Employers Gear Up For Health Care Changes

Original article from insurancenewsnet.com

By Cyril Tuohy

With the enrollment period for health care coverage under the Affordable Care Act (ACA) little more than four months away, employers are gearing up to inform their workers of the big changes ahead.

For employers who have not yet decided whether to continue offering health coverage or pay the fine for dropping coverage, “now is the time to think about that,” Andrew Molloy, assistant vice president of health management and insurance programs at Unum, said in an interview with InsuranceNewsNet.

So far, it appears the vast majority of employers will keep their coverage for full-time workers, according to a recent poll by the Foundation of Employee Benefit Plans. The survey found that 69 percent of employers will “definitely” continue to provide employer-sponsored health care when the exchanges go live Jan. 1, 2014.

Proponents of health reform, including President Barack Obama, said workers who receive good coverage under their employer-sponsored plan are likely to maintain that coverage, either with existing plans or something very similar.

Employees have an advantage under employer-sponsored coverage models, thanks to the power of group health pricing. Employers benefit as well because of the tax advantages associated with offering workplace-based coverage.

Corporate human resources departments, therefore, are working overtime to inform employees of the big changes. Everyone from insurance carriers to benefits brokers to payroll administrators are racing to inform clients of the changes through brochures, podcasts, blog postings, webinars and dedicated webpages.

“We know that everybody needs to comply with the Affordable Care Act and they are going to try as hard as they can to reduce cost under their respective health care plan and certainly you need a health care compliance strategy to achieve that,” Dave Sanders, health and benefits legal practice with AonHewitt, said in a recent webcast.

For now, companies can focus on the compliance strategy. But, in the long term, they also will need a health care strategy, he said.

Government websites also are full of information about what employers and employees need to know before employees make an enrollment decision. Earlier this month, for instance, the Department of Labor issued guidance to companies on notification procedures of coverage options to employees under Section 18(B) of the Fair Labor Standards Act.

Unum, which offers, life, disability and voluntary benefits coverage, believes a more informed employer makes life easier for employees and insurance carriers.

“It’s important in our role that we educate our clients, and we mean it so that requires us to help our clients, or in some cases brokers, to understand what their implications are on their total benefit of decision making,” Molloy said. “We recognize that medical is the biggest driver of the benefit decision.”

The majority of employer-sponsored health plans begin coverage Jan. 1, 2014, following the three-month enrollment period from Oct. 1 to Dec. 31.

“Some employees will qualify for subsidies and qualify for the exchanges, and employees will be asking questions,” he said. If employees are not asking lots and lots of questions they really should be, Molloy said.

Unum clients and brokers, who play a key role in advising clients, have snapped up the company’s 50-page pamphlet outlining key steps and strategies companies should think about for 2014 and beyond, Molloy also said.

Big-picture questions many employers will want answers to include:

- whether to “pay or play,” meaning to pay the fine or play in the employer-sponsored health benefits marketplace

- whether they meet the 50 full-time-equivalent threshold under which they don’t have to offer coverage

- which states have a state-run exchange or have elected to default to the federal exchange (Fewer than half the states are establishing an exchange.)

The finer points of the law -- such as compliance with deductible limits and out-of-pocket expenses, the contributions to the Transitional Reinsurance Program by sponsors of self-insured group health plans, new limitations on Flexible Spending Accounts, who qualifies for subsidies and levies on medical device manufacturers -- are better left to benefits brokers and advisors.

Still, employers need to be informed in upcoming discussions with their brokers, and with Memorial Day weekend around the corner, many advisors and corporate benefits experts can expect this to be, if not a hot summer, then at least a long one.

“If you are a company that’s going to play and you haven’t thought about it, it’s time,” Molloy said.

© Entire contents copyright 2013 by InsuranceNewsNet.com, Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

 

by 6d-destani

Employers’ confidence in health plans rising

Original article from ebn.benefitnews.com

By Tristan Lejeune

The vast majority of employers are actively developing tactics to work within the Affordable Care Act and companies’ confidence in employer-sponsored health care is up. These are among the results of the International Foundation of Employee Benefit Plans’ 2013 survey, released ahead of the group’s Washington Legislative Update conference, held today and tomorrow.

Only 10% of employers are still in a “wait-and-see mode” regarding health care reform regulations, according to the survey 2013 Employer-Sponsored Health Care: ACA’s Impact; the rest are busy taking steps to deal with reform’s rules and regulations.

Sixty-nine percent of employers tell the IFEBP that they definitely plan to provide employer-sponsored health care when exchanges begin in 2014; in 2012, only 46% of companies were willing to commit to that. An additional 25% say they are very likely to continue the offering.

