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by Leila Morris
• Treasury Modifies FSA Use-or-Lose Rule
• Texas Agents Counter ACA Misinformation
• Middle-Income Retirees Say What’s Best and Worst About the Affordable Care Act
• 2014 Medicare Drug Plans Vary Widely in Availability of Drugs and Restrictions
• Best Medicare Advantage Plans and Medicare Part D Plans
• Alternate Payers to Compete With Traditional Health Plans
• Confusion Over Drug Kickbacks in the Exchange
• Web Portal Explains The Affordable Care Act For People With HIV
• Twitter Reveals Public Reaction to the Exchanges
• Blue Shield Steps Back From Individual Policy Cancellations
• Sutter Health Agrees to Record Settlement For Anesthesia Billing
• Supplemental Benefit for Self Funded Plans
• Group Life/AD&D Policies & EAPs
• Enhanced HSA Option
• Private Exchange Marketplace For Large Groups
• The Type of Stress That Most Affects Job Performance
Treasury Modifies FSA Use-or-Lose Rule
The Dept. of Treasury and the IRS issued a notice modifying the longstanding “use-or-lose” rule for health flexible spending arrangements (FSAs). The updated guidance permits employers to allow plan participants to carry over up to $500 of their unused health FSA balances remaining at the end of a plan year. Some plan sponsors may be eligible to adopt a carryover provision as early as plan year 2013. In addition, there are existing options for plan sponsors to allow employees a grace period after the end of the plan year. However, a health FSA cannot have both a carryover and a grace period; it can have one or the other or neither.
Jeremy Miller, president and founder of FSAstore.com said, “Changes to the use it or lose it rule present a significant growth opportunity for flexible spending accounts. The use it or lose it provision was one reason why people shied away from FSAs. This change, coupled with the major pre-tax savings on out-of-pocket expenses, should encourage many new participants to take advantage of FSAs.”
The policy change is in response to public comments. An overwhelming majority of feedback was from individuals, employers, and other organizations that wanted the health FSA use-or-lose rule to be modified. With the use-or-lose rule, any account balances at the end of the year are forfeited. Those commenting said it is difficult for employees to predict needs for medical expenditures; FSAs need to be accessible to employees of all income levels; and there should be incentives to minimize unnecessary spending at the end of the year.
Texas Agents Counter ACA Misinformation
Consumer confusion and frustration don’t appear to be subsiding one month into the roll-out of the Affordable Care Act’s health information exchanges. Mark Bellman, president of the Texas Association of Health Underwriters says that polls reflect a broad lack of understanding about the new law, confusion about the enrollment process and choices, and frustration with glitches that have plagued the rollout of the health exchanges. Increasing misinformation adds to these complexities. Bellman says that health agents hear from hundreds of Texans each day with questions that highlight the confusion. The good news is that many consumers are reaching out to a professional benefit advisor to get answers and avoid making costly mistakes, he said.
The Texas Association of Health Underwriters says these 10 areas generate the most confusion:
• Can I keep my existing coverage? Many plans will not be in compliance and will be eliminated because the ACA contains new requirements for coverage. For example, the ACA requires all policies to cover 10 essential benefits. An individual with a non-compliant plan will be forced to change coverage. Employers offering health insurance could have grandfathered their plans to avoid being forced to change their employees’ coverage. If an employer did not grandfather its plan, employee benefits change. These benefits could improve or erode depending on the employer’s ability to absorb cost changes resulting from the Affordable Care Act.
• Am I required to purchase insurance coverage through the health insurance exchange? Consumers are not required to purchase coverage through the Exchange. Most Americans will be required to carry health insurance, which can be purchased outside of the Exchange in the commercial market.
• Will insurance coverage purchased through the Exchange cost less because it provides Americans with a government subsidy? There is no guarantee that insurance purchased through the Exchange will be more affordable than coverage in the commercial market. Subsides available in the Exchange may reduce the cost. People with incomes from 100% of the poverty line (or about $23,550 for a family of four) to 400% of poverty ($94,200 for a family of four) may be eligible for a subsidy. All consumers should compare benefits, rates, as well as physician and hospital networks in the commercial market with those in the Exchange. This comparison will be particularly important for consumers who want to keep their doctor.
