On February 4, the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) was signed into law. CHIPRA allows states to subsidize premiums for employer-provided group health coverage for eligible children, but it also imposes certain requirements on plan sponsors. CHIPRA applies to both fully insured and self-funded group health plans.

About CHIP

The Children’s Health Insurance Program (CHIP) is jointly financed by the federal and state governments and is administered by the states. Within broad federal guidelines, each state determines the design of its program, eligibility groups, benefit packages, payment levels for coverage, and administrative and operating procedures.

Beginning April 1, group health plans must permit employees and their dependents that are “eligible but not enrolled for coverage” to enroll in that group health plan coverage under two scenarios:

1. The employee’s or dependent’s Medicaid or CHIP coverage is terminated as a result of loss of eligibility.
2. The employee or dependent becomes eligible for group health plan premium assistance under a Medicaid or State children’s health insurance program.

These two new 60-day special enrollment rights are in addition to the existing 30-day group health plan special enrollment rights related to loss of eligibility of coverage or the addition of a new spouse or dependent.

Responsibility of the Plan Sponsor

1. Notify employees of the new special enrollment opportunity.
Employers who sponsor fully insured or self-funded group health plans must notify their employees about the new enrollment rights as soon as possible, but no later than April 1, 2009.

2. Permit eligible employees to enroll under the terms of the special enrollment.
Effective April 1, 2009, a plan sponsor of a group health plan must permit employees and dependents who are eligible but not enrolled for coverage to enroll in that coverage if:

1. The employee’s or dependent’s Medicaid or CHIP coverage is terminated as a result of loss of eligibility; or
2. The employee or dependent becomes eligible for a premium assistance subsidy under Medicaid or CHIP.

3. Review and amend plan benefit documents.
CHIPRA imposes certain notification requirements on sponsors and administrators of health plans to inform employees of the potential opportunities for premium assistance.

Plan sponsors will receive some assistance with respect to this disclosure since CHIPRA directs Health and Human Services (HHS) to develop national and state-specific model notices by February 4, 2010. These notices will then be used by plan sponsors to satisfy their disclosure obligations for the plan year enrollment following release of the model notices.

Most insurance companies are in the process of amending group health plan documents and notices, including the Notice of Special Enrollment Rights, group health plan enrollment forms, the Summary Plan Documents, and the Certificates of Creditable Coverage, if applicable, to accurately reflect the new HIPAA special enrollment rights mandated under CHIPRA.

4. Be prepared to provide disclosure to state agencies if requested.
The law requires plan administrators to disclose to states, upon request, information about when a plan participant or beneficiary is covered under the company’s group health plan and Medicaid or CHIP. HHS and the U.S. Department of Labor will be developing a model disclosure form for this purpose. States may not request this information until the first plan year that begins after the date on which the model form is first issued.

Tags: children's health insurance program, Children's Health Insurance Program group health plans, CHIP

Effective for new groups issued on or after June 1, 2009, or upon renewal dates on or after June 1, 2009, Blue Cross and Blue Shield of Illinois (BCBSIL) group plan members – will have the option to cover non-military dependents to age 26 and returning military dependents to age 30. This applies to all insured groups, as well as self-insured municipalities, counties and schools. These dependents must meet specific eligibility requirements in order to be covered under the policy, described below.

If members elect to extend coverage or add dependent coverage, this change must be made during the employer group’s initial 90 day open enrollment period. Dependents not added during this 90-day enrollment period may be added later during the next open enrollment period. This is separate from the current open enrollment for employees and spouses who previously declined coverage and wish to enroll as of this open enrollment.

Eligibility Requirements
The following requirement and qualifications apply:

For Non-Military Dependents

• Cannot be married
• Must be age 26 or younger
• Do not have to be enrolled as a full-time student or tax dependent
• Do not have to be living in Illinois
• Do not have to reside with the insured

Returning Military Dependents

• Cannot be married
• Must be age 30 or younger
• Do not have to be enrolled as a full-time student or tax dependent
• Do not have to be a resident of Illinois
• Do not have to reside with the insured

Tags: Blue Cross Blue Shield of Illinois dependent age

On March 9th, the Illinois Division of Insurance published revised information regarding the American Recovery and Reinvestment Act (ARRA) and how it affects groups that are subject to Illinois state continuation, but not subject to federal COBRA continuation. Specifically, Congress revised ARRA and gave states the opportunity to allow for the special extended election period, which was not previously an option for the states. Illinois has decided to allow for the extended election.

