Tuesday, December 20, 2011

MERRY CHRISTMAS!!!!!!!!!!!!!!!

I would like to take a moment this Holiday Season and wish you and your family a Very Merry Christmas and prosperous 2012.  Although most of us are happy to see 2011 come to an end, as it has been a trying year for many, I hope you will join me in counting the many blessing God has bestowed upon us.

My Holiday prayer is for success and health, happiness and prosperity for you and your loved ones.

All the best to you and your families.
Brooks Benefit Services, LLC

Monday, December 12, 2011


Under the Affordable Care Act (PPACA), a provision requiring health care insurers and employer-sponsored health plans to furnish a standardized Summary of Benefit and Coverage (SBC) by March, 2012, has been delayed.  This provision has been put on hold because final rules and regulations have yet to be released by the Fed.  Therefore, the Department of Labor determined that carriers and employer-sponored health plans will not be required to issue SBC's until after the final rules and regulations are released.

Monday, November 14, 2011


The US Supreme Court announced that it will hear over 5 hours of oral argument regarding the legality of certain provisions under the health care law (PPACA).  In particular below is the allotted times for each argument to be heard:

  • 90 Minutes-Whether the entire health care law should be terminated if the "Individual Mandate" is ruled unconstitutional. 
  • 120 Minutes-Did Congress have the power under Article 1 of the Constitution to enact the Affordable Care Act? (Article 1 regulates interstate commerce and other laws under Congressional Authority they are able to pass)
  • 60 Minutes-determine if the Supreme Court should rule on whether the individual Mandate Penalty constitutes a tax.  This would thereby trigger a federal statute called the anti-injunction act.  They may not be able to rule on this as there hasn't been any tax levied since this provision doesn't go into effect until 2014 (This is required under the anti-injunction act)
  • 60 Minutes-Determining the Constitutionality of Congress allowing the Federal Government to allow states to gain funding based on their participation in the Laws Health Care Reforms.
 Arguments are slated to be heard sometime in mid-March with decisions possibly by the end of June prior to the summer break. 

Thursday, November 10, 2011





Monday, October 31, 2011


It seems employers are just getting tired of paying for unhealthy lifestyles.  Many companies are instituting wellness programs where if you sign-on and get your blood pressure checked and do some smoking cessation classes or a walk here and there, you get rewards.  Maybe you get $25 or $50 for participation or an umbrella or a beach blanket.  A pat on the back could be just the right kind of encouragement to get employees engaged in a healthier lifestyle.

There is a second school of thought however, and it is shared by companies such as Walmart, and Veridian Credit Union which are going the route of the "stick" versus the "carrot".  These companies are charging employees higher premiums for unhealthy lifestyles.  For those that can't get their obesity or cholesterol in check or stopping the smoking habit, they will pay.  Employers are getting tired of making the healthier employees pay for the bad habits or lack of attention to health issues of the unhealthy employees.

The Cleveland Clinic has decided to cut smoking at their medical centers, refused to hire smokers, implemented a comprehensive wellness plan, gym and weight loss classes.   In addition they reduced premiums to those employees who maintained or improved their health.

It seems as though trying to be "nice" regarding having employees become serious about their health isn't working for some employers.  Under health reform (PPACA), employers will be allowed to have a premium differential of 30% in 2012 and could go as high as 50% in 2014 for healthy versus unhealthy employees.  This means that for some unhealthy employees,  that choose to remain that way, health care could get a lot more expensive for them.

Tuesday, October 18, 2011


The CLASS ACT was on life support.  Any and all  heroic measures have been exhausted and once taken off support, it was unable sustain life.   Last Friday, October 14, 2011, the Obama administration stopped any further advances on the Community Living Assistance Services and Supports (CLASS) Act. under PPACA (Health Reform Law). The repeal of this provision is pending........but it appears to be dead.

The Class Act was a good idea on paper but with the adverse-selection that the program would attract, it was doomed to be a tax payers nightmare. 

On that note, I wish everyone a Happy Halloween!!

