Justices Seem Unlikely to Strike Down Entire Affordable Care Act
The U.S. Supreme Court appears hesitant to invalidate the Affordable Care Act (ACA) in its entirety, based on questions the justices posed during oral argument Nov. 10.
The ACA requires that most Americans either maintain a minimum level of health care coverage or pay a specified amount to the Internal Revenue Service. In a 2012 opinion written by Chief Justice John Roberts Jr., the Supreme Court upheld this mandate as a legitimate exercise of Congress' taxing power. In 2017, and effective in 2019, Congress amended the ACA to set the penalty to zero, making the individual mandate provision unenforceable.
In two consolidated cases, California v. Texas and Texas v. United States, the Supreme Court has been asked to decide whether reducing the penalty to zero rendered the minimum-coverage provision unconstitutional—and, if so, whether the rest of the ACA can remain enforceable without it.
"The justices seem to be leaning toward, at a minimum, finding the individual mandate severable and preserving the remainder of the law," observed Benjamin Conley, an attorney with Seyfarth Shaw in Chicago. The most notable takeaway from the arguments, he said, was that Roberts and Justice Brett Kavanaugh "all but stated that they believe the individual mandate is severable."
Questions Before the Court
The court will first consider whether the plaintiffs have standing to challenge the ACA, then it will move to the merits of the case. Texas and other states that challenged the ACA argued that "Congress may not use its power to regulate interstate commerce to order Americans to buy health insurance" and that the only reason the individual mandate survived a legal challenge was because it was "fairly possible" to read the ACA's mandate as a tax trigger. "Because the mandate raises no revenue, it can no longer be read as a tax," they wrote in a brief to the Supreme Court.
The U.S. House of Representatives and a group of Democrat-led states are fighting to keep the ACA intact. If Texas successfully challenges the ACA, "more than 20 million Americans could lose their health care coverage, 130 million Americans with pre-existing conditions could lose protections, and drug costs could skyrocket for seniors," House Speaker Nancy Pelosi tweeted Nov. 10.
In December 2019, the 5th U.S. Circuit Court of Appeals sided with Texas, holding that the mandate is unconstitutional since there is no longer a penalty for people who fail to buy health insurance.
But the Supreme Court justices raised doubts about that argument. "I think it's hard for you to argue that Congress intended the entire act to fall if the mandate were struck down when the same Congress that lowered the penalty to zero did not even try to repeal the rest of the act," Roberts said during oral argument. "I think, frankly, that they wanted the court to do that. But that's not our job."
Justice Amy Coney Barrett, the court's newest justice and sixth conservative on the bench, has previously raised concerns with the Supreme Court's 2012 ruling. "Justice Barrett has criticized Justice Roberts' decision to uphold the ACA," said Sage Fattahian, an attorney with Morgan Lewis in Chicago. "The general view is that her vote may be the deciding vote in invalidating the ACA, but all of that remains to be seen."
Seyfarth Shaw's Conley noted that votes from Roberts and Kavanaugh, plus the three liberal justices—Justices Stephen Breyer, Elena Kagan and Sonia Sotomayor—would be enough to preserve the remainder of the law.
"The most interesting questions and comments, for me, came from Justice Kavanaugh," Fattahian observed. At oral argument, Kavanaugh said he thinks there is "a very straightforward case for severability" under Supreme Court precedent.
"Chief Justice Roberts also asked questions that seemed to indicate that the proper remedy in this case would be to sever the individual mandate from the rest of the ACA," Fattahian said. "This would mean that the ACA's plan mandates and employer mandate, along with ACA reporting requirements, would all remain intact."
Employer Takeaway
So what will a ruling in the case mean for employers? "While a ruling striking down the entire law could definitely have an impact in the long term, we don't think any short-term action is required," Conley said.
Even if, for instance, the Supreme Court invalidates the provision of the law allowing dependents to remain on their family's plans until age 26, an employer could certainly continue to offer such coverage even if it is no longer required. "So any plan-driven changes resulting from the ruling would be more incremental and long term," Conley added.
A decision in the case is not expected until June 2021. "In the meantime, employers should note that the health care law remains fully in effect during the litigation, including all coverage obligations and reporting requirements," said Chatrane Birbal, vice president of public policy for the Society for Human Resource Management. If there are changes to the health care law, employers should be aware that the changes will not take effect immediately, she noted.
Fattahian said, "Employers should continue down the path of compliance. Should the ACA be held to be unconstitutional, it will remain to be seen how it will all unwind and what, if anything, will take its place."
