COBRA Extensions Possible Twist?

The legislation to extend and enhance the COBRA subsidy that was introduced two weeks ago in the House and last week in the Senate has a possible twist that cost employers more money.  The proposed legislation – S.2730 in the Senate and HR. 3930 in the House – would continue COBRA healthcare coverage for another six months for those who have been laid off and their families.

The twist is that the subsidy would increase from 65% to 75% what’s unclear is whether the increase would apply to all COBRA participant that are currently receiving the subsidy or the newly unemployed or both.

Regardless employers will need to prepare for the changes and administration of this extension.  I will keep everyone in the loop as to the status of this change.

 

Final Regulations on Excise Taxes for Group Health Plans Released

Group health plans are responsible for compliance with a number of federal laws governing issues such as continuation coverage and portability of health coverage. If a group health plan does not comply with applicable group health plan requirements, the employer maintaining the plan is subject to an excise tax. Employers are also subject to an excise tax if they do not satisfy comparable contribution rules for health savings accounts (“HSAs”) and Archer medical savings accounts (“MSAs”). The Internal Revenue Service (IRS) has issued final regulations on reporting and paying the applicable excise tax, which are effective January 1, 2010. 

Group Health Plan Rules Subject to Excise Tax

Generally, an excise tax of $100 per individual per day will apply to violations of the following rules (“Group Health Plan Requirements”):

• Continuation coverage (COBRA);
• Portability and nondiscrimination for health coverage (HIPAA);
• Genetic information nondiscrimination (GINA);
• Parity between mental health benefits and medical/surgical benefits (Mental Health Parity and Addiction Equity Act);
• Minimum hospital lengths of stay in connection with childbirth (Newborns’ and Mothers’ Health Protection Act); and
• Continued coverage for post-secondary students with a serious medical condition (Michelle’s Law).

For violations of the comparable contribution rules for HSAs and Archer MSAs, the excise tax will generally be 35 percent of the amount contributed by the employer to the Archer MSAs or the HSAs of all employees within the applicable calendar year.

For more information got to the IRS Regs

GINA Regulations

The Internal Revenue Service (IRS), Department of Labor (DOL) and Health and Human Services (HHS) recently released regulations under the Genetic Information Nondiscrimination Act of 2008 (GINA). GINA amended HIPAA to prohibit employer-sponsored health plans (or insurers) from collecting, using or disclosing genetic information concerning employees or their family members either (1) before or in connection with enrollment or, (2) at any time, for “underwriting purposes.”

For purposes of these rules, “genetic information” is broadly defined to include family medical history. “Underwriting purposes” is broadly defined to include anything that relates to a determination of eligibility for benefits or the determination of premiums or other contribution amounts, including discounts, rebates, incentives and copays.

To Whom Do These Regulations Apply?

All employer-sponsored group health plans except for plans that are considered “excepted benefits” for purposes of the HIPAA portability rules and federal government plans.

What Do These New Regulations Provide?

The new regulations provide that wellness programs that otherwise meet the requirements of the prior HIPAA wellness program regulations violate GINA if they provide rewards for completing health risk assessments (often called
“HRAs”) that request genetic information, including questions about family medical history.

The regulations also provide that a health risk assessment that includes questions about family medical history and that is completed prior to or in connection with enrollment violates GINA, even if no incentive is provided for completing the assessment. The regulations provide that, for purposes of determining whether a health plan expense is medically appropriate, plans may continue to use the minimum necessary amount of the patient’s genetic information.

When Do These Regulations Go Into Effect?

These regulations are effective for plan years beginning on or after December 7, 2009.  

How Do These Regulations Impact Employers?

Naturally, all employers with, or considering, wellness programs and/or health risk assessments should review those practices (and all related notices and election forms) in light of these new GINA rules and the continually evolving Equal Employer Opportunity Commission (EEOC) position on the impact of the Americans with Disabilities Act (ADA).

