People love making predictions. Foretelling the Supreme Court’s decision on the constitutionality of the individual mandate in the Patient Protection and Affordable Care Act (ACA) is no exception.
If you relied on CNN’s legal analyst Jeffrey Toobin’s assessment of the case just after oral arguments back in March, most likely you’ve predicted the entire law is going down. Toobin said the arguments were “a train wreck for the Obama administration” and that the law could be in “grave trouble.”
Or take a look at the predictions on FantasySCOTUS.net where 54% say the individual mandate is unconstitutional.
Further, InTrade indicates there’s a 61% chance the Court will rule the mandate unconstitutional before December 31, 2012. You can even buy or sell “shares” based on whether or not you think this event will occur. (That’s a bit disturbing to me, but like I said, people love making predictions, and they really love the possibility of making money off those predictions. Never mind the possibility of losing money!)
But others have a more tempered approach. “While predictions about what the Court will decide are highly sought after, they are generally meaningless. The Court will make a decision this term, probably in June, and we will move forward after that point,” Kathryn Bakich, Senior Vice President and National Health Compliance Practice Leader at The Segal Company, said in an interview with Wolters Kluwer.
Bakich continued, “Nevertheless, many commentators predict a six-to-three vote in favor of the mandate, with Chief Justice Roberts joining a five-member majority consisting of Justices Kagan, Breyer, Sotomayor and Ginsberg plus Justice Kennedy. Justice Kennedy’s vote is key to sustaining the validity of the mandate, but his questions during oral argument did not give comfort to supporters of the mandate, as he sharply criticized the government’s points and indicated he was looking for a principle by which to limit the government’s authority to regulate commerce.”
No matter which way you think the court will rule (please comment on this post and let’s discuss it!), a lot of work continues on implementing the law as we continue to wait for the Court’s decision (expected in late June). In the meantime, if you insist on making predictions on this or any other future event, I have a Magic 8 Ball you can borrow.
-->
In honor of Memorial Day, Health Reform Talk will take a short break.
The National Moment of Remembrance encourages all Americans to pause wherever they are at 3 p.m. local time on Memorial Day for a minute of silence to remember and honor those who have died in service to the nation.
Nearly 62,000 individuals nationwide had enrolled in the Pre-Existing Condition Insurance Plan (PCIP), the temporary high risk health insurance pool established under the Patient Protection and Affordable Care Act, in the first quarter of 2012, the Center For Consumer Information and Insurance Oversight (CCIIO) reported.
These numbers are not as impressive as supporters hoped they would be, however-- 5 million persons had been expected to enroll in the $5 billion program. To help more individuals with preexisting conditions sign up for the program, last year, the CCIIO reduced premiums in the PCIP by as much as 40 percent in 18 states and eased eligibility standards in the 23 states and the District of Columbia where the federal government administers the PCIP.
The PCIP is designed to provide health insurance coverage for individuals who have been uninsured for six months and who have been denied a policy because they have preexisting conditions, including employees in companies that do not provide health coverage. The program is administered by either the state or the federal government and 27 states have elected to administer their own. In the 23 and the District of Columbia states where the federal government runs the program, enrollment applications began to be accepted on July 1, 2010, with coverage beginning Aug. 1, 2010, at the earliest. The pool will run until Jan. 1, 2014, when state-based Affordable Insurance Exchanges are scheduled to begin operation.
Massachusetts and Vermont are guarantee issue states that have already implemented many of the broader market reforms included in the Affordable Care Act that take effect in 2014. Existing commercial plans offering guaranteed coverage at premiums comparable to PCIP are already available in both states, the CCIIO explained.
Premium costs and the six-month waiting period likely are obstacles to increased PCIP enrollment. For example, in Illinois, a state that runs its own PCIP, the following options are available:
Premium: $76 to $693 for a non-smoker, rates vary by region
Deductible: $500, $1000, $2,000, and $5,000
Out of Pocket Limit: $2,850 to $5,000 for medical depending on plan option, $0 to $1,600 for pharmacy depending on plan option, with a maximum out-of-pocket limit from $5,000 to $5,950 depending on plan option
The federal government’s HealthCare.gov website has a helpful feature that allows individuals to search for insurance options in their state and lists options for affordable health care services regardless of insurance-status. Awareness-raising would help.
Wednesday, May 30, 2012
Monday, May 28, 2012
Happy Memorial Day!
In honor of Memorial Day, Health Reform Talk will take a short break.
The National Moment of Remembrance encourages all Americans to pause wherever they are at 3 p.m. local time on Memorial Day for a minute of silence to remember and honor those who have died in service to the nation.
Friday, May 25, 2012
Health Reform’s Temporary High-Risk Pool Open For Business
Nearly 62,000 individuals nationwide had enrolled in the Pre-Existing Condition Insurance Plan (PCIP), the temporary high risk health insurance pool established under the Patient Protection and Affordable Care Act, in the first quarter of 2012, the Center For Consumer Information and Insurance Oversight (CCIIO) reported.
These numbers are not as impressive as supporters hoped they would be, however-- 5 million persons had been expected to enroll in the $5 billion program. To help more individuals with preexisting conditions sign up for the program, last year, the CCIIO reduced premiums in the PCIP by as much as 40 percent in 18 states and eased eligibility standards in the 23 states and the District of Columbia where the federal government administers the PCIP.
The PCIP is designed to provide health insurance coverage for individuals who have been uninsured for six months and who have been denied a policy because they have preexisting conditions, including employees in companies that do not provide health coverage. The program is administered by either the state or the federal government and 27 states have elected to administer their own. In the 23 and the District of Columbia states where the federal government runs the program, enrollment applications began to be accepted on July 1, 2010, with coverage beginning Aug. 1, 2010, at the earliest. The pool will run until Jan. 1, 2014, when state-based Affordable Insurance Exchanges are scheduled to begin operation.
