COOP Health Insurance...Alert!

Section 1322 of the Affordable Care Act (ACA) allowed for the establishment of "consumer operated and oriented plans" or COOPs.  Bolstering the ACA's goal of expanded health insurance coverage, and borrowing from the agricultural industry's adoption of COOPs in the 1920's, twenty-four COOPs were approved and funded by the federal government.  Specifically, the fed awarded nearly $2 billion to the 24 approved COOPs operating in 24 different states.  In theory, the COOPs would bring more competition and choice into the market, which is a welcome change from the hundreds of insurers who have abandoned the health insurance market over the last several years (see Metropolitan Life, Travelers, NY Life, Prudential, Principal, American Chambers Life, and Mutual of Omaha to name just a few).  And if not for funding cuts, and a significant reduction of the originally proposed $6 billion funding allocation, there would likely be even more COOPs in existence. 

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Narrow Networks...Healthcare Buyers Beware!

In the current, post Affordable Care Act (ACA) world, the term - “narrow network” – is often heard, and at times, is a strategy deployed by employers and insurers.  There are a variety of other ways to describe narrow networks, such as - carve out network; exclusive provider network; select network; tiered network…you get the idea.  From a covered member's standpoint, this strategy involves limiting the number of contracted providers plan members can seek care from, and in return, receive the best benefits, and lowest out of pocket costs.  From the standpoint of the insurer or employer, narrow networks mitigate risk and reduce expenses.  Readers who have been around the healthcare scene since the eighties might recall the original introduction of narrow networks, albeit presented at the time as “HMO Lite”;  “a PPO/HMO hybrid”; or more commonly –  “exclusive provider organization”, replete with its very own acronym  - EPO! 

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

The ACA and Newton's 3rd Law of Motion

Sir Isaac Newton’s Third Law of Motion taught us that “for every action, there is an equal and opposite reaction”.  As we near the end of the fourth full year of the [partial] roll out of The Affordable Care Act /Obamacare, it has become increasingly more challenging for people to differentiate “action” from the “equal and opposite reaction”.  Put another way, some of the things we’re experiencing, required by the ACA, are directly attributable to the law itself (call these “actions”).  And then there are things we’re seeing that are the result of the many requirements, mandates, fees/taxes, expansions associated with the ACA (call these “equal and opposite reactions”).   This will all make more sense when you see the chart at the end of this article.

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Ebola ~ Just the Facts

Readers of this blog (soon to be "resource library") typically find health INSURANCE, FUNDING, and FINANCING issues addressed here.  But occasionally, health CARE issues come to light which I feel compelled to address.  With all the media coverage and confusion surrounding the recent outbreak of the Ebola virus, I decided to attempt to clarify some important facts.  My primary source of information for this post is the Douglas County Health Department (Douglas County, Nebraska), which under the direction of Dr. Adi Pour, does a fantastic job of data mining and educating, among other things.  (See http://www.douglascountyhealth.com )

The Ebola virus was first discovered in 1976 in the Ebola River, which is located in a region of Africa now known as the Democratic Republic of the Congo in lower, central Africa.  Although the virus has been found in several African countries since its initial outbreak, as of the time of this blog post, there are four (4) countries in the western region that have experienced outbreaks - Guinea, Liberia, Nigeria, and Sierra Leone.  The current, 2014 outbreak is the largest in history, and the first to occur in west Africa.

Perhaps the most misunderstood, and in some instances, incorrectly reported aspect of Ebola, is how it is spread.  It is NOT spread via air or water, but rather through direct contact with someone who: a. is infected with the virus; and b. is also experiencing symptoms.  Clearly health care workers are at the greatest risk of contracting the virus, as evidenced by the recent reporting infected health care workers in Dallas, TX. The U.S. Centers for Disease Control and Prevention (CDC) are taking very deliberate and focused measures to mitigate, if not prevent Ebola and for that matter all infectious diseases, from arriving and spreading throughout the U.S.

IMPORTANT: CDC Director - Thomas Friedan - specifically addressed rumors relative to the ability of the Ebola virus to spread through the air, which have actually "fueled" the rumor mill.
On 10/7/14, he said:
"The rate of change [with Ebola] is slower than most viruses, and most viruses don't change how they spread.  That is not to say it's impossible that it could change [to become airborne].  That would be the worst-case scenario.  We would know that by looking at...what is happening in Africa.  That is why we have scientists from the CDC on the ground tracking that."

