Tomorrow (January 31) is the deadline for submitting comments to the Department of Health and Human Services (HHS) on the essential health benefits bulletin, which HHS issued on December 16, 2011.
You can send your comments to: EssentialHealthBenefits@cms.hhs.gov
The bulletin outlined the approach HHS intends to pursue in rulemaking to define essential health benefits. As you may recall, the Patient Protection and Affordable Care Act (ACA) requires health insurance plans offered in the individual and small group markets, both inside and outside the Affordable Insurance Exchanges (Exchanges), to offer a comprehensive package of items and services, known as essential health benefits (EHB).
In the bulletin, HHS gave states the flexibility to decide what EHBs must be included in coverage sold to individuals or small businesses in the Exchanges. The law mandates coverage within ten benefit categories, but it is up to each state to decide the specifics, such as how many doctors’ visits or what drug services the plans will be required to offer. States can use several options to base those benefit requirements, including what some existing health plans in the state offer.
Choosing a benchmark. States are allowed to select an existing health plan as a "benchmark" for items and services in their EHB packages. If a benchmark does not cover one of the ten benefit categories, it must be supplemented, the HHS advises. Four health insurance plan options were given for choosing a benchmark, one of which was the choice of the largest plan (by enrollment) in any of the three largest small-group-insurance products in a particular state’s small group market.
Last week, HHS released a list of those three products for each state, but it cautions that it is for illustrative purposes only, and is not an official list of products that will be states’ benchmark options.
Monday, January 30, 2012
Friday, January 27, 2012
Indiana job loss is likely under ACA, say economic experts
Indiana can expect to lose a substantial number of jobs in the near future, according to a report issued by Timothy F. Slaper, Ph.D, Director of Economic Analysis, and Ryan A. Krause, Research Analyst, using research findings obtained by the Indiana Business Research Center, Kelley School of Business, Indiana University.
Indiana's Senate just passed a right-to-work bill, which some fear may lessen Indiana's attractiveness to outside businesses. Slaper and Krause somewhat bypass that argument, stating that it "may" put Indiana in a weaker competitive position compared to states without such right-to-work legislation, and, instead predict that it is the ACA that will, without question, put at least 12,700 jobs at risk, based on statistics they gathered with regard to small businesses job growth from 2003 to 2008. For that period, Indiana businesses that started with between zero and 49 employees, and ended with fewer than 100 employees created exactly 12,698 jobs.
At first glance, it would seem that a right-to-work bill would leave Indiana at more of a disadvantage than would the ACA, because not every state has passed right-to-work legislation, and prospective employers might bypass Indiana for a non-right-to-work state. By comparison, since the ACA is a federal law, employers in every state are held equally to its various restrictions. However, Slaper and Krause argue convincingly that the ACA's requirement that employers with 50 or more employees must soon provide their employees with health insurance or pay a $2,000 fine, might make employers think twice about expanding from a 49-employee business to a 50 or more employee business. It is this small-scale expansion, they contend, that will no longer happen because small employers will be reluctant to add an extra one or two employees.
Slaper and Krause explain that, starting in 2014, small employers will have to pay a $2,000 assessment if they don't provide health insurance, but the ACA exempts the first 30 employees from the fine. So, for an employer that employs 49 employees at an average salary of $35,500 and doesn't provide health insurance, a 50th employee will cost $35,500, plus $40,000 ($2,000 times (50 employees minus 30 exempt employees)), for a grand total of $75,500. Even employers looking to add a few more employees might hesitate to incur the extra cost involved.
Big businesses would be less likely to be affected, because they would most likely start out with an excess of 50 employees, and very fast growing businesses, termed “parachute” firms by Slaper and Krause, would see the ACA assessment spread out among large numbers of employees. On top of this, Slaper and Krause stated that they didn’t take into account in their calculations businesses with 50 or slightly more employees that would terminate jobs just to avoid the penalty. Slaper and Krause have only looked at data from Indiana, but it’s hard to believe that other states aren’t facing the same concerns.
It seems as though Slaper and Krause are assuming that most Indiana small businesses don’t provide their employees with health insurance, which may very well be the case. Also, employees who don't obtain health insurance from their employer have to get it from somewhere, or face the possibility of financial ruin in the event of a severe illness or medical emergency. Ideally, small businesses should take that into account when determining what their employees salaries should be. The $600 and $1,700 more per year that Slaper and Krause report that Indiana small businesses and parachute firms pay their employees, respectively, compared to other Indiana employers, would hardly be enough to cover those costs. Presumably, small businesses will have to re-think employee salaries, and perhaps offer less to offset the cost of employee health coverage.