Massachusetts and Vermont are guarantee issue states that have already implemented many of the broader market reforms included in the Affordable Care Act that take effect in 2014. Existing commercial plans offering guaranteed coverage at premiums comparable to PCIP are already available in both states, the CCIIO explained.
Premium costs and the six-month waiting period likely are obstacles to increased PCIP enrollment. For example, in Illinois, a state that runs its own PCIP, the following options are available:
Premium: $76 to $693 for a non-smoker, rates vary by region
Deductible: $500, $1000, $2,000, and $5,000
Out of Pocket Limit: $2,850 to $5,000 for medical depending on plan option, $0 to $1,600 for pharmacy depending on plan option, with a maximum out-of-pocket limit from $5,000 to $5,950 depending on plan option
The federal government’s HealthCare.gov website has a helpful feature that allows individuals to search for insurance options in their state and lists options for affordable health care services regardless of insurance-status. Awareness-raising would help.
Wednesday, May 23, 2012
Twelve Health Reform Consumer Oriented and Operated Plans Approved For 2014
To date, a total of 12 Consumer Oriented and Operated Plans (CO-OPs) have been approved to receive repayable loans to help them establish private nonprofit, consumer-governed health insurance companies, the Centers for Medicare and Medicaid Services (CMS) has announced. The CO-OP plans were created by the Patient Protection and Affordable Care Act (ACA) to give consumers and small businesses more health insurance choices. Starting Jan. 1, 2014, CO-OPs will be able to offer health plans through Affordable Insurance Exchanges in each state, as well as outside of an Exchange. These 12 CO-OPs have been awarded $982,472,104 to develop coverage options in 12 states.
CO-OP loans support the creation of new nonprofit health insurers to promote competition and increase choice in the insurance market, especially for individual and small groups. As consumer-directed organizations, CO-OPs are designed to be accountable to members and responsive to the specific health care needs of plan members by using profits to lower premiums, improve quality, and expand benefits or enrollment.
All CO-OP loans must be repaid with interest and loans will only be made to private, nonprofit entities that demonstrate a high probability of becoming financially viable. CMS will closely monitor CO-OPs to ensure they are meeting program milestones. Funds can only be drawn down incrementally as milestones are met. To ensure strong financial management, CO-OPs are required to submit quarterly financial statements, including cash flow and enrollment data, receive site visits, and undergo annual external audits. This CMS monitoring is concurrent with the financial and operational oversight of state insurance regulators.
The following five CO-OPs announced on May 18 join seven others announced in February: Michigan Consumer’s Healthcare CO-OP, a coalition of 15 county health plans; Hospitality Health CO-OP, Nevada; Maine Community Health Options (MCHO); Oregon’s Health CO-OP (Incorporated as Community Care of Oregon); and Consumers’ Choice Health Insurance Company (CCHIC), South Carolina. Loan recipients approved in February include: Freelancers CO-OP of Oregon, New Mexico Health Connections, Montana Health Cooperative, Midwest Members Health (Iowa and Nebraska), Common Ground Healthcare Cooperative (Wisconsin), Freelancers CO-OP of New Jersey, and Freelancers Health Service Corporation (New York).
The awardees will receive start-up and solvency loans to fund start-up activities required to become a health insurance issuer and enable them to meet state licensure, solvency, and reserve requirements. Start-up loans must be repaid in five years and solvency loans paid back within 15 years. Like other plans, CO-OPs must meet state and federal standards for qualified health plans to sell coverage through the Exchanges and the state’s Small Business Health Option Programs (SHOP Exchanges.
CMS will continue to review applications, with quarterly deadlines through Dec. 31, 2012, and announce additional awardees on a rolling basis. More information on the CO-OPs is available here.
CO-OP loans support the creation of new nonprofit health insurers to promote competition and increase choice in the insurance market, especially for individual and small groups. As consumer-directed organizations, CO-OPs are designed to be accountable to members and responsive to the specific health care needs of plan members by using profits to lower premiums, improve quality, and expand benefits or enrollment.
All CO-OP loans must be repaid with interest and loans will only be made to private, nonprofit entities that demonstrate a high probability of becoming financially viable. CMS will closely monitor CO-OPs to ensure they are meeting program milestones. Funds can only be drawn down incrementally as milestones are met. To ensure strong financial management, CO-OPs are required to submit quarterly financial statements, including cash flow and enrollment data, receive site visits, and undergo annual external audits. This CMS monitoring is concurrent with the financial and operational oversight of state insurance regulators.
The following five CO-OPs announced on May 18 join seven others announced in February: Michigan Consumer’s Healthcare CO-OP, a coalition of 15 county health plans; Hospitality Health CO-OP, Nevada; Maine Community Health Options (MCHO); Oregon’s Health CO-OP (Incorporated as Community Care of Oregon); and Consumers’ Choice Health Insurance Company (CCHIC), South Carolina. Loan recipients approved in February include: Freelancers CO-OP of Oregon, New Mexico Health Connections, Montana Health Cooperative, Midwest Members Health (Iowa and Nebraska), Common Ground Healthcare Cooperative (Wisconsin), Freelancers CO-OP of New Jersey, and Freelancers Health Service Corporation (New York).
The awardees will receive start-up and solvency loans to fund start-up activities required to become a health insurance issuer and enable them to meet state licensure, solvency, and reserve requirements. Start-up loans must be repaid in five years and solvency loans paid back within 15 years. Like other plans, CO-OPs must meet state and federal standards for qualified health plans to sell coverage through the Exchanges and the state’s Small Business Health Option Programs (SHOP Exchanges.
CMS will continue to review applications, with quarterly deadlines through Dec. 31, 2012, and announce additional awardees on a rolling basis. More information on the CO-OPs is available here.
Monday, May 21, 2012
Health Insurance Premium Tax Credit Guidance Issued
In regulations to be published in the May 23 Federal Register, the Internal Revenue Service provides guidance for individuals who enroll in qualified health plans through American Health Benefit Exchanges and claim the health insurance premium tax credit and for affordable insurance Exchanges that provide qualified health plans to individuals and employers. The regulations are effective on May 23, 2012, and apply to tax years ending after Dec. 31, 2013. These final regulations clarify the proposed regulations issued on Aug. 17, 2011.