Changes, however, are coming. Eighteen percent of employers have increased plan participants’ share of premiums, and a quarter plans to do so over the next year. Of those making changes, 25% are upping their emphasis on high-deductible health plans and health savings accounts, and 14% are assessing the feasibility of adding one.

“Employers across the country have to deal with the impact of implementing the ACA while still being able to provide competitive benefits for their employees,” says Julie Stich, research director for the IFEBP. “Employees across the board can expect to see changes in how their employer-sponsored health care plans operate.”

Benefits leaders are also doing more to spur healthy behavior: 19% are either developing an organized wellness program, or expanding an existing one. Fourteen percent of respondents are either adopting or expanding healthy-lifestyle financial incentives, and another 25% plan to do so in the next year.

“We are seeing trends that indicate more changes may be on the horizon. More and more organizations are losing their grandfathered status, dropping from 45% in 2011 to 27% in 2013,” says Stich. “Also many organizations are redesigning their plans to avoid the 2018 excise tax on high-cost or so called ‘Cadillac plans.’ In 2011, only one-in-ten indicated they were redesigning their plan to avoid the additional tax, but we’ve seen a steady increase over the past two years that shows the number will soon double.”

 

by 6d-destani

The Tomato Paradox of Health Care Reform

Original article https://analytics.ubabenefits.com

By Mick Constantinou

There is an old paradoxical adage that, “Knowledge is knowing that a tomato is a fruit, while wisdom is not putting it in a fruit salad.”

In terms of the promises of the health care reform law(keep, access and affordable), paradoxes like the tomato have come to light, but the Tomato Paradox relates directly to the difference between having knowledge and commanding wisdom.

Most Americans are aware of health care reform and the massive changes to how health insurance and health care will be accessed and regulated beginning this fall.  Some companies and individuals have the knowledge (or think they have the knowledge) of how the law will impact them directly, but the variable is the source of their knowledge and whether or not that knowledge is based in fact, political rhetoric or meetings at the water cooler.

The other variable is wisdom.  Employers may have the knowledge of “what they must do,” or “do not have to do,” based on the number of FTEs they employ, whether they are fully-insured or self-insured and other factors, but many have not been afforded access to the wisdom to answer the simple question: “What should we do?”

Regardless of whether an employer decides to “play or pay” in 2014 and beyond, there are other subjective factors (hidden costs) of health care reform that will impact company culture and strategic direction.  These factors need to be considered in concert with the results of modeling and compliance tools orchestrated by a trusted advisor, including but not limited to:

  • Increased reporting burdens, whether you “play or pay”
  • Recruitment and retention challenges related to changes in total compensation
  • Impacts to employee productivity and morale
  • Changes in taxable income for both employers and employees

In simple terms, knowledge is information and facts of which someone is aware, and wisdom is the ability to make correct, common sense judgments and decisions based on the facts.  Wisdom is an intangible quality gained through experience and expertise.

What separates insurance sales people from trusted advisors is the experience, expertise and wisdom brought to the unique challenges faced (and overcome) during the benefits renewal process in the era of health care reform.

 

by 6d-destani

6 key compliance deadlines for 2013 and beyond

As PPACA moves forward, employers must keep track of 6 key compliance deadlines for 2013 and beyond

Original article 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

The wellness path not taken

Original article: https://ebn.benefitnews.com

By Kathleen Koster

With full implementation of health care reform marching along, the landscape of employer-sponsored health benefits will never be the same. As employers turn to private and public exchanges beginning in 2014 as allowed under the Patient Protection and Affordable Care Act, the purpose for and implementation of worksite wellness programs also are likely to change.

Dr. Matthew Liss, East Coast medical director of NBCUniversal Health Services, fears that employers may not see wellness as their responsibility or employees will be less engaged in wellness initiatives because employers won't work as closely with vendors in the exchange.

Employers may not have access to health data as in the past, which could influence their investment in wellness programs, as well as impact incentives for healthy behavior. Liss points to premium reductions for nonsmokers or incentives for going to the gym that are currently offered by working hand in hand with health care providers. Employers may lose this ability to work with vendors while developing wellness incentives if employees receive coverage through a public or private exchange.

Certain populations could lose out

Bryce Williams, the president and CEO of Extend Health, Inc., which operates the nation's largest private exchange recently acquired by Towers Watson, believes that the most likely demographic to move employees into public exchanges would be small employers with 500 or fewer employees. Employers in this situation would be more likely to stop providing or lessen wellness services to workers than those entering private exchanges, he says.

