With an upcoming State House vote expected on the Health Insurance Consumer Protection Act (House Bill 3923), legislation establishing key reforms on health insurance in Illinois, AARP released the following letter to State Legislators today alerting them that the Association will record roll call votes on the bill, and inform its 1.8 million members in Illinois how their legislator voted.

According to exit polls, roughly 1 out of every 4 voters in the past election was a member of AARP. Nearly 100% of AARP members are registered to vote, while over 70% vote in every local, state and federal election.

“Illinoisans need and deserve to know where their State Senators and Representatives stand on the issues, and AARP will ensure they have that information on issues such as health insurance reform,” said Robert Gallo, AARP Illinois Senior State Director.

With record numbers of people losing their employer-based health insurance and now purchasing coverage in the private insurance market, the Health Insurance Consumer Protection Act, introduced by Representative Greg Harris, will establish several critical consumer protections. The Senate’s vote on the legislation will also be tracked and reported as it happens.

The legislation will:

• Require insurance companies to spend at least 75% of premium dollars on medical care rather than on executives’ salaries, marketing, and profits.
• Establish an Office of Consumer Health Insurance to conduct external independent reviews of denied claims and rate increases.
• Simplify the complicated application process for both individual and small group markets by creating a standard application, making it easierfor them to get coverage.

AARP is urging all legislators to pass the measure; getting the bill signed into law is a top priority for the Association.

Following are excerpts from the letter sent by Gallo to State Legislators:

“AARP members are looking to us to keep them informed about what issues are dominating the policy debates in Illinois and where their elected officials stand on these issues.

“Our members care deeply about fixing our broken health care system; including addressing the unfair and inconsistent practices in the private health insurance market. They want to know both how AARP is representing their concerns and how the Illinois State Legislature is responding to our efforts.

“We believe that people make the right choices when they understand the issues and the positions taken by their elected officials. People need and deserve to know where their Representatives and Senators stand on the issues that matter most.

“Therefore, AARP will be recording House and Senate roll call votes on key issues, and informing our Illinois members of the results of these key votes — and how their elected officials voted.

“AARP will track and report the upcoming House vote on House Bill 3923, the Health Insurance Consumer Protection Act, introduced by Representative Greg Harris. With record numbers of people losing their employer-based health insurance and now purchasing coverage in the private insurance market, the legislation will establish several critical consumer protections.

“The legislation will require insurance companies to spend at least 75% of premium dollars on medical care; establish the Office of Consumer Health Insurance to conduct external independent reviews of denied claims and rate increases; and simplify the application process for both individual and small group markets by creating a standard application.

“AARP strongly urges you to vote in favor of this legislation.”

Tags: aarp, AARP Illinois Insurance, Illinois Health Insurance News, Illinois Health Insurance Reform

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

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

The U.S. House and Senate will vote on a compromise $790 billion stimulus package that includes subsidies for 65% of the COBRA health insurance premiums paid by laid-off workers, under a hard-fought conference report unveiled late Feb. 12.

The final version of the American Recovery and Reinvestment Act, which followed intense negotiations between leaders of the two chambers, is smaller than either the $819 billion stimulus passed by the House or the $838 billion package cleared by the Senate. Completion of the conference report for H.R. 1 sets up a planned Feb. 13 House vote, with the Senate to move the package either later in the day or over the President’s Day weekend. Following the vote, Congress will stand in recess until Feb. 23.

The final COBRA provisions, which were welcomed by the health insurance industry, are more generous than the 50% subsidy in the Senate version, but do not last as long as the 12-month subsidy included in both prior versions of the bill. Estimated to cost $24.7 billion, the provision would provide aid to an estimated 7 million involuntarily terminated between Sept. 1, 2008 and Dec. 31, 2009 to pay continue paying health insurance premiums through the 23-year-old Consolidated Omnibus Budget Reconciliation Act program.

COBRA allows employees who are terminated or leave their jobs voluntarily to remain in their former employer’s group health plan for up to 18 months, which can be extended to 36 months for those with extenuating life circumstances. Employers are permitted to charge COBRA enrollees up to 102% of the true cost of group health premiums, which average more than $1,000 per month.

According to the final report, the aid would be available for up to nine months, or until the terminated worker receives an offer of any new employer-sponsored health care coverage or becomes eligible for Medicare. Subsidies would not be available to those who earn more than $125,000 a year, or $250,000 per household.

