Author: Site Staff

Likely Republican efforts next year to strip a controversial provision from the health care reform law that will require individuals to enroll in a qualified health care plan or be fined could lead to yet higher health care costs, an industry lobbyist warns.

If the individual mandate, which takes effect in 2014, were removed and other provisions remain, such as the ban of the denial of coverage for pre-existing conditions, “it would be a disaster,” said Patricia Henry, executive vice president and deputy general counsel for commercial property and casualty insurance company ACE Group Holdings Inc. in Philadelphia.

Delivering the keynote address Nov. 10 at the 20th World Captive Forum in Scottsdale, Arizona, Henry likened such action to allowing people to buy homeowners insurance while their house was burning down.

With restrictions, such as the ban on pre-existing condition exclusions, in place, healthy people in some cases would wait until they were sick to buy coverage, resulting in adverse selection and ultimately forcing insurers to significantly boost premiums, she warned.

Whether GOP backers of such action would be successful is not clear. Henry predicted more gridlock in the new congressional session.

But she said it is likely that Congress would repeal a provision, which she described as “anathema” to the small-business community that will require employers to furnish 1099 reporting statements whenever they do more than $600 in business with a corporate vendor. Many Republicans and some Democrats want the provision repealed, and President Barack Obama said last week that he is open to considering changes to the provision.

Henry, though, said she does not sense much interest in Congress for legislation backed by the risk retention group industry to allow RRGs to write property coverage for policyholder-owners.  

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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H1N1 flu hospitalization rates were higher—while H1N1 and seasonal flu vaccination rates were lower—among African-Americans, Hispanics and American Indian/Alaska Natives than whites, according to a new report from the Trust for America’s Health.

Last year’s flu pandemic, which infected about 20 percent of the U.S. population and led to about 274,000 hospitalizations and 12,000 deaths, resulted in historically high rates of flu vaccinations, the report noted.

Still, during the 2009-10 flu season, the African-American hospitalization rate was 29.7 per 100,000 people compared with the white hospitalization rate of 16.3 per 100,000 people, and vaccination rates for the deadly H1N1 virus were 9.8 percent lower for African-American adults and 4.2 percent lower for African-American children than for white children.

Meanwhile, seasonal flu vaccinations were 16.5 percent lower for African-American adults than white adults and 5.6 percent lower for African-American children than white children. The report’s findings also showed that the H1N1 vaccination rate was 11.5 percent lower for Hispanic adults than for whites, although the rate was 5.5 percent higher for Hispanic children than white children.

For the seasonal flu, the vaccination rates were 21.7 percent lower for Hispanic adults and 2.6 percent lower for Hispanic children than whites.

The report also said that all healthcare personnel should receive the seasonal vaccine. As of last January, the report said, 62 percent of health care workers had been vaccinated against seasonal flu and only 37 percent received an H1N1 shot.

“Health care providers are role models as well as trusted sources of information,” the report said. “Americans are less likely to trust the safety of vaccines if their providers are not vaccinated, and no one should ever get the flu from their doctor, nurse of medical technician.”  

Filed by Jessica Zigmond of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Sponsors of “mini-med” plans that receive waivers from federal regulators to allow them to temporarily continue to offer the arrangements face new reporting requirements.

The waivers are needed because most, if not all, mini-med plans run afoul of federal rules—mandated by the health care reform law—that set a minimum annual dollar limit on essential benefits that health care plans must provide. The minimum limit, under regulations released earlier this year, is $750,000 in 2011, $1.25 million in 2012 and $2 million in 2013.

Starting in 2014, the law bars annual limits for essential benefits.

The minimum limits allowed for the next three years, though, are far more than the maximum benefits provided through mini-med plans, which typically are offered to low-wage, part-time or seasonal employees who, in many cases, could not afford coverage in other group plans offered to full-time employees.