• Are individuals required to contact a navigator to purchase coverage in the Exchange? There is no requirement to contact a navigator. Navigators will have limited, if any, knowledge about rates outside the Exchange and are likely to have only a basic understanding of coverage benefits. Consumers who have questions about finding the best coverage for themselves and their family would be wise to contact a professional benefit adviser.
• Do the Obamacare insurance options compete with coverage from plans offered by Blue Cross Blue Shield, Aetna and United Healthcare? Obamacare refers to the entirety of the federal health care reforms or the Affordable Care Act, therefore it is not a health plan. It includes such things as the types of coverage that can be offered, rules for pricing and penalties for those who don’t purchase coverage.
• Are all employers required to provide health insurance coverage? Beginning in 2015, the federal rule is that employers with 50 full-time equivalents will have a responsibility to offer health coverage or face penalties depending on where their employees get coverage and if they get subsidies. Employers with less than 50 full-time equivalents will not face any coverage requirements.
• Am I better off letting my employees purchase their own coverage rather than purchasing a group plan for my business? This is a subject of considerable complexity. An employer must weigh a number of issues including number of employees, wages, and other financial considerations to determine what fits it’s situation. A health insurance professional will be able to guide an employer through the maze of considerations.
• Am I required to cover my children, under 26, on my insurance policy? There is no requirement that parents cover their children through age 26. Parents have the option of carrying their adult children on their health insurance plan. If a plan covers children, they can be added or kept on the health insurance policy until they turn 26 years old.
• Has the Affordable Care Act has been postponed? Portions of the bill that involve certain types of employers have been postponed, but the individual health insurance requirement goes into effect in early 2014. The open enrollment phase for individual insurance plans is underway, and the deadline to enroll remains March 31. The date to enroll and avoid a penalty has been extended from February 15 to March 31.
• Will the Exchange allow me to compare rates of policies inside and outside the Exchange? The Exchange does not provide a comparison of rates within and outside of the Exchange. For rate comparisons, consumer should seek professional guidance. Attempts to defraud consumers have already been reported as scam artists attempt to exploit the confusion and misinformation about the law and gain access to social security numbers, credit cards, bank accounts, and other personal information. Consumers should be wary about providing personal information in the process of purchasing health coverage to comply with the new law.
Middle-Income Retirees Say What’s Best and Worst about the Affordable Care Act
A majority of middle-income retirees say that the best aspects of the Affordable Care Act are that it eliminates pre-existing condition exclusions (68%); offers a free Medicare annual wellness visits (60%); and includes initiatives to make Medicare more efficient (60%).
However, 52% say that one of the worst aspects of the Affordable Care Act (ACA) is the requirement that individuals own health insurance or pay a penalty, according to a latest survey by the Bankers Life. One in six retirees are not aware that ACA caps health insurance premiums for older people relative to rates for younger people (18%) or that it will close the Medicare Part D prescription drug donut hole (18%).
Twenty-three percent of middle-income retirees say they retired due to a health issue or disability. Therefore, many retired Americans under 65 will turn to the newly formed state exchanges for health insurance coverage until they are old enough to qualify for Medicare.
Twenty-seven percent of middle-income retirees ages 55 to 64 who don’t get any government insurance coverage have purchased their own private health insurance policy (15%) or don’t have health insurance (12%). In fact, slightly more retirees ages 55 to 65 are potential beneficiaries of the state health insurance exchanges compared to those in the working population. Forty-two percent of middle-income retirees (ages 55 to 65) have looked into the cost of getting health insurance through an exchange or will do so. For more information, visit www.CenterForASecureRetirement.com.
2014 Medicare Drug Plans Vary Widely in Availability of Drugs and Restrictions
Slightly more drugs will be available under Medicare stand-alone prescription drug plans (PDPs) in 2014, and fewer will be available under the Medicare Advantage prescription drug benefit (MAPD), according to analysis by HealthPocket.
