Posts Tagged ‘Healthcare Reform’
Under the health care reform all children under 19 can not be declined or pre x on a health plan. Everyone in the industry had major concerns over this issue. One of the big concerns was parents would wait until the child had a health care crisis and then enroll them on the plan. It was just released that carriers are now going to be able to have open enrollments for these types of plans. That means the child can get the plan without underwriting but only once a year.
We are now starting to see the reality of what can and cannot be done under the health care reform. In the last few months almost every Individual carrier pull out of the stand alone child market. Not only did we see regional carriers pull out but we also saw national carriers. When national carriers pull out of a market that is the a huge red flag because they have large reserves. It will be interesting to see if the carriers that pulled out get back in.
Another aspect that might be interesting is the premium for those stand alone policies during the open enrollment period. Will that policy cost more?
Effective first of the plan year or after September 23, 2010 , health plans will have in effect internal claims appeal procedures. Each plan must allow the insured to review his or her plan to present evidence and testimony as part of the appeal process.
So what this means is if carrier declines a claim the insured now has the right to appeal the claim from an independent source. If the independent source declines the claim the insured can this go to the Department of Insurance and appeal the claim in person. So some could give their testimony in person to appeal the claim.
This would have a huge impact on experimental treatment. Almost all plans exclude experimental treatment but now the insured has a right to appeal the denied claim. For example if a family had a child that need a experimental heart transplant and received the treatment and the claim was denied. Now that family has multiple sources to appeal the claim. There is a very good possibility that if a family appeals that claim in person the chance of it being declined is a lot less. Who would decline a claims that saved a child’s life?
Now this does create some situations for groups that are self funded that use reinsurance. It is vital going forward that the contract states the re insurance will pay for that claim if its appealed and won. Other wise you could have a group that is self funded that is now responsible for paying for a very large claim. So any group that has re insurance contracts in place should be looking at the at this aspect very closely.
If a group is grandfathered in then they do not have to comply with this requirment of the health care reform.
With the health care reform we are now going to see plans required to cover preventive care. It should be very interesting to see what kind of impact these coverages have on premium. There is no doubt that these additional coverage will increase premium. The problem right now is no one knows what kind of premium increase these coverages are going to have. From a long term standpoint if everyone takes advantage of these first dollar benefits will it reduce costs? If someone can catch a health problem early then the treatment can be much more effective which could reduce larger treatments down the road. In the short period we all pay more in premium.
“If you have a new health insurance plan or insurance policy beginning on or after September 23, 2010, the following preventive services must be covered without your having to pay a copayment or coinsurance or meet your deductible, when these services are delivered by a network provider.”
Covered Preventive Services for Adults
Abdominal Aortic Aneurysm one-time screening for men of specified ages who have ever smoked
Alcohol Misuse screening and counseling
Aspirin use for men and women of certain ages
Blood Pressure screening for all adults
Cholesterol screening for adults of certain ages or at higher risk
Colorectal Cancer screening for adults over 50
Depression screening for adults
Type 2 Diabetes screening for adults with high blood pressure
Diet counseling for adults at higher risk for chronic disease
HIV screening for all adults at higher risk
Immunization vaccines for adults–doses, recommended ages, and recommended populations vary:
Hepatitis A
Hepatitis B
Herpes Zoster
Human Papillomavirus
Influenza
Measles, Mumps, Rubella
Meningococcal
Pneumococcal
Tetanus, Diphtheria, Pertussis
Varicella
Obesity screening and counseling for all adults
Sexually Transmitted Infection (STI) prevention counseling for adults at higher risk
Tobacco Use screening for all adults and cessation interventions for tobacco users
Syphilis screening for all adults at higher risk
Covered Preventive Services for Women, Including Pregnant Women
Anemia screening on a routine basis for pregnant women
Bacteriuria urinary tract or other infection screening for pregnant women
BRCA counseling about genetic testing for women at higher risk
Breast Cancer Mammography screenings every 1 to 2 years for women over 40
Breast Cancer Chemoprevention counseling for women at higher risk
Breast Feeding interventions to support and promote breast feeding
Cervical Cancer screening for sexually active women
Chlamydia Infection screening for younger women and other women at higher risk
Folic Acid supplements for women who may become pregnant
