Doctor vacancies soar as PPACA rolls out

Just as new patients are set to start looking for care under the Patient Protection and Affordable Care Act, providers face a startling reality: Doctor and nurse vacancies are approaching nearly 20 percent.

AMN Healthcare said the vacancy rate for physicians at hospitals is now nearing 18 percent. While the vacancy rate for nurses is 17 percent, more than three times what it was in 2009.

There hasn’t been a shortage of previous reports about the ongoing doctor shortage itself, but AMN’s is different because it identifies an exact number of vacancies — and a startling jump from just four years prior.

In 2009, vacancies for nurses were just 5.5 percent while doctor vacancies hovered at 10.7 percent.

“Change in health care is a continuous evolution, but the one constant is people,” AMN president and chief executive officer Susan Salka said. “No matter what models of care are in place, it takes physicians, nurses and other clinicians to provide quality patient care, and the fact is we simply do not have enough of them.”

Nurse practitioners and physician assistants also are in short supply with AMN reporting a vacancy rate of 15 percent. The growth in vacancy rates is due to a number of factors, including the impact of PPACA, the improving economy, a growing demand for services and an aging clinical workforce, AMN executives said.

The health care staffing firm surveyed hospital executives and found that a whopping 78 percent said the nation is facing a physician shortage, while 66 percent said there’s a shortage of nurses, and 50 percent said there’s a shortage of advanced practitioners.

Worse yet, the survey found that more than 65 percent of hospital executives believe the influx of newly insured patients will increase the need for physicians at their facilities, while 63 percent said the law will increase the need for nurses and more than 52 percent said it will increase the need for nurse practitioners and physician assistants.

AMN Healthcare also found that more than 70 percent rated the staffing of physicians, nurses, nurse practitioners and physician assistants as a high priority in 2014. That’s a huge jump from the 24 percent who said it was a priority in 2009. It won’t be an easy road, though: Hospital executives said recruitment of physicians and nurses is especially difficult.

By. Kathryn Mayer

Save The Date For Our Next Event...

Please join Discovery Benefits Solutions, San Diego’s premier advocate for self-funded health plans on January 30th for a complimentary lunch and learn at the Grande Colonial Hotel in La Jolla, CA.  This month’s topic focuses on driving down healthcare cost through price transparency tools like Healthcare Blue Book.   Founder, BillKampine will discuss how employees can use transparency tools to save themselves and their employers thousands of dollars a year.

Healthcare Blue Book is an online and mobile healthcare pricing tool designed to help consumers know what

they should reasonably expect to pay for medical care. Many procedures ranging from low cost MRIs to higher

ticket items like hip replacements can vary by thousands of dollars within a single zip code. Health Care Blue

Book’s price transparency tool allows employees to compare and understand treatment options. Incentive

programs designed to cover copays and deductibles steer employees to lower-cost high-value providers saving employers tens of thousands of dollars a year.

Representatives from self-funded or fully insured companies with one hundred or more employees are

encouraged to attend this event.

California's health insurance exchange: 5 things to watch in December

Like many retailers, California's health insurance exchange is banking on a rush of December shoppers.

California has already signed up nearly 80,000 people in private health plans and 135,000 more in Medi-Cal, the state's Medicaid program. But crunch time starts now as deadlines approach.

People have until Dec. 23 to sign up for coverage that takes effect Jan. 1. Open enrollment runs through March 31.

1. Can California handle an even bigger surge?

Enrollment numbers in the Covered California exchange have been accelerating, and supporters of the healthcare law urged families to discuss Obamacare over Thanksgiving turkey.

Experts say the Monday after Thanksgiving has traditionally been the busiest time for Medicare open enrollment, so a flood of applicants is likely.

California's exchange website has experienced far fewer problems than the error-prone HealthCare.gov site. State officials also took their online enrollment system down for two days recently for upgrades.

2. Can people who got cancellation notices find new coverage in time?

Coverage is running out Dec. 31 for more than 1 million Californians who have individual policies that don't meet all the requirements of the Affordable Care Act. The state exchange rejected President Obama's recent call to let those policyholders hold on to their coverage another year.

Full coverage: Obamacare rolls out

Covered California launched a hot line at (855) 857-0445 to help those consumers understand their options.

Many will end up paying less thanks to federal premium subsidies based on their income.  But the exchange estimates about half of the people losing coverage will pay more for replacement policies.

3. Will people be able to get through by phone?

As calls and applications have increased in recent weeks, so has the average wait time at Covered California.

People calling the exchange in October waited less than six minutes, on average. In November, that grew to nearly 25 minutes one week and 18 minutes most recently.

The state has added a third call center in Fresno, and it expects to have roughly 560 people answering calls overall by early December.

4. Does a shortage of enrollment counselors hurt the state?

California has been running behind at getting enrollment counselors in place to assist consumers in person.

It had 1,836 certified counselors as of Nov. 23 and 4,307 more people are still waiting to get through the process.

The state has made more progress certifying insurance agents who can help enroll people. Nearly 7,500 agents have completed state training.

5. Will the exchange do a better job reaching Latinos?

Amid solid enrollment during the first seven weeks, one group that was conspicuously absent were Latinos.

Only 3% of California's October enrollment, or less 1,000 people, were primarily Spanish speakers. Overall, that group is 29% of California's population and a key target for the state's $80-million marketing campaign.

The exchange expects enrollment among Latinos to pick up as more Spanish-speaking enrollment counselors reach out in the community and more Spanish advertising blankets the airwaves.

