President Obama Tuesday night signed into law legislation that provides a stopgap, 31-day extension of federal subsidies of COBRA health care premiums.

The measure was approved earlier Tuesday by the Senate on a 78-19 vote, while the House cleared it last week.

Under H.R. 4691, the 65%, 15-month premium subsidy for laid-off workers is extended to those involuntarily terminated from March 1 through March 31.

Without the extension, employees laid off after Feb. 28 would have been ineligible for the subsidy.

The measure also will allow employees to receive the subsidy if they first lost group coverage due to a reduction in hours and then were terminated after enactment of the legislation, if certain conditions are met.

Meanwhile, the Senate Wednesday will continue consideration of legislation, H.R. 4213, that would extend the premium subsidy to employees laid off through Dec. 31, 2010.

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Tags: 2010 COBRA Benefits, 2010 COBRA Benefits Extension, 2010 COBRA Subsidy Deadline, 65% COBRA Subsidy Extension, COBRA Extentension, COBRA Health Care Premium Subsidy Deadline, COBRA Subsidy Extension

President Obama has signed a bill that extends federal COBRA health insurance premium subsidies for the unemployed.

The Senate, in a rare Saturday session, passed H.R. 3326 on an 88-10 vote. The measure—a military spending bill that the House passed earlier last week—includes a provision that extends the nine-month, 65% premium federal subsidy by six months. The change applies to those who are involuntarily terminated through Feb. 28, 2010.

Previously, employees who lose their jobs after Dec. 31 would have been ineligible for the subsidy.

The legislation also provides another six months of subsidized coverage for beneficiaries whose nine-month COBRA premium subsidy has run out.

In addition, the legislation gives beneficiaries whose subsidy expired and who didn’t pay the full premium the opportunity to receive retroactive coverage. For example, a beneficiary whose nine months of subsidized coverage ran out Nov. 30 and who didn’t pay the unsubsidized premium for December could pay his or her 35% share in January and receive COBRA coverage for December.

The legislation also requires employers to notify current and future COBRA beneficiaries of the new 15-month premium subsidy.

The fate of the legislation has been followed closely by terminated workers—eager to know whether the subsidy will be extended—as well as employers who need to tell beneficiaries the COBRA premium they should pay.

The legislation makes clear that employers can offset future COBRA premiums or issue refund checks for beneficiaries who overpaid their COBRA premium. That could happen if a beneficiary whose subsidy ran out in November paid the full premium rather than the 35% share in December.

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Tags: COBRA Legislation Extension, COBRA stimulus, COBRA stimulus package, COBRA subsidy, COBRA Subsidy Expansion, COBRA Subsidy Extended, COBRA Subsidy Extension, Obama COBRA Subsidy

As we head into July, the federal debate has become more defined as four of the five Congressional committees with jurisdiction over health reform have released draft health reform bills. On June 19th , the Education and Labor, Energy and Commerce, and Ways and Means Committees in the House of Representatives released a joint tri-committee draft health reform bill. Earlier in June, the Senate Health, Education, Labor, and Pensions (HELP) Committee released its health reform bill. The final committee with jurisdiction over health reform, the Senate Finance Committee, is expected to release its health reform bill soon after the 4th of July Congressional recess. House and Senate leadership hope to pass legislation in their respective chambers before August and get a final compromise bill to the President in October. Key components of the recently released House tri-committee bill include:

National Health Insurance Exchange: By 2013, a National Health Insurance Exchange is to be established to replace the current individual health insurance market and provide an option for employers and public program enrollees in Medicaid and the Children’s Health Insurance Program (CHIP). States would be allowed to apply to the federal government to establish state or regional exchanges. The Exchange is to establish health plan standards, facilitate the provision of comparative information, enrollment, billing, and other administrative functions, administer coverage subsidies, and respond to consumer grievances.

Public Plan: No later than 2013, the Department of Health and Human Services is to develop and offer a Public Plan through the Exchange to compete with private insurers. The Public Plan is to comply with the same requirements as other private health plans participating in the Exchange, but provider payments from the Public Plan are to be similar to Medicare rates and providers participating in Medicare would be required to participate in the Public Plan for five years. The federal government would provide start up funding for the Public Plan, but it must become self-sustaining after initial start up.

Insurance Market Reform: The legislation requires changes to the individual and group markets that prohibit pre-existing condition exclusions, prohibit premium rating based on health status, gender, or occupation and limit rating by age, require guarantee issue and renewal of coverage, require a medical loss ratio of 85 percent, prohibit annual or lifetime benefit limits and limit annual cost sharing, establish a Benefits Advisory Committee to recommend a minimum benefit package and three additional standard benefit plans, and establish a risk spreading mechanism to minimize unequal risk selection in health plans.

Coverage Mandates: By 2013, all individuals would be required to have health insurance coverage. Those not complying with the mandate are to be assessed a tax up to the cost of the minimum benefit plan. Exceptions to the mandate are granted for religious objection and financial hardship. Employers would be required to provide 72.5 percent for single coverage and 65 percent for family coverage of the lowest cost minimum benefit set plan or pay an eight percent tax on wages. Certain small businesses with payroll below a set level would be exempt.

Coverage Subsidies: Sliding scale subsidies varying by income would be available through the Exchange for individuals and families with incomes below 400 percent of the federal poverty level ($88,000 for a family of four) so that premiums would not exceed 10 percent of income. Sliding scale subsidies varying by employee income and employer size worth up to 50 percent of premium would be available to employers with less than 25 employees whose average wage is below $40,000.

Medicaid Reform: The legislation expands Medicaid eligibility for all individuals to 133 percent of the federal poverty level ($14,000 for an individual) and requires an 85 percent medical loss ratio for Medicaid managed care organizations. It also establishes new preventive services benefits, increases payments for primary care, and implements a medical home pilot project to reduce costs and improve outcomes through use of preventive services and care coordination.

Medicare Reform: The legislation restructures provider payment rates and requires the Department of Health and Human Services to develop new payment methods to promote coordinated care and reward quality and efficiency in areas such as hospital readmissions, post-acute care, imaging, and primary care. The bill reduces payment rates and establishes an 85 percent medical loss ratio for Medicare Advantage plans. The legislation also eliminates the coverage gap (donut hole) in Part D by 2023 and reauthorizes Special Needs Plans (SNPs) that integrate care for beneficiaries with coverage through Medicaid and Medicare.

Other Health System Reforms: The legislation also makes investments in the health care workforce to improve access to primary care, makes investments in prevention and public health programs, establishes national centers for quality improvement and comparative effectiveness research, establishes mechanisms to simplify administrative functions, and enhances efforts to reduce fraud, waste, and abuse.

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Tags: House Health Committee bill, House Health Subcomittee, House insurance bill, House of representative insurance proposal

The House and Senate have approved a compromise budget resolution that sets parameters for spending and revenue legislation. As requested by the President, the budget resolution includes a reserve fund for health care reform initiatives that must be deficit-neutral for fiscal years 2009 through 2014 or fiscal years 2009 through 2019. The resolution allows Medicare physician payment legislation, that would likely prevent cuts to physician payment rates for two years, to be exempt from the deficit-neutral requirement.

The budget resolution also allows for the ability to consider health care reform legislation under the reconciliation process. Reconciliation is a procedure that Congress may use to make it easier to pass budget bills related to tax and entitlement spending programs. A reconciliation bill can not be filibustered as debate is limited to 20 hours, and this allows a bill to be passed quickly with a simple majority vote.

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Tags: Health care reform, health care reform agreement

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

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

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.

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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)).

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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.

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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.

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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.

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