Category: Benefits

Three out of four children on Medicaid in nine states did not receive all required medical, vision and hearing screenings, according to a new report from the Department of Health and Human Services’ Office of the Inspector General.

The OIG report examined the extent to which children in nine selected states—Arkansas, Florida, Idaho, Illinois, Missouri, North Carolina, North Dakota, Texas, Vermont and West Virginia—received required Medicaid Early and Periodic Screening, Diagnostic and Treatment screenings, a child health benefit for children younger than 21. It found that 2.7 million children, about 76 percent, missed one or more of the required EPSDT medical, vision or hearing screenings, and 41 percent of children did not receive any required medical screenings. And more than half did not receive required vision or hearing tests. Meanwhile, 60 percent of children who did receive EPSDT medical screenings lacked at least one component of a complete screening.

To ensure these children are getting the most from this benefit, the OIG report recommended that the Centers for Medicare and Medicaid Services (CMS) require states to report vision and hearing screenings; collaborate with states and providers to develop effective strategies to encourage beneficiary participation in these screenings; work with states and providers to develop education and incentives for providers to encourage complete screenings; and identify and disseminate state practices for increasing children’s participation in, and providers’ delivery of, complete medical screenings.

According to the report, CMS said it will need “to assess the effect that new data-collection requirements might have on states’ financial resources” and also consider “the difficulty states might have in obtaining data on services that are provided outside traditional provider settings.” The CMS agreed with the other three recommendations, the report said.

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

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

One-quarter of employers expect the requirements that group health care plans extend coverage to employees’ adult children up to age 26 and that they eliminate lifetime dollar limits will increase plan costs at least 3 percent, according to a survey released Thursday, May 20.

The provisions, which generally go into effect in 2011, are among the first plan changes required under the new health care reform law.

Thirteen percent of employers responding to the Mercer survey expect the adult-child and dollar-limit provisions to boost costs by 3 to 4 percent, while 12 percent expect cost increases of at least 5 percent.

On the other hand, many employers expect a more modest impact: Thirteen percent expect cost increases of less than 1 percent, while 28 percent estimate cost increases of 1 to 2 percent.

Thirty percent say they don’t yet know how much costs will increase as a result of complying with the new coverage mandates, according to the Mercer study.

Demographics are a key factor in why costs will vary, said Tracy Watts, a partner in Mercer’s Washington office. For example, employers with young workforces likely would have few employees with young-adult children, but employers with a high number of employees ages 45 to 60 likely would have many young-adult children.

In the wake of the new requirements, some employers already are considering changes to their premium structures. For example, 20 percent said they will strongly consider changing their premium rate tiers. Many employers now have only two or three premium tiers.

In addition, 16 percent are strongly considering boosting the premium share for dependent coverage. Nearly half are strongly considering requiring children above a specified age to certify that no other coverage is available. Under the health care reform law, the adult-child coverage requirement does not apply until January 1, 2014, if the adult child is eligible to enroll in another employer plan.

Twenty-nine percent of respondents said a new 40 percent excise tax on the most costly plans is the reform provision that worries them most. Under the provision that is slated to begin in 2018, a 40 percent excise tax will be imposed on premiums exceeding $10,200 for single coverage and $27,500 for family coverage.

The tax poses a difficult issue for employers with generous plans, Watts said. If they pare coverage, employers will lose a tool that has provided a recruiting edge; but if they make no changes, employers face additional costs.

The survey is based on the responses of 791 employers.

 

 

Federal COBRA premium subsidies would be extended through year-end and employers would have more time to fund their pension liabilities under a tax bill that the House could vote on this week.

Under the measure—proposed by Senate Finance Committee Chairman Max Baucus, D-Montana, and House Ways and Means Committee Chairman Sander Levin, D-Michigan—the 65 percent, 15-month COBRA premium subsidy would be extended to involuntarily terminated employees through the end of the year.

Without congressional action, employees who lose their jobs after May 31 will not be eligible for the subsidy.
The measure, H.R. 4213, also would give employers more time to fund pension plan shortfalls.

Under current law, employers must amortize funding shortfalls over seven years. The proposed American Workers, State and Business Relief Act of 2010 would give employers two alternatives to that schedule.

Under one alternative, employers could amortize funding shortfalls over 15 years for any two plan years between 2008 and 2011.

Under the second alternative, employers would have to pay interest on a funding shortfall for only two of the plan years they choose. After that, the seven-year amortization period would begin.

For example, if an employer chose the latter approach for the 2010 plan year, it would pay interest on the shortfall in 2010 and 2011. Then the shortfall would be amortized over seven years starting in 2012.