By Chad Terhune

How to Manage Health Coverage Costs for a Competitive Advantage

Most CEOs are all too familiar with the nearly 15 percent average annual increases in the direct cost of health insurance and the subsequent impact on the company’s bottom line. It’s when companies begin expanding through mergers and acquisitions that the indirect costs and the inflexibility of most health insurance plans become apparent. With vast regional differences among health plans and coverage provisions, health insurance issues often impact on business expansion initiatives. Mike Lutosky, employee benefit broker and owner at Discovery Benefit Solutions, says that there is no need for CEOs to become victims of the business cycles of the health insurers — a situation which has been further exacerbated by industry consolidation, causing average HMO premiums to double over the last few years. He says that what CEOs need is an effective strategy that provides an alternative to traditional health insurance. “What’s your current strategy to control health coverage costs? If you are waiting until 60 to 90 days before your current renewal and then merely reacting to the increase that your health insurer dishes up, you aren't strategically dealing with the issue,” says Lutosky. Smart Business spoke with Lutosky about how CEOs can incorporate self-funding into their overall strategy for controlling the cost of health care. 


What is self-funding? 

Self-funding is an alternative to fully insured group health insurance plans. Instead of an insurance company collecting premiums and paying your claims, the company funds the program, sets the rules and has control over paying claims. More than 60 percent of U.S. companies offering benefits use a self-funded program. 

What are the qualifications for offering a self-funded program? 

Companies in any industry with as few as 50 employees should consider implementing a self-funded program. Frequently, CEOs who want to establish their firm as an ‘employer of choice’ prefer self-funded programs because they have greater flexibility in terms of plan design, claims payment thresholds and claims processing speed. Because consumer satisfaction with health insurance is based upon personal experience, employee satisfaction is much higher when companies offer a self-funded program that avoids yearly swings in premiums and coverage limits. With greater consistency, employees feel more secure and have fewer reasons to look for new opportunities. 

How can CEOs benefit from self-funding health coverage? 

CEOs will regain an enormous amount of control with a self-funded program. Financially, there is an increase in cash flow through the ability to recapture the use of plan reserves, and the company will earn interest on the money held in reserve. Self-funded plans comply with federal guidelines instead of state-mandated laws, and there is a reduction in most of the state-imposed taxes. Not only are the administrative fees lower through a third-party administrator than through traditional health insurance plans, but with a self-funded plan you see where every penny spent on health care goes. I worked with one company that wanted to make an out-of-state acquisition. There was a key employee in the new firm who was vital to the business, but because the plan offered here in California was more expensive and did not offer a comparable level of benefits, the acquisition was impacted. With a self-funded plan, this kind of scenario can be avoided. You have the flexibility with self-funding to design a separate plan for a group of key employees when merging or acquiring. 

How can CEOs limit risk with a self-funded program? 

We protect against catastrophic loss by purchasing reinsurance from A+ rated carriers. Because the market is plentiful, there are numerous choices for CEOs when selecting a reinsurance company. With the average monthly HMO premium standing at $300 to $400 for each employee, self-funding your benefits program makes more financial sense than ever. In more than 20 years, we have only had a handful of employers move back to a fully insured program for financial cost reasons. 

What are the steps to initiating self-funded health coverage? 

Self-funding is a much more proactive way of dealing with the issues associated with providing employee health coverage than the reactive process of soliciting competitive bids 60 days prior to renewal. We start by educating CEOs about self-funding. Then we provide a financial analysis, to see if it is financially viable for your organization to consider self-funding. Next, we design a comprehensive transition plan for the company and its employees.Self-funding gives CEOs a strategy and a plan to better understand and deal with the financial impact of escalating health care costs. This strategy gives CEOs a measure of financial control and understanding that does not exist in a fully insured program.  

-"How to Manage Health Coverage Costs for a Competitive Advantage," 
Smart Business Magazine 
Interviewed by Leslie Stevens-Huffman



mikel@discoverybenefitsolutions.com
or (619) 298-3715.
Mike Lutosky
Employee Benefits Broker
Discovery Benefit Solutions, Inc.

Insurers do not need to cancel old plans

Under heavy pressure by congressional Democrats to fix Obamacare, President Barack Obama announced Thursday that the administration will allow insurance companies to keep individual customers on their existing plans for an additional year, even if the plans don't meet the law's standards. 

The president's plan does not require the insurance companies to take back the Americans they kicked off, but does give them the option of taking the customers back if they want. The government will inform state insurance commissioners that they have permission to allow insurers to offer the out-of-date private plans for an additional year. It's up to them whether to allow them to continue or not.

Obama has been caught between two problems of his administration’s own making: millions of cancellations of individual health care coverage despite his pledge that “if you like your plan, you can keep it” and a botched federal website that was supposed to allow Americans to buy new insurance.

"I completely get how upsetting this can be for a lot of Americans," a contrite Obama told reporters Thursday afternoon. "Americans whose plans have been canceled can choose to enroll in the same kind of plan."

The cancellations, estimated to affect up to 7 million Americans, are due to new standards in the Affordable Care Act that insurance 

The cancellations, estimated to affect up to 7 million Americans, are due to new standards in the Affordable Care Act that insurance companies are required to meet. Those who received cancellations were expected to go on to the new federal insurance marketplace — which has been plagued by tech problems since its Oct. 1 rollout — and purchase coverage there. About 5 percent of insured Americans get their insurance on the individual market.