There is help on the horizon from the ACA that might make it easier for small businesses to avoid the $2,000 assessment by offering their employees relatively inexpensive helath insurance. It looks like Slaper and Krause are either unaware of, or decided not to factor in, Act Sec. 1311 of the ACA. The ACA requires states to establish Small Business Health Options Program (SHOP) Exchanges. Under these Exchanges, individuals and small businesses with 100 or fewer employees can purchase affordable qualified coverage, though, eventually, states may allow businesses with more than 100 employees to purchase coverage in the SHOP Exchange. Indiana could even form a regional exchange with other states. SHOP Exchanges will be designed to assist qualified small employers (i.e., with 100 or fewer employees) in the state in enrolling their employees in qualified health plans in the state's small group market.
For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, as well as provisions for small businesses, just click here.
Indiana's Senate just passed a right-to-work bill, which some fear may lessen Indiana's attractiveness to outside businesses. Slaper and Krause somewhat bypass that argument, stating that it "may" put Indiana in a weaker competitive position compared to states without such right-to-work legislation, and, instead predict that it is the ACA that will, without question, put at least 12,700 jobs at risk, based on statistics they gathered with regard to small businesses job growth from 2003 to 2008. For that period, Indiana businesses that started with between zero and 49 employees, and ended with fewer than 100 employees created exactly 12,698 jobs.
At first glance, it would seem that a right-to-work bill would leave Indiana at more of a disadvantage than would the ACA, because not every state has passed right-to-work legislation, and prospective employers might bypass Indiana for a non-right-to-work state. By comparison, since the ACA is a federal law, employers in every state are held equally to its various restrictions. However, Slaper and Krause argue convincingly that the ACA's requirement that employers with 50 or more employees must soon provide their employees with health insurance or pay a $2,000 fine, might make employers think twice about expanding from a 49-employee business to a 50 or more employee business. It is this small-scale expansion, they contend, that will no longer happen because small employers will be reluctant to add an extra one or two employees.
Slaper and Krause explain that, starting in 2014, small employers will have to pay a $2,000 assessment if they don't provide health insurance, but the ACA exempts the first 30 employees from the fine. So, for an employer that employs 49 employees at an average salary of $35,500 and doesn't provide health insurance, a 50th employee will cost $35,500, plus $40,000 ($2,000 times (50 employees minus 30 exempt employees)), for a grand total of $75,500. Even employers looking to add a few more employees might hesitate to incur the extra cost involved.
Big businesses would be less likely to be affected, because they would most likely start out with an excess of 50 employees, and very fast growing businesses, termed “parachute” firms by Slaper and Krause, would see the ACA assessment spread out among large numbers of employees. On top of this, Slaper and Krause stated that they didn’t take into account in their calculations businesses with 50 or slightly more employees that would terminate jobs just to avoid the penalty. Slaper and Krause have only looked at data from Indiana, but it’s hard to believe that other states aren’t facing the same concerns.
It seems as though Slaper and Krause are assuming that most Indiana small businesses don’t provide their employees with health insurance, which may very well be the case. Also, employees who don't obtain health insurance from their employer have to get it from somewhere, or face the possibility of financial ruin in the event of a severe illness or medical emergency. Ideally, small businesses should take that into account when determining what their employees salaries should be. The $600 and $1,700 more per year that Slaper and Krause report that Indiana small businesses and parachute firms pay their employees, respectively, compared to other Indiana employers, would hardly be enough to cover those costs. Presumably, small businesses will have to re-think employee salaries, and perhaps offer less to offset the cost of employee health coverage.
There is help on the horizon from the ACA that might make it easier for small businesses to avoid the $2,000 assessment by offering their employees relatively inexpensive helath insurance. It looks like Slaper and Krause are either unaware of, or decided not to factor in, Act Sec. 1311 of the ACA. The ACA requires states to establish Small Business Health Options Program (SHOP) Exchanges. Under these Exchanges, individuals and small businesses with 100 or fewer employees can purchase affordable qualified coverage, though, eventually, states may allow businesses with more than 100 employees to purchase coverage in the SHOP Exchange. Indiana could even form a regional exchange with other states. SHOP Exchanges will be designed to assist qualified small employers (i.e., with 100 or fewer employees) in the state in enrolling their employees in qualified health plans in the state's small group market.
For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, as well as provisions for small businesses, just click here.
Wednesday, January 25, 2012
White House paints picture of life without ACA
We recently blogged on this site about what healthcare reform would look like without the individual mandate of the Patient Protection and Affordable Care Act (ACA). Now, the White House wants us all to think about what might happen if healthcare reform had been completely repealed, which is what the House tried and failed to do last January, and what the U.S. Supreme Court may do this year.
