Implementation Delay for Employer Mandate & Update on Supreme Court Rulings

The White House Administration announced on July 2, 2013, that they would be delaying the Employer Mandate portion of Healthcare Reform legislation until 2015.  The Employer Mandate requires employers with 50 or more full-time or full-time equivalent employees to offer a health insurance plan to employees that is affordable and meets the minimum actuarial value established by the Federal government.  Employers that do not comply with this regulation will be subject to fines and penalties.  A key component of the regulation is additional reporting requirements to the government by employers.  The government has acknowledged the complexity of these reporting requirements for employers and has decided to delay the implementation for one year.  The government hopes to provide employers with further guidance sometime this summer. This announcement leaves unchanged other provisions of the law such as the individual mandate which requires most Americans to carry health insurance.  Employees will still be allowed to buy their own health insurance through a state exchange; with the only change being that their employers won't be penalized next year if they do so.

Another important ruling was handed down by the U.S. Supreme Court on June 26, 2013.  This ruling identifies Section 3 of the Defense of Marriage Act to be unconstitutional.  Section 3 did not permit the marriage between two individuals of the same gender.  Same-sex marriages were recognized as legal by 12 states and the District of Columbia at the time of the ruling.  The decision does not force same-sex marriage on the states, which choose not to recognize same-sex marriage.  The impact of the ruling on employee benefit plans is significant.

For employer’s who operate in a state that currently allows or acknowledges same sex marriage, the following rules will apply. 

• Employers who offer a benefits program must not discriminate between spouses of the same sex or spouses of the opposite sex in regards to the benefits that are offered.  Spouses of the same sex are now entitled to the same benefits. 
• Employees and their spouse who participate in their company’s Section 125 plan are now eligible to receive their spouse’s contribution on a pre-tax basis.  
• Employers will now be responsible to offer continuation of coverage (COBRA) to an eligible spouse. 
• The same sex spouse will also now be entitled to their partner’s 401(k) benefit if he or she should happen to pass away. 
• Employees must be permitted to take family and medical leave to care for an ill same-sex spouse.

The healthcare and benefits industry will be constantly changing over the next several months.  To make sure your company is up to date with the latest rulings and regulations, please visit our Best Bottom Line articles for the most up to date information.  Please feel free to contact our office as well with any questions regarding these two significant announcements.

Thank you.

Employer Notice Regarding Health Insurance Exchanges

Under the Patient Protection and Affordable Care Act (PPACA), health benefit exchanges will be operational on Jan. 1, 2014. PPACA requires employers to provide a notice to all benefits eligible employees prior to the beginning date of the exchange.

The notice informs employees about the existence of the health benefits exchange and gives a description of the services provided by the exchange. The notice also explains how the employee may be eligible for a premium tax credit or a cost-sharing reduction if the employer's plan does not meet certain requirements. The notice informs employees that if they purchase a qualified health plan through the exchange, they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of the employer contribution to employer-provided coverage may be excludable for federal income tax purposes. Lastly, the notice includes contact information for customer service resources within the exchange, and an explanation of appeal rights.  The notification requirement will take effect on October 1, 2013 and penalties apply for noncompliance.

Employers will need to provide new employees the notice within 14 days of their start date.  For current employees, employers will need to provide the notice to their employees no later than October 1, 2013.  For employees who may be electing COBRA, employers must also provide the notice with their COBRA letter as well.

Earlier this year, the Department of Labor provided employers with sample “Notices” to use if their company offered health insurance or if they did not offer health insurance.  Employers will be able to use this sample “Notice” until the Department of Labor creates a final version “Notice” for all employers to use.  Please click here to view the sample “Notice”.  Employers can click here to review the guidelines regarding the exchange notice.  If your company does not offer health insurance, please click here to view the “Notice” you have to provide to your employee population.

The notice must be provided in writing to all benefits eligible employees.  Alternatively, it may be provided electronically if the requirements of the DOL's electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are met.

If your company has any questions regarding these “Notices” or has general questions regarding the new Health Care Reform laws, please feel free to contact Ipswich Bay Advisors at our offices at 978.777.6554.

Thank you.

