Health Reform Hits Main Street, A You Tube Video

Check this video out at youtube.com  It's very good at explaining the new laws in simple terms that we can all understand.  It was produced by the Kaiser Family Foundation and only takes a few minutes to watch.  We think it does a good job of explaining the basics of the new health care laws and what is happening and when.  Click on the link or copy and paste it into your browser.  We hope it helps and we welcome your commments.

http://www.youtube.com/watch?v=vmdbllWOOzs&hd=1

Health Care Changes Coming in 2011

From the Kaiser Family Foundation website, http://www.kff.org/,
upcoming health care laws changes for 2011:

1.   Minimum Medical Loss Ratio for Insurers Requires health plans to report the proportion of premium dollars spent on clinical services, quality, and other costs and provide rebates to consumers if the share of the premium spent on clinical services and quality is less than 85% for plans in the large group market and 80% for plans in the individual and small group markets.  Implementation: Requirement to report medical loss ratio effective for 2010; requirement to provide rebates effective beginning January 1, 2011

2.   Closing the Medicare Drug Coverage Gap Requires pharmaceutical manufacturers to provide a 50% discount on brand-name prescriptions filled in the Medicare Part D coverage gap beginning in 2011 and begins phasing-in federal subsidies for generic prescriptions filled in the Medicare Part D coverage gap. Implementation: January 1, 2011

3.   Medicare Payments for Primary Care Provides a 10% Medicare bonus payment for primary care services; also, provides a 10% Medicare bonus payment to general surgeons practicing in health professional shortage areas. Implementation: January 1, 2011 through December 31, 2015

4.   Medicare Prevention Benefits Eliminates cost-sharing for Medicare-covered preventive services that are recommended (rated A or B) by the U.S. Preventive Services Task Force and waives the Medicare deductible for colorectal cancer screening tests; authorizes Medicare coverage for a personalized prevention plan, including a comprehensive health risk assessment. Implementation: January 1, 2011

5.   Center for Medicare and Medicaid Innovation Creates the Center for Medicare and Medicaid Innovation to test new payment and delivery system models that reduce costs while maintaining or improving quality. Implementation: Center established by January 1, 2011

6.   Medicare Premiums for Higher-Income Beneficiaries Freezes the income threshold for income-related Medicare Part B premiums for 2011 through 2019 at 2010 levels resulting in more people paying income-related premiums, and reduces the Medicare Part D premium subsidy for those with incomes above $85,000/individual and $170,000/couple.  Implementation: January 1, 2011

7.  Medicare Advantage Payment Changes Restructures payments to private Medicare Advantage plans by phasing-in payments set at increasingly smaller percentages of Medicare fee-for-service rates; freezes 2011 payments at 2010 levels; and prohibits Medicare Advantage plans from imposing higher cost-sharing requirements for some Medicare covered benefits than is required under the traditional fee-for-service program.  Implementation: January 1, 2011

8.   Medicaid Health Homes Creates a new Medicaid state option to permit certain Medicaid enrollees to designate a provider as a health home and provides states taking up the option with 90% federal matching payments for two years for health home-related services.  Implementation: January 1, 2011

9.   Chronic Disease Prevention in Medicaid Provides 3-year grants to states to develop programs to provide Medicaid enrollees with incentives to participate in comprehensive health lifestyle programs and meet certain health behavior targets.  Implementation: January 1, 2011

10. CLASS Program Establishes a national, voluntary insurance program for purchasing community living assistance services and supports (CLASS program).  Implementation: January 1, 2011

11. National Quality Strategy Requires the Secretary of the federal Department of Health and Human Services to develop and update annually a national quality improvement strategy that includes priorities to improve the delivery of health care services, patient health outcomes, and population health.  Implementation: Initial strategy due to Congress by January 1, 2011

12. Changes to Tax-Free Savings Accounts Excludes the costs for over-the-counter drugs not prescribed by a doctor from being reimbursed through a Health Reimbursement Account or health Flexible Spending Account and from being reimbursed on a tax-free basis through a Health Savings Account or Archer Medical Savings Account. Increases the tax on distributions from a health savings account or an Archer MSA that are not used for qualified medical expenses to 20% of the amount used.  Implementation: January 1, 2011

13. Grants to Establish Wellness Programs Provides grants for up to five years to small employers that establish wellness programs.  Implementation: Funding authorized beginning in fiscal year 2011

14. Teaching Health Centers Establishes Teaching Health Centers and provides payments for primary care residency programs in community-based ambulatory patient care centers.  Implementation: Funding appropriated for five years beginning in fiscal year 2011