But it remains unclear whether insurance companies will rescind the cancellations they’ve already handed out, since the Obama administration is not requiring them to do so. And the extension is only for one year, so the fix only delays the fact that many Americans will not be able to keep their current insurance under the new law.

The administration argues that many of the canceled plans were subpar and that many people can buy better insurance for less on the federal marketplace. The law significantly overhauled the individual insurance market, prohibiting plans that kick people off if they become sick or hiking premiums due to illness, among other reforms.

Obama said he believes the Affordable Care Act will work, but admitted the rollout of the exchanges has been bad. "We fumbled the rollout of this health care law," he said. The president added that he was not informed that the glitches in HealthCare.gov were so extensive and crippling — he believed they were minor and not systemic before Oct. 1.

With his second term — and his legacy — in the balance, Obama frequently seemed deflated, almost defeated, light-years away from his soaring “audacity of hope” or the “fierce urgency of now” that powered his eager first term.

Things will get better, he promised, “if we can just get the darn website working and smooth this thing out.”

“I make no apologies for us taking this on because somebody, sooner or later, had to do it,” the president said. “I do make apologies for not having executed better over the last several months.”

View gallery."

President Barack Obama speaks about his signature health care law, Thursday, Nov. 14, 2013, in the B …

And he offered worried and angry congressional Democrats — many of whom fear the Affordable Care Act will prove a potent Republican weapon in the 2014 midterm elections — a kind of “I feel your pain” moment.

“There is no doubt that our failure to roll out the ACA smoothly has put a burden on Democrats, whether they're running or not, because they stood up and supported this effort through thick and thin and, you know, I feel deeply responsible for making it harder for them rather than easier for them,” he said. “We’re letting them down.”

But he took more personal responsibility for the botched rollout than he has before in public.

“There have been times where I thought we, you know, got slapped around a little bit unjustly. This one's deserved, all right? It's on us,” he said.

After promising on Oct. 1 that buying insurance on the federal website would work “the same way you’d shop for a plane ticket on Kayak or a TV on Amazon,” a more chastened Obama acknowledged that “buying health insurance is never going to be like buying a song on iTunes.”

Boehner: Only Health Care Fix Is Scrap LawPlay video."

He denied any deliberate attempt to mislead the public or that he was hasty in rolling out the website even as internal tests showed it would fail.

“I'm accused of a lot of things, but I don't think I'm stupid enough to go around saying, ‘this is going to be like shopping on Amazon or Travelocity,’ a week before the website opens, if I thought that it wasn't going to work,” he said.

As he closed the press conference, Obama dug for a more upbeat, combative message.

“Part of this job is, the things that go right, you guys aren't going to write about. The things that go wrong get prominent attention; that's how it's always been. That's not unique to me as president, and I'm up to the challenge,” he said.

Democrats crafted a bill that would require insurance companies to keep on the millions of customers, pressuring Obama to make the fix. Sen. Mary Landrieu, the bill's sponsor, said in a statement that she appreciated the president's announcement and would continue to "support legislation to fix this problem."

Republicans, meanwhile, have pounded away at Obama’s false promise and failed website to hammer home their message that the president is neither honest nor a competent manager.

"There is no way to fix this," Republican House Speaker John Boehner said. "I am highly skeptical that they can do this administratively."

Obama's statement is part of an all-out push to rescue the law. The White House was to host Senate Democrats later in the day, while chief of staff Denis McDonough was expected on Capitol Hill to reassure House Democrats.

By Liz Goodwin and Olivier Knox

Health FSA Use-It-or-Lose-It Rule Modified to Allow $500 Carryover

In the recently released Notice 2013-71, the IRS modified its use-it-or-lose-it rule for Health Flexible Spending Accounts (FSAs). The ruling permits Health FSAs to adopt carryover provisions that allow up to $500 of unused funds remaining at the end of a plan year to reimburse medical expenses incurred in the following plan year.

Some important information for plan sponsors to note:

* A plan may not have both a carryover and a grace period provision. The grace period refers to a plan which allows participants an additional 2½ months from the close of the plan year to incur expenses attributable to the prior year's election. Also, such provisions are not required - a plan may choose to adopt neither a carryover nor grace period.

* Additional rules apply to plans that must be amended to eliminate a grace period. If a plan has provided for a grace period and is being amended to add a carryover provision, the plan must also be amended to eliminate the grace period provision by no later than the end of the plan year from which amounts may be carried over.

* Carryovers will not count against the annual limit on Health FSA salary reductions (currently $2,500).

* A plan sponsor may choose a carryover amount that is less than $500.

* Any amount in excess of $500 (or a lower amount specified in the plan) that remains unused as of the end of the plan year (that is, at the end of the run-out period for the plan year) is forfeited. Any unused amount remaining in an employee's health FSA as of termination of employment also is forfeited unless the employee elects COBRA continuation coverage with respect to the Health FSA.

* In general, amendments must be adopted on or before the last day of the plan year from which amounts may be carried over, although employers satisfying certain requirements have until the end of the 2014 plan year to formally adopt carryover amendments for the 2013 plan year.

* Plan sponsors offering a Health Savings Account (HSA) may have special considerations when deciding whether to move forward with the $500 carryover provision for their Health FSA. Although not addressed in the recent guidance, individuals who are covered by general-purpose Health FSAs are not eligible for HSA contributions. Given previous IRS guidance on the 2½ month grace period, it is possible that IRS rules regarding ineligibility for HSA contributions will apply to the new carryover feature as well.