In general, small employers don't have data to show them the best practices in wellness programs, explains Dave Ratcliffe, a principal at Buck Consulting. This could remain the case for small employers whose workers enter the public marketplaces. Ratcliffe adds that the more employers measure their initiatives, the more investment they make into wellness.

In the retail industry, where part-time workers outnumber full-time workers, some employers will reframe their total reward strategy for a post-2014 health care reform world. Some of Ratcliffe's clients in this sector are considering restructuring jobs and recalibrating total remuneration in order to attract, retain and motivate the workforce. For example, he says an employer may limit part-time workers to clock fewer than 30 hours each week, while rewarding top talent with over 30 hours of scheduled work so they can receive the best health benefits as defined under PPACA. While such a workforce restructuring may require more part-time employees who work under 30 hours per week, this framework could be a motivational carrot to drive talent.

Instead of developing wellness programs exclusively to drive down the health cost curve, employers will use wellness to improve population health and the overall productivity.

"Even if your employees are getting coverage through the exchange now, you want to make sure that they are healthy because a healthier employee is a more productive employee," says Julie Stich, research director at the International Foundation of Employee Benefit Plans.

Williams adds that large employers could leverage any savings they absorb through an exchange setup by reinvesting them into employees, especially into their wellness component.

Giving up a global edge?

According to a recent report from Buck Consultants, 87% of global employers recognize managing employee health as their responsibility in 2012, up from 75% in 2010. Further, 49% of multinational employers now have global health promotion strategies, up from 34% in 2004.

Based on these results, employers believe they need a healthy and productive workforce to have an edge in a global economy.

"If you look globally, the universal responses from all of the countries that productivity and reducing presenteeism was the No. 1 goal for their wellness program, [whereas] for U.S. companies, the No. 1 goal is reducing health care costs," Ratcliffe says. For most employers outside the U.S., employees receive coverage from a government-sponsored system, yet they continue to view wellness initiatives as paramount to driving a profit.

Further, the 2014 reinsurance tax (which could increase employers' health insurance costs by 1-2%), a looming 2018 excise tax, mandated benefits and auto-enrollment could all cause employers to consider shifting cost downward and investing more into wellness. In recent years, plan sponsors have managed a 5% trend rate by predominantly cutting benefits or cost-shifting. "From an attraction and retention standpoint, how much more can we afford to continue to cut benefits? So we're left with wellness to manage costs instead of shifting costs," says Ratcliffe.

In the new health care reform environment, Ratcliffe believes incentives and disincentives will play an even larger role in motivating employees to participate and succeed in wellness. PPACA permits an increase of allowable incentive dollars from 20% to 30%, and more employers are using outcomes-based incentives to drive results.

Overall, the U.S. spends roughly 18% of their total GDP on health care, while the rest of the world spends 9.5% on average. However the U.S.'s average rate of obesity is nearly double the rest of the world's (28% compared to 15%), according to 2012 OECD health data.

"Regardless of health care reform, we're not going to be able to compete in the future without making a change," says Ratcliffe.

Vendor relationships also will morph

The private exchange market, whether insured or self-funded, will function more like a group exchange, where the employer contracts with the exchange instead of sending people individually to a public exchange. For these private exchanges, "employers are not losing access to that data because they are still in a group world in 2014," Ratcliffe explains.

Public exchanges may tell a different story. Employers won't get data for people sent to public exchanges, but Ratcliffe doesn't expect many employers will go this route initially in 2014. Farther down the road when there's a viable individual market similar to Medicare, vendor relationships may change.

Employers' relationships with health vendors, in addition to how they measure and run wellness programs, are sure to change in coming years as employers consider private and public exchanges as options to provide insurance coverage to workers. It remains to be seen how exchanges will change wellness initiatives, but it's clear that wellness programs will always be a business imperative to keep workers healthy, productive and satisfied with their employer.

 

by 6d-destani

Many workers aren’t ready for health care reform

Original article https://www.kansascity.com

By Diane Stafford

National health care reform and cost-cutting by employers is changing the way many workers get health insurance, but a majority of employees may not understand what’s ahead.

The Aflac WorkForces Report, the insurer’s third annual employee benefits study, polled 5,299 employees across the country and found that three-fourths said they had never heard the phrase “consumer-driven health care.”

That’s a problem. Consumer-driven health care is the direction the nation is moving. It’s the underlying concept that requires individuals to take more control over their health care spending.

“It may be referred to as ‘consumer-driven health care,’ but in actuality, consumers aren't the ones driving these changes, so it’s no surprise that many feel unprepared,” said Audrey Boone Tillman, executive vice president of corporate services at Aflac.

There’s another problem. The survey found that more than half of the workers polled said they preferred not to have greater control over their health insurance options. Fifty-four percent said they don’t have the time or knowledge to manage the responsibility.