Beginning in 2014, under the Patient Protection and Affordable Care Act, individuals and small businesses will be able to purchase private health insurance through state-based competitive marketplaces called American Health Benefit Exchanges. Exchanges are intended to offer competition and choice. Insurance companies will compete for business on a level playing field, driving down costs. Consumers will have a choice of health plans to fit their needs and Exchanges will give individuals and small businesses the same purchasing power as big businesses.
The ACA allows a refundable premium tax credit to help individuals and families afford health insurance coverage by reducing a taxpayer's out-of-pocket premiumfor a qualified health plan.
To be eligible for a premium tax credit, an individual must be an applicable taxpayer defined as a taxpayer:
1. with household income for the taxable year between 100% and 400% of the federal poverty line (FPL) for the taxpayer's family size;
2. who may not be claimed as a dependent by another taxpayer; and
3. who files a joint return if married.
Among other issues, these flatest inal regulations clarify the definition of family and household income. Household income does not include the modified adjusted gross income of a family member who is required to file a tax return solely to report tax imposed under code sections other than Code Sec. 1 (federal income tax on taxable income), such as the early distribution penalty under Code Sec. 72(q) or self-employment tax under Code Sec. 1401. However, modified adjusted gross income does include Social Security benefits not included in gross income under Code Sec. 86 as required by The 3 Percent Withholding Repeal and Job Creation Act (P.L. 112-56).
In addition, the final regulations clarify that the higher federal poverty line applies if married taxpayers reside in separate states with different federal poverty guidelines, or if a taxpayer resides in states with different federal poverty lines during the year.
If an individual fails to complete the requirements for benefits under a government-sponsored program by the last day of the third full calendar month following the eligibility event, that individual will be eligible for coverage on the first day of the fourth calendar month, the final regulations state. The three-month time period does not include the time needed for a government agency to process an application. The IRS expects to publish additional guidance clarifying when or if an individual becomes “eligible for government-sponsored minimum essential coverage” (such as Medicaid) when the eligibility for that coverage is due to a particular illness or condition, for example, blindness or disability.
If, after an individual enrolls in a qualified health plan, new or different employer-sponsored coverage becomes available, the individual must notify the exchange and get a new determination to extend the affordability safe harbor. The affordability safe harbor applies only until available employer-sponsored coverage changes and the employee affirmatively provides information allowing an exchange to determine that employer-sponsored coverage is unaffordable. The final regulations also clarify that an employee is not eligible for coverage under the employer’s plan during a waiting period.
An employee is not enrolled in an eligible employer-sponsored plan if: (1) the employee is automatically enrolled in the plan, and (2) terminates the coverage before a specified date. Thus, an individual who is automatically enrolled in a plan that is unaffordable or that does not provide minimum value and who terminates that coverage by the specified date will not be treated as eligible for minimum essential coverage under the employer-sponsored plan for the period during which the individual was automatically enrolled. Accordingly, the individual will not be precluded by the automatic enrollment from inclusion in the taxpayer’s coverage family for computing the premium tax credit for that period.
The applicable benchmark plan for family coverage is the plan that applies to the members of the taxpayer’s coverage family. The final regulations clarify that the coverage family includes only those members of the taxpayer’s family who are not eligible for other minimum essential coverage and enroll in a qualified health plan.
Comments on the final regulations will be accepted until August 22.
Beginning in 2014, under the Patient Protection and Affordable Care Act, individuals and small businesses will be able to purchase private health insurance through state-based competitive marketplaces called American Health Benefit Exchanges. Exchanges are intended to offer competition and choice. Insurance companies will compete for business on a level playing field, driving down costs. Consumers will have a choice of health plans to fit their needs and Exchanges will give individuals and small businesses the same purchasing power as big businesses.
The ACA allows a refundable premium tax credit to help individuals and families afford health insurance coverage by reducing a taxpayer's out-of-pocket premiumfor a qualified health plan.
To be eligible for a premium tax credit, an individual must be an applicable taxpayer defined as a taxpayer:
1. with household income for the taxable year between 100% and 400% of the federal poverty line (FPL) for the taxpayer's family size;
2. who may not be claimed as a dependent by another taxpayer; and
3. who files a joint return if married.
Among other issues, these flatest inal regulations clarify the definition of family and household income. Household income does not include the modified adjusted gross income of a family member who is required to file a tax return solely to report tax imposed under code sections other than Code Sec. 1 (federal income tax on taxable income), such as the early distribution penalty under Code Sec. 72(q) or self-employment tax under Code Sec. 1401. However, modified adjusted gross income does include Social Security benefits not included in gross income under Code Sec. 86 as required by The 3 Percent Withholding Repeal and Job Creation Act (P.L. 112-56).
In addition, the final regulations clarify that the higher federal poverty line applies if married taxpayers reside in separate states with different federal poverty guidelines, or if a taxpayer resides in states with different federal poverty lines during the year.
If an individual fails to complete the requirements for benefits under a government-sponsored program by the last day of the third full calendar month following the eligibility event, that individual will be eligible for coverage on the first day of the fourth calendar month, the final regulations state. The three-month time period does not include the time needed for a government agency to process an application. The IRS expects to publish additional guidance clarifying when or if an individual becomes “eligible for government-sponsored minimum essential coverage” (such as Medicaid) when the eligibility for that coverage is due to a particular illness or condition, for example, blindness or disability.
If, after an individual enrolls in a qualified health plan, new or different employer-sponsored coverage becomes available, the individual must notify the exchange and get a new determination to extend the affordability safe harbor. The affordability safe harbor applies only until available employer-sponsored coverage changes and the employee affirmatively provides information allowing an exchange to determine that employer-sponsored coverage is unaffordable. The final regulations also clarify that an employee is not eligible for coverage under the employer’s plan during a waiting period.