The change means that employers subject to Illinois State Continuation will have to follow all phases of the ARRA, including allowing ex-employees who were involuntarily termed between September 1, 2008 and February 17, 2009 the ability to elect Illinois state continuation. This change does not affect Illinois spousal continuation or Illinois dependent continuation.

Tags: COBRA stimulus and small employers Illinois, COBRA stimulus package, Employers and American Recovery and Reinvestment Act of 2009, Illinois State continuation, Illinois state continuation and American Recovery and Reinvestment Act

More than three-quarters of adult Americans who have health insurance say they still worry about paying more for their medical care, and nearly 50 percent say they’re “very” or “extremely” worried about the issue, a new Harris Interactive/HealthDay poll shows.

More than half (57 percent) of those polled said they feared losing their health insurance sometime in the future, which may explain another key finding in the poll — sizeable numbers of Americans said they’re skipping doctor visits or not getting prescriptions filled to save money.

Middle-aged Americans — people too old to be blasé about their health but too young to be covered by Medicare — seemed most worried about paying their health care bills. Among insured individuals aged 45 to 64, a full 84 percent said they were concerned that rising health care costs would exceed their ability to pay.

Only 8 percent of all insured Americans polled were “not at all worried” about getting health care coverage.

“Many are, in fact, not filling prescriptions, skipping a doctor’s visit, not following up on something that was recommended by the doctor, taking a medication less or pill-splitting, doing without dental care,” said Humphrey Taylor, chairman of The Harris Poll.

He added that with the economy in a tailspin and many Americans losing their employer-based health insurance, the problem may only get worse. “If the number of uninsured rises sharply, one would expect to see these numbers increase,” Taylor said.

One consumer advocate wasn’t surprised by the results of the poll, which included 2,078 adults surveyed between Feb. 25 and 27.

“Even for people who have insurance, increasingly, the costs have been shifted to them — and those costs have risen,” said Carol Pryor, policy director at The Access Project, a nonprofit group dedicated to making health care available to more Americans. More and more, she added, insured Americans are paying higher deductibles and co-pays, stretching their ability to get proper medical care.

Pryor agreed with Taylor that the situation is only likely to get worse, since “more people are becoming uninsured as a result of the economic meltdown.”

Some other key findings from the poll:

• 78 percent of adults with health insurance worry about paying more for their medical care.
• Nearly two-thirds (65 percent) of all insured adults say they’re worried about how they can afford to pay for medical care and prescription drugs, with that number rising to 76 percent among people aged 45 to 54. Even among those aged 65 and over — most of whom are eligible for Medicare — 62 percent say they worry about paying for the care they need.
• Over the past year, one in five insured adults skipped filling a prescription because of the cost. That number jumped to 30 percent for those without insurance.
• Similarly, cost concerns led 24 percent of the insured and 51 percent of the uninsured to forgo seeing a doctor for a specific medical problem. Twenty-one percent of the insured and 33 percent of the uninsured didn’t get a recommended follow-up test or treatment for the same reason.
• Trying to cut down on medical expenses, 14 percent of the insured and 19 percent of the uninsured took a medication at a lower dose than that recommended by a doctor.
• Dental care took the biggest hit: 51 percent of the uninsured and 30 percent of the insured skipped necessary dental care over the past year due to financial concerns.

Forgoing care to save costs over the short term may not save costs over the long term, the experts warned. “Some things do go away on their own over time,” Pryor said. “But there are a lot of conditions that get worse if they aren’t treated, and they then require more expensive care later. So it’s definitely a gamble.”

Taylor noted that the statistics on the percentage of Americans skipping needed care have remained about the same since 2007, when Harris first asked these types of questions. That may seem odd given the recent downturn in the economy, he added. But, he noted that even if a few million Americans lose their health insurance, that’s still only 2 percent of the adult population — not enough to show up in this type of survey.

The new poll results come on the heels of a report released Wednesday by the nonprofit advocacy group Families USA. It found that a third of Americans under the age of 65 — nearly 87 million people — went without health care coverage at some point over the past two years.