In two informal opinion letters issued this year, the EEOC has indicated that any health risk assessment that includes disability-related inquiries (and most health risk assessments include such questions) likely violates the ADA unless the health risk assessment is completely voluntary. Based on this still-informal position, the EEOC would not consider a health risk assessment in connection with an employer’s health plan to be voluntary if there is any significant penalty imposed for failing to complete it (or if any significant incentive is offered for completing it). All employers that offer an incentive or impose a penalty in connection with a health risk assessment or similar wellness programs that might involve disability-related questions should consider how this EEOC position would apply to their plans.

2010 HSA Indexed Contribution Limits

For High Deducible Health Plans & Health Savings Accounts

The Treasury Department and Internal Revenue Service released IRS 2009-29 which lists the new indexed amounts, adjusted for inflation, for High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs) under Internal Revenue Code section 223(g).

To whom do These New Inflated Amounts Apply?

These rates will apply to any employer offering an HSA and/or a qualified HDHP. Merely because a plan has high deductibles, will not in and of itself, make the plan an HDHP. In order for a plan to be considered a qualified HDHP, in addition to other requirements, the plan must satisfy minimum deductible and maximum out-of-pocket requirements. 

What are the New Inflated Amounts?

For  HSAs: The annual HSA contribution amount for individual coverage is $3,050 and $6,150 for family coverage. Catch-up contributions continue to be allowed for HSA eligible individuals age 55 and over. The annual catch-up contribution amount is $1,000.

For an HDHP: In order for a plan to be considered a qualified HDHP, for 2010, the minimum deductible cannot be less than $1,200 for an individual or $2,400 for a family. The maximum out-of-pocket cannot exceed $5,950 for an individual or $11,900 for a family. 

When do These New Inflated Amounts Go Into Effect?

The new inflated amounts will apply to calendar years starting January 1, 2010.

How do These New Inflated Amounts Impact Employers?

For any employer who currently offers an HSA and/or a qualified HDHP, employers must amend their plan documents and other marketing materials to reflect these new inflated amounts. Any employers who are considering adding an HSA and/or HDHP, should remember to build those plans keeping the above limits in mind.

House Health Care Reform Bill: Towers Perrin’s Cheat Sheet for Employers

If you need to quickly digest the 2,000-odd page health care reform bill passed by the House last week, you’re in luck. Towers Perrin has boiled down the key points — provisions that would have a significant impact on employers and could appear in final legislation — to a four-page cheat sheet. Stay tuned for updates as the Senate re-writes this bill.

House Health Care Reform cheat sheet

House Health Care Reform Podcast

Congress Introduces COBRA Subsidy Expansion Bills

Two separate bills have been introduced, one which is more expansive than the other. The smaller of the two bills is HR 3966, which would only extend the ARRA subsidy for involuntary terminations and loss of coverage occurring through June 30, 2010.  However, the larger bill is HR 3930, and includes the following provisions:

Qualifying events with the 18-month COBRA period would be extended to 24 months for any termination of employment (voluntary or involuntary) or reduction of hours that occurred during the 21-month period starting on April 1, 2008, and ending on December 31, 2009. Further, if an individual’s COBRA coverage already expired before the law is passed, affected qualified beneficiaries would have a second election right to obtain the additional six months of coverage.

The ARRA subsidy would be extended for involuntary terminations and loss of coverage occurring through June 30, 2010. Further, all ARRA subsidies would continue for up to 15 months (current 9 months plus an additional 6 months under the proposal), but all subsidies would end by December 31, 2010 regardless of the new 15-month rule.

These bills have been introduced in the House and are currently in committee; however, they have not reached the House floor for a full vote.  The Senators Brown and Casey have introduced S.2730 in the Senate, a bill which extends COBRA as would HR 3930, but would also increae the subsidy from 65% TO 75%.  Stay tuned to the Health and Wellness as a Business Strategy blog for updates on these bills.

Updated information provided by Joanne Flora.