An employee is not enrolled in an eligible employer-sponsored plan if: (1) the employee is automatically enrolled in the plan, and (2) terminates the coverage before a specified date. Thus, an individual who is automatically enrolled in a plan that is unaffordable or that does not provide minimum value and who terminates that coverage by the specified date will not be treated as eligible for minimum essential coverage under the employer-sponsored plan for the period during which the individual was automatically enrolled. Accordingly, the individual will not be precluded by the automatic enrollment from inclusion in the taxpayer’s coverage family for computing the premium tax credit for that period.
The applicable benchmark plan for family coverage is the plan that applies to the members of the taxpayer’s coverage family. The final regulations clarify that the coverage family includes only those members of the taxpayer’s family who are not eligible for other minimum essential coverage and enroll in a qualified health plan.
Comments on the final regulations will be accepted until August 22.
New Guidance On Summary Of Benefits And Coverage Adds Safe Harbors
Just as employers have been advised to continue taking steps to ensure they are in compliance with the health reform law as it stands, even as we wait for the Supreme Court to weigh in on the law, federal agencies are not sitting on their hands either. On May 11, the Department of Labor’s Employee Benefits Security Administration, together with the Departments of Health and Human Services and the Treasury (the Departments), issued additional guidance in the form of 14 frequently asked questions (FAQs) for implementation of the Summary of Benefits and Coverage (SBC) requirement of the Patient Protection and Affordable Care Act (ACA). As discussed in previous posts here and here, starting on Sept. 23, 2012, health insurers and group health plans will be required to provide the SBC and the uniform glossary to consumers.
At the same time, the Department issued a corrected SBC template, a sample SBC, and a guide for coverage examples calculator for diabetes cases.
Among the issues the new set of FAQs address are the following:
1. Electronic provision of SBC—Safe harbors, certain electronic features. In addition to previously provided safe harbors, SBCs may be provided electronically in connection with online enrollment or renewal and to participants and beneficiaries who request the SBC online, as long as individuals have the option to receive a paper copy. In addition, the electronic SBC can include some electronic features such as scrolling and expansion of columns and the SBC can be displayed on a single webpage.
2. Circumstances that trigger the SBC provision requirement. For applicants in the individual market or for group health plan/sponsors, the SBC must be provided no later than seven business days after receiving a “substantially complete” application. When coverage terms are under negotiation after an application was filed and the SBC information changes, the revised SBC need only be provided again on the first day of coverage.
3. SBC must be provided upon request to group health plan or sponsor shopping for coverage.
4. Combining SBCs or SBC elements to allow comparison. This may be done, but the full SBC for all benefit packages still must be available as required by the final rules.
5. Application of penalties for violations. The Departments are focused on assisting employers and insurers to comply, rather than imposing penalties. In previously released FAQs, and again in this new set of FAQs, the Departments confirmed that during the first year of applicability, they “will not impose penalties on plans and issuers that are working diligently and in good faith to provide the required SBC content in an appearance that is consistent with the final regulations. The Departments intend to work with stakeholders over time to achieve maximum uniformity for consumers and certainty for the regulated community.”
The Departments also are developing calculators to use as safe harbors to complete coverage examples. Written translations of the SBC template are available in Spanish, Chinese, and Tagalog, and soon will be available in Navajo.
The high level of the Departments’ productivity issuing regulations and guidance to implement the ACA, give affected employers and insurers a head start to prepare.
At the same time, the Department issued a corrected SBC template, a sample SBC, and a guide for coverage examples calculator for diabetes cases.
Among the issues the new set of FAQs address are the following:
1. Electronic provision of SBC—Safe harbors, certain electronic features. In addition to previously provided safe harbors, SBCs may be provided electronically in connection with online enrollment or renewal and to participants and beneficiaries who request the SBC online, as long as individuals have the option to receive a paper copy. In addition, the electronic SBC can include some electronic features such as scrolling and expansion of columns and the SBC can be displayed on a single webpage.
2. Circumstances that trigger the SBC provision requirement. For applicants in the individual market or for group health plan/sponsors, the SBC must be provided no later than seven business days after receiving a “substantially complete” application. When coverage terms are under negotiation after an application was filed and the SBC information changes, the revised SBC need only be provided again on the first day of coverage.
3. SBC must be provided upon request to group health plan or sponsor shopping for coverage.
4. Combining SBCs or SBC elements to allow comparison. This may be done, but the full SBC for all benefit packages still must be available as required by the final rules.
5. Application of penalties for violations. The Departments are focused on assisting employers and insurers to comply, rather than imposing penalties. In previously released FAQs, and again in this new set of FAQs, the Departments confirmed that during the first year of applicability, they “will not impose penalties on plans and issuers that are working diligently and in good faith to provide the required SBC content in an appearance that is consistent with the final regulations. The Departments intend to work with stakeholders over time to achieve maximum uniformity for consumers and certainty for the regulated community.”
The Departments also are developing calculators to use as safe harbors to complete coverage examples. Written translations of the SBC template are available in Spanish, Chinese, and Tagalog, and soon will be available in Navajo.
The high level of the Departments’ productivity issuing regulations and guidance to implement the ACA, give affected employers and insurers a head start to prepare.
Friday, May 18, 2012
CCIIO updates state exchange information
The Center for Consumer Information & Insurance Oversight (CCIIO) has released an assortment of updates with regard to the new state exchanges to be implemented under the Patient Protection and Affordable Care Act (ACA).
First, six Level One Exchange Establishment grant awards, totaling more than $181 million, have just been awarded to Illinois, Nevada, Oregon, South Dakota and Tennessee. This brings the total of Exchange-related grants provided to states over the last two years to more than $1 billion. The grants are designed to provide one year of funding to states that have begun the process of building their Exchanges.
