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Children’s coverage and retroactive rescissions were among the health reform topics discussed by Kevin Knopf, attorney-advisor, Treasury Office of Benefits Tax Counsel, at the American Bar Association’s 21st Annual National Institute on Health and Welfare Benefit Plans in Washington , D.C. on October 25. Knopf elaborated on the official guidance issued on those requirements under the Patient Protection and Affordable Care Act. Children’s Coverage The ACA requires that employers providing health insurance coverage to an employee’s dependent child must continue to do so until the child reaches age 27. Knopf acknowledged that, while they prevent an insurer from defining “child,” the regulations do not themselves provide a definition of “child” for purposes of the health care reform package. He said that this was not a mistake: rather than provide a hard-and-fast definition, the IRS instead provided a safe harbor for taxpayers who rely upon the definition of “child” in IRC S...

The potential for increased cost-shifting to private payers, the health insurance exchanges operating effectively in all states by 2014, and the elimination or revision of the tax on high cost plans are the issues of greatest concern about the new health reform law of chief human resources officers (CHROs) at large firms. Furthermore, nearly all (96%) of the more than 250 CHROs the HRPolicy Association surveyed in September 2010 believed that the Patient Protection and Affordable Care Act (ACA) will raise their companies' costs: 56% of these expect an increase of 5% or less; 27% expect a 6% to 10% increase; and 19% anticipate increases of more than 10%. In response to increased costs, 64% of the CHROs predicted that their companies would split costs with their employees and retirees, and 19% said they would pass on the costs to their employees. In addition, CHROs believed that a much greater number of employees than Congress anticipated will obtain health coverage tho...

On October 21, the National Association of Insurance Commissioners (NAIC) voted to adopt a model regulation containing the definitions and methodologies for calculating medical loss ratios as required by the Patient Protection and Affordable Care Act (ACA). In a prepared statement, Kathleen Sebelius, HHS Secretary, said regulations based on the model would be published quickly: "The next step is for the HHS to issue a medical loss ratio regulation that will provide clear guidance to stakeholders in the coming weeks. "We will work quickly to promulgate this regulation, using the NAIC recommendations as a basis, because we believe these new policies will help ensure not only cost savings but higher quality care for consumers. We look forward to working closely with NAIC throughout the process." Background On October 14, the NAIC Health Insurance and Managed Care Committee approved a draft regulation, and that draft "passed with only technical ame...

Though the first wave of its coverage provisions have been in effect since late September, the Affordable Care Act continues to be debated, both in the court of public opinion and in courts of law. Approximately 55% of  "likely voters" surveyed on October 16 and 17 said that they favored a repeal of the Affordable Care Act, according to Rasmussen Reports . Since the passage of the ACA in March, support for repeal has ranged from a low of 53% to a high of 63%. Of the 40% who opposed repeal of the law, 30% said they "strongly oppose" repeal. Party affiliation. Not surprisingly, support for the law is divided among party lines: Rasmussen found that 84% of Republicans and 57% of independents favor repeal, while 63% of Democrats oppose repeal. Litigation continues. Even assuming that Republicans regain control of one or both Houses of Congress, garnering a veto-proof majority seems unlikely. However, court challenges to the law continue to move forward. Late last week,...

Did you include a health risk assessment (HRA) as part of your open enrollment planning for 2011? If so, take note of a recently-released set of FAQs from EBSA. These question/answer sets detail what group health plans must do to comply with the Genetic Information Nondiscrimination Act. GINA bars a plan from collecting genetic information (including family medical history) prior to or in connection with enrollment. Thus, under GINA, health plans must ensure that any health risk assessment (HRA) conducted prior to or in connection with enrollment does not collect genetic information, including family medical history. Health plans are allowed to have employees complete an HRA, but must comply with two provisos. First, the genetic information that is obtained must not be used for underwriting purposes. Second, if it is reasonable to anticipate that the collection will result in the plan receiving health information, the plan must explicitly notify the person providing the information tha...

Several surveys and studies released in 2010 have concluded that the COBRA participation—or “take-up” rate---increased when subsidized coverage was made available for those who lost their jobs between September 2008 and May 2010. However, the rate of improvement reported has varied widely. EBRI, using Census Bureau data, has now issued a study concluding that take up rates increased less than was expected when Congress enacted the subsidy as part of the 2009 stimulus law ( EBRI Notes , October 2010, ebri.org). Lower than expected. When the American Recovery and Reinvestment Act of 2009 was passed, the Congressional Budget Office anticipated that $14 billion in COBRA subsidies would be provided in 2009. This expenditure was expected to provide 7 million people with subsidized coverage. Instead, EBRI says that census data shows that the number of nonworking adults with coverage through a former employer increased from 5 million in December 2008 to 5.7 million in August 200...

Parents who are thinking of looking for child-only health insurance coverage might want to pay especially close attention to insurers’ open enrollment periods, based on a recent news release from the Health and Human Services Department (HHS). In the wake of health care reform, many insurance companies have dropped or are threatening to drop child-only policies, a move which drew fire from HHS Secretary Kathleen Sebelius on October 13, writing to the National Association of Insurance Commissioners, “Unfortunately, as we discussed, some insurers have decided to stop writing new business in the 'child-only' insurance market – reneging on a previous commitment made in a March letter to 'make pre -existing condition exclusions a thing of the past,'" adding, “… the decision of some health insurance companies to stop selling new polices for children is extremely disappointing.” This latest move by the insurance industry has forced the Obama Administration to make yet ano...

