Reminder – Things you need to know now for health care reform

While not all inclusive, these highlights will help you to be better informed of the key areas that impact your employee benefits program.  For all practical purposes, these changes are effective for plan years on or after October 1, 2010.  Please call or email if you need assistance or have questions.   

Your responsibilities include:

1.  W2 reporting of employer contributions for health care coverage, excluding HSA and FSA contributions.  This will be on the W2 for the 2011 plan year…it is not taxable, just reportable.  Get ready to start tracking this beginning in January.
2. Allow dependent children to remain covered on the plan until age 26, even if they are married, and not dependent upon the employee for financial support.
3. Changes to Flexible Spending Accounts – Over the Counter drugs may no longer be reimbursable, unless prescribed by a physician.  The maximum annual deferral will be reduced to $2,500.
4. Determine if your health plan discriminates in favor of highly compensated individuals, and if so, read the next section.

Important things to remember about “grandfathered plans”:

1. Plans in place on or before March 23, 2010, are considered to be “grandfathered”, and not subject to certain reform provisions, such as the inability to discriminate in favor of highly compensated individuals.  This is significant if your company offers an executive medical reimbursement plan, such as Exec-U-Care™. 
2. New health plans going forward cannot discriminate in favor of highly compensated individuals.  Companies may continue to offer executive plans other than health, such as life insurance, disability coverage, long term care insurance and non-qualified retirement plans for executives. 
3. If you want to keep your grandfathered plan the way it is, make no changes other than adding or deleting new employees who are in the same class or category as before.
4. Some of the new provisions still apply to grandfathered plans, including the requirement to cover dependents to age 26, unless they have other group coverage available.

Small Business Tax credits and grants

1. Tax credit are available retroactive for premiums paid beginning in 2010 for companies who pay at least half of employee health care premiums. 
2. These are for companies with fewer than 25 employees earning average annual wages of less than $50,000, and for companies with 10 or few employees earning $25,000 or less on average. 
3. Kaiser and NFIB have both posted calculators to estimate annual credits.  Here is a link to a Kaiser Excel spreadsheet for the calculation:  https://secure.logmein.com/f?aFNjy5-iziOysR3osHlk6MVIbaofwyQPytvs5s3w.Dw
4. Small group employer-based wellness program grants will be available beginning in 2011.
5. Unrelated to healthcare reform, there are also hiring tax credits.  New employees must have been unemployed for the past 60 days to qualify for either the Social Security exemption or the $1,000 Federal Tax credit.  Here is a link to the guide:  http://www.qqestpayroll.com/documents/pdf/hire_act_guide.pdf

Insurance changes for plans that renew on or after October 1, 2010:

1. No lifetime benefit limits based on dollar amounts – allowed restricted yearly limits on the dollar value of certain benefits.
2. No cost-sharing obligations for certain preventive services. 
3. No pre-existing condition exclusions for dependent children under 19 years of age.
4. No coverage rescissions/cancellations, except for fraud or intentional misrepresentation.
5. Must have dependent coverage up to age 26.
6. New health plan disclosure and transparency requirements.
7. New internal and external appeal processes.

Pre-existing condition coverage for individual market consumers:

1. Check out the website www.healthcare.gov for information about a high-risk pool for people who have been uninsured for at least six months, and cannot obtain current individual coverage. 
2. There is another website that has been around a long time which helps people who are uninsured by showing them all of their options, both public and private.  There is an online questionnaire and brochures for free downloads at www.coverageforall.org.

 For a more detailed timeline prepared by the national Association of Health Underwriters, click here:  http://www.nahu.org/legislative/resources/Reform%20Timeline%20revised%20july%20_2_.pdf?ibcToken=319abcd0-9e34-4cbe-8429-3dcff02e20b5

New Benefit Plan Requirements for 2010–Are You Up-To-Date?

With all the focus on health care reform, it is easy to lose track of all the OTHER new laws that affect employee benefits.  A number of new federal laws and regulations were enacted and adopted in 2008 and 2009 that will have 2010 compliance implications for many employers.  Here’s an overview of new requirements for the 2010 plan year. 

The Genetic Information Nondiscrimination Act of 2008 (GINA)

The federal departments of Labor, Health and Human Services and Treasury issued an interim final rule to implement the Genetic Information Nondiscrimination Act of 2008 (GINA) in October 1, 2009 went into effect on December 7, 2009.   The new law and rule prohibit group health plans from discriminating on the basis of genetic information and strictly limits the collection of any information that could possibly contain genetic information by employers.  Unfortunately, the rules extend these prohibitions to family-history questions on health-risk assessment (HRA) forms used to place people in appropriate employer-based wellness and disease management programs.  They also prohibit providing any incentive or reward for employees who complete an HRA. 