A Level Two Establishment grant has also been awarded, for the first time, to the State of Washington. Level Two grants are provided to states that are further along in building their Exchange and offers funding over multiple years.*
For those of you wondering how much has been given to each state, and what each plans to do with its funds, there is a state-by-state breakdown of grant awards
detailing what each state plans to do with its Exchange funding, at a new map tool on HealthCare.gov - www.healthcare.gov/news/factsheets/2011/05/exchanges05232011a.html. Details such as the award amount, administrator, application due date, and level of funding are available, once you click on the map provided.
Next, guidance has also been issued in the form of a 45-page draft Exchange Blueprint, (under “Affordable Insurance Exchanges”, then “Forms” at http://cciio.cms.gov/resources/other/index.html#hie). States may use the Blueprint to demonstrate how their Affordable Insurance Exchange will work to offer a wide range of competitively priced private health insurance options. The Blueprint clarifies that states wanting to either operate state-based exchanges or participate in state partnership exchanges for 2014 must first declare the type of exchange model they intend to pursue through an Exchange Declaration Letter, and must complete an Exchange Application, details of which are provided in the Blueprint. The HHS will then review and potentially approve or conditionally approve the exchange no later than January 1, 2013, so it can begin offering coverage on January 1, 2014.
Consumers in every state are to have access to coverage through an Affordable Insurance Exchange by Jan. 1, 2014, advises the CCIIO. If a state decides not to operate an Exchange for its residents, the Department of Health and Human Services (HHS) will operate a Federally-facilitated Exchange (FFE). Guidance describing how HHS will consult with a variety of stakeholders to implement an FFE, where necessary, how states can partner with HHS to implement selected functions in an FFE, and key policies organized by Exchange function can be found at a document entitled “General Guidance on Federally-facilitated Exchanges” at http://cciio.cms.gov/resources/regulations/index.html#hie (under “Affordable Insurance Exchanges”, then “Guidance”).
The HHS has scheduled some implementation forums in the coming months to work with states and stakeholders on their exchange questions, and it also plans to engage in consultation with Tribes, Tribal Governments, and Tribal Organizations on how exchanges can serve their populations.
Upcoming forums include Regional Implementation Forums in Washington, DC (July 18), Chicago (August 2), Denver (August 10), and Atlanta (August 15) and Tribal Consultations in Washington, DC (July 26), Anchorage (August 7), and Denver (August 9).
For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.
* In 2010, 49 states and the District of Columbia received Exchange Planning grants totaling more than $54 million; in 2011, seven states received more than $249 million in Early Innovator grants; and to date, 34 states and the District of Columbia have received more than $856 million in Establishment grants, says the CCIIO. Exchange grants can be applied for through the end of 2014, although the funds are available for use beyond 2014.
First, six Level One Exchange Establishment grant awards, totaling more than $181 million, have just been awarded to Illinois, Nevada, Oregon, South Dakota and Tennessee. This brings the total of Exchange-related grants provided to states over the last two years to more than $1 billion. The grants are designed to provide one year of funding to states that have begun the process of building their Exchanges.
A Level Two Establishment grant has also been awarded, for the first time, to the State of Washington. Level Two grants are provided to states that are further along in building their Exchange and offers funding over multiple years.*
For those of you wondering how much has been given to each state, and what each plans to do with its funds, there is a state-by-state breakdown of grant awards
detailing what each state plans to do with its Exchange funding, at a new map tool on HealthCare.gov - www.healthcare.gov/news/factsheets/2011/05/exchanges05232011a.html. Details such as the award amount, administrator, application due date, and level of funding are available, once you click on the map provided.
Next, guidance has also been issued in the form of a 45-page draft Exchange Blueprint, (under “Affordable Insurance Exchanges”, then “Forms” at http://cciio.cms.gov/resources/other/index.html#hie). States may use the Blueprint to demonstrate how their Affordable Insurance Exchange will work to offer a wide range of competitively priced private health insurance options. The Blueprint clarifies that states wanting to either operate state-based exchanges or participate in state partnership exchanges for 2014 must first declare the type of exchange model they intend to pursue through an Exchange Declaration Letter, and must complete an Exchange Application, details of which are provided in the Blueprint. The HHS will then review and potentially approve or conditionally approve the exchange no later than January 1, 2013, so it can begin offering coverage on January 1, 2014.
Consumers in every state are to have access to coverage through an Affordable Insurance Exchange by Jan. 1, 2014, advises the CCIIO. If a state decides not to operate an Exchange for its residents, the Department of Health and Human Services (HHS) will operate a Federally-facilitated Exchange (FFE). Guidance describing how HHS will consult with a variety of stakeholders to implement an FFE, where necessary, how states can partner with HHS to implement selected functions in an FFE, and key policies organized by Exchange function can be found at a document entitled “General Guidance on Federally-facilitated Exchanges” at http://cciio.cms.gov/resources/regulations/index.html#hie (under “Affordable Insurance Exchanges”, then “Guidance”).
The HHS has scheduled some implementation forums in the coming months to work with states and stakeholders on their exchange questions, and it also plans to engage in consultation with Tribes, Tribal Governments, and Tribal Organizations on how exchanges can serve their populations.
Upcoming forums include Regional Implementation Forums in Washington, DC (July 18), Chicago (August 2), Denver (August 10), and Atlanta (August 15) and Tribal Consultations in Washington, DC (July 26), Anchorage (August 7), and Denver (August 9).
For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.
* In 2010, 49 states and the District of Columbia received Exchange Planning grants totaling more than $54 million; in 2011, seven states received more than $249 million in Early Innovator grants; and to date, 34 states and the District of Columbia have received more than $856 million in Establishment grants, says the CCIIO. Exchange grants can be applied for through the end of 2014, although the funds are available for use beyond 2014.