The variation is significant: MAPD plans range from 956 to 2,334, and PDP plans range from 995 to 2,333. On average, MAPD plans will include 1492 drugs on plan formularies, and PDP plans will include 1,456. An estimated 90% of Medicare enrollees have a drug benefit. As with the private health insurance market, each Medicare plan has a formulary. Consumers pay the full cost of drugs that are not on the plan formulary. Even if a drug is on the formulary, plans can restrict access by limiting the quantity, requiring prior authorization, and mandating a step therapy process for certain medications.
In 2014, MAPD plans will carry quantity limits on 0% to 32% of drugs, prior authorization on 3% to 37%, and step therapy on 0% to 11%. PDP plans will have quantity limits on 1% to 31% of drugs, prior authorization on 7% to 32%, and step therapy on 0% to 9%. Kaiser’s MAPD plan offers a high number of drugs, with 2,320 drugs on its formulary, approaching the industry maximum of 2,333. None of the drugs on its formulary carries quantity limits or step therapy restrictions, and prior authorization is required for only 3% of all drugs offered.
Steve Zaleznick of HealthPocket stressed that Medicare patients need to do their homework during open enrollment to figure out which plans give them the best deal. The most important question is whether their prescriptions are on the plan’s formulary and what hoops they may have to jump through to actually get the drugs, he added. Consumers can review Medicare plan options for free using HealthPocket’s Medicare comparison tool at http://www.healthpocket.com/medicare.
Best Medicare Advantage Plans and Medicare Part D Plans
U.S. News & World Report has expanded its health insurance site to include the Best Medicare Advantage Plans, Best Medicare Part D Plans, and Best Medicare Plans. The site presents information on the private and marketplace health insurance plans available in each state in a consumer-friendly, searchable interface. For more information, visit www.rankingsandreviews.com.
Alternate Payers to Compete With Traditional Health Plans
Traditional commercial health plans may soon face increasing competition from alternative payers. More than a third of Americans are open to trying insurance plans offered through hospitals, health systems, or state-run consumer oriented and operated plans (CO-OPs), according to research by Valence Health.
“We may be shifting away from the era where big brand, commercial insurance companies take the largest piece of the pie. Consumers are open and ready to try smaller, local systems, not only because it’s potentially easier on the wallet, but also because they perceive it to be more convenient and may lead to better overall patient healthcare outcomes,” said Kevin Weinstein, Valence Health Chief Marketing Officer.
“If only five percent of insured Americans try new insurance options, that translates to nearly 10 million people who account for more than $20 billion in healthcare spending. Imagine if we start to educate the majority of people who said they were still unsure about their options. We are talking about creating a huge monetary shift in the industry,” he added. The survey reveals the following:
• More than 31% of consumers would be very or somewhat likely to purchase health insurance through their local hospital or health system.
• 23% say hospital-sponsored plans would be less expensive and higher quality than traditional insurance plans, and 39% say provider-sponsored health plans would offer more coordinated care.
• More than 43% are very or somewhat likely to consider switching to CO-OPs.
• More than 39% are very unlikely to use online insurance exchanges; the majority prefer insurance through employers.
• Less than 10% are willing to accept salary increases or stipends to purchase out-of-pocket health insurance.
• A majority of respondents are for Obamacare while a majority says insurance rates will rise due to health reform.
Plan benefits and price drive most Americans’ health insurance choices as opposed to physician choice, according to the survey. Coverage for emergency room visits and hospital stays are top priorities while the insurance company’s brand name is the lowest priority. The complete research findings are available at http://valencehealth.com/resources/white-papers.
Confusion Over Drug Kickbacks in the Exchange
A recent memorandum by the Center for Consumer Information and Insurance Oversight (CCIIO) says that, while it has been suggested that third-party providers and companies can cover patient premiums and cost-sharing in exchange plans, there are significant concerns that this could skew the insurance risk pool and create an unlevel field. Interestingly, at the agency level, a recent letter from HHS Secretary Kathleen Sebelius states that providers, drug manufacturers, and others are not prohibited from using kickbacks to induce greater use of their products and services in Affordable Care Act (ACA) coverage.