How To Obtain and Use A Referral With Your HMO Health Insurance Plan

Medical procedures and services can be expensive especially if your doctor is not contracted with your health insurance carrier.  With all the changes in health care plan options, employees sometimes get stuck with medical expenses because they did not follow the rules of the HMO plan.  Here is a great refresher for using the referral services of the HMO plan.

Knowing your health insurance plan and which providers you can and cannot see is a great way to keep your medical costs down.  If you are currently enrolled in a HMO plan, you are required to select a primary care provider.  A primary care provider is a doctor who you will see for your annual physical, sick visits, or any injuries you may have throughout the year.  Your primary care provider is the one who will determine if your illness or injury is severe enough that it would require you to see a specialist.

In a HMO plan, you cannot see a specialist without a referral from your primary care provider.  If you went to a specialist without a referral, you would be responsible for the full cost of the appointment.  If your primary care provider determines you need to see a specialist, he or she will refer you to a specialist who is in the network.  By referring you to a specialist who is in the network, this allows you to only be responsible for a small copayment for the appointment.  Typically, the primary care provider is responsible for coordinating the referral with the health insurance company and the referring doctor.  Members who are new to HMO plans may think they can go to any doctor they want.  However, if they choose a doctor who is not in the network or receive care from a specialist without a referral, they will responsible for the full cost of the appointment or procedure.

To learn more about HMO plans & referrals and how they work, feel free to contact our office at (978)-777-6554.

Thank you.

Form I-9 Revised

There was a new Employment Eligibility Verification Form I-9 form made available to employers on Friday, March, 8 2013.  For companies that will be hiring new employees, the new Form I-9 should be used during the hiring process.  If an employer plans on rehiring any former employees, the employer must use the revised Form I-9 as well.  The new Form I-9 will be coded in the bottom right hand corner of the document.  To verify you have the most up to date Form I-9, please make sure the code being used is (Rev. 03/08/13)N.

There are several differences between the revised Form I-9 and the old one.  The new revised Form I-9 provides the new hire with more detailed and in depth instructions.  Unlike the old I-9 forms, the new form is compiled into two pages with added fields for the new hire to enter in his or her e-mail address and phone number.  Employers will still be allowed to use the old I-9 forms which are coded as (Rev. 08/07/09Y or 02/02/09N).  Employers will only be able to use these old forms until Tuesday, May 7, 2013.  After this date, employers will have to transition to the new revised I-9 forms.

If you have not obtained a copy of the revised Form I-9, please visit the U.S. Citizens and Immigration Services website.  Once you are at this website, please click the I-9 central link which is located under the Verification tab on the right hand side of the website.  For any questions regarding the new Form I-9, please contact Ipswich Bay Advisors at (978)-777-6554.

Thank you. 

2013 Massachusetts Insurance Mandates

Massachusetts appears to be ahead of the pack when it comes to health care reform compared to some other states across the U.S.  Massachusetts has already implemented health insurance exchanges and cooperatives which allow individuals to shop for more affordable health care.  Roughly around 98% of the population in Massachusetts is covered under a health insurance plan.  This percentage is among the nations highest which allows our state to be a model for all the other states.  Recently, Massachusetts has also passed into law these new health insurance mandates which will take effect in January 2013.

Coverage for Hearing Aids

Children who are affected by hearing loss or hearing impairments will be relieved to know health insurance carriers must provide coverage for their hearing aids.  Insurance carriers must provide up to $2,000 in coverage to go towards a single hearing aid or any services associated with obtaining a hearing aid.  If a family meets the $2,000 maximum, they will have to wait 3 years for this amount to reset.  This new benefit will be available for any individual who is younger than 21 years of age.

Cleft Lip/Palate Treatment

Health insurance carriers are required to cover certain services for children who are affected by a cleft lip or cleft palate.  Some services that will now be covered are restorative dental and medical surgeries as well as speech therapy.  Coverage will be provided for any child who is under the age of 18.  Please check with your health or dental insurance carrier to see what services or procedures would be covered.

Physician Assistant’s

When health insurance members have to go see their primary care provider for any services or procedures, they will now have the opportunity to have these procedures covered by the doctor’s physician assistant.  Health insurance carriers are now required to consider physician assistants equal to a primary care provider.