This is an interim final rule, which means while it could be changed for 2011, its requirements are in effect for the 2010 plan year.  Since its effective date was just December 7, 2009, it is very important to make sure your company is not unintentionally out of compliance.  The majority of employer-sponsored health benefit plans are based on the calendar year, and many calendar-year plans have already distributed HRAs that include questions about family medical history as part of their open enrollment materials for the 2010 plan year.  These plans may or may not have expectation of getting these documents back before January 1, 2010, and may have rewards already planned and promised to employees for completion to be distributed after the start of the new plan year.  If this is the case, please take steps to correct your wellness or disease management programs right away!

Mental Health Parity

For most group benefit plans (all calendar-year plans), the Wellstone-Domenici Mental Health Parity and Addiction Equity Act goes into effect on January 1, 2010. The law applies to employers of more than 50 people who provide mental health and substance abuse services as part of the employee benefits program.  While large employers are not required to provide those benefits to employees, those who do may not impose any stricter financial requirements on mental health or substance use coverage than the predominant financial requirements for medical and surgical coverage under the plan. Generally, this means plans may not have higher cost sharing provisions for mental health and substance abuse benefits (e.g., deductibles, co-payments and out-of-pocket requirements) than those that apply to medical and surgical coverage. In addition, plans may not have stricter annual and lifetime dollar limits or any more restrictive coverage limits on the number of office visits or similar restrictions on the duration of coverage for mental health or substance use services than there are for medical or surgical treatment generally. And if the plan provides out-of-network benefits for medical and surgical services, then they also have to provide them for mental health and substance abuse, and they cannot be subject to stricter financial requirements or treatment limitations than those that apply to out-of-network medical and surgical services.

Michelle’s Law–Coverage for College Students

Michelle’s Law, which was signed in 2008, also goes into effect on January 1, 2010 for calendar year plans.  It applies to all most all group plans if they cover dependents and use student-status as a means of determining whether or not an individual is a dependent.  This measure prohibits group health plans from terminating a college student who is on medical leave from school or has had to reduce their college status to part-time for medically necessary reasons for one year after the first day of the medically necessary leave of absence, or until the date coverage otherwise would terminate under the terms of the plan (like exceeding the plan’s age limits). 

 Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA)

The passage of CHIPA last year created special enrollment rules, effective April 1, 2009, that require employers to amend their plans to allow special enrollment rights (similar to a qualifying event under HIPAA) for individuals that become eligible for state-paid coverage under CHIP or lose their CHIP eligibility.  In addition, if your state offers a CHIP premium assistance program to help subsidize employer-sponsored coverage as an alternative to CHIP enrollment, employers must provide their employees with annual notification of the existence of the premium assistance program.

COBRA Premium Subsidy

The temporary 65% federal subsidy of COBRA health insurance premiums for workers and their families who were involuntarily terminated between September 1, 2008 and December 31, 2009 began to phase out last month.  Employers are responsible for advancing the premium subsidy and receive a federal tax credit as reimbursement.  The reduced-cost premiums only last for nine months, so those who started getting subsidized coverage in March of 2009 — the first full month after the stimulus bill was signed — lost their subsidy in December 2009. Unless the subsidy is extended by new legislation (which is pending but has not been acted on yet) then no newly laid-off workers are currently eligible.  However, those involuntarily laid-off workers who started receiving subsidies after March can continue receiving subsidized benefits in 2010.  The expiration date for those individuals continues to be nine months after the start of benefits, meaning that even without any federal subsidy extension legislation employers will potentially need to continue to advance this subsidy until August 2010 for eligible individuals.

Protecting the Privacy of Medical Information

Privacy and security rules under the Health Insurance Portability and Accountability Act (HIPAA) were extended this year, so that they now cover all business associates of entities covered by HIPAA, including health care plans as well as third-party administrators and other vendors. The potential civil penalties for HIPAA violations were also substantially increased and a tiered penalty structure based on categories of violations became effective on November 30, 2009, and applies to violations occurring on or after February 18, 2009.  Also, interim final rules on the breach notification requirements and guidance on encrypting/decrypting protected health information became effective September 23, 2009, but the Department of Health and Human Services has announced they will not begin enforcement of the rules for failure to provide notifications that are discovered before February 22, 2010.  Until then, covered entities are expected to attempt to comply and DHHS will help covered entities through technical assistance and voluntary corrective action.

Reprinted with permission. Content copyright © 1998-2010 National Association of Health Underwriters. All rights reserved. National Association of Health Underwriters · 2000 North 14th Street, Suite 450 · Arlington, VA 22201
703.276.0220 · fax 703.841.7797 · info@nahu.org

Health Care Reform – Small Business Tax Credits

One of the first impacts of the new health care reform law is actually a tax credit, rather than a tax increase. Small businesses with 25 or fewer FTE (full time equivalent) employees who offer health insurance to their employees may be eligible for some tax relief. A tax credit for up to 35% of the cost of providing coverage will provide an incentive for small businesses, the drivers of our economy, to help reduce the uninsured in America. After all, group health insurance already has protections for guaranteed coverage, pre-existing conditions, and the inability to cancel your coverage if you become sick. The same cannot be said for individual and family plans.

The tax credit calculation is explained in detail on the IRS website via this link:

http://www.irs.gov/newsroom/article/0,,id=220839,00.html

One thing to be established before these credits actually start hitting our balance sheets is what is an average premium for small group in a given market? A list of average premiums by state is to be published by the IRS later this April.

