cost-sharing for many Medicare-covered services are lower than what they would be without the ACA.

Medicare and Medicaid Dual Eligible Beneficiaries

by 6d-destani

HHS finalizes Medicaid rule

Source: https://www.benefitspro.com

By Kathryn Mayer

Health officials on Friday issued a final rule guaranteeing 100 percent funding for new Medicaid beneficiaries as part of the Patient Protection and Affordable Care Act.

Health reform authorizes states to expand Medicaid to adult Americans under age 65 with income of up to 133 percent of the federal poverty level—about $15,000 for a single adult in 2012—and provides unprecedented federal funding for these states.

Under the new regulations, the federal government will pay all of the cost of certain newly eligible adult Medicaid beneficiaries through 2016, phasing down to a permanent 90 percent matching rate by 2020. It will remain there permanently.

The rule, issued by the U.S. Department of Health and Human Services, will take effect in January of next year.

“This is a great deal for states and great news for Americans,” HHS Secretary Kathleen Sebelius said. “Thanks to the Affordable Care Act, more Americans will have access to health coverage and the federal government will cover a vast majority of the cost. Treating people who don’t have insurance coverage raises health care costs for hospitals, people with insurance, and state budgets.”

HHS said the rule builds on several years of work that the department has done to support and provide flexibility to states’ Medicaid programs ahead of the 2014 expansion. The rule also offers more collaboration with states on audits that track down fraud and outlines ways states can make Medicaid improvements without going through a waiver process, HHS said in comments.

The administration will take comments from interested parties and the public for 60 days. The full text of the rule can be found here.

 

by 6d-destani

How to prepare for a health and welfare compliance audit

Source: https://ebn.benefitnews.com

by John F. Galvin

When I speak with employers about health and welfare plan compliance, I’m often asked the question: “What happens if I don’t do everything?”

It’s not that employers don’t want to follow the rules. Rather, it’s that in the mid-market, especially with employers who have fewer than 500 employees, the benefit program is often managed by HR professionals who are wearing so many hats that they know the chances are high that something will fall through the cracks — and, thanks to ERISA, HIPAA and other laws, there are lots of cracks.

When I explain that they could be subject to an audit by the Department of Labor, I’m usually met with some doubts. Some want to know if the DOL really goes after mid-market employers, or if it just focuses on large corporations. Others will wonder if the DOL would be interested in their particular industry. But we’ve seen more and more DOL compliance audits in the mid-market, and with the myriad new compliance responsibilities that benefits professionals will need to deal with as a result of health care reform, this trend may continue to grow.

Summary plan descriptions

So what does the DOL tend to focus on with health and welfare audits? Much of the typical DOL audit goes back to employer requirements outlined in the original ERISA legislation – summary plan descriptions. SPDs were the government’s way of requiring employers to provide information on benefit plans that can be understood by the average participant.  However, unlike an average benefits summary, the requirements of what must be included in an SPD are numerous. Detailed descriptions of benefit provisions, eligibility, and a variety of legislation passed since 1974 all must be part of the SPD. In fact, by the time all this is information is included, the document can hardly be called a “summary.”

Given all of the work that goes into the creation of SPDs, it isn’t surprising to find out that many mid-market employers aren’t compliant. In the event of an audit, the chances are high that an SPD will need to be produced, along with some assurance that the document is actually making its way to employees correctly.

Many small and mid-market employers erroneously believe this is a requirement only for large employers. But employers of every size in any industry should review the guidelines for the creation and distribution of SPDs, and ensure their practices are compliant. In fact, once an SPD is in place, many of the other compliance responsibilities associated with health and welfare plans become much easier since the document becomes the plan’s “bible.”

HIPAA compliance

The second-most frequent item in DOL audits is related to the Health Insurance Portability & Accountability Act, or HIPAA. HIPAA is like a large tree trunk with many different branches. When discussing HIPAA, one could be talking about its rules for handling pre-existing conditions under a health plan, rules for issuing certificates of creditable coverage to terminating participants, rules for informing participants about enrollment rights, protecting private health information, and more. Any one of those items might show up in a DOL audit. Employers should review HIPAA rules thoroughly to make sure their plan is in compliance.