Supreme Court to Rule Next Year on the ACA's Validity
With the Affordable Care Act (ACA) being questioned on whether it is in-whole or in-part constitutional, the U.S. Supreme Court has decided to rule on this matter again. The ruling regarding the validity of the ACA is expected by June of 2021. Continue reading this blog post to learn more.
The U.S. Supreme Court will again rule on whether the Affordable Care Act (ACA) is constitutional, in whole or in part, during its term beginning this October, the court announced on March 2. A ruling is expected before the term ends in June next year.
In 2019, Congress eliminated the ACA's penalty on individuals who lack health coverage—the so-called individual mandate. In the aftermath, several Republican state attorneys general filed a lawsuit claiming the ACA itself was no longer constitutional, while Democratic states and the House of Representatives, controlled by Democrats, stepped in to defend the statute.
Back in 2012, the U.S. Supreme Court upheld the constitutionality of the ACA's individual mandate as a justifiable exercise of Congress's power to tax. But without an existing tax penalty, ACA critics charge that the health care statute itself, or at least the parts of the act closely linked to the individual mandate, are no longer constitutionally valid.
In December 2018, a Texas district court struck down the ACA but stayed its ruling pending appeal, concluding that the individual mandate is so connected to the law that Congress would not have passed the ACA without it. On appeal, in Texas v. United States, a split panel of the 5th Circuit instructed the district court to rehear the matter and "to employ a finer-toothed comb on remand and conduct a more searching inquiry into which provisions of the ACA Congress intended to be inseverable from the individual mandate."
Now that the Supreme Court has agreed to hear the case, it will not go back to the district court judge for that analysis, leaving the high court free to uphold the entire ACA, uphold the statute but void provisions linked to the individual mandate, or strike down the law in full, although that draconian option is viewed as exceedingly unlikely by legal analysts. The same five justices that upheld the ACA in 2012 remain on the court.
The health law remains fully in effect during the litigation, including all employer coverage obligations and reporting requirements.
The Supreme Court's Packed Schedule
The Supreme Court has placed five cases—including Texas v. United States—on the 2020 docket. This suggests that the hearing could be held in early or mid-October 2020, right before the 2020 election, although we may not know the oral argument schedule until later this spring or summer. In any event, a decision in Texas v. United States would not be expected until 2021 (and presumably not until June 2021).
It is worth noting that the Court will hear a separate ACA-related challenge on the final day of oral argument during its current term. On April 29, 2020, the Court will hear one hour of oral argument in the consolidated cases of Little Sisters of the Poor v. Pennsylvania and Trump v. Pennsylvania. These cases focus on the validity of two Trump-era rules that created broad exemptions to the ACA's contraceptive mandate for religious or moral reasons. And we are still waiting on a decision from the Court over whether insurers are owed more than $12 billion in unpaid risk corridor payments; oral argument was held in that challenge in December 2019 and a decision could be issued at any time.
(Health Affairs)
Lawsuit Stoked Confusion
America's Health Insurance Plans (AHIP), the insurance industry's leading lobbying group, applauded the justices' decision to hear the lawsuit. "We are confident that the Supreme Court will agree that the district court's original decision to invalidate the entire ACA was misguided and wrong," said AHIP President Matt Eyles in a statement.
Association for Community Affiliated Plans (ACAP), a group that represents more than 70 safety-net plans, noted that the lawsuit "has cast a pall of uncertainty over the future of the individual insurance market," according to ACAP CEO Margaret A. Murray.
(Fierce Healthcare)
5th Circuit Highlighted Suspect ACA Provisions
When the 5th Circuit instructed the district court to rehear the matter and to focus on those ACA provisions that Congress intended to be "inseverable from the individual mandate," this suggested, legal analysts said, that the appellate court was unlikely to overturn the ACA in full. However, the appellate court might have struck down those parts of the law directly related to the individual mandate, such as the 5:1 ratio age band, under which insurers can't charge seniors premiums more than five times what younger patients pay, and community rating, which prevents insurers from varying premiums within a geographic area based on age, gender, health status or other factors.
The increase in revenue to insurers from the individual mandate was meant to offset the decrease from these restrictions. It's unclear whether the U.S. Supreme Court will take a similar approach when it hears the case.