In addition to how the Ebola is (and is not) spread, here are some of the more relevant and pertinent facts concerning Ebola, gleaned from the aforementioned source:

• An individual that recovers from being infected can no longer spread the virus.  However, the virus can survive for up to three months in semen.
• Only mammals have shown the propensity to be infected with, and spread, Ebola.  Specifically at this point in time - humans, apes, monkeys, and bats.  Mosquito's and other insects, at this point, are not able to transmit the Ebola virus.
• The CDC and the U.S. Fish and Wildlife Service have specific protocols in place to prevent the Ebola virus from coming into the U.S. via non-human primates and bats.  The greater challenge, as we now know, is dealing with humans arriving on U.S. soil, who have contracted the virus.
• The CDC is working with all U.S. hospitals on establishing and implementing the proper infection control measures to control the continued spread of the Ebola virus.
• Since all U.S. citizens have the right to return to the U.S. for treatment of any contacted disease/disorder, we simply can not completely prevent infected citizens from re-entering the country.  For this reason, the CDC has taken specific and deliberate actions, including raising the travel alert level to Level 3 (i.e., travelers incur high risk of traveling to the four identified, west African countries, and are advised against nonessential travel to those locations).
• The CDC's Emergency Operations Center (EOC) has been activated to assist with the coordination, communication, monitoring, and management of this current challenge.

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ACA's Transitional Reinsurance Fee/Tax

Self funded health plans face a rapidly approaching compliance deadline of January 15, 2015 relative to the Affordable Care Act's so called "transitional reinsurance fee".  A previous post addressed the various reinsurance (or bailout) programs devised in the ACA (click - http://sstevenshealthcare.blogspot.com/2014/01/acas-insurance-company-bailouts.html). 
These programs are sometimes referred to as the "Three R's", which are:

1. Reinsurance Program
2. Risk Corridor
3. Risk Adjustment

The first of these reinsurance/bailout programs - the [temporary] reinsurance program - is funded by virtually ALL health insurance plans (e.g., individual, group, fully insured, self funded) through the assessment of a fee/tax.  Fully insured plans owe the tax, but do not have to worry about counting/collecting/remitting.  Self funded plans however, are responsible for all of the aforementioned.  So, here's the scoop on determining the amount of your organization's tax, along with when, and how to submit it....

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA's Health Plan Identifier Requirement

As the old saying goes, "the devil is in the details", and the Affordable Care Act (ACA) has its fair share of DETAILS.  Among the rapidly approaching compliance deadlines for many employers is requesting/obtaining a ten-digit Health Plan Identifier or HPID.   While ALL employers offering health insurance plans must comply with this requirement, the due date for obtaining the ID, along with determining who is responsible for obtaining it varies based on a couple of factors.  Here's an overview of the whole HPID matter...

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Open Enrollment Best Practices

As we approach the labor day holiday, human resources officials, brokers, consultants, and others begin to think not as much about the end of summer, but rather, the approaching OPEN ENROLLMENT SEASON!  Before we know it, that special time of the year will be upon us.  Having been involved with so many open enrollments over the years, as an insurance company executive, third party administrator, wholesaler, consultant, and retailer/broker, I have accumulated some insight as to what employees/enrollees should be considering during this important time of the year.  Call these my "open enrollment best practices", or, put another way, the things enrollees/employees should consider as they enter open enrollment season...

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA Employer Reporting...Continued

A previous post informed about an upcoming (voluntary in 2015; mandatory in 2016) Affordable Care Act (ACA) compliance requirement requiring employers (small and large) and health insurers to report on health insurance coverage offered to employees. 
(See - http://sstevenshealthcare.blogspot.com/2014/03/aca-employer-reporting-requirements.html )

Recently the IRS released draft versions of various forms that employers will need to disclose detailed information to both their employees and the IRS.  The purpose of the reporting is to assist the federal government in enforcing the ACA's individual mandate, employer mandate, and premium subsidy provisions.

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA Changes, Repeals, Modifications, Clarifications...Thus Far

Readers and health care stakeholders may find it interesting (if not frustrating), that as of the date of this blog post (August 6, 2014) there have been a grand total of 42 changes* made to the Affordable Care Act (ACA) since its signing into law on March 23, 2010.  Furthermore, the changes have not originated from a single source; nor have the changes been influenced/encouraged by a single political party.  The fact is, of the 42 changes to date, 24 have been made unilaterally by the President; 16 resulting from acts of Congress; and perhaps the most notable - 2 - by the Supreme Court of the United States (SCOTUS).

