Happy 2010!

Happy 2010!

Happy Holidays!

As we enter 2010 we want to include some timely information on year end health reform and its possible impacts.

Right before Christmas, The Senate has passed 60-39 its version of a health care reform bill that, if enacted, will impact your business benefits plan more than any federal law in the past half century.  The Senate’s bill must still be merged with legislation passed by the House before President Obama could sign a final bill in the new year.

Most measures are expected to take place in 2014.  As for the impact on small businesses, The Senate would exempt companies with fewer than 50 workers from having to offer insurance. The House excuses companies with annual payrolls of less than $500,000; firms that are bigger would pay a fee equivalent to a portion of their payroll costs if they don’t offer insurance. That payment would rise to 8 percent of payroll for the largest firms.

Brief Comparison of Senate and House Health Reform Bills

The 10-year, $871 billion health reform bill is designed to extend insurance coverage to 31 million uninsured Americans.

Barring any major changes, the final health care reform bill is expected to:

  • Require most employers to contribute to the cost of employee coverage or pay into a health fund, while small businesses would be exempt or receive tax credits.
  • Require everyone to carry insurance, with discounts for people who cannot afford it and penalties for people who refuse to buy coverage.
  • Create a new marketplace or “Exchange” for individuals and small businesses to comparison-shop for insurance.
  • Levy a new excise tax on high-value health plans.
  • Provide insurance discounts for those earning less than 400 percent of the federal poverty level (about $73,000 for a family of three).
  • Impose new restrictions on insurance practices, such as prohibiting the denial of coverage because of pre-existing conditions, and increase the Medicare payroll tax on high-income people.

Most of these changes will likely be phased in beginning of 2013 and continue up until 2016, although changes to health care Flexible Spending Accounts could occur in 2011. The legislation would place an annual limit of $2,500 on the amount of funds employees can contribute to FSAs.

For more on specifics and timing of the pending legislation, please see Health Care Reform Frequently Asked Questions for employers by clicking here.

It’s important to remember that any dramatic changes would not be immediate. However, there are some things employers can do right now in preparation for the passage of a bill. The most important of these are to stay informed, follow developments and involve your benefits staff and partners.

Employers may also want to begin evaluating their employee demographics and assessing their current health plan design.

  • Do you have a balanced health care plan?
  • Will you be subjected to the 40% “Cadillac Tax”?
  • Will you be subject to pay or play penalties?
  • Can you take advantage of Exchange options if low-income employees would receive greater subsidies?
  • What would be the overall impact to your budget?

Health care reform is estimated to cost between $890 billion and $1 trillion over 10 years. It would be paid for by a combination of savings to Medicare and Medicaid, along with new sources of revenue from tax changes.

Once a bill is signed into law, we will help our clients with the practical implications of the legislation and its potential impact to organizations.

Our agency has strived to be ahead of the curve and keep our clients within budget regardless. We realize your organization – now more than ever – needs up-to-date information, industry-leading expertise and the assurance a reliable benefits partner can bring to your business.   We thank you all for reading our material, referring us business and most of all believing in us!

Once again thank you and we wish you and your family a wonderful Holiday Season!

NYS Age 29 Regulations Update

NYS Age 29 Regulations Update

Highlights of the new dependent coverage legislation
The legislation has two dependent coverage features, the “make available option” and the “young adult option” (also called “NY DU30 option”). Under the make available option, Insurers offer customers the option to provide dependent coverage to age 30. This option is similar to adding a rider to a benefits plan.

Under the NY DU30 option, dependents who reach the maximum age can elect extended coverage to age 30.

For either option, a dependent must meet these requirements:

  • Is a child of an employee or other group member insured under a group.
  • Is under age 30.
  • Is unmarried.
  • Is not insured by or eligible for coverage through the young adult’s own employer-sponsored group policy or contract, whether insured or self-funded, provided the policy or contract includes both hospital and medical benefits.
  • Lives or works in New York State or in the service area of the insurer’s network-based policy or contract (as set forth and defined by the policy or contract).
  • Is not covered under Medicare.

For an FAQ and more information click here

Health Care Reform!

Health Care Reform!

Healthcare Reform  picture

Health Care Reform!

Ok so unless you’ve been stuck in the Arctic for a year you’ve been hearing a lot about this heated topic.  Everyone has strong feelings about it evidently, I myself included, but I have stayed away from the fray for the most part.

As congress takes their August recess and those who still have jobs are on vacation I thought its a good time to put my two cents into it.