Gonorrhea screening for all women at higher risk
Hepatitis B screening for pregnant women at their first prenatal visit
Osteoporosis screening for women over age 60 depending on risk factors
Rh Incompatibility screening for all pregnant women and follow-up testing for women at higher risk
Tobacco Use screening and interventions for all women, and expanded counseling for pregnant tobacco users
Syphilis screening for all pregnant women or other women at increased risk
Covered Preventive Services for Children
Alcohol and Drug Use assessments for adolescents
Autism screening for children at 18 and 24 months
Behavioral assessments for children of all ages
Cervical Dysplasia screening for sexually active females
Congenital Hypothyroidism screening for newborns
Developmental screening for children under age 3, and surveillance throughout childhood
Dyslipidemia screening for children at higher risk of lipid disorders
Fluoride Chemoprevention supplements for children without fluoride in their water source
Gonorrhea preventive medication for the eyes of all newborns
Hearing screening for all newborns
Height, Weight and Body Mass Index measurements for children
Hematocrit or Hemoglobin screening for children
Hemoglobinopathies or sickle cell screening for newborns
HIV screening for adolescents at higher risk
Immunization vaccines for children from birth to age 18 —doses, recommended ages, and recommended populations vary:
Diphtheria, Tetanus, Pertussis
Haemophilus influenzae type b
Hepatitis A
Hepatitis B
Human Papillomavirus
Inactivated Poliovirus
Influenza
Measles, Mumps, Rubella
Meningococcal
Pneumococcal
Rotavirus
Varicella
Iron supplements for children ages 6 to 12 months at risk for anemia
Lead screening for children at risk of exposure
Medical History for all children throughout development
Obesity screening and counseling
Oral Health risk assessment for young children
Phenylketonuria (PKU) screening for this genetic disorder in newborns
Sexually Transmitted Infection (STI) prevention counseling for adolescents at higher risk
Tuberculin testing for children at higher risk of tuberculosis
Vision screening for all children
http://www.healthcare.gov/law/about/provisions/services/lists.html
This is the clearest explanation that I could find on the health care tax credit. This information was put together by 15 attorneys that specialize in interpreting these types of laws. This is very complicated. What was spun as a simple tax credit is very difficult to qualify and understand. A small business might end up spending more on professional services to get the credit than what the tax credit is worth.
Who is Eligible for the Credit? To be eligible for the Credit, an employer must be an “eligible small employer” for the year – requiring all 4 criteria to be satisfied:
1. taxable employer or a 501(c) tax-exempt employer (e.g., colleges and universities);
2. fewer than 25 full-time equivalent employees (“FTE”) for the taxable year;
- • FTE: In order to determine the number of FTEs, the employer must divide the total “hours of service” (but not more than 2,080 hours for an employee) of the”employees” by 2,080, and round down to the next lowest whole number.
- • Employees: For this purpose, count employees who perform services for the employer (which is a controlled group concept), excluding (1) partners, soleproprietors, 2% S-corp. owner, and 5% owners (along with any family members),and (2) seasonal employees unless they work more than 120 days during the taxable year (but always count these premiums).
- • Hours of Service: Hours include (1) each hour for which an employee is paid, orentitled to pay, for work performed; and (2) each hour for which an employee is paid, or entitled to pay, for periods the employee did not perform work due to a vacation, holiday, illness, incapacity disability, layoff, jury duty, military duty or leave of absence (maximum 160 hours for a single continuous period). This calculation may be a challenge depending on your pay types and payroll records;therefore, the IRS permits using either an 8 hours/day or 40 hours/week equivalency (which should be considered if it lowers the hours). We recommend reviewing the available options with your payroll department.
3. “average annual wages” for FTEs must be less than $50,000; and
- • Average Annual Wages: The employer divides the total Medicare wages paid by the employer for the “hours of service” during the taxable year by the number o FTEs, rounded down to the nearest $1,000. Unfortunately, this may not simply line up with box 5 of the W-2 because this is only wages attributable to “hours of service.”
4. employer pays “health insurance coverage” through a “qualifying arrangement.”
- • Heath Insurance Coverage: The Notice provides an expansive list of medical care coverage (whether insured or self-funded, which should include HRAsand HSAs), including HMO/PPO, dental, vision, long-term care, nursing home care, specified disease or illness, hospital indemnity, and Medicaresupplemental. The list excludes, among others, accident or disability insurance and worker’s compensation insurance. Importantly, the credit only covers employer paid premiums and does not include employee pre-tax or post-tax payments (e.g., section 125 payments are not eligible). Also, in general, State tax credits or premium subsidies are counted as employer paidpremiums and will not negatively affect the amount of the Credit.