For plans that want to add the $500 carryover, DBS does recommend that you consider implementing for a future date. This will give you time to communicate the change and give participants time to appropriately plan their elections. Further, plans that are switching from a grace period to carryover can avoid issues with participants who may still have high balances in their Health FSA at the end of the current plan year. 

Source: Health Now Administrative Services

OBAMA ADMINISTRATION ANNOUNCES TRANSITION POLICY FOR CANCELED HEALTH PLANS

On November 14, 2013, President Obama announced a new transition policy in response to pressure from both consumers and Congress over the cancellation of millions of individual and small group insurance policies that did not comply with the Affordable Care Act (ACA)'s reforms set to take effect beginning on January 1, 2014.

Under the new policy, individuals and small businesses whose coverage had been canceled (or would be canceled) because it will not meet the ACA's standards may be able to re-enroll or stay on their coverage for an additional year. This one-year reprieve may not be available to all consumers because the insurance market is primarily regulated at the state level, and thus, state governors or insurance commissioners will have to allow for the transition relief. Also, health insurance issuers are not required to follow the transition relief and renew plans, and have expressed concern that the change could disrupt the new risk pool under the federal and state health insurance marketplaces (Marketplace).

TRANSITION RELIEF POLICY

The Department of Health and Human Services (HHS) outlined the transition policy in a letter to state insurance commissioners. Under this transitional policy, for 2014, health insurance issuers may choose to continue coverage that would otherwise be terminated or canceled due to the ACA's reforms, and affected individuals and small business may choose to re-enroll in that coverage.

Health insurance coverage in the individual or small group market that is renewed for a policy year starting between January 1, 2014, and October 1, 2014 (and associated group health plans of small businesses), will not be considered to be out of compliance with specified ACA reforms as long as certain conditions are met.
Requirements for Transition Relief

The transition relief only applies with respect to individuals and small businesses with coverage that was in effect on October 1, 2013. The transitional relief is not available to grandfathered plans because these plans are not subject to most of the ACA's market reforms. It also does not apply with respect to individuals and small businesses that obtain new coverage after October 1, 2013. All new plans must comply with the full set of ACA reforms. Furthermore, the health insurance issuer must send a notice to all individuals and small businesses that received a cancelation or termination notice with respect to the coverage (or to all individuals and small businesses that would otherwise receive a cancelation or termination notice with respect to the coverage).

Notice Requirements

The notice to individuals and small businesses must provide the following information:
Any changes in the options that are available to them;
Which of the specified ACA reforms would not be reflected in any coverage that continues;
Their potential right to enroll in a qualified health plan offered through a Marketplace and possibly qualify for financial assistance;
How to access such coverage through a Marketplace; and
Their right to enroll in health insurance coverage outside of a Marketplace that complies with the specified market reforms.

Where individuals or small businesses have already received a cancelation or termination notice, the issuer must send this notice as soon as reasonably possible. Where individuals or small business would otherwise receive a cancelation or termination notice, the issuer must send this notice by the time that it would otherwise send the cancelation or termination notice.
According to HHS, it will consider the impact of the transition relief in assessing whether to extend it beyond the specified timeframe.
By Burnham Benefits

The Youtoons Get Ready For Obamacare

This video will help you understand Obamacare in under 7 minutes.

Self-insurance: A threat to Obamacare?

Happy Jack Adventures is a successful small business, much like the many others the federal government hopes will line up to buy health insurance for their workers once the Patient Protection and Affordable Care Act fully kicks in.

Yet fearful of sharp premium hikes and with a mostly young, seemingly healthy workforce of 50, Jack McCormick, the founder and CEO of the Seattle, Wash.-based adventure tourism company, has something else in mind.

McCormick believes his firm is fiscally sound enough to bear the risk of self-insurance and is looking to make the switch.

“(Self-insurance) looks like a good option for us and a way to avoid high premiums and other hidden costs we don’t know about yet,” he said. “I call those gotcha costs, and I hate those. Everyone does.”

It’s views like these that researchers and analysts have speculated could threaten the integrity of the PPACA, with small employers avoiding the requirements of the law altogether by going the self-insurance route and, along the way, potentially driving up the health care premiums the government is hoping to contain.

About 60 percent of insured American workers already are in self-insurance plans. Most of these workers are either in unions or employed by larger companies.

Self-insured employers pay for most worker health costs directly, though they typically contract with an insurer or another company to administer claims. Employers that self-insure buy coverage known as stop-loss to keep one huge claim from wiping them out.

Brokers say a growing number of organizations see such plans as low-cost alternatives to conventional coverage, given that they’re exempt from PPACA requirements such as insurance taxes and specified benefits.

“I’ve been at this over 30 years, and interest in the self-insurance market definitely is increasing,” said Larry Thompson, CEO of BSI Strategic Consulting, a Fresno, Calif.-based firm that specializes in self-insurance.

According to a recent study by Munich Health North America, a subsidiary of reinsurer Munich Re, more employers are expected to follow the self-insure path – perhaps many more.

Among the 326 industry executives surveyed, 82 percent said they have seen a growing level of interest among employers in self-funding their group health insurance plans over the past 12 months, with nearly one-third saying that interest has increased “significantly.”

Nearly 70 percent of health insurance organizations plan on growing their self-funding portfolios over the next year, the survey also found.

Still, self-insured plans today remain far more common among large employers, especially those with at least 1,000 employees. Their size gives these employers bargaining power in the health care market and allows them to pool risk across their employees.

According to a Kaiser Family Foundation Survey, just 15 percent of insured workers at firms with fewer than 200 employees are enrolled in self-insured plans, compared to 81 percent of insured workers at larger firms.