One of the most common errors I see with mid-market employers is in regards to the requirement under HIPAA that plans inform participants about enrollment rights, or more specifically “special enrollment rights.” The HIPAA Notice of Special Enrollment Rights informs participants who are eligible for your health plan about when they can join your plan or change their election due to certain qualifying life events such as marriage, birth of a child, or loss of eligibility under another employer’s plan.

The notice is important because it informs your participants about the timeframes in which they must request these enrollment rights. While some employers may have trouble during a DOL audit because they don’t have this notice at all, more employers are making mistakes with the actual distribution of the notice. For example, it’s not uncommon for employers who have an SPD to include the notice right in that document. However, unless your SPD is being distributed to those employees who are eligible for the plan but choose not to enroll, then the distribution requirements for special enrollment rights under HIPAA are not being met. Employers should take the time to review the HIPAA notice and its requirements for distribution to make sure they are compliant.

 

by 6d-destani

Is There Room in the Medicare Reform Debate Climate?

Source: https://medicarenewsgroup.com

by Bob Rosenblatt

Medicare has been considered the blue-ribbon, A-plus health insurance plan since its inception in 1966, when it began covering millions of disabled and elderly.

But this perception may change in a big way on Jan. 1, 2014, when the Affordable Care Act (ACA) brings a new protection to consumers covered by private coverage. These policies will have annual out-of-pocket spending limits, offering protection for those facing big medical bills. The average maximum annual amount will be $6,400 for a single person and $12,800 for a family.

Suddenly, Medicare will be the lone health insurance policy without any protection on the catastrophic end, meaning there is no limit to the amount a patient may be forced to pay out-of-pocket.

This is already sparking a new policy debate on what sort of protections should be offered to Medicare beneficiaries against the threat of huge financial losses from medical bills. This question is becoming entangled with the discussion of Medicare’s fiscal future and the desire to slow its spending.

Debate “over these changes will be contentious,” warned the Kaiser Family Foundation in a recent study.

A Medicare beneficiary may face severe financial risk from medical costs. For a hospital stay, there is a deductible of $1,184 for a hospital stay of 1-60 days; $296 per day for days 61 to 90; $592 per day for days 91 through 150; and all costs for each day beyond 150. For outpatient visits to a doctor under Part B, there is a $147 annual deductible, and then a 20 percent co-payment for further expenses. In addition, there is the cost of the Part B premium at $104.90 per month (higher for individuals with income over $85,000 a year), and another premium if drug coverage under Part D has been selected. In addition, many beneficiaries also buy Medicare supplementary insurance, known as Medi-gap, back-up insurance to help with co-payment costs.

Add together the co-payments, deductibles and premiums, and it can become a financial struggle for many people, Kaiser Family Foundation Vice President Tricia Neuman told a Congressional health subcommittee of the House Ways and Means Committee in February, in a report titled, “Changing Medicare's Benefit Design: Implications For Beneficiaries.”

“Even with Medicare, and supplemental insurance, beneficiaries tend to have relatively high out-of-pocket health costs,” she said. “In 2009, half of all Medicare beneficiaries spent 15 percent or more of their income on health-related expenses, including premiums, cost sharing for Medicare-covered services, and services not covered by Medicare; more than one-third of all beneficiaries (39%) spent at least 20 percent of their income on medical expenses that year.”

The majority of people on Medicare derive their income from their monthly Social Security check. Social Security’s annual cost-of-living increase is pegged to the general rate of inflation in the economy. This provision, in effect since 1974, is designed to provide a measure of income security over time, so that the value of a retiree’s check keeps pace with expenses.

But the flaw here is that the cost of medical care is rising faster than the general rate of inflation, and thus it is eroding the value of the Social Security check. According to a 2011 Kaiser Family Foundation report, “Medicare the expense of Medicare—the total cost of the monthly premiums, the deductibles and co-payments—was equal to 27 percent of the average Social Security retirement check in 2010. By the year 2030, the report says, Medicare costs will consume 36 percent of the average Social Security check.

“The benefit structure has long been criticized for being too complex, and for promoting overutilization of care which, in turn, translates into higher costs for seniors,” Sen. Orrin Hatch (R-Utah) said in a recent call for a cap on out-of-pocket costs. “Streamlining the cost-sharing will make it easier for seniors to navigate Medicare more efficiently while also reducing costs. Most importantly, it will give seniors financial security in cases of high out-of-pocket costs.”