(SHRM Online)
SOURCE: Miller, S. (03 March 2020) "Supreme Court to Rule Next Year on the ACA's Validity" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/hr-topics/benefits/Pages/supreme-court-to-rule-next-year-on-CAs-validity.aspx
A New Approach to Paid Leave: WorkFlex in the 21st Century Act
From SHRM, let's take a look a this innovative approach toward paid leave using WorkFlex.
Do you ever sit in your office and wonder about everyone else? Ponder whether anyone is dealing with the same things that you are in that very moment? The simple fact is that everyone independent of age, gender, race or title, wants to be there to support their family. For myself, that means advocating for clients, while caring for my mother and doing all that I can for my wife and two boys. It is quite a balancing act on the best of days. To be fair, I know that I am not alone in this balancing act. As I write this I am wondering if you know exactly what I mean. Perhaps not for yourself, but a colleague or a friend.
Now since we generally live, work or both in New Jersey and in particular within the Delaware Valley there are some things that impact our ability to balance. For example, if you work for an organization that has offices in Philadelphia, PA; Wilmington, DE; Trenton, NJ; Montclair, NJ and Haddonfield, NJ exactly how do you provide equal paid leave to employees? Why should you care? Because these specific locations differ in how they require paid leave to be provided to employees. Are you concerned about this? You are not alone, clients regularly ask what to do as it relates to dealing with paid leave. Often this is more challenging for us than in most places around the country due to the varying ways that towns as opposed to States or the Commonwealth deal with this issue.
Some time ago I was asked to assist SHRM with the creation of federal legislation to address the issue of varying applications of paid leave laws around the country. After a significant amount of discussions, revisions and hard work by a host of individuals we came up with a legitimate proposal to address our respective concerns. Recently the “Workflex in the 21st Century Act” (HR 4219) was introduced in the House by Representative Mimi Walters. This bill is designed to support the goals of everyone, not just employers or employees. You can read more about the specifics at: https://www.advocacy.shrm.org/workflex.
For now, allow me to give you three specific reasons (although there are more) that both you and your organization should support this legislation:
First, unlike federal mandates under the FMLA, FLSA, or ADA, this legislation is OPT-IN, which means as an employer in order for your organization to be held responsible under the bill it would have to decide to agree to it first. Put another way, an employer is not required to do it if it chooses to go in another direction.
Second, many federal employment laws bring with them a threshold beyond which every employer is held to the same standard, however that is not the case with the “Workflex in the 21st Century Act.” It is designed to grow with your organization. As a result the benefit thresholds change based on the number of employees in an organization, so that it supports growth rather than stifling expansion.
Third, contrary to the way things are currently going in our region, this bill provides a level of certainty and flexibility for both employers and employees alike to know the threshold of their leave benefits, which will result in more productive employees and organizations. Part of the reason for this certainty is that the various local leave laws would be preempted by this bill.
What does all this mean? I would suggest that this bill is a good compromise of interests across the spectrum of both employers and employees, as well as unions, who want to do the right thing. Allow for realistic time to care for a child, parent or for yourself. No one needs to change jobs to get a specific type of benefit and employers can choose if it makes sense for their workplace, rather than being dictated to in terms of the benefits to provide their employees.
Now I would like to challenge you to join me. This is the first piece of legislation that SHRM has created for the workplace and as you can see the goal is to address concerns that all workers have, independent of title, so we can all have the balance that we need and want in order to be better contributors in our respective organizations, supportive of our parents, children and ourselves. How can we achieve this together? We can all reach out to our federal legislators and let them know that you support the “Workflex in the 21st Century Act” (HR 4219). You can find more information on https://www.advocacy.shrm.org/workflex or on the SHRM Advocacy App. Let’s take this opportunity to make the workplace better for everyone, together.
Read more.
Source: Lessig L. (February 8th, 2018). "A New Approach to Paid Leave: WorkFlex in the 21st Century Act" [Web Blog Post]. Retrieved from address https://www.advocacy.shrm.org/shrm/app/document/26467137
A New Approach to Paid Leave: WorkFlex in the 21st Century Act
From SHRM, let's take a look a this innovative approach toward paid leave using WorkFlex.
Do you ever sit in your office and wonder about everyone else? Ponder whether anyone is dealing with the same things that you are in that very moment? The simple fact is that everyone independent of age, gender, race or title, wants to be there to support their family. For myself, that means advocating for clients, while caring for my mother and doing all that I can for my wife and two boys. It is quite a balancing act on the best of days. To be fair, I know that I am not alone in this balancing act. As I write this I am wondering if you know exactly what I mean. Perhaps not for yourself, but a colleague or a friend.