15. Medical Malpractice Grants Authorizes $50 million for five-year demonstration grants to states to develop, implement, and evaluate alternatives to current tort litigations.  Implementation: Authorizes funding beginning fiscal year 2011

16. Funding for Health Insurance Exchanges Provides grants to states to begin planning for the establishment of American Health Benefit Exchanges and Small Business Health Options Program Exchanges, which facilitate the purchase of insurance by individuals and small employers.  Implementation: Grants awarded starting March 23, 2011.  Enrollment in Exchanges begins January 1, 2014

17. Nutritional Labeling Requires disclosure of the nutritional content of standard menu items at chain restaurants and food sold from vending machines.  Implementation: By March 23, 2011

18. Medicaid Payments for Hospital-Acquired Infections Prohibits federal payments to states for Medicaid services related to certain hospital-acquired infections.  Implementation: July 1, 2011

19. Graduate Medical Education Increases the number of Graduate Medical Education (GME) training positions by redistributing currently unused slots and promotes training in outpatient settings.  Implementation: July 1, 2010

20. Medicare Independent Payment Advisory Board Establishes an Independent Advisory Board, comprised of 15 members, to submit legislative proposals containing recommendations to reduce the per capita rate of growth in Medicare spending if spending exceeds targeted growth rates.  Implementation: Funding available October 1, 2011.  First recommendations due January 15, 2014

21. Medicaid Long-Term Care Services Creates the State Balancing Incentive Program in Medicaid to provide enhanced federal matching payments to increase non-institutionally based long-term care services and establishes the Community First Choice Option in Medicaid to provide community-based attendant support services to certain people with disabilities.  Implementation: October 1, 2011

Denial of Health Insurance Claims

From the AARP website, http://www.aarp.org/

“Q. If my health insurance company denies my claim, does the health care reform law make it easier to fight that decision?

A. Yes, the law provides you with new rights not only to appeal denials within your plan but, if the plan won't budge, you can get an unbiased decision from an outside review organization. And that decision won't merely be advisory, as it has been in some states. If you win, your insurer will have to pay for the benefit it denied.

The ability to appeal to an independent group of experts is a "key element" of the law, said Karen Pollitz, director of the new Office of Consumer Support in the U. S. Department of Health and Human Services. "When we talk about putting Americans back in control of their health care, this is a prime example of how," she said.

The law also creates consumer advocates in every state who can make sure you don't become hopelessly overwhelmed by incomprehensible rules.  Nearly everyone who has health insurance will be able to challenge an insurer's decision to deny a benefit, whether it is denied outright or reduced or terminated. For example, you can appeal if your insurer decides:

• Your emergency room visit was not medically necessary.
• The treatment you received was experimental.
• The medical test you received isn't covered.
• The treatment you received was related to a preexisting health condition.
• Your coverage was canceled because you provided inaccurate information on your enrollment application.

After July 1, insurers are required to clearly state the reasons for the denial. They must also explain in plain English — and not in the fine print — how to appeal the decision both within and outside the plan, as well as also provide contact information for the consumer assistance office or ombudsman. In areas of the country where a significant portion of the population speaks a language other than English, the denial and appeal information must be provided in that language.

You have 60 days from the time you receive the notice of denial to file an internal appeal with your plan, and four months from the time you receive the denial notice to file an external appeal. You can contact your plan or your state department of insurance for more details."

Information on Pre-Existing Conditions

News on Pre Existing Conditions from www.healthcare.gov:

“Under the Affordable Health Care Act having a pre-existing condition no longer means you can’t get health coverage.

For years, it has been all too common to hear stories of people living with conditions like cancer, diabetes or heart disease who are unable to find health insurance because of their pre-existing condition.  This is changing--thanks to the continued implementation of the Affordable Care Act.

The new Pre-Existing Condition Insurance Plans (PCIP) offers a range of health benefits to uninsured individuals with pre-existing conditions. These plans mean that people who were previously shut out of the insurance market can get coverage.

Over the next few months, we’ll be talking about some of the people enrolling in Pre-Existing Condition Insurance Plans--people like Johanna in Denver, who lost her insurance coverage after she lost her job and her COBRA coverage ran out.  After she was diagnosed with depression, she found it impossible to obtain health insurance because depression is considered a pre-existing condition.  After the Affordable Care Act passed, Johanna was able to find coverage through her state’s Pre-Existing Conditions Insurance Plan.

And now, this program is getting better. We are announcing new plan choices for people enrolling in the federal Pre-Existing Condition Insurance Plan for 2011. In 2010, there was only one type of plan, but in 2011, there will be three plan options: the Standard Plan, the Extended Plan, and the Health Savings Account eligible plan.  In addition, families will be able to enroll their eligible children in the program at child-only rates.  These options will allow enrollees to select a plan that best meets their needs.