Tuesday, October 11, 2011


You remember the CLASS Act (Community Living Services and Supports Program), it's the part of the Health Reform law that created a long-term care program for everyone.  It also had the brakes put on it by the Obama Administration.  The reason for this is that it is an actuary time-bomb.  It would build up reserves over 5 years (during this time nobody can use it) and then, because it has no pre-existing condition limitations, would go quickly into a death-spiral from all the sick people making claims.  As part Health Reform, the CLASS Act also needed to be self-sustaining. 

Interestingly, the CLASS Act is on the books as reducing the federal deficit.  The administration is using premiums that haven't been paid for a program that hasn't been established count as reducing the deficit. 

Anyway, unless they can make this program self-sustaining, it doesn't seem that it's going to be implemented.  At least not anytime in the near future.

Friday, September 23, 2011

PPACA: Should I Care About a Wellness Program for My Company?

The answer to this is maybe.  Many carriers offer some version of a wellness program.  Some may even customize to your population.  They can be very helpful pin-pointing certain illness' that can truly affect your claims. Perhaps a walking program or a smoking cessation campaign would be helpful to your employees.  Much of the time it's about showing your employees that you care.  You care about their physical health, mental health, morale etc.  By doing this you may create a more effective and productive employee who wants to come to work and do a great job.  And at the same time may be reducing your claims exposure which ultimately lowers medical premiums. 

Except if you are in the fully-insured small group market in Maryland.  Since there is no pre-existing condition limitation it doesn't matter how healthy or sick you are and your rates are primarily based on a community pool.  However, if you have a relatively healthy group, you may want to consider partially-self insuring.  These plans protect you from claims like a traditional health insurance plan does, except if you are healthy and use less claims, you may get a refund.  In addition, the initial premiums are typically less costly.  If you have a bad claims year, you are not on the hook for any additional premium and if the renewal is high, you can move back to the fully-insured market.  Besides being friendly to you employee's, wellness programs can help your bottom-line especially if you are partially or fully self-insured. 

In addition, through Health Reform there may be grants for employers who currently haven't established a wellness program.  Also, the success to any wellness program is that the senior management be fully-on board and that there is high participation within the employees.  Wellness programs can be crafted to encourage employees to participate by way of rewards or penalty.

If you haven't had a conversation with your consultant about wellness or partially self-insured plans, you should.  If the are unfamiliar, please give me a call at 410-239-5009.  I'd be happy to discuss.


Tuesday, September 6, 2011


Under the Affordable Care Act each state has been given the authority to evaluate every instance where carriers are requesting increases of greater than 10% in the individual and small group market.  "Rate review will help bring down the cost for small businesses and consumers.  According to healthcare.gov, "Rate review assesses whether proposed increases in health insurance premiums are based on reasonable estimates, reflecting medical cost trends and health care utilization instead of unjustified assumptions that serve to increase the price to the consumer."  Thanks to grants from the Affordable Care Act, Maryland was able to reduce premium increases in 10 of the 22 rate filings approved during the third quarter of 2010.  On September 1, 2011, HHS (Health and Human Services) issued an amendment that extended the above provision to all individual and small group health plans that are sold through associations effective November 1, 2011.

Friday, August 19, 2011

Individual Mandate Ruled Unconstitutional

On June 6th, 2011 a federal appeals court in Cincinnati ruled that the Individual Mandate (the portion of the reform law that states all individuals must have health insurance) was constitutional.  This was the first appellate court to rule on the issue.  Well, on August 12, 2011 a second federal appeals court in Atlanta has ruled the Individual Mandate as unconstitutional.  When ruling, they stated that this provision, although unconstitutional, is "severable" from the rest of the legislation.  This means that the Individual Mandate would be eliminated but the rest of the law would remain. 

Since there are now two federal courts that have ruled on the issue and have split their decision, it makes it much more likely that this issue will be in front of the U.S. Supreme Court as early as the fall with a decision in 2012.

Friday, August 12, 2011

Contraception Now Covered At No Cost Under Health Reform (PPACA)

On August 1, 2011 the Department of Health and Human Services (HHS) issued new policy that will require health plans to include women's preventive services such as well-woman visits, breastfeeding support and services and FDA-Approved contraception.