To access the complete article, click- https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA Split Court Decision/Subsidy Eligibility

 

On July 22, 2014, two separate U.S. appellate courts issued contrasting rulings pertaining to a key aspect of the Affordable Care Act (ACA).  The issue at hand is language contained in the 2,700 page law addressing eligibility for subsidies (or tax credits) for those unable to afford the premiums for INDIVIDUAL health insurance.  Specifically, the cases hinge of just four words - "...established by the state", or in its entirety - "[ACA] subsidies shall be available to persons who purchase health insurance in an exchange established by the state". 

Since the overwhelming majority of states opted to defer to a federal or hybrid federal/state exchange (36) the language presented a significant problem.  In effect, the language meant that only eligible individuals residing in one of the 14 states that opted to establish a state based exchange would be eligible for subsidies. The following graphic indicates (in white) those states that actually formed STATE based exchanges:

 To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

PCORI/CERF Requirement...Year 2

A little over a year ago, I posted a blog addressing the Affordable Care Act's (ACA) - Patient Centered Outcomes Research Institute (PCORI) fee requirement, also referred to as the Comparative Effectiveness Research Fee (CERF).  Click here to access this post - http://sstevenshealthcare.blogspot.com/2013/06/to-pcori-feeor-not-to-fee-that-is.html
Last year, affected plans were required to remit a fee equal to $1 per plan participant.  This year, affected plans owe $2 per plan participant, based on their plan date.  Since last year's PCORI/CERF related post addressed the "who" and "what" of this particular ACA requirement; this post will address the "how", as in how to calculate the average number of affected lives, and then calculate and remit the applicable fee.

To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA's Future

Here are a few questions often posed pertaining to the Affordable Care Act (ACA): 

1. "What does the future of health care/health insurance look like, once the ACA is fully implemented"?
2. "Will the ACA result in significantly fewer or more uninsured individuals"?
3.  "After four years, what do we know about the affect of the ACA on premiums"?

This week's post offers my overall response, and associated concerns, related to these three, and perhaps other questions...

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Supreme Court Ruling/Contraception Coverage

This week (June 30, 2014) the Supreme Court ruled in favor of plaintiffs - Hobby Lobby, Mardel, and Conestoga Wood Specialties - in their respective challenges to the Affordable Care Act's (ACA) contraception mandate.  The basis for their cases was simple in nature, but sweeping in scope, as there are over 90 similar cases currently pending in courts around the country.  The court's decision was quickly followed by a tremendous amount of media coverage, some of which is patently false and misleading.  Here's an overview of what we know at this point...

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

HIPAA - Forgotten But Not Gone

With so much emphasis being placed on Affordable Care Act (ACA) compliance these days, some folks have gradually (and frighteningly) forgotten about the ACA's "older brother" - the Health Insurance Portability and Accountability Act (HIPAA).  Several ACA provisions supersede or expand upon HIPAA provisions that went into effect on and after January 1, 1997 (e.g., preexisting condition limitations, guaranteed issue/renewability, certificates of creditable coverage, etc.).  However, the ACA did virtually nothing to change the privacy and security aspects of HIPAA, which are not only still in effect, but carry stiff fines and penalties for non-compliance.

HIPAA created a new acronym - PHI - which stands for protected health information.  And among the many requirements created by HIPAA, perhaps none are more important than those addressing the request, disclosure and use of PHI by "covered entities" and "business associates".  HIPAA privacy rules also create rights for individuals to access, review, and amend their PHI.  Readers are likely familiar with the seemingly constant flow of HIPAA disclosure notices.  I want to provide a considerable amount of caution in this week's post, relative to HIPAA and PHI:

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA Transition Relief - Employer Mandate

In February of this year (2014), I provided an overview of the IRS' final regulations pertaining to the Affordable Care Act's (ACA) employer mandate.
Since this is such a confusing provision of the ACA, to say nothing of the fact that there have been not one, but two separate delays of this provision, I decided to recap some of the more pertinent aspects of the final regulations and associated transitional relief.

To access the complete article and related links, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Prescription Drugs - Health Care's Low Hanging Fruit

There is an often overused metaphor equating things easily obtained with "low hanging fruit".  And in the world of health care and consumer driven health care (CDH), there is perhaps NO lower hanging fruit to be had than prescription drugs.  I would further submit that few if any other product category in our entire economy has the sheer number of FREE...DISCOUNTED...REDUCED...SAMPLE offers connected to it, by a variety of constituencies including - manufacturers, distributors, insurers and employers - than do prescription drugs.  But do the very people these offers of "low hanging fruit" are directed toward understand the "what", "why", or even "where" associated with them?