Pharmaceutical Care Management Association (PCMA) president and CEO Mark Merritt explains that copays for brand name drugs and other kickback schemes induce patients to ignore formularies, networks, and other cost-saving tools. He urges regulators to formally determine what everyone already knows: that federal anti-kickback laws apply to the ACA.
Web Portal Explains The Affordable Care Act For People With HIV
The Kaiser Family Foundation has a new consumer web portal to help people living with HIV navigate the Affordable Care Act (ACA). People with HIV could be among those who make the greatest gains in coverage from the ACA since one in four people with HIV are uninsured and many more are underinsured. For more information, visit www.kff.org/aca-consumer-resources.
Twitter Reveals Public Reaction to the Exchanges
When it came to top Twitter hashtags last month, Obamacare was right up there with iPhone launch, MLB World Series, Justin Bieber, and The Voice. In fact, Obamacare was among the most tweeted topics in October 2013. Over 13.2 million tweets were related to Obamacare in this first month of pre-enrollment.
The California HealthCare Foundation (CHFC) looked at Twitter to get a read on how public is reacting to the rollout of the federal and state health insurance marketplaces. In the days before federal exchange (HealthCare.gov) launched, tweets containing a link to HealthCare.gov trended positively, with a score of 74/100. But the sentiment dipped significantly to 29/100 five days after the launch, after tens of thousands of people had tried to access HealthCare.gov.
A positive spike occurred on October 20 the day before President Obama’s Rose Garden speech. But the conversation quickly turned negative the next day. The volume of tweets containing search terms related to Obamacare and HealthCare.gov increased as a result of the Rose Garden speech: from 78,012 tweets within 24 hours before the speech; to 35,436 tweets during the hour of the speech itself; and then doubling to 185,184 tweets in the 24 hours after the speech.
Tweets about state-based exchanges were more positive than tweets about the federal exchange. The sentiment score of tweets containing a link to HealthCare.gov was 44 points lower than tweets containing links to the 17 state-based exchange sites combined. Since October 1, the state-based exchange sites had a positive sentiment score of 70/100. Conversely, HealthCare.gov had a negative sentiment score during this period of 26/100.
These five celebrities who were most frequently retweeted when they used #getcovered, the hashtag used by Enroll America and the White House:
Lady Gaga (40 million followers, 14.9K retweets)
Nina Dobrev (4 million followers, 1.4K retweets)
Pharrell Williams (2 million followers, 1.3K retweets)
John Legend (4 million followers, 982 retweets)
Emily VanCamp (320K followers, 499 retweets)
On October 22, the Colorado Consumer Health Initiative (CCHI) launched an irreverent spoof on the “Got Milk?” ads. Its “Got Insurance?” campaign’s message is now popularly known as “Brosurance,” a term used in one of the ads. The campaign, which was aimed at the young invincible demographic, promoted the hashtag #GotInsurance and the website doyougotinsurance.com. Although #GotInsurance was the promoted hashtag, #brosurance began to dominate the conversation after October 22, and accelerated again when it was raised during HHS Secretary Sebelius’ Congressional testimony on October 30. For more information, visit http://www.chcf.org/programs/healthreform/aca140/october#ixzz2jt6fYDtm
Blue Shield Steps Back From Individual Policy Cancellations
Insurance Commissioner Dave Jones got an agreement from Blue Shield to allow its California policyholders to keep their individual and family health insurance policies through March 31, 2014. Previously, the company announced plans to cancel these individual and family policies on December 31.
Jones said, “There is nothing in the healthcare reform law that requires insurers to narrow their provider networks, but some insurers are doing so, which means consumers will want to confirm that their doctors and hospitals are in the network before selecting new coverage.”
Blue Shield agreed to send a new notice to consumers allowing them to stay in their individual market policies if they elect to do so and to provide the existing coverage through March 31, 2014, at the existing price with the existing medical provider network. If all of the policyholders elect to stay in their existing plans until March 31, the premium savings could be as high as $28.6 million. However, policyholders who are eligible for federal premium subsidies through Covered California will likely want to select their new policies by December 15, so they can start receiving premium assistance for January 1 coverage in their new plan.