Wednesday, May 16, 2012
Final medical loss ratio rule establishes notice requirements
While we're all waiting to see if the Patient Protection and Affordable Care Act (ACA) is deemed constitutional by the U.S. Supreme Court, the Department of Health and Human Services (HHS) is still churning out conforming regulations. The HHS has now published a final rule that amends the regulations implementing the medical loss ration (MLR) standards for health insurance issuers (see Federal Register Doc. 2012-11753, May 16, 2012).
According to Public Health Service Act (PHSA) Sec. 2718, as added by the ACA, insurers offering group or individual health insurance must report annually, to the HHS, on the percentage of health premiums used for claims reimbursement and must maintain certain minimum MLRs. If minimums are not maintained, rebates must be provided to health plan participants.
The final rule establishes notice requirements for issuers in the group and individual markets that meet or exceed the applicable MLR standard in the 2011 MLR reporting year. The MLR notice must be provided with the first plan document (for example, open enrollment materials) that is provided to enrollees on or after July 1, 2012.
On December 7, 2011, the Centers for Medicare and Medicaid Services (CMS) issued a final rule, with comment period, regarding the implementation of MLR rules for health plans under the ACA . The final rule required only that issuers that owed rebates as a result of not meeting the applicable MLR standard must provide a notice to policyholders. However, this meant that policyholders and subscribers of issuers meeting or exceeding the MLR standards would not receive MLR information. The HHS solicited comments about extending the notice requirement to include the issuers that met the MLR standard, to provide transparency in how premiums dollars are used, for all health care consumers.
Based on the comments received and weighing consumer transparency and competition gains with burden on issuers, the final rule establishes a simple, straightforward notice requirement for health insurance issuers that meet or exceed the MLR standards established by the ACA. The final rule only requires the notice for the 2011 MLR reporting year, the first year that the MLR rules are in effect, and does not require issuers to include information about the current or prior year MLR. The notice will direct enrollees to the HHS website, www.HealthCare.gov, for specific information about issuers' MLRs.
The notice must be prominently displayed in clear, conspicuous 14-point bold type on the front of the plan document, insurance policy or certificate, or as a separate notice. The MLR notice may be included in the same mailing as other mailed notices. Further, the notice may be provided electronically, consistent with the policy for providing the summary of benefits and coverage under PHSA Sec. 2715.
Health insurance issuers that sell plans with total annual benefit limits of $250,000 or less ("mini-med" plans) or expatriate policies are not required to provide MLR notices to policyholders and subscribers if they meet or exceed the applicable MLR standard.
According to Public Health Service Act (PHSA) Sec. 2718, as added by the ACA, insurers offering group or individual health insurance must report annually, to the HHS, on the percentage of health premiums used for claims reimbursement and must maintain certain minimum MLRs. If minimums are not maintained, rebates must be provided to health plan participants.
The final rule establishes notice requirements for issuers in the group and individual markets that meet or exceed the applicable MLR standard in the 2011 MLR reporting year. The MLR notice must be provided with the first plan document (for example, open enrollment materials) that is provided to enrollees on or after July 1, 2012.
On December 7, 2011, the Centers for Medicare and Medicaid Services (CMS) issued a final rule, with comment period, regarding the implementation of MLR rules for health plans under the ACA . The final rule required only that issuers that owed rebates as a result of not meeting the applicable MLR standard must provide a notice to policyholders. However, this meant that policyholders and subscribers of issuers meeting or exceeding the MLR standards would not receive MLR information. The HHS solicited comments about extending the notice requirement to include the issuers that met the MLR standard, to provide transparency in how premiums dollars are used, for all health care consumers.
Based on the comments received and weighing consumer transparency and competition gains with burden on issuers, the final rule establishes a simple, straightforward notice requirement for health insurance issuers that meet or exceed the MLR standards established by the ACA. The final rule only requires the notice for the 2011 MLR reporting year, the first year that the MLR rules are in effect, and does not require issuers to include information about the current or prior year MLR. The notice will direct enrollees to the HHS website, www.HealthCare.gov, for specific information about issuers' MLRs.
The notice must be prominently displayed in clear, conspicuous 14-point bold type on the front of the plan document, insurance policy or certificate, or as a separate notice. The MLR notice may be included in the same mailing as other mailed notices. Further, the notice may be provided electronically, consistent with the policy for providing the summary of benefits and coverage under PHSA Sec. 2715.
Health insurance issuers that sell plans with total annual benefit limits of $250,000 or less ("mini-med" plans) or expatriate policies are not required to provide MLR notices to policyholders and subscribers if they meet or exceed the applicable MLR standard.
Monday, May 14, 2012
Blackburn amendment would deny funding to DOJ for future defense of ACA
Even if the U.S. Supreme Court rules if favor of the constitutionality of the Patient Protection and Affordable Care Act (ACA), it is, of course, possible, and even likely that additional lawsuits will be filed to challenge it. If the GOP has its way, however, the government's defense of the ACA may prove to be a bit more difficult the next time around.
On Wednesday, May 9, an amendment that would prevent Department of Justice (DOJ) from using funds to defend the ACA was added to H.R. 5326, an appropriations bill for the Departments of Commerce and Justice, Science, and related agencies for the fiscal year ending September 30, 2013. The amendment was sponsored by Rep. Marsha Blackburn (R-TN), and it's not surprising that it passed the Republican-controlled House, with 229 in favor of the amendment and 194 against it.
The amendment would also prohibit the DOJ from defending any action challenging certain provisions of the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152), which made health-related financing and revenue changes to the Patient Protection and Affordable Care Act.
According to a press release entitled "Blackburn Amendment Handcuffs DOJ’s Ability to Defend Obamacare" that turned up on Blackburn's website, the "amendment prohibits DOJ from spending funds we don’t have in defense of a program the American people do not want," Blackburn said. "The Supreme Court has heard arguments and is set to reveal their decision on the constitutionality of the President’s health care mandate next month. The Supreme Court is the highest court in the land and DOJ should not need additional resources for any future defense."