Under the Health Reform Laws (PPACA) the list of preventive services was expanded (since it wasn't large enough) to include these new benefits without deductible or co-pays.  The expanded benefits include:
  • Well-Women Visits
  • Domestic Violence Screening and Counseling
  • Breastfeeding support, counseling, supplies (including the cost for renting breastfeeding equipment)
  • Annual counseling and screening for HIV for all sexually active women
  • Annual sexually transmitted infection counseling for all sexually active women
  • Screening for gestational diabetes for all pregnant women
  • FDA approved contraception methods, sterilization procedures and contraceptive counseling
Non-Grandfathered and New Health plans will be required to provide the expanded coverage beginning the first plan year that begins on or after August 1, 2012.  I am guessing that regardless of your plan beginning grandfathered or not (here in the state of Maryland), this expansion will be included in all plans.

As a side note, it seems as more and more benefits are being added to health plans, and costs continue to rise because of these forced expansions, insurance companies will be blamed for increasing premiums when the blame should be squarely on the back of our government. 

Friday, July 22, 2011



The Gang of Six, a bipartisan group of senators challenged with trying to cut the deficit, has put the Class Act in its cross-hairs.  This act, in PPACA (Health Reform), was slated to set-up a government run Long-Term Health care Plan.  Some of the key elements of The Class Act include: 
  1. Average premium should be in the $150 per month range (less for youngers, more for olders)
  2. You must pay into the plan for 5 years before accessing any benefits
  3. You must be actively at work at least 3 out of 5 years
  4. Guaranteed Issue (Except for the limitations noted above)
  5. It is a voluntary plan primarily delivered through employers-employers are able to opt-out or opt-in.  If employers opt-in employees area able to opt-out on a case by case basis.
The Gang Of Six wants to repeal the program which in-turn would create $500 Billion in cuts from federal health care programs over the next ten years according to documents provided by the senators at a July 19th, 2011 meeting.

The Class Act has been under scrutiny because people would have to pay in for 5 years before ever being able to access benefits, mostly only the sick would apply, because it's guaranteed issue, creating adverse selection and it's seen as a way for the Federal Government to subsidize Medicaid, something we already pay for.    Also, according to Kent Conrad, (D-ND), Chairman of the Senate Budget Committee, speaking on the sustainability of the Class Act stated "a ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of." 

"The Gang" is also considering major changes in the Tax-Code, Medicare and Social Security.

Monday, July 18, 2011

Free Money For Small Group Wellness Programs!! Maybe.....

If you are thinking of starting a Wellness Program for your small group (Under 100 Employees), there may be funding available for you.  Under PPACA (Health Reform) certain provision have been set-up to fund a five year $200 Billion grant program.  However, with the nations check-book getting a little light, who knows if and when there will be funding available and to what extent. 

Starting with the next fiscal year (October 1, 2011), the PPACA authorizes an appropriation of $200 million over five years (fiscal years 2011 through 2015) for certain small businesses that implement wellness programs.[Section 1201 of H.R. 3590, adding section 2705 to PHSA]
  • A five-year/$200 billion grant program will be available to small employers (less than 100 employees working 25 hours per week) that did not provide a wellness program as of March 23, 2010.  The grants are intended to apply to "comprehensive" wellness programs that include the following components:
  • Health awareness initiatives (including health education, preventive screenings and HRA(Health Risk Assessment)
  • Efforts to maximize employee engagement (including mechanisms to encourage employee participation).
  • Initiatives to change unhealthy behaviors and lifestyle choices (including counseling, seminars, online programs and self-help materials).
  • Supportive environment efforts (including workplace policies to encourage healthy lifestyles, healthy eating, increased physical activity and improved mental health). 
  • It is expected that regulations will be issued to clarify various aspects of the program, such as the criteria for a qualifying wellness program, how to apply for a grant, etc.
Grant application
Eligible employers seeking to participate in the grant program must submit an application to the Secretary of HHS that contains a proposal for a comprehensive workplace wellness program meeting the criteria and requirements listed above.  However, the PPACA fails to indicate whether grants will cover part or all of the cost of a qualifying wellness program. It is anticipated that HHS will issue guidance on the grant application and other details surrounding workplace wellness programs prior to October 2011.