How will workers learn to navigate the world of health care and insurance choices? Seventy-five percent said they expect their employers to educate them about the details of reform.

There’s another problem. Only 13 percent of the 1,884 “benefits decision-makers” in organizations reached in a companion poll said they thought educating employees about health care reform is “important” to their organizations.

At least most employees realize they’re not ready. About half said they fear they will leave their families less protected if they make poor insurance plan choices.

The poll, released Wednesday, emphasized the education challenges as employers shift away from their health care benefits.

One-third of the employees polled said they weren’t knowledgeable about health savings accounts, three-fourths said they weren’t knowledgeable about the impending federal or state health insurance exchanges, half said they weren’t knowledgeable about health reimbursement accounts and one-fourth said they weren’t knowledgeable about flexible spending accounts.

All of those are benefits options for employers to subsidize employee health care in different ways or exit health benefits entirely.

“It’s time for consumers to face reality,” Tillman said. “The responsibility lies in the hands of consumers to educate themselves.”

by 6d-destani

Top Dem Sees 'train wreck' for PPACA

Source: https://www.lifehealthpro.com

By Ricardo Alonso-Zaldivar

A senior Democratic senator who helped write the Patient Protection and Affordable Care Act (PPACA) stunned administration officials last Wednesday, saying openly he thinks it's headed for a "train wreck" because of bumbling implementation.

"I just see a huge train wreck coming down," Senate Finance Committee Chairman Max Baucus, D-Mont., told Obama's health care chief during a routine budget hearing that suddenly turned tense.

Baucus is the first top Democrat to publicly voice fears about the rollout of the new health care law, designed to bring coverage to some 30 million uninsured Americans through a mix of government programs and tax credits for private insurance that start next year. Polls show the public remains confused by the complexity of the law, and even many uninsured people are skeptical that they will be helped.

A six-term Democrat, Baucus expects to face a tough re-election in 2014. He's still trying to recover from approval ratings that nosedived amid displeasure with the health care law in his home state.

Normally low-key and supportive, Baucus challenged Health and Human Services Secretary Kathleen Sebelius at Wednesday's hearing.

He said he's "very concerned" that new health insurance exchanges for consumers and small businesses will not open on time in every state, and that if they do, they might just flop because residents don't have the information they need to make choices.

"The administration's public information campaign on the benefits of the Affordable Care Act deserves a failing grade," he told Sebelius. "You need to fix this."

Responding to Baucus, Sebelius pointedly noted that Republicans in Congress last year blocked funding for carrying out the health care law, and she had to resort to raiding other departmental funds that were legally available to her.

The administration is asking for $1.5 billion in next year's budget, and Republicans don't seem willing to grant that, either.

At one point, as Sebelius tried to answer Baucus' demand for facts and figures, the senator admonished: "You haven't given me any data; you just give me concepts, frankly."

"I don't know what he's looking at," Sebelius told reporters following her out of the room after Baucus adjourned the hearing. "But we are on track to fully implement marketplaces in Jan. 2014, and to be open for open enrollment."

That open-enrollment launch is only months away, Oct. 1. It's when millions of middle-class consumers who don't get coverage through their jobs will be able to start shopping for a private plan in the new exchanges. They'll also be able to find out if they qualify for tax credits that will lower their premiums. At the same time, low-income people will be steered to government programs, mainly an expanded version of Medicaid.

But half the states, most of them Republican-led, have refused to cooperate in setting up the infrastructure of Obama's law. Others, like Montana, are politically divided. The overhaul law provided that the federal government would step in and run the new markets if a state failed to do so. Envisioned as a fallback, federal control now looks like it will be the norm in about half the country, straining resources.

Administration officials say their public outreach campaign will begin in earnest over the summer. They question the wisdom of bombarding consumers with insurance details now, when there's not yet anything to sign up for. Baucus said in his state, that vacuum has mostly been filled by misinformation.

While some other Democratic lawmakers have privately voiced similar frustrations, most have publicly lauded Sebelius for her department's work. Democrats from reliably blue states have less to worry about, since their governors and legislatures have embraced the law and are working to make it succeed.

In Montana, the legislature rejected Democratic Gov. Steve Bullock's bid for a state-run insurance exchange. The governor is now trying to find a compromise on expanding Medicaid.

Republicans are certain to remind Montana voters next year that Baucus' fingerprints are all over the health care law, even though a similar strategy failed to knock off fellow Democratic Sen. Jon Tester last year.

After the hearing, Baucus' office clarified that he still thinks PPACA is a good law, but he questions how it is being carried out.

 

by 6d-destani

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