Blue Shield CEO Bruce Bodaken said, “We have long acknowledged that the individual health insurance market is broken and we are pleased that the rules will change in 2014. But health reform will succeed only if we restrain the rising cost and utilization of medical services that is driving premium increases. We are dedicated to working collaboratively with providers and regulators to address that issue. A consistent, predictable and fair regulatory environment is another key component of a thriving competitive market that will drive affordability. Constantly changing what information is requested and imposing long delays confuses consumers and threatens the long-term viability of the market. The rules should be clear and regulators should act promptly on rate filings to enable individual insurance purchasers to know what they will pay for coverage and when they will pay it.”
Blue Shield lost $27 million on individual health insurance coverage in 2010 and even with the now withdrawn rate increase, the company expected additional losses on this business in 2011. As a result of today’s decision, Blue Shield individual policyholders will save $35-40 million this year.
In October 2010, the company filed for new individual market rates with the Department of Insurance, to be effective in March 2011. In January, Insurance Commissioner Dave Jones asked Blue Shield to delay the filing for 60 days and the company complied. At the same time, Blue Shield submitted the rates to an independent actuarial review by David Axene, who had completed rate reviews for the Department of Insurance in 2010 and discovered errors in several filings. Blue Shield also promised to pay refunds to its members if Axene’s review found that the rates were too high. On March 1, Axene released his report, which concluded that the rates were appropriate. With today’s action, however, that filing is withdrawn and the new rates will not take effect.
Under rates that are already in effect, some Blue Shield members will see their premiums change in 2011 if they move to a new region, add or subtract family members from their policy, or enter a new age band. Blue Shield changes rates based on age every five years, at the time of the member’s birthday.
Sutter Health Agrees to Record Settlement For Anesthesia Billing
Sutter Health agreed to pay $46 million and implement historic changes in its billing and disclosure of anesthesia charges and services to its patients, insurers and other payers.
Sutter has over 20 hospitals in northern California, including California Pacific Medical Center in San Francisco, Sutter General Hospital in Sacramento, and Memorial Medical Center in Modesto. The settlement closes a 2011 whistleblower lawsuit brought against Sutter by billing auditor, Rockville Recovery Associates. The commissioner joined the whistleblower in that lawsuit.
This settlement with the Department of Insurance requires Sutter to disclose on its Website every component of its anesthesia billing and what those services cost Sutter. Patients, insurers, and the public will now be able to compare Sutter’s costs to what it charges for anesthesia. “This new transparency should lead to lower prices and point the way to similar billing reforms for all types of hospital services,” said Commissioner Dave Jones.
The related whistleblower lawsuit alleged that Sutter included a false and misleading charge in its surgery bills. Sutter patients or their insurers got three separate charges relating to anesthesia, including a charge by an outside anesthesiologist, a charge for the operating room and a charge under an obscure Code 37x Anesthesia. Sutter often charged thousands of dollars for Code 37x Anesthesia for each operation. Yet the services covered by that code were allegedly already captured in the operating room charge, itself a charge in the thousands of dollars. Sutter charged for anesthesia on a time-based or chronometric basis even when no Sutter employee, only the outside anesthesiologist, was present and overseeing anesthesia. Some hospitals also charged separately for anesthesia gasses using code 25x. Sutter’s contracts with insurers also included a clause alleged to unduly restrict insurers from contesting the bills.
The settlement requires Sutter to do the following:
• Pay $46 million.
• Stop billing for anesthesia in the operating room on a chronometric basis and instead charge on a fully disclosed flat-fee basis.
• Describe every component of its anesthesia billing.
• Post on its Website and provide to insurers and the commissioner the cost to each Sutter hospital of its anesthesia services, updated annually.
• Clarify the relationship between its master schedule of charges and the bills that consumers and insurers get. This change will lead to an increase of transparency and accountability in hospital billing.
• More readily permit insurers and other payers to contest Sutter’s bills.
