Wednesday, January 5, 2011

In 2011, Implementation And Repeal Will Battle For The Fate Of Health Care Reform

Polar opposites, the effective implementation of health care reform and its wholesale repeal or funding blockade, will dominate the landscape of the Patient Protection and Affordable Care Act in 2011.

In other words, health reform will continue to expand its reach even as the courts and Congress debate the validity of the law.

Repeal, Defund

Several lower courts have begun the inevitable journey of health reform to the Supreme Court, which likely will not end until 2011 or 2012; and Republicans in the House of Representatives have scheduled a January 12 vote on repeal of the ACA, a certainty to pass in the Republican-led House and fail in the Democratic-controlled Senate.

Some analysts have predicted a difficult road in even a partial repeal or defunding efforts. Meanwhile, dozens of health reform provisions already have taken effect or will take effect this year, including those for the following (see also here, here, and here).

  • Grandfathered plans

  • Coverage for adult children

  • Nondiscrimination rules for insured health plans

  • Preventive care services

  • Lifetime and annual limits

  • Minimum loss ratios

  • Preexisting condition exclusions

  • Claims appeals processes

  • Early retiree reinsurance program

  • Benefits summary standards

  • Expanding patient selection of providers

  • Reviews of premium increases

  • Small employer health insurance credit 

  • Automatic health plan enrollment

  • Nursing mother breaks

  • Health care Internet portal

  • W-2 health coverage disclosure

  • Small employer “simple cafeteria plans”

  • Over-the-counter medicines not reimbursable through HSAs & HRAs

  • Increased excise tax on HSA & HRA non-medical distributions

More detailed information on the health reform provisions taking effect in 2010 and later are available to Wolters Kluwer Law and Business subscribers here.

Recent Guidance

And just in the two weeks since Health Reform Talk took a holiday break, the following implementing guidance has been issued

Health Reform Nondiscrimination Requirements Delayed. The application of the new nondiscrimination requirements in the Patient Protection and Affordable Care Act (ACA) have been delayed, according to IRS Notice 2011-1.

Under Public Health Service Act Sec. 2716 (as added by the ACA), new insured group health plans and plans that are not grandfathered must comply with the IRC Sec. 105(h) nondiscrimination requirements, including rules that the plan does not discriminate in favor of highly compensated individuals as to eligibility to participate. In addition, the benefits provided under the plan may not discriminate in favor of participants who are highly compensated. Notice 2011-1 notes that “because regulatory guidance is essential to the operation of the statutory provisions,” the Treasury Department and the IRS, as well as the Departments of Labor and Health and Human Services have determined that compliance with Sec. 2716 “should not be required (and thus, any sanctions for failure to comply do not apply) until after regulations or other administrative guidance of general applicability has been issued under Sec. 2716.”

IRS Offers New Guidance On FSA And HRA Debit Cards. The Internal Revenue Service has issued new guidance in IRS Notice 2011-5 allowing the continued use of health flexible spending arrangement (FSA) and health reimbursement arrangement (HRA) debit cards for the purchase of prescribed over-the-counter medicines and drugs.

Information Sought On Value-Based Health Plans. Federal agencies are seeking additional information regarding specific examples and best practices of value-based insurance design (VBID) for recommended preventive services under the Public Health Service Act Sec. 2713, as added by the Patient Protection and Affordable Care Act (ACA). In addition, the agencies seek information on data used to support and inform VBID benefit design, measurement, and evaluation in the context of recommended preventive services.

The Internal Revenue Service, the Department of Labor’s Employee Benefits Security Administration (EBSA), and the Department of Health and Human Services’ Office of Consumer Information and Insurance Oversight sought the information in a request for information issued jointly in the Dec. 28, 2010, Federal Register.

HHS Issues New and Updated Guidance On Early Retiree Reinsurance Program. The Department of Health and Human Services’ Early Retiree Reinsurance Program (ERRP) Center has published new and revised questions and answers for plan sponsors, including the questions and answers on the application for the program, costs and reimbursements, early retiree issues, and price concessions and cost adjustments.

DOL, HHS, Treasury Answer More Questions On Health Reform, Mental Health Parity. On December 22, the Department of Labor's Employee Benefit Security Administration (EBSA), the Department of Health and Human Services (HHS), and the Treasury Department (the Departments) released the fifth set of frequently asked questions about the Patient Protection and Affordable Care Act (ACA). The FAQs also addressed some issues related to the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA).

DOL Requests Comments On Nursing Mother Provision Of Health Reform. The Patient Protection and Affordable Care Act (ACA) amended the Fair Labor Standards Act (FLSA) to require employers with more than 50 employees to provide reasonable break time and a place for nursing mothers to express breast milk for up to one year after the child's birth. This provision became effective when the ACA was signed into law on March 23, 2010. While the Department of Labor's Wage and Hour Division has issued a fact sheet on the provision, entitled Break Time for Nursing Mothers.  Under the FSLA, the DOL has requested comments on the provision before formulating further guidance. The request for information was published in the December 21 Federal Register.

HHS Proposes A Health Insurance Rate Increase Review Program Required By ACA. A new proposed rule from the Department of Health and Human Services' (HHS) Office of Consumer Information and Insurance Oversight (OCIIO) would establish a rate review program to ensure that all rate increases that meet or exceed an established threshold are reviewed by a state or the HHS to determine whether the rate increases are unreasonable. This requirement is included in Sec. 2794 of the Public Health Service Act, as enacted in the Patient Protection and Affordable Care Act (ACA), relating to the disclosure and review of unreasonable premium increases. Beginning in 2014, the ACA empowers states to exclude from the new health insurance exchanges health plans that show a pattern of excessive or unjustified premium increases. The rule was published in the December 23 Federal Register.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform and other recent developments in employee benefits, just click here.


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