Other provisions in the bill, though, would require employers that use either temporary funding schedule to contribute more to their plans if they paid “excessive” employee compensation or shareholder payments. A summary of the actual legislation, which was not immediately available, does not define excessive.

Under a previous version of the legislation, an amount equal to compensation that is in excess of $1 million paid to any employee would have to be paid to the pension plan. If an employer had 10 employees who each made $1.5 million, the employer would have to contribute an extra $5 million to the plan.

The House could vote on the bill this week and the Senate could vote on the plan next week.

 

Buoyed by a resurgent equities market, the value of 401(k) plan account balances has regained ground from the low point just over a year ago, according to a study released Wednesday, May 19.

The average account balance jumped 41 percent to $66,900 as of March 31, up from $47,500 at the end of March 2009, said Fidelity Investments, a Boston-based 401(k) plan administrator and mutual fund provider.

As of March 2008, the average account balance was $65,000, a number that tumbled later in the year as the equities market plunged.

“Over the long run, the tried-and-true strategies work best when it comes to saving for retirement,” James M. MacDonald, president of Fidelity’s Workplace Investing unit, said in a statement.

“Even through all of the volatility of the past couple of years, participants who continued to save in their 401(k) accounts now have a positive return from the start of the downturn in 2008,” he said.

The study is based on a Fidelity analysis of 17,000 corporate plans with 11 million participants.

A summary is available online at www.fidelity.com.

 

 

More than three-fourths of employers say they will wait until the effective date to comply with a provision in the health care reform law that requires group plans to extend coverage to employees’ adult children up to age 26, according to a new survey.

Among 661 employers responding to the survey by New York-based Towers Watson & Co., 16 percent said they would extend the coverage before the required effective date, 78 percent said they would wait until the effective date, and 6 percent did not yet know.

The law requires the extension to be made on the first day of the plan year that starts after September 23. For calendar-year plans, which are the most common, the effective date is January 1, 2011.

Few employers intend to comply early because of the demands that would put on company resources, said Randy Abbott, a Towers Watson senior consultant in Wellesley Hills, Massachusetts.

“Early adoption means more communications and more administrative issues to deal with. At a time when many employers are resource-constrained, they are prepared, unless there is overwhelming demand, to wait until the effective date,” Abbott said.

So far, just one major self-funded employer—United Technologies Corp. in Hartford, Connecticut—has said it will comply early. Effective immediately, the company is continuing coverage of employees’ adult children enrolled in its plan who would have lost coverage for reasons that include graduation from school.

Then on July 1, coverage will be offered to employees’ adult children up to age 26 regardless of whether they are covered now, unless they are eligible to enroll in another employer’s health care plan.

A top company executive earlier said United Technologies is complying sooner than required because it is the right thing to do and because such action is consistent with its practice of providing competitive benefits.

Interim final regulations published by the Internal Revenue Service, and the departments of Labor and Health and Human Services estimate that the coverage expansion would increase premiums by an average of 0.7 percent in 2011.

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

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

The Internal Revenue Service soon will be sending out questionnaires to about 1,200 sponsors of 401(k) plans as part of a project to provide the agency with information on a wide range of issues.

Among the 69 questions the IRS is asking are:

• What was the average contribution—as a percentage of salary—made by highly and non-highly compensated employees in 2006, 2007 and 2008?
• Does the plan permit participants to take loans?
• How frequently are participants required to make loan repayments?
• For what situations does the plan permit hardship distributions
• How often can participants change the percentage of salary contributed to the plan?
• Does the plan have an automatic contribution feature?

The IRS says it is conducting the survey to “determine potential compliance issues” as well as to help it decide where to focus enforcement efforts.

A previous IRS study found that 401(k) plans are the “most non-compliant plan type in the retirement plan universe.” Since 401(k) plans have become the dominant employment-based retirement plan, “it is important to the future of the private retirement system these plans maintain the highest level of compliance possible,” the IRS said in a preface to the questionnaire.

 

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

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Chicago Public Schools this fall will open the city’s first high school specializing in health care, a move local hospitals hope will help relieve chronic workforce shortages.

The school, which recently used a lottery system to enroll a freshman class of 160, will have a heavy emphasis on math and science. Juniors and seniors will be able to earn credits by shadowing hospital workers and interning as assistant nurses and in other professions.

Planners aim to prepare students for health- and science-related college programs and certify them for entry-level jobs in health care, such as pharmacy technicians or assistant physical therapists.

“There’s a tremendous need for us to prepare the next generation of health care professionals,” said Juan Salgado, president of Instituto del Progreso Latino, a nonprofit career development group in Pilsen. “If we don’t do a better job of that in our city neighborhoods and communities of color, we’re going to fall short.”