Another defendant, Marin General Hospital, has agreed to implement the same changes to its procedures for billing anesthesia services. Marin General Hospital was a member of Sutter Health during the period of the misconduct alleged by the complaint. In 2010, Marin General Hospital became an independent hospital. The settlement also includes defendants MultiPlan (Multiplan) and Private Healthcare Systems (PHCS), whose provider contracts with Sutter included Sutter’s audit policy that allegedly unduly restricted payers’ ability to challenge Sutter’s charges. In addition to paying $925,000, MultiPlan and PHCS agreed to continue to provide notifications to payers about their audit rights.
Supplemental Benefit for Self Funded Plans
EmployerDirect now offers SurgeryPlus. The supplemental healthcare benefit reduces the costs of planned medical procedures by 30% to 50% through bundled case rates at high-quality providers. SurgeryPlus is implemented by a personalized care coordinator team and negotiates all costs before surgery, thereby empowering patients in the decision-making process. All surgeons in the SurgeryPlus Network are board certified and meet strict selection criteria. Covered procedures are mostly elective and include orthopedic, spine, cardiovascular, bariatric, general surgery and carpel tunnel surgeries, along with minor outpatient procedures such as colonoscopy, endoscopy, and arthroscopy. Most of the procedures are performed at specialty hospitals and surgery centers, where nurse-to-patient ratios and service is better, and exposure to patients with multiple medical issues is not present. Patients at high risk for a procedure like a heart valve repair or replacement get direct access to acute care hospital with SurgeryPlus. EmployerDirect collects data on local hospitals, physician-owned hospitals, and ambulatory surgery centers. When selecting medical centers, the company looks at quality comparison analysis at each site and each specialty For more information, visit www.edhc.com or call 512-651-
Group Life/AD&D Policies & EAPs
Lincoln Financial Group has partnered with ComPsych to offer new services to its Employee Assistance Programs (EAPs) and Group Life/AD&D policies. Employers can offer help to employees through one of two Lincoln Employee Assistance Programs (EAPs): EmployeeConnect, offered at no additional cost with Lincoln’s Long Term Disability plans and EmployeeConnect Plus, offered as a premium standalone EAP program. At no additional cost to the employee, the programs deliver a wide range of services including confidential counseling and practical guidance. For more information, visit www.LincolnFinancial.com.
Enhanced HSA Option
Employer groups that sign up for an HSA Bank program can now add the Tango Health solution. Tango’s software offers simple and convenient online and mobile tools, including patented features. Employees can now combine the many benefits and features of their HSA Bank savings account with Tango’s solutions in an integrated, seamless manner. Employees access these features through www.hsabank.com.
Private Exchange Marketplace For Large Groups
United Benefit Advisors (UBA) launched Benefits Passport, a private insurance exchange marketplace available through The Wilson Agency, LLC. Based on a defined contribution model, Benefits Passport will serve large group employers (more than 50 employees) and provide services, such as online enrollment, an employee contact center, accounting, payroll deduction reporting, and billing. Benefits Passport is an open source program that can support all major insurance carriers as well as any carrier with a standard data feed. It is designed to help employers reduce costs, increase efficiency, simplify administration, and provide value to employees in the face of health care reform. The online exchange was set to open Nov. 1, 2013 for coverage to start Jan. 1, 2014. Benefit offerings include major medical and pharmacy, as well as ancillary (or voluntary) benefits such as dental, vision, life, disability, and critical illness. Wellness programs will also be available and customer care support is provided for all participants. For more information, visits www.UBAbenefits.com.
The Type of Stress That Most Affects Job Performance
Stress at work contributes more to poor job performance than does stress at home or financial worries, according to a study by the Integrated Benefits Institute (IBI). Employees measured their job performance based on how often they were not careful, had difficulty concentrating, got less done compared to others, or got no work done at all.
Sixty-eight percent of employees who say they never experience stress at work, perform at or above the average. Just 41% of employees who face permanent or continual workplace stress perform at that level.
“Employers are between a rock and a hard place in dealing with workplace stress. On the one hand, the challenging economy translates into employees working longer hours and experiencing more stress at work. On the other hand, employers want a high-performing workforce,” said IBI president Thomas Parry, PhD. The study also found that healthier employees are less likely to face work-related stress, with those in excellent health least likely to be stressed out. For more information, visit www.ibiweb.org.