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Archive for the ‘Health Care Reform’ Category

Prepare your ‘health plan’ for 2012:

In Employee Benefits, Health Care Reform on November 7, 2011 at 6:54 pm

What changes are in store for employee healthcare benefits in 2012? Here are some facts that will help you better manage your program in the coming year.

Health insurance premiums: In 2011, average employer-sponsored family health plans cost $15,073—9 percent higher than 2010, according to a recent survey by the Kaiser Family Foundation and the Health Research and Educational Trust. Single coverage costs an average of $5,429, up 8 percent from 2010. Gary Claxon, director of Kaiser’s Health Care Marketplace Project, attributed most of the cost increase to rising healthcare costs. Changes caused by the Patient Protection Act, which now allows children up to age 26 to remain on their parents’ insurance and requires insurers to cover certain preventive services with no co-payment, accounted for about one percent of the increase.

Look for slightly better news in 2012. Preliminary findings from a Mercer survey indicate health benefit costs could increase an average of 5.4 percent, the smallest increase since 1997. Of course, this is still higher than the general rate of inflation and these are averages only. Premiums for your group could increase more or less, depending on group size, location and claims experience.

Mercer researchers attributed the smaller cost increase to lower utilization of health services. Several reasons could account for this: higher out-of-pocket costs discouraging employees from using healthcare; employees skipping non-urgent care due to less disposable income; employer wellness and disease management programs improving workers’ health; or some combination of these factors.

Consulting firm Segal said in a recent news release, “Price inflation for services and supplies continues to be the biggest element of overall medical plan cost trends.” To control medical costs, it recommends employers obtain deeper discounts from provider networks, invest in wellness and disease management, encourage healthier lifestyles, manage imaging/diagnostic technologies and implement value-based plan designs, among other steps.

Employee cost-sharing: Many employers will pass along most of the cost increases to their employees. According to Mercer, about one-third of survey respondents plan to raise deductibles or co-payments in 2012.

High-deductible health plans: To control their healthcare costs, employers are increasingly turning to high-deductible health plans linked to health savings accounts or health reimbursement arrangements. In 2011, 31 percent of workers with health insurance have high-deductible health plans. For 2012, a qualifying “high deductible health plan” must have an annual deductible of at least $1,200 for self-only coverage or $2,400 for family coverage — no change from calendar year 2011.

Reporting requirements: Employers must begin reporting the value of their health insurance coverage on employees’ Form W-2 for tax year 2012. Employers are not required to report the cost of health coverage on any forms furnished to employees before January 2013. The requirement does not apply to employers filing fewer than 250 Forms W-2 for the previous calendar year. The IRS has clarified that reporting is for informational purposes only and employees will not be taxed on the value of their health benefits.

The Patient Protection Act also requires sponsors of most group health plans to provide a summary of benefits and coverage (SBC) to the plan’s participants and beneficiaries. In the fall, the U.S. Departments of Labor, Treasury and Health and Human Services issued a proposed regulation that would make this requirement effective March 23, 2012. This means employers would not have to comply for 2012 calendar year plan open enrollments. However, if the proposed regulation is adopted, they will have to comply by mid-year HIPAA special enrollment dates.

SBCs must follow a specific format, with four pages and simplified language. Plan sponsors must provide SBCs with open enrollment materials, as well as to new hires and other new enrollees. Plan sponsors must also provide enrollees written notice of any plan changes at least 60 days before their effective date.

Healthcare reform: Employers remain apprehensive about the Patient Protection Act. In a May 2011 survey by Lockton, a consulting firm, 56 percent of employers said it would “significantly increase” their administrative responsibilities, while 26 percent said it would “slightly increase” those responsibilities.

As this issue went to press, the fate of the Act remained unclear. By fall of 2011, 26 states had sued to stop the law from taking effect. In August, a three-judge panel of the U.S. Court of Appeals in Atlanta ruled that the law’s centerpiece, a requirement that individuals buy health insurance, was unconstitutional. In late September, the Department of Justice filed a cert petition asking the Supreme Court to review the 2-1 decision. This action makes it likely the U.S. Supreme Court will hear a case on healthcare reform in late 2011 or early 2012.

If you have any questions on managing your employee health benefits for 2012, please contact us.