Now since we generally live, work or both in New Jersey and in particular within the Delaware Valley there are some things that impact our ability to balance. For example, if you work for an organization that has offices in Philadelphia, PA; Wilmington, DE; Trenton, NJ; Montclair, NJ and Haddonfield, NJ exactly how do you provide equal paid leave to employees? Why should you care? Because these specific locations differ in how they require paid leave to be provided to employees. Are you concerned about this? You are not alone, clients regularly ask what to do as it relates to dealing with paid leave. Often this is more challenging for us than in most places around the country due to the varying ways that towns as opposed to States or the Commonwealth deal with this issue.
Some time ago I was asked to assist SHRM with the creation of federal legislation to address the issue of varying applications of paid leave laws around the country. After a significant amount of discussions, revisions and hard work by a host of individuals we came up with a legitimate proposal to address our respective concerns. Recently the “Workflex in the 21st Century Act” (HR 4219) was introduced in the House by Representative Mimi Walters. This bill is designed to support the goals of everyone, not just employers or employees. You can read more about the specifics at: https://www.advocacy.shrm.org/workflex.
For now, allow me to give you three specific reasons (although there are more) that both you and your organization should support this legislation:
First, unlike federal mandates under the FMLA, FLSA, or ADA, this legislation is OPT-IN, which means as an employer in order for your organization to be held responsible under the bill it would have to decide to agree to it first. Put another way, an employer is not required to do it if it chooses to go in another direction.
Second, many federal employment laws bring with them a threshold beyond which every employer is held to the same standard, however that is not the case with the “Workflex in the 21st Century Act.” It is designed to grow with your organization. As a result the benefit thresholds change based on the number of employees in an organization, so that it supports growth rather than stifling expansion.
Third, contrary to the way things are currently going in our region, this bill provides a level of certainty and flexibility for both employers and employees alike to know the threshold of their leave benefits, which will result in more productive employees and organizations. Part of the reason for this certainty is that the various local leave laws would be preempted by this bill.
What does all this mean? I would suggest that this bill is a good compromise of interests across the spectrum of both employers and employees, as well as unions, who want to do the right thing. Allow for realistic time to care for a child, parent or for yourself. No one needs to change jobs to get a specific type of benefit and employers can choose if it makes sense for their workplace, rather than being dictated to in terms of the benefits to provide their employees.
Now I would like to challenge you to join me. This is the first piece of legislation that SHRM has created for the workplace and as you can see the goal is to address concerns that all workers have, independent of title, so we can all have the balance that we need and want in order to be better contributors in our respective organizations, supportive of our parents, children and ourselves. How can we achieve this together? We can all reach out to our federal legislators and let them know that you support the “Workflex in the 21st Century Act” (HR 4219). You can find more information on https://www.advocacy.shrm.org/workflex or on the SHRM Advocacy App. Let’s take this opportunity to make the workplace better for everyone, together.
Read more.
Source: Lessig L. (February 8th, 2018). "A New Approach to Paid Leave: WorkFlex in the 21st Century Act" [Web Blog Post]. Retrieved from address https://www.advocacy.shrm.org/shrm/app/document/26467137
HHS Nominee Vows To Tackle High Drug Costs, Despite His Ties To Industry
What is President Trump’s solution for fighting high drug prices? From Kaiser Health News, check out this article on the new Department of Health and Human Services (HHS) nominee.
Senate Democrats on Tuesday pressed President Donald Trump’s nominee for the top health post to explain how he would fight skyrocketing drug prices — demanding to know why they should trust him to lower costs since he did not do so while running a major pharmaceutical company.
Alex M. Azar II, the former president of the U.S. division of Eli Lilly and Trump’s pick to run the Department of Health and Human Services, presented himself as a “problem solver” eager to fix a poorly structured health care system during his confirmation hearing before the Senate Finance Committee. Azar said addressing drug costs would be among his top priorities.
But armed with charts showing how some of Eli Lilly’s drug prices had doubled on Azar’s watch, Democrats argued Azar was part of the problem. Sen. Ron Wyden of Oregon, the committee’s top Democrat, said Azar had never authorized a decrease in a drug price as a pharmaceutical executive.
“The system is broken,” Wyden said. “Mr. Azar was a part of that system.”
Azar countered that the nation’s pharmaceutical drug system is structured to encourage companies to raise prices, a problem he said he would work to fix as head of HHS.