Friday, July 1, 2011

McKinsey Report: Act II

This whole McKinsey report thing has been a mess, and a lot of publicity for McKinsey.  The McKinsey Report was a survey of more than 1,000 employer groups and found that approximately 30% would "definitely" or "probably stop offering employer sponsored health coverage to their employees because it could be less costly to send the employees to the exchange and pay a penalty, if any.  

The White House is still pushing McKinsey to release more information on the findings since the outcome of the McKinsey Report was so different from that of the Congressional Budget Office, RAND or Urban Institutes findings. 

McKinsey commissioned IPSOS, the third largest market and research firm in the world to conduct the survey.  The survey was comprised using employer groups ranging from less that 20 employees to more than 10,000 and from a pool of hundreds of thousands of people in IPSOS databases. 

There are many surveys and some will have countering views.  However, if I am an employer and paying $10,000 a year for my employees health care and they can go to an exchange and get it cheaper while I pay a $2000 penalty, I may just do that.  And so may many other employers.  However, many won't because they may believe that keeping their coverage intact, keeps them more competitive. 

I guess time will tell and we will see what happens in 2014.  Cause if you can't keep the plan you have, as the President promised, it may be big pill to swallow for many people. 

Tuesday, June 14, 2011

McKinsey Report: One Third Of Employers Will Drop Medical Coverage in 2014

Say what?  According to the McKinsey Report a full one third of employers will drop their health coverage because it will be so much more cost effective to pay a fine (or not) and send their employees off for subsidized coverage through the exchanges.  The report was based on a survey of over 1000 employer groups.  The problem is that the Congressional Budget Office estimated that the number will be closer to 7%.....whoops!  Naturally, once the White House got wind of this survey, they were none too happy. 

According to Nancy-Ann DeParle, Deputy Chief of Staff  posted on the White House blog June 8.......“Unfortunately, the [McKinsey] study misses some key points and doesn’t provide the complete picture about how the Affordable Care Act [PPACA] will strengthen the health care system and make it easier for employers to offer high quality coverage to their employees”. 

The White House is diligently trying to push McKinsey to release the scope and breadth of the the study to determine its legitimacy.  McKinsey is pushing back stating that the details of the study are proprietary and cannot be released.

This isn't over..................

McKinsey Quarterly

Friday, May 27, 2011

Maryland Launches New Health Plan Portal

According to Health Reform (PPACA), by 2014 all states must have a health benefit exchange set-up to make health plans to individuals and small businesses.  What appears to be the Maryland Health Care Commission's initial attempt, is their new Health Plan Portal (Virtual Compare) which allows small business with 2-50 employees, to compare plans from several different carriers including:  Carefirst, Aetna, Kaiser, Coventry etc.  At this point it does not allow an employer to purchase coverage through the portal.  Employers are able to contact carriers or health insurance brokers to help them with their plan choices and questions.  Brooks Benefit Services, LLC is listed within the portal. 

Following is a link to the Virtual Compare website: http://mhcc.maryland.gov/virtualcompare

Friday, May 13, 2011

The Cadillac Tax Under PPACA-Is It Discriminatory?

Under Health Reform (PPACA), in 2018 the Cadillac Tax will be implemented.  The Cadillac Tax is a 40% Tax on any amount an employer pays for Health Coverage over $10,200 for an individual and $27,500 for a family.  It would seem that this is suppose to discourage companies from offering premium health plans with all the bells and whistles.  Initially when this provision was inked, Unions and the Federal Government employees were exempt.  However, as of now, Unions have been included in the provision. 