The final version also strips out a provision opposed by the National Business Group on Health, which represents large employers, that would have allowed beneficiaries older than age 55 and those who have worked for the same employer for a decade to retain COBRA coverage until they become eligible for Medicare.

The measure also includes $17.2 billion in funding for health information technology infrastructure and an additional $2 billion in affiliated grants and loans. The bill sets a goal of seeing 90% of doctors and 70% of hospitals adopt electronic health records within the next decade, but it couples that with more stringent regulations on the transmission of identifiable health information. Insurers have protested that the bill’s notification requirements for security breaches were broadly worded, that it authorizing state attorneys general to enforce federal privacy standards and that new regulations could restrict health promotion, disease management and care coordination programs.

However, groups such as the Blue Cross Blue Shield Association and America’s Health Insurance Plans welcomed $1.1 billion in new funding for comparative effectiveness research. The BCBSA has proposed creation of an industry-funded institute to offer recommendations on the most effective and cost-efficient medical treatments.

“With comparative effectiveness, patients and providers will be able to assess drugs, technologies, and treatment options and make decisions that best reflect the patients’ needs and preferences,” AHIP President Karen Ignagni said in a statement. “We applaud efforts to address this important priority in the current economic recovery bills.”

The final package mostly eliminates a $54 billion provision, seen as potentially beneficial particularly to financial guaranty and mortgage guaranty insurers, that would have allowed corporations to carry back net operating losses for 2008 and 2009 against taxes paid in the prior five years. The final version offers a much more limited, $947 million carryback open only to businesses with gross receipts of less than $15 million, which could potentially be helpful to some agencies and small carriers.

Other small business tax provisions of potential benefit to agencies include $41 million to allow a one-time write-off of up to $125,000 in capital expenses; $829 million for raising the small business stock sale capital gains exclusion to 75% from 50%; and $415 million to temporarily reduce the built-in gains holding period for S corporations from 10 years to seven years.

Tags: COBRA, COBRA laws, COBRA legislation, COBRA stimulus package, COBRA subsidy

U.S. President Barack Obama reversed controversial Bush administration orders limiting states from expanding a low-income children’s health insurance program.

Obama issued a memo reversing his predecessor’s orders on the same day he signed an extension of the State Children’s Health Insurance Program to include more participants in the state-run, federally funded insurance program for low-income children, The Hill reported Thursday.

Although the legislation Obama signed into law Wednesday provides more than $30 billion in additional SCHIP funding to permit states to enroll 4 million more children in addition to the 7 million already receiving benefits, it didn’t specifically address Bush administration letters sent outlining its SCHIP policies in 2007 and 2008.

“These requirements have limited coverage under several state plans that otherwise would have covered additional uninsured children. As a result, tens of thousands of children have been denied healthcare coverage,” Obama wrote.

Tags: Obama SCHIp news, SCHIP

With Michigan’s governor looking on, President Barack Obama reauthorized an expanded health insurance program for children this afternoon, calling it a “down payment on my commitment” to ensure coverage for every American.

The $74-billion reauthorization of the state Childrens’ Health Insurance Program — representing an increase of about $33 billion over the next five years — represented what Obama called “one of the highest responsibilities we have.”

SCHIP already covers about 7 million kids; congressional estimates are that the additional money should allow the states to cover about 4 million more, including legal immigrant children in some cases. The House approved the legislation on a vote of 290-135 earlier today.

President George W. Bush had vetoed the expansion twice in the last Congress.

Obama said parents without insurance for their children are often forced into decisions they should never have to make — “how long to put off that doctor’s appointment, whether to fill that prescription, whether to let a child play outside, knowing that all it takes is one accident, one injury, to send your family into financial ruin.”

“This is not who we are,” added Obama. “We are not a nation that leaves struggling families to fend for themselves.”

Also attending the bill signing at the White House this afternoon from Michigan were Rep. John Dingell, a Dearborn Democrat, and U.S. Sen. Debbie Stabenow.

In Michigan, the additional funding could result in more than 71,000 additional kids receiving basic health care coverage, according to the Families USA, a health care advocacy group based in Washington, D.C. Right now, about 114,000 children in Michigan receive health care through Michigan’s SCHIP program, known as MiChild.

“Enactment of this bill represents a clear example of the change voters demanded last fall,” said Rep. Gary Peters, a Bloomfield Township Democrat who last fall defeated Republican Joe Knollenberg, who was criticized in some quarters for voting against the legislation last year. “Thousands of Michigan kids went without health care for years while Washington bickered.”