• Qualifying Arrangement: The employer pays a uniform percentage of not less than 50% of the premium cost for the coverage. (Each type of coverage is tested separately for this purpose.) For 2010, the employer only needs to pay an amount equal to at least 50% of the premium for single (employee-only) coverage for each enrolled employee, and all premiums paid in 2010 will count (even if paid prior to the March 23, 2010 enactment date).
What is the Amount of the Credit? The maximum Credit is currently 35% of the employer paid “health insurance coverage” premiums (25% for tax-exempt employers). The maximum Credit is increased to 50% beginning in 2014 but will only be available if the coverage ispurchased through the Exchange. Importantly, the Credit is phased out rather quickly if the employer has more than 10 FTEs or the “average annual wage” exceeds $25,000. The following steps can be taken to calculate the 2010 Credit:
Step 1: Determine that you meet the definition of “eligible small employer” for the year.
Step 2: Determine the employer portion of the premium paid for the year for each “employee” (which includes any State subsidy).
Step 3: Take the lesser of Step 2 amount or the employer’s percentage of average small group market rates set forth in Revenue Ruling 2010-13 (by State) for each “employee” and sum this amount.
Step 4: Multiple Step 3 amount by 35% (25% for a tax-exempt employer).
Step 5: For a tax-exempt employer, enter the smaller of Step 4 amount or the aggregate federal income tax withholding and employer and employee share of Medicare taxes paid/withheld for the year (which will likely require a review of Form 944 and again help from your payroll department). For a taxable employer, enter the amount from Step 4.
Step 6: Reduce Step 5 amount by the sum of: (1) if more than 10 FTEs: (FTE – 10)/15 x Step 5, and (2) if “average annual wages” exceeds $25,000: (“average annual wages” – $25,000)/$25,000 x Step 5. (If negative, then the Credit is zero and stop here.)
Step 7: Reduce Step 6 amount to not exceed the employer’s net premium payments if State credits or subsidies for health insurance are available to the employer (e.g., amount actually paid by the employer excluding the State subsidy).
How is the Credit Claimed? For taxable employers, the Credit is claimed on the employer’s annual income tax return (e.g., Form 1120 and presumably Form 3800) a nonrefundablegeneral business tax credit (which can be carried forward 20 years and may offset AMT). Note that a deduction for the health care costs is not permitted for the amount of the Credit, which should be considered when determining the value of the Credit. For tax-exempt employers, the IRS is still working on how to receive the refundable credit (e.g., likely Form 990-T to offset unrelated business income tax or result in a refund, but for small employersthat may rarely file Form 990-T, a new schedule to Form 990/990-EZ would be preferred). When valuing the Credit for these employers, the loss of the deduction is not a factor but theCredit is limited to the annual employment taxes (federal income tax withholding andemployer and employee share of Medicare tax), which may impact the value of the Credit. Importantly, for all employers, the Credit has no impact on employment tax forms/deposits(e.g., no impact on Form 944 or related deposits), which is a which is a helpful clarification.
| The medical loss ratio (MLR) is the most important aspect of healthcare reform. This interpretation of this law is going to determine if the private industry stays in business. The one positive thing is the NAIC is in charge of interpreting the MLR.
The National Association of Insurance Commissioners was charged by Congress with considerable implementation responsibilities relative to PPACA, and NAHU continues to work with state regulators and the NAIC on a weekly basis on implementation issues of concern to health insurance agents and brokers. The primary issue the NAIC is currently working on of key interest to NAHU and its members is the crafting of definitions relative to what health insurance services will be covered by the PPACA’s minimum loss ratio (MLR) requirements.
The law gives the NAIC until December 31 to craft the MLR definitions, but HHS has requested that the NAIC complete its work early so that necessary regulations relative to MLR implementation can also be developed. HHS originally asked that the NAIC complete its work by June 1, but the NAIC rejected the timetable, stating it was too tight. Initially, the NAIC said they hoped to get their final work product to HHS by the end of July. However, during a conference call yesterday, Commissioner Steve Ostlund, chair of the NAIC’s Accident and Health Working Group, which is the primary committee within the NAIC working on the definitions, backed away from the end-of-July timeframe. While he was clear that the group will finish its work well in advance of December 31, he refused to specify exactly when they will finish.