This well done score card brought to you by Empire Blue Cross is a great illustration of the leading proposals and voices in Washington.  A nicely published overview by the Lewin Group is actually a great read on the proposed Government Sponsored Health Plan. The analysis covers the bill as it appeared on July 15, 2009.

Bills Key Provisions:

  • Require all Americans to purchase health insurance or be fined, although those making less than $88,000 annually would be able to get a subsidy.
  • Get rid of copays and deductibles for preventative care
  • Make it illegal to deny coverage for pre-existing conditions
  • Create a public plan
  • Raise taxes for the wealthy – as much at 5.4 percent for incomes above $350,000

But what are we really talking about?  A Government Plan to compete with private payers?  Really?

The assumption in the study is that the government plan pays Medicare Rates.  Provider reimbursements are on average 70% of private insurance reimbursements.  The specter of physicians opting out of this plan is rather daunting as they would be giving up the single largest payer.

How does a private insurer compete with a government plan?  Imagine a Government-owned subsidized Automobile competing with private companies?  Would they not print more tax payer money and pump them up? Oh wait that’s already happened in Detroit, bad example.

The President claims that a government plan does already work and its name is Medicare.  Yet, Medicare we are also told will go broke as early as by 2018 reported by Washington Post. Medicare, meanwhile, now pays private insurers to take care of seniors under the Medicare Advantage Plans.  It is cheaper for the government to do this than to manage it themselves

As brokers, we work with the AARP Oxford Secure Horizons Program where some plans are $0 premium and include a fairly sizable network.

So which one is it? Does the Medicare plan work now and is proof of what’s to come or is it costly and inefficient and unsustainable?

Clearly the costs are indeed high and I question what insurers are thinking with some of the rate increases.  This year, especially, I’ve seen increases of over 20% from the top carriers.

Speaking of Medicare, the Part D Plan in 2003 was just a gift to the Pharmaceutical industry’s under the Bush administration.  Many people didn’t realize that the language used barred the U.S. from negotiating drug pricing. How can Canada with an entire population of 33 mill pay 50% on the dollar while 40 million US seniors pay full retail?  Coincidentally, the legislators of Medicare Part D earned themselves nice cushy paying Pharmaceutical jobs within 1 year.

Obama has easily gotten concessions from Big Pharma,  Insurers and the AMA (provided there is tort reform) already and I applaud him for it.  There probably is even more good news to come on this.

What may be an interesting possible outcome are Regional Health Insurance Co-ops.  These are a bridge between government and non-government options.  The co-op alternative, led by Sen. Kent Conrad (D-ND), continued to gain traction on both sides of the aisle.  The plan would call for the creation of nonprofit health cooperatives in lieu of public health insurance options.  Said Sen. Baucus, “.The Conrad approach has got legs…it’s quite viable.”

On the House side, Rep. Roy Blunt (R-MO), chairing the Health Care Solutions Group, released an alternative to the House Democratic plan that he “hopes will receive bipartisan support.”

An example of this is GroupHealth in Washington State.  “At Group Health, doctors are rewarded for consulting by telephone and secure e-mail, which allows for longer appointments. Patients are assigned a team of primary care practitioners who are responsible for their well-being. Medical practices, and insurance coverage decisions, are driven by the company’s own research into which drugs and procedures are most effective.”  A good piece in last months’ NYT. discusses this.

There are many versions of this and perhaps there ought to be Federal provisions and overall guidelines but with regional flexibility afforded to each state. This topic requires further discussion and I will tackle it next month.

Enjoy the rest of your summer!!!

Governor Signs COBRA Extender, Dependent Coverage to Age 29 & HMO Reform Bills

As expected, Governor David Paterson has signed 3 of his healthcare reform proposals into law, to wit:

S.5471 (Breslin) / A.8400 (Peoples) – extends state mini-COBRA from 18 to 36 months.  Effective date is July 1, 2009 and shall apply to all policies and contracts of insurance issued, renewed, modified, altered or amended on or after such date.

S.6030 (Breslin) / A.9038 (Morelle) – allows for dependent care coverage of children up to 29 years of age. Effective date is September 1, 2009 and shall apply to all policies and contracts of insurance issued, renewed, modified, altered or amended on or after such date.
S.5472-A (Breslin) / A.8402-A (Morelle) – HMO reform act.  Various effective dates depending upon the specific provision of the bill.

Here’s a link to the Governor’s Press Release announcing the same:

Article in Newsday – “New state law eases medical coverage for 20-somethings”