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The information presented and conclusions within are based solely upon our best judgment and analysis.  It is not guaranteed information, but is intended to provide accurate and authoritative information in regard to the subject matter covered.  It does not necessarily reflect all available data, and is provided with the understanding that we are not rendering legal, accounting, or tax advice.  Any web links/addresses are current at time of publication but subject to change.  This material is being reproduced with the permission of the publisher via a paid subscription by Insurance One Management, Inc. dba Don Crawford & Associates, Midland, TX.

©2011 Smart’s Publishing – Employee Benefits Report – Volume 9, Number 11 – All Rights Reserved. – Website: http://www.smartspublishing.com

Health Care Reform puts limits on Limited Benefit Plans (Mini-Med Plans):

In Health Care Reform on February 3, 2011 at 6:11 pm

Although limited benefit medical plans (also called “mini-medical” plans) have existed for nearly 30 years, healthcare reform is likely to bring about their demise by 2014, unless the law is changed or repealed. If your organization currently offers a limited benefit plan, here’s what you need to know now…and what to look for in 2014.

The Patient Protection and Affordable Care Act (PPACA) requires new or existing group health plans to provide minimum annual limits of at least $750,000 for “essential health benefits” in 2011.

The minimum limit increases to $1.25 million in 2012 and $2 million in 2013. For plan years beginning on or after January 1, 2014, group plans will no longer be able to put annual limits on essential health benefits.

By definition, limited benefit plans usually provide annual limits of much less than the new $750,000 threshold—sometimes as little as $2,000 per year. This means that limited benefit plans do not comply with the PPACA.

Limited benefit plans often offer lower-cost coverage to part-time workers, seasonal workers and volunteers who otherwise might not be able to afford coverage at all. For this reason, regulations implementing the PPACA allow waivers of the minimum annual limits requirement if compliance would “result in a significant decrease in access to benefits or a significant increase in premiums.” Health plans or insurers offering a limited benefit plan must apply to the U.S. Department of Health and Human Services for a waiver.  If your organization currently offers an insured limited benefit plan, your insurer has likely applied for a waiver. Waivers are good for one year, but will not be available for plans beginning after January 1, 2014.

When it receives waiver approval, a group health plan or health insurer must notify current and eligible members that their plan does not comply with the provisions of the Affordable Care Act. The Office of Consumer Information and Insurance Oversight (OCIIO) developed a model notice, which reads (in part) as follows:

The Affordable Care Act prohibits health plans from applying arbitrary dollar limits for coverage for key benefits. This year, if a plan applies a dollar limit on the coverage it provides for key benefits in a year, that limit must be at least $750,000.

Your health insurance coverage, offered by [name of group health plan or health insurance issuer], does not meet the minimum standards required by the Affordable Care Act described above. Instead, it puts an annual limit of: [dollar amount] on [all covered benefits] and/or [dollar amount(s)] on [which covered benefits – notice should describe all annual limits that apply].

In order to apply the lower limits described above, your health plan requested a waiver of the requirement that coverage for key benefits be at least $750,000 this year. That waiver was granted by the U.S. Department of Health and Human Services based on your health plan’s representation that providing $750,000 in coverage for key benefits this year would result in a significant increase in your premiums or a significant decrease in your access to benefits. This waiver is valid for one year.

If the lower limits are a concern, there may be other options for health care coverage available to you and your family members.

Other low-cost health options

Some employers that offered limited benefit plans in the past are switching to fixed indemnity plans on renewal. These plans qualify as a supplemental plan under healthcare reform—therefore, the minimum annual benefit limits under the PPACA do not apply.

For example, a hospital indemnity policy is a supplemental policy that pays cash benefits when the insured is hospitalized for a non-occupational injury or illness.

Unlike medical plans, which pay benefits according to expenses incurred, a hospital indemnity plan pays a flat benefit whenever the insured is hospitalized for a non-occupational injury or illness. Hospital indemnity plans may pay benefits on a per-confinement basis or a per diem basis. The first type pays a flat dollar amount for each hospital confinement, typically ranging from $1,000 to $2,000. Many plan sponsors select limits that correspond with deductibles on their major medical plan. The second type pays a fixed benefit for each day of hospitalization, usually about $100 per day. Each plan type has annual maximums.

Indemnity plans differ from major medical coverage in several ways. First, benefits go directly to the insured rather than the healthcare provider. The insured can use benefits however he chooses. The claim process for these policies is relatively simple—the insured simply provides proof of hospitalization, and the insurer will pay benefits. Under a major medical policy, insured individuals must file a claim with their insurer, which evaluates the claim to make sure it is covered, then makes payment directly to the healthcare provider as reimbursement. (Many providers will file a claim on behalf of the insured.)