Any number of healthcare organizations are looking to increase admissions to drive revenue and volume by associated physicians. Some providers are returning to the days of employing physicians and that seems to be making a big comeback due to the Patient Protection and Affordable Care Act (PPAAC). Here's hoping lessons learned from the last go around of physician employment will result in fewer mistakes this time. Sales staffs are popping up all over like weeds-in-a-field, complete with goals and objectives, territories and sales quotas for specific docs along identified and profitable disease-states. In most cases they are managed by people who have never sold anything in their life. Little understanding of the relationship sales cycle, what is important to the physicians, their needs and ultimately their patients. The first time the sale person comes back to the organization with "This needs to change" request, it all breaks down because nobody internally wants to reall...

There have apparently been concerns among many employees that passage of health care reform would mean that they would have to pay tax on the value of health benefits they receive from their employers. One source of this rumor was probably the fact that there is now a space for employers to include, if they wish, the cost of health benefits on the 2011 W-2 Form, which the IRS has just released. Inclusion of the information will be mandatory starting in 2012. One example, from charlestonteaparty.org, states "Starting in 2011, (next year folks), your W-2 tax form sent by your Employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that’s a private concern or governmental body of some sort. If you’re retired? So what; your gross will go up by the amount of insurance you get." The entry goes on to state that: "You will be required to pay taxes on a large sum of money that you have never seen. Take your tax...

According to healthcarelawsuits .net, several lawsuits filed against the Affordable Care Act have been dismissed, but there are still in excess of 20 active claims challenging the constitutionality of the law. Some of the more interesting recent activity occurred on October 7, when the U.S. District Court for the Eastern District of Michigan ruled against the plaintiffs' motion for preliminary injunction and dismissed two of six claims in Thomas More Law Center v. President of the United States (No. 2:10- cv -11156). The plaintiffs, a conservative Christian not-for-profit law center, plan to appeal. The suit includes a claim under the Commerce Clause of the U.S. Constitution, which is a claim common to other suits against the ACA , as well as claims that the ACA is an unconstitutional tax, that it violates the Tenth Amendment, and that it violates the Equal Protection and Due Process provisions of the Fifth Amendment. The suit also includes a claim that the passage of the ACA vi...

Living in a large metropolitan area with some pretty well recognized system heavyweights and Academic Medical Centers, I am fortunate enough to see a good deal of hospital advertising. Anyhow, happy smiling patients, doctors looking intently into a microscope, nice building exterior shots and high-tech equipment all promoting a central system brand. High production values and in most cases using hired talent instead of employees. One even made the claim of being one of the top 10 hospital systems on the country. I have said it before and I am saying it again, where is the differentiation? And what does the statement: "We are one of the top-10 hospital systems in the country" mean? So I thought I would go to their web site expecting to see some kind of explanation on the award, but I was sadly mistaken. All the site had in the About Us was top-10 again. Okay, is that in customer satisfaction, financial performance, system integration? What exactly does that mean? Food for thou...

Sen. Jay Rockefeller’s skepticism notwithstanding, the Department of Health and Human Services went ahead and gave 30 organizations waivers from health plans’ annual limits requirements. Without the waivers, companies would have had to provide individual policies with a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013, and unlimited coverage in 2014. Reportedly, the Obama Administration defends the waivers as the best way to keep people insured until the law fully takes effect. Regulations implementing the Affordable Care Act established those annual limits to incrementally eliminate coverage limits beginning in 2014. As we discussed previously in this blog , Sen. Rockefeller questions the value of the mini-med policies BCS, one of the waiver grantees, sells to McDonald’s hourly employees. In early September guidance, HHS explained the reason for the waivers this way: A class of group health plans and health insurance coverage, general...

Since late August, the Department of Health and Human Services (HHS) has approved nearly 3,000 applications for the early retiree reinsurance program (ERRP) established under the Affordable Care Act. HHS says applications for the program have been received from more than 50% of Fortune 500 companies, all major unions, and government entities in all 50 states and the District of Columbia. The approved applications represent nearly every sector of the economy: 32% of applications came from businesses, 26% from state and local governments, 22% from union sponsors, 14% from schools and other educational institutions, and 5% from nonprofit organizations. Among the applicants for the ERRP are these nine states that are suing to overturn the Affordable Care Act: Alaska, Arizona, Florida, Idaho, Indiana, Louisiana, Michigan, Nebraska, and Nevada. Cities or counties in many other states that also are challenging the health reform law also have applied for the ERRP. Might as well take advant...

In an October 1 letter to BCS Financial Corporation, which provides medical benefits for McDonald’s hourly employees, Sen. Jay Rockefeller (W.Va.), Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, has requested premium and claims information to clarify the fast food restaurant chain’s health care coverage, which reportedly will not meet the medical loss ratio requirements instituted by the Patient Protection and Affordable Care Act. According to the letter, a recent memo from McDonald’s to the Department of Health and Human Services warned that the company would not be able to meet the new minimum loss ratio requirements. Reportedly, McDonald’s provides low level medical coverage, (also called a mini-med plan) for workers at 10,500 U.S. locations, most of them franchised. A single worker pays up to $14 a week for a plan that caps annual benefits at $2,000, or about $32 a week to get coverage up to $10,000 a year. Citing a recent Wall Street Journal artic...

As they learn more about the new health reform law, human resource professionals are addressing its short-term implications, according to a poll by the Society for Human Resource Management (SHRM). According to SHRM, 75 percent or more of organizations are: Working with a legal or benefits counsel to better understand the law’s implications; Sending staff to classes—including seminars and webcasts—to learn details of the law and its impact; and Partnering with current health benefits providers to design 2011 plans to include areas affected by the law. Analyzing financial impact . More than 50 percent of respondents say that their organizations are developing a cost analysis for their executives and analyzing the short-term financial impact of the law and the feasibility of offering health care. The larger the organization, the more likely it was taking these steps, SHRM found. Start shifting to long-term strategies . “Although many organizations have been appropriately focused on the ...