Is Your Wellness Program Compliant with the ACA, GINA and EEOC?

Great article from our partner, United Benefit Advisors (UBA) by Valeria S. Tivnan.

Workplace wellness programs have increased popularity through the years. According to the most recent UBA Health Plan Survey, 49 percent of firms with 200+ employees offering health benefits in 2016 offered wellness programs. Workplace wellness programs’ popularity also brought controversy and hefty discussions about what works to improve population health and which programs comply with the complex legal standards of multiple institutions that have not really “talked” to each other in the past. To “add wood to the fire,” the Equal Employment Opportunity Commission (EEOC) made public some legal actions that shook the core of the wellness industry, such as EEOC vs. Honeywell International, and EEOC vs. Orion Energy Systems.

To ensure a wellness program is compliant with the ACA, GINA and the EEOC, let’s first understand what each one of these institutions are.

The Affordable Care Act (ACA) is a comprehensive healthcare reform law enacted in March 2010 during the Obama presidency. It has three primary goals: to make health insurance available to more people, to expand the Medicaid program, and to support innovative medical care delivery methods to lower the cost of healthcare overall.1 The ACA carries provisions that support the development of wellness programs and determines all rules around them.

The Genetic Information Nondiscrimination Act of 2008 (GINA) is a federal law that protects individuals from genetic discrimination in health insurance and employment. GINA relates to wellness programs in different ways, but it particularly relates to the gathering of genetic information via a health risk assessment.

The U.S. Equal Employment Opportunity Commission (EEOC) is a federal agency that administers and enforces civil rights laws against workplace discrimination. In 2017, the EEOC issued a final rule to amend the regulations implementing Title II of GINA as they relate to employer-sponsored wellness program. This rule addresses the extent to which an employer may offer incentives to employees and spouses.

Here is some advice to ensure your wellness program is compliant with multiple guidelines.

  1. Make sure your wellness program is “reasonably designed” and voluntary – This means that your program’s main goal should be to promote health and prevent disease for all equally. Additionally, it should not be burdensome for individuals to participate or receive the incentive. This means you must offer reasonable alternatives for qualifying for the incentive, especially for individuals whose medical conditions make it unreasonably difficult to meet specific health-related standards. I always recommend wellness programs be as simple as possible, and before making a change or decision in the wellness program, identify all difficult or unfair situations that might arise from this change, and then run them by your company’s legal counsel and modify the program accordingly before implementing it. An example of a wellness program that is NOT reasonably designed is a program offering a health risk assessment and biometric screening without providing results or follow-up information and advice. A wellness program is also NOT reasonably designed if exists merely to shift costs from an employer to employees based on their health.
  2. Do the math! – Recent rules implemented changes in the ACA that increased the maximum permissible wellness program reward from 20 percent to 30 percent of the cost of self-only health coverage (50 percent if the program includes tobacco cessation). Although the final rules are not clear on incentives for spouses, it is expected that, for wellness programs that apply to employees and their spouses, the maximum incentive for either the employee or spouse will be 30 percent of the total cost of self-only coverage. In case an employer offers more than one group health plan but participation in a wellness program is open to all employees regardless of whether they are enrolled in a plan, the employer may offer a maximum incentive of 30 percent of the lowest cost major medical self-only plan it offers. As an example, if a single plan costs $4,000, the maximum incentive would be $1,200.
  3. Provide a notice to all eligible to participate in your wellness program – The EEOC made it easy for everyone and posted a sample notice online at https://www.eeoc.gov/laws/regulations/ada-wellness-notice.cfm. Your notice should include information on the incentive amount you are offering for different programs, how you maintain privacy and security of all protected health information (PHI) as well as who to contact if participants have question or concerns.
  4. If using a HRA (health risk assessment), do not include family medical history questions – The EEOC final rule, which expands on GINA’s rules, makes it clear that “an employer is permitted to request information about the current or past health status of an employee's spouse who is completing a HRA on a voluntary basis, as long as the employer follows GINA rules about requesting genetic information when offering health or genetic services. These rules include requirements that the spouse provide prior, knowing, written, and voluntary authorization for the employer to collect genetic information, just as the employee must do, and that inducements in exchange for this information are limited.”2Due to the complexity and “gray areas” this item can reach, my recommendation is to keep it simple and to leave genetic services and genetic counseling out of a comprehensive wellness program.

WellSteps, a nationwide wellness provider, has a useful tool that everyone can use. Their “wellness compliance checker” should not substituted for qualified legal advice, but can be useful for a high level check on how compliant your wellness program is. You can access it at https://www.wellsteps.com/resources/tools.

I often stress the need for all wellness programs to build a strong foundation, which starts with the company’s and leaders’ messages. Your company should launch a wellness program because you value and care about your employees’ (and their families’) health and well-being. Everything you do and say should reflect this philosophy. While I always recommend companies to carefully review all regulations around wellness, I do believe that if your wellness program has a strong foundation based on your corporate social responsibility and your passion for building a healthy workplace, you most likely will be within the walls of all these rules. At the end, a workplace that does wellness the right way has employees who are not motivated by financial incentives, but by their intrinsic motivation to be the best they can be as well as their acceptance that we all must be responsible for our own health, and that all corporations should be responsible for providing the best environment and opportunities for employees to do so.

See the original article Here.

Source:

Tivnan V. (2017 May 9). Is your wellness program compliant with the ACA, GINA  and EEOC? [Web blog post]. Retrieved from address http://blog.ubabenefits.com/is-your-wellness-program-compliant-with-the-aca-gina-and-eeoc


Compliance Recap May 2017

Make sure to stay up-to-date with the most recent rules and regulations from May regarding healthcare legislation thanks to our partners at United Benefit Advisors (UBA).

May was an active month in the employee benefits world. On May 4, 2017, the U.S. House of Representatives passed a bill titled the “American Health Care Act of 2017” (AHCA) to repeal and replace the Patient Protection and Affordable Care Act (ACA).

The Internal Revenue Service (IRS) released its Employer Shared Responsibility affordability percentage indexed for 2018. The U.S. Citizenship and Immigration Services (USCIS) issued redesigned permanent resident cards and employment authorization documents. The USCIS also issued a warning about phone scams targeting immigrants. The Occupational Safety and Health Administration (OSHA) announced that it will delay electronic submission of injury and illness records.

The IRS released dollar limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs) for 2018. The IRS released guidance confirming that health flexible spending arrangements (health FSAs) cannot reimburse Medicare premiums. The IRS also released a memo regarding tax treatment of benefits paid under an arrangement that combines a self-funded fixed indemnity heath plan and wellness program.

The Centers for Medicare & Medicaid Services (CMS) announced that it will end the Federally Facilitated SHOP Exchange (FF-SHOP) at the end of 2017. The U.S. Department of Labor (DOL) issued an advisory opinion on an employee welfare benefit plan maintained by an association of employers. The U.S. Supreme Court declined to take an opt-out arrangement case, leaving intact a lower court’s decision that opt-out payments must be included in overtime calculations under the Fair Labor Standards Act (FLSA).

UBA Updates

UBA released three new advisors in May: • House Passes AHCA Bill in

  • House Passes AHCA Bill in First Step to Repeal and Replace the ACA
  • Frequently Asked Questions About Employees’ Reduction in Hours
  • What Qualifying Events Trigger COBRA?

The House Passes AHCA Bill in First Step to Repeal and Replace the ACA

On May 4, 2017, the U.S. House of Representatives passed House Resolution 1628, a reconciliation bill aimed at "repealing and replacing" the ACA. The AHCA will now be sent to the Senate for debate, where amendments can be made, prior to the Senate voting on the bill.

It is widely anticipated that in its current state the AHCA is unlikely to pass the Senate. Employers should continue to monitor the text of the bill and should refrain from implementing any changes to group health plans in response to the current version of the AHCA.

IRS Releases Employer Shared Responsibility Affordability Percentage Indexed for 2018

The Internal Revenue Service (IRS) released its Revenue Procedure 2017-36 that sets the required contribution percentage to determine whether employer-sponsored health coverage is affordable at 9.56 percent for calendar year 2018.

USCIS Issues Redesigned Green Cards and Employment Authorization Documents

The U.S. Citizenship and Immigration Services (USCIS) began issuing the new Permanent Resident Cards (also known as Green Cards) on May 1, 2017. The new cards incorporate enhanced graphics and fraud-resistant security features. These new cards are also part of an ongoing effort between USCIS, U.S. Customs and Border Protection, and U.S. Immigration and Customs Enforcement to enhance document security and deter counterfeiting and fraud.