He sought to bring back into the debate the proposal put forth by the deficit reduction Simpson-Bowles Commission, which had been appointed by President Obama. In 2010, the commission called for a combined annual deductible of $550, instead of the separate Part A and Part B deductibles. It also called for a 20 percent co-payment schedule, and an annual out-of-pocket limit of $7,500. This would have saved the federal government approximately $110 billion over a 10-year period.

Putting an annual limit on financial exposure would save money for some of the sickest people on Medicare, but it would force nearly everyone else to pay more, Neuman said in the Congressional hearing.

She also said that a variation of the Simpson-Bowles plan would have offered some beneficiaries a 5 percent savings (an average of $1,570 a year) but 71 percent would have faced larger bills (an average increase of $180 a year).

The views of these proposals depend on politics. Conservatives, who worry about the deficit, say measures are needed to slow down Medicare’s growth, while limiting the financial threat to the Medicare beneficiaries with the biggest bills.

Liberals oppose any measure they say would shift expenses to already hard-pressed beneficiaries.

Liberals want more affluent people to pay more. The liberal Center for American Progress has offered this proposal: the out-of-pocket maximum should be $5,000 a year for those with incomes below 400 percent of the federal poverty level; $7,500 a year for people with income between 400 percent and 600 percent of the poverty standard; and $10,000 when income exceeds 600 percent of the poverty level.

AARP, the powerful lobby on behalf of those ages 50 and older, has been studiously neutral in discussions of this issue, offering ammunition to both sides of the argument in a brief by its Public Policy Institute.

“If an annual out-of-pocket spending cap were included in this redesign, Medicare beneficiaries—particularly those with high utilization—would have more financial protection from expenses caused by severe and often unexpected illnesses,” AARP said. “In addition, increased cost-sharing could make beneficiaries more price- sensitive in using health care services, resulting in lower utilization and greater Medicare savings. These savings would improve the long-term stability of the Medicare program for both current and future beneficiaries.”

Then, arguing for the other side, the AARP analysis said, “Medicare beneficiaries, especially those with modest incomes or no supplemental coverage, could find it difficult to afford these cost-sharing requirements. These beneficiaries may decide not to get the medical care that they need in order to avoid paying coinsurance or deductible amounts, which could lead to poorer health outcomes and higher Medicare costs in the long run.”

With AARP viewing the issue as an on-the-one-hand, on-the-other hand hard choice, Congress and the president are certain to tread delicately as they maneuver around this politically explosive issue.

 

by 6d-destani

A Consumer's Guide To The Health Law

By Mary Agnes Carey and Jenny Gold

Source: https://www.kaiserhealthnews.org

Some analysts argue that there could be modifications to reduce federal spending as part of a broader deficit deal; for now, this is just speculation. What is clear is that the law will have sweeping ramifications for consumers, state officials, employers and health care providers, including hospitals and doctors.

While some of the key features don't kick in until 2014, the law has already altered the health care industry and established a number of consumer benefits.

Here's a primer on parts of the law already up and running, what's to come and ways that provisions could still be altered.

I don't have health insurance. Under the law, will I have to buy it and what happens if I don’t?

Today, you are not required to have health insurance. But beginning in 2014, most people will have to have it or pay a fine. For individuals, the penalty would start at $95 a year, or up to 1 percent of income, whichever is greater, and rise to $695, or 2.5 percent of income, by 2016.

For families the penalty would be $2,085 or 2.5 percent of household income, whichever is greater. The requirement to have coverage can be waived for several reasons, including financial hardship or religious beliefs.

Millions of additional people will qualify for Medicaid or federal subsidies to buy insurance under the law.

While some states, including most recently Alabama, Wyoming and Montana, have passed laws to block the requirement to carry health insurance, those provisions do not override federal law.

I get my health coverage at work and want to keep my current plan. Will I be able to do that? How will my plan be affected by the health law?

If you get insurance through your job, it is likely to stay that way. But, just as before the law was passed, your employer is not obligated to keep the current plan and may change premiums, deductibles, co-pays and network coverage.