The reason that the Cadillac Tax could be considered discriminatory, at least for small employers in the state of Maryland, is that one of the primary factors that determines cost is age.  For example: A HMO (you need to get referrals) through Carefirst with a $20 Co-pay for Primary Office Visits and $30 for Specialist Visits and a $10-$20-$30 Prescription Plan (hardly a Cadillac plan) would cost a company in Baltimore with an average age of 32, $450 for an Individual and $1260 for a family.  This same plan for a company in Baltimore with an average age of 62 would cost $918 for an individual and $2570 for a family or $11,016 per year for individual and $30,840 per year for a family.  As I understand it there are provisions made for slightly higher triggers for older age groups.  However, these rates are for 2011,  if we consider an 8% trend- increase in medical costs per year, the rate could be 60% higher than it is now, easily breaking through those trigger points simply for being an older group. 

In addition, following this logic (if there is any), this could encourage employers to hire younger employees to keep their average age down, reducing their medical premium and keeping them further away from the Cadillac Tax trigger points.  I guess this would be discrimination to avoid an arguably discriminatory provision in the law?????

Thursday, April 28, 2011

PPACA (Health Reform) and How To Cut Medical Insurance Costs

Under Health Reform (PPACA) and currently in the Maryland Small Group Market (Under 50 Employees), medical plans are guaranteed issue.  This means that when a small group employer puts a medical plan in place there are no questions asked.  Plans are chosen, employees enrolled and thats it.  There are two main criteria used  to establish a rate:  Average age of the employees electing coverage and Location of the Company.  All things being equal, one employer located in the same county as another employer with the same average age will pay the exact same rate for the same medical plan through the same carrier.  The rates that the insurance carrier uses are filed with the State of Maryland and based on pooling.  What this means is that regardless of how much or how little you or your employees use the medical coverage you will pay the exact same rates as other companys with the same demographics because all claims are pooled together.  Now, if your company is sick, then this is a good thing because you are going to benefit from all the healthy people in the pool.  However, if your group is healthy, you are helping to pay for all those sick, unhealthy people.  This is where self-funding or partial self-funding comes in.  For small group plans, partial self-funding is a combination of traditional medical coverage, a claims fund, and stop-loss coverage.  Under a traditional plan you pay your premium whether you use the plan or not.  Under self-funded plans, if you don't use the plan, some of those premium dollars may come back to you.  For example, lets say a 40 employee group pays $200,000 in medical premium per year.  Under a partially self-funded plan $100,000 may go to a claim fund.  To protect your fund there are limits on claims.  One is a specific Stop-Loss Insurance, maybe $10,000 (for specific one-time claims) and Aggregate Stop-Loss Insurance (this amount is the total amount of claims that will be paid out before this coverage kicks in).  If all those dollars aren't used in the plan year, they are paid back to the employer.  If claims exceed this amount, under partially self-funded plans, employers costs are only limited to their premiums paid in.  These plans will become ever more attractive to healthy employer groups as Exchanges are set-up and younger healthy employees may be opting-out to go find cheaper coverage leaving the employer group with older, more costly, employees that will only drive up the costs of their coverage. 

Monday, April 11, 2011

Funding for Free Choice Vouchers Gets Cut in 2011 Budget

Under Health Reform if an employer has over 50 employees and offers "Minimal Essential Coverage", and the the cost for coverage is between 8% and 9.8% of an employees annual income, they, in 2014, could take those employer dollars to the Health Care Exchanges and purchase coverage under the "Free Choice Voucher Program".  Except, that under the latest budget negotiations, funding for the "Free Choice Voucher" has been eliminated.   This means that employees will no longer be able to take those employer health care dollars to the exchanges. 

Also, in agreements made, there will be several studies performed on the impact of several health care reform law provisions including: Impact on Premiums, Comparative Effectiveness (coming in 2012-Non-Government Entity used to gather and disseminate findings to health care decision makers) and Limited Benefit Plans. 

Wednesday, March 30, 2011

Gotta Light?

Fast forward to 2014.  We are now purchasing health insurance through exchanges.  Individual and small business will be able to go to a virtual site, with the help of a navigator (possibly a broker or producer) and purchase medical coverage.  Depending upon your household income, you may also be eligible for a subsidy to help pay for that coverage.  The coverage you will be applying for is guaranteed issue, no-questions-asked coverage.  As it stands now, there are only a couple things that could impact the amount that you pay for your plan:

1) Family Composition (Individual, Parent/Child, Husband/Wife, Family)
2) Where you live or Rating Area
3) Age
4) And the only question that has to do with health.......do you use tobacco?