“I don’t know that there is any drug price of a brand-new product that has ever gone down from any company on any drug in the United States, because every incentive in this system is towards higher prices, and that is where we can do things together, working as the government to get at this,” he said. “No one company is going to fix that system.”
Azar’s confirmation hearing Tuesday was his second appearance before senators as the nominee to lead HHS. In November, he faced similar questions from the Senate Health, Education, Labor and Pensions Committee during a courtesy hearing.
If confirmed, Azar would succeed Tom Price, Trump’s first health secretary, who resigned in September amid criticism over his frequent use of taxpayer-paid charter flights. A former Republican congressman who was a dedicated opponent of President Barack Obama’s signature health care law, Price had a frosty relationship with Democrats in Congress as he worked with Republicans to try to undo the law.
Price and the Trump administration often turned to regulations and executive orders to undermine the Affordable Care Act, since Republicans in Congress repeatedly failed to enact a repeal. “Repeal and replace” has been the president’s mantra.
But at the hearing, Azar was circumspect about his approach, noting that his job would be to work under existing law. “The Affordable Care Act is there,” he said, adding that it would fall to him to make it work “as best as it possibly can.”
Senate Republicans touted Azar’s nearly six years working for the department under President George W. Bush, including two years as a deputy secretary. Committee Chairman Orrin Hatch (R-Utah) praised Azar’s “extraordinary résumé,” adding that, among HHS nominees, he was “probably the most qualified I’ve seen in my whole term in the United States Senate.” Hatch, who is the longest-serving Republican senator in history, has been a senator for more than 40 years.
In addition to drug costs, Azar vowed to focus on the nation’s growing opioid crisis, calling for “aggressive prevention, education, regulatory and enforcement efforts to stop overprescribing and overuse,” as well as “compassionate treatment” for those suffering from addiction.
Pressed about Republican plans to cut entitlement spending to compensate for budget shortfalls, Azar said he was “not aware” of support within the Trump administration for such cuts.
“The president has stated his opposition to cuts to Medicaid, Medicare or Social Security,” Azar said. “He said that in the campaign, and I believe he has remained steadfast in his views on that.”
But Democrats pushed back, pointing out that Trump had proposed Medicaid cuts in his budget request last year. Sen. Sherrod Brown (D-Ohio) said such cuts would hurt those receiving treatment for opioid addiction.
“What happens to these people?” he said.
Despite such Democratic criticism, Azar is likely to be confirmed when the full Senate votes on his nomination. An HHS spokesman Tuesday pointed reporters to an editorial in STAT supporting Azar, written by former Senate majority leaders Bill Frist and Tom Daschle — a Republican and a Democrat. “We need a person of integrity and competence at the helm of the Department of Health and Human Services,” they wrote. “The good news is that President Trump has nominated just such a person, Alex Azar.”
Read further.
Source:
BREAKING: Health Care Bill Moves to Debate on Senate Floor with 51-50 vote
In case you haven't heard, the motion to debate a version of the Health Care Bill after multiple renditions that has been dragging it's way through congress and stalled in the Senate has just been successfully passed with a narrow vote of 51-50 in favor with Vice President Pence casting the tie-breaking vote. The bill has a long road ahead and likely a vast number of revisions.
You can keep an eye on relevant news from our Navigator page right here on our own website. We know it is overwhelming to try to keep up with all of the news from all of the disparate sources. Our Navigator resource simply works to curate content from a variety of trusted, non-partisan sites across the internet and bring them to a central location to provide you a trusted place to stay-up-to-date on Health Care news at a glance.
Source: Wall Street Journal, Daniel Nasaw,Michelle Hackman
Access Live Updates on the Motion Here: https://www.wsj.com/livecoverage/senate-obamacare-repeal-and-replace-vote
Moments ago:
Vice President Mike Pence just broke the 50-50 tie. The motion to proceed passes and the Senate will now begin debate on a bill to repeal and replace the Affordable Care Act.
With the motion passed, Senators will now proceed to 20 hours of debate on several proposals repealing parts of the 2010 Affordable Care Act, including their replacement package and a separate bill repealing the law with a two-year delay.
They are expected to debate numerous amendments – not counted toward the 20 hours – including proposals put forward by Democrats....
Are You Ready for the Marketplace Notices?
Original Post from ThinkHR.com
By: Laura Kerekes
Under the Affordable Care Act (ACA), each Health Insurance Exchange (Marketplace) must notify employers when they have an employee who has received a government subsidy to enroll in a health plan through the Marketplace. These notices will begin being sent to employers in the coming weeks and months, either individually or in batches. Because the notice procedure is being phased in, you may or may not receive notices, even if you have employees who received subsidies through a Marketplace. Here’s what you need to know.