The new Green Cards and Employment Authorization Documents (EADs):

  • Display the individual’s photos on both sides • Show a unique graphic image and color palette:
    • Green Cards will have an image of the Statue of Liberty and a predominately green palette
    • EAD cards will have an image of a bald eagle and a predominately red palette
  • Have embedded holographic images
  • No longer display the individual’s signature

Also, Green Cards will no longer have an optical stripe on the back.

Some Green Cards and EADs issued after May 1, 2017, may still display the existing design format as USCIS will continue using existing card stock until current supplies are depleted. For more information about the Green Card application process, please visit USCIS.gov/greencard.

USCIS Issues a Warning on Phone Scam Targeting U.S. Immigrants

U.S. immigrants have been targeted by a phone scam that appears as if it is from the Canadian government’s Immigration, Refugees, and Citizenship Canada (IRCC) call center (1-888-242-2100). Recipients of these calls are advised to hang up immediately and check their status by:

  • Making an InfoPass appointment at http://infopass.uscis.gov, or
  • Using myUSCIS to find up-to-date information about their application, or
  • Calling the USCIS National Customer Service Center at 1-800-375-5283.

Scam email or phone calls should be reported to the Federal Trade Commission at http://1.usa.gov/1suOHSS. Suspicious emails may be forwarded to the USCIS webmaster at uscis.webmaster@uscis.dhs.gov. The USCIS will review the emails received and share them with law enforcement agencies as appropriate. Visit the Avoid Scams Initiative at www.uscis.gov/avoid-scams for more information on common scams and other important tips.

OSHA Proposes to Delay Electronic Submission of Injury and Illness Records

In 2016, the Occupational Safety and Health Administration (OSHA) announced that certain high-risk employers of 20 or more employees and employers with 250 or more employees must electronically file Form 300A for workplace illnesses and injuries that occurred in calendar year 2016.

OSHA recently posted a notice on its website stating that “OSHA is not accepting electronic submission of injury and illness logs at this time and intends to propose extending the July 1, 2017 date by which certain employers are required to submit the information from their completed 2016 form 300A electronically.” It should be noted that the requirement to keep records has not changed; only the method in which they are submitted is under scrutiny.

IRS Releases 2018 Amounts for HSAs 

The IRS released Revenue Procedure 2017-37 that sets the dollar limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs) for 2018. For

For calendar year 2018, the annual contribution limit for an individual with self-only coverage under an HDHP is $3,450, and the annual contribution limit for an individual with family coverage under an HDHP is $6,900. For

For calendar year 2018, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,650 for self-only coverage or $13,300 for family coverage.

IRS Releases Information Letter to Confirm that FSAs Cannot Reimburse Medicare Premiums

The IRS released its Information Letter Number 2017-0004 to confirmed that a health flexible spending arrangement (health FSAs) cannot reimburse Medicare premium expenses. The IRS cited its Publication 969 which states that an FSA cannot reimburse health insurance premium payments. Because Medicare premiums are premiums for other health coverage, Medicare premiums are not FSA-reimbursable expenses.

IRS Releases Memo Regarding Tax Treatment of Benefits Paid by Self-Funded Health Plans

On May 12, 2017, the IRS released a Memorandum to address the taxability of benefits paid under an arrangement that combines a self-funded fixed indemnity heath plan and wellness program. The IRS specifically refutes the claim that these arrangements provide nontaxable cash payments to employees and employment tax savings for the employer and employees.

The IRS concluded that benefits paid under a such an employer-provided self-funded health plan should be included in an employee’s income and wages if the average amounts received by the employee for participating in a health-related activity predictably exceed the employee’s after-tax contributions.

CMS Plans to End SHOP Exchange

On May 15, 2017, the Centers for Medicare & Medicaid Services (CMS) announced that it will issue rules to essentially end the Federally Facilitated SHOP Exchange (FF-SHOP) at the end of 2017.

Under the rules that CMS intends to propose, HealthCare.gov will continue to make FF-SHOP participation eligibility decisions for small employers regarding the Small Business Health Care Tax Credit, but the FF-SHOP will stop handling SHOP functions, such as processing premium payments or handling employer or employee enrollment, for SHOP plans taking effect on or after on January 1, 2018. CMS intends to allow employers to directly enroll with insurers offering SHOP plans or through FF-SHOPregistered brokers or agents.

DOL Issues Advisory Opinion on Employee Welfare Benefit Plan Sponsored by a Group of Employers

On May 16, 2017, the Department of Labor (DOL) issued its Advisory Opinion to address whether a membership-based organization could fall within ERISA’s definition of “group or association of employers” who sponsor an ERISA employee welfare benefit plan.

Based on the facts presented to the DOL, the DOL concluded that the organization’s membership is comprised of employers engaged in the same industry and that the employers have a genuine organizational relationship unrelated to the health plan through their membership in the organization. The DOL determined, based on the proposed arrangement’s facts, that the participating member employers would be a bona fide group or association of employers under ERISA and that the health plan would be an ERISA employee welfare benefit plan.

U.S. Supreme Court Declines to Take Opt-Out Arrangement FLSA Case

Last year in court case Flores v. City of San Gabriel, the 9th Circuit Court of Appeals (which covers several western states including Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) determined that when an employer pays cash to an employee for opting out of its health plan, the payment must be considered part of the employee’s “regular rate of pay” under the Fair Labor Standards Act (FLSA). This means that the adjusted rate of pay must be used in calculating compensation for overtime hours.

The City of San Gabriel appealed the 9th Circuit’s decision to the U.S. Supreme Court. On May 15, 2017, the Supreme Court declined to take the case, essentially leaving the decision intact.

Practically speaking, if an employer is in one of the states covered by the 9th Circuit and if the employer calculates compensation for overtime hours, then it should consider this additional FLSA aspect to offering cash in lieu of benefits.

To download the full compliance alert click Here.


What's Really at Stake in the Medicaid Spending Debate

Does the prospect of a $834 billion reduction in Medicaid spending have you worried. Then take a look at this article by Drew Altman of Kaiser Family Foundation and find out how cuts to Medicaid will impact more than just healthcare.

The $834 billion cut in federal Medicaid spending in the American Health Care Act would kick off budget battles in the states that go way beyond Medicaid. We could see cuts to higher education, school funding, corrections, environmental protection or other state priorities — or new taxes, depending on the state.

The bottom line: What began as a Medicaid spending reduction in Congress will end up as a battle of budget priorities.

A new analysis from long time state Medicaid expert Vern Smith at HMA suggests why. To offset the $834 billion in reductions in federal Medicaid spending in the AHCA, states would need to increase their own general fund spending by an average of one third beginning in 2022, and 37% in 2026. States will have to decide whether to eat the reductions and cut their Medicaid programs, raise taxes, or cut spending for other state priorities, or to do some combination of these things.

In the short term, most of the reductions come from curtailing the ACA's Medicaid expansion, and the 31 states plus the District of Columbia that have expanded will be the most affected.

The problem: It's possible that with more flexibility, states could absorb some of the reductions by operating their Medicaid programs more efficiently, but only at the margins.

Medicaid spending is already growing more slowly than Medicare and private insurance on a per capita basis. Virtually all states have already picked the low hanging fruit to rein in their Medicaid costs, and most have already deployed the full spectrum of delivery and payment reforms currently in the arsenal to control spending growth.

Cutting payments to providers is always the Medicaid cut of first resort, but payments to providers are already too low in many states to cut them further.

What to watch: The need to absorb large reductions in Medicaid will pit cabinet agencies, legislative committees and interest groups against one another in some states. Nothing receives more attention from governors, legislators and interest groups than the size of the annual increase in the state general fund and how the increase is divided each year.

The amount of the annual increase that goes to Medicaid is already a sore point in state budgets. Now the annual budget dance will start with a big hole to fill in Medicaid.

It does not seem to have dawned on folks with an interest in state funding for higher education, or corrections, or schools, or environmental protection that the debate about Medicaid could soon become a debate about their issues. But Medicaid is the largest source of federal revenues states receive, and once the proposed reductions trickle down to state budgets, it won't only be a Medicaid debate any longer.

See the original article Here.

Source:

Altman D. (2017 June 2). What's really at stake in the medicaid spending debate [Web blog post]. Retrieved from address https://www.axios.com/whats-really-at-stake-in-the-medicaid-spending-debate-2428102663.html


Analysis: 6.3 Million People with Pre-Existing Conditions Would Be at Risk for Higher Premiums under the House’s Health Bill

Take a look at this interesting article from Kaiser Family Foundation about how people with pre-existing conditions will face higher premiums on their health insurance due to the passing of the AHCA.