The list of scenarios is fairly extensive. According to a report issued by the White House last week, the following would have happened:
The list of scenarios is fairly extensive. According to a report issued by the White House last week, the following would have happened:
- 2.5 million currently-insured young adults would be without health insurance;
- 2.65 million seniors would pay a total of $1.5 billion more for their prescription drugs, since the ACA provided a 50% discount on covered brand name prescription drugs for seniors and people with disabilities who hit the "donut hole";
- 24.2 million seniors (as of November 2011) would be paying more for preventive care, such as mammograms and colonoscopies;
- 45,000 Americans with pre-existing conditions would, as of November 2011, be uninsured. The White House bases this estimate on insurance provided through the ACA's Pre-Existing Condition Insurance Plan;
- 102 million would have not seen their coverage expanded beyond the caps on their lifetime care;
Sunday, January 22, 2012
Vermont wants to be a single payer state
The State of Vermont is fast on its way to not only achieving compliance with health care reform requirements, but to becoming a single-payer state, and other states should perhaps take note of, or at least admire, its pro-active approach. On January 17, 2012, the 5-member Green Mountain Care Board issued its report to the Vermont General Assembly, detailing how it is laying a foundation for fulfilling the purposes of Act 48, a bill signed last May by Vermont governor Peter Shumlin.
The stated purpose of Act 48 is to provide Vermont residents with high quality, publicly-financed health care by maximizing the receipt of federal funds, including those available via the Patient Protection and Affordable Care Act (ACA). The Act states that "Vermont must begin to plan now for health care reform, including simplified administration processes, payment reforms, and delivery reform." Furthermore, with Act 48, Vermont is establishing a universal health care program, called "Green Mountain Care," that is to provide health benefits via a single payment system.
As a result, Vermont's director of health reform, Robin Lunge, will oversee the integration of multiple payers into the Vermont health benefit exchange.
A bill is now under consideration (H.559) by the Vermont legislature that, among other things, merges the individual and small group insurance markets, gives the Green Mountain Care Board authority over health insurer rate review, hospital budget review, and certificate of need processes, bans discretionary clauses in health insurance contracts, and restricts the amount of insureds' out-of-pocket expenditures for prescription drugs.
The stated purpose of Act 48 is to provide Vermont residents with high quality, publicly-financed health care by maximizing the receipt of federal funds, including those available via the Patient Protection and Affordable Care Act (ACA). The Act states that "Vermont must begin to plan now for health care reform, including simplified administration processes, payment reforms, and delivery reform." Furthermore, with Act 48, Vermont is establishing a universal health care program, called "Green Mountain Care," that is to provide health benefits via a single payment system.
As a result, Vermont's director of health reform, Robin Lunge, will oversee the integration of multiple payers into the Vermont health benefit exchange.
A bill is now under consideration (H.559) by the Vermont legislature that, among other things, merges the individual and small group insurance markets, gives the Green Mountain Care Board authority over health insurer rate review, hospital budget review, and certificate of need processes, bans discretionary clauses in health insurance contracts, and restricts the amount of insureds' out-of-pocket expenditures for prescription drugs.
Friday, January 20, 2012
IRS Preparing For Health Reform Tax Appeals
The Internal Revenue Service Office of Appeals is preparing for the new cases that it anticipates will result from the new tax law provisions included in the Patient Protection and Affordable Care Act (ACA), according to a report released by the Treasury Inspector General for Tax Administration (TIGTA). The ACA contains $438 billion in revenue provisions that are in the form of new taxes and fees and about 42 of its provisions add to or amend the Internal Revenue Code.
“Because of the potential for the ACA to affect most taxpayers, effective planning is critical to ensuring Appeals’ readiness to prepare for this legislation and resolve taxpayer requests in a timely and effective manner,” said Treasury Inspector General for Tax Administration J. Russell George.
As Appeals moves forward with its planning efforts, TIGTA believes management should develop a more formal approach to its ACA planning activities to ensure they are ready to resolve taxpayer requests regarding ACA-related issues in a timely and effective manner. This should include outlining the key objectives and tasks that need to be addressed to prepare for the ACA-related impact on Appeals, establishing who should be responsible for conducting these activities, and developing time-lines for completing these actions over the next several years.
“Because of the potential for the ACA to affect most taxpayers, effective planning is critical to ensuring Appeals’ readiness to prepare for this legislation and resolve taxpayer requests in a timely and effective manner,” said Treasury Inspector General for Tax Administration J. Russell George.
As Appeals moves forward with its planning efforts, TIGTA believes management should develop a more formal approach to its ACA planning activities to ensure they are ready to resolve taxpayer requests regarding ACA-related issues in a timely and effective manner. This should include outlining the key objectives and tasks that need to be addressed to prepare for the ACA-related impact on Appeals, establishing who should be responsible for conducting these activities, and developing time-lines for completing these actions over the next several years.
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