Reason for Notice
These notices, also called 1411 Certifications in reference to the pertinent section of the ACA, will be sent to employers as part of the government’s verification efforts regarding persons who received Marketplace subsidies for individual health insurance. Marketplaces want to confirm whether the individual was eligible for, or enrolled in, an employer’s health plan since those facts can affect someone’s eligibility for subsidies.
You may receive a notice (similar to the sample found here) for each employee that received a subsidy to enroll in insurance through a Marketplace. The notice only informs you that the employee was granted a subsidy — it is not a notification that you have been assessed any penalty. Under the ACA’s play or pay rules, penalties may be assessed later by the Internal Revenue Service to applicable large employers for failing to offer full-time employees affordable minimum value coverage; however, play or pay penalties, and notice of them, are a separate process entirely.
What You Should Do
- Even if you do not believe that any of your employees obtained individual coverage through a Marketplace, be on the lookout for these notices because you have 90 days from the date of the notice to file an appeal, if necessary. Notices may go to a subsidiary instead of the parent company or to a particular worksite instead of the employer’s main office, depending on the information the employee provided to the Marketplace. Alert all departments and worksites to watch for mail in envelops from a government agency or insurance Marketplace.
- Important:Keep these notices confidential because employers are prohibited by law from discriminating or retaliating against employees who may receive subsidies. Consider segregating functions so staff involved in reviewing notices is separate from staff involved in employment or benefit plan decisions.
- Establish your audit process for reviewing any notices you may receive and for filing appeals when appropriate. Confirm that the information is correct based on your employment and payroll records. If you are an applicable large employer subject to the ACA’s play or pay rules, you also should check if the employee was a full-time employee and, if so, whether you had offered affordable minimum value coverage to the employee. Read more about the notice and appeal process here.
- File an appeal within 90 days of receipt of the notice if any of the information is incorrect. To do this, be sure to retain the notice and follow the directions for appeal. Remember that these notices will not advise you of any penalties on large employers, so appeals at this stage are to correct any mistakes in employment information. In addition:
- If you are a small employer and not subject to the ACA play or pay rules, you are not impacted directly but your appeal may alert the Marketplace that the individual was enrolled in your group health plan and not eligible for subsidies.
- If you are an applicable large employer who is subject to the ACA’s play or pay rules, you should be proactive in appealing the Marketplace’s subsidy determination if any information is incorrect. (An applicable large employer generally is one that employed an average of 50 or more full-time and full-time-equivalent employees in the prior calendar year. Related employers in a controlled group are counted together.) Although Marketplaces cannot access play or pay penalties, your appeal may help establish the facts and head off later penalty action by the IRS.
You may not receive Marketplace notices, but if you do, be prepared, review them thoroughly, and appeal incorrect information quickly.
5 Crucial Wellness Strategies for Self-Funded Companies
Original post careatc.com
Instead of paying pricey premiums to insurers, self-insured companies pay claims filed by employees and health care providers directly and assume most of the financial risk of providing health benefits to employees. To mitigate significant losses, self-funded companies often sign up for a special “stop loss” insurance, hedging against very large or unexpected claims. The result? A stronger position to stabilize health care costs in the long-term. No wonder self-funded plans are on the rise with nearly 81% of employees at large companies covered.
Despite the rise in self-insured companies, employers are uncertain as to whether they’ll even be able to afford coverage in the long-term given ACA regulations. Now more than ever, employers (self-insured or not) must understand that wellness is a business strategy. High-performing companies are able to manage costs by implementing the most effective tactics for improving workforce health.
Here are five wellness strategies for self-insured companies:
Strategy 1: Focus on Disease Management Programs
Corporate wellness offerings generally consist of two types of programs: lifestyle management and disease management. The first focuses on employees with health risks, like smoking or obesity, and supports them in reducing those risks to ultimately prevent the development of chronic conditions. Disease management programs, on the other hand, are designed to help employees who already have chronic disease, encouraging them to take better care of themselves through increased access to low-cost generic prescriptions or closing communication gaps in care through periodic visits to providers who leverage electronic medical records.