You may have seen some law-related changes already. For example, most plans now ban lifetime coverage limits and include a guarantee that an adult child up to age 26 who can't get health insurance at a job can stay on her parents' health plan.

What other parts of the law are now in place?

You are likely to be eligible for preventive services with no out-of-pocket costs, such as breast cancer screenings and cholesterol tests.

Health plans can't cancel your coverage once you get sick – a practice known as "rescission" – unless you committed fraud when you applied for coverage.

Children with pre-existing conditions cannot be denied coverage. This will apply to adults in 2014.

Insurers will have to provide rebates to consumers if they spend less than 80 to 85 percent of premium dollars on medical care.

Some existing plans, if they haven't changed significantly since passage of the law, do not have to abide by certain parts of the law. For example, these "grandfathered" planscan still charge beneficiaries part of the cost of preventive services.

If you're currently in one of these plans, and your employer makes significant changes, such as raising your out-of-pocket costs, the plan would then have to abide by all aspects of the health law.

I want health insurance but I can’t afford it. What will I do?

Depending on your income, you might be eligible for Medicaid. Currently, in most states nonelderly adults without minor children don't qualify for Medicaid. But beginning in 2014, the federal government is offering to pay the cost of an expansion in the programs so that anyone with an income at or lower than 133 percent of the federal poverty level, (which based on current guidelines would be $14,856 for an individual or $30,656 for a family of four) will be eligible for Medicaid.

The Supreme Court, however, ruled in June that states cannot be forced to make that change. Republican governors in several states have said that they will refuse the expansion, though that may change now that Obama has been re-elected.

What if I make too much money for Medicaid but still can't afford to buy insurance?

You might be eligible for government subsidies to help you pay for private insurance sold in the state-based insurance marketplaces, called exchanges, slated to begin operation in 2014. Exchanges will sell insurance plans to individuals and small businesses.

These premium subsidies will be available for individuals and families with incomes between 133 percent and 400 percent of the poverty level, or $14,856 to $44,680 for individuals and $30,656 to $92,200 for a family of four (based on current guidelines).

Will it be easier for me to get coverage even if I have health problems?

Insurers will be barred from rejecting applicants based on health status once the exchanges are operating in 2014.

I own a small business. Will I have to buy health insurance for my workers?

No employer is required to provide insurance. But starting in 2014, businesses with 50 or more employees that don't provide health care coverage and have at least one full-time worker who receives subsidized coverage in the health insurance exchange will have to pay a fee of $2,000 per full-time employee. The firm's first 30 workers would be excluded from the fee.

However, firms with  50 or fewer people won't face any penalties.

In addition, if you own a small business, the health law offers a tax credit to help cover the cost. Employers with 25 or fewer full-time workers who earn an average yearly salary of $50,000 or less today can get tax credits of up 35 percent of the cost of premiums. The credit increases to 50 percent in 2014.

I'm over 65. How does the legislation affect seniors?

The law is narrowing a gap in the Medicare Part D prescription drug plan known as the "doughnut hole." That's when seniors who have paid a certain initial amount in prescription costs have to pay for all of their drug costs until they spend a total of $4,700 for the year. Then the plan coverage begins again.

That coverage gap will be closed entirely by 2020. Seniors will still be responsible for 25 percent of their prescription drug costs. So far, 5.6 million seniors have saved $4.8 billion on prescription drugs, according to the Department of Health and Human Services.

The law also expanded Medicare's coverage of preventive services, such as screenings for colon, prostate and breast cancer, which are now free to beneficiaries. Medicare will also pay for an annual wellness visit to the doctor. HHS reports that during the first nine months of 2012, more than 20.7 million Medicare beneficiaries have received preventive services at no cost.

The health law reduced the federal government's payments to Medicare Advantage plans, run by private insurers as an alternative to the traditional Medicare. Medicare Advantage costs more per beneficiary than traditional Medicare. Critics of those payment cuts say that could mean the private plans may not offer many extra benefits, such as free eyeglasses, hearing aids and gym memberships, that they now provide.

Will I have to pay more for my health care because of the law?

No one knows for sure. Even supporters of the law acknowledge its steps to control health costs, such as incentives to coordinate care better, may take a while to show significant savings. Opponents say the law’s additional coverage requirements will make health insurance more expensive for individuals and for the government.