But there remained concerns that waivers to the states could result in them authorizing funding for children whose families would otherwise qualify for private health insurance. Midland Republican Dave Camp — the ranking Republican on the House Ways and Means Committee — said in some cases families making up to $88,000 a year could be eligible for free healthcare and that private coverage could be eliminated for some 2.4 million people. But while waivers could be granted to allow states to offer coverage to families making more, there is nothing in the legislation that requires it.

Among Michigan’s delegation, all the Democrats voted for the legislation, as did four Republicans — Candice Miller of Harrison Township, Thad McCotter of Livonia, Vern Ehlers of Grand Rapids and Fred Upton of St. Joseph. Voting against were Republicans Camp, Mike Rogers of Brighton and Pete Hoekstra of Holland.

In all Democrats voted 250-2 in favor of the bill; among Republicans, 40 were supportive and 133 against.

In Michigan, the program covers kids ineligible for Medicaid whose families have incomes less than twice the national poverty level — $44,100 for a family of four. And while Michigan’s program has provided coverage to childless adults with incomes of less than 35% of the poverty level — $3,790.50 — the legislation phases out that coverage (though it includes a provision to provide SCHIP coverage to pregnant women).

The legislation would be paid for through a 62-cent-a-pack increase in the federal excise tax on cigarettes, which would hike that tax from 39 cents a pack to $1.01. It also raises taxes on other tobacco products. The congressional Joint Committee on Taxation estimates that will increase federal revenues by $71.4 billion — covering most of the cost — during the next five years.

Tags: Child health insurance legistlation, children's health insurance program, kids health insurance program, SCHIP

The federal government would pay 65% of COBRA health care continuation premium for one year for eligible beneficiaries who have lost their jobs since Sept. 1, 2008, as part of a massive economic stimulus bill unveiled Thursday by the House Democratic leadership.

The bill also would allow other beneficiaries to hold on to COBRA coverage, for decades in some cases.

The COBRA premium subsidy is certain to increase the number of laid-off employees opting for COBRA. The subsidy is the same provided under a 2002 trade law to employees who lose their jobs due to foreign competition and to pension plan participants 55 years and older in plans taken over by the Pension Benefit Guaranty Corp.

Currently, only about 20% of those eligible for COBRA enroll, a low acceptance due in part to the high cost of coverage. Under law, employers can charge beneficiaries a rate equal to 102% of the cost of coverage offered to employees.

With a higher takeup rate, employer costs would rise since beneficiaries opting for COBRA on average use more medical services than other health plan enrollees, surveys have found.

House Democrats estimate the subsidy would cost the government a total of $30.3 billion. In addition, the stimulus package, which legislators are expected to consider next week, would significantly stretch out the period of time some beneficiaries can retain COBRA coverage.

Under the measure, employees 55 and older and employees who have worked for the same company for at least 10 years could retain COBRA until they are eligible for Medicare at age 65 or obtain health care coverage from a new employer. In the case of younger employees, that could mean they could retain COBRA for decades.

Under current law, employees who lose their jobs can purchase COBRA for 18 months. In other situations, such as death, divorce or martial separation, beneficiaries have a right to keep COBRA coverage for 36 months.

Tags: COBRA, government insurance subsidies

Michelle’s Law (HR-2851) was passed by Congress and signed into law by the President on October 3, 2008 as Public Law No: 110-381. Michelle’s Law requires group and individual health plans to continue covering otherwise eligible dependent children taking a medical leave of absence from a postsecondary educational institution (e.g., a college, university or vocational school) due to a serious illness or injury. Dependent children on a leave of absence must be covered until the earlier of one year from the first day of the leave of absence or the date on which the coverage otherwise would terminate.

The law:

• Defines “dependent child” as a dependent child, under the terms of the plan or coverage, who was enrolled in the plan or coverage on the basis of being a student at a postsecondary educational institution immediately before the first day of the medically necessary leave of absence
• Requires that health plans and insurers receive certification by the dependent child’s treating physician that the child is suffering from a serious illness or injury and that the leave of absence is medically necessary
• Requires health plans and insurers to include, with any notice about required certifications for student status for coverage, a description of the requirements under this new law for continued coverage during medically necessary leaves of absence
• Takes effect for plan years beginning on or after one year from the date the legislation was signed into law, October 9, 2009. For example, a group that renews on January 1, 2009 must be in compliance with the law by January 1, 2010.

Tags: insurance for sick college students, Insurance Laws, Michelle's Law