On Wednesday, May 9, an amendment that would prevent Department of Justice (DOJ) from using funds to defend the ACA was added to H.R. 5326, an appropriations bill for the Departments of Commerce and Justice, Science, and related agencies for the fiscal year ending September 30, 2013. The amendment was sponsored by Rep. Marsha Blackburn (R-TN), and it's not surprising that it passed the Republican-controlled House, with 229 in favor of the amendment and 194 against it.
The amendment would also prohibit the DOJ from defending any action challenging certain provisions of the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152), which made health-related financing and revenue changes to the Patient Protection and Affordable Care Act.
According to a press release entitled "Blackburn Amendment Handcuffs DOJ’s Ability to Defend Obamacare" that turned up on Blackburn's website, the "amendment prohibits DOJ from spending funds we don’t have in defense of a program the American people do not want," Blackburn said. "The Supreme Court has heard arguments and is set to reveal their decision on the constitutionality of the President’s health care mandate next month. The Supreme Court is the highest court in the land and DOJ should not need additional resources for any future defense."
Friday, May 11, 2012
While awaiting Court’s ruling, employers should continue to prepare to comply with health reform law
Despite uncertainty around the Patient Protection and Affordable Care Act (PPACA), as the nation awaits a likely late June Supreme Court ruling on the law's constitutionality, employers should continue taking steps to ensure they are in compliance with the law as it stands, Mercer, a benefits consultant, advises.
"It will be some time before a ruling is issued. In the meantime, employers should proceed with plans to comply with the law," says Sharon Cunninghis, a Senior Partner and leader of Mercer'sU.S.
Also, while health reform could result in higher levels of health plan enrollment for many employers—leading to an estimated average increase of 2 percent in 2014--they need to continue to pursue cost control strategies no matter what the outcome of the case before the Supreme Court. There are a number of strategies for achieving this, Cunninghis advises, including:
"It will be some time before a ruling is issued. In the meantime, employers should proceed with plans to comply with the law," says Sharon Cunninghis, a Senior Partner and leader of Mercer's
Also, while health reform could result in higher levels of health plan enrollment for many employers—leading to an estimated average increase of 2 percent in 2014--they need to continue to pursue cost control strategies no matter what the outcome of the case before the Supreme Court. There are a number of strategies for achieving this, Cunninghis advises, including:
- Using low-cost consumer directed health plans (CDHPs) as a default plan for auto-enrollment or as the sole option for newly eligible part-time employees;
- Narrowing the scope of benefit spending by making some employer-paid benefits voluntary (paid by the employee), and reducing spending on dependent coverage;
- Creating a healthier workforce by selecting health plans with better-coordinated care management for high-cost patients, adding or improving wellness and health management programs, or implementing high-quality network plans; and
- Participating in a private exchange to support a defined contribution approach.
Wednesday, May 9, 2012
Health Reform May Increase Benefits Administration Outsourcing
Health reform and compliance complexities are causing many companies to reconsider how they’re administering benefits and whether to outsourcer the benefits administration function, according to recent research from the ADP Research Institute. In fact, 45 percent of midsize (those with 50-999 employees) and 54 percent of large (those with 1,000 or more employees) employers have indicated that the Patient Protection and Affordable Care Act (ACA) and increasing compliance complexity have made them more likely to outsource some or all of their benefits administration, according ADP. The ADP survey noted that compliance with ACA provisions can increase both the complexity and time required to administer benefits, and 28 percent of midsize and 42 percent of large companies report that they are planning to outsource more services over the next 24 months.
Why? ADP found that ensuring compliance is one of the top reasons survey respondents said they outsource benefits administration (54 percent of midsize and 49 percent of large). Employers also cited the need to access subject matter knowledge and expertise (50 percent of midsized companies and 41 percent of large firms) and reduce the administrative burden on internal staff (43 percent of midsized companies and 50 percent of large firms) as other key reasons for outsourcing.
“It’s likely that outsourcing will become more common as compliance becomes increasingly complex with new health care regulations in the mix,” said Tim Clifford, President, Benefits Services at ADP. Clifford added that it is not just in the area of health care reform that compliance is becoming more demanding. The Sarbanes-Oxley Act (SOX), Health Insurance Portability and Accountability Act (HIPAA), Consolidated Omnibus Budget Reconciliation Act (COBRA), Family and Medical Leave Act (FMLA), Americans with Disabilities Act (ADA) and Age Discrimination in Employment Act (ADEA), to name only a few, have also increased administrative complexity in benefit plans for most employers. As new regulations are issued or prior ones are amended and modified, this trend is likely to continue.
Outsourcing experiences. The vast majority of HR/benefits decision makers reported that their outsourcing provider or providers have met or exceeded expectations (88 percent of midsize and 92 percent of large), the survey found. Additionally, 80 percent of midsize and 91 percent of large employers report that outsourcing at least some elements of benefits administration provided real value for their company and that outsourcing achieved several of their key goals.
ADP noted that most employers continue to handle at least some elements of benefits administration internally, although large employers are more likely to outsource a greater number of tasks than midsize employers. Forty-one percent of midsize companies (compared to 21 percent in large companies) said that they are most likely to administer benefits in-house because they believe it is easier to do so. Large companies have a different priority, with almost half (48 percent of large compared to 29 percent of midsize) reporting that they are most likely to administer benefits in-house because they want to maintain control over the process.
Currently, COBRA administration, Flexible Spending Account (FSA) administration and 401(k) administration are among the most highly outsourced functions. Almost two-thirds of companies say that allowing internal staff to focus on more core business or strategic issues is a key advantage of outsourcing benefits administration functions (65% of midsized and large). Cost of services is the most important criterion when identifying an outsourced provider (71 percent of large and 72 percent of midsized), the ADP study found.