That said, there are some new taxes and fees. For example, starting in 2013, individuals with earnings above $200,000 and married couples making more than $250,000 will paya Medicare payroll tax of 2.35 percent, up from the current 1.45 percent, on income over those thresholds. In addition, higher-income people will face a 3.8 percent tax on unearned income, such as dividends and interest.

Starting in 2018, the law also will impose a 40 percent excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year and $27,500 for families. The tax has been dubbed a "Cadillac" tax because it hits the most generous plans.

In addition, the law also imposes taxes and fees on several major health industries. Beginning in 2013, medical device manufacturers and importers must pay a 2.3 percent tax on the sale of any taxable medical device to raise $29 billion over 10 years. An annual fee for health insurers is expected to raise more than $100 billion over 10 years, while a fee for brand name drugs will bring in another $34 billion.

Those fees will likely be passed onto consumers in the form of higher premiums.

Has the law hit some bumps in the road?

Yes. For example, the law created high-risk insurance pools to help people purchase health insurance. But enrollment in the pools has been less than expected. As of Aug. 31, 86,072 people had signed up for the high-risk pools, but the program, which began in June 2010, was initially expected to enroll between 200,000 and  400,000 people. The cost and the requirements have been difficult for some to meet.

Applicants must be uninsured for six months because of a pre-existing medical condition before they can join a pool. And because participants are sicker than the general population, the premiums are higher.

Enrollment has increased since the summer, after the premiums were lowered in some states by as much as 40 percent and some states stepped up advertising.

A long-term care provision of the law is dead for now. The Community Living Assistance Services and Supports program (CLASS Act) was designed for people to buy federally guaranteed insurance that would have helped consumers eventually cover some long-term-care costs. But last fall, federal officials effectively suspended the program even before it was to begin, saying they could not find a way to make it work financially.

Are there more changes ahead for the law?

Some observers think there could be pressure in Congress to make some changes to the law as a larger package to reduce the deficit. Among those options is scaling back the subsidies that help low-income Americans buy health insurance coverage. The amount of the subsidies, and possibly the Medicaid expansion as well, could be reduced.

It’s also possible that some of the taxes on the health care industry, which help pay for the new benefits in the health law, could be rolled back. For example, legislation to repeal the tax on medical device manufacturers passed the House with support from 37 Democrats (it is not expected to receive Senate consideration this year). Nine House Democrats are co-sponsoring legislation to repeal the law’s annual fee on health insurers.

Meanwhile, the Independent Payment Advisory Board (IPAB), one of the most contentious provisions of the health law, is also under continued attack by lawmakers. IPAB is a 15-member panel charged with making recommendations to reduce Medicare spending if the amount the government spends grows beyond a target rate. If Congress chooses not to accept the recommendations, lawmakers must pass alternative cuts of the same size.

Some Republicans argue that the board amounts to health care rationing and some Democrats have said that they think the panel would transfer power that belongs on Capitol Hill to the executive branch. In March, the House voted to repeal IPAB.

by 6d-destani

Consulting leaders advise employers to ‘be nimble’ amid changing health care landscape

By Tristan Lejeune

A roundtable discussion from benefits consulting leaders on what employers need to know and need to be thinking about going forward with their health strategies served as the wrap-up to a National Business Group on Health annual business agenda event last week in Washington, D.C. With cost-control still very much top of mind for employers, NBGH President and CEO Helen Darling aptly pointed out that, “If they were charging, this would be hundreds and hundreds of dollars an hour. So, this is your chance to get some free consulting from these leaders.”

The group included Julie Stone, health and group consulting leader at Towers Watson; Sharon Cunninghis, U.S. health and benefits regional business leader for Mercer; and Jim Winkler, Aon Hewitt senior vice president and chief innovation officer. Darling served as the panel’s moderator.

As employers plan for the realities of health care reform cost and compliance in 2014, Cunninghis said, “it’s really important to be nimble.” Employers may think they have a firm bead on health care changes at the moment, but many, she said, could use some help.

