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by Leila Morris
• Employers’ Top Five Questions About the ACA
• Obamacare May Cause Employees to Work Less
• Patients Face Long Wait Times
• Bill Would Establish Collection of Health Cost Data
• A Snapshot of Covered California Enrollees
• Delta Dental Names Executive VP & Chief Legal Counsel
• Kaiser Permanente Rated Highest in Quality
• Affordable Term Life
• Private Exchange
• LTC Shareability
• Health Reform Knowledge Center
• Plan Cost Estimator for Brokers
• Living Benefit Riders
• Retirement Plan for Non-Profits
• Many Employees Don’t Know How to Handle A Disability
• Life Partners Prevails in SEC Lawsuit
Employers’ Top Five Questions About the ACA
Paychex has identified these top five questions from business owners about the ACA; and has provided answers:
1. How do the Employer Shared Responsibility provisions affect a business that is part of a controlled group? A controlled group consists of two or more corporations under common control. There are several types of controlled groups including parent-child, brother-sister, and affiliated service groups, which are created based on common ownership/control. All employees in each entity in a controlled group are taken into account when determining whether the controlled group is an applicable large employer and subject to the Employer Shared Responsibility provisions. If these provisions do apply, each company within the controlled group will be looked at individually when calculating what payments or fees may apply, if any. Employers should consult with their legal or financial advisor to determine if they are in a controlled group.
2. What fees are associated with the Affordable Care Act and who is responsible for them? Business owners need to be aware of the Patient Centered Outcomes Research Institutes fee, the Health Insurance Industry fee, and the Transitional Reinsurance fee.
* The Transitional Reinsurance fee is charged to the health insurer for fully insured health plans and to plan sponsors for self-insured plans. (Effective since 2012 and continuing until 2019).
* The Health Insurance Industry fee is charged to health insurers. (Effective January 1, 2014.)
* The Transitional Reinsurance fee will be charged to health insurers and plan sponsors. They are allowed to pass along the fee to employees. (Effective January 1, 2014 and applicable until 2016).
3. How can a plan determine whether it meets the minimum value requirement of the Employer Shared Responsibility provisions? A plan that covers at least 60% of the total allowed cost of plan benefits is considered to provide minimum value. An HHS final rule, issued in February 2013, provides four approaches for plans to determine whether they meet the minimum value requirement:
I. Any plan in the small group market that meets any of the metal levels of coverage provides minimum value (Bronze, Silver, Gold, or Platinum).
II. CMS developed a calculator to determine a plan’s minimum value (http://www.cms.gov/cciio/resources/regulations-and-guidance/index.html.)
III. A plan can get an actuarial certification from a member of the American Academy of Actuaries.
IV. HHS and the IRS are developing checklists for employers to compare their plans’ coverage. If an employer’s plan is consistent with one of these checklists or more generous, the plan will be treated as providing minimum value.
Applicable large employers that do not provide minimum value health plans may be subject to an annualized penalty of $3,000 per affected employee.
4. How is the small business tax credit changing for 2014? For tax years beginning in 2014, the maximum credit will increase to 50% of small business employers’ contributions to health insurance. The maximum tax credit will increase to 35% for small business tax-exempt employers’ contributions. To be eligible for the credit, a small employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) marketplace. The credit will only be available for two consecutive taxable years.
5. How are a full-time employee and full-time equivalent employee defined under the Employer Shared Responsibility provisions? A full-time employee is employed an average of at least 30 hours per week or 130 hours in a calendar month. A full-time equivalent employee is a combination of employees who are counted as the equivalent of a full-time employee. Each of these employees is not employed, on average, at least 30 hours of service per week or 130 hours per month. To calculate the total number of employees in a calendar month, take the total hours worked by full-time equivalent employees during the month (capped at 120 hours for each employee) divide by 120, and add it to the total number of full-time employees.
For more information, visit http://www.paychex.com/health-reform.
Obamacare May Cause Employees to Work Less
The Affordable Care Act could reduce the labor force by 2.5 million workers in 2024, according to the non-partisan Congressional Budget Office’s annual outlook. More people are likely to reduce their hours or leave the workforce in order to stay under the income caps for Medicaid and federal subsidies. President Obama gave the following remarks in response to the report:
Since the Affordable Care Act passed into law in March 2010 the private sector has added 8.1 million jobs. That is the strongest 45-month job growth since the late 1990s and contrasts with the 3.8 million private sector jobs lost in the decade before the Affordable Care Act passed.
Claims that the Affordable Care Act hurts jobs are simply belied by the facts in the CBO report. CBO’s findings are not driven by an assumption that ACA will lead employers to eliminate jobs or reduce hours, in fact, the report itself says that there is no compelling evidence that part-time employment has increased as a result of the ACA.
While many factors affect job growth, the actual performance of businesses refutes those who predicted that the Affordable Care Act would dramatically hurt the economy.
