Most employers search for methods of lowering their company’s spending on their health benefit plans. A Self Funded, or Self-Insured plan, is one in which the employer assumes the financial risk for providing health care benefits to its employees. In practical terms, Self-Insured employers pay for claims out-of-pocket as they are presented instead of paying a pre-determined premium to an insurance carrier for a Fully Insured plan. Typically, a self-insured employer will set up a special trust fund to earmark money (corporate and employee contributions) to pay incurred claims.
In a self-funded — also known as self-insured — health plan, the employer takes on direct financial responsibility for employees’ health care costs. Rather than being part of a larger risk pool, an employer that self-funds takes on the risk for its employee group alone. All of a health plan may be self-funded, or an insurance contract might be purchased to cover certain types of claims. Most self-funded employers buy stop-loss insurance to cover catastrophic claims
Being exempt from state insurance laws and mandates and not having to pay premiums on a regular basis to an insurance company can result in substantial cost savings. Yet, many employers, especially smaller employers, shy away from self-funding, perceiving it as too risky.
According to a Kaiser Family Foundation Health Benefits Survey, about 55 percent of all employees covered for health care are in self-funded plans. Among employers with 200 or more workers, 77 percent of employees are in self-funded health plans, compared to 12 percent of employees in firms with 3–199 workers.
What is a TPA?
A third party administrator (TPA) is an entity that processes or adjudicates claims for an employee benefit plan. A TPA may provide additional services to an employee benefit plan or employer, such as collecting premiums, contracting for PPO services, providing utilization review of claims, and similar ancillary services to the operation of the employee benefit plan. Self-insured employers can either administer the claims in-house, or subcontract this service to a TPA.
Why do employers self fund their health plans?
There are several reasons why employers choose the self-insurance option. The following are the most common reasons:
The employer can customize the plan to meet the specific health care needs of its workforce, as opposed to purchasing a ‘one-size-fits-all’ insurance policy.
The employer maintains control over the health plan reserves, enabling maximization of interest income – income that would be otherwise generated by an insurance carrier through the investment of premium dollars.
The employer does not have to pre-pay for coverage, thereby providing for improved cash flow.
The employer is not subject to conflicting state health insurance regulations/benefit mandates, as self-insured health plans are regulated under federal law (ERISA).
The employer is not subject to state health insurance premium taxes, which are generally 2-3 percent of the premium’s dollar value.
The employer is free to contract with the providers or provider network best suited to meet the health care needs of its employees.
Is self-insurance the best option for every employer?
No. Since a self-insured employer assumes the risk for paying the health care claim costs for its employees, it must have the financial resources (cash flow) to meet this obligation, which can be unpredictable. Therefore, small employers and other employers with poor cash flow may find that self-insurance is not a viable option. It should be noted, however, that there are companies with as few as 25 employees that do maintain viable self-insured health plans.
Can self-insured employers protect themselves against unpredicted or catastrophic claims?
Yes. While the largest employers have sufficient financial reserves to cover virtually any amount of health care costs, most self-insured employers purchase what is known as stop-loss insurance to reimburse them for claims above a specified dollar level.
With what laws must self-insured group health plans comply?
Self-insured group health plans come under all applicable federal laws, including the Employee Retirement Income Security Act (ERISA), Health Insurance Portability and Accountability Act (HIPAA), Consolidated Omnibus Budget Reconciliation Act (COBRA), the Americans with Disabilities Act (ADA), the Pregnancy Discrimination Act, the Age Discrimination in Employment Act, the Civil Rights Act, and various budget reconciliation acts such as Tax Equity and Fiscal Responsibility Act (TEFRA), Deficit Reduction Act (DEFRA), and Economic Recovery Tax Act (ERTA).
How can your organization benefit from self insurance or level funding? Are there Self-Insurance advantages of avoiding Essential Health Benefits and using the lower cost Minimum Actuarial Value in Health Care Reform?
For additional information on self-funding please contact us at 1-855-667-4621 or e-mail us at info@medicalsolutionscorp.com.
[tab_item title=”Reminder PCORI Research Fees Due by July 231st”]
Posted on July 24 2013
Fees Apply to Employers Sponsoring Certain Self-Insured Plans
Effective for plan years ending on or after October 1, 2012, and before October 1, 2019, employers that sponsorcertain self-insured plans are responsible for new fees to fund the Patient-Centered Outcomes Research Institute (also known as PCORI). HRAs and health FSAs that are not treated as excepted benefits are generally subject to the fees.
