Wednesday, April 16, 2014

Plans that don’t conduct standard transactions should be exempt from certification of HIPAA compliance, group suggests

Controlling health plans (CHP) that are not engaged in standard transactions should be exempt from the certification of Health Insurance Portability and Accountability Act of 1996 (HIPAA) compliance, according to recent comments from the American Benefits Council (Council) on the Department of Health and Human Services’ (HHS) proposed rule on administrative simplification.

The Council also requests that employee benefit plan arrangements, such as flexible spending arrangements (FSAs), health care reimbursement accounts (HRAs), and health savings accounts (HSAs), be exempted from the certification requirements under the proposed regulations even if they otherwise meet the definition of a CHP.

Background. The Patient Protection and Affordable Care Act (ACA) enacted certain changes under Section 1173 of the Social Security Act. Section 1173(h) requires certification of compliance for health plans and the periodic review of health plans by the Secretary of HHS.

Proposed rule. The proposed rule establishes certification requirements that are intended to align with the requirements and timelines under the Unique Health Plan Identifier Final Rule (HPID Final Rule). Specifically, the proposed rule would require certification at the CHP level. All CHPs must meet the certification submission requirements. The preamble to the HPID Final Rule clarified that self-insured employer group health plans meet the HIPAA definition of “health plan.”

Self-insured group health plans. The Council notes that under the proposed rule, all health plans that meet the definition of a CHP are required to meet the certification requirements whether or not they actually conduct any standard transactions. The rule does not explicitly address the responsibilities of the self-insured plan and the plan administrator with respect to meeting certification requirements in those cases. But in the vast majority of these situations, the self-insured group health plan is not self-administered and does not engage in standard transactions, but utilizes third parties to administer the plan, including carrying out any covered transactions.

“A self-insured group health plan can impose obligations necessary to fulfill the certification requirement only through its arrangement with those third parties that actually carry out standard transactions in the administration of the plan, and the multiplicity of such arrangements could make the effort both time-consuming and burdensome,” the Council wrote.

As such, the Council requests that final regulations clarify that CHPs that are not engaged in standard transactions are exempt from the certification requirements under the proposed rule.

Health spending arrangements. Likewise, employee benefit plan arrangements, such as FSAs, HSAs, and HRAs, typically have no standard transactions between covered entities, by the plan itself or through vendors. The Council requests that such plans also be exempted from the certification requirements. If not exempted, the Council requests that HHS provide specific guidance for how plans are expected to provide a certification and also provide a simplified method for obtaining such certification.

Monday, April 14, 2014

ACA will have little effect on costs or coverage in near term for most people, study says

Approximately 230 million people, about 70% of the U.S. population, will see very little change in their premiums due to the Patient Protection and Affordable Care Act (ACA; P.L. 111-148), according to a  study by the American Institute for Economic Research (AIER). These are mostly individuals who are covered by employer-sponsored health insurance or public assistance programs.
 
Many of those who purchase insurance on the individual market and the uninsured are likely to see significant changes in premium costs, however. AIER estimates that more than 50 million people will likely face higher premiums, while more than 30 million will likely see lower or very low premiums.
 
“The Affordable Care Act is one of the most confusing and controversial pieces of legislation in years,” said Stephen Adams, President of AIER. “We conducted this study to provide Americans with an objective, non-partisan analysis of how the law will affect them. The good news for most people is that the ACA will have little effect on their costs or coverage, at least in the near term. But, for those who are affected, it’s important to have an unbiased understanding of what might change.”
 
Employer plans. Workers who are dropped from their employers’ small or large group plans are likely to experience significant cost increases, the study finds. These people must purchase insurance in the individual market where they pay full premium costs and lose the benefit of sharing costs with their employer. It’s not likely that a large number of people will be in this position because employers who drop insurance will have more difficulty competing for workers, according to the study.
 
Many small group plans face conflicting pressures from the ACA, the study notes. For many small group plans, the ACA’s stricter limits on medical underwriting will help hold down premium costs. But they also will face upward price pressure from the additional administrative costs associated with complying with the ACA and the costs of higher take-up rates by employees.
 
Medicaid gap. AIER also estimates that nearly 6 million people will fall into the Medicaid gap, a quirk in the law created when 25 states declined to expand national eligibility standards for Medicaid. This gap includes people with incomes that are too low to be eligible for subsidies under the ACA, but are too high to qualify for Medicaid in their state.

The study provides an analysis of how the law will change insurance costs and a guide to how it will affect people in each health insurance group.

“Implementation of important parts of the law has been delayed, so it’s hard to predict the law’s impacts with any precision,” Adams added. “It’s unknown how many employers will stop offering plans because of the law, for instance, or whether enough people will sign up for individual insurance to keep premiums in check. These are some of the aspects of the law that will need to be monitored over the next few years.”

Friday, April 11, 2014

Reforms have potential to change insurance map of the country

Thirty-two million people under age 65 were underinsured in the United States in 2012, which means they had health coverage but it provided inadequate protection against high health care costs relative to their income, a recent Commonwealth Fund report finds. The first report to examine the underinsured at the state level, it finds that the rate of underinsured ranged from a low of 8 percent in New Hampshire to highs of 16 percent in Mississippi and Tennessee and 17 percent in Idaho and Utah.

Low- and middle-income families were most likely to be affected: 13 percent—4 million—of the underinsured were middle-income, earning between about $47,000 and $95,000 for a family of four, and 81 percent—26 million—were low-income, earning less than 200 percent of the federal poverty level, or under $47,000 a year for a family of four.

In addition, 47 million people were uninsured in 2012—a decline of nearly 2 million from 2010, likely due in large part to the Patient Protection and Affordable Care Act’s (ACA) early provision to expand dependent coverage for young adults.

Wednesday, April 9, 2014

Cost of ACA to large employers could be up to $5,900 per employee


When looking at increases in health care costs solely due to the Patient Protection and Affordable Care Act (ACA), the cost of the ACA to large employers (those with 10,000 or more employees) is estimated to be between $4,800 to $5,900 per employee, according to recent research from the American Health Policy Institute. The study, The Cost of the Affordable Care Act to Large Employers, contained responses from 100 large employers, and intended to isolate the ACA’s role in increasing health care costs—separate from the larger trends taking place in health care, such as the aging workforce or the rate of health care inflation. In addition, the study does not take into account possible off-setting savings generated by the ACA.

Monday, April 7, 2014

Law eliminates deductible limits for employer-sponsored plans in small group market


The Protecting Access to Medicare Act of 2014 (P.L. 113-93) eliminates the deductible limits for employer-sponsored health plans in the small group market. Specifically, Sec. 213 of the law repeals Section 1302(c)(2) of the Patient Protection and Affordable Care Act, which had placed limits on deductibles in employer-sponsored health plans in the small group market, subject to the law’s actuarial value requirements. These limits on deductibles are not in effect for the 2014 and 2015 plan years.

The new law, which President Barack Obama signed on April 1, 2014, provides that the amendment will be effective as if included in the enactment of the ACA.