But, again, smaller employers are now increasingly exploring this option and large health insurers such as United Health Group and Humana are helping these employers – including those with as few as 10 members – sign up.

Historically, concerns about the financial risks have discouraged most small firms from self-insuring, said Amado Cordova, a senior engineer at RAND, a think tank that seeks to influence policy and decision making through research and analysis.

Cordova said that if the PPACA does lead to big premium increases, it’s likely small employers will find self-insurance more attractive.

And if significant numbers of small firms with healthy, young workers self-insure, this could have far-reaching implications including potentially increasing health care premiums for companies that choose to remain on the regulated market, she said.

He said whether more small firms self-insure may depend less on PPACA and more on the companies that sell stop-loss coverage.

“There are already many signs that insurers are trying to lure small firms into self-insuring by advertising low stop-loss attachment points,” she said in her RAND blog. “This inducement to self-insurance could be counterbalanced by government action, in order to maintain a balance of healthy and less-healthy employees across the marketplace.”

Some states already are looking at limitations to self-insurance coverage, Cordova said. California, Rhode Island and Minnesota are mulling over legislation that raises the point at which stop-loss insurance kicks in, reducing or eliminating small firms’ ability to self-insure.

In February, the Self-Insurance Institute of America announced the formation of the Self-Insurance Defense Coalition. The purpose of the new coalition is to coordinate lobbying, litigation and media relations activities of leading national trade associations on issues related to self-insured group health plans at both the federal and state levels.

Among those pushing back is the Center for American Progress, a liberal Washington think tank, which has openly declared war on self-insurance.

In a whitepaper entitled “The Threat of Self-Insured Plans Among Small Businesses,” the group predicted that the increasing popularity of self-insurance will “cause an insurance premium death spiral and threaten the stability of the (Obamacare) exchanges.”

By Gina Binole

Self-insured win partial PPACA fee exemption

Self-insured employers and self-administered health plans are about to catch a break, thanks to fine-tuning of the Patient Protection and Affordable Care Act by the Department of Health and Human Services.

In a soon-to-be-published compendium of rule modifications, HHS says it will exempt certain self-insured employers from the second two years of paying the reinsurance fee.

HHS says the proposed modifications — of which there are quite a few — are the result of its “listening” sessions with interested parties about specific requirements of the act. The full list can be found in the proposal, “Program Integrity: Exchange, Premium Stabilization Programs, and Market Standards; Amendments to the HHS Notice of Benefit and Payment Parameters for 2014.”

Mike Ferguson, the CEO of the Self-Insured Institute of America, welcomed the news.

"SIIA certainly has communicated the view to members of Congress and regulators that the reinsurance fee is unfair to self-insured employers," he said, adding, "We were frankly surprised to hear about this development and are trying to find out more details just like you."

Indeed, HHS didn't offer a whole lot of detail on the exemption matter. It said in order to address employer feedback that the fees are burdensome, it will accept payment of the fee in two chunks instead of one (at the beginning of 2014 and at the end of the year) and will “exempt certain self-insured, self-administered plans from the requirement to make reinsurance contributions for the 2015 and 2016 benefit years” in future rulemaking and/or guidance proposals.

However, all employers will be required to pay the first-year fee for the program, which begins in 2014.

The 2014 fee for the three-year Transitional Reinsurance Program was set at $63 per plan participant. Fee levels have not been set for 2015 and 2016.

The fees are designed to yield $25 billion over the three-year program – money that would help offset costs incurred by insurers covering high-cost individuals purchasing coverage in public insurance exchanges.

HHS’s missive addressed other matters, including what happens when a small company buys small group insurance, and then it becomes a large company. The employer can keep the small group insurance package as long as it doesn’t make substantial modifications to it. But if discontinues small group coverage, it will then have to purchase insurance through the large group exchanges.

HHS also promised to provide further guidance on the sticky issue of what constitutes a fulltime employee for purposes of the all-important employee head count.

The proposals are scheduled to be published in the Federal Register on Wednesday.

By Dan Cook

Health Care Reform: What Do Employers Need to Do Now?

Employers struggling with the application of the Patient Protection and Affordable Care Act (ACA) received welcome relief in July 2013 when the Treasury announced a one-year delay on implementation of the "pay or play" mandate. This mandate would have required most employers with the equivalent of at least 50 full-time employees to provide affordable, minimum value health insurance coverage to their full-time employees by Jan. 1, 2014, or pay penalties.

However, the delay on implementation of the "pay or play" mandate did not delay the individual mandate, which will require most individuals to purchase health insurance coverage in 2014, or pay a tax penalty. Treasury has also indicated that the delay in the employer mandate will not affect employees' access to the premium tax credits available under ACA exchanges beginning Jan. 1, 2014.