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Employers Reimbursing Employees for Individual Coverage

Recently, the IRS issued guidance which places harsh penalties on employers that deploy the strategy of "dumping" employees into the Individual health insurance marketplace.  The guidance followed the White House's objection to the idea of allowing employers the ability to provide employees with a lump sum of money with which to buy individual insurance on the exchange/marketplace.  This builds on guidance released last year from the Department of Labor (DOL) which was more broad in scope.  A previous blog post addressed the DOL guidance, which effectively "killed" the ability to use tax preferred funds from HRAs and FSAs to fund Individual health insurance premiums, regardless of the source of such coverage.
The recent ruling and associated guidance is short and sweet.  Here's the scoop...

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

COBRA, ACA, and Special Enrollment Rights

With the seemingly endless flow of guidance, updates, notices, and delays swirling about relative to the Affordable Care Act (ACA),  a rather important piece of guidance may have been overlooked.  Issued jointly by the Department of Labor (DOL) and Health and Human Services (HHS) earlier this month (May 2, 2014), this guidance provides an opportunity for individuals enrolled in COBRA coverage the option to dis-enroll in their COBRA coverage, and enroll in potentially lower cost individual health insurance coverage, FOR A LIMITED TIME.  (Click - http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/SEP-and-hardship-FAQ-5-1-2014.pdf )
This week's post addresses this guidance and provides additional information related to the transection of COBRA and the ACA.

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

HSA Updates and Advanced Guidance

The Internal Revenue Service (IRS) has announced the Health Savings Account (HSA) maximum contribution amounts, and qualified high deductible health plan (QHDHP) deductible and out of pocket limits for 2015.  Since I have provided basic guidance on "all things HSA" in a previous post (see - http://sstevenshealthcare.blogspot.com/2013/10/health-savings-accounts-hsas.html ), I thought I would provide some advanced HSA guidance in this week's blog, along with the recently announced 2015 IRS maximums.

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

CDHPs Affect on Health Care Spending

Ordinarily, I try to couple a picture with the content of my post, creating a theme of sorts.  This week, my selected picture IS the essence of the blog post.  The picture is a chart provided by the Centers for Medicare and Medicaid Services (CMS) showing the slowing of health care spending from 2002 to 2013, by nearly 90%.  A previous blog post addressed this topic (click - http://sstevenshealthcare.blogspot.com/2014/01/whats-causing-health-care-spending-to.html)
One of the factors contributing to the slow down in health care spending cited in this post (titled appropriately - What's Causing Health Care Spending to Slow?) is the growth in popularity and implementation of so called high deductible health plans with accompanying tax preferred spending accounts.  Better known as Consumer Driven Health Plans, or CDHPs, these plans affect both the demand and supply of health care, and as time, data, and logic has now proven, THESE PLANS REDUCE HEALTH CARE COSTS WITHOUT COMPROMISING CARE!

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Understanding the Two Separate ACA Delays

 

French novelist and critic - Jean-Baptiste Alphonse Karr - famously said (originally in French and translated to English in the mid 1800's) - "the more things change, the more they remain the same".  Based on recent news in Nebraska, relative to the roll out of the Affordable Care Act (ACA), aka Obamacare, I am going to reverse Mr. Alphonse Karr's famous quote to say - "the more things remain the same, the more they change"!  If you're not in Nebraska, keep reading because this week's blog post addresses the allowance of what now amounts to a nearly three year delay of several key provisions* of the ACA...for some.

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

CDH - Shifting Behavior Rather Than Costs

Since the "birth" of so called Consumer Driven Health Plans (CDHP) in the mid 90's, opponents have argued that CDHP's merely shift health care related costs from employer to employee. This is simply not the case, and health insurer/administrator Cigna's eighth annual "Choice Fund Experience Study" offers quite the opposing view, buttressed by empirically derived facts.  Over the course of CDH's evolution, I have learned a great deal from many of the pioneers and trailblazers of CDH, including the "father of HSAs" (John Goodman), "Mr. HSA" (Roy Ramthun), and the "Godmother of CDH" (Regina Herzlinger).  And studies like Cigna's provide sound data and efficacy to once again advance the fact that CDH LOWERS HEATH CARE COSTS without sacrificing care or coverage!

The study compares actual claims experience from 3.6 million Cigna customers enrolled in CDH, traditional PPO, and HMO health plans.  To access a summary of findings, click here - http://newsroom.cigna.com/images/9022/874630_ExecutiveSummary_FINAL.pdf
Here are some interesting, if not compelling highlights...