The NAIC committees addressing this issue meet via conference call on at least a weekly basis, and the group is holding an interim meeting on the MLR issue in Washington the week of July 18. The NAIC will also hold their regularly scheduled meeting in Seattle from August 14-17, and NAHU will continue to be an active participant in all of these calls and meetings. Our most recent letter to the NAIC on the MLR issue was sent in conjunction with the entire Agent/Broker Alliance and can be found here.
In addition to the MLR issue, the NAIC is also charged with crafting a sample of the notice all health insurers must send to customers by March 2012 outlining plan benefits and costs. The goal of the NAIC committee is to translate complicated insurance-related terms and benefit information into summaries that can be easily digested by consumers. PPACA required the NAIC committee to be made up of not just insurance regulators, but also interested parties like insurers and consumer groups. NAHU CEO Janet Trautwein was appointed by the NAIC as one of the statutory working group’s formal members to represent the interests of health insurance agents and brokers.
The law gives the NAIC group until March 2011 to craft their sample forms, and the committee has begun meeting on a biweekly basis to accomplish that task. As with the MLR definitions, HHS has requested that the committee finish its work early—by the fall of 2010. NAHU will keep you apprised of the committee’s progress on the sample notices via future editions of Washington Update. |
The Government website www.healthcare.gov has just released a free service for comparing hospitals services.
This tool provides a listing of Indiana hospitals, and 44 quality measures.
This kind of information is cutting edge when it comes to healthcare. Recently companies like Anthem and Unitedhealthcare have released these kinds of tool to their clients. Now everyone can access this type of information to help make informed healthcare decisions. This is really important because if you are going to have a surgery you should have the best Doctor and facility to perform that procedure.
One way to reduce healthcare costs is to use the best care aviable . We all know complications leads to higher costs and personal discomfort.
So if you or a loved one is in need of hospital services take advantage of this tool.
http://www.healthcare.gov/compare/index.html
As we move through and have a better understanding of this very complicated health care reform it becomes clearer the disconnect from the white house and real life. This is so complicated and the effects are only going to raise costs.
For Indiana Small group health plans there is very little chance they can be grandfathered in. These small group plans are unable to keep their current plan designs and not do more cost shifting. Once these groups have to have plans that have the additional coverages force on them this is only going to raise premium. These are increase that small groups can’t afford. The Reform is giving small groups tax credits but very few groups are going to qualify for those tax credits once you read the small print.
When the health exchanges open in 2014 no one will be able to afford them without tax subsidies. How can you offer such rich benefit plans and think it will bring down premiums?
The launch of the High Risk Pool plans is a perfect example of how these law makers did not use math. Right now the prediction on the high risk pool plans cost is anywhere from $600-$900 a month for single coverage and there is a 3-6 month wait until pre x is covered and you have had to go without coverage for 3-6 months. The White House is clueless on the reality of a high risk pool. First off very few will be able to afford the plan. The other problem is the waiting period for benefits to kick into place. This is another huge example of disconnect.
In my experience $900 a month premium is a very real possibility once the exchange goes into effect. When we look at states like Mass and NY where they are already practicing Guaranteed issue type policies we have big problems there. One is a complete lack of carrier competition. They carriers can not make any money in fact most of them lose money operating in those markets. So you end up with one or two carriers that are charging $2,800 a month for a family plan. I am afraid we are on a fast track to see these kinds of premiums.
The next big issue for this month is Medical Loss Ratio (MLR). This law is going to force the carriers to pay 80%-85% of the premiums towards claims or refund a portion of the premium. We could see private carriers forced out of business on this one. The problem with doing an MLR on a case by case scenario is one group might be health and the other one has huge claims. At the end of the day the carriers is making a profit because the healthy groups help to offset the sick ones. Once again the White House with total disconnect to the industry could destroy the private carriers in a very short time period.
There is no doubt that health care and health insurance is a very complicated problem but I am affraid the healthcare reform package is taking us in the wrong direction.