“You have to really stay on top of everything that’s happening, and I know that’s hard,” Cunninghis said. “Many of you have employees all over the world, so, to some degree, I would start leaning on others — whether it’s leaning on your health plan [or] other vendors that you work with. Make sure — literally on a weekly basis — that you’re on top of all the changes.”

Winkler agreed that it’s important benefits leaders seek assistance when they need it, but also cautioned that providers and vendors may be primarily seeking an opportunity, not necessarily serving an employer’s best interests. He urged employers to watch their backs and their bottom lines.

“One man’s cost savings is another man’s income reduction,” he said. “I think it’s a critical moment for employers to be activists … Work with your health plans, but don’t cede total control to them.”

Stone said that quality is tied to efficiency and warned that often, employers lose track of the former in search of the latter. “I think we need not to lose focus on quality,” she said, and that way employers can reach and enjoy the benefits of a cycle of good health among workers.

In addition to targeted messaging, Darling asked, how can employers move to the next stage of engagement on employee health care and wellness?

“You have to think of this as a marketing exercise, not a benefits communication exercise,” Winkler answered. He said “we have to take that targeted messaging to a new level,” to really squeeze every drop into return on investment, but he emphasized using language and formats that actually work.

“If you think about how we have all shifted to a new paradigm of communication — technology, texting, Skyping, — we changed our routines and patterns in a fundamental way and we’re not going back,” Stone said. “We need to change those same routines around health, health management, healthy eating, all of those things, so they really are routine” and health becomes a matter of natural course.

Cunninghis agreed about using natural English, but she said employer shouldn't be looking beyond targeted language, but at how to change it. “The next generation … is very into the notion of self-serving,” she said, and they can be taught to seek out their own best-case health solutions.

“I think we’ve been very limited in how we target to people, and I think we should take that a step further and ask, how do we get people to target to themselves?” Cunninghis asked.

Source: https://ebn.benefitnews.com/news/consulting-leaders-advise-employers-be-nimble-amid-changing-healthcare-land-2731519-1.html

by 6d-destani

5 Steps to Assess Employees' Benefits Eligibility Under PPACA

Source: https://ebn.benefitnews.com

By Laurie S. Miller

"Health care reform is overrated," a broker responded flippantly to his (now former) employer-client after the employer initiated the call. "I'll email you a one-page cheat sheet." The client had reached out to his broker following a two-hour presentation about the impact of health care reform from the broker's competitor. This was the same broker who, for the last two years, had faxed over the client's renewal and had delegated the servicing of the employees to the client's bookkeeper. Shaking his head, the client hung up the phone, then dialed his broker's competitor and moved the business.

Consulting firms around the nation have deployed significant resources and compliance teams to help clients proactively manage the strategic, financial and operational impact of the Patient Protection and Affordable Care Act. There are significant penalties for noncompliance so it is important that employers keep up with the regulations. In addition, employers may see increased enrollment as employees seek to comply with the individual mandate, which requires coverage.

Eligibility for coverage is one area that employers need to assess. PPACA defines a full-time employee as working 30 hours per week. Many employers currently set their eligibility threshold at a higher level, such as 35 or 40 hours a week.

"We could potentially have 40 new enrollees on our plan," pointed out one human resources executive at a recent health care reform seminar, as she weighed the cost impact.

If your plan defines eligibility as greater than 30 hours a week or excludes certain classes of employees (for example, a nine-month non-certified employee at a school vs. a 12-month employee), this is the time to assess the impact of the legislation and determine an action plan. Here's a checklist to get you started:

1. Review employees who currently waive the plan. Model potential plan costs if these employees join the health plan.

2. Review employees who are currently ineligible due to higher eligibility thresholds (greater than 30 hours per week.) Assess the financial impact of newly eligible employees joining the health plan.

3. Review variable-hour employees. If they exceed an average of 30 hours a week during the measurement period, they may be eligible for benefits.

4. Are partial-year employees eligible for coverage? (i.e., nine-month employees who don't work during the summer months?) If currently excluded, assess potential impact if they exceed 30 hours per week.

5. Review seasonal employees. Do they exceed 120 days per year? They may be eligible for benefits.

There are many other components to developing a strategic approach to health care reform. Look for a broker that offers a proprietary financial modeling tool that can help your company determine a cost-effective strategy for the future.