Fees are due no later than July 31st of the year following the last day of the plan year. The IRS has revised Form 720for affected employers to report and pay the required fees.
Review our Health Care Reform Checklist for information on other requirements impacting employers and group health plans this year.
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[tab_item title=”Affordable Care Act Weekly Webinar Series”]
Posted on July 23 2013
Free Series for Small Business Owners to Help Understand the Law
The U.S. Small Business Administration (SBA), together with the Small Business Majority (a national nonprofit advocacy organization), has launched the Affordable Care Act 101 Weekly Webinar Series. The webinars feature guidance on key pieces of the law for small business owners provided by SBA representatives, followed by a question and answer period.
Topics being discussed in the webinars include:
Small business tax credits—who is eligible and how to claim the credit;
Shared responsibility (also known as “pay or play”);
Cost containment; and
Tools and resources available for small businesses to learn more about the law.
The free series will take place every Thursday from now through the opening of the Health Insurance Exchanges (Marketplaces) in October. The first series of webinars will cover the same content; a second round of webinars featuring new content will be held later this fall.
The registration links for the first series of webinars can be found by clicking here. After registering, you will receive a confirmation email with all of the information needed to access the webinar either by telephone or online.
Visit our Health Care Reform Blog section to stay on top of the latest Affordable Care Act updates.
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[tab_item title=”4 Things Employers Should Know About Providing the Health Insurance Exchange Notice”]
Posted on July 19 2013
Notice Must Be Distributed to Current Employees No Later Than October 1, 2013
Following a delay in the original effective date, employers will need to comply with the new requirement to provide each employee a written notice with information about a Health Insurance Exchange (also known as a Marketplace) beginning this fall. Below are four important reminders about the notice.
The notice requirement applies to employers covered by the federal Fair Labor Standards Act (FLSA). In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. The FLSA also specifically covers certain entities such as hospitals, educational institutions, and government agencies.
Employers must provide the notice to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.
The U.S. Department of Labor has provided two sample notices employers may use to comply with this requirement. The law requires that specific information be included in each notice. One model notice is available for employers that offer a health plan to some or all employees, and another model notice may be used by employers that do not offer a health plan.
Notices must be provided to each current employee no later than October 1, 2013, and to each new employee at the time of hiring beginning October 1, 2013. In general, a notice will be considered provided at the time of hiring if it is provided within 14 days of an employee’s start date. The notice is required to be provided automatically and free of charge. Employers may distribute the notice by first-class mail, or electronically if certain requirements are met.
Visit our section on Health Reform Resource for information on other notices required to be provided and to download additional model notices available for employers and group health plans.
[/tab_item][tab_item title=”5 Q and As on Individual Shared Responsibility”]
Posted on July 12 2013
Employer-Sponsored Coverage Considered “Minimum Essential Coverage”
The individual shared responsibility provision, which goes into effect on January 1, 2014, requires individuals of all ages (including children) to have minimum essential health coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. Below are five questions and answers related to the mandate that may be of interest to employers and employees.
1. What counts as minimum essential coverage? Minimum essential coverage includes employer-sponsored coverage (including COBRA coverage and retiree coverage), coverage purchased in the individual market, Medicare Part A coverage and Medicare Advantage, Children’s Health Insurance Program (CHIP) coverage, and certain other types of coverage.
Minimum essential coverage does not include coverage providing only limited benefits, such as coverage only for vision care or dental care, workers’ compensation, or disability policies.
2. If an employee receives coverage from a spouse’s employer, will that employee have minimum essential coverage? Yes. Employer-sponsored coverage is generally minimum essential coverage. If an employee enrolls in employer-sponsored coverage for himself and his family, the employee and all of the covered family members have minimum essential coverage.
3. Does an employee’s spouse and dependent children have to be covered under the same policy or plan that covers the employee? No. An employee, his or her spouse, and dependent children do not have to be covered under the same policy or plan. However, the employee, spouse, and each dependent child for whom the employee may claim a personal exemption on his or her federal income tax return must have minimum essential coverage or qualify for an exemption, or a payment will be owed.
4. A company’s health plan is “grandfathered.” Does the employer’s plan provide minimum essential coverage? Yes. Grandfathered group health plans provide minimum essential coverage.