If you use tobacco you can be charged up to a 50% higher premium than non-tobacco users.  I understand that tobacco users are at a much higher risk of having health issues and probably should pay more, but what about all the other behaviors that cause illness?  Why is there no rate increase for them?   How about people who are diabetic because of their poor diets?  How about people who use crack or heroin?   While the diabetic gets insulin and diet counseling and the drug addict gets substance abuse treatment and medications to curb the desire, the tobacco user gets a 50% rate increase instead of acupuncture, hypnosis and/or a prescription for Chantix.  In all fairness though, smoking cessation counseling is now included under preventive in all health policies.

You may be thinking to yourself that this is no different than the life insurance industry where typically a tobacco user pays at least 50% more on their coverage.  The main difference is that life insurance isn't guaranteed issue.  If you are a diabetic or drug user, you will probably be turned down entirely.  Since your health plan through the exchange will be guaranteed issue, you can't be turned down.

This is definitely a head-scratcher for me.

Tuesday, March 15, 2011

"To Be Or Not To Be?" 1099 Requirement under Health Reform (PPACA)

Killing the requirement that all business and property owners provide to anyone they paid more than $600 in goods and services a 1099, has made it quickly through the House 314 -112.   HR 4, was supported by every Republican and 76 Democrats.  The loss of income to the Fed is approximately 25 billion dollars.  Republicans wanted to pay for this by modifying repayments of health care tax credit overpayments to those beneficiaries of subsidized coverage who no longer qulaify for the benefit.  The bill has moved to the Senate where it is likely to be passed but has stalled a bit becuase they do not like the way the house Republicans wanted to pay for it.  Senate Majority leader Reid, D-Nev, announced he has postponed plans to bring the bill to the Senate floor because Democrats were unable to reach an agreement on the bill over concerns about the offsets used to pay for the bill. 

Both the House and Senate want this part of the law killed.  It is a huge burden on business.  Another piece of PPACA to be removed.  Wonder whats next?

Wednesday, March 2, 2011

Boring But Important-States Can Opt-Out of Health Care Plan (Mandates) 3 Years Earlier

"If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act (PPACA) does, without increasing the deficit, you can implement that plan, and we'll work with you to do it."  This is was President Obama said while speaking at the National Governors Association 2011 Meeting in Washington, D.C.  on February 28th.  What this means is that states would be able to withdraw from some of the law's regulatory mandates in 2014 instead of 2017 through a "state innovation waiver".

In bipartisan support of "Empowering States to Innovate Act" it allows states to establish independent insurance regulatory models instead of Health Exchanges.  In addition it also allows those states to have no individual mandate and no penalties for those companies with more than 50 employees that do not meet PPACA requirements.  This could be of great interest to those states who filed a lawsuit against the PPACA's individual mandate, in Florida.

Even though there would be more flexibility for the states, they still would be required to offer policies that are as comprehensive and affordable as those offered through the exchange, cover as many residents as would have through PPACA and not increase the deficit.  In addition, certain mandates would need to stay, including: No lifetime limits, Dependents can stay on parents plan until age 26, Patients can choose any network physician and Carriers must spend at least 80% on Health Care and no more that 20% on administrative costs.

The questions I have would be how would the fed be able to police these plans?  In other words how would they ever be able to prove how many residents would have been covered under PPACA versus the states own version?  Also, states will have the opportunity to do more.  In other words they could go the other way and set-up a government run single-payer plan. 

Monday, February 21, 2011

Health Saving Accounts and Over the Counter Medications for 2011

Effective January 1, 2011 you are not allowed to use HSA (Health Savings Account) FSA (Flexible Spending Account), MSA (Medical Savings Account) or HRA (Health Re-imbursement Arrangement) 
dollars for over the counter medications, unless they are prescribed.  In addition, for HSA and MSA's, the penalty tax if you do, goes from 10% to 20% and 15% to 20% respectively.  I have no idea, with the exception of raising more revenue, why the federal government would either disallow the OTC medications from being coverable or increasing the penalty.  In addition, how are they going to police this?  It would seem the increase of government employees needed to oversee this would negate any funds risen.  Anyway, if you have your physician prescribe your over-the-counter medication you are able to use your HSA and other named accounts to pay for it.  You do not need to have it filled by a pharmacist, just have the prescription on file.  Also, see if you can have the doc write it for a yearly supply.

