Not-for-Profit Board Governance & Compliance Update

As a key player in the nonprofit community, New York recently took big steps to combat bad habits and under-supported initiatives and regulations. In a recent report drafted by the Leadership Committee for Nonprofit Revitalization (“Committee”) and released by New York Attorney General Eric T. Schneiderman (“Attorney General”), among all issues addressed, strengthening board governance and accountability seemed to be the elephant in the room.

Adam Reiss, CPA and Citrin Cooperman’s  Practice Leader of the firms Not-for-Profit Organizations and Employee Benefit Plans Practices has addressed the two initiatives designed around improvement of board governance and developed an “Annual Board Governance and Compliance Checklist”.  To review this article and check list click here.

Changing the Conversation: Health vs. Healthcare

The statistics are foreboding: since 1980, growth in healthcare spending has outpaced all other consumer spending by a factor of nearly three, while increasing from 5% to 18% of GDP. Looking just 3 years ahead, this figure is projected to reach at least 22%.  Despite so much of the national conversation focused on managing “healthcare”, employers remain confronted with:

  • Healthcare renewal costs that are unsustainable
  • Plan design changes that have reduced benefits
  • Employee dissatisfaction with reduced benefits and increased costs

To understand why a shift in the national conversation from healthcare to health is necessary, one needs only to consider the implications of the data provided by our medical professionals:

  • Nearly 75% of Americans are overweight, and 33%  qualify as obese
  • Cardiovascular disease and stroke are now the leading cause of death
  • 17.5 million Americans will be afflicted with diabetes, and 25.1 million with cardiovascular disease
  • 1 in 3 children born after 2000 will develop diabetes by age 50
  • 29% of adults with high blood pressure are undiagnosed
  • 70% of all claim costs are the direct results of behavior
  • 74% of all claims are confined to four chronic conditions: cardiovascular disease, diabetes, cancer and obesity

For those business owners seeking real solutions to rising healthcare costs, we propose the need to change the conversation on how to improve the health of those who are employed.

Understanding that the cost of improving health is far lower than the healthcare costs associated with combating increased disease, companies must learn how to build a culture of health improvement and engage employees and families in order to achieve sustainability in healthcare costs. To do so, employers can take a “measures-based approach” to identify risk within the employee population, develop strategies to facilitate positive change among high risk individuals, and strategies to keep the healthy population healthy.

By learning and adopting new strategies that emphasize and reward employees and their families to embrace healthy lifestyle choices, employers can help employees and their families become far more efficient healthcare consumers, and move towards a zero trend health plan (for our next discussion).

Thomson Reuters Health Care Spending Index: Insurance Costs Climb 4.0% for Q3 2011 

Is Obesity an Infectious Disease?

Changing the Conversation: Health vs. Healthcare, is an editorial series designed to advance the health improvement model as a business strategy, supported by medical research, academic and corporate case studies. Scott Bradley is a Sr. Vice President with Cook, Hall & Hyde, Inc., a health and welfare advocate supporting middle market employers to design, implement and manage employee health improvement and insurance programs.     

Obama Administration Allows States to Define Health Benefits in 2014

The Obama administration said Friday that it would not define a single uniform set of “essential health benefits” that must be provided by insurers for tens of millions of Americans.

Instead, it will allow each state to specify the benefits within broad categories. The new law lists 10 categories of “essential health benefits” that must be provided by insurance offered in the individual and small-group markets, starting in January 2014. These include preventive care, emergency services, maternity care, hospital and doctors’ services, and prescription drugs.

NY Times article, December 16, 2011

U.S. Surgeon General declares Thanksgiving as “Family Health History Day”

United States Surgeon General Dr. Regina Benjamin today declared Thanksgiving 2011 as the nation’s eighth annual “Family Health History Day,” when families can share information by using the My Family Health Portrait website to gather their family’s health history in one place.

“An important first step in preventing illness and disability is learning about health conditions in our families that may put us at increased risk for diseases such as diabetes, heart disease, some cancers, Alzheimer’s Disease, mental illness and many others.  Discussing health information with other members of your family can often uncover conditions and explanations for health problems which you never knew about, simply because no one ever asked.