Health Care Bill Update

On October 13, 2009, the Senate Finance Committee approved Senator Max Baucus’s (D-Montana) health care bill, the America’s Healthy Future Act, by a vote of 14 to 9. Senator Olympia Snowe (R-Maine) was the only Republican to vote with the committee’s 13 Democrats in favor of the bill. The Congressional Budget Office (CBO) estimated the cost of the bill at $829 billion over 10 years.

The bill will now be fully merged with Sen. Kennedy’s HELP bill with hands-on participation from Senate Majority Leader Harry Reid and key Administration officials. Some of the most contentious issues to be resolved in the merger include the fate of the HELP bill’s government option, the Finance Committee’s weak individual mandate penalties and new taxes and fees on the insurance industry.  

The stated aims of the legislation are to lower costs, provide quality, affordable health care coverage, make purchasing health insurance easier, prohibit discrimination due to health factors and improve the way the health care system delivers care. However, many in Congress are divided on whether the bill can meet these objectives. Opponents of the bill have argued that it will increase costs for many Americans, rather than making health care more affordable.  

Stayed tuned for MANY updates as this bill is vollyed about  the Senate and House.

NYS Health Coverage Expansion Through Age 29

Effective September 1, 2009  the “Age 29” law, permits eligible young adults through the age of 29 to continue or obtain coverage through a parent’s group policy. Insurers will notify employees of this benefit. Employees or their eligible dependents may then elect the benefit and pay the premium, which cannot be more than 100% of the single premium rate. This benefit, referred to here as the “young adult option,” is separate and distinct from the “make-available” requirement. It is called the young adult option benefit because it permits eligible young adults to continue their coverage through a parent’s health insurance coverage once they reach the maximum age of dependency under the policy. Young adults may also elect this coverage when they newly meet the eligibility criteria, such as if they lose eligibility for group health insurance coverage.

“Age 29″  Frequently asked questions

Three New Federal Healthcare Mandates Will Impact Healthcare Costs

American’s with Disabilities Act (ADA) Amendments

• • Effective October 3, 2009 for all large and small groups.
  • Hearing Aids:
    • Coverage of hearing aids will be standard.
    • Dollar limits mirror Durable Medical Equipment (DME) and Prosthetics and vary by state and plan
    • Limited to one device as follows:
      • Connecticut every 12 months
      • New Jersey every 24 months
      • New York every 3 years 

 Mental Health/Substance Use Parity

• • Effective October 3, 2009 for large (51+ lives) groups.
  • The new law does not allow more restrictive financial requirements for mental health and substance use disorder coverage than for any other medical expense.
  • It specifically states that deductibles, copayments, coinsurance, and out-of-pocket expenses must be in parity.
  • A plan may still have an aggregate lifetime limit and an aggregate annual limit that is applied to both medical and mental health/substance use disorder benefits.
  • The law also prohibits treatment limits on mental health and substance use disorder benefits that are more restrictive than those of medical/surgical benefits. The law specifically requires the following limitations to be in parity:
    • Limits on frequency of treatment
    • Limits on number of visits
    • Limits on number of days of coverage
    • Other similar limits on the scope or duration of coverage.

 Michelle’s Law

• • Effective October 9, 2009 for individual plans, large, and small groups.
  • Prevents dependent children covered under a group health plan from losing coverage if they are forced to take a medically necessary leave of absence from school

Governor Patterson Slams Healthcare Premium Costs

 

Health care premiums will be increasing as a result of the State Legislature approving the Governor’s proposed increases in taxes, fees and assessments on your health benefits as part of his Deficit Reduction Plan. This increase may very well come prior to your next annual renewal.

 

In short, as part of the Deficit Reduction Plan, the Governor has added to the State Premium tax and has imposed a new tax on certain physician services.

 

The insurance carriers are required to collect these taxes, fees and assessments and there will be no exceptions or extensions. The estimated overall percentage is thought to be between 1% and 5% which will be passed along to the carriers’ clients. At this point, the carriers are determining how and when they will roll this out.  For more details on these taxes see my Feb 4th post. 

 

We will monitor this situation and advise you as we get additional information