Indemnity policies—like all supplemental policies—don’t replace major medical plans. They “wrap around” and complement basic health insurance.

If you are interested in providing lower-cost basic health insurance coverage to your employees, a high-deductible health plan linked to a health savings account (HSA) could offer a solution. High-deductible plans can provide coverage for catastrophic illness/accident, while workers can use funds in the linked HSA to pay for unreimbursed medical expenses.

Either the employer, the employee or both can make tax-exempt contributions to the HSA. However, the employee owns the HSA, so balances are fully portable. Balances can accumulate year to year indefinitely and tax-free.

You can further tailor your health benefit program by offering supplemental benefits to wrap around the basic health plan. These programs, such as hospital indemnity plans, pharmacy indemnity plans and others, can help bridge the gaps in high-deductible health plans. Many are available on a voluntary (employee-paid) basis. For more information on the many health benefit options available, please contact us.

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The information presented and conclusions within are based solely upon our best judgment and analysis.  It is not guaranteed information, but is intended to provide accurate and authoritative information in regard to the subject matter covered.  It does not necessarily reflect all available data, and is provided with the understanding that we are not rendering legal, accounting, or tax advice.  Any web links/addresses are current at time of publication but subject to change.  This material is being reproduced with the permission of the publisher via a paid subscription by Insurance One Management, Inc. dba Don Crawford & Associates, Midland, TX.

©2011 Smart’s Publishing – Employee Benefits Report – Volume 9, Number 2 – All Rights Reserved. – Website: http://www.smartspublishing.com

Preventive Benefit Changes and Your Health Plan under PPACA:

In Health Care Reform, Preventive Care on February 3, 2011 at 6:03 pm

The Patient Protection and Affordable Care Act (PPACA) requires most group health plans that are not “grandfathered” to cover certain evidence-based preventive services with no copayments or cost-sharing. This includes screenings, check-ups and patient counseling to prevent illnesses, disease or other health problems.

Covering preventive care services with no cost-sharing sounds like a good idea. Allowing your employees to schedule annual exams or certain screenings without having to pay out-of-pocket could encourage more of them to do so.

In theory, the increase in preventive services will lower healthcare costs in the long term, by catching certain illnesses and conditions early, when treatment costs less. However, nothing is really free. Experts estimate the cost of covering these preventive care services with no cost-sharing—along with the additional treatments and follow-up care likely to result—will add another 1 to 3 percent to your group health premiums.

News stories, healthcare providers and others are telling the public that healthcare reform laws require group and individual insurance plans to cover preventive treatments with no deductible, co-payment or coinsurance. They may fail to explain that this requirement doesn’t apply to grandfathered plans, those already in existence when the PPACA was enacted on March 23, 2010. If your organization’s plan is grandfathered and does not waive cost-sharing for preventive treatments, you will need to educate your employees.

The PPACA does not address instances when there are changes to the insurance carrier offering the plan (e.g., new corporate owner); it is not clear whether organizational changes would make grandfathered plans into new plans. If any of these changes have occurred to your organization’s plan, please check with your carrier or contact us—the preventive care and other provisions of the PPACA might apply. We can also help with employee benefit education—please contact us for more information.

What’s Covered

What preventive care services qualify for coverage with no cost-sharing under healthcare reform?

The preventive care provisions of the PPACA give insureds under qualifying group plans “free” access to preventive services such as:

  • Blood pressure, diabetes and cholesterol tests;
  • Many cancer screenings, including mammograms and colonoscopies;
  • Counseling on such topics as quitting smoking, losing weight, eating healthfully, treating  depression and reducing alcohol use;
  • Routine vaccinations against diseases such as measles, polio or meningitis;
  • Flu and pneumonia shots;
  • Counseling, screening and vaccines to ensure healthy pregnancies;
  • Regular well-baby and well-child visits, from
    birth to age 21.

Availability of benefits might vary depending on age, gender and other risk factors.

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The information presented and conclusions within are based solely upon our best judgment and analysis.  It is not guaranteed information, but is intended to provide accurate and authoritative information in regard to the subject matter covered.  It does not necessarily reflect all available data, and is provided with the understanding that we are not rendering legal, accounting, or tax advice.  Any web links/addresses are current at time of publication but subject to change.  This material is being reproduced with the permission of the publisher via a paid subscription by Insurance One Management, Inc. dba Don Crawford & Associates, Midland, TX.