If you would like to see how simple and affordable it is to offer group health insurance to your employees, please feel free to give us a call.

Kelly D. Moore, CEBS
Moore Benefits, Inc.
(877) 872-2080

Moore Benefits on CNBC

Update on Health Care Reform

Even though the federal version of health care reform is stalled, the states are still working on these issues. After a lengthy and heated debate, the California Senate last week passed a single-payer bill. As with past incarnations, the bill passed on a party-line vote. Previous attempts to advance single-payer legislation have been vetoed by Governor Arnold Schwarzenegger. Supporters of the bill claim it would actually cost the state nothing, despite a Senate Appropriations Committee analysis that pegs the cost at $200 billion. Republicans decried the bill as a government take-over of health care.

In other news, California in 2011 will become the first state to set legal limits on the time patients must wait to see their HMO doctors. The Department of Managed Health care has announced there will be a maximum wait time of 10 business days for an appointment to see a family practitioner, 15 days to see a specialist, and 48 hours for people seeking urgent care. In addition, doctors’ offices must return telephone calls within 30 minutes. The time limits apply only to doctors in HMOs, which officials say will cover 21 million Californians. A 2002 state law mandated timely access to medical care, and the specifics were worked out after years of negotiations with doctors, hospitals, HMOs and consumer groups. Also, the CEO of the California Medical Association, Alfred Gilchrist, has announced his resignation after serving for just over 2 months. Gilchrist is returning to his former role as CEO of the Colorado Medical

States Consider Their Own Health Reform Ideas

Medical News Today covers some news about states considering their own health reform ideas.

Drug Company CEOs Under Pressure

Medical News Today covers this issue:

In a separate article, Dow Jones Newswires/The Wall Street Journal reports on a high and “generational” turnover among pharmaceutical CEOs. “The new leaders are taking over an industry under pressure. The past decade has brought heightened scrutiny of drug safety, government probes of sales and marketing practices, and greater pricing pressure from drug-benefit plans and generic competitors. Drug makers feel compelled to control costs and do more to get results from the billions of dollars they pour into their research labs”

Poll: Health care bill won’t help Democrats

Politico writes about this issue:

“At this point, it looks like the political damage for Democrats on health care has been done, whether they end up passing the bill or not,” said PPP President Dean Debnam. “Republican support for this fall is identical with, or without it.”

The Debate Over Selling Insurance Across State Lines

Kaiser Health News writes about this issue:

Congressional Republicans have proposed the concept in the past and Sen. John McCain, R-Ariz., embraced it as part of his 2008 presidential campaign. Advocates – including some insurers and small business groups – say it would give the more than 17 million Americans who buy individual coverage a greater choice of plans and the possibility of lower prices. (The measure does not apply to the 159 million non-elderly Americans who obtain insurance through their employers.)

But critics — including consumer watchdog groups and the National Association of Insurance Commissioners — say the provision would erode many state government consumer protections, leave policyholders with inadequate coverage and could actually lead to higher premiums for some people.

New Study Raises Questions about Government-Run Public Insurance Plan

A government-run public health insurance option for middle-class families could help cover the uninsured, but it may well put private insurers out of business, a respected consulting firm concluded in a study released on April 6.The report by the Lewin Group, a public policy firm that serves government and private clients, stated the outcome of a public health insurance system depends on details that lawmakers are far from deciding. Nonetheless, the report could provide ammunition for critics who say a public plan would move in the direction of government-run medicine.President Obama and many Democrats want to create a government insurance plan to compete with private plans that now cover about 170 million Americans. The issue is a major sticking point for Republicans and the insurance industry.The Lewin study found that if such a plan were open to all employers and individuals and paid doctors and hospitals the same as Medicare, the government plan would quickly grow to 131 million members, while enrollment in private insurance plans would plummet.“The private insurance industry might just fizzle out altogether,” said John Sheils, a Lewin vice president and leading author of the study.By paying Medicare rates, the government plan would be able to set premiums well below what private plans charge. The study estimates that monthly premiums for family coverage would be $761 in the government plan, compared with an average of $970 in private plans. Employers and individuals would flock to the public plan to cut costs.President Obama has not spelled out in detail what he would like to see in a public plan. As a candidate, he said it would only be open to small employers, individuals and the self-employed. When Lewin ran the numbers for that limited scenario, the results were not as sweeping.A government-run public plan for small employers and individuals that paid Medicare fees would have nearly 43 million members. If it was designed like a private plan and paid higher fees to doctors and hospitals, it would only enroll 17 million members.The study found that a public plan would help reduce the number of uninsured to 28 million people, cutting the current uninsured population by nearly 50%, depending on how it was designed. The main reason not all the estimated 48 million uninsured would be covered is that President Obama’s health care proposal does not require all Americans to obtain coverage.Sheils said the study is meant to give lawmakers a feel for the options. “Our paper is more or less written as a ‘how to’ manual,” he explained.