Category Archives: Health Care Reform News

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Association Based Health Insurance – A Cure For Small Group?

Under the Affordable Care Act (ACA), employers that do not meet the 50 or more full-time or full-time equivalent employee threshold to be Applicable Large Employers (ALEs), are not required to offer health coverage. Nor do they face penalties. Not surprisingly, as a result, smaller businesses often do not offer coverage.

New regulations proposed by the U.S. Department of Labor (DOL) want to change that dynamic. And in a thriving economy, where unemployment means retention is key, health insurance is a key driver in employee acquisition and retention.

Up to 11 million Americans working for small businesses or who are sole proprietors and their families lack employer-sponsored insurance. The DOL hopes new rules on HOW healthcare plans are purchased will close the gap of uninsured Americans; without eliminating options available in the healthcare marketplace.

New Rules

The proposed regulations will allow small business health plans—known as Association Health Plans (AHP)—to expand under The Employee Retirement Income Security Act of 1974 (ERISA). This may allow the self-employed and other small businesses to band together to form their own associations for the purposes of providing healthcare coverage.

AHPs would be required to accept all applicants and could not deny individuals with pre-existing conditions or charge more for people who are sick. However, they could reduce prescription drug coverage and increase coverage in other categories to compensate for the reduction, the effect of which would be to increase costs for chronic care patients.

The employer members of these plans would need to be in the same trade, industry, line of business, profession, or to have their principal place of business in the same state, or, if in multiple states, in the same metropolitan area.

Under the current regulations, an AHP is considered a single plan only if the association has a purpose or function unrelated to offering healthcare benefits and the employer members have a common economic interest. So, few options exist and all have to comply with the ACA’s “essential benefit rules”.

The end result of these new rules, or so the thinking goes, is that this will make premiums more affordable. The trade-off is that these health insurance plans would be less extensive then what is usually required by health insurance plans offered by the current marketplace. Lots of review and legislation await the proposed offering of new association plans. However, they offer a glimmer of home to the problem of rising health insurance costs.

Trump Signs Executive Order Amending ACA – Will it Help?

EXPANDING ACCESS TO MORE AFFORDABLE OPTIONS

President Donald J. Trump is taking action to increase the healthcare choices for millions of Americans, potentially allowing some employers to join together across State lines to offer coverage.

* President Trump signed an Executive Order to reform the United States healthcare system to take the first steps to expand choices and alternatives to Obamacare plans and increase competition to bring down costs for consumers.

* The order directs the Secretary of Labor to consider expanding access to Association Health Plans (AHPs), which could potentially allow American employers to form groups across State lines.

o A broader interpretation of the Employee Retirement Income Security Act (ERISA) could potentially allow employers in the same line of business anywhere in the country to join together to offer healthcare coverage to their employees.

It could potentially allow employers to form AHPs through existing organizations, or create new ones for the express purpose of offering group insurance.

o By potentially making it easier for employers to band together, workers could have access to a broader range of insurance options at lower rates in the large group market.

o Employers participating in an AHP cannot exclude any employee from joining the plan and cannot develop premiums based on health conditions.

* The order directs the Departments of the Treasury, Labor, and Health and Human Services to consider expanding coverage through low cost short-term limited duration insurance (STLDI).

o STLDI is not subject to costly Obamacare mandates and rules. One study found that on average STLDI costs one-third the price of the cheapest Obamacare plans.

o Despite its low cost, STLDI typically features broad provider networks and high coverage limits.

o The main groups who benefit from STLDI are people between jobs, people in counties with only a single insurer offering exchange plans, people with limited coverage networks, and people who missed the open enrollment period but still want insurance.

* The order directs the Departments of the Treasury, Labor, and Health and Human Services to consider changes to Health Reimbursement Arrangements (HRAs) so employers can make better use of them for their employees.

o HRAs are employer-funded accounts that reimburse employees for healthcare expenses, including deductibles and copayments.

o The IRS does not count funds contributed to an HRA as taxable income.

o Expanded HRAs could potentially give American workers greater flexibility and control over how to finance their healthcare needs.

OBAMACARE IS FAILING: The status quo is not delivering quality healthcare options for the American people, who are facing higher premiums and fewer options.

* The percentage of workers at small firms receiving coverage through their employer has declined from nearly half in 2010 to about one-third in 2017.

* In 2018, more than 1,500 counties (nearly 50 percent of all counties) are projected to have only one option on their individual insurance exchanges, according to the Centers for Medicare and Medicaid Services.

o This means 2.6 million Americans, or nearly 30 percent of exchange participants, will be left without a choice of insurers.

* From 2013 to 2017, average premiums for individual health insurance plans have doubled, increasing by $2,928 according to the Department of Health and Human Services.

o During this period, every State using www.healthcare.gov saw individual insurance premiums increase.