Monday, May 7, 2012
House Ways And Means Panel Mulls FSA Coverage for OTC Medicines
The House Ways and Means Oversight Subcommittee on April 25 considered a $5-billion provision (Sec. 9003) in the Patient Protection and Affordable Care Act (ACA) that prohibits using certain tax-favored spending plans to reimburse taxpayers for the cost of over-the-counter (OTC) medicines. GOP lawmakers said requiring taxpayers to visit a doctor is tantamount to a tax increase that would clog physicians' offices, thereby reducing health care access for millions of American families. The provision prohibiting the tax-favored plans from reimbursing expenses for over-the-counter drugs, which was intended to improve tax compliance and reform tax expenditures, was first suggested by the Joint Committee on Taxation in 2005, Democrats on the subcommittee countered. The ACA provision took effect on January 1, 2011.
Rep. Charles Boustany (R-LA) said, in his opening statement, that the ACA "required that consumers using tax-advantaged plans must first obtain a doctor's prescription in order to use their tax-preferred account funds to purchase over-the-counter medication. This provision alone is a $5 billion tax increase on the American people."
Scott Melville, president of the Consumer Healthcare Products Association, a trade group representing the makers of over-the-counter medicines and dietary supplements, testified that using flexible spending arrangements and health savings accounts to pay for OTC medicines could eliminate about 20-million office visits each year and save about $5 billion in health care costs. Melville said there is no medical justification for requiring an office visit before buying OTC medicines with a spending plan.
However, Paul N. Van De Water, a senior fellow of the Center on Budget and Policy Priorities, a research group that examines policy and public programs that affect low- and moderate-income families and individuals, said the use of tax-advantaged accounts encourages the overconsumption of health care. The accounts make taxpayers less price-sensitive and reduce the effects of the cost-sharing requirement in controlling utilization, he testified.
Rep. Charles Boustany (R-LA) said, in his opening statement, that the ACA "required that consumers using tax-advantaged plans must first obtain a doctor's prescription in order to use their tax-preferred account funds to purchase over-the-counter medication. This provision alone is a $5 billion tax increase on the American people."
Scott Melville, president of the Consumer Healthcare Products Association, a trade group representing the makers of over-the-counter medicines and dietary supplements, testified that using flexible spending arrangements and health savings accounts to pay for OTC medicines could eliminate about 20-million office visits each year and save about $5 billion in health care costs. Melville said there is no medical justification for requiring an office visit before buying OTC medicines with a spending plan.
However, Paul N. Van De Water, a senior fellow of the Center on Budget and Policy Priorities, a research group that examines policy and public programs that affect low- and moderate-income families and individuals, said the use of tax-advantaged accounts encourages the overconsumption of health care. The accounts make taxpayers less price-sensitive and reduce the effects of the cost-sharing requirement in controlling utilization, he testified.
Friday, May 4, 2012
First ACOs announced under ACA Shared Savings Program
Twenty-seven Accountable Care Organizations (ACOs) in 18 states have entered into voluntary agreements with CMS under the new Medicare Shared Savings Program established under the Affordable Care Act. Under the Shared Savings Program, these ACOs have agreed to take responsibility for improving the health and experience of care for individuals and improving the health of populations while reducing the rate of growth in health care spending. These selected ACOs include more than 10,000 physicians, 10 hospitals, and 13 smaller physician-driven organizations in both urban and rural areas and will serve an estimated 375,000 Medicare beneficiaries.
These ACOs must meet strict quality standards to ensure that savings are achieved through improving and providing care that is appropriate, safe, and timely. For 2012, CMS has established 33 quality measures relating to care coordination and patient safety, appropriate use of preventive health services, improved care for at-risk populations, and the patient and caregiver experience of care. Their models for coordinating care and improving quality must be responsive to the needs of the beneficiaries in the areas they are serving.
Shared savings program. Section 3022 of the ACA added a new Section 1899 to the Social Security Act that required the Secretary of HHS to establish the Shared Savings Program.
These 27 ACOs will bring the total number of organizations participating in Medicare shared savings initiatives to 65 as of April 1, 2012, including the 32 Pioneer Model ACOs that were announced in December 2011, and six Physician Group Practice Transition Demonstration organizations that started in January 2011. In all, under these initiatives, more than 1.1 million beneficiaries will receive care from providers participating in Medicare shared savings initiatives. CMS also is reviewing more than 150 applications from ACOs seeking to enter the program in July.
For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.
Wednesday, May 2, 2012
ACA reporting: simplify, simplify
Having mandated that most individuals receive minimum essential coverage, the ACA also includes the inevitable rules requiring government agencies to track compliance with the mandate. The IRS in turn is now seeking help from employers and others to suggest ways to make the reporting rules as simple as possible.
Beginning in 2015, most large employers will be required to begin reporting to the IRS certain information on employer-provied health care coverage provided on or after January 1, 2014. Information to be reported includes the dates employees were covered by minimum essential coverage during the calendar year.
This new reporting requirement will affect health insurance issuers, government agencies, employers that sponsor self-insured plans, and other persons that provide minimum essential coverage to an individual. Minimum essential coverage includes individual health insurance coverage, eligible employer-sponsored plans, and government-sponsored coverage such as Medicare, Medicaid, TRICARE, and veterans’ health care.
Notice 2012-32 provides a list of issues the IRS is considering as it develops the reporting requirements. Interested employers should review the list of issues and offer any comments by June 11, 2012. Comments may be sent to Notice.Comments@irscounsel.treas.gov or via mail. The IRS will then proceed to issue a proposed rule on the topic.
Issues the IRS is seeking help on include the following:
1. How to determine when an individual's coverage begins and ends for purposes of reporting the dates of coverage.
2. How to minimize duplication between the reporting by health insurance issuers and employers under Code Sec. 6055 and the reporting by Exchanges under Code Sec. 36B(f)(3).
3. How to coordinate and minimize duplication between the reporting under the various requirements for employers that sponsor self-insured plans, including the potential combined reporting provided for under the ACA in Code Sec. 6056(d).
Not surprisingly, in Notice 2012-33, the IRS makes a similar request for comments regarding the information required from large employers regarding employer-provided health care coverage under Code Sec. 6056.
For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.