A new Kaiser Family Foundation analysis estimates that 6.3 million people — 23 percent of 27.4 million non-elderly adults with a gap of several months in insurance coverage in 2015 – could potentially face higher premiums under the House’s American Health Care Act (AHCA), due to pre-existing health conditions.

The bill, which passed the House earlier this month, allows states to waive community rating in the individual insurance market. Insurers in states with such waivers could vary premiums by health status for an entire plan year for enrollees with a gap in insurance of 63 or more consecutive days in the past year.

People with pre-existing conditions would likely face large premium surcharges under an AHCA waiver, according to the analysis, as insurers would be unable to decline coverage based on a person’s medical history, a practice that was permitted in nearly all states before it was prohibited by the Affordable Care Act in 2014. An earlier analysis from the Foundation estimated that 27 percent of non-elderly adults have a condition that would have led to a coverage refusal in the pre-ACA market.

The new analysis also identifies a second group of people who could be at risk of higher premiums: those with pre-existing conditions now buying their own insurance. It finds that an estimated 3.8 million adults, or about 25 percent of all adult enrollees in the 2015 individual insurance market, had a pre-existing condition that could subject them to higher premiums under an AHCA community rating waiver if they don’t maintain continuous coverage.

The AHCA allocates $8 billion over five years to states with community rating waivers, resources that can be used to help reduce premiums or pay out-of-pocket medical expenses for people rated based on their health status. However, the House bill does not require states to set up an alternate source of coverage for people who face higher premiums based on their health. It is uncertain how many states would waive community rating under the AHCA.

See the original article Here.

Source:

Author (Date). Analysis: 6.3 million people with pre-existing conditions would be at risk for higher premiums under the house's health bill [Web blog post]. Retrieved from address http://www.kff.org/health-reform/press-release/analysis-6-3-million-people-with-pre-existing-conditions-would-be-at-risk-for-higher-premiums-under-the-houses-health-bill/?utm_campaign=KFF-2016-The-Latest&utm_source=hs_email&utm_medium=email&utm_content=52062246&_hsenc=p2ANqtz-_VsXEz5DH19yz9a0M6hl4QfqXSaABYhLLADcvZymz30D-94xqDepLSsy4AGwu-LbtONEahQvbbjampBln3kkIlrAgSlw&_hsmi=52062246


Ten Ways That the House American Health Care Act Could Affect Women

The American Health Care Act (AHCA) will bring a lot of changes to many people and their healthcare. Find out how women's healthcare will be affected by the new legislation in this great article by Kaiser Family Foundation.

Women have much at stake as the nation debates the future of coverage in the United States. Because the Affordable Care Act (ACA) made fundamental changes to women’s health coverage and benefits, changes to the law and the regulations that stem from it would have a direct impact on millions of women with private insurance and Medicaid. On May 4, 2017, the House of Representatives passed the American Health Care Act (AHCA), to repeal and replace elements of the ACA (Appendix Table 1). It would eliminate individual and employer insurance mandates, effectively end the ACA Medicaid expansion, cap federal funds for the Medicaid program, make major changes to the federal tax subsidies available to assist individuals who purchase private insurance, and ban federal Medicaid funds from going to Planned Parenthood. It would also allow states to waive the ACA’s Essential Health Benefits requirements and permit health status as a factor in insurance rating for individuals who do not maintain continuous coverage with the goal of reducing insurance costs.1 The Senate will now take up legislation to repeal and replace the ACA and may consider several elements that the House has approved in the AHCA. This brief reviews the implications of the AHCA for women’s access to care and coverage.

ACA’s Impact on Coverage and Access for Women

Since the ACA’s passage, the uninsured rate has declined to record low levels. Between 2013 and 2015, the uninsured rate among women ages 19 to 64 fell from 17% to 11% (Figure 1). This drop was due in large part to the Medicaid expansion that was adopted by 31 states and DC, and the availability of federal tax credits to subsidize premium costs for many low and modest-income women and men. In addition to coverage improvements, fewer women face affordability barriers since the ACA was enacted. Women have consistently been more likely than men to report that they delay or go without needed care because of costs. The ACA addressed some of these financial barriers by providing subsidies for premiums and cost sharing, eliminating out of pocket costs for preventive services, lifting the lifetime limits on expenses insurance will cover, and requiring minimum levels of coverage for ten Essential Health Benefit categories. Since its passage, the share of women who report that they delayed or went without care due to costs has fallen (Figure 2). This drop has been particularly marked among low-income women, although costs continue to be a greater challenge for this group as well.

1. MEDICAID ELIGIBILITY: EXPANSION AND WORK REQUIREMENTS

Medicaid has been the foundation of coverage gains under the ACA. Eliminating federal funds for the ACA’s Medicaid expansion could leave many of the nation’s poorest women without a pathway to coverage.

Women comprise the majority of Medicaid beneficiaries—before the passage of the ACA and today. Prior to the ACA, compared to men, women were more likely to qualify for Medicaid because of their lower incomes and because they were more likely to meet one of the program’s eligibility categories: pregnancy, parent of a dependent child, over 65, or disability. The ACA eliminates the program’s “categorical” requirements, allowing states to extend Medicaid eligibility to all individuals based solely on income. In the 31 states and DC that have chosen to expand Medicaid, individuals with household incomes up to 138% of the Federal Poverty Level (FPL) qualify, and the federal government finances 95% of the costs.2

It is estimated that by 2015, 11 million adults had gained coverage as a result of the ACA’s Medicaid expansion. This opened the door for continuous coverage to pregnant women who often became ineligible for coverage 60 days after the birth of their baby and had no other pathway to coverage as new mothers. The Medicaid expansion has also helped women who do not have children gain access to coverage, since before the expansion they were ineligible for coverage in most states. If passed, the AHCA bill would withdraw the enhanced federal funds for the Medicaid expansion except for beneficiaries enrolled as of December 31, 2019 who do not have a break in eligibility for more than 1 month. This loss of federal financing would leave states without the funds needed to continue supporting this expansion, potentially forcing some states to roll back eligibility for parents to the very low levels that were in place before the ACA (Figure 3). For example, a single mother of two living in Louisiana or Indiana would not have qualified for Medicaid if her income exceeded $4,687. The Congressional Budget Office (CBO) estimates that, under the House AHCA bill, some states that have already expanded their Medicaid programs would not continue that coverage (some states might also begin to reduce coverage prior to 2020), and that no new states will adopt the expansion.

The AHCA bill would also amend the federal Medicaid statute to allow states to require some beneficiaries, including parents of children 6 and older and adults without disabilities, to show proof of employment. States would have flexibility to design the details of the work requirement within federal guidelines and would receive additional federal support to help cover the administrative costs of this change.

2. CAPPING FEDERAL MEDICAID SPENDING

Medicaid provides health coverage to nearly one in five women in the U.S. Capping the program would limit the federal dollars that states would receive for a program that pays for half of births, three-quarters of all public family planning, and provides supplemental coverage for nearly 1 in 5 senior women on Medicare.

Since its inception in 1965, Medicaid has evolved to become a leading source of coverage for low-income women of all ages (Figure 4). The program provides health coverage to one in five women of reproductive age and one in four Latinas and African American women. Over the years, the program has also expanded to be the largest payor of maternity care and publicly-funded family planning in the U.S.

Medicaid is financed by a combination of federal and state dollars. For most beneficiaries, the federal government pays a percentage of costs, ranging between 50-75% depending on the state. Beginning in 2020, the AHCA would convert federal Medicaid funding from an open-ended matching system to an annual fixed amount of federal dollars. States could choose a “block grant” (for payment of services for children under 18 and poor parents of dependent children) or a “per capita cap” approach for five enrollment groups (the elderly, individuals with disabilities, children, newly eligible adults, and all other adults). While a capped approach would reduce federal spending, it would also shift more responsibility to states to pay more of their own dollars if they want to sustain the program at current levels.

While fixed federal financing would affect all individuals insured by Medicaid, one area that is particularly important for women is the program’s coverage of family planning services. Currently, the federal government requires coverage of family planning services and supplies and pays for 90% of the cost of these services, a higher match than for all other services.3 This higher federal payment rate provides states with an incentive to cover the full range of contraceptive methods. Under a per capita cap structure, states will still be required to cover family planning services, but there will no longer be an enhanced federal matching rate for family planning services provided to most beneficiaries. As a result, there may be less up-front financial incentive for states to cover the more expensive methods of contraception like IUDs, even though they are highly effective at preventing unintended pregnancies. Should states select a block grant option, family planning services would no longer be a mandatory benefit for non-disabled women on Medicaid.