According to a 2012 Rand Corporation study, both program types collectively reduced the employer’s average health care costs by about $30 per member per month (PMPM) with disease management responsible for 87% of those savings. You read that right – 87%! Looking deeper into the study, employees participating in the disease management program generated savings of $136 PMPM, driven in large part by a nearly 30% reduction in hospital admissions. Additionally, only 13% of employees participated in the disease management program, compared with 87% for the lifestyle management program. In other words, higher participation in lifestyle management programs marginally contributes to overall short-term savings; ROI was $3.80 for disease management but only $0.50 for lifestyle management for every dollar invested.
This isn’t to say that lifestyle management isn’t a worthy cause – employers still benefit from its long-term savings, reduced absenteeism, and improved retention rates – but it cannot be ignored that short-term ROI is markedly achieved through a robust disease management program.
Strategy 2: Beef Up Value-Based Benefits
Value-Based Benefit Design (VBD) strategies focus on key facets of the health care continuum, including prevention and chronic disease management. Often paired with wellness programs, VBD strategies aim to maximize opportunities for employees make positive changes. The result? Improved employee health and curbed health care costs for both employee and employer. Types of value-based benefits outlined by theNational Business Coalition on Health include:
Individual health competency where incentives are presented most often through cash equivalent or premium differential:
- Health Risk Assessment
- Biometric testing
- Wellness programs
Condition management where incentives are presented most often through co-pay/coinsurance differential or cash equivalent:
- Adherence to evidence-based guidelines
- Adherence to chronic medications
- Participation in a disease management program
Provider Guidance
- Utilization of a retail clinic versus an emergency room
- Care through a “center of excellence”
- Tier one high quality physician
There is no silver bullet when it comes to VBD strategies. The first step is to assess your company’s health care utilization and compare it with other benchmarks in your industry or region. The ultimate goal is to provide benefits that meet employee needs and coincide with your company culture.
Strategy 3: Adopt Comprehensive Biometric Screenings
Think Health Risk Assessments (HRAs) and Biometric Screenings are one and the same? Think again. While HRAs include self-reported questions about medical history, health status, and lifestyle, biometric screenings measure objective risk factors, such as body weight, cholesterol, blood pressure, stress, and nutrition. This means that by adopting a comprehensive annual biometric screening, employees can review results with their physician, create an action plan, and see their personal progress year after year. For employers, being able to determine potentially catastrophic claims and quantitatively assess employee health on an aggregate level is gold. With such valuable metrics, its no surprise that nearly 51% of large companies offer biometric screenings to their employees.
Strategy 4: Open or Join an Employer-Sponsored Clinic
Despite a moderate health care cost trend of 4.1% after ACA changes in 2013, costs continue to rise above the rate of inflation, amplifying concerns about the long-term ability for employers to provide health care benefits. In spite of this climate, there are still high-performing companies managing costs by implementing the most effective tactics for improving health. One key tactic? Offer at least one onsite health service to your population.
I know what you’re thinking: employer-sponsored clinics are expensive and only make sense for large companies, right? Not anymore. There are a few innovative models out there tailored to small and mid-size businesses that are self-funded, including multi-employer, multi-site sponsored clinics. Typically a large company anchors the clinic and smaller employers can join or a group of small employers can launch their very own clinic. There are a number of advantages to employer-sponsored clinics and it is worthwhile to explore if this strategy is right for your company.
Strategy 5: Leverage Mobile Technology
With thousands health and wellness apps currently available through iOS and Android, consumers are presented with an array of digital tools to achieve personal goals. So how can self-insured companies possibly leverage this range of mobile technology? From health gamification and digital health coaching, to wearables and apps, employers are inundated with a wealth of digital means that delivering a variation of virtually the same thing: measurable data.
These companies curate available consumer health and wellness technology to empower employers by simplifying the process of selecting and managing various app and device partners, and even connecting with tools employees are already be using.
Conclusion:
Self-insured companies have a vested interest in improving employee health and understand that wellness is indeed a business strategy. High-performing companies are able to manage costs by implementing the most effective tactics for improving workforce health including an increased focus on Chronic Disease Management programs; strengthening value-based benefit design; adopting comprehensive biometric screening; exploring the option of opening or joining an employer-sponsored clinic; and leveraging mobile technology.
Employers' Greatest Fears: PPACA & Compliance
Original post benefitspro.com
The last few years have put employers in the position of becoming compliance officers. The Department of Labor, Health and Human Services, and the Internal Revenue Service have actively been pursuing small- and mid-size businesses about various issues, from PPACA reporting to wage and hour miscalculations.
It is becoming a full-time job for manager HR representatives to keep up with the requirements of a compliant business.