Many other ACA provisions also require compliance by Jan. 1, 2014, including:

• Minimum value compliance for employer-sponsored group health plans still needs to be determined for the 2014 plan year. This information must be reported both in written notices about the new health insurance exchanges, which most employers should have distributed by Oct. 1, 2013, and in summaries of benefits and coverage due during 2014 annual enrollment.
• New fees and assessments, such as the Patient-Centered Outcomes Research Institute (PCORI) and transitional reinsurance feesand health insurer tax. [See the SHRM Online article "PCORI & Reinsurance Fees—Keeping Them Straight."]
• Summaries of benefits and coverage (SBCs) must be prepared and distributed for 2014, using an updated template. [See the SHRM Onlinearticle "For Open Enrollment, Remember New Templates for SBCs."]
• Elimination of annual dollar limits on essential health benefits under group health plans, beginning Jan. 1, 2014.
• No more pre-existing condition exclusions for adults as well as children for plan years beginning in 2014.
• Grandfathered health plans can no longer exclude adult children under age 26 who have access to other employment-based coverage, effective Jan.1, 2014. [ See the SRM Online article "FAQs about Grandfathered Plans for 2014."]
• Coverage waiting periods can't be longer than 90 days effective for plan years beginning in 2014.
• Coverage of clinical trials is required for non-grandfathered group health plans, along with prohibition on discrimination based on participation in a clinical trial.
• New wellness incentive rules for plan years beginning in 2014. [See theSHRM Online article "Final Rules Provides Wellness Incentive Guidance."]
• Maximum out-of-pocket limitation will prohibit, for both insured and self-insured non-grandfathered plans, out-of-pocket limits that that exceed $6,350 (self) and $12,700 (family) coverage, for plan years beginning in 2014.

So, What Should Employers Be Doing Now?

First, employers should make sure their plans comply with all ACA provisions that have not been delayed. Next, employers should plan for eventual application of the pay or play mandate to their workforce. This should include:

• For a smaller organization, confirming whether or not it will meet the threshold to be subject to the mandate in 2015, particularly if the organization could be considered under common control with other entities that share some common ownership.
• Confirming how the employer will comply with the mandate—whether it will pay or play and how to implement its compliance strategy in 2015.
• If 2014 coverage expansions were planned to achieve compliance, deciding whether to proceed, delay until 2015 or consider another compliance strategy.
• Identifying which employees are full-time, seasonal or variable hour employees.
• Considering whether and how to utilize the safe harbor "look-back measurement method" of determining full-time status of some or all ongoing employees or new variable hour and seasonal employees (which would include selecting appropriate measurement, administrative and stability periods).
• Considering whether and how the employer's use of limited term employees and agency temporaries could affect compliance with the mandate and developing strategies to address those issues.

The one-year delay also gives employers more time to see whether changes in the law may relieve them from expanding coverage to workers who average more than 30 hours per week or perform only seasonal labor. As of mid -September, at least four bills had been introduced to change the full-time employee standard to 40 hours. At this point, the chances of passage are unclear, so this will be an important issue to watch.

While the delay in the pay or play mandate gives employers additional time, the clock is ticking for many other ACA compliance efforts, and employers should be prepared and seek guidance now.

by Maureen Maly, leader of the ERISA, benefits and executive compensation group

Health Marketplace: Costs for Similar Plans Can Vary Widely

Consumers shopping in the new health insurance marketplaces will face a bewildering array of competing plans in some counties and sparse options in other places, with people in some areas of the country having to pay much more for the identical level of coverage than consumers elsewhere.

A Kaiser Health News analysis of the 1,923 plans being sold on federally run online marketplaces found wide variations of price and availability. For instance, Cigna is offering 50-year-olds one of its midlevel plans for $614 if they live in Flagstaff, Ariz. That same plan, contracting with different hospitals and doctors, will cost $428 in Phoenix and just $395 in Nashville.

These are plans being sold in the 34 states where the Department of Health and Human Services is running the marketplaces or working in partnership with the states. Most plans fall into two types: 806 are health maintenance organizations (HMO) plans, in which patients have to stay within the network of doctors and hospitals that have contracts with the insurer, while 714 plans are preferred-provider organizations, where the insurer has discounted rates with some doctors and hospitals and agrees to pay some portion of the cost if the patient goes to a provider that is out of that network.

All the plans take effect in January, although consumers can shop and sign up before then. They are designed for people who don’t get health coverage through their employer or through a government program, such asMedicare or Medicaid.

Policies are grouped into four tiers of coverage — platinum, gold, silver and bronze — to help buyers compare policies. Policies in tiers named for less valuable metals generally have lower premiums. But the trade-off is insurers pick up less of the costs of medical care than they do in the higher metal tiers. People earning below 400 percent of the federal poverty level (about $46,00 for an individual and $94,000 for a family of four) will get subsidies to help pay the cost of the insurance.

The KHN analysis of premium rate data released by federal officials focused on plans that are offered to consumers of any age and excluded 23 child-only plans and 186 catastrophic plans that pay for most expenses only after the beneficiary satisfies a large deductible.

Insurers offered 158 plans in eastern Florida’s Seminole County, the most available in any single county, and 50 or more plans in 217 other counties across the country. On the other end of the spectrum, shoppers in 161 counties will have 10 or fewer plans to choose from. In sparsely populated Florence County, on the northern border of Wisconsin, Molina Healthcare, an HMO that also runs Medicaid plans in a number of states, was the only insurer to offer coverage: two plans. One costs $1,064 a month for a family of 30-year-old parents and two children. The other plan would cost $944 a month for that family. (Families with more children or older parents will pay higher premiums.)

The large number of plans in some places masks the fact that there aren’t that many insurers actually competing. In Miami-Dade County in Florida there are nine insurers selling 137 plans; Florida Blue alone offers 52 of them. Few markets are as competitive as is Miami. Nationwide, 18 percent of counties have only one insurer offering plans and 33 percent of counties have only two insurers competing, the KHN analysis found.

Monthly premiums are just one factor consumers will take into consideration when comparing plans. The data released by the federal government did not detail other crucial components of these plans, including deductibles, co-payments and which doctors and hospitals are in their networks. Consumers will have to turn to the insurers to find some of that information.