©2011 Smart’s Publishing – Employee Benefits Report – Volume 9, Number 2 – All Rights Reserved. – Website: http://www.smartspublishing.com

Health Care Reform Bill “Surprise” – 1099 Nightmare:

In Health Care Reform on January 24, 2011 at 5:29 pm

– An article from Bloomberg BusinessWeek regarding a clause buried in the health care reform bill that requires more tax forms, and small business will bear the brunt of it.

– H.R. 5297: Senate Nixes 1099 Fix

– Three Senate Democrats say they will support efforts to repeal the broad new Form 1099 tax reporting law – but only if they get a clean bill from the House.

– Senators Reid and Baucus introduce ’1099 Fix’ Bill

Addressing the timing of the application of the PPACA provisions prohibiting insured group health plans from discriminating in favor of highly compensated individuals:

In Health Care Reform on January 5, 2011 at 12:22 am

The Patient Protection and Affordable Care Act (PPACA) included a provision that prohibited non-grandfathered group health plans from offering coverage that discriminated in favor of highly compensated individuals. The IRS released Notice 2011-01 on December 23, 2010, which indicates the IRS, Department of Labor and the Department of Health and Human Services will not require compliance with this non-discrimination provision until these Departments are able to issue further regulations or other guidance on the topic.

– An article from TaxArticles.info

– IRS Notice 2011-1

– An article from Employee Benefit News

– IRS Temporarily Suspends Compliance With Non-Discrimination Rules

Personal Health Account debit card users can still use their cards to buy “doctor-prescribed” over-the-counter (OTC) drugs at a wide range of stores after Jan. 15, 2011, IRS says:

In Health Care Reform, Pharmacy, Rx on January 5, 2011 at 12:17 am

– An article from LifeAndHealthInsurancenews.com

IRS finalizes Small Business Health Care Tax Credit:

In Health Care Reform on December 6, 2010 at 9:11 pm

– An article from Employee Benefit News

– Breaking down the small business tax credit [Podcast]

Texas Department of Insurance selects UnitedHealthcare to provide insurance for new ‘HealthyTexas’ program:

In Health Care Reform on December 2, 2010 at 5:18 pm

HealthyTexas, an employer-based program, is designed to help uninsured small-business owners offer health insurance to their employees and families.

• HealthyTexas uses a state-funded pool to reimburse carriers for above-average health care claims costs. Because of this public/private partnership, HealthyTexas premiums should be on average approximately 25% to 30% lower than commercial market plans.

• HealthyTexas features a streamlined application and enrollment process. Since health status does not impact the rates for this guarantee-issue program, there is no medical underwriting or rate penalties for pre-existing conditions.

• HealthyTexas plans are for groups with 2-50 eligible employees and will be available for Jan. 1, 2011 case effective groups.

• To qualify for HealthyTexas, groups must meet the following criteria:
1) Employer must be located in Texas and must qualify as a small business with 2-50 eligible employees
2) Employers must not have provided group insurance 12 months prior to HealthyTexas application
3) At least 30% of employees must receive annual wages at or below the federal poverty level ($32,490 in 2010)
4) 60% of eligible employees must enroll with at least one of them being under the federal poverty level.
5) Employer must pay at least 50% of the premium costs for employees

• Visit www.healthytexasuhc.com to learn more about this program.

To get an immediate HealthyTexas quote as well as determine if a company is eligible for a small business tax credit, please contact us toll free at: 1-800-373-4255 x106, or e-mail us at:  dalw@doncrawford.com

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Click the link below (or cut and paste the link below into your web browser) to view a presentation by Josh Willson, Vice President of Small Business Sales and Account Management, which includes:

• Details of the HealthyTexas program
• The UnitedHealthcare HealthyTexas plans
• Quoting and installing cases with UnitedHealthcare

– UHC online info. regarding Healthy Texas program

– Healthy Texas FAQ

Groups Can Shop Around and Not Lose Their Grandfathered Status under PPACA:

In Health Care Reform on November 16, 2010 at 2:34 pm

This is a big deal…good decision Uncle Sam!!!

[Amended grandfathered status rules]

[Grandfathered health plans can change insurers]

[Eased Health-Law Rules Help Employers]

Senate to Consider 1099 Proposal Under PPACA:

In Health Care Reform on November 16, 2010 at 2:34 pm

UPDATE: Senate rejects 1099 filing repeal – AGAIN! (11/30/10)

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This needs to change! In it’s current form, it will put a strangle on businesses of all sizes…not well conceived at all!