Thursday, February 10, 2011

Florida Stopping Implementation of PPACA (Health Reform)

This is a follow-up to the previous post, District Court Judge Roger Vinson Just Said No, Too!  As a result of the recent federal court ruling, by U.S District Judge Roger Vinson, which declared PPACA or at least the Individual Mandate to be unconstitutional, Florida has stopped the implementation of the law.  Florida Governor Rick Scott said, "We're not going to spend a lot of time and money with regard to trying to get ready to implement that until we know exactly what is going to happen and I hope and believe that either it will be declared unconstitutional or it will be repealed.  Florida Insurance Commissioner Kevin McCarty stated, "PPACA, a major component of the federal Affordable Care Act package, is not now in effect in Florida."  In addition McCarty said that he told the director of HHS (Health and Human Services) Office of the Consumer Information and Oversight, that Florida would not be spending any of the funds it had been allocated to implement the insurance exchange program. 

Since there were 25 other states that also were part of the lawsuit, I wonder how many of them will make decisions, at the state level, to stop implementation until a final determination has been made?  Final determinations could take as long as two years. 

Tuesday, February 1, 2011

District Court Judge Roger Vinson Just Said No, Too!

On January 31, 2011 District Court Judge Roger Vinson declared the "Individual Mandate" of the PPACA (Health Reform) unconstitutional.  Vinson stated, "because the individual mandate is unconstitutional and not severable, the entire act must be void."  So the count is 2-2.  Judges in Michigan and Virginia, both democrat appointees, have ruled the Health Reform constitutional and Judges in Virginia and now Florida, both republican appointees,  have ruled, at least the individual mandate, as unconstitutional.  The Department of Justice is going to appeal the decision which was filed in March of 2010 by Florida but then 25 other states joined the suit.  The case will ultimately be heard in the Supreme Court which could take up to two years. 

As it stands now, in 2014, if someone doesn't purchase health insurance they will pay a fine of $95 per year or 1% of income whichever is greater and by 2017 amount goes to $695 or 2.5% of income to a maximum of 3X the individual penalty.  In addition, if you earn up to $14,000 you get coverage for free, up to $44,000 and it's subsidized.  Big freaking deal!  Since it's guaranteed issue, I'll take my chances and get coverage when I'm sick. 
Non-payers will receive a notice from the IRS.  If they don’t pay, the IRS will take it from their tax refund in the future.  If they continue to not pay the fine, they will not be subject to any criminal prosecution or penalties.  The secretary cannot file a notice of lien or file a levy on any property.  As stated in a previous post, this penalty has no teeth! 
So my question is what do the democrats do if the individual mandate is ultimately and finally deemed to be unconstitutional?  Do they allow each state to individually allow the reform?  If so, I'm thinking every sick person and their mother will flock to that state for guaranteed issue health care coverage with crushing claims that will make the coverage unaffordable for everyone else.  Or do they come back with a plan that doesn't create a penalty for not having coverage, but just increase taxes and give it to everyone?

Interestingly, some republicans and democrats are trying to come up with ideas that wouldn't require people to carry coverage but would encourage.  For example, people would be given a deadline to enroll and if that deadline is missed, they would have to satisfy long waiting periods.  Or people who apply late and are eligible for tax credits could be penalized by reducing their subsidies.  (sounds like a penalty to me)

Wouldn't it be great if healthy people paid less for coverage, sick people paid a bit more and for those who are truly unable to afford it, given help?  Instead of throwing all this money at bigger government to wrangle this thing, use it to help those who need it the most. 

