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

GUIDANCE ISSUED ON ACA’S SUMMARY

The Affordable Care Act (ACA) requires each employer group health plan to provide a 4-page summary of its benefits to all individuals who are eligible for coverage.  This requirement takes effect on March 23, 2012 (two years after the enactment of the ACA).  The three agencies charged with implementing many of the ACA’s requirements have just issued proposed regulations, along with templates of proposed formats, under which a plan may furnish this new “summary of benefits and coverage” (SBC). Under the proposed rules, employers or plan administrators (for self-funded plans) and insurers (for insured plans) must provide participants and beneficiaries with SBCs detailing, in a “culturally and linguistically appropriate manner,” simple and consistent information about health plan benefits and coverage.  Conceding that this cannot be done in only four pages, the agencies propose to read the statutory reference to “four pages” as four double-sided pages (i.e., eight pages).  Plans also must provide a separate glossary with uniform definitions of specific medical and coverage-related terms. Each SBC must include the following: Uniform definitions of standard insurance terms and medical terms; A description of the coverage, including cost sharing, for certain benefit categories; Exceptions, reductions, and limitations on coverage; Cost-sharing provisions of the coverage, including deductible, coinsurance, and copayment obligations; Renewability and continuation of coverage provisions; Coverage examples illustrating three common benefit scenarios; Beginning January 1, 2014, a statement as to whether the plan provides “minimum essential coverage” (a determination that will be important under the “Exchanges” that are to be established as of that date); A statement that the SBC is only a summary and that the plan document, policy, or certificate of insurance should be consulted to determine the governing contractual provisions of the coverage; A contact number to call with questions and an Internet address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained; An Internet address or directions for obtaining a list of network providers, if applicable; An Internet address or directions for obtaining information about the prescription drug formulary, if applicable; An Internet address to access and review the uniform glossary; and Premium information (or the cost of coverage under self-insured plans). The SBC templates were prepared by the National Association of Insurance Commissioners (NAIC), and even the NAIC concedes that they will need some tweaking before they can be used by a self-funded plan.  They include not only a blank template, but also detailed instructions for completing the template and a sample of an SBC with the blanks completed. The templates also include the glossary of uniform definitions, which would have to be used without modification.  Both the templates and the uniform definitions are designed to allow individuals (and employers looking to purchase a health insurance policy) to more easily compare the provisions of multiple plans or policies on an apples-to-apples basis. Group health plans must provide SBCs as a part of their written enrollment materials (or if none, upon eligibility for enrollment); upon a change in information included in the SBC; upon a special enrollment event; and within seven days of a request.  SBCs need only be provided with respect to benefit packages in which a participant or beneficiary is enrolled, unless an individual requests an SBC for another option as to which he or she is eligible. SBCs may be furnished in paper form or electronically.  For ERISA plans, SBCs may be delivered electronically so long as the Department of Labor’s electronic disclosure safe-harbor requirements are satisfied.  Group health plan sponsors should note that the obligation to provide SBCs is in addition to any current duty to furnish ERISA summary plan descriptions, summaries of material modifications, or other disclosures. The proposed rules also require plans to give covered individuals at least 60 days’ advance notice of any mid-year material modifications that affect SBC content.  For this purpose, a “modification” includes not only a benefit reduction, but also a benefit improvement.  A plan (or its administrator) that willfully fails to provide an SBC may be fined up to $1,000 for each affected individual. Comments on the proposed rules are due by October 21, 2011.  The agencies specifically request input on special considerations for self-funded plans and the feasibility of meeting the March 23, 2012, deadline to begin providing SBCs.  It appears likely that changes will be made to the proposed rules; therefore, group health plans should pay close attention to any changes in the final guidance, which should be issued within the next several months.

Expanding Access to Preventive Services for Women

Affordable Care Act Rules on Expanding Access to Preventive Services for Women

New private health plans must cover the guidelines on women’s preventive services with no cost sharing in plan years starting on or after August 1, 2012.