5. Is transition relief available in certain circumstances? Yes. Notice 2013-42 provides transition relief from the shared responsibility payment for individuals who are eligible to enroll in employer-sponsored health plans with a plan year other than a calendar year (non-calendar year plans) if the plan year begins in 2013 and ends in 2014. The transition relief applies to an employee, or an individual having a relationship to the employee, who is eligible to enroll in a non-calendar year eligible employer-sponsored plan with a 2013-2014 plan year. The transition relief begins in January 2014 and continues through the month in which the 2013-2014 plan year ends.
For More Information You may review additional questions and answers in their entirety on the IRS website.
[/tab_item][tab_item title=”IRS Guidance on Delay of Pay or Play Requirements”]
Posted on July 10 2013
No Penalties Will Be Assessed for 2014
Formal guidance released by the IRS provides additional details regarding the delay of the Health Care Reform “pay or play” requirements. Under those provisions, certain large employers (generally those with at least 50 full-time employees) who do not offer full-time employees affordable health insurance that provides a minimum level of coverage may be subject to a penalty tax.
According to the guidance, no penalties (also known as employer shared responsibility payments) will be assessed for 2014. The “pay or play” requirements will be fully effective for 2015 and employers are encouraged to maintain or expand health coverage in 2014 in preparation for compliance.
The delay is a result of transition relief being provided for 2014 with respect to certain employer and insurer reporting requirements. Such reporting will be necessary for the IRS to determine whether a penalty may be due, and, consequently, the transition relief makes it impractical to determine which employers owe shared responsibility payments for 2014. Once the information reporting rules are issued, employers are encouraged to voluntarily comply with the reporting requirements in 2014.
The delay does not affect the application or effective dates of other Health Care Reform provisions, including the individual shared responsibility requirements and employees’ access to premium tax credits for enrolling in qualified health plans through the Health Insurance Exchanges.
“New Jersey and all other states still await substantial federal guidance on the functioning of all three types of exchanges,” Mr. Christie said in his veto message. “To be sure, the decision of whether to move forward with a state-based exchange can only be fully understood when competitively compared to the overall value of the other options.”
States have until Dec. 14 to decide whether to establish a state-based exchange. They have more time to decide whether to partner with the federal government or let federal bureaucrats design and run the state exchange. Many states with Republican governors have said they would not participate in the process, citing their opposition to the law and its potential costs. This is the current Map of State Exchange Status.
What is an Exchange? One of the centerpieces of the recently passed Patient Protection and Affordable Care Act (PPACA) is the establishment of state based health insurance exchanges by the year 2014.
An “Exchange” is a mechanism for organizing the health insurance marketplace to help consumers and small businesses shop for coverage in a way that permits easy comparison of available plan options based on price, benefits, service and quality. By pooling individuals and small groups together, transaction costs can be reduced and transparency can be increased. Exchanges can create more efficient and competitive markets for individuals and small employers.
States have until Dec. 14 to decide whether to establish a state-based exchange. They have more time to decide whether to partner with the federal government or let federal bureaucrats design and run the state exchange. Many states with Republican governors have said they would not participate in the process, citing their opposition to the law and its potential costs.
Many Republican governors were saying before the Court ruling that the Medicaid expansion was yet another unfunded federal mandate they could not afford. Yes the Supreme Court ruling has given the Republican governors enormous leverage. Republican governors have long argued that state control and flexibility can save lots of Medicaid money. If they put a reasonable plan on the table to expand their Medicaid programs to 133% of poverty–one that saves at least as much as their state match–it could be a win for everyone. The Republican governors get their flexibility and the Obama administration gets their expansion.
Anti Mandatory Mail Order Victory. A little noticed NYS Healthcare Law has gone under the radar amidst fast changes in Affordable Care Act tumult. AMMO – Anti-Mandatory Mail Order passed late Dec 2011 effective for groups renewing after Jan 11, 2012. A significant signal by Governor Cuomo to stand up to the billion dollar industry no doubt.
According to trade group Pharmacists United for Truth the PBM (pharmaceutical benefits managemnt) claim that mandatory mail order lowers costs proves otherwisee. Plan sponsors are routinely charged far more than retail price in mandatory mail order plans, and their lack of transparency keeps plan sponsors to detecting the unreasonable prices.
After spending a good part of a day in early March helping a NYS client faced with mandatory mail order I learned of this change. For certain medications the insurer limits retail pharmacy coverage. While the incentivisation of 90 day supply at 2 copays was attractive this has now declined to 2.5 copay. With few exceptions such as specialty pharmaceuticals retail pharmacists are given the same advantages and evening the playing field.