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

What Employees Should Know About the ACA

I am often asked by HR professionals, CEO's, CFO's, Executive Directors, etc. the following question - "what should I be telling my employees about the Affordable Care Act (ACA)"?  Between the 2,700 pages of the actual law, and the thousands of pages of regulations and guidance released to date, the question is very relevant, and extremely important.  While I firmly believe folks occupying roles with the aforementioned titles should receive a thorough initial overview of the ACA, and ongoing guidance and updates; rank and file employees need only get the absolute critical aspects.  So you might ask - "what are the critical aspects"?

My list of employee-centric, critical aspects is based on the following questions/criteria:

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Workplace Wellness Programs

Within just the past decade or so, Workplace Wellness has become an industry within an industry.  In fact, as a benefits broker/consultant, I get as many calls from Wellness program vendors as I do from insurance companies, seeking new client opportunities.  Recently I came upon an article that made some interesting points relative to Workplace Wellness programs, and the potential outlay of employer dollars in the interest of reducing health care related claims costs.  Here are some thoughts for readers and stakeholders to ponder:

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Public Marketplaces/Exchanges Still Open!

Despite numerous reports of the "closing" of the Affordable Care Act's (ACA) public health insurance exchanges/marketplaces on March 31, 2014, THEY'RE ACTUALLY STILL OPEN FOR BUSINESS!  Media reports stating that "the exchanges are closed" are simply inaccurate.  Much like group health insurance plans, ACA marketplace/exchange plans have two (2) enrollment periods:

1. Open Enrollment - which ran from 10/1/13 - 3/31/14 in the inaugural year of the launching of the public marketplaces/exchanges.   IMPORTANT: The Department of Health and Human Services (HHS) announced on March 26, 2014 that it would extend the open enrollment deadline for consumers to enroll in a public marketplace/exchange health insurance plan if they started enrollment before March 31 but weren’t able to complete the application by midnight.; and
2. Special Enrollment - qualified individuals have another opportunity to obtain coverage both on and off the the public marketplaces/exchanges, on a guarantee issue basis, with all the other ACA related provisions (e.g., community rating, 10 essential health benefits, no pre-existing condition limits, etc.).  Such an opportunity, referred to as a "special enrollment period" is triggered by one or more "circumstances", including, but not limited to the following:

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA Transition Relief/Delay Extended...Maybe

On March 5, 2014, the White House announced a two-year extension to the previously announced one-year transition relief allowing individual and small group insured members to "keep the plans they liked".  In other words, delay the implementation of several Affordable Care Act (ACA) provisions for another two years.  This extension is subject to the same stipulation affecting the initial one year delay announced on 11/14/13, which is that both insurers and States must allow and approve of the relief/delay.  A previous blog post addressed the initial delay.

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA Tampering...The New Jenga!

Anyone that has ever played the game – Jenga – or any other “stacking” game appreciates the challenge, if not the risk, associated with removing individual pieces of a constructed mass.  If just a single piece is yanked out of the construct, the entire design crashes down, leaving a mess of pieces, and nothing resembling the original design.  Approaching its 4^th anniversary, the Affordable Care Act (ACA), or Obamacare, is gradually turning into a great big game of Jenga!  Ironically, a law that was passed on a 100% partisan, party-line basis is now being attacked directly and indirectly, from both sides of the aisle, democrat and republican alike. 

To date, a number of ACA provisions (or in Jenga terms – pieces) have been delayed, repealed, or had legislation introduced in an effort to change it somehow.  Some examples include:  the employer mandate (delayed); the individual mandate (legislation proposed); the CLASS Act (repealed); medical device tax (legislation proposed); non-discrimination standards (delayed); minimum loss ratio; 1099 provision (repealed); and now, the risk mitigation programs.  Sadly, if not frighteningly, the rationale for delaying, repealing, or removing various provisions of the ACA now seem to be based less on making the law better (or work),  and more on gaining political favor among the voting electorate.  Again, this is happening on both sides of the political aisle, and is dangerous at best, perilous at worst!

The latest ACA provisions coming under threat of removal by way of congressional action are the “risk mitigation” programs carefully embedded in the law.  These elaborate risk mitigation programs – 1. Risk Corridor; 2. Transitional Reinsurance; and 3. Risk Adjustment - were designed to stabilize the dramatically revised health insurance marketplace, particularly for the first three (3) years of the law’s rollout.   The changes to our healthcare financing and delivery sectors (whether you agree or disagree with the end product) brought about by the ACA, required very careful and precise treatment of the elaborate and decentralized insurance mechanisms in existence at the time. 