If a state chooses a per capita cap structure, the AHCA would not change the financing structure for stand-alone family planning expansions that are currently in place in over half the states. These limited scope programs have allowed states to extend Medicaid coverage for family planning services to low-income women and men who do not have other family planning coverage. Since the AHCA’s per capita cap does not apply to these programs, states could continue to receive a 90% federal matching rate for them. These programs may become increasingly important to women because the CBO predicts that under this bill the number of uninsured would rise by 24 million over the next 10 years, and these Medicaid family planning programs are often an important source of reproductive care for uninsured women.

Both capped financing approaches would limit states’ ability to respond to rising costs, new and costly treatments, or public health emergencies such as the opioid epidemic or Zika. States may decide to make programmatic cuts such as cutting provider payments, particularly when facing fiscal pressures. For example, on average, Medicaid pays ob-gyns 76% of the Medicare rate4 and a smaller share of the commercial rate. If states were to make further cuts to provider payments or to plans, the pool of participating providers could shrink in response to reduced rates, which could make it harder for many women enrollees to find a participating ob-gyn or cause delays in scheduling appointments.
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3. MEDICAID AND PLANNED PARENTHOOD

Planned Parenthood provides reproductive health services for many low-income women across the nation. Cutting off federal Medicaid payments to the organization could limit the availability of the most effective contraceptives, as well as STI and cancer screenings for many women on Medicaid.

Many low–income women obtain reproductive care at safety-net clinics that receive public funds to pay for the care they provide. The network includes a range of clinics that provide a broad range of primary care services, such as community health centers (CHCs) and health departments as well as specialized clinics that focus on providing family planning services. The largest organization of specialized family planning clinics is Planned Parenthood, which receives federal support through reimbursement for care delivered to women and men on Medicaid, as well as grant funds from the federal Title X family planning program. Despite comprising only 6% of the safety-net clinics that provided subsidized family planning services in 2015, Planned Parenthood clinics served 32% of women (nearly 2 million women) seeking contraceptive care at these centers (Figure 5).

Should it become law, the AHCA would prohibit federal Medicaid payments to Planned Parenthood for one year, even though federal law already prohibits federal dollars from being used to pay for abortions other than those to terminate pregnancies that are a result of rape, incest or a threat to the pregnant woman’s life. The AHCA bill would provide additional funds to CHCs, presumably to compensate for loss of a major provider of care to women, but there are no specifics in the bill that would require the health centers to use these funds to provide services to women. There is also concern that CHCs do not currently have the capacity to fill the gap in care that would arise if Planned Parenthood were no longer a participating Medicaid provider.5 Not all CHCs provide the same range of services as Planned Parenthood, and care at CHCs could be more costly than that provided by specialized family planning providers like Planned Parenthood.6 The CBO’s March 13, 2017 analysis of the AHCA stated that cutting off Medicaid payments to Planned Parenthood for one year would result in loss of access to services in some low-income communities because it is the only public provider in some regions. The report also stated that the policy would result in thousands of additional unintended pregnancies that would be financed by Medicaid.7

4. ABORTION COVERAGE

Private and public coverage of abortion is currently limited in many states through the federal Hyde Amendment and state laws. The AHCA would go further than the ACA to restrict the availability of abortion coverage through private insurance policies.

Since 1976, the federal Hyde Amendment has limited the use of federal funds for abortion only to cases when the pregnancy is a result of rape or incest or is a threat to the woman’s life. Since its first passage over 40 years ago, the amendment has dramatically limited coverage of abortion under Medicaid, as well as other federal programs.8

In private insurance, the ACA explicitly bars abortion from being included as part of the Essential Health Benefit package defined by states and allows states to ban all plans in their Marketplaces from covering abortion. States can also ban abortion coverage in all state regulated private plans.9 As of March 2017, 25 states have laws limiting or banning coverage of abortion in ACA Marketplaces, and of these, 10 states ban abortion coverage in both the Marketplaces and in the private insurance market.

To ensure no federal dollars are used to subsidize abortion coverage, the AHCA bill would no longer make this a state option, rather it would ban abortion coverage in all Marketplace plans as well as prohibit the use of federal tax credits to purchase any plans that cover abortion that are available outside the Marketplace. The bill would limit employer coverage of abortion by disqualifying small employers from receiving tax credits if their plans cover abortion beyond Hyde limitations.

This provision would be in direct conflict with existing state policies in California and New York that require plans to cover abortion. Furthermore, no off market plans in these states would be able to enroll individuals who receive tax credits. Therefore, if enacted, the AHCA’s abortion coverage ban would likely face legal challenges.

5. TAX CREDITS, PREMIUM AND COST-SHARING SUBSIDIES

The AHCA would set the level of tax credit assistance using primarily age, and would repeal the ACA’s cost-sharing protections for low-income individuals. Because women have a lower income than men at all ages, this approach could place women at a disadvantage compared to men.

Women comprise more than half (54%) of ACA marketplace enrollees in the 34 states that use the federally facilitated marketplace, healthcare.gov. Approximately eight in ten (81%) Marketplace beneficiaries receive a premium tax credit, which offsets premium costs and makes them more affordable. In 2015, more than one-third (37%) of women who purchased insurance on their own were low-income ($23,540 for a single person) compared to 31% of men. 10 The current subsidy structure under the ACA provides higher levels of subsidies to those who are low-income, older, and who live in areas with more expensive coverage.

The AHCA, in contrast, would take a very different approach and reduce the amount that the federal government would contribute to subsidies with the goal of reducing federal spending. The AHCA would provide a flat tax credit based on age only up until an income of $75,000 for a single individual, and phases out at higher incomes. This would result in a large decrease in tax subsidies to older Marketplace enrollees compared to what is available to them today.

The AHCA would set aside additional federal funds to assist older enrollees as well as services for pregnant women and newborns and individuals with mental health and substance use disorders, but how those funds would be allocated is still to be determined. Nonetheless, under the AHCA’s tax credit methodology, people with lower incomes would receive significantly less than they do under current law. A higher share of women is poor or low-income than men, because women are more likely than men to head single parent households, work part-year or part-time, are paid less than men for similar work, and take breaks from the workforce to stay home and care for children and aging parents. As a result, this approach could disproportionately disadvantage women. In addition, the AHCA proposes to repeal the cost-sharing subsides available today under the ACA that provide additional protection from the high costs of deductibles, cost-sharing, and co-insurance to individuals with incomes below 250% of the federal poverty level.

6. INSURANCE REFORMS

The ACA banned many of the long-standing discriminatory practices in the individual insurance market that translated into higher cost burdens for women. While the AHCA maintains the gender-rating ban and the dependent coverage expansion, it could allow states to permit insurers to charge higher premiums to individuals with health problems if they have a lapse in coverage.
DEPENDENT COVERAGE

A popular element of the ACA is the provision that requires private health insurers that offer dependent coverage to children to allow young adults up to age 26 to remain on their parents’ insurance plans. This provision was the first in the ACA to take effect, and it increased the availability of insurance to an age group that historically had a high uninsured rate (Table 1). In 2015, 39% of women ages 19 to 25 reported that they were covered as a dependent.

GENDER RATING

Prior to the ACA, non-group insurers in many states charged women who purchase individual insurance more than men for the same coverage, a practice called gender rating.12 Yet, plans sold on the individual market often did not cover many important services for women, such as maternity care, mental health services, and prescription drugs.13 An estimated 6.5 million women purchased coverage on the individual insurance market in 2011, and many of these women paid higher rates than men. Prior to the ACA, most of the women in this market were of reproductive age, working, and had incomes below 250% FPL.14 The ACA bans gender rating and the AHCA would not change this.

PRE-EXISTING CONDITIONS

One of the most popular provisions of the ACA has been the ban on pre-existing condition exclusions. In the years before the ACA was passed, insurance companies often denied or would not renew coverage to individuals with a “preexisting condition,” which included several conditions common among women such as pregnancy, breast cancer, or a prior C-section. The AHCA would not re-instate this practice, but individuals who do not maintain continuous coverage would be charged a penalty when they try to obtain health insurance after having a coverage gap. The penalty could be in the form of higher premium rates (30%) for one year. Alternatively, states could obtain a waiver to allow insurers to again engage in medical underwriting for one year, charging people with health problems higher rates. This would have the effect of raising premiums for people with pre-existing conditions such as pregnancy, prior C-section, or clinical depression.
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7. ESSENTIAL HEALTH BENEFITS

The ACA instituted new rules that require all plans in the individual market as well as Medicaid expansion programs to cover ten categories of benefits. Of particular importance to women has been the inclusion of maternity care, preventive services, and mental health.