The National Community Pharmacists Association’s blog post below offers a helpful FAQ. Additionally with the steady decline of the local independent pharmacist a quality of personalized care has been eroded. The price paid in patient compliance and safety has received little attention. Independent Pharmacists have been the canary in the mine for fellow small businesses competing with large copra big box chain stores. At least now NYS is finally listening.
Community pharmacists in New York scored a significant win for their patients, communities and pharmacy choice in late 2011 with the enactment of the Anti-Mandatory Mail Order or AMMO with overwhelming, bipartisan backing. What lessons might the campaign in support of the AMMO law hold for community pharmacists across the country?
To find out, NCPA recently asked one of the legislation’s staunchest supporters and advocates to share his observations on the effort to enact the AMMO law. Craig Burridge, M.S., is Executive Director of the Pharmacists Society of the State of New York (PSSNY). Mr. Burridge credits PSSNY members as most instrumental to enacting AMMO over the fierce opposition of mandatory mail order proponents, principally large pharmacy benefit managers (PBMs). He notes people including Ray Macioci, Charles Catalano, Vinny Chiffy and literally hundreds of pharmacy owners helped win a hard fought battle by gathering tens of thousands of signatures on petitions from their patients and coordinating tens of thousands of phone calls, emails and letters.
What follows is a Q&A with Mr. Burridge, in hopes that his advice would benefit patients and independent community pharmacists in other states advocating for patient choice.
NCPA: When it comes to the forced or mandated use of mail order pharmacies, many of the concerns expressed by patients and the community pharmacists who care for them are not new and have, in fact, been voiced for a number of years. What made 2011 different in New York?
Mr. Burridge: In New York, consumers by the tens of thousands signed petitions at their local pharmacy against mandatory mail order. Patients wrote dozens of letters to the editor of many regional newspapers telling about their horror stories with mail order. Finally, pharmacy owners had had enough of losing their patients to self-dealing PBMs. Tens of thousands of phone calls to the Governor’s Office and to Legislators were made by pharmacy owners, their staffs and their patients in support of passage of the no mandatory mail order bill.
NCPA: One obstacle to ensuring patient choice of pharmacy is the myth of mail order savings. This persists in some minds despite what appears to be rampant mail order waste and studies demonstrating how health plan sponsors that incent or require the use of mail order can end up paying more for drugs. Did you encounter such misperceptions and, if so, what did you do to alter or overcome them?
Mr. Burridge: We did in New York. The PBMs came at us with ads stating that costs would go up and that it was a ‘prescription drug tax’ or that it would ‘prohibit mail order.’ We responded with evidence that exposed the ‘spreads’ being used at mail for generics and the fact that the legislation requires participating pharmacies to agree to the same reimbursement and the same co-pays.
NCPA: The health care benefits of a patient’s face-to-face consultation with a community pharmacist and the preference of most patients for going to a local pharmacy are both well-established. But how did you chronicle and reinforce the economic and tax benefits of buying local when it comes to pharmacies?
Mr. Burridge: According to national data (IMS Health) for 2009, the last year we had data before introducing legislation, 22.8 percent of the national drug spend was for mail order prescriptions. Using New York’s percentage of total drug spend (11 percent), we removed hospital expenditures and Medicaid (which had less than one percent mail order) and came up with a mail order drug spend in NY in access of $5.8 billion annually. New York State has no major mail order facilities so this represents thousands of lost pharmacy jobs.
NCPA: Like PSSNY, NCPA continually stresses to its members the importance of grassroots activism, whether it is at the federal or state levels or with local employers and leaders. Did you find that your memberships became more engaged than usual in 2011 and, if so, what did you do to encourage their further involvement?
Mr. Burridge: It helped to have the PBM industry fly in colleagues from around the country and host their own Lobby Day. They told legislators that New York’s pharmacies could survive on acute medications only. This only caused yet another round of thousands of phone calls from our pharmacists, their staffs and patients. Our grass roots turned into a raging grass fire. Livelihoods were at stake and our opponents showed their hand. They wanted ALL maintenance medications going to their wholly-owned out-of-state mail order facilities. Our legislators saw that too.
NCPA: What surprised you the most about your 2011 campaign against mandatory mail order?
Mr. Burridge: I’ve been doing this too long to be surprised. We expected the worst from our opponents and they did not disappoint us.
NCPA: What were some of your opponents’ most challenging arguments and how did you address them?