Until 2014, mini-med plan providers can obtain waivers from the required minimum annual benefit in situations where meeting those requirements would result in a significant decrease in access to benefits or significantly increase premiums, the Department of Health and Human Services said in guidance issued in September. Several dozen organizations have received the waivers.

In a supplemental guidance issued late last week, HHS regulators said as a condition of receiving waivers, mini-med sponsors will have to provide written notification to enrollees that the plan does not meet the annual limit requirements and that a waiver has been approved.

The notice also will have to give the dollar amount of the annual limit requirements and state that the waiver will be for only one year. HHS said it intends to soon provide a model waiver notice that sponsors could provide to enrollees.  

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Employees enrolled in a high-deductible health plans and health savings accounts are finding two important changes in 2011. They no longer can use their HSAs to cover over-the-counter drug purchases unless they have a prescription and will be hit with a higher penalty for nonmedical withdrawals—20 percent up from 10 percent.

The health care reform law limits reimbursements for medications like pain relievers, cold medicines, antacids and allergy medications, from HSAs and other types of flexible spending accounts. Despite the new restrictions, benefits experts predict the popularity of medical pretax payment accounts will continue to expand.

Maureen Fay, a principal in Aon-Hewitt’s health and benefits practice, says she anticipates growth of 20 to 30 percent annually for HSAs in the coming years. Steadily rising costs and changes under the Obama administration’s health care reform legislation have spurred interest in high-deductible health plans coupled with pretax accounts, also known as consumer-driven health plans.

Since HSAs were signed into law in 2003, small-business owners have been driving the increase. Yet large employers comprise the fastest-growing market for these accounts, Fay says.

“In the large employer market, many have been investigating these kinds of plans and putting a toe in the water,” she says. “Most have been sticking with their PPOs and HMOs but a few things have happened over the past couple of years to create the perfect storm to drive enrollment in these plans.”

She says the flagging economy has increased pressure to cut costs, forcing employers to manage health care dollars by consolidating plans, passing along costs to employees and emphasizing health and wellness.

“They are running out of runway,” Fay says. “There’s only so much tweaking they can do. They are looking for new solutions.”

Some 10 million people were enrolled in HSAs as of January—up 25 percent from the previous year, according to a survey by America’s Health Insurance Plans, an insurance industry trade association based in Washington, D.C. According to a survey by the association, the number of large employers offering these plans increased by 33 percent between January 2009 and January 2010. By comparison, small-group coverage increased by 22 percent.

David Josephs, managing director and head of consumer-directed health care at JPMorgan Chase & Co. based in New York, predicts a big year for HSAs. Chase, one of the nation’s largest providers of the accounts, reported a 30 percent increase in its HSA business between February 2009 and February 2010.

“It’s still early in the (benefit) enrollment season. We’ll start to see exact volumes in the next week or so, but what we’ve seen so far is that we’ve tripled the number of employers and individuals we’re serving directly,” he says. “We’re going to have a very, very robust enrollment season in 2011.”

Like Fay, he cites the economy as one reason for the increase, but also notes, “People are getting a lot more comfortable with these products and how they can create a multiyear way to finance their health care needs.”

Unlike the “use it or lose it” nature of other pretax accounts like FSAs, HSAs allow individuals to set aside pretax dollars for medical expenses that can be rolled over each year without a penalty and can be invested in stocks and other accounts similar to those in an Individual Retirement Account.

Josephs says that as people become more comfortable with high-deductible plans and see the potential cost savings, enrollment will increase. However, he acknowledges that it may take time for people to accept a plan that means higher upfront, out-of-pocket costs.

Helen Darling, president of the National Business Group on Health, based in Washington, a membership organization representing large employers, says companies need to clearly communicate the potential cost savings to employees.

“It’s a huge paradigm shift for employees,” she says. Employees “have to pay attention. In some cases they may have to pay for their office visits. Americans have gotten used to having everything covered. You just pay a copayment and then you get your notice of benefits. This is a very different experience. It’s a major change management and communications challenge, and employers have to be ready.” 

—Rita Pyrillis