Price Differences Within Counties

The analysis found that the most expensive plan in a county tended to be about double the cheapest plan. In some places it was even more. Policies in Miami-Dade County ranged from a Florida Blue plan that costs 30-year-old parents and two children $1,419 a month and covers 90 percent of average health costs, to CoventryOne’s HMO plan that would cost that same family $550 a month and include a high deductible.

Plans for a 27-year-old in Dallas ranged from $153 to $387 a month. That most expensive plan, sold by Aetna, will help pay some bills if a patient goes out of network. That policy is in the gold category, where the insurer is required to pick up 80 percent of medical costs. The cheapest Dallas plan, sold by Blue Cross Blue Shield of Texas, is an HMO in the bronze category, where it must pay for only 60 percent of medical costs.

The data show that prices vary significantly among policies grouped together in the same coverage tier. In Cook County, Ill., insurers offered 21 plans at the silver level, where insurers pay about 70 percent of the costs. Aetna is selling the most expensive silver plan in Cook County for $1,108 a month for a family, while Blue Cross Blue Shield of Illinois is selling the cheapest silver plan for $582 a month.

Names Offer Clues

The names insurers have given their plans hint how they hope to get an edge in these marketplaces. CoventryOne is selling “Bronze $10 Copay HMO.” Other plans include the annual deductible amount in their names to help differentiate them from each other.

Other insurers are seeking to tease the plan approach with less jargon-filled names. Molina Healthcare’s plans include “Be Protected,” “Be Prepared,” “Be Saavy,” “Be Aligned” and “Be Connected.” In Arizona, Meritus Mutual Health Partners is offering “Saver Choice Bronze” and “Lifestyle Choice Bronze” for the low-premium plans that require patients to pick up about 40 percent of the costs. Meritus’ most comprehensive plans are named “Smart Choice Gold” and “Clear Choice Gold.”

Outlier In Virginia

The premium data include some striking price outliers, especially in Virginia. There, the records say Optima Health’s silver-level premiums for a 27-year-old reach as high as an eye-popping $1,858 a month. Executives with the insurer, owned by hospital system Sentara, say those premiums are misleading because they include coverage for bariatric surgery, an expensive treatment for morbid obesity. Excluding those policies, the average Virginia silver plan was below the national rate.

“At the eleventh hour, the state allowed us to change that to a rider instead of a specific benefit,” said John DeGruttola, senior vice president of sales. Without the rider, the plan costs a 27-year-old $285 a month in those same counties.

Price Differences Across The Country

Raymond Smithberger, Cigna’s general manager for individual and family plans, said that medical costs can vary regionally because of differences in rates of disease, hospital charges and state-required benefits, among other factors.

“Similar to how the cost of living ranges in different parts of the U.S., so does the cost of health care,” he said.

Excluding the high-priced Virginia plans that covered bariatric surgery coverage, the average premium varied between parts of the country by as much as twofold. The average premium for a 27-year-old in Pierce County in western Wisconsin was $391; in Hidalgo County, Texas, it was $188.

The most expensive silver plan for a 27-year-old comes from Meritus in Arizona, a nonprofit co-op run by members. Its “Meritus Secure Silver PPO” runs $469 a month in some rural counties, according to the government data.

Jean Tkachyk, chief operations officer at Meritus, said the insurer has decided not to actively market those plans in those rural counties because “they would not be competitively priced.” In Phoenix and Tucson, Meritus was able to offer lower premiums because it was easier to get doctors and hospitals to join its network, she said. Meritus will be actively selling its plans there.

The lowest-priced silver plan in the country is in Pittsburgh, Pa., where a Highmark plan that excludes some area doctors and hospitals is being sold for $134 a month for a 27-year-old. Like many insurers, Highmark has created a smaller network to help hold down premiums. The $134 a month plan, for example, uses Highmark’s Community Blue Network, which has 8,000 doctors and 54 hospitals, compared with a broader network of 11,000 doctors and 63 hospitals that Highmark offers in more expensive plans.

Absent from the Blue network is the well-known University of Pittsburgh Medical Center, the main rival in the Pittsburgh region to Highmark’s own Allegheny Health Network. Highmark’s selective network “is generally more efficient, high quality and lower cost,” said spokeswoman Kristin Ash. A similar policy with the broader network including UPMC would cost $197 a month, she said.

By Jordan Rau and Julie Appleby, Kaiser Health News

Employers project 4.8 percent rise in 2014 benefit spending

Are employers finally getting a grip on that line item marked “health care?”

A Mercer study released Tuesday shows that companies expect to bump up their budgets for health benefits for 2014 by 4.8 percent.

The data was extracted early by Mercer from some 2,000 responses to a major employer survey that will be released in its entirety later. Last year, Mercer said, health benefit cost per employee increased by 4.1 percent over 2011 — a 15-year low.  

“The recession has been one factor behind slower cost growth, by dampening utilization,” said Beth Umland, Mercer’s director of research for health and benefits. “But employers have made fundamental changes in their health benefit programs in recent years that have put the brakes on unsustainable cost growth.”

The fact that employers are actively re-examining their plans to hold down costs comes through when they are asked how much costs would increase “if they made no changes to their current plans.” The answer: about 7 percent.

Among strategies employers reported they are using to control healthcare costs: consumer-directed health plans, which give employees financial incentives to be more careful about how they spend health dollars.

Employers also are turning to wellness programs to manage costs, Mercer affirmed. Wellness plans continue to grow in popularity as employers embrace the concept that healthier employees don’t use their health insurance as often.