The federally administered program is available in 23 States and the District of Columbia.  To find out if your State’s PCIP is federally administered please visit our interactive map at www.healthcare.gov.

The program is designed as a bridge to 2014 for people with pre-existing conditions who cannot obtain health insurance coverage in today’s private insurance market.  In 2014, all Americans – regardless of their health status – will have access to affordable coverage either through their employer or through a new competitive marketplace, and insurers will be prohibited from denying coverage to anyone based on the state of their health.”

New 1099 Reporting Requirements

NEW 1099 REPORTING REQUIREMENTS

Based upon the new health care reform law, all businesses, charities, and government entities will likely have to track and report all payments totaling $600 or more in a calendar year associated with any single vendor for either goods or services purchased. The PPACA also repeals the longstanding reporting exception for payments to a corporation. This provision takes effect in 2012, and Congress estimates it will raise $17 billion over 10 years.  Presumably, Form 1099-MISC will be used to comply with the new reporting rule, or the IRS may develop a new form.

Historically, Form 1099 filings were limited to services only. The new reporting requirement will require businesses to issue more paperwork every time they pay rent for their offices, buy new equipment to make their workers more efficient or increase capacity, or simply purchase basic office supplies like coffee and paper towels for their break rooms.

It is possible that Congress might take some action to limit or repeal this provision before it goes into effect. But that is mere speculation at this point.

1099 Reporting:  What Should Employers Do Next?

There are some proactive steps your clients can take now to prepare for the new reporting requirement. The way vendor information is collected and managed will be more important than ever. Basic information should include every vendor's name and TIN, the amounts spent at each vendor and the total annual amount spent at each vendor. It should be requested that each vendor, particularly regular vendors, complete IRS Form W-9 to have on record. Form W-9 will provide you with the vendor's legal name, address, and TIN.

PART II:  NEW FORM W-2 REPORTING REQUIREMENTS

Section 9002(a) of the new health care reform law provides that employers must disclose the aggregate cost of applicable employer-sponsored health coverage(s) provided to employees on the employee’s Form W-2. The cost of the health benefit is not considered taxable income, but will appear on the employee's W-2 for informational reporting purposes.  The coverage costs, whether under an insured or self-insured plan, must be reported under the new requirement.

On October 12, 2010, the IRS announced a one-year delay in the start date of this requirement (See http://www.irs.gov/pub/irs-drop/n-2010-69.pdf). The new reporting requirement goes into effect for Form W-2s issued in 2012 (instead of the original date of 2011).

Why add this additional reporting burden? The drafters of PPACA could have created this new requirement to better educate employees on the cost of their health insurance benefits, help businesses determine whether they have a high-cost plan that will be subject to the PPACA’s excise tax on “Cadillac” health plans, and/or maybe to allow the federal government to track the individual insurance mandate that goes into effect in 2014.

If an employee participates in more than one employer-sponsored insurance coverage program under multiple plans, the aggregate value of all such health coverage (except certain benefits discussed below) must be disclosed. Here is an illustrative example:

• If an employee enrolls in one or more employer-sponsored health insurance coverage programs under a major medical plan, a dental plan and a vision plan, the employer is required to report the total value of the combination of all of these health-related insurance coverages. For this purpose, employers generally use the same value for all similarly situated employees receiving the same category of coverage (such as single or family health insurance coverage).  Employers will not be required to provide a specific breakdown of the various types of coverage, but must only report an aggregate cost.

Reporting is required not only for current employees, but also to former employees who are provided with health coverage. This will include early retirees, retirees, terminated employees on COBRA and surviving spouses if they are on the employer’s health plan.  Many of these individuals would not typically receive a Form W-2 from the employer, at least not for taxable years following their termination of employment. Accordingly, an employer's overall W-2 reporting requirements may increase dramatically.

Reported Coverage

Pursuant to this new requirement, the information that must be reported relates to “applicable employer-sponsored coverage.” Applicable employer-sponsored coverage is, with respect to any employee, coverage under any group health plan made available to the employee by the employer, which is excludable from the employee’s gross income under The IRS Code Sect. 106.