Coverage for Birth Control

For employer sponsored health insurance plans that renew on or after August 1, 2012 some birth control methods will be covered at 100% with no copayment to the member.  This new regulation is part of the Affordable Care Act and Health Care Reform.  To see if your birth control method is covered at no cost to you, please call your health insurance carrier member service team on the back of your ID card.

If you have any questions regarding these new state mandates, please contact our office at (978)-777-6554.

Thank You.

Summary of Benefits and Coverage

With health care reform being upheld by the Supreme Court Justices, there will be numerous new health care regulations that will be established over the coming years.  One particular regulation that will be required for all health insurance carriers is to provide employers with a Summary of Benefits and Coverage.  Health insurance carriers will be responsible to distribute these documents to each employer who offers a health insurance plan.  This regulation will take effect on September 23, 2012 for all health insurance plans that will be renewing on or after this date.

This Summary of Benefits and Coverage document will explain each provision of the plan in detail and the plan costs associated with each service.  The document will also highlight any procedures that may not be covered under the plan.  The reason for this summary is to inform all employees and participants of the plan about the services and plan costs associated with the health insurance plan.  It will also highlight any plan changes that may have taken place during the plan policy year.  It is up to the employer to distribute these documents to the employees once they have received them from the insurance carrier.

The Summary of Benefits and Coverage will be distributed either through e-mail to the plan administrator or via direct mail.  The health insurance carriers will be distributing these documents within a reasonable amount of time before the health insurance plan renews.  If the employer decides to switch health insurance plan designs, the health insurance carrier will provide an updated summary once the change has been processed.  To get employees started on understanding their health plan, we have included a link that will bring you to a sample glossary of terms document. (http://cciio.cms.gov/resources/files/Files2/02102012/uniform-glossary-final.pdf).  For more information about the Summary of Benefits and Coverage please contact our office at (978)-777-6554.

Thank You.

2012 Employer Health Care Trends

Over the past decade, how individuals receive and pay for their healthcare is changing. As the Supreme Court prepares to decide on the constitutionality of the Patient Protection and Affordable Care Act (PPACA), employers recognize the ruling will have a significant impact on health care in the years to come. Confused by the pending legislation, employers are also fearful of rising insurance costs and are hesitant to make any significant changes to their current plans. However, despite this uncertainty, there are a few strategies employers can employ to manage the changing tide.

2012 Health Care Trends

According to the 2011 annual survey of medical cost trends by PriceWaterhouseCoopers (PwC), on average US employers can expect health care cost to rise 8.5 percent in 2012. This is 1.5 percent below the Aon Hewitt 2011 Health Care Trend survey which estimated national medical care costs will increase by 10 percent. These figures are lower than 2010 and 2011figures which were between 12 percent – 14 percent. Much of the slowdown is due to the recession and thus not unexpected health experts say. But some of it seems to be attributable to changing behavior by consumers and providers of health care — meaning the lower rates of growth might persist even as the economy picks up.

Since Medicare and Medicaid are two of the largest contributors to the country’s long-term debts, slower growth in health costs could reduce the pressure for enormous spending cuts or tax increases. In 2009 and 2010, total nationwide health care spending grew less than 4 percent per year.  This was the slowest annual pace in more than five decades, according to the latest numbers from the Centers for Medicaid and Medicare Services. After years of taking up a growing share of economic activity, health spending held steady in 2010, at 17.9 percent of the gross domestic product.

The growth rate has also slowed as millions of Americans lost insurance coverage along with their jobs. Worried about job security, employees may have feared taking time off work for doctor’s visits or surgical procedures, or skipped non-urgent care when money was tight. Still, the slowdown was sharper than health economists expected.  A broad bipartisan range of academics, hospital administrators and policy experts have started to wonder— if doctors and patients have begun to change their behavior in ways that bend the so-called cost curve.  If so, it was happening just as the new health care law was coming into force and before the Supreme Court could weigh in on it or the voters could pronounce their own verdict at the polls.