Thursday, January 20, 2011

Breastfeeding Law under Health Reform (Preliminary Interpretations)

The Fair Labor Standard Act (FLSA) was amended by PPACA (Health Reform).  Basically, the amendment states that nursing mothers must be provided with a private space (not a bathroom) and unpaid break time in order to express breast milk for one year after the birth of their children.  Since this interpretation is preliminary the Department of Labor (DOL) doesn't have plans to issue regulations as of yet.  This is due in large part by the many factors that could impact mother's needs including work environments, schedules, and personal/individual needs.  However, the DOL could issue regulation at any time so HR should work with nursing mothers to settle on policy for accommodations and expectations of both the employer and employee.

Space for Expressing Milk

The space must at least have a place for the mother to sit and a flat surface in which to place the pump.  In addition, the space must have a door that locks (or a sign that designates that the space is in use) and windows must be covered.  Smaller employers may use partitions/screens to designate an area.  There doesn't appear to be any rulings that require the space to have a sink or refrigerator or other accommodations. 

Reasonable Break Time

According to the DOL, lactation breaks will last from 15-20 minutes, however, actual times may vary depending upon the speed of the pump, how long it takes to clean up, distance to a refrigerator/sink etc.  The number of breaks in a normal 8 hour shift will also vary depending upon how old the child is and if they are also eating solid food which would decrease the number of expressions needed.

Undue Hardship

According to the DOL, employers who have less than 50 employees will not have to comply with the law if it creates an "undue hardship" in difficulty or expense.  However, don't hang your hat on this because the employer needs to demonstrate that a hardship exists before the DOL will grant a waiver and they will sue employers on behalf of lactating mothers. 

Regardless of the size of your company, It may be a good idea to give some thought to having a stand-by breastfeeding space, just in case.

Tuesday, January 11, 2011

Thou Shalt Not Discriminate. Wait.......You Can For Now But...

Under Health Reform (PPACA) and effective on your company's first health insurance renewal after September 23, 2010, employers may not discriminate in favor of highly compensated employees.  However, this applies to health plans that have lost "grandfathered status" under the rules defined in the Health Reform Law (PPACA).  You may recall in previous posts that when an employer loses grandfathered status they are then subject to many rules under the Health Reform (PPACA), including not discriminating in favor of highly compensated employees.

 Your health plan will lose grandfathered status and become non-grandfathered if:
  1. Employer significantly raises co-pays.  This is the greater of $5 or Medical inflation +15% 
  2. Employer significantly raises deductibles.
  3. Employer significantly lowers employer contributions. Can't decrease percentage by more than 5%
  4. Employer Raises Co-Insurance
  5. When PPACA first arrived employers couldn't change health plans, even if it was better coverage, without losing grandfathered status but this has since been rescinded.....probably because it didn't make any sense.
For the most part, it seems, many/most employers will eventually lose grandfathered status simply because it will become increasingly difficult to maintain current levels of coverage while maintaining their contribution levels. 

Therefore, under section 2716 of the Public Health Service Act (PHS) under the PPACA, it provides that a group health plan must satisfy the requirements of section 105(h) of the code. What this section essentially states is that a health plan does not discriminate in favor of highly compensated individuals as to eligibility to participate or benefits provided under the plan. 

Failure to comply with the code could result in a civil action to force employer groups to comply, and/or an excise tax of $100 per day per individual discriminated against and/or civil penalty of $100 per day for each individual discriminated against.

Some side thoughts........

This could be a good thing for many employees:  If you are an employee of a company, and you know that significant changes have been made to your health plan, first renewal after September 23, 2010, chances are you should be paying the same cost for your health care as everyone else in your company.

This could be a bad thing for some business owners:  If you are an owner of a company who has taken a risk to get it started, has provided jobs to many people, possibly put their own livelihood on the line, shouldn't that person possibly be rewarded by the company paying a larger percentage of their health care costs?

But Wait, There's More! 

The IRS on December 22, 2010 just announced in notice 2011-1 that compliance with the Non-Discrimination rules will be "Delayed" until the regulations or other administrative guidance has been issued.  The IRS said that plans would not be subject to the Non-Discrimination rules until plan years following  the issuance of the guidance.