Mr. Burridge: That depends if you consider outright lies as a challenge. Their ads said that it was a “Prescription Tax” or, when that flopped, they said our bill “would prohibit mail order.” These were easily swept aside and only upset legislators who felt the PBM industry was accusing them of passing a tax on prescription drugs.
NCPA: Do you have any other words of wisdom that you would like to share with concerned patients or your colleagues in community pharmacy?
Mr. Burridge: Choosing one’s pharmacy should be a basic right. If the playing field is level, it only makes sense to buy local. Watch out for PBMs calling all maintenance medications so-called ‘specialty drugs’ as a way of getting around no mandatory mail order laws. We’ll have a lot more to say on that in the near future.
Short Term Disability coverage for ALL their employees.
Have you reviewed your New York State Statutory Disability Insurance lately?
FIRST REHABILITATION
GUARDIAN
HARTFORD
MUTUAL OF OMAHA
STANDARD LIFE
ZURICH
Male Rates
$2.25
$2.35
$2.45
$2.75
$2.45
$1.66
Female Rates
$4.95
$5.11
$5.70
$5.90
$5.65
$3.78
New York State Statutory Disability Insurance. In New York State and you have employees, this benefit is mandated by New York State, with almost no exceptions. All insurance companies provide the same core benefit. A 7-day wait for either sickness or accident, 50% of gross weekly earnings, maximum weekly benefit of $170.00 and a maximum benefit period of 26 weeks. For fewer than 50 employees there is a rate for males and a rate for females. Over 50 employees the rate will be determined by experience (rates determined by prior year loses) or based on payroll. Whether a community rated plan (under 50 lives) or experience rated (50 plus) you look for the lowest priced carrier. This is a benefit that is a 24 hour a day, seven days a week, non-work related benefit. This coverage which is provided by the Employer, is usually added with a short term or long term disability insurance
Hello. It’s been awhile, hope you’re all well. To all who have inquired, my thanks for your concern, but all’s good. Hectic, but good. Lot’s going on and an awful lot of travel. I’ve had a chance to meet and talk with with insurance carriers, Health Human Services, Trade Groups, Broker panels and most importantly customers with spirited opinions such as yourselves. It’s been a great time to learn, recharge and stay a bit too busy to write any meaningful posts. While staying busy appears to be the new constant, I’ll try to find something worthy to share on a more regular basis. Before I get into it some news at MMS Corp:
Check our new 360peo.com this summer. We began the redesign and update of our web site to make it more user friendly and features packed with the following:
1-Quoting Module – The quoting engine will offer cross leading plans based on your location, income and employee total. Not all plans and carriers will participate and it is recommended that you get in touch with us. 2-Health Care Reform Section-this tab is dedicated to the new PPACA law. 3 Instant Chat – Scheduled Fall 2011 4. Social 2.0- Find us on Facebook, Linkedin and Twitter. 5. HR Log In- For clients only. Some of you have already begun using this online HR Kiosk. We’ve deployed this in partnership with HR Connect Technologies to offer employers tools for common HR tasks such as Benefit Plan Admin, Forms for new hires, terminations, work-site postings and employee record keeping. HR-Connect is a secure, HIPAA-compliant, Internet driven system designed to simplify your human resource department. Employees can review their own personal information, but not other employee’s data. Click Video Demo here and just ask us to set it up for your business at no charge!
Lastly, we have been appointed earlier in 2011 to the Empire Broker Advisory Council which consists of top 10 of 5000 brokers that meets throughout the year to discuss relevant topics such as market insights, health reform changes and input on future plan designs. We take this opportunity seriously in giving voice to our clients and shaping a more consumer friendly plan. To Empire’s credit, they have been indeed listening and have taken suggestions seriously. New plan options released in the Fall will be examples of this.
For now, however, let’s play some catch-up:
Latest new is that US Court of Appeals has ruled that the Affordable Care Act is constitutional. The ruling is online here. The ruling stated that this is in synch with the commerce clause of interstate commerce. Furthermore, since Congress can force someone to buy health insurance because even if they don’t need insurance today they will at some point in their life. While this ruling is impactful and could influence future rulings, this is expected by many to go to Supreme Court. They have been loudly silent on this touchy topic thus far.
Regardless, this Individual Mandate has little teeth with penalties @ $95 or 1% for 2014, $325 or 2% in 2015 and $695 or 2.5% in 2016. In other words if one can still buy health insurance, face little penalties and no pre-existing condition whats stopping someone form buying insurance when they’re in the hospital?!