The most recent U.S. government statistics suggest that 16 percent of all adults (including those 65 and older) have no health insurance. And a Commonwealth Fund report published last June found that the number of “underinsured” — people who have insurance that doesn’t fully meet their health care needs — rose by 60 percent between 2003 and 2007.

The issue gained momentum in the nation’s capitol last Thursday, when President Barack Obama convened a long-anticipated White House summit on health care reform. The Associated Press reported that Obama made a point of bringing a wide range of views to the table — voices representing the insurance industry, patient groups, physicians and even those advocating a single-payer system.

“Every voice has to be heard. Every idea must be considered,” Obama said during the summit. “The status quo is the one option that is not on the table.”

According to Pryor, one item that should be up for discussion in Washington is the plight of the underinsured.

“Covering the uninsured is only part of the problem,” she said. “Unless reform includes adequate, comprehensive and affordable coverage, just having insurance will not be protection — either from facing barriers to care or concern over one’s financial stability. And after all, those two things are the function of insurance.”

Tags: health care costs, health care costs poll

Original Article from Businessweek

U.S. workers and employers get 23% less value from their health-care spending than those in Britain, Canada, France, Germany, or Japan, and 46% less value than in Brazil, China, or India, according to a Business Roundtable study that examined the cost and performance of the U.S. health-care system.

That value gap exists even though the U.S. spends far more on health care per worker than the other countries examined. The study, released on Mar. 12, found that for every dollar the U.S. spent on health care, Britain Canada, France, Germany, and Japan spent 63¢, yet the health of the U.S. workforce lags by 10% on a composite measure. As for Brazil, China, and India, they spend just 15¢ for each U.S. dollar spent, yet the health of the U.S. workforce lags behind those three by 5%.

The Business Roundtable, an influential association of CEOs of large U.S. companies, is actively lobbying Congress for health-care reforms, but it wants to maintain the current employer-based insurance system. Most business leaders say they see health insurance as a valuable recruitment benefit. Also, “companies know they are going to end up paying the bill somehow or other, so they want to have an influence on how those benefits are designed,” says James A. Klein, president of the American Benefits Council, a trade association for employer-based benefit plans.

A Drag on Business

But business leaders also desperately want the costs of the current system brought under control, since most of their global competitors operate in nations with government-subsidized, universal care that is far less onerous. “Health-care costs are one of the top cost pressures facing American business today, inhibiting job creation and hurting America’s ability to compete in global markets,” Harold McGraw III, CEO of The McGraw-Hill Companies (MHP) (which publishes BusinessWeek) and chairman of the Business Roundtable, said at a news conference releasing the study. On that point the Business Roundtable is aligned with President Barack Obama, who at last week’s health-care summit at the White House called exploding health-care costs “one of the greatest threats, not just to the well-being of our families and the prosperity of our businesses, but to the very foundation of our economy.”

The study was led by Dr. Arnold Milstein, a consultant with Mercer Health & Benefits. To calculate the measure of value, the study weighed 17 separate measures of workforce health, chosen for their relevance to employers and employees, and how effectively each nation’s health system addressed them. These issues included life expectancy, mortality rates, deaths from heart disease, injuries and communicable diseases, blood pressure, cholesterol levels, medical errors, and work absence due to illness. Spending calculations were based on each nation’s employer-paid health benefits in manufacturing, and health-care spending that is financed through taxes paid by employers and workers. The researchers noted that in 2006, the U.S. spent $1,928 per capita on health care, compared with $1,100 in Britain, Canada, France, Germany, and Japan; and $274 in Brazil, China, and India.

The Business Roundtable said it plans to update the study annually in order to track U.S. competitiveness on health-care spending.

Tags: United States health care disadvantage, US health care system

In an ominous sign for the health industry, Illinois’ largest insurer said its business may not grow for the first time in 25 years. The top executive at Blue Cross and Blue Shield of Illinois said the recession and rising number of unemployed consumers will lead to losses in the number of health plan subscribers.

Illinois Blue Cross, which grew its enrollment 2 percent, to 7.3 million plan members, last year from 2007, did not say how much it expected its membership to decline.

“I would be surprised if we grew,” said Paul Boulis, president of Blue Cross and Blue Shield of Illinois. “I don’t think since the 1984-85 cycle that we have lost business.”

Any reduction of members at the Illinois insurer is a national economic barometer for the health sector.