 

by 6d-destani

6 key compliance deadlines for 2013 and beyond

Source: https://ebn.benefitnews.com

By Kathleen Koster

For plan sponsors, 2013 is a year of crossing Ts and dotting Is on PPACA compliance for their health care plans and strategizing for next year, when the employer mandate and public exchanges go into effect. The health care reform law has many moving parts and a great deal of regulations yet to come, which will keep benefits professionals on their toes all year.

"Employers have never experienced this complexity and oversight in compliance for their health plans. Employers are used to a compliance-rich environment around their retirement plans, but they need an equally robust and hands-on approach to managing the compliance of their health plans," says Mike Thompson, a principal in the human resources services practice of PricewaterhouseCoopers. He adds that "the rules, regulations and level of enforcement have never been greater."

Thompson believes "2013 is a period of strategic re-evaluation of whom the employer will provide benefits to in light of the changes in the individual market allowing guaranteed issue and subsidies for lower- and middle-income Americans."

He believes that employers will also transition around financing as "more employers look at community-type programs with the interest of moving away from their own programs and potentially contributing towards a private exchange or facilitating access to coverage in the open market."

To help employers keep all their compliance ducks in a row while managing and determining long-term strategies for their plans, EBN asked legal and health care experts for top issues to keep in mind for 2013 and beyond.

1. Preparing for the 2014 employer mandate

"At the top of the list is the interpretation of employer responsibility provisions that includes what constitutes minimum essential coverage that employers have to provide or be subject to penalties. Along with that, there are very important issues around the minimum value of the coverage they provide as well as who they have to provide it to," says Paul Dennett, senior vice president of health care reform at the American Benefits Council.

The employer mandate applies only to large employers. Whether an employer is defined as large under PPACA (generally companies with 50 or more employees) depends on the number of its full-time equivalent employees. Companies with 50 or more full-time workers (averaging at least 30 hours per week) must offer minimum health care coverage that is affordable.

In 2013, an employer ought to be determining whether it is a large employer and, therefore, subject to the mandate. "If they offer coverage in 2014, the coverage must meet the minimum value standards and the contributions the employer requires of employees cannot be so high the coverage is unaffordable relative to the employee's household income," says Jean C. Hemphill, practice leader of Ballard Spahr's health care group.

To determine the minimum value, fully insured plans will rely on their insurance carrier for information on whether they meet the minimum value of 60% for their plan. Self-insured plans can turn to an actuary or determine their value with the aid of a government-provided calculator or government-provided checklists.

When it comes to determining the affordability of the plan, an employer cost-sharing arrangement must be affordable relative to the employees' household income, as stated under PPACA. So, "the employee's contribution and cost-sharing obligations can't exceed 9.5% of their household income," says Hemphill.

However, the IRS acknowledges that employers don't know workers' household income, and suggests employers use W-2 wage information instead to determine their plan's affordability.

Hemphill expects more guidance on this issue since employees' contributions are typically much greater for dependents coverage than their own. An employee offered otherwise qualifying coverage by their employer can't use the public exchange unless they prove their employer-sponsored coverage is unaffordable.

The affordability issue may be of greater concern to employers with fairly low-income workforces or for employers not offering comprehensive plans to employees or all employees, such as the mini-medical plans sometimes offered in the retail industry. Employers only need to offer one affordable plan with minimum value to satisfy the rules, however mini-medical plans will be illegal after 2014.

Actuarial experts predict that most high-deductible health plans with deductibles in the $2,000-$3,000 range will most likely qualify, however those with much higher cost-sharing may not meet the minimum value.

While sponsors can vary the deductible and coinsurance amount of HDHPs, they should remember that the higher the deductible, the lower actuarial value of the plan.

"There are variables that can be adjusted in the plan design, but the most important one is where to set the amount of the deductible," says Dennett. He adds that guidance so far has indicated employer contributions toward HSAs or credits toward HRAs will count toward the minimum value. The question is whether the amount contributed is counted 100% to the plan or if it is discounted in the actuarial value formula that HHS would use in the calculation of actuarial value coverage.

Overall, "the Affordable Care Act was designed so employers don't need to make too many plan design changes to their plan," says J.D. Piro, national practice leader for Aon Hewitt's health and benefits legal department. "They may need to open it up to more employees but, generally speaking, they should be able to meet the affordability and minimum value requirements."