The Instituto Health Sciences Career Academy will set up shop temporarily on the Chicago campus of National-Lewis University. It will seek a permanent site in the Pilsen neighborhood.

Instituto del Progreso Latino and the Metropolitan Chicago Healthcare Council, a trade group of hospitals and other medical providers, applied to CPS to form the school. It’s one of nearly 100 city schools formed under Renaissance 2010, the city’s 6-year-old plan to open innovative schools in poor neighborhoods.

Chicago-area hospitals had openings for more than 3,000 registered nurses as of March, according to the Illinois Department of Employment Security. They’re looking for hundreds more physical therapists, pharmacists, lab technicians, computer specialists and other professionals.

“The shortage of nurses and allied health professionals continues to exist, and it’s going to become a bigger problem,” said Kevin Scanlan, CEO of the health care council. “This is an innovative program that relies on hospitals to provide opportunities to students.”

Filed by Mike Colias of Crain’s Chicago Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

   

Enrollment in health savings accounts linked to high-deductible health insurance plans surged to 10 million people as of January 1, a 25 percent increase in a year, according to an annual census released Wednesday, May 19.

HSA enrollment rose in all markets, according to the Washington-based America’s Health Insurance Plans.

The large-employer market registered the largest percentage gain. Employers with at least 51 employees had 5 million people in HSAs as of January 1, an increase of about a 33 percent in the past year.

In the small-employer market—employers with up to 50 employees—HSA enrollment increased to about 3 million people, up about 22 percent. Meanwhile, the individual market climbed to just more than 2 million people, a 12 percent rise.

HSAs, authorized under a 2003 law that added a prescription drug benefit to the Medicare program, became available on January 1, 2004, and enrollment has risen steadily since then. AHIP said 1 million people were enrolled in HSAs in March 2005, 3.2 million as of January 1, 2006, 4.5 million in 2007, 6.1 million in 2008 and 8 million in 2009.

The key factor driving HSA growth is that premiums for high-deductible health insurance plans, to which HSAs must be linked by law, tend to be lower than more traditional health plans.

This year, the minimum deductible for single coverage through an HSA-linked health plan is $1,200. The minimum deductible for family coverage is $2,400.

The AHIP census is based on 93 insurers and their subsidiaries offering HSA-linked health insurance plans. AHIP said it believes its census covers virtually all people enrolled in plans linked to HSAs.

Copies of the census are available at www.ahipresearch.org.

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

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

 

Under a provision tucked into the new health care reform law, a 40 percent excise tax will be imposed starting in 2018 on premiums exceeding $10,200 for single coverage and $27,500 for family coverage. The tax on the so-called Cadillac health care plans will be paid by insurers and third-party claims administrators, but they are expected to pass that added cost on to employers.

Benefit consultant Towers Watson & Co. of New York estimates that in 2010 the average cost for single coverage will be $5,184 and family coverage will cost $14,988. If costs increase at an 8 percent annual clip, more than 60 percent of the employer plans Towers Watson analyzed would be hit by the tax in 2018, the consultant estimates.

“All it takes to drive costs above the excise tax cap for six in 10 employers is an 8 percent average annual cost increase.

And without making plan design changes, that’s what many employers are projecting,” Dave Osterndorf, Towers Watson chief health actuary in Milwaukee, said in a statement. “This rate of increase has been typical for the past several years.”

On the other hand, if employers hold down cost increases to 6 percent, many will not be hit by the excise tax until 2023. “These top performers may avoid hitting the excise threshold until 2023 or beyond due to their focus on workforce improvement, wellness, chronic condition management and communicating the prudent use of health care goods and services,” Osterndorf said.

Still, there is good news, said Randy Abbott, a senior Towers Watson consultant in Wellesley Hills, Massachusetts.

“Employers have a long runway to plan for 2018, so there is time to approach the issue strategically and thoughtfully,” he said.

The analysis is based on health care plans sponsored by 552 employers, mainly Fortune 1,000 companies. 

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

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Final interim rules unveiled Tuesday, May 4, detail the requirements that employers must meet to receive federal reimbursement of claims by pre-Medicare-eligible retirees.

Under a $5 billion program—authorized by the new health care reform law—employers with health care plans covering retirees from age 55 through 64 will be reimbursed for 80 percent of such retirees’ claims between $15,000 and $90,000.

The Department of Health and Human Services’ rules specify that only health care expenses incurred after June 1, 2010, are eligible for reimbursement. Health benefits that qualify for reimbursement include medical, hospital, surgical, prescription drug, mental health and other benefits that may be specified by the HHS secretary.

To receive reimbursement, health care plans must have programs in place that save costs or have the potential to save costs for participants with chronic and high-cost conditions, according to a White House fact sheet. 

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

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.