The ACA requires all Marketplace plans and Medicaid expansion programs to cover ten categories of “essential health benefits” (EHB). Each state chooses a benchmark benefit plan, which sets the floor for services that plans in that state must cover within each EHB category.15
The AHCA would allow states to apply for a waiver to define their own EHBs beginning in 2020. Waivers would be automatically approved unless the HHS Secretary issues a denial within 60 days of submission. This means states could choose to exclude mental health or maternity care (see pregnancy-related care section below) from their EHB requirements. While the idea of choice sounds appealing to some, it is antithetical to how insurance operates ─ by spreading the costs and risks across the pool of insured individuals. Plans that include a broader range of benefits would be considerably more expensive than they are today. In addition to state-level waivers, the AHCA bill would rescind the EHB requirement for Medicaid expansion programs, meaning that beneficiaries in this group would not be entitled to coverage for all ten categories. Existing Medicaid rules require states to cover some of the categories, such as hospitalization and maternity and newborn care, but others such as substance abuse treatment and prescription drugs are optional and offered at state discretion.Prior to the ACA, there were few federal requirements on what private plans in the individual market had to cover. The ACA established a floor for benefits that individual market plans must cover with the goal of reducing variation and adverse selection by standardizing “meaningful coverage.” This is particularly important for women, as they are the exclusive users of maternity care and more frequent users of services in some other EHB categories, such as prescription drugs and mental health. Mental health services in particular were routinely excluded in individual plans prior to the ACA. Depression, anxiety, and eating disorders are all more common among women than men.

8. PREVENTIVE SERVICES

Currently, all private plans, Medicaid expansion programs, and Medicare must cover recommended preventive services without cost sharing. Important services for women include: breast and cervical cancer screening, osteoporosis screening, pregnancy related services, well woman visits, and contraception.

In addition to EHBs, the ACA included a related requirement that all private plans cover federally-recommended preventive services without charging cost-sharing. In contrast to EHBs, which apply to individually purchased plans and Medicaid expansion only, the preventive services requirement applies to all forms of private insurance, including employer-sponsored and individual market plans. Prior to the ACA, the only federal–level requirements that applied to group plans were for coverage of a minimum length of stay after a delivery, availability of reconstructive surgery following a mastectomy, and parity for mental health services. The preventive services coverage requirement also applies to the Medicaid expansion and Medicare programs. This means that most adults with some form of private or public insurance now have coverage without cost-sharing for all of the services recommended by the U.S. Preventive Services Task Force (USPSTF), immunizations recommended by the federal Advisory Committee on Immunization Practices (ACIP), and services for women recommended by the Health Resources and Services Administration.16

Among the slate of services covered, many are exclusively for women or address conditions that have a disproportionate impact on women (Figure 6). These services address some of the most common conditions for women, including breast cancer, cardiovascular disease, and obesity. For older women, the preventive services policy means that Medicare now covers the full cost of mammograms and bone density screenings, which were previously subject to 20% co-insurance before passage of the ACA.

The AHCA would maintain preventive services requirements for private plans, but would repeal the requirements for the Medicaid expansion population. Preventive services for adults are covered at state option for other Medicaid beneficiaries. States could opt to roll back coverage of preventive services for this group.

9. CONTRACEPTIVE COVERAGE

Today, the majority of women with private insurance have no cost contraceptive coverage. This preventive benefit has reduced women’s out-of-pocket spending on birth control and made the most effective, but often costly, contraceptive methods affordable for most insured women. This provision could be eliminated or modified through regulatory changes without the need for Congressional action.

Current law requires that most private plans include coverage of all FDA-approved contraceptive methods for women at no additional cost. Research has found that the requirement has had a large impact in a short amount of time. For example, in the first two years that the policy was in effect, the share of women with any out of pocket spending on oral contraceptives fell sharply to just 3.0% of women with employer-sponsored insurance (Figure 7).17 Similar effects have been documented for other contraceptives, including IUDs.18

The AHCA bill does not specifically address the contraceptive coverage requirement. However, President Trump and Secretary Price have expressed support for advancing “religious freedom,”19 and this provision has been at the heart of two cases that have reached the Supreme Court where employers have claimed that the requirement violates their religious beliefs. The contraceptive coverage requirement was implemented through a series of agency regulations that included contraception in the package of women’s preventive services, defined the religious exemption and accommodation available to houses of worship and faith-based nonprofits respectively, and clarified that plans must cover 18 contraceptive methods. Since these requirements are in regulations, the Trump Administration can issue new regulations and guidance to permit employers and insurers to cover fewer methods, or to exempt more employers with religious objections without the need for congressional action.20President Trump’s Executive Order Promoting Free Speech and Religious Liberty specifically calls on the Secretaries of Labor, Treasury, and Health and Human Services to amend regulations to protect conscience-based objections to the ACA’s preventive-care mandate.21 The goal of this is to exempt any employer with a religious or moral objection from the contraceptive coverage requirement, even though current regulations already relieve employers from paying for such coverage while assuring that women have coverage for contraceptives.

If the federal requirement is eliminated or scaled back, the scope of contraceptive coverage would again be shaped by employers, insurance plans, and state policy. More than half (28) of states have laws requiring plans in their states to cover contraceptives, but these are more limited than the ACA. Only five of the 28 states require coverage of the full range of contraceptives without cost sharing, but these state-level mandates do not apply to self-funded plans, which cover most insured workers.22

10. PREGNANCY-RELATED CARE

Today, pregnant and postpartum women have a greater range of protections and benefits than they did prior to the ACA. These range from mandatory maternity and newborn coverage, to no-cost prenatal screening, and breastfeeding supports. The AHCA would allow states to define the Essential Health Benefits requirements with a waiver, potentially excluding coverage for maternity care.

Before the ACA, pregnant women seeking insurance in the individual market were routinely turned away as having a pre-existing condition. Furthermore, many individual plans did not cover maternity services because it was not required in this market. Some individual plans offered separate maternity coverage as a rider which could be costly, ranging from roughly $15 to $1600 a month.23 Some plans also imposed a waiting period before the rider took effect. These discriminatory practices were limited to the individual market because coverage for maternity services has been required for decades both under Medicaid and in most employer-sponsored plans due to the Pregnancy Discrimination Act. The ACA changed this by including maternity and newborn care as part of the EHB package that must be included in individual private plans as well as under Medicaid expansion. While some states had required individual plans in their states to cover maternity services to varying degrees prior to the ACA, most did not.24 In addition, the ACA made other improvements through coverage of preventive services such as no-cost prenatal screenings and breastfeeding supports.

The AHCA would weaken some of the protections for pregnant women that are currently in place. By halting funds for Medicaid expansion, some new mothers would lose coverage once the 60-day postpartum period ends and become uninsured. Furthermore, it would permit states to waive the current federal EHB standards, potentially allowing states to remove or scale back maternity services as a required benefit. The bill would also allot funds to the Patient and State Stability Fund for pregnancy and newborn care, but there are no details on how it will be used.

Some have touted the benefits of excluding maternity coverage for those who will not need it such as men and older women as a way of giving policyholders more flexibility to choose their own coverage and purchase less expensive plans. However, this also means that the risk pool for plans that include maternity services would primarily be comprised of women who anticipate using maternity care, and would likely greatly increase costs for women who sought such coverage. Furthermore, given that nearly half of pregnancies are unintended some women would buy coverage that does not include maternity care thinking they won’t need it, only to find out their coverage falls short when they are pregnant.

Conclusion

Today, women’s health coverage levels are at an all-time high. In addition to the coverage gains in the Marketplaces and Medicaid, many of the long-standing discriminatory practices in the individual insurance market that translated into higher cost burdens for women have been banned. Minimum standards for benefits that individual plans must cover through the EHB and the preventive services requirements for all private plans have assured that most insured women have coverage for a broad range of recommended services that they need such as maternity care, mental health services, and preventive services such as mammograms, pap smears, and contraceptives. Recent polling shows that the American public values these protections, including those for poorer women (Figure 8). In addition, while the AHCA would prohibit federal Medicaid funds to Planned Parenthood for one year, 75% of Americans say they favor continued federal funding for Planned Parenthood.

If enacted, the AHCA would alter subsidies for private insurance, eliminate the Medicaid expansion, ban Medicaid funding to Planned Parenthood, place a cap on Medicaid spending, and turn EHB standards over to the states. This legislation would have considerable impact on women, particularly low-income women who rely on subsidies and those who are on Medicaid. The Senate will now take up their own debate about the future of the ACA. In addition to legislation, many of the ACA’s other provisions could be amended through federal-level administrative actions. Given the gains that women have made in access to meaningful and affordable coverage, they have much at stake in the current debate over the future of our nation’s private and public insurance programs.