To date, many key provisions have already been enacted. Some of those are:
Extending the age of adult children eligible for coverage under their parents’ health care plan to age 26
Prohibiting individual and group health plans from placing lifetime limits on the dollar value of coverage
Preventing health insurers from rescinding coverage (except in cases of fraud)
Prohibiting health insurers from imposing pre-existing condition exclusions for children
Mandating coverage for recommended immunizations and preventive care
PPACA items that died in 2011.
1. The non-discrimination provision for Group Health Plans have been delayed. The short answer is that IRS needs more funding to enforce this as well as additional guidance. See blog here
3. W2 Reporting delayed- the IRS said employers who file fewer than 250 Forms W-2 in 2011 will not be required to report the cost of health care coverage prior to January 2014
Items that have funding delays:
1. Free Choice Voucher Program Takes a Hit- The program would have provided funding of vouchers for lower income employees to subsidize the employer contribution. Under this provision, plan sponsors of employer-based plans (including self-funded benefit plans) would have been required to offer vouchers to employees who fall below a pre-defined income threshold, while the state-based exchanges would credit the employee the amount of the voucher that exceeded their monthly premium.
2. No Health Co-Ops- The goal of the program was to spur the creation of qualified nonprofit health insurance issuers that could offer health plans for individuals and small businesses in states where insurance issuers are licensed to offer them. The program also would have provided loans and grants to fund start-up and maintenance costs for these plans.
This is a bit disappointing as we looked to the highly rated Seattle-based Group Health Cooperative program as a successful at managing costs and offering consumer centric care, click here for more info.
3. Wellness Funding for Small groups- no updates as of yet on the $750 Million funding. This was forward thinking incentives for small groups to afford a a Wellness Program for smoking cessation, diet/nutrition, gym etc. Typically large groups have had these programs as their rates are directly linked to “experience” of their members. In small market the rates are spread over thousands of other small groups. This is a first come first serve funding that we are closely monitoring to help our groups.
We are partnering with Wellness Companies and Health Insurers on establishing a program for small groups. The ROI on this is typically 1.6 :1. If you think your group could benefit please drop us a note at info@medicalsolutionscor.com.
The biggest news really will be the Health Exchanges schedule to open by 2014. NYS in particular than most states has enjoyed 2 rounds of Federal seed capital with almost $30 million for this effort. Each state has to set up an exchange, or marketplace, where small employers and individuals whose employers don’t provide coverage, or who can’t afford the employer plans, can purchase insurance. About 2.7 million New Yorkers are uninsured.
Sponsors say it should also result in one statewide, online, streamlined system for enrolling and renewing enrollment in government-supported Medicaid, Child Health Plus and Family Health Plus programs.
Each state can implement their own version. Several states have rejected funding and do not want to participate in the exchange. By discounting health plan rates based on income its unclear of how much will fall as a state burden?
Florida is one state that has decided not to implement a state health insurance exchange altogether. That state is seeking to shift virtually all of its Medicaid population from government coverage into private plans starting in July 2012.
Two states, Massachusetts and Utah, each have existing state exchanges that differ fundamentally. The Massachusetts exchange is considered an “active purchaser” model, has a large organization and a sizeable budget. The state’s model does not allow all licensed insurers to participate in the exchange. The Utah model, on the other hand, is an “all-comer” model that allows any licensed health insurer to participate. Utah’s exchange initiative is much smaller in scope with only two full-time employees and a limited budget. Currently, the Massachusetts state exchange is suffering major cost overruns.
Rebecca Vesely, writing in Business Insurance, makes this clear in her article describing how two states, Vermont and Florida, are taking strikingly different paths in addressing health care reform. Vermont has taken the first step toward creating a single payer system by 2017. Legislation to set up a five member board to move the state in this direction has already been enacted. And while many details need to be worked out (funding, to name one) and Vermont will need to obtain a waiver from the Centers for Medicare and Medicaid Services to put the package together, the state is further down the road to single payer than any other.
With healthcare becoming a hot issue for 2012 both parties are entrenched. Democrats are promoting Medicare as an effective low cost plan that provides insurance for millions of people. The fact that it is imploding is seemingly lost. Republicans, on the other hand, are touting touting free enterprise system but the Medicare Part D law enacted by Bush in 2003 had been under estimated by half! Along with Medicare Advantage plans that have cost the Gov in excess of what was expected.
Rita Redberg, UCF professor of medicine writes an amazing editorial in NYT “Squandering Medicare Money”. While this war of words by both parties goes on no one is really minding the issues. There are things that can be done right now while Washington tries to get its own house in order. An honest appraisal of Medicare Advantage shows that the program doesn’t deserve a fatter payday; it demands a serious crackdown.