It’s important to keep in mind that our U.S. healthcare system is still based on a private marketplace, albeit with a very high degree of government regulation.  Any attempt to improve, reform, or modify the system relies on the involvement and participation of private sector, mostly for-profit companies.    Accordingly, the risk mitigation programs designed and included in the ACA were meant to address of number of critical aspects:

1. Provide the necessary protections, if not confidence, to encourage as many insurers to remain in the market and offer coverage as possible.  Insurance company actuaries had no historical basis with which to calculate premiums in the post ACA era.
2. Offset the elimination of previous barriers to health insurance coverage, such as pre-existing condition limitations, underwriting, and premium rate setting.  These historical insurance techniques allow insurers to offer generous insurance protection at reasonable rates.  Without these and other historically relied upon and used techniques, insurers needed carefully crafted ways to continue offering coverage at reasonable rates.
3. Limit resultant market disruption which would lead to higher rates and fewer insured individuals…exactly the opposite of the overall goal of the ACA.
4. Keep the premium subsidies at reasonable and affordable levels, and avoid skyrocketing subsidy amounts tied directly to potentially escalating premiums.

My Jenga game analogy is by no means, meant to diminish the potentially devastating effects of dismantling the ACA, piece by piece.  Well intended or otherwise, efforts to pick apart the ACA, piece by piece, provision by provision, will without question lead to undesirable results.  The old saying – “be careful what you wish for” applies quite well here.  With respect to risk mitigating programs, these are neither new nor heretofore unseen.  Barely a decade ago, the Bush administration’s Part D Medicare Drug program relied on a strikingly similar program, and like the ACA’s risk corridor program, had a finite time frame associated with it (six years, compared to the ACA risk corridor’s three).  There are a host of other private sector insurance programs that rely on very similar, government collaborative risk stabilizing programs (e.g., flood insurance, crop insurance, and terrorism risk coverage).

Those looking for more of a “return on investment” or ROI rationale for leaving the ACA’s risk stabilizing programs intact might find the Congressional Budget Office’s (CBO) recent report interesting.  The CBO projects that under the risk corridor program, participating insurers will pay in $16 billion, while the federal government will pay out $8 billion.  Not a bad ROI.  Ironically, the CBO projected that the one year delay in the employer mandate (a previous ACA piece meal tweak) would result in a loss of a little over $8 billion in lost fine revenue in 2014.  I believe we just found a way to “clean up” the mess left by this bit of incremental tinkering, by leaving the law alone!

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ACA EMPLOYER Reporting Requirements

Last week (March 5, 2014), the IRS and the Department of Treasury (DOT) released FINAL rules related to some very important Affordable Care Act (ACA) requirements addressing health insurance plan reporting.  These reporting requirements (originally set to take effect at the end of this year, but delayed one year along with the employer mandate) affect employers with 50 or more full-time employees (including full-time equivalents) starting in early 2016 for plans in force during the 2015 calendar year (regardless of anniversary or ERISA plan date).   Reporting is voluntary for 2014/2015, although it might not be a bad idea to consider a "dry run" in preparation for the 2016 requirement.  This week's post provides a very general overview of the final rules and their impact on what the rules refer to as ALE's or applicable large employers, which again, are those with 50 or more FT or FTE's.

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA's Cadillac Tax

Ordinarily, this blog addresses current events in the health insurance and health care spaces.  But this week I'm making an exception and informing about a provision of the Affordable Care Act (ACA) that is not set to take effect until 2018.  Many of the clients, colleagues, friends and audiences I encounter are talking (if not worrying) about the so called Cadillac tax...now!  Accordingly, this week's post is meant to provide some background on this provision, if not for those merely worrying about it, but for those that are long term planners.  Please keep in mind that final regulations addressing the Cadillac tax have not been released to date.  Here is what we do know...

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

90 Day Waiting Period Guidelines Issued

Last week (02/20/2014), the ACA's "trinity" of compliance and enforcement (i.e., departments of Health/Human Services; Labor; Treasury) jointly issued both FINAL and PROPOSED regulations pertaining to the ACA provision addressing new hire waiting period limitations.  This week's post will focus primarily on the FINAL regulations.

Let me start by defining what it is that we received guidance on - the so called "90 day waiting period limitation".  For readers not familiar with this issue...the waiting period is the period of time allowed to pass before health insurance coverage can become effective for an otherwise eligible employee (and his/her dependents).  Per the Affordable Care Act (ACA), this period of time is now restricted, and can be NO LONGER than 90 days.  Thus, the latest possible time that coverage can take effect is the 91st day from the initial date of hire.  This affects any employer that has a waiting period that is:

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Gallup Healthways Well-Being Grades for 2013

There is an old expression - "Figures don't lie…liars do figure".  We all rely on data for various purposes, and the health care industry is no exception in its use of data to explain, defend, describe, or refute various measures.  In fact, there is a relatively quiet movement underway to establish health care standards to better enable providers to utilize a standardized, "best practices" method of delivering care.  If you want to understand this movement better, google - "patient centered outcomes research institute" or PCORI, and check it out.  (By the way, the Affordable Care Act (ACA) requires health insurers and self funded plans to fund the PCORI at a rate of $2 per insured member per year in 2014.)