Illinois Blue Cross provides the bulk of the 12.4 million health plan members of its parent company, Health Care Service Corp.

The Chicago-based company is the nation’s fourth-largest health insurer, with Blue Cross plans also in Oklahoma, Texas and New Mexico.

Though Boulis said Health Care Service plans elsewhere are growing, Illinois Blue Cross is suffering partly because of its national accounts: companies with workers in multiple states, and unionized workers who get health benefits through health and welfare trusts. Such union workers losing their jobs include carpenters, plumbers and pipe fitters.

“We have 1 million members in health and welfare trusts,” Boulis said. “As the housing industry tanked, they were the [workers] immediately affected.”

When large health insurers lose business, it often means more people are joining the ranks of the uninsured. That, Boulis said, will put pressure on policymakers in Washington as they work to address the more than 45 million Americans without health insurance.

“It just makes the challenge for the Obama administration much more Herculean,” Boulis said.

I used to respect Rush Limbaugh, but he’s turned into a babbling shock jock that will say anything for ratings.

Tags: Limbaugh on health care, Rush Limbaugh and Ted Kennedy, Rush Limbaugh health care

Health Savings Accounts (HSAs) are gaining popularity in the United States – in part because health care costs are rising, but also because consumers want to take charge and make the most of their health care dollars. HSAs can make a significant difference to your budget bottom line – at all stages of adult life.

What is an HSA?

An HSA is a personal, tax-advantaged saving account that works in conjunction with an HSA-qualified health plan – a high deductible health plan (HDHP) with a minimum deductible of $1,150 for single coverage, or $2,300 for family coverage. Maximum annual in-network out-of-pocket expenses are $5,800 for single coverage or $11,600 for family coverage. Through an HSA, you can save money to pay for qualified medical expenses as defined by the Internal Revenue Code.

HSAs can be effective because of their triple-tax advantage:

• Contributions are tax-free up to the IRS’ annual maximum limit.

• Interest and investment earnings are tax-free.

• Withdrawals used for qualified medical expenses are also tax-free.

In order to open and contribute to an HSA, you must be enrolled in an HDHP, cannot be enrolled in any non-HDHP plan, cannot be enrolled in Medicare, be a dependent on someone else’s tax return, or have received VA medical benefits in the past three months.

HSAs for 20-somethings

Parents understand how important health coverage is but their young adult children may not. If they are too old to be covered by your insurance, and not yet covered by their own, there are options.

The first step might be to obtain health care coverage in the form of an HDHP. According to the Center for Policy and Research think tank run by America’s Health Insurance Plans in Washington, D.C., the average premiums for a young adult are $1,500 per year. Once enrolled in an HDHP, and assuming other eligibility requirements are met, the young adult can open an HSA. He or she (or their loved ones) can then deposit money up to the maximum annual contribution limit as defined by the IRS, and use it for a variety of medical costs today and into the future.

Funds in an HSA can grow tax free. And, because there is no “use it or lose it” provision, the account stays with a person through their lifetime.

HSAs for middle age

Statistics from the American Medical Association show there are nearly 50 million individuals in families who spend more than 10 percent of their household income on medical care. Regular checkups, eyeglasses and braces can add up. HSAs can help stretch buying power because you are using pre-tax dollars to pay for qualified medical expenses.

These accounts also can help save money for healthcare costs during retirement. Financial advisers often characterize an HSA during this stage of life as a medical emergency fund and suggest it be part of your retirement planning strategy. One possible strategy suggested is to meet your company match for 401(k), then contribute the maximum to your HSA and put the remaining retirement saving dollars into your Individual Retirement Account or 401(k).

Contribution limits to an HSA change annually. In 2009, the maximum contribution limits are $3,000 for single coverage and $5,950 for family coverage.

HSAs for retirement age

Even if we take great care of ourselves today, we know that as we age we’ll inevitably require some form of health care, whether it’s a daily prescription or even long-term care in a nursing home. According to the Center for Retirement Research at Boston College, a couple retiring in the year 2030 can expect to spend nearly $400,000 during retirement on healthcare alone.

You can’t use HSA dollars to pay for “regular” medical insurance premiums, but the IRS allows you to use your HSA dollars to pay for Medicare premiums – that’s an average of $1,200 per year, according to the Centers for Medicare and Medicaid Services. And, if you are age 55 or older, you can make an additional catch-up contribution of up to $1,000.