While health cost growth may have slowed, the premiums for insurance still need to catch up.  Confirming this, actuarial firm Milliman released its 2011 Milliman Medical index in May 2011. The report shows health care cost for a typical U.S. family of four covered by a preferred provider organization (PPO) in 2011 was $19,393. This reflects an increase of 7.3 percent over 2010. Even though the percentage of increase was the lowest in recent years, the increase in total dollars—$1,319 in 2011—was the highest in the history of the study. Of this $1,319, employers covered about 40% of the increase ($641) while employees shouldered the rest—$403 in payroll contributions and $275 in additional cost sharing.

Employers React to Rising Costs & Health Care Reform

Here are four strategies that have been growing in popularity over the past several years.  These strategies have been successful in containing insurance premiums and overall costs:

1.    Consumer Directed Health Plans

2.    Accountable Care Organizations

3.    Micro Market Networks

4.    Employee Wellness Programs

Consumer Directed Health Plans

Employers continue to explore consumer‐directed health care plans (CDHC). These plans are structured to give employees greater control over their personal health care costs, thereby promoting caution before they utilize expensive procedures or request unnecessary treatments.

CDHC plans offer higher deductible plan options, coupled with a Health Savings Account (HSA) or Health Reimbursement Account (HRA).  Employees will pay for out‐of-pocket medical costs with their self‐funded plans.

Accountable Care Organizations

An Accountable Care Organization (ACO) is a network of health care organizations, hospitals and doctors that unite in order to provide coordinated medical care to patients. Until recently, health care in America has mostly been fragmented. Hospitals, pharmacies, skilled nurses, primary care and specialty doctors operated as separate entities across the health spectrum. ACOs were created as a result of the Health Care Reform and are meant to integrate, coordinate and be held accountable for an individual’s health car.  This will generate better medical outcomes at a lower cost. Studies performed on current ACOs including Mayo Clinic, Cleveland Clinic and Intermountain indicate by delivering efficient health care this will help reduce health care costs by as much as 50%. By driving out inefficiencies, reducing unnecessary hospital admissions and applying the best approaches to clinical care, ACOs provide a promising picture of affordable health care.

In Massachusetts, the Massachusetts Health Care Cost Trends - Premiums and Expenditures study released in May 2012 also concluded health care costs growth has slowed in Massachusetts and is consistent with the national slowing trend due primarily to ACOs.

Micro Market Networks

Micro Market Networks operate in a similar vein to ACOs, without being quite as integrated. Many insurance companies, including Blue Cross, Harvard, Tufts and Fallon, are working on the initial phases of Micro Market Networks.  These carriers are offering a variety of options including the purchase of an independent plan that only includes access to a particular group of self-contained health providers. The expectation over the coming two years is many regional networks of this sort will develop. The hope is these Micro Market Networks will operate in a similar fashion to ACOs.  These networks will improve efficiencies and drive costs down.  Currently in MA, these Micro networks are seeing from a 3 percent to 12 percent reduction in premiums.

Employee Wellness Programs

As premiums continue to increase, employers are looking to promote employee wellness programs to offset costs. Well documented research indicates a balanced lifestyle – including a proper diet, exercise and leisure time – leads to healthier and more productive employees. In turn, the employees’ medical utilization is reduced and health premiums drop. Additionally, a healthy workforce will have fewer sick days, be on time more often, and remain focused throughout the day. In contrast, other studies conducted on workplace stress indicate a stressful unbalanced lifestyle can lead to health risks and impact insurance premiums.

A major source of rising workplace health costs is the declining health of employees.  A new Gallup poll reports an astonishing six of every seven full-time employees in the US are overweight or suffer from a chronic health condition.  This is a terrible waste of human capital and an enormous burden on the bottom line, costing employers more than $153 billion a year in absenteeism alone.  We already know wellness programs can reduce costs.  A study last year by Harvard health economist Katherine Baicker found medical costs fell by $3.27 for every dollar spent on wellness programs.

Conclusion

While the future of health care reform remains uncertain and the cost of insurance will remain a large financial responsibility for employers, employers can take action to help reign in costs.  We have outlined a few strategies employers can explore to help manage these cost increases.  If you would like to learn more about how these strategies can work for your organization, please contact our office at 978.777.6554.