Limitations on funding both at the federal and state levels will need to be addressed to avoid a rise in government deficit levels. In the short term, PPACA will continue to face significant political and legal hurdles. Nonetheless, implementation will continue, with more provisions and offices becoming established under the law.
* * * * *
As more information becomes available, MMS Corp is committed to keeping you up-to-date in a timely manner. Coming soon 360peo.com to view past Legislative Alerts in the “Newsroom” section. Or, you may visit alexmiller.wordpress.com for blog posts, polls, surveys and numerous resources. If you have any questions, please contact us. Thank you for taking the time to read through this important notification.
Change in tax treatment for over-age dependent coverage
Accounting impact of change in Medicare retiree drug subsidy tax treatment
Early retiree medical reinsurance
Medicare prescription drug “donut hole” beneficiary rebate
Break time/private room for nursing moms
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[tab_item title=”2011″]
No lifetime dollar limits on essential health benefits
Restricted annual dollar limits on essentail health benefits, phased amounts until 2014
No pre-existing condition limitations for enrollees up to age 191 and no recissions
No health FSA/HRA/HSA reimbursement for non-prescribed drugs
Increased penalties for non-qualified HSA distributions
Additional standards for new or “non-grandfathered” health plans, including preventive care in network with no cost-sharing appeal and external review, provider choice and non-discrimination provisions for insured plans
Income-based Medicare Part D premiums
Pharmaceutical importers and manufacturers’ fees start
Medicare, Medicare Advantage benefit and payment reforms
Insurers subject to medical loss ratio rules
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[tab_item title=”2012″]
Employers to distribute uniform summary of benefits and coverage (SBC) to participants (deadlines vary with group of recipients)
60-day advance notice of mid-year material modifications to SBC content
Form W-2 reporting for health coverage (track in 2012 for W-2 form provided in early 2013)
Coverage for additional women’s preventive care services5
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[tab_item title=”2013″]
$2,500 per plan year health FSA contribution cap (plan years on or after January 1, 2013)
Comparative effectiveness group health plan fees first due
Annual dollar limits on essential health benefits cannot be lower than $2 million
Employers notify employees about exchanges
Medical device manufacturers’ fees start
Higher Medicare payroll tax on wages exceeding $200,000/individual; $250,000/couples
Change in Medicare retiree drug subsidy tax treatment takes effect
Health Insurance exchanges initial open enrollment period
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[tab_item title=”2014″]
Health insurance exchanges
Individual coverage mandate
Financial assistance for exchange coverage of lower-income individuals
States Medicaid expansion (possibly only some states)
Employer shared responsibility
Dependent coverage to age 26 for any covered employee’s child
No annual dollar limits on essential health benefits
No pre-existing condition limits
No waiting period over 90 days
Wellness limit increase allowed
Health insurance industry fees
Additional standards for non-grandfathered health plans, including limits on out-of-pocket maximums,
provider nondiscrimination, and coverage of routine medical costs of clinical trial participants
Small market, non-grandfathered insured plans must cover essential health benefits with limited deductibles (initially $2,000/individual, $4,000/family), using a form of community rating
Insurers must apply guaranteed issue and renewability to non-grandfathered plans of all sizes
Auto enrollment sometime after 2014
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[tab_item title=”2015″]
Temporary reinsurance fees first due in late 2014/early 2015
Additional employee-specific reporting and disclosure of 2014 coverage
[/tab_item]
[tab_item title=”2018″]
40% excise tax on “high cost” or Cadillac coverage
New York State Partnership for Long-Term Care-The Partnership was created to help New Yorkers finance long-term care without impoverishing themselves or signing over their life savings, with the accompanying loss of dignity
Employer Alliance for Affordable Health–Take action to fight unnecessary expensive health insurance mandates that increase your premiums and contribute to the number of uninsured New Yorkers.
Insurance Information Institute–The Insurance Information Institute provides facts and assistance free of charge to the media, individuals and organizations.
This month on April 12th, 2011 marked the five-year anniversary of Massachusetts 2006 State Health Care Reform. The reform was signed into law by then-governor Mitt Romney with the goal of providing affordable health insurance coverage to the estimated 6% of Massachusetts residents that were uninsured at the time.