  

Plans for which coverage costs MUST BE reported under the new requirement include:

1.    Medical plans

2.    Prescription drug plans

3.    Executive physicals

4.    On-site clinics if they provide more than de minimis care

5.    Medicare supplemental policies

6.    Employee assistance programs

7.    Coverage under dental and vision plans (unless they are “stand-alone” plans)

8.    Coverage Not Reported

9.    Coverage that is NOT included in the aggregate cost of coverage include:

10.  Long-term care

11.  Accident or disability income insurance

12.  Coverage for a specific disease or illness

13.  Hospital indemnity or other fixed indemnity insurance

14.  Salary reduction contributions to a health Flexible Spending Arrangement (FSA) under a cafeteria plan

15.  Contributions to an Archer Medical Savings Account (Archer MSA)

16.  Contributions to a Health Savings Account (HSA)

17.  Additional Information

18.  Items that are required to be reported separately on Form W-2:

19.  The individual’s name

20.  Social security number

21.  Wages

22.  Tax deducted

23.  The total amount incurred for dependent care assistance under a dependent care assistance program

24.  The amount contributed to any HSA by the employee or his or her spouse

How to Value Plans

The aggregate cost of coverage under the plans (including the employee and employer portions of cost) is determined under rules similar to COBRA—minus the two percent administrative charge permitted under COBRA. For purposes of this reporting requirement, it does not matter whether the employer or the employee pays for the coverage.

Effective Dates:

·        December 31, 2011: The new Form W-2 reporting requirements are effective for tax years beginning after midnight.

·        January 2012: Employers will need to update their payroll systems because employees are entitled to request their Form W-2s early if they terminate during the year.

·        January 2013: The first Form W-2 to include the aggregate cost of employer-sponsored health coverage will be the 2011 Form W-2.

W-2 Reporting:  What Employers Should Do Next?

Although this requirement is not fully effective until the 2012 tax year, employers should not wait to prepare for these changes. An employee who terminates in the month of January 2012 is entitled to receive a W-2 with the new information included shortly after the employee’s termination. Employers should ensure that they or their payroll provider are prepared to gather this information in advance of having to complete the Forms W-2 for the tax year 2012. In doing so, they should make sure they can identify the applicable employer-sponsored coverage that was provided to each employee and be prepared to calculate the aggregate cost of that coverage.

The IRS Notice and press release indicate that further guidance will be issued in the near future. Presumably, this guidance will provide more details on the items that must be reported and how the cost of those items is to be determined.

Medical Loss Ratios and Why They Are Important to You

From the Healthcare.gov. website:

What Is a Medical Loss Ratio and Why Does it Matter? 

Posted October 21, 2010 

"Every year, American consumers and employers spend billions of dollars to purchase health insurance to help them gain access to the health care that they need and the cost of coverage has doubled over the last 10 years.

The Affordable Care Act:

The law was enacted in two parts: The Patient Protection and Affordable Care Act was signed into law on March 23, 2010 and was amended by the Health Care and Education Reconciliation Act on March 30, 2010. The name “Affordable Care Act” is used to refer to the final, amended version of the law. 

Consumers can soon rest assured that the bulk of their premium dollars are going primarily to pay for care, not for overhead, marketing, advertising, and big salaries and bonuses.

How will this happen?  Through an important provision of the law requiring insurance companies to meet new requirements concerning their “medical loss ratios.”

Like many health insurance terms, “medical loss ratios” sounds confusing, but all it refers to is the percentage of your premium dollars that an insurance company spends on providing you with health care and improving the quality of your care, versus how much is spent on administrative and overhead costs and, in many cases, high salaries or bonuses.

To be sure your premium dollars are spent primarily on health care itself, the law requires that 80-to-85% of the money collected by insurance companies be spent on health care services and health care quality improvement.

In other words, for many of you, this part of the law---the medical loss ratio limits---will mean that more of your money that you pay out each month for premiums will be going to your actual health care, and to improving the quality of that health care.

To give insurance companies time to adjust, these requirements will kick in next year.  And if insurance companies do not meet these goals because their administrative costs or profits are too high, they must provide rebates to you, the consumers.

This is part of the larger goals of the Affordable Care Act: making insurance more affordable and more transparent; holding insurance companies accountable, and increasing the quality of your care.

Today, the National Association of Insurance Commissioners (NAIC), with representatives from every state and the District of Columbia, approved a set of recommendations on how to calculate an insurance company’s medical loss ratio.  This was the product of months of hard work, public hearings, and consultation with consumers, employers, insurers, and others. The NAIC has a long history of helping develop these types of rules through a transparent process so everyone is at the table.

The NAIC recommendations work to ensure that consumers get better value for their health care dollar, while recognizing that this is a big step for the insurance industry.  Now, the Department of Health and Human Services (HHS) will use the NAIC recommendations as a basis for writing the official rules."

We welcome your thoughts or comments.

The New Healtcare Laws Explained from The Kaiser Foundation

Take a look at the link that we have included here to the Kaiser Foundation that will show you a brief video explaining the new healthcare laws in a basic and simple way.  We like it because it helps to get the information to you quickly and easily.  We hope you find it helpful.  The link is: http://healthreform.kff.org/The-Animation.aspx