The absolute "king" of data mining and reporting is, arguably, Gallup Inc.  Back in 2008, Gallup launched its Healthways Well Being Index initiative, and conducts 500 phone calls each day to households throughout the U.S. (The initiative also has a global component to it, which involves roughly 140 countries.)  The goal of Healthways Well-Being is to quantify our state of well being, and relies on the following six (6) criteria to arrive at their index:

1. Physical and emotional health
2. Healthy behaviors
3. Work environment
4. Social and community factors
5. Financial security
6. Access to necessities (e.g., food, shelter, health care)

The 2013 survey relied on 178,000 interviews conducted nationwide, providing a sample representing an estimated 95% of all U.S. households.  As a Nebraska resident, I was both proud and pleased to see our fine state ranked #3 for 2013, a rise from #7 in 2012.  Here are the rankings, and changes, for 2012 and 2013...

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Employer Mandate - Delay and Final Regulations

This past Monday (February 10, 2014) the Treasury Department issued long awaited FINAL REGULATIONS pertaining to the Affordable Care Act's (ACA) "employer mandate", aka "employer shared responsibility"; or "pay or play".  There is a great deal of information and guidance contained in these regulations, thus, I will not attempt to address all of it in this post.  Rather, I'll provide some of the highlights, and embed some links to direct you to more comprehensive details.  To review what, how, and whom the employer mandate affects, click - http://sstevenshealthcare.blogspot.com/2013/06/understanding-employer-shared.html

It is imperative that readers/stakeholders understand there are two (2) aspects to this release:

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ACA Replacement Bill Proposed ~ C.A.R.E. Act

From the time the Affordable Care Act (ACA) was signed into law on March 23, 2010, after having been passed by congress on a 100% partisan basis by the Democrat party, the Republican party has largely expressed opposition to the law.  In fact, the Republican controlled House of Representatives has passed upwards of 40 bills seeking to completely repeal the ACA.  However these bills never made it to the Democrat controlled Senate floor for a full vote, and thus "died on the vine".  Perhaps no other issue facing our country has seen the level of opposition and discourse than has health care "reform".

For the second time since the ACA's passage, a replacement bill has been proposed, and interestingly, its origination is the U.S. Senate.  (Note: Late in 2013, Sen. John McCain and Rep. Tom Price introduced companion ACA replacement bills, which have not gained much traction in either chamber.)  Last week (01/27/2014) Republican Senators Orrin Hatch (UT), Tom Coburn (OK), and Richard Burr (NC) introduced the "Patient Choice, Affordability, Responsibility, and Empowerment Act", or CARE.  Shortly thereafter (01/30/2014) House of Representatives leader Eric Cantor announced the House would be - "taking up a bill that mirrors the Hatch, Coburn, Burr bill later this year".

There are three (3) reasons to believe this bill, or some variation thereof, may actually have a chance of replacing the ACA:

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In Healthcare, Time is of the Essence!

[This week's blog post borrows heavily from a recent blog post written by Dr. Gregory Sorensen, CEO of Siemens Healthcare - http://blogs.hbr.org/2014/01/to-cut-health-costs-focus-on-the-first-minutes-of-care/.]
We've all heard the expression - "time is of the essence".  But a recent blog post I came across (see above) compelled me to share with my readers the incredible application of this expression to the health care industry.  Not only does effective triage and initial diagnosis portend better outcomes, it also has a significant impact on efficiency and costs.  And let's face it…at a time when health care consumes nearly a fifth of our nation's gross domestic product (GDP), finding ways to cut health care costs is critical.

So it got my attention when Dr. Sorensen reported in his blog that - "It is in the first 15 minutes of a medical encounter that up to half of all medical costs are set in motion.   Placing this in a dollars and cents perspective, nearly $1.4 trillion is impacted by what happens in less time than it takes to listen to Led Zeppelin's "Stairway to Heaven".  Coincidentally, 15 minutes is also the average amount of time a primary care physician spends with a patient.  