What the CBO report does find is one key immediate effect of the Affordable Care Act is to induce some employers to hire more workers or to increase the hours of employees during the 2014 to 2016 period. Over the longer run, CBO finds that because of this law, individuals will be empowered to make choices about their own lives and livelihoods, like retiring on time rather than working into their elderly years or choosing to spend more time with their families. At the beginning of this year, we noted that as part of this new day in health care, Americans would no longer be trapped in a job just to provide coverage for their families, and would have the opportunity to pursue their dreams. This CBO report bears that out, and the Republican plan to repeal the ACA would strip those hard-working Americans of that opportunity.
In addition, the CBO itself confirms that this analysis of the implications of the ACA on the labor force is incomplete, does not take into account the impact that ACA’s slowing health care cost growth which experts have estimated that slower growth in health costs due to the ACA will cause the economy to add an additional 250,000 to 400,000 jobs per year by the end of the decade. Moreover, CBO does not take into account positive impacts on worker productivity due to the ACA’s role in improving workers’ health, including reduced absenteeism. Finally, as it has since the enactment of the ACA, CBO continues to confirm that the ACA is projected to reduce the deficit by more than $1 trillion over the next two decades.
Patients Face Long Wait Times
It takes an average of 19 days to schedule a doctor’s appointment, according to a survey by Merritt Hawkins and AMN Healthcare. It takes 28 days to see a cardiologist in Denver, 49 days to see a dermatologist in Philadelphia, 35 days to see an ob/gyn in Portland, 18 days to see an orthopedic surgeon in San Diego, and 26 days to see a family physician in New York. Physician appointment wait times varied from as little as one day to over eight months. Mark Smith, president of Merritt Hawkins said, “Finding a physician who can see you can be a challenge, even in urban areas where there is a high ratio of physicians per population. The demand for doctors is simply outstripping the supply.” The average rate of Medicaid acceptance for all five specialties in all 15 markets is 45.7%. For more information, visit www.merritthawkins.com.
Bill Would Establish Collection of Health Cost Data
Assembly member Roger Hernández (D – West Covina) announced the introduction of AB 1558. This bill would ensure public access to comprehensive and uniform information on healthcare costs and prices via a website while protecting patient confidentiality and respecting providers of care. All-payer claims databases have been established in several states including Maine, Colorado, Massachusetts, Connecticut and Kansas.
A Snapshot of Covered California Enrollees
Covered California offers these facts on enrollees so far:
* Of the 395,614 consumers who identified their ethnicity, nearly 20% are of Hispanic, Latino, or Spanish origin. In addition, an estimated 30% of consumers who have applied but haven’t selected a health plan self-identified as Hispanic, Latino, or Spanish origin. This figure compares to the estimate that about 46% of subsidy-eligible Californians are Latino.
* Through Dec. 31, 125,033 consumers ages 18 to 34 enrolled for coverage, or 25% of the consumers enrolled. This age group represents about 25% of the state’s population, but approximately 36% of those who are eligible for subsidies.
* Sixty-one percent of consumers signed up for a Silver plan, the second lowest cost of the four plan tiers. About 85% of consumers across all metal tiers got some sort of financial assistance.
* Anthem Blue Cross of California, Blue Shield of California, Kaiser Permanente, and Health Net lead the way among plans chosen, reflecting almost 96% of total enrollment.
* In Covered California’s Small Business Health Options Programs (SHOP), more than 289 small businesses have applied for coverage, with all successfully completing their enrollment. A total of 2,155 employees and their dependents were provided coverage by their employer.
* Consumer response to the application process for Covered California and Medi-Cal has been positive. In the first three months, at least 60% of those who completed enrollment said it was easy.
Delta Dental Names Executive VP & Chief Legal Counsel
Delta Dental of California promoted Michael Hankinson to executive vice president and chief legal officer. Hankinson will oversee legal, regulatory, and compliance activities and human resources and public and government affairs in 15 states plus the District of Columbia. He replaces Charles Lamont, who retired after 28 years at Delta Dental. Hankinson most recently served as chief compliance officer and senior vice president of the legal division. A cum laude graduate of the Pace University School of Law, he also holds an MBA in finance from Fordham University and has extensive experience as a general counsel in the insurance and health care technology industries, dealing with corporate and commercial transactions, risk management, compliance and regulatory matters.
Kaiser Permanente Rated Highest in Quality
For the sixth consecutive year, Kaiser Permanente is the only health plan in California to earn a 4-star rating for quality of care in the annual Healthcare Quality Report Card from the California Office of the Patient Advocate. The annual report card (opa.ca.gov/report_card) provides California consumers with side-by-side comparisons of the largest health plans in the state (10 HMOs and six PPOs), ranking them on several national quality of care and member care experience measures.