The average employer cannot tell you what the affordability test is compared to the value test, but they know that it is now a requirement. Most important is the employer's concern for their employees to have the best health insurance available for the least expensive price. The employees are now looking for jobs that will provide them with health insurance in order to not be penalized at tax filing time. Employers are trying to understand what exactly they should be providing under health care reform in order to not pay additional fines for doing it incorrectly.
IRS fines are increasing in 2016 for employees to either $695 or 2.5 percent of adjusted family income per uninsured adult, whichever is greater. Employers will have to pay $2,160 per employee (after the first 30) if not providing health insurance or for an incorrect plan, and $3,240 for each employee getting a subsidy through the marketplace. Penalties for not filing certain documents in time, such as form 5500 or form 1094C, can add up to $1,100 per late day.
Insurance agents are becoming consultants in a very different world than we first began. Employers are asking accounting and legal questions which are requiring research and partnerships with other professionals.
Employers want to know the difference now in using a professional employer organization (PEO) versus outsourcing their HR and payroll departments. If the employer decides to do it themselves, questions they ask are:
- How long do I keep the necessary paperwork?
- Should I use the qualifying offer method or the 98 percent offer method?
- Which Safe Harbor would be best for my situation?
Insurance consultants will be the ones answering these questions with their employers as well as reviewing the documents and procedures.
Education and wisdom are the most important values for an insurance consultant’s job security. Just about the time you learn it, it will change.
How Agents Can Help Comply with PPACA
Original post benefitspro.com
“You can help your employer clients comply with the Patient Protection and Affordable Care Act [PPACA] by becoming their trusted advisors,” Julie L. Hulsey, CLU, LUTCF, president and CEO, Zynia Business Solutions, Amarillo, Texas, told her audience in her presentation, “Employers’ Greatest Fears: PPACA and Compliance.”
As of Jan. 1, 2016, Hulsey reminded the audience, employers of 50 or more full-time equivalent (FTE) employees are required to provide health insurance to at least 95% of their employees or face a penalty. One key issue for employers is that many federal government entities are auditing small businesses with little to no coordination, for example:
1. Department of Labor, including the Wage and Hour Division, the Equal Employment Opportunity Commission and the Occupational Safety and Health Administration
2. Internal Revenue Service
3. Office for Civil Rights
4. Immigration Customs Enforcement
5. Department of Transportation
“Smaller employers, those with less than 50 employees, or 50 to 100 employees, don’t have an HR department or even an HR professional on staff,” Hulsey observed. One way agents and brokers can demonstrate their value is by providing clients with charts showing affordable coverage employee wage calculations for a 40-hour work week and for a 30-hour work week, she explained, showing the charts she had created for her clients.
Penalties 101 for agents and brokers
Hulsey reminded the audience that for 2016 the employer shared responsibility penalty of $2,000 is now $2,160, and the $3,000 penalty is now $3,240. If an employer is considering paying the penalty instead of offering insurance, you can point out that the penalty is not a tax deductible business expense but health insurance premiums are, which may affect the employer’s decision.
“Penalties will be calculated on a monthly basis so if you are out of compliance for just one month, you will only be penalized for that month,” Hulsey pointed out. “Therefore, become compliant as soon as possible to avoid accumulating more monthly penalties.”
If an employer offers a “minimum essential coverage” plan that meets the “affordable” and “minimum value” tests to an employee who declines it, no employer penalty will be owed for that employee. “Tell the employer to keep a copy of the signed waiver of coverage form, and get a signed waiver every year!” Hulsey said.
It’s important to let our clients know what the Department of Labor and the Department of Justice are targeting, Hulsey said. Quoting from a recent presentation by the DOL and DOJ that she attended, Hulsey said that the DOL’s FY 2013 Strategic Plan has a goal to generate $1,172,108,000 in enforcement results through 4,330 reporting compliance reviews. They indicated their enforcement program will use a series of approaches (including national/regional priorities, civil/criminal litigation, and sample Investigation Programs) to achieve this goal. The current strategic plan is under review and that enforcement goal is likely to increase.
Hulsey acknowledged that agents and brokers are losing commissions but you can take some action to limit those losses “Connect with professionals like TPAs and payroll vendors to offer some of those third party services,” she suggested. “Also, be sure you understand your clients’ needs so you can answer their questions.” Employers need answers about PPACA and compliance, and they’ll be calling you or their attorneys. “It’s better if they call you,” she said.