An HSA in your health care tool box can help you better manage your healthcare costs. And that means you can save your retirement nest egg for the things you’ve been dreaming about – like spoiling your grandkids and traveling around the world.

The Department of Labor says it is working on guidance regarding the newly created subsidy for COBRA premiums.

The American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65 percent subsidy for COBRA continuation premiums for up to 9 months for workers who have been involuntarily terminated, and for their families.

The subsidy terminates when the covered individual is offered any new employer-sponsored healthcare coverage or becomes eligible for Medicare. Workers who were involuntarily terminated on or after September 1, 2008, and before February 17, 2009, but failed to initially elect federal COBRA continuation coverage, have an additional 60 days to elect federal COBRA and receive the subsidy.

To qualify for the subsidy, individuals must meet all of the following requirements:

• Is eligible for COBRA continuation coverage at any time during the period beginning September 1, 2008 and ending December 31, 2009;
• Elects COBRA coverage (when first offered or during the additional election period), and
• Has a qualifying event for COBRA coverage that is the employee’s involuntary termination during the period beginning September 1, 2008 and ending December 31, 2009.

The ARRA provides that an assistance-eligible individual (AEI) is treated as having paid the full premium required for COBRA continuation coverage for a coverage period if the individual pays 35 percent of the premium. The subsidy program is effective for the first coverage period beginning on or after February 17, 2009. In most cases (plans with calendar month coverage periods), this will be March 1, 2009.

The legislation requires that information on the COBRA subsidy be included in COBRA notices. Under the legislation, the Department of Labor must create a model notice within 30 days of February 17, 2009.

Tags: COBRA Recovery and Reinvestment Act laws, COBRA subsidy

The American Recovery and Reinvestment Act of 2009 signed into law February 17 expands COBRA in ways that will certainly impact employers. Most significantly, the act offers assistance-eligible individuals a 65 percent subsidy of their required COBRA premiums and an additional enrollment period within which to elect COBRA coverage.

Under the provision, the federal government will provide the subsidy for up to nine months for workers who lose health coverage as a result of being involuntarily terminated between September 1, 2008 and December 31, 2009 and who are eligible for COBRA coverage benefits, and their dependents.

The COBRA subsidy becomes applicable March 1. Assistance-eligible workers will receive a notice within 60 days of enactment that will outline the steps and requirements necessary to get the subsidy. We are awaiting government requirements for the forms and notices. These requirements are expected by mid-March. COBRA participants should pay their March premium as invoiced, and an adjustment will be made and the adjusted premium will be invoiced for future payments. The 65 percent subsidy will be applied retroactively, if applicable, from March 1.

Plan sponsors of all group health plans, multi-employer plans (and federal plans subject to comparable) COBRA laws will bear the brunt of administering the new provisions and will need to work closely with their COBRA administrators to ensure compliance. In addition, groups under 20 employees will also have responsibilities because the new subsidy is applicable to small groups and church plans covered by comparable state continuation laws.

On February 20, 2009, the Internal Revenue Service released a revised Form 941, the form for employers’ quarterly tax return on which employers report payroll taxes. Instructions for Form 941 were also revised. See lines 12, 12a, and 13 of Form 941 and pages 1, 2, and 6 of the instructions for directions for reporting credits to recover COBRA premium subsidies.

The Employee Benefit Security Administration (EBSA), the part of the Department of Labor (DOL) that administers federal labor laws regulating employee retirement and health plans, recently unveiled a Web site dedicated to the COBRA premium subsidy. No guidance is posted on the site yet, but it is anticipated that DOL guidance will be posted to the site as it is released.

The Department of Labor is required by H.R. 1 to conduct expedited reviews of denials of premium assistance (§ 3001(a)(5)). The Web site states that “The Department is currently developing a process and an official application form that will be required to be completed for appeals.”

The Web site also says that “EBSA is actively working to issue additional guidance regarding the COBRA premium reductions.” The Department of Labor is also responsible for developing a model notice for use by employers (§ 3001(a)(7)(D)) and outreach consisting of public education and enrollment assistance (§ 3001(a)(9)).

Tags: American Recovery And Reinvestment Act Of 2009, Employer COBRA Stimulus, Employers and American Recovery and Reinvestment Act of 2009