See the original article Here.

Source:

Ranji U., Salganicoff A., Sobel L., Rosenzweig C. (2017 May 8). Ten ways that the house american health care act could affect women [Web blog post]. Retrieved from address http://www.kff.org/womens-health-policy/issue-brief/ten-ways-that-the-house-american-health-care-act-could-affect-women/


Preexisting Conditions And Continuous Coverage: Key Elements Of GOP Bill

Do you suffer from a preexisting condition? Take a look at this article by Michelle Andrews from Kaiser Health News and find out how the passing of the AHCA will impact your health care.

Before he was diagnosed with head and neck cancer in 2015, Anthony Kinsey often went without health insurance. He is a contract lawyer working for staffing agencies on short-term projects in the Washington, D.C., area, and sometimes the 90-day waiting period for coverage through a staffing agency proved longer than the duration of his project, if coverage was offered at all.

When Kinsey, now 57, learned he had cancer, he was able to sign up for a plan with a $629 monthly premium because the agency he was working for offered group coverage that became effective almost immediately. The plan covered the $62,000 surgery to cut out the diseased bone and tissue on the left side of his face, as well as chemotherapy and radiation. His share of the treatment cost was $1,800.

If the American Health Care Act, which the House recently passed, becomes law, people like Kinsey who have health problems might not fare so well trying to buy insurance after a lapse.

The Republican bill would still require insurers to offer coverage to everyone, including people who have preexisting medical conditions, such as diabetes, asthma or even cancer. But it would allow states to opt out of the federal health law’s prohibition against charging sick people more than healthy ones. In those states, if people have a break in coverage of more than 63 days, insurers could charge them any price for coverage for approximately a year, effectively putting coverage out of reach for many sick people, analysts say. After a year, they would be charged a regular rate again.

Coming up with a figure for how many people have preexisting conditions that could put them at risk for facing unaffordable health insurance premiums has been the subject of debate, with estimates ranging from 133 million on the high end to 2 million on the low end.

What we know is that before the Affordable Care Act, known as Obamacare, insurers in the individual market frequently charged people more if they were sick. According to a 2009 survey of individual market insurers by America’s Health Insurance Plans, a trade group, 34 percent of coverage was offered at higher-than-standard rates, while 6 percent of those offers included waivers that excluded coverage for specific conditions.

But some health policy analysts suggest that it’s not only people who have a gap in coverage who could be affected if a state seeks the health law waiver. There could be consequences for anyone with a preexisting condition, even those who have maintained continuous insurance coverage. That’s because the bill opens the door for insurers to set rates for people based on their health. For example, those without a health condition could be offered discounted premiums.

“If you have a preexisting condition, you’re going to be put into the block of business with the sicker risk pool,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms.

Requiring people to maintain continuous coverage is the Republicans’ preferred alternative to Obamacare’s individual mandate that requires people to have insurance or pay a fine. But there are many reasons people may have a gap in coverage, especially if they’re sick, say consumer advocates.

“If they’re diagnosed with cancer and going through a grueling treatment, they might move closer to their caregiver or the cancer center,” said Kirsten Sloan, vice president for policy at the American Cancer Society Cancer Action Network. “They may quit their job for that reason, or they may lose their job.”

Once people have a gap in coverage they may really be in a bind if the available coverage is unaffordable. To address this, the Republican bill requires states to set up a high-risk pool or reinsurance program or participate in a federal risk-sharing program.

State high-risk pools, which were available in 35 states before the ACA passed, have been widely criticized, however, as inadequate for people with expensive health care needs. Premiums were often extremely high, and there were frequently lifetime or annual limits on coverage. Some plans excluded coverage for as long as a year for the very conditions people needed insurance.

Still, Thomas Miller, a resident fellow at the American Enterprise Institute, says high-risk pools offer a reasonable solution for the 2 million to 4 million people in the individual market he estimates have preexisting conditions but would otherwise be medically uninsurable or offered such high-cost coverage that they couldn’t afford it. The $130 billion over nine years that the bill sets aside to use for high-risk pools or other individual market activities, along with an additional $8 billion over five years for states that get waivers from ACA community-rating requirements, “could be adequate” to meet the need, he said.

Besides, he argued, the higher rates would last for only a year.

“Once you’ve paid up, you graduate back to the regular market,” Miller said. “It’s not like being sentenced to the Gulag.”

Kinsey said he plans to keep his coverage up to date from now on, but he doesn’t think it’s fair to charge sick people higher rates even if they have a break in coverage.

“It would be problematic,” he said. “I’m not in favor of that.”

See the original article Here.

Source:

Andrews M. (2017 May 16). Preexisting conditions and continuous coverage: key elements of GOP bill [Web blog post]. Retrieved from address http://khn.org/news/preexisting-conditions-and-continuous-coverage-key-elements-of-gop-bill/?utm_campaign=KFF-2016-The-Latest&utm_source=hs_email&utm_medium=email&utm_content=52062246&_hsenc=p2ANqtz-90h4NOm7X9KLzIv7cYUNaGbi_qAFjmLW8NHmH89fiCT1u4SVQ8G95MFvTb3ljYlm3XiY20qWwsBfqH8PKOCwaULkf-ug&_hsmi=52062246


The Effects of Ending the Affordable Care Act’s Cost-Sharing Reduction Payments

Take a look at this interesting article by Kaiser Family Foundation and see how the cost-sharing mandate under the ACA will be affected in the AHCA.

Controversy has emerged recently over federal payments to insurers under the Affordable Care Act (ACA) related to cost-sharing reductions for low-income enrollees in the ACA’s marketplaces.

The ACA requires insurers to offer plans with reduced patient cost-sharing (e.g., deductibles and copays) to marketplace enrollees with incomes 100-250% of the poverty level. The reduced cost-sharing is only available in silver-level plans, and the premiums are the same as standard silver plans.

To compensate for the added cost to insurers of the reduced cost-sharing, the federal governments makes payments directly to insurance companies. The Congressional Budget Office (CBO) estimates the cost of these payments at $7 billion in fiscal year 2017, rising to $10 billion in 2018 and $16 billion by 2027.

The U.S. House of Representatives sued the Secretary of the U.S. Department of Health and Human Services under the Obama Administration, challenging the legality of making the cost-sharing reduction (CSR) payments without an explicit appropriation. A district court judge has ruled in favor of the House, but the ruling was appealed by the Secretary and the payments were permitted to continue pending the appeal. The case is currently in abeyance, with status reports required every three months, starting May 22, 2017.

If the CSR payments end – either through a court order or through a unilateral decision by the Trump Administration, assuming the payments are not explicitly authorized in an appropriation by Congress – insurers would face significant revenue shortfalls this year and next.

Many insurers might react to the end of subsidy payments by exiting the ACA marketplaces. If insurers choose to remain in the marketplaces, they would need to raise premiums to offset the loss of the payments.

We have previously estimated that insurers would need to raise silver premiums by about 19% on average to compensate for the loss of CSR payments. Our assumption is that insurers would only increase silver premiums (if allowed to do so by regulators), since those are the only plans where cost-sharing reductions are available. The premium increases would be higher in states that have not expanded Medicaid (and lower in states that have), since there are a large number of marketplace enrollees in those states with incomes 100-138% of poverty who qualify for the largest cost-sharing reductions.

There would be a significant amount of uncertainty for insurers in setting premiums to offset the cost of cost-sharing reductions. For example, they would need to anticipate what share of enrollees in silver plans would be receiving reduced cost-sharing and at what level. Under a worst case scenario – where only people eligible for sharing reductions enrolled in silver plans – the required premium increase would be higher than 19%, and many insurers might request bigger rate hikes.

While the federal government would save money by not making CSR payments, it would face increased costs for tax credits that subsidize premiums for marketplace enrollees with incomes 100-400% of the poverty level.

The ACA’s premium tax credits are based on the premium for a benchmark plan in each area: the second-lowest-cost silver plan in the marketplace. The tax credit is calculated as the difference between the premium for that benchmark plan and a premium cap calculated as a percent of the enrollee’s household income (ranging from 2.04% at 100% of the poverty level to 9.69% at 400% of the poverty in 2017).