My Family Health Portrait is available on the Office of the Surgeon General’s website at https://familyhistory.hhs.gov.  This tool is secure, free and takes about 20 minutes to create your unique family health portrait. Information can be shared with other family members who may not be home for Thanksgiving. They can build on your Family Health Portrait by adding their health information and can choose to share with you.

When you complete the questions, the website creates a personalized “family health tree” that can be saved to your home computer. From there, families may update the information at any time.  Your information remains private.  The federal website does not retain the information once the tool has been used to assemble it. 

Prepare for a Thanksgiving Day conversation by making a list of your relatives including your parents, grandparents, brothers, sisters, and cousins. Because some health conditions skip generations, be sure to talk to your older relatives who may know additional family history. Share this family history information with your doctors, PA or nurse practitioner so they may recommend specific test or treatment plan to prevent or delay disease.

Health Care Reform – Delayed Compliance Date for Summary of Benefits and Coverage

The Patient Protection and Affordable Care Act (PPACA) adds to the list of necessary health plan disclosures by requiring plans and issuers to distribute a summary of benefits and coverage (SBC) to applicants and enrollees. The SBC is intended to be a relatively short document that provides important plan information in plain language so that health consumers can better understand their coverage options. This disclosure requirement applies to both grandfathered and non-grandfathered plans.

On Aug. 22, 2011, the Departments of Health and Human Services, Labor and Treasury (Departments) issued proposed regulations for the SBC. The proposed regulations include guidance on providing and preparing the SBC as well as a proposed template for the SBC. The SBC regulations are not final. The Departments have indicated that they will likely make changes to the SBC regulations before they are finalized.

On Nov. 17, 2011, the Department of Labor (DOL) issued a set of Frequently Asked Questions (FAQs) that addresses when plans and issuers must start providing the SBC. The proposed regulations provided that plans and issuers must start providing the SBC by March 23, 2012. However, in the FAQs, the DOL delays the compliance date for providing the SBC. The DOL provides that plans and issuers can wait to start providing the SBC until after the final regulations are released. Thus, the March 23, 2012 deadline no longer applies.

It is uncertain when the final SBC regulations will be released. However, according to the DOL, plans and issuers will be given sufficient time after the final regulations are released to get ready for complying with the new requirements.

This delay is significant because it gives plans and issuers more time to develop the SBC. Also, because plans and issuers can wait until final regulations are released to complete the SBC, they will not need to prepare the SBC based on the proposed regulations only to have to update it later for the final guidance.

Medicare Part B premiums for 2012 lower than projected

The U.S. Department of Health and Human Services (HHS) announced that Medicare Part B premiums in 2012 will be lower than previously projected and the Part B deductible will decrease by $22. While the Medicare Trustees predicted monthly premiums would be $106.60, premiums will instead be $99.90. Earlier this year, HHS announced that average Medicare Advantage premiums would decrease by four percent and premiums paid for Medicare’s prescription drug plans would remain virtually unchanged.

Thanks to the Affordable Care Act, people with Medicare also receive free preventive services and a 50 percent discount on covered prescription drugs when they enter the prescription drug “donut hole.”  This year, 1.8 million people with Medicare have received cheaper prescription drugs, while nearly 20.5 million Medicare beneficiaries have received a free Annual Wellness Visit or other free preventive services like cancer screenings.

“The Affordable Care Act is helping to keep Medicare strong and affordable,” said HHS Secretary Kathleen Sebelius. “People with Medicare are seeing higher quality benefits, better health care choices, and lower costs. Health reform is also strengthening the Medicare Hospital Insurance Trust Fund and cracking down on Medicare fraud.”

Medicare Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items. In 2012, the “standard” Medicare Part B premium will be $99.90. This is a $15.50 decrease over the standard 2011 premium of $115.40 paid by new enrollees and higher income Medicare beneficiaries and by Medicaid on behalf of low-income enrollees.