* Americans are departing the Obamacare exchanges and millions are choosing to pay the law’s penalty instead.

o 500,000 fewer Americans enrolled in an Obamacare plan in 2017 compared to the prior year.

o Current exchange enrollment is 60% below what the Congressional Budget Office expected when the law took effect.

o 6.7 million Americans chose to pay the Obamacare penalty in 2015 rather than purchase insurance on the exchanges. 37% of penalized households made less than $25,000, and 79% of penalized households made less than $50,000

American Workers Don’t Understand Their Benefits – Mass Mutual

American Workers Don’t Understand Their Benefits – October 2015

While most Americans understand the importance of their personal finances and employee benefits, 40% say they know little or nothing about these benefits, according to a study from MassMutual. Most people seemingly have their financial house in order, saying they prioritize understanding their personal finances (77%), having enough medical insurance (74%) and being on track to retire comfortably (65%). Yet 38% say they know little or nothing about their employer-provided benefits, such as healthcare, life insurance, 401(k) retirement plans, and other benefits. Forty-two percent say they are clueless about whether or not they are on track to retire comfortably.

While many people say they do just fine managing their finances, 37% find doing so somewhat or very difficult and 40% say personal financial problems are a distraction at work, according to the study. Some groups find personal finance more difficult than others, including Millennials (58%), parents (50%), Generation X (47%), women (44%) and those with annual incomes of $50,000 or less (44%). Baby Boomers were the least likely to encounter difficulty in managing their finances (28%) or being distracted at work by financial issues (24%).

Eighty percent do not use an online financial tool to manage their retirement, healthcare and other forms of insurance. However, 73% say they would be likely to use such a tool if it were available free, especially if it were provided by a trusted and respected financial services company.

Millennials (82%), parents (80%) and Gen Xers (78%) are especially interested in using an online financial tool. Thirty-two percent said they would be more likely to enroll in their employee benefits if they could use an online tool to help them figure out their needs.

How the FDA Is Driving Drug Price Hikes – National Center Policy Analysis Reports

HEALTHCARE
How the FDA Is Driving Drug Price Hikes October 2015

The FDA’s backlog of 4,000 generic drug applications is hindering competitors who could hold prices down, according to a study by the National Center for Policy Analysis (NCPA). Also, older generic drugs are often made on aging production lines, which are sometimes shut down for maintenance. Lines can be stopped after the manufacturer is warned by the FDA that the facility is out of compliance with good manufacturing practices. The resulting shortage often drives prices higher.

Thousands of drugs predate the FDA’s approval process required under the 1938 Food Author and Drug & Cosmetics Act; many were grandfathered, but never officially approved. NCPA senior fellow Devon Herrick says, “The FDA wants these cheap drugs off the market and replaced with more costly approved versions from any drug makers willing to conduct clinical studies on them.”

State regulations also bite consumers in the wallet. Generic substitution laws in some states make it harder for consumers to save. In the face of rising drug prices, many states have passed laws that worsen the situation, such as banning efficient pharmacy networks, restricting mail-order pharmacies, and restricting maximum allowable cost lists.

The NCPA study highlights several ways to lower America’s drug bills, including the following:
•Clear the FDA’s backlog of applications to manufacture generic drugs.
•Resist passing perverse regulations designed to protect local business.
•Promote competition in the production of generic medications.

“Much of the recent rise in the price of generic drugs can be directly linked to regulatory and legal causes,” says Herrick. This study is Part II of Herrick’s in-depth examination of the rising costs of generic drugs. For more information, visit ncpa.org.

PACE Bill changes ACA – No impact in California Anticipated 10/08/2015

Under the Affordable Care Act (“ACA”), the definition of a small group for purposes of non-grandfathered insured coverage was set to change from an employer with 50 or fewer employees to an employer with 100 or fewer employees, effective for plan years beginning on or after January 1, 2016.

On October 7, 2015, the President signed into law bipartisan legislation, the Protecting Affordable Coverage for Employees
(“PACE”) Act, which maintains the “50 or fewer” definition of a small employer. The PACE Act contains language that permits a state to use the expanded small group definition (employers with 100 or fewer employees). At this point, it is unclear whether states will retain the “50 or fewer” definition or opt to expand the small group market.

What does this mean?

If a state follows the federal government and retains the existing small group definition (50 or fewer employees), employers with insured non-grandfathered plans in the 51-100 employee market will not be subject to the following:

• The requirement that all of the essential health benefits are provided under the group health plan and the actuarial
value of coverage cannot fall below a Bronze level plan (60% actuarial value); and
• New underwriting requirements that limit rating variations to:
• The benefit level and tier of coverage (e.g., single vs. family);
• Geographic area;
• Age (shall not vary by more than a 3 to 1 for adults); and
• Tobacco use (shall not vary by more than 1.5 to 1).

This change has no effect on other aspects the ACA, including the Employer Penalty and reporting on Forms 1094-C and