Massachusetts State Health Care Reform and the Affordable Care Act are virtuallyidentical.Both reforms rely heavily on state-based health insurance exchanges, subsidies for qualifying individuals, and mandates for employers and individuals. As a result, Massachusetts presents the most appropriate example of what to expect from federal health care reform.
So, what have we learned from Massachusetts state reform? The 2006 Massachusetts State Health Care Reform:
Created the MAHealthConnector(a state health insurance exchange) to provide guaranteed issue health insurance to MA residents;
Mandated that every resident of the state obtain a minimum level of health insurance or face penalties;
Mandated that employers provide a “fair and reasonable contribution” to their employees’ health insurance premiums or face penalties; and
Provided free health insurance and partially-subsidized insurance to qualifying residents based on income.
Proponents of the law argue that Massachusetts Health Reform:
Has increased the percentage of private companies that offer health insurance from 70% in 2005 to greater than 77% today.
Has lowered the cost of individual health insurance premiums in Mass. due to the fact that primarily healthy people have moved to the individual market.
Opponents of the law argue that Massachusetts Health Reform:
Was setup for failure from the start due to its reliance on employer-sponsored health plans, plans that employers cannot afford due to rising costs.
Has resulted in more than half of the newly-insured residentsreceiving health insurance that is partially or completely subsidized by Massachusetts’ taxpayers.
Has Massachusetts health care reform been properly utilized as a test bed for Federal Reform? Will the costs associated with Massachusetts health care reform be sustainable over the long term?
The President yesterday released with great anticipation his own version of the Reform Health Bill. This is the opening bid before Thursday’s Bipartisan Summit.
The proposed Bill for the most part is similar to the Senate Bill passed in December with a few minor changes anticipated to cost almost $1 trillion over 10 years. The comprehensive bill adds cost saving measures and more affordability for lower income Americans.
As expected and in step with both Houses the proposal eliminates pre-existing condition but raises the penalty for individuals not paying into a mandatory health plan to 2.5% of adjusted gross income by 2016. Included, also, is an increase in the tax credits for health insurance premiums a sort of carrot and the stick model.
Spurred by recent rate increases by insurers such as Anthem’s 39% planned rate hike in California there is a provision to establish a new Health Insurance Rate Authority to give guidance and oversight to states and monitor insurance market behavior. “If a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable.”
Also included is elimination of Nebraska’s politically wrangled special deal to help pay for a proposed Medicaid expansion, and would instead provide more help for all states to pay for their new Medicaid enrollees. It would delay enactment of a the Cadillac tax (40% tax in excess of $10,200/$27,500 for single/ families) on high-cost employer-sponsored insurance plans with no special exceptions to Union groups.
There is elimination of the Medicare Rx “doughnut hole” for Part D. There will be a 25% coinsurance fee instead for seniors in this gap. Currently, the gap starts after the first covered $2830 and continues on the next $4550 with only a 5% member responsibility thereafter.
Our small employer groups will be relieved to know that groups under 50 employees are exempt form the mandate. Under the Senate plan, employers with more than 50 employees that do not offer coverage would pay a $750 assessment for each full-time employee. The White House proposal would bump up that assessment to $2,000 for each full-time employee. However, in determining the assessment, an employer’s first 30 employees would be excluded from the calculation. Taking the case of an employer with 100 employees that did not offer coverage, for example, its assessment would be 70 times $2,000.
The proposal also is believed to retain a provision in the House and Senate bills that would impose a $2,500 annual cap, starting in 2011, on the maximum annual contributions that could be made to health care flexible spending accounts such as HRA and FSA.
Our position is that Health Care Reform done responsibly is important and inevitable for the sustainability of our country. While the current leaves millions uninsured it just as importantly leaves many who are already insured struggling to pay and possibly drop out going forward. Addressing the cost factors for those already insured is being understated.
Stay tuned till the end of the week for the Bipartisan Summit. We expect to see proposals on creating tax credits for employers who already offer benefits. Also allowing insurers to easily cross state lines and increase competition by creating a basic Federal health package. This will allow strong reputable companies like Humana to enter the NY/NJ/CT market and side step the choke full of mandates. NY already includes almost 20% of overall costs going to these add-ons.
In a self-funded — also known as self-insured — health plan, the employer takes on direct financial responsibility for employees’ health care costs. Rather than being part of a larger risk pool, an employer that self-funds takes on the risk for its employee group alone. All of a health plan may be self-funded, or an insurance contract might be purchased to cover certain types of claims. Most self-funded employers buy stop-loss insurance to cover catastrophic claims