The majority of people with Medicare have paid $96.40 per month for Part B since 2008, due to a law that freezes Part B premiums in years where beneficiaries do not receive cost-of-living (COLA) increases in their Social Security checks. In 2012, these people with Medicare will pay the standard Part B premium of $99.90, amounting to a monthly change of $3.50 for most people with Medicare. This increase will be offset for almost all seniors and people with disabilities by the additional income they will receive thanks to the Social Security cost-of-living adjustment (COLA). For example, the average COLA for retired workers will be about $43 a month, which is substantially greater than the $3.50 premium increase for affected beneficiaries. Additionally, the Medicare Part B deductible will be $140, a decrease of $22 from 2011.

“Thanks in part to the Affordable Care Act, people with Medicare are going to have more money in their pockets next year,” said Centers for Medicare & Medicaid Services (CMS) Administrator Donald Berwick, M.D. “With new tools provided by the Affordable Care Act, we are improving how we pay providers, helping patients get the care they need, and spending our health care dollars more wisely.”

Today, CMS also announced modest increases in Medicare Part A monthly premiums as well as the deductible under Part A. Monthly premiums for Medicare Part A, which pays for inpatient hospitals, skilled nursing facilities, and some home health care, are paid by just the 1 percent of beneficiaries who do not otherwise qualify for Medicare. Medicare Part A monthly premiums will be $451 for 2012, an increase of $1 from 2011. The Part A deductible paid by beneficiaries when admitted as a hospital inpatient will be $1,156 in 2012, an increase of $24 from this year’s $1,132 deductible. These changes are well below increases in previous years and general inflation. 

For more information on how seniors are getting more value out of Medicare, please visit: http://www.healthcare.gov/news/factsheets/2011/10/medicare10272011a.html

For more information about the Medicare premiums and deductibles for 2012, please visit: https://www.cms.gov/apps/media/fact_sheets.asp

2012 Annual Benefit Plan and Social Security Limits

2012 Annual Benefit Plan Amounts
Contribution & Benefit Limits 2011 Limit 2012 Limit
Section 401(k), 403(b), or 457(b) annual deferral $16,500 $17,000
SIMPLE plan annual deferral $11,500 $11,500
Section 415 maximums
– annual benefit from                 
   defined benefit plan
$195,000 $200,000
– annual additions to defined
   contribution plan
$49,000 $50,000
Maximum IRA contribution $5,000 $5,000
Catch-up contribution limits
– retirement plan $5,500 $5,500
– SIMPLE plan $2,500 $2,500
– IRA $1,000 $1,000
Compensation Amounts
Annual compensation limit $245,000 $250,000
Grandfathered governmental plan participants $360,000 $375,000
Highly compensated employees
– any employee* $110,000 $115,000**
– 5-percent owner no minimum no minimum
*Employer may elect to limit to top-paid 20%**Due to the look-back rule, first applies in determining HCEs in 2013.
Key employees
– officer $160,000 $165,000
– 1-percent owner $150,000 $150,000
– 5-percent owner no minimum no minimum
Social Security/HSA Limits
Social Security 2011 Limit 2012 Limit
– OASDI taxable wage base $106,800 $110,100
– OASDI tax rate – employer 6.2% 6.2%
– OASDI tax rate – employee 4.2% 6.2%#
– maximum monthly benefit at
   SSRA*
$2,366 $2,513
– cost of living adjustment 0% 3.6%
Maximum income without reducing Social Security retirement benefits
– SSRA* or over no limit no limit
– year individual attains SSRA* $3,140/mo^ $3,240/mo^
– under SSRA* $14,160/yr $14,640/yr
#Subject to legislative change.
*Social Security Retirement Age (age at which an individual may receive an unreduced monthly benefit). 
^No limit on earnings beginning the month an individual attains SSRA.
HSA Limits
Maximum HSA contribution
– individual $3,050 $3,100
– family $6,150 $6,250
Minimum HDHP deductible
– individual $1,200 $1,200
– family $2,400 $2,400
Catch-up contribution limit $1,000 $1,000
  

 

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