Additional women’s preventive services that will be covered without cost sharing requirements include:           

• Well-woman visits: This would include an annual well-woman preventive care visit for adult women to obtain the recommended preventive services, and additional visits if women and their providers determine they are necessary. These visits will help women and their doctors determine what preventive services are appropriate, and set up a plan to help women get the care they need to be healthy.
• Gestational diabetes screening: This screening is for women 24 to 28 weeks pregnant, and those at high risk of developing gestational diabetes. It will help improve the health of mothers and babies because women who have gestational diabetes have an increased risk of developing type 2 diabetes in the future. In addition, the children of women with gestational diabetes are at significantly increased risk of being overweight and insulin-resistant throughout childhood.
• HPV DNA testing: Women who are 30 or older will have access to high-risk human papillomavirus (HPV) DNA testing every three years, regardless of pap smear results.  Early screening, detection, and treatment have been shown to help reduce the prevalence of cervical cancer.
• STI counseling, and HIV screening and counseling: Sexually-active women will have access to annual counseling on HIV and sexually transmitted infections (STIs). These sessions have been shown to reduce risky behavior in patients, yet only 28% of women aged 18 to 44 years reported that they had discussed STIs with a doctor or nurse. In addition, women are at increased risk of contracting HIV/AIDS. From 1999 to 2003, the CDC reported a 15% increase in AIDS cases among women, and a 1% increase among men. 
• Contraception and contraceptive counseling: Women will have access to all Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling. These recommendations do not include abortifacient drugs. Most workers in employer-sponsored plans are currently covered for contraceptives. Family planning services are an essential preventive service for women and critical to appropriately spacing and ensuring intended pregnancies, which results in improved maternal health and better birth outcomes.
• Breastfeeding support, supplies, and counseling: Pregnant and postpartum women will have access to comprehensive lactation support and counseling from trained providers, as well as breastfeeding equipment. Breastfeeding is one of the most effective preventive measures mothers can take to protect their children’s and their own health. One of the barriers for breastfeeding is the cost of purchasing or renting breast pumps and nursing related supplies.
• Domestic violence screening: Screening and counseling for interpersonal and domestic violence should be provided for all women. An estimated 25% of women in the U.S. report being targets of intimate partner violence during their lifetimes. Screening is effective in the early detection and effectiveness of interventions to increase the safety of abused women. 

UnitedHealthcare/Oxford Contract with East End Hospitals in Jeopardy of Cancellation

The East End Health Alliance Hospitals (Southampton, Peconic Bay and Eastern Long Island) and UnitedHealthcare/Oxford are currently in good faith efforts to negotiate a new contract.  If they are unable to reach an agreement the current agreement may terminate on July 15, 2011.

In the event of a contract termination, the State of New York requires insurance carriers and hospitals to observe a two month “cooling off period,” which is simply a period of time after the termination of a contract when fully insured commercial and Medicare members can still access the terminated hospitals on an in-network basis in the hopes that the hospital and the carrier can reach a new agreement.

Since this cooling off period does not apply to commercial self-funded groups and members, in the event of a termination, EEHA would become non-participating for those members on July 15, 2011. For fully insured commercial, Medicare and Medicaid members, EEHA, and physicians without admitting privileges somewhere other than an EEHA hospital, would become non-participating on September 15, 2011

UnitedHealthcare/Oxford will have Transitional Care guidelines in place so members who have scheduled or ongoing medical treatments at EEHA hospitals will continue to get care as appropriate.

Fully insured commercial, Medicare and Medicaid members would continue to have access to EEHA hospitals on an in-network basis through the New York State cooling off period, which would end September 15, 2011. Transitional Care may be available after the cooling off period in accordance with the member’s Certificate of Coverage.

After July 14, 2011, a primary care physician or specialist should not refer members to an EEHA hospital for any treatment or test. Instead, members should be referred to one of the major neighboring hospitals in the network listed below.

Brookhaven Memorial, John T. Mather Hospital, St. Charles Hospital, Stony Brook University Medical Center, St. Catherine of Siena Medical Center and Southside Hospital.