Any systematic increase in premiums for silver marketplace plans (including the benchmark plan) would increase the size of premium tax credits. The increased tax credits would completely cover the increased premium for subsidized enrollees covered through the benchmark plan and cushion the effect for enrollees signed up for more expensive silver plans. Enrollees who apply their tax credits to other tiers of plans (i.e., bronze, gold, and platinum) would also receive increased premium tax credits even though they do not qualify for reduced cost-sharing and the underlying premiums in their plans might not increase at all.

We estimate that the increased cost to the federal government of higher premium tax credits would actually be 23% more than the savings from eliminating cost-sharing reduction payments. For fiscal year 2018, that would result in a net increase in federal costs of $2.3 billion. Extrapolating to the 10-year budget window (2018-2027) using CBO’s projection of CSR payments, the federal government would end up spending $31 billion more if the payments end.

This assumes that insurers would be willing to stay in the market if CSR payments are eliminated.

Methods

We previously estimated that the increase in silver premiums necessary to offset the elimination of CSR payments would be 19%.

To estimate the average increase in premium tax credits per enrollee, we applied that premium increase to the average premium for the second-lowest-cost silver plan in 2017. The Department of Health and Human Services reports that the average monthly premium for the lowest-cost silver plan in 2017 is $433. Our analysis of premium data shows that the second-lowest-cost silver plan has a premium 4% higher than average than the lowest-cost silver plan.

We applied our estimate of the average premium tax credit increase to the estimated total number of people receiving tax credits in 2017. This is based on the 10.1 million people who selected a plan during open enrollment and qualified for a tax credit, reduced by about 17% to reflect the difference between reported plan selections in 2016 and effectuated enrollment in June of 2016.

We believe the resulting 23% increase in federal costs is an underestimate. To the extent some people not receiving cost-sharing reductions migrate out of silver plans, the required premium increase to offset the loss of CSR payments would be higher. Selective exits by insurers (e.g., among those offering lower cost plans) could also drive benchmark premiums higher. In addition, higher silver premiums would somewhat increase the number of people receiving tax credits because currently some younger/higher-income people with incomes under 400% of the poverty level receive a tax credit of zero because their premium cap is lower than the premium for the second-lowest-cost silver plan. We have not accounted for any of these factors.

Our analysis produces results similar to recent estimates for California by Covered California and a January 2016 analysis from the Urban Institute.

See the original article Here.

Source:

Levitt L., Cox C., Claxton G., (2017 April 25). The effects of ending the affordable care act's cost-sharing reduction payments[Web blog post]. Retrieved from address http://www.kff.org/health-reform/issue-brief/the-effects-of-ending-the-affordable-care-acts-cost-sharing-reduction-payments/


Why Private Exchanges Haven't Taken Off As Predicted

Great article from our partner, United Benefit Advisors (UBA) by Paul Rooney.

While the health care affordability crisis has become so significant, questions still linger—will private exchanges become a viable solution for employers and payers, and will they will continue to grow? Back in 2015, Accenture estimated that 40 million people would be enrolled in private exchange programs by 2018; the way we see this model’s growth today doesn’t speak to that. So, what is preventing them from taking off as they were initially predicted? We rounded up a few reasons why the private exchange model’s growth may be delayed, or coming to a halt.

They Are Not Easy to Deploy

There is a reason why customized benefits technology was the talk of the town over the last two years; it takes very little work up-front to customize your onboarding process. Alternatively, private exchange programs don’t hold the same reputation. The online platform selection, build, and test alone can get you three to six months into the weeds. Underwriting, which includes an analysis of the population’s demographics, family content, claims history, industry, and geographic location, will need to take place before obtaining plan pricing if you are a company of a certain size. Moreover, employee education can make up a significant time cost, as a lack of understanding and too many options can lead to an inevitable resistance to changing health plans. Using a broker, or an advisor, for this transition will prove a valuable asset should you choose to go this route.

A Lack of Education and a Relative Unfamiliarity Revolves Around Private Exchanges

Employers would rather spend their time running their businesses than understanding the distinctions between defined contribution and defined benefits models, let alone the true value proposition of private exchanges. With the ever-changing political landscape, employers are met with an additional challenge and are understandably concerned about the tax and legal implications of making these potential changes. They also worry that, because private exchanges are so new, they haven’t undergone proper testing to determine their ability to succeed, and early adoption of this model has yet to secure a favorable cost-benefit analysis that would encourage employers to convert to this new program.

They May Not Be Addressing All Key Employer and Payer Concerns

We see four key concerns stemming from employers and payers:

  • Maintaining competitive benefits: Exceptional benefits have become a popular way for employers to differentiate themselves in recruiting and retaining top talent. What’s the irony? More options to choose from across providers and plans means employees lose access to group rates and can ultimately pay more, making certain benefits less. As millennials make up more of today’s workforce and continue to redefine the value they put behind benefits, many employers fear they’ll lose their competitive advantage with private exchanges when looking to recruit and retain new team members.
  • Inexperienced private exchange administrators: Because many organizations have limited experience with private exchanges, they need an expert who can provide expertise and customer support for both them and their employees. Some administrators may not be up to snuff with what their employees need and expect.
  • Margin compression: In the eyes of informed payers, multi-carrier exchanges not only commoditize health coverage, but perpetuate a concern that they could lead to higher fees. Furthermore, payers may have to go as far as pitching in for an individual brokerage commission on what was formerly a group sale.
  • Disintermediation: Private exchanges essentially remove payer influence over employers. Bargaining power shifts from payers to employers and transfers a majority of the financial burden from these decisions back onto the payer.

It Potentially Serves as Only a Temporary Solution to Rising Health Care Costs

Although private exchanges help employers limit what they pay for health benefits, they have yet to be linked to controlling health care costs. Some experts argue that the increased bargaining power of employers forces insurers to be more competitive with their pricing, but there is a reduced incentive for employers to ask for those lower prices when providing multiple plans to payers. Instead, payers are left with the decision to educate themselves on the value of each plan. With premiums for family coverage continuing to rise year-over-year—faster than inflation, according to Forbes back in 2015—it seems private exchanges may only be a band-aid to an increasingly worrisome health care landscape.

Thus, at the end of it all, change is hard. Shifting payers’, employers’, and ultimately the market’s perspective on the projected long-term success of private exchanges will be difficult. But, if the market is essentially rejecting the model, shouldn’t we be paying attention?

See the original article Here.

Source:

Rooney P. (2017 April 26). Why private exchanges haven't taken off as predicted [Web blog post]. Retrieved from address http://blog.ubabenefits.com/why-private-exchanges-havent-taken-off-as-predicted


An Update on Health Care and Tax Reform

Make sure you are staying up-to-date with all the recent changes happening in healthcare. Here is a great article by Joseph Minarik from the Committee for Economic Development to help you stay informed with everything going on with the new healthcare legislation.

The status of what may be the Administration’s two highest legislative priorities, health care reform and tax reform, remains uncertain.

The overwhelming consensus in Washington is that the Administration and the Congress have virtually no alternative but to either complete or abandon health care reform before taking up tax reform. That is because both an Administration health care reform (to “repeal and replace” Obamacare, more formally known as the Affordable Care Act, or ACA), and any Administration tax reform, can be enacted only under reconciliation procedures in the Senate (which prevent a filibuster that would require 60 votes to break). By budget process rules, there can be only one reconciliation process in progress at one time. The current process was designed expressly for health care reform. The health care reform process cannot continue if tax reform is begun.

A decision to abandon health care reform would be extremely painful to the many Republicans in Congress who made repealing Obamacare their signature campaign promise. This would certainly be an admission of failure in the current environment, with Republicans controlling the White House and both chambers of the Congress. But that delays and reduces the time available to complete any attempted tax reform. Of course, the relevant policy players can have tax reform conversations among themselves, but that is not the same as actually engaging in a public debate over actual legislative language.

So the current debate over health care legislation is time-sensitive. And passing the House health care bill, the American Health Care Act (AHCA), was extraordinarily difficult. The Senate cannot pass the AHCA, and their passing any similar bill would likely be even more difficult than was the process in the House.

To begin, Democrats will provide zero votes to “repeal” what they hold as the signature achievement of the Obama Administration. Republicans have 52 votes in the Senate, and thus, even under the reconciliation procedure, can afford to lose only two votes. (The Vice President would be called on to break a 50-50 tie.) Thus, the Senate Republicans’ margin for error is extremely small, and the ideological spread of their membership is probably wider than is that of their caucus on the House side.

And under these daunting arithmetic constraints, the Senate health bill must thread several very small substantive needles.

The bill will be under very tight fiscal constraints. The Republicans want the health bill to reduce the deficit, so that the money it saves can be used to pay for tax reform. This is expected even after the repeal of many of the taxes and fees and some of the spending cuts that Obamacare used to finance itself.