Affordable Term Life
MetLife introduced simplified issue term life insurance, which is easy to qualify for and easy to afford. Simplified Issue Term is term life insurance, available to anyone from age 18 to 70, and can be purchased over the phone with same-day approval. The product is offered in face amounts from $10,000 to $100,000. No medical exam is necessary; applicants just answer a few simple health questions. A $50,000 face value policy for a female aged 43 costs $30 per month. For more information, visit www.metlife.com.
Cigna established a private retail exchange offering employers a new benefit marketplace and employees more options and convenience for health improvement. Cigna’s private exchange is available to smaller employers in Atlanta, Dallas, Washington, D.C. metro area, and San Francisco, and will be expanded to other markets and larger employer groups throughout 2014. For more information, visit Cigna.com.
LifeSecure launched its LTC II with Shareability Option to the individual and multi-life markets. It includes a shared-care benefit rider for couples. It also includes a standard international coverage benefit, improved online tools, and two new distinct multi-life programs that allow a more competitive solution for different sized groups. For more information, visit www.YourLifeSecure.com.
Health Reform Knowledge Center
Wolters Kluwer Law & Business introduced its the Health Reform KnowlEDGE Center. For a subscription fee, it offers news and analysis of the Affordable Care Act (ACA) from attorneys and industry experts. For more information, visit http://www.wolterskluwerlb.com/health-reform-knowledge-center.
Plan Cost Estimator for Brokers
Health Insurance Innovations launched its Health Insurance Plan Cost Estimator.
It gives insurance agents the ability to determine the health insurance plan most suitable to their clients’ budget and coverage needs. For more information, visit www.hiiquote.com.
Living Benefit Riders
AIG launched AG Asset Protector. Two riders allow policyholders to access their death benefit while they are still living. They can access the Accelerated Access Solution in the event of a chronic illness, and the Lifestyle Income Solution that offers customers more financial control during uncertain economic times and affordable protection against outliving retirement income. For more information, visit www.RetireStronger.com.
Retirement Plan for Non-Profits
OneAmerica, launched Index (b), an indexed investing option designed for nonprofit organizations. The new retirement plan offering arrives on the heels of OneAmerica’s successful rollout of Index(k), a similar program designed for for-profit corporations, last year. Index (k) and Index (b) were created in response to an increased focus by the defined contribution retirement plan industry on management fees, total investment expenses and transparency. An index investment option will generally return an investment performance similar to the index it is based on, such as benchmarks by S&P, Russell or MSCI, and often requires less time for investment performance attribution, manager selection and ongoing evaluation. Index (b) helps reduce the cost to plan participants and allows nonprofits to spend less time managing their investments. For more information, visit www.tiaa-cref.org for details.
Many Employees Don’t Know How to Handle A Disability
Twenty-three percent of employers are not sure of how to handle disability absences and or accommodate disabled employees, according to a report by the Standard. Only 37% of employers have worked with their disability insurance carrier to find employee accommodations. Based on a series of case studies, the report found that employers make these common mistakes when it comes to employee disability issues:
• Strictly enforcing policies
• Believing that employee accommodations are too expensive
• Not considering new approaches
• Devaluing an aging workforce
• Not asking for help
The authors note that mishandling or refusing reasonable accommodations can result in a complaint with the Equal Employment Opportunity Commission or even a lawsuit for failing to accommodate a disabled employee. For more information, visit www.workplacepossibilities.com.
Life Partners Prevails in SEC Lawsuit
A federal jury has found that Life Partners did not commit fraud and its officers did not engage in insider trading as the Securities and Exchange Commission had claimed. The SEC made these claims in SEC v. Life Partners Holdings et al., which was tried in the United States District Court for the Western District of Texas, Austin Division.
The SEC had claimed that Life Partners violated Rule 10b-5 by intentionally underestimating the life expectancies of the insureds in the life settlements it facilitated and that it hid this practice from the investing public. Life Partners disputed these claims arguing that it described the process of estimating life expectancies in detail, the life expectancies were independently sourced and the life expectancies were not underestimated when taken as a whole.
The jury also found that Life Partners’ CEO, Brian Pardo, and its General Counsel, Scott Peden, did not engage in insider trading. The jury did find for the SEC regarding its claim that Life Partners had misstated its revenue recognition policy. This finding also supported the SEC claims that the Life Partners books and records were misstated. Life Partners denied that it had intentionally misstated its policies or financial statements. Before trial, the SEC had represented to the court that it was not pursuing the revenue recognition claims, and it did not present evidence regarding these claims. As a result, Life Partners has requested that the court dismiss these claims as a matter of law. The court is expected to rule on this motion before issuing a judgment.
Life Partners’ CEO, Brian Pardo said, “We are extremely pleased that the jury has exonerated our company, our business practices and the life settlement asset class itself. As we demonstrated to the jury, life settlements as transacted through Life Partners provide a valuable service to senior Americans who want to sell their unwanted life insurance policies and are a tremendous alternative asset class for accredited investors seeking to avoid the volatility of the stock market. We provide a win-win transaction for everyone involved and, when put to the test, the jury could see the SEC’s allegations were not true.”