The NAIC's role in health care reform

Do you ever wonder how all the changes required by both the Senate and House reform bills will be implemented (assuming they become law)? Do you envision dozens and dozens of federal and state workers, busily crafting new regulations and procedures?

If so, remember that those government workers will have some help from the National Association of Insurance Commissioners. The NAIC is a voluntary organization of the chief insurance regulatory officials of the States. First established in 1871, the NAIC has a long history of developing model insurance laws that have enjoyed widespread adoption by the States.

In several instances in both the House and the Senate bills, Congress directs new initiatives to be developed in conjunction with guidelines or model laws developed by the NAIC.

In H.R. 3590, the Senate calls on the help of the NAIC in these areas:

--Under Act Sec. 1001 (adding new PHSA Sec. 2715), the Secretary of Health and Human Services must consult with NAIC (among others) to develop new uniform explanation of coverage documents;
--Under Act Sec. 1311, HHS must also consult with NAIC as it develops standards for the State Exchanges;
--Under Act Sec. 1333, the NAIC would help HHS create a framework for interstate health insurance compacts, which would be designed to facilitate the purchase of individual health insurance coverage across state lines (the House bill contains a similar concept at Sec. 309);
--Under Act Sec. 1341, the NAIC is tasked with helping HHS develop model regulations to govern a transition reinsurance program for the individual health coverage markets in each State; and
---Under Act Sec. 3210, the NAIC would aid in the development of new standards for certain Medigap plans.

In H.R. 3962, the House utilizes the NAIC’s help in the following ways:
---Under Act Sec. 101, the NAIC would help to develop the rates for premiums to be charged for coverage under the temporary national high-risk pool program;
---Under Act Sec. 243, the new Health Choices Commissioner is directed to consult with NAIC in the development of standards relating to access to affordable coverage and consumer protections;
---Under Act Sec. 309, the NAIC would help HHS create the framework for interstate health insurance compacts (similar to the concept in the Senate version discussed at Act Sec. 1333); and
---Under Act Sec. 1173, the NAIC would help to develop standards for reporting on the administrative costs of Medicare Advantage plans.

A Second Amendment In Health Care Reform

The National Basketball Association may frown on firearms possession and use, but don’t expect a basketball wellness program to know about firearms possession, at least not if one of my favorite provisions in the Senate health reform bill becomes law.

That provision would be Sec. 2717(c)(1) of the Patient Protection and Affordable Care Act, an amendment first proposed by Sens. Charles Grassley (Iowa), Tom Coburn (Okla.), Sam Brownback (Kan.), Saxby Chambliss (Ga.), Johnny Isakson (Ga.), Lisa Murkowski (Ark.), Jim Bunning (Ken.), Robert Bennett (Utah), George LeMieux (Fla.), John Barrasso (Wyo.), and Michael Enzi (Wyo.); and later agreed to by majority leader Harry Reid (Nev.).

The provision adds to a quality of care and wellness section the following odd duck:

Protection of Second Amendment Gun Rights. Wellness and prevention programs provided by group health plans and insurers may not require the disclosure of information relating to the possession or use of lawful firearms or ammunition.

In addition, HHS is prohibited from authorizing the collection of any information or the maintaining of records relating to the following:

• lawful ownership or possession of a firearm or ammunition;


• lawful use of a firearm or ammunition;


• lawful storage of a firearm or ammunition.

The lawful possession, use, and storage of lawful firearms or ammunition also may not be used to increase health coverage premium rates, deny health insurance, or reduce or withhold wellness program discounts, rewards.

Why is this one of my favorite provisions?  Because reactions to it say a lot about how differently liberals and conservatives view the world and how difficult compromise has become.

Liberals I know (I am one of them) typically react to hearing about this provision with “Really! You are kidding, aren’t you?”

On the other hand, conservatives I know react with “Oh, sure, I understand why that’s there.”

Here’s the liberal take, from Slate Magazine.

Here’s the conservative take, from Gun Owners of America.

There is an almost palpable conservative fear of the future here, a fear of government takeovers, of confiscation of all firearms, and of an imminent socialist (if not communist) state). And there is an appalling inability of the liberals in power to allay these fears.

A health reform bill that enlarges the privatization of health care delivery, reinforces restrictions on abortion, and extends gun rights to wellness programs feels a lot like attempts to appease conservatives—attempts that clearly are failing. They also underscore the widening (and frightening) chasm between liberals and conservatives.

In 1992 Rodney King issued his iconic plea, “Can we all get along?” In health care reform, the answer is no.

Employers Take Note, Part Four: Employers Must Report Costs, FSA Distributions Are Limited To Prescribed Drugs In Health Reform

As the House and Senate leadership begin to discuss their differing health care reform proposals, Health Reform Talk continues a series examining health reform provisions that will affect employer-sponsored health plans and would take effect soon after enactment of any legislation. This series will look at features of the legislation already passed in the House (H.R. 3962) and in the Senate (H.R. 3590). These are features likely to survive in final health reform legislation and which will directly affect employers. Today, an employer requirement to report health care costs and a distribution limitation on flexible spending arrangements (FSAs) are discussed.

Health Care Cost Determinations

H.R. 3590: Sec. 9002 requires employers to identify and report the annual cost of employer-sponsored health care coverage. This cost, which excludes salary reduction amounts in an FSA, will be included on an annual W-2 and is to be determined using the cost calculation methods for COBRA continuation of coverage under IRC Sec. 4980B(f)(4).

This provision is effective for taxable years beginning after Dec. 31, 2010.

H.R. 3962: There is no similar provision in the House bill.

Distributions Restricted To Prescribed Drugs, Insulin

H.R. 3590: Sec. 9003 would limit distributions from health savings accounts under IRC Sec. 223, medical savings accounts under IRC Sec. 220, and FSAs and health reimbursement arrangements (HRAs) under IRC Sec. 106 would be limited to prescribed dugs and insulin. Existing law also allows reimbursements for over-the-counter medications.

This provision is effective for taxable years beginning after Dec. 31, 2010.

H.R. 3962: Sec. 531 contains the same limits and the same effective date as the Senate provision.

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