2. Public exchanges

Employers are required to provide employees with notice alerting them of the existence of public insurance exchanges. It is thought that the government will issue a model notice for this purpose. At press time, the government had yet to produce this model notice or other guidance about the notice requirement. The March 1 notification deadline has been extended until "late summer or fall," according to a recent FAQ announcement from the Centers for Medicare and Medicaid Services.

"There may still be unanswered questions about whether the state exchanges, partnership exchanges or the federal exchanges are really at an operational readiness stage to be able to go live as of October 2013," says Dennett.

Assuming the exchanges are on track and sponsors receive the guidance they need, they should expect many questions from workers about how the process affects them.

"While most major employers will continue to offer coverage to employees, there will be some confusion around the availability of coverage in the public exchanges and what the implications are [for employees] getting coverage from their employer, says Thompson.

He suggests employees will primarily want to know:

* Do I still have coverage through my employer?

* Am I eligible to get coverage through the exchange?

* Can I potentially get subsidies through the exchange?

* Is it in my best interest to go through the exchange?

3. Waiting periods

Another design-related issue employers must factor into their plans is that under PPACA, waiting periods for health care coverage cannot exceed 90 days. The 90-day period begins when the employee is otherwise eligible for coverage. Employers with a high-turnover workforce that currently have long waiting periods will have to shorten them.

If an employer requires employees to work a minimum number of hours to qualify for coverage, it may need to monitor workers' timesheets in 2013 to determine if and when coverage needs to be offered in 2014; this may be complicated for seasonal employees and other employees with variable hours.

Thompson believes this is part of a larger question of meeting qualifications for providing coverage.

"It's part of a package in my mind," he says. "Employers must evaluate employee classes when looking at whether they meet the minimum threshold of providing coverage to full-time employees. Seasonal, temporary, or contract workers are classes that need to be evaluated in order to avoid or at least understand what the penalties might be."

4. Pre-existing and non-discrimination prohibitions

"The non-discrimination rules are new for insured plans in 2014," says Hemphill. Even though these prohibitions should already be in effect, government agencies have delayed enforcement until they release regulations.

"It will be an important issue because right now there is no requirement to offer coverage to part-time employees, but with the definition of full-time employees as an average of 30 hours per week and new non-discrimination testing rules, the employer obligation may be different," she says.

Either way, employers can expect notice and guidance well before implementation because, "it is a big plan design issue," says Edward I. Leeds, counsel in the employee benefits and executive compensation group at Ballard Spahr.

5. Wellness programs

PPACA includes rules that prohibit plans from discriminating against individuals based on a range of health-related factors. Plans cannot impose restrictions on eligibility or increase employee costs for coverage based on these factors.

"When the government issued guidance under ACA, they actually revised the HIPAA regulations. So now the ACA and HIPAA rules ... will be the same," says Leeds. "By and large the rules follow HIPAA with some changes, the most significant of which is that the potential reward for meeting requirements under the wellness programs will increase as of January 1, 2014."

The potential reward for meeting a wellness requirement will increase from 20% of cost of coverage to 30% of cost of coverage. Incentives related to tobacco cessation will increase up to 50%. (For more details, read "Regs increase wellness rewards," page 28.)

6. Upcoming fees and taxes

Patient-Centered Outcomes Research Institute, established by PPACA, will collect and publish information about clinical effectiveness of treatments for patients. It will be paid for through fees assessed against insurers and self-funded plans equal to $2 ($1 in the first year) per covered life. The assessment will last seven years and eventually be adjusted for inflation. Employers with self-funded plans will need to report and pay these fees starting in July 2013.

The Transitional Reinsurance Program aims to stabilize the individual health insurance market as insurers provide coverage, starting in 2014, to large numbers of individuals who do not currently have coverage and present uncertain risks. The program will provide reinsurance payments to insurers that take on high-risk individuals. The program is funded through a three-year tax (expected to be $63 per covered life in the first year.)

The Additional Medicare Tax, in effect this year, is an additional 0.9% tax applied to high-income individuals. Employers are responsible for withholding the tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year.

by 6d-destani