October 2, 2015
Small Group Definition Will Not Change Nationally in 2016 –
States Have Flexibility

On October 1, Congress approved a bill repealing the Affordable Care Act (ACA) provision expanding the small group employer definition, which was scheduled to change from 1-50 to 1-100 employees on January 1, 2016. President Obama is expected to sign the bill into law next week.
The repeal legislation, the Protecting Affordable Coverage for Employers (PACE) Act, maintains the current 1-50 employee definition of a small employer and gives states flexibility to expand the small employer definition up to 100 employees if they determine market conditions necessitate the change.
The District of Columbia and several states – CA, CO, MD, NY, VA and VT – have enacted laws or issued regulatory guidance changing their small group definition to the 1-100 employee definition in 2016.* With the repeal of this ACA provision, these states may revise their laws/regulatory actions to, once again, conform to the federal definition of small employer. Until then, these laws/regulatory actions remain in effect.
Expansion of the small group definition subjects non-grandfathered insured plans of employers with 51-100 employees to the ACA community-rating standards and requires them to cover all Essential Health Benefits. These requirements result in higher costs and less carrier choice. Non-grandfathered insured plans of employers with 51-100 employees in states that keep their small group definition at 1-50 employees are not subject to these requirements.
It’s important to note that U.S-issued expatriate plans were already exempt from the ACA’s small group definition change. Plans of any group that employs more than 50 global lives will continue to be considered large group plans.

This is a reminder that all ALE’s (Applicable Large Employer’s) must comply with the “Pay or Play” rules outlined in the Affordable Care Act (ACA) beginning January 1, 2016 and the IRS Code Section 6056 reporting beginning in 2016, for the 2015 calendar year.

‘ALE’ is defined as an Employer who has an average of 50 or more Full Time Equivalent (FTE) employees during the prior calendar year (please see “Are you an ALE” ).

Note: A full time equivalent employee (FTE) is a combination of employees, each of whom individually is not a full time employee (has fewer than 30 hours of service per week) but who, in combination, are equivalent to a full time employee.

Pay or Play Rules for Groups 50-99 go into effect January 1, 2016
The Employer shared responsibility provision of the Affordable Care Act (ACA) requires ALE’s to offer affordable, minimum health insurance coverage to their full time employees, or pay a penalty. ALEs will face penalties if one or more of their full-time employees obtain a premium tax credit or cost-sharing reduction through an Exchange. An individual may be eligible for a premium tax credit or cost-sharing reduction either because the ALE does not offer coverage, or the ALE offers coverage that is either not “affordable” or does not provide “minimum value.”

IRS Code 6056 Reporting for 2015
The Individual shared responsibility provision of the ACA states that every person must have basic health insurance, also referred to as Minimum Essential Coverage (MEC), or face a penalty.

In order for the IRS to confirm if ALE’s and Individuals offer and/or has Minimal Essential Coverage (MEC), the IRS requires those who provide MEC to comply with IRS Code Section 6056 reporting.

Who

• ALE’s that offer MEC coverage

What

• MEC data to the IRS using Form 1095-C
• MEC statements to workers using Form 1094-B (Insurance Carriers will supply these directly to members)
o Due to members by January 31 (like W-2 or 1099)

When

• IRS reporting is due starting in 2016 for 2015 coverage year and every year there after
o February 28 due for paper filing
o March 31 due for electronic filing
 Mandatory electronic filing for groups over 250
o For the 2016 filing, the IRS has stated that they will not penalize employers who file, but have missing or inaccurate data.

Please click here to view the IRS guidelines on the 6056 Reporting. The tracking of the MEC data should be done through your payroll administrator, so please contact them to be sure they are tracking this data for you, if you haven’t already.

Although we know how many employees are covered under your group benefit plan, that may not represent how many actual employees you have. If you have more than 50 employees on payroll (part time, full time, etc.) please contact us so we can help determine if you need to comply with these guidelines.

Keep in mind that Corporate Strategies, Inc. now offers payroll services, and our low fees include MEC tracking. If you would like to learn more about our Payroll and/or HR services, please contact your Account Executive or Account Manager.

We strive to keep you informed of the ever-changing world of healthcare reform and relative legislation, and are always available to address any questions or concerns you may have.
We welcome your feedback, so please contact any one of us at any time!

HealthCareFinance.com
July 06,2015

Aetna buys Humana for $37 billion in largest-ever insurance merger.
The deal is also the fourth-largest consolidation in the American economy this year.