The programmatic expectations on the bill will be considerable. Opinion surveys showed “Obamacare” to be highly unpopular. But when not identified with the bill, many of Obamacare’s key features were found to be resoundingly popular – even among Republicans, and even in the very same surveys. One such feature was eliminating discrimination against persons with pre-existing conditions. At the same time, one of the highest House Republican priorities was reducing premiums. The House Republicans could find no alternative way to reduce premiums but to water down the protections for those with pre-existing conditions, in some instances through provisions that were less than totally transparent. The Senate Republicans are likely to be less accepting of such provisions.

The House Republican AHCA sought to attract younger, healthier households to purchase insurance (without the mandate that their Members abhor) by raising the relative premiums of older enrollees. That is unlikely to sit well in the Senate – or at least well enough with a margin of only two votes.

Next on what could be a very long list of concerns is the repeal of Obamacare’s Medicaid expansion. There are 20 Republican Senators who represent states that have expanded Obamacare. As much as some Republicans opposed the Medicaid expansion, the same Senators are unwilling to impose a sudden reduction in their states’ federal funding to repeal it. Many of those Republicans also do not want to remove health care coverage from the working families who were covered by the expansion.

In the broadest terms, Republican Senators will not want to take away a benefit that has been given to the citizens of their states – even though those Senators may have on a principled basis opposed granting that benefit in the first place. But achieving everything that they want to achieve in this bill, subject to a rigorous budget constraint, may prove impossible.

And then, assuming the Senate manages to pass a bill, it will then have to reconcile its very different bill with that of the House. It is always possible that many House and Senate Republicans will decide to sacrifice their preferences to that the Administration can have its first-year victory to set a positive tone (and avoid a highly negative one). But the first instinct of a Member of Congress is almost always self-preservation, and the fondest hope and expectation is that the next election will see the triumph of his or her ideological view and thus the ability to achieve all of the goals that cannot be obtained in the present because of the service of doctrinal purity.

Whether health care reform succeeds or not, the President and the Congress are sure to find that tax reform is every bit as complex as is health care reform. Again, they will begin with the tightest budget constraint, along with a lengthy list of priorities. They already have discussed tax cuts for large businesses and small businesses, public corporations and LLCs, and of course a massive tax cut for the middle class. How all of that happens without widening the already excessive and growing budget deficit is a true puzzle. At present, the House Ways & Means Committee chair continues to maintain that he will put forward a revenue-neutral bill by relying on the so-called “border-adjustment tax” which CED has discussed in a recent policy brief, and which has proven highly unpopular in the Senate. This makes the prospects even more murky.

If all of this fails, which it may or may not, the Administration and the Congress will find themselves at the end of the year with no particular legislative achievement. There is some possibility that they would respond to that conundrum by following the path of least resistance and proposing a large net tax cut, forcing the political opposition to vote against it and thus cross many taxpayers. But that, of course, would worsen the already troubling budget outlook.

See the original article Here.

Source:

Minarik J. (2017 May 17). An update on health care and tax reform [Web blog post]. Retrieved from address https://www.ced.org/blog/entry/an-update-on-health-care-and-tax-reform


Health Reform Expert: Here’s What HR Needs to Know About GOP Repeal Bill Passing

The House of Repersentives has just passed the American Health Care Act (AHCA), new legislation to begin the repeal process of the ACA. Check out this great article from HR Morning and take a look how this new legislation will affect HR by Jared Bilski.

Virtually every major news outlet is covering the passage of the American Health Care Act (AHCA) by the House. But amidst all the coverage, it’s tough to find an answer to a question that’s near and dear to HR: What does this GOP victory mean for employers? 

The AHCA bill, which passed in the House with 217 votes, is extremely close to the original version of the legislation that was introduced in March but pulled just before a vote could take place due to lack of support.

While the so-called “repeal-and-replace” bill would kill many of the ACA’s taxes (except the Cadillac Tax), much of the popular health-related provisions of Obamacare would remain intact.

Pre-existing conditions, essential benefits

However, the new bill does allow states to waive certain key requirements under the ACA. One of the major amendments centers on pre-existing conditions.

Under the ACA, health plans can’t base premium rates on health status factors, or pre-existing conditions; premiums had to be based on coverage tier, community rating, age (as long as the rates don’t vary by more than 3 to 1) and tobacco use. In other words, plans can’t charge participants with pre-existing conditions more than “healthy” individuals are charged.

Under the AHCA, individual states can apply for waivers to be exempt from this ACA provision and base premiums on health status factors.

Bottom line: Under this version of the AHCA, insurers would still be required to cover individuals with pre-existing conditions — but they’d be allowed to charge astronomical amounts for coverage.

To compensate for the individuals with prior health conditions who may not be able to afford insurance, applying states would have to establish high-risk pools that are federally funded. Critics argue these pools won’t be able to offer nearly as much coverage for individuals as the ACA did.

Under the AHCA, states could also apply for a waiver to receive an exemption — dubbed the “MacArthur amendment” — to ACA requirement on essential health benefits and create their own definition of these benefits.

Implications for HR

So what does all this mean for HR pros? HR Morning spoke to healthcare reform implementation and employee benefits attorney Garrett Fenton of Miller & Chevalier and asked him what’s next for the AHCA as well as what employers should do in response. Here’s a sampling of the Q&A:

HR Morning: What’s next for the AHCA?
Garrett Fenton: The Senate, which largely has stayed out of the ACA repeal and replacement process until now, will begin its process to develop, amend, and ultimately vote on a bill … many Republican Senators have publicly voiced concerns, and even opposition, to the version of the AHCA that passed the House.

One major bone of contention – even within the GOP – was that the House passed the bill without waiting for a forthcoming updated report from the Congressional Budget Office.  That report will take into account the latest amendments to the AHCA, and provide estimates of the legislation’s cost to the federal government and impact on the number of uninsured individuals …

… assuming the Senate does not simply rubber stamp the House bill, but rather passes its own ACA repeal and replacement legislation, either the Senate’s bill will need to go back to the House for another vote, or the House and Senate will “conference,” reconcile the differences between their respective bills, and produce a compromise piece of legislation that both chambers will then vote on.

Ultimately the same bill will need to pass both the House and Senate before going to the President for his signature.  In light of the House’s struggles to advance the AHCA, and the razor-thin margin by which it ultimately passed, it appears that we’re still in for a long road ahead.

HR Morning: What should employers be doing now?
Garrett Fenton: At this point, employers would be well-advised to stay the course on ACA compliance. The House’s passage of the AHCA is merely the first step in the legislative process, with the bill likely to undergo significant changes and an uncertain future in the Senate. The last few months have taught us nothing if not the impossibility of predicting precisely how and when the Republicans’ ACA repeal and replacement effort ultimately will unfold.  To be sure, the AHCA would have a potentially significant impact on employer-sponsored coverage.

However, any employer efforts to implement large-scale changes in reliance on the AHCA certainly would be premature at this stage.  The ACA remains the law of the land for the time being, and there’s still a long way to go toward even a partial repeal and replacement.  Employers certainly should stay on top of the legislative developments, and in the meantime, be on the lookout for possible changes to the current guidance at the regulatory level.

HR Morning: Specifically, how should employers proceed with their ACA compliance obligations in light of the House passage of the AHCA?Garrett Fenton: Again, employers should stay the course for the time being, and not assume that the AHCA’s provisions impacting employer-sponsored plans ultimately will be enacted.  The ACA remains the law of the land for now.  However, a number of ACA-related changes are likely to be made at the regulatory and “sub-regulatory” level – regardless of the legislative repeal and replacement efforts – thereby underscoring the importance of staying on top of the ever-changing guidance and landscape under the Trump administration.

Fenton also touched on how the “MacArthur amendment” and the direct impact it could have on employers by stating it:

“… could impact large group and self-funded employer plans, which separately are prohibited from imposing annual and lifetime dollar limits on those same essential health benefits.  So in theory, for example, a large group or self-funded employer plan might be able to use a “waiver” state’s definition of essential health benefits – which could be significantly more limited than the current federal definition, and exclude items like maternity, mental health, or substance abuse coverage – for purposes of the annual and lifetime limit rules.  Employers thus effectively could be permitted to begin imposing dollar caps on certain benefits that currently would be prohibited under the ACA.”

See the original article Here.

Source:

Bilski J. (2017 May 5). Health reform expert: here's what HR needs to know about GOP repeal bill passing [Web blog post]. Retrieved from address http://www.hrmorning.com/health-reform-expert-heres-what-hr-needs-to-know-about-gop-repeal-bill-passing/