There is a potential bump in the road. With the advent of the Patient Protection and Affordable Care Act, employers will have to offer coverage to more workers. Mercer found that “about a third of all large employer health plan sponsors (those with 500 or more employees) do not currently offer coverage to all employees working 30 or more hours per week.”

Mercer opined that some employers will follow in the footsteps of giants like Trader Joe’s and cut worker hours just below the 30-hour trigger point.

But, Mercer concluded, “most employers affected by the rule will simply open their plans to all employees working 30 or more hours per week and brace for rising enrollment. In addition, next year all individuals will be required to have health coverage or face a tax penalty. Because of this, employers may see fewer employees choosing to waive coverage.”

Given these factors, Mercer suspects that overall cost-per-employee for health care may jump as employers integrate the requirements of the PPACA into their budgets.

“Rising enrollment will be an even bigger issue in 2015 when the shared responsibility penalty goes into effect,” said Tracy Watts, senior partner and Mercer’s leader for health reform. “While some employers are going ahead with plans to expand eligibility in 2014 despite the delay, most of those with the big part-time populations are holding off and will feel the pinch in 2015.”

Meantime, Mercer also projects that, based on its early data analysis, very few large employers (5 percent) will terminate their health plans over the next five years. More small employers (those with fewer than 200 employers) will do so, Mercer said.

By Dan Cook

10 Things to Know About Health Insurance Exchanges

Your health insurance options are about to change.

Starting Oct. 1, Americans will be able to shop for coverage through national and state-administered insurance exchanges. But you only have six months to make your move.

Here are 10 things you need to know before open enrollment begins.

HEALTH INSURANCE EXCHANGE QUESTIONS ANSWERED

1. What happens on Oct. 1?

Starting Oct. 1, you can purchase health coverage through the Affordable Care Act health insurance exchange program. The coverage kicks in Jan. 1, 2014.

Your coverage options depend on where you live. Some states have exchanges run by the federal government, whereas others have their own exchanges or ones created in conjunction with the Obama administration. Either way, you can go to HealthCare.gov to see your coverage options and how much they cost.

You have six months to make a choice. If by March 31 you have no health insurance through the exchanges or your employer, you face a fine of 1 percent of your yearly income or $95 per person -- whichever is higher. The fee increases every year, rising to 2.5 percent of your yearly income in 2016 or $695 per person. That's on top of any health care costs.

2. What if I have health insurance through my employer?


If you have health insurance through your employer, you can keep it.

Job-based plans qualify as "minimum essential coverage." In other words, you won't be fined for not having health insurance if you're covered through your job. And because your employer pays a proportion of your premium, the coverage might be cheaper than the plans offered through the insurance exchange program.

You might still want to explore your options, but beware: Depending on the job-based coverage available to you, you might not qualify for certain savings offered through the health insurance exchange program. Check HealthCare.gov to find out.

3. What are the different types of health insurance?


All of the available health insurance plans will offer "essential health benefits" for emergency services, maternity, neonatal and pediatric care, outpatient and rehabilitation services, counseling and therapy, preventive and wellness services and prescription drugs.

Certain plans may offer additional coverage. You'll be able to compare plans in terms of coverage and cost starting Oct. 1 on HealthCare.gov.

4. What is a "catastrophic" plan?


A catastrophic plan offers essential health benefits but has a higher deductible. Think of it as a safety net in case you have an unexpected accident or illness; you'll pay less up front but more if you need it. The plan does, however, cover three annual primary care visits and preventive services at no cost.

To qualify for a catastrophic plan, you must be under 30 years old or get a "hardship exemption" because you're unable to afford health coverage.

5. Can I get dental coverage?


Dental care is considered an essential health benefit for children, but not for adults.

Adults can choose a plan that includes dental coverage, or opt into a separate dental plan and pay an additional premium.

6. How much will health insurance cost?


Different plans have different costs depending on the coverage, but all of them must be approved by state insurance departments.

The pricing information will be posted Oct. 1 at HealthCare.gov, where you can compare coverage options and their costs. You might qualify for cost savings based on your income.

7. Will be my kids be covered?


Children can be covered by their parents' health insurance plan until they turn 26. If a dependent turns 26 during 2014, he or she can enroll in a new health insurance plan even after open enrollment closes March 31.

People under 30 can qualify for catastrophic coverage with a lower premium but a higher deductible.

8. What if I have a pre-existing condition?


Starting in 2014, you can't be denied health insurance or charged more because you have a pre-existing health condition, even if you've been refused coverage in the past.

The only exception is for grandfathered individual health insurance plans, according to HealthCare.gov. But you can purchase a new plan through the health insurance exchange program Oct. 1 and get coverage for your pre-existing conditions.

9. What if I'm unemployed?


Your coverage options depend on your household income, not your employment status.

Depending on your income, you might qualify for Medicaid or the Children's Health Insurance Program. You might also qualify for lower monthly premiums and out-of-pocket costs through the health insurance exchange program. Check HealthCare.gov on Oct. 1 to find out.

10. What if I miss the March 31 deadline?


You have six months to choose the health insurance plan that's best for you and your family. If you miss the March 31 deadline, you could face a fine of 1 percent of your yearly income or $95 per person, whichever is higher.

But some life events, like the loss of a job, birth or a divorce, qualify you for a special enrollment period outside the October-to-March window. A 26-year-old dependent that loses his or her coverage through a parent's plan can also enroll throughout the year.

by Katie Moisse