HHS Releases Final Interim Guidance on Several PPACA Provisions
On June 22, 2010, the Departments of Health & Human Services, Labor, and Treasury issued new regulations that better define the following PPACA provisions:
- No Pre-Existing Condition Exclusions for Anyone Under Age 19
- No Arbitrary Rescissions of Insurance Coverage
- No Lifetime Dollar Limits on Coverage
- Restricted Annual Dollar Limits on Coverage
- Broader Doctor Choice
- No Higher Out-of-Network Cost-Share for Emergency Department ServicesOn June 22, 2010, the Departments of Health & Human Services, Labor, and Treasury issued new regulations that better define the following PPACA
These are labeled as interim final rules (IFRs), which means final rules may differ. As clarification continues to be provided through the federal government’s rule-making process, we’ll share that information with you. Please continue to look out for e-mail Alerts and information on our Health Care Reform website on these important subjects.
All provisions are effective on the first plan anniversary on or after 9/23/2010
No Pre-Existing Condition Exclusions for Anyone Under Age 19
Plans are prohibited from denying coverage to anyone under the age of 19 based on a pre-existing condition. This ban includes both benefit limitations and coverage denials. These policies apply to all individual market and group health insurance plans. The requirement will be extended to all ages starting in 2014. Grandfathered individual plans are exempt from this requirement.
No Arbitrary Rescissions of Insurance Coverage
Insurers and plans will be prohibited from rescinding coverage – for individuals or groups of people – except in cases involving fraud or an intentional misrepresentation of material facts.
No Lifetime Dollar Limits on Coverage
Insurers and employers are prohibited from imposing lifetime dollar limits in all health plans and insurance policies issued or renewed on or after September 23, 2010.
Restricted Annual Dollar Limits on Coverage
The rules will phase out the use of annual dollar limits on “essential health benefits” over the next three years until 2014 when the Affordable Care Act bans them for most plans. The limits can only apply to essential health benefits; however, the rule does not provide any further detail on the definition of “essential health benefits” beyond that provided in the law.
- Plans issued or renewed beginning September 23, 2010, will be allowed to set annual limits no lower than $750,000
- Beginning September 23, 2011, minimum limit will be raised to $1.25 million
- Beginning September 23, 2012, minimum limit will be raised to $2 million
- Beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited
These limits apply to all employer plans and all new individual market plans. It does not apply to grandfathered individual plans.
Waiver Process/Special Consideration:
The IFRs indicate that the Health & Human Services Secretary will design a process by which employers and insurers may apply for a waiver to delay complying with the restricted annual dollar limit rules if compliance would cause a significant loss of coverage or increase in premiums. The IFRs indicate that limited medical plans are one example of the type of plan that may apply for a waiver. We await details from the Secretary about the waiver application process.
Broader Doctor Choice
Health plan members are free to designate any available participating primary care physician (PCP) as their provider (e.g., pediatricians for children). Also, plans cannot require a referral for OB-GYN care.
These policies apply to all individual market and group health insurance plans except those that are grandfathered.
No Higher Out-of-Network Cost-Share for Emergency Department Services
Health plans and insurers will not be able to charge higher cost-sharing (copays or coinsurance) or require prior authorization for emergency services that are obtained out of a plan’s network. This policy applies to all individual market and group health plans except those that are grandfathered.
Starting in the fall, all new health plans must cover certain preventive screenings and other services for pregnant women at no additional cost to the patient. Those include folic acid supplements, which reduce the risk of neural tube defects in developing fetuses, and counseling to help pregnant women stop smoking. Medicaid will also begin to cover smoking cessation counseling and drug therapy for pregnant women.
This will have an impact on what we pay in health premium. Its great that there will be additional coverages for pregnancy that is currently excluded from most private individual health plans today. The Health Care Reform is making it mandatory that everyone has this coverage and that it does not add any additional cost to the insured for treatment. This is another aspect of Health Care Reform that has pro and cons. The positive is additional coverage that will not have additional cost for treatment. The negative is the premium will have to go up. The other negative is you will not have choices to opt out of that coverage if you don’t need it. If you are not planning on having any more children it would be nice to have the choice to opt out of that coverage and pay less in premium.
The Grandfathered clause of the new health care reform gave individuals and group plans the right to keep their current plans. To keep that grandfathered status you can not make any changes to the plan. So that means you can not raise the deductible or coinsurance to lower the premium. From a employer standpoint the group is unable to shift more than a 5% increase onto what the employee pays. Most small groups receive around a 17% rate increase in Indiana. It will be very difficult of an employer to absorb all of that cost.
So it is going to be almost impossible to keep the coverage that you have.
If your plan is not Grandfathered in then you can expect to have a significant rate increase just for the new health care coverages.