Aetna will pay $37 billion cash and stock to acquire Humana, the companies announced on July 3, in what will be the biggest health insurance merger to ever hit the industry.

“The acquisition of Humana aligns two great companies,” said Aetna chairman and CEO Mark Bertolini. “The complementary combination brings together Humana’s growing Medicare Advantage business with Aetna’s diversified portfolio and commercial capabilities to create a company serving the most seniors in the Medicare Advantage program and the second-largest managed care company in the United States.”

With Humana valued at $37 billion, or $230 per share, the deal is the fourth-largest consolidation in the American economy this year, ranking behind HJ Heinz’s $44 billion takeover of Kraft Foods and the pending $79 billion Charter-Time Warner deal. The acquisition is the largest consolidation in the global insurance industry, exceeding Swiss property and casualty giant ACE’s proposed $28 billion takeover of the Chubb Group and the $1.6 billion Anthem-WellPoint merger in 2004. Aetna said it will cover the costs through a combination of cash and stock, based on the company’s closing stock price of $125 on July 2.

[Also: Anthem, United eye big deals as game of thrones raises concerns]

The deal is part of an expected wave of consolidation in managed care and health insurance. Anthem may chase an acquisition of Cigna after its earlier $50 billion bid was rejected. Meanwhile, Centene, a growing St. Louis-based Medicaid managed care company, is going ahead with a $6.8 billion acquisition of Health Net.

Aetna told investors that the deal should yield $1.25 billion in 2018, along with higher operating earnings in 2017.

For health systems, the insurance industry consolidation brings cost containment and competitive pressures but it also creates opportunities for collaboration. A large part of Aetna’s accountable care strategy has involved new health plan networks designed and co-branded with health systems like Banner Health and Catholic Health Initiatives. Aetna is also helping some hospital systems launch their own health plans for their workforce and for regional employers.

If the deal is approved as a whole by regulators, Humana will bring Aetna’s membership to more than 33 million. Humana will add 3 million seniors on Medicare Advantage, as well as 4.3 million Medicare Part D drug plan customers, 1.1 million individual members (including some high-cost Affordable Care Act exchange populations in markets like Georgia), 1.8 million members in employer-sponsored plans, and more than 3 million military plan members

Oregon’s insurance regulator has approved big premium increases sought by health plans for 2016 under the health law, and in some cases ordered higher raises than insurers requested, signaling that the cost of insurance for people who buy it on their own could jump after two years of relatively modest growth.

Around the U.S., the biggest insurers have proposed hefty premium increases for the year ahead, based on what they say they now know about the costs of covering people newly enrolled under the Affordable Care Act. Supporters of the law have been counting on state regulators to rein in hefty premium increases for the law’s third year in full effect.

But in Oregon, the first state to announce final 2016 rates, Insurance Commissioner Laura Cali approved an average 25.6% increase for Moda Health Plan Inc., the biggest plan on the state’s health exchange. She also gave a green light to average increases of 30% or more for four smaller companies. And she required plans that hadn’t attempted to raise rates to do so anyway, including Kaiser Foundation Health Plan of the Northwest, by an average of 8.3%.

Ms. Cali said the changes were necessary for plans to stay afloat. State actuaries had reviewed claims incurred in 2014 and concluded they exceeded premiums collected that year by $127 million, or an average of $624 a person who signed up for insurance on their own, she said.

WSJ July 06, 2015
The U.S. Food and Drug Administration approved Vertex Pharmaceuticals Inc.’s cystic-fibrosis drug Orkambi, which could treat as many as 8,500 patients in the U. S.—but at a whopping annual wholesale cost of $259,000 per patient.

The drug, a twice-daily oral tablet for patients 12 years and older, expands the company’s reach in the treatment of cystic fibrosis, the progressive lung disease that often kills patients in their 20s. Vertex said the new drug would be available within days. Orkambi is aimed at treating patients with a genetic mutation that is the leading cause of cystic fibrosis.

The U.S. Food and Drug Administration approved Orkambi Thursday. The Vertex pill, taken twice per day, is targeted at a genetic defect found in almost half of cystic fibrosis patients. Orkambi sales are expected to transform Vertex into a sustainably profitable company for the first time since its founding in 1989.

In approving Orkambi, the FDA concurred with the positive recommendation from a panel of outside experts who voted 12-1 in May that two large clinical trials conducted by Vertex provided sufficient evidence to support the efficacy and safety of the drug. European drug regulators are also reviewing Orkambi with an approval decision expected in the fourth quarter.