The Institute of Medicine found that between 20 - 50 percent of health care spending is either wasted or unnecessary.  Perhaps more compelling is the fact that studies show that much of this inefficiency is directly attributable to care that never should have been provided, primarily due to incorrect diagnosis. In short, what happens in that first 15 minutes is extremely important.  Driving this point home, Dr. Sorensen provides the following observations:

• Diagnoses that are missed, wrong or delayed affect an estimated 10 to 20 percent of cases, numbers much greater than drug errors or surgery on the wrong patient or body part;

• As far back as 1991, the Harvard Medical Practice Group study found that diagnostic error accounts for 17 percent of preventable errors in hospitalized patients, while autopsy studies covering four decades reveal that nine percent of patients experienced a major diagnostic error that went undetected while they were alive;

• A 2012 study found that 40,500 people die each year due to fatal diagnostic errors in U.S. intensive care units, nearly equal to the lives taken annually by breast cancer;

• In a review of 25 years of U.S. malpractice claim payouts, from 1986 through 2010, researchers at Johns Hopkins found that diagnostic errors—not surgical mistakes or improper medication—accounted for 35 percent of total claims, generated payments of nearly $39 billion and resulted in death or disability almost twice as often as other error categories;

• A 2009 report published in the Journal of the American Medicine Association found that diagnostic errors account for 40,000 to 80,000 hospital deaths in the U.S. each year, with errors of diagnosis being the most common, the most costly, and the most deadly form of medical error;

• A recent commentary on a Texas VA study as reported by Kaiser Health News estimates that “with more than half a billion primary care visits annually in the United States . . . at least 500,000 missed diagnostic opportunities occur at U.S. primary care visits, most resulting in considerable harm.”

To better address this challenge, Dr. Sorensen offered the following four ideas:

1. BETTER COORDINATION OF CARE - The Affordable Care Act endeavors to change the way health care providers are paid, moving away from quantity of care to quality of care.
2. TECHNOLOGY - Studies have linked the use of software to better diagnosis and treatment protocols, resulting in significant reductions in hospital stays.
3. RESEARCH - Innovations that improve pathology result in more correct diagnosis and treatment which again, reduce costs.
4. BETTER BASELINES - Shockingly, not a single hospital in the U.S. tracks or counts diagnostic errors.  Doing so would allow for the establishment of relativity's that would no doubt result in the prevention of errors.

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ACA's Insurance Company Bailouts

1. Patient Centered Outcomes Research Institute Fee
2. Transitional Reinsurance Fee
3. Health Insurance Tax

These are three (3) of the more than 18 new taxes, fees, and deduction changes that have been created/implemented in order to fund the Affordable Care Act (ACA), aka Obamacare.  The later two (2) have not yet been imposed/collected, but the bell rings this year (2014) for their collection and remittance to Uncle Sam.  This week I thought I would delve into the ear marking of some of this revenue, and what many are calling the ACA's "insurance company bailout". 

The ACA contains three (3) separate and distinct "bailout programs" embedded within it's 2,700 pages.  They are the Reinsurance Program (temporary), Risk Adjustment Mechanism, and Risk Corridor.  In short, each program is designed to protect insurance companies that participate in the health care marketplaces/exchanges, from costs and losses.  The Congressional Budget Office (CBO) has projected the ACA to direct some $1,071,000,000,000.00 (that's trillion with a T) over the 10 year period from 2014 - 2023, to eligible insurers.  Here's a brief description of each of these programs.

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What's Causing Health Care Spending to Slow?

Those of us in the health care industry (both delivery and financing) are pleasantly surprised, albeit cautiously optimistic, to learn that health care spending has slowed rather dramatically in recent years.  In fact, for the first time ever, the percentage of our Gross Domestic Product (GDP) attributable to health care has decreased from 17.3% in 2011 to 17.2% in 2012 ($2.8 trillion).  Fellow health care stakeholders may find it interesting that in1960; health care consumed a mere 5% of our nation’s GDP.  Put another way, in 2012 health care spending grew by 3.7%, which is virtually identical to the spending percentage growth in 2009, 2010, and 2011.  By contrast, in 2002, health care spending grew by a whopping 9.7%.

So while this is great news for the nation, it begs a couple of questions: 1. What is/are the cause(s) of the decline in health care spending; and 2. Is the trend temporary or sustainable?  Let’s examine some of the contributing factors associated with the recent trend.  

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ACA Marketplace/Exchange Update

Happy New Year to all my friends, colleagues, and subscribers throughout the land!  As you may have noticed, this blog went “dormant” over the holidays, which was as much a relief for my readers; I’m sure, as it was for me.  So now here we are in 2014, and back to business, and weekly blog posts!

I thought I’d start the new year off with a brief update on what’s happening with the public health insurance marketplaces/exchanges.  Last month involved a flurry of activity, guidance and extensions announced just prior to the holidays.  Here’s the latest…

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