HHS announces indefinite delay of the use of a Health Plan Identifier (HPID)

November 4th, 2014

By Employee Benefit Research Group

Sponsors of most self-insured group health plans need not apply for a health plan identifying number (HPID) by the November 5, 2014, deadline formerly required by regulations from the U.S. Department of Health and Human Services (HHS), according to an October 31 HHS announcement. The use of the HPID in HIPAA transactions will not be enforced until further notices, according to the HHS.

The HPID requirement applied to all “controlling health plans,” although those with $5 million or less in annual receipts had an additional year to comply (see Benefits Alert 14-8).

The delay resulted from a review by the National Committee on Vital and Health Statistics (NCVHS), an advisory body to the HHS, which found a “lack of benefit and value in the use of and reporting of HPIDs in health care transactions” and made several recommendations. The HHS noted that the delay would provide additional time for the agency to review NCVHS’s recommendations.

For additional information about the HHS delay or the final regulations on the use of the HPID, please contact your Milliman consultant.

Benefit news , ,

Regulatory roundup

November 3rd, 2014

By Employee Benefit Research Group

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Survey data on health insurance coverage
The U.S. Department of Health and Human Services (HHS) has published survey results assessing health insurance coverage for 2013 and 2014.

Health insurance marketplace coverage became available on January 1, 2014, as a result of the Patient Protection and Affordable Care Act (ACA), and its federally financed, state-optional, Medicaid expansion started on the same day. Since then, millions of Americans have gained coverage through each of these sources, and total insurance coverage has expanded markedly. All told, estimates based on data from the Gallup-Healthways Well-Being Index (WBI) suggest that 10.3 million previously uninsured nonelderly adults (ages 18 to 64) gained coverage under the ACA through June 2014. This estimate includes the effect of the surge in marketplace enrollment in late March, at the end of the open enrollment period, as well as Medicaid/Children’s Health Insurance Program (CHIP) growth through June.

To read the entire survey, click here.

IRS’s IRPAC issues 2014 public report warning of trouble ahead in determining minimum essential coverage
The Information Return Reporting and Advisory Committee (IRPAC) of the Internal Revenue Service (IRS) has released its 2014 IRPAC Public Report. The report provides recommendations on many issues, including determining minimum essential coverage.

To read the Executive Summary, click here.
To read the full report, click here.

Benefit news , ,

COLAs for retirement, Social Security, and health benefits for 2015

October 31st, 2014

By Employee Benefit Research Group

With the release of the September 2014 Consumer Price Index (CPI) by the U.S. Bureau of Labor Statistics, the Social Security Administration (SSA) and the Internal Revenue Service (IRS) have announced cost-of-living adjustment (COLA) figures for Social Security and retirement plan benefits, respectively, for 2015. The 2015 adjusted figures for high-deductible health plans (HDHPs) and health savings accounts (HSAs) included in this Client Action Bulletin were released by the IRS earlier this year and are provided here for convenience.

Benefit news , , ,

Medical professional liability’s slinky effect

October 30th, 2014

By Javier Sanabria

The recent medical professional liability insurance market has seen healthy profits for nearly a decade, but has been stuck on the same straight path of lower rates and lower levels of written premium during that time. As MPL companies’ rates continue to slowly erode, the market dynamic is similar to the stop-and-go highway traffic pattern dubbed “the Slinky effect.” While no one in the industry believes the current situation can last forever, any visible change in the current soft market is still some years off. Milliman’s Chad Karls provides some perspective in this article.

This article was first published in Medical Liability Monitor.

Liability, Medmal ,

Regulatory roundup

October 27th, 2014

By Employee Benefit Research Group

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Transitional reinsurance program: Annual enrollment contributions form and procedures released
The Centers for Medicare and Medicaid Services (CMS) released the “Transitional reinsurance annual enrollment and contributions submission form” on October 24. The form, available at pay.gov, has now been released along with an overview and procedures for reinsurance contributions.

Here is the guidance provided:

Annual enrollment and contributions submission form manual
Supporting documentation job aid manual
ACA transitional reinsurance program annual enrollment contributions submission
Overview and procedures for reinsurance contributions

IRS issues information for employers about their responsibilities under the ACA
The Internal Revenue Service (IRS) has published guidance informing employers of their duties under the Patient Protection and Affordable Care Act (ACA).

Employers with 50 or more full-time and full-time-equivalent employees are generally considered to be “applicable large employers” (ALEs) under the employer shared responsibility provisions of the ACA. Applicable large employers are subject to the employer shared responsibility provisions. However, more than 95% of employers are not ALEs and are not subject to these provisions because they have fewer than 50 full-time and full-time-equivalent employees.

For additional information, click here.

CMS posts new common questions and RDS spotlight
The CMS has published more than 200 common questions on the Retiree Drug Subsidy (RDS) Program website. Additionally, a new RDS Spotlight section has been added to the homepage.

For additional information, click here.

Benefit news , ,

How will Prop 46 and ACA affect medical professional liability?

October 23rd, 2014

By Javier Sanabria

The medical professional liability (MPL) industry experienced sustained profitability in 2013. Profits are likely to continue over the next several years. There are a few market uncertainties like healthcare reform and California’s Proposition 46 that will test insurers’ current business models though. In this article, Milliman consultants Richard Lord and Stephen Koca explain how these issues may affect the MPL industry moving forward.

This excerpt provides some perspective:

Physician shortage?
The huge influx of insured individuals, which is expected to top 30 million by the time ACA is fully implemented in 2016, could lead to a shortage of physicians, who may turn over some of their duties to nurse practitioners or physician assistants. Lacking the same expertise as a physician, these providers may fail to diagnose or misdiagnose some condition. On the other hand, they may form more personal relations with patients, and that has been shown to reduce the likelihood of a lawsuit.

Under collateral-source payment rules, the ACA may result in lower awards, since the cost of future medical care would no longer be included in awards, thereby limiting MPL insurers’ exposure to the cost to future health insurance payments in an award, or it might have only a negligible impact, depending on how it is administered and the courts’ decisions.

These scenarios are actually less than a handful of the dozens of possibilities that can arise from the ACA. Any one of the ACA’s provisions is unlikely to upend MPL insurers’ cost structure, but in tandem, the layers and layers of issues stated or implied in the ACA could tip costs in a direction that might prove difficult to absorb.

The ACA, however, is only one of the uncertainties facing MPL insurers.

The California question
In November, California voters will decide whether the state’s landmark statute, which caps non-economic MPL damages at $250,000, will remain intact, as written. Enacted nearly 40 years ago, California’s Medical Injury Compensation Reform Act (MICRA) has withstood a series of constitutional challenges, the last of which was in 1985.

…But MICRA is now being challenged in a ballot proposal [Proposition 46] that would raise the cap on non-economic damages to more than $1 million.

If enacted, the proposal would raise the cap on any claim that is outstanding as of January 1, 2015. MPL insurers and self-insured entities would see their liability increase for any unsettled claim on their books, as well as future claims. In all likelihood, claim severity would increase, but the frequency of claims would almost certainly rise if litigation were viewed as a more attractive means of compensation than it now is.

This development has far-ranging consequences, given the size of the California market, but it could also signal a change in sentiment if other states decide to follow California’s lead—since California has long been a state that’s a bellwether for social and economic change.

According to the National Conference of State Legislatures, 35 states have some type of cap on medical professional awards. How many states might again follow California’s lead and challenge reforms?

These two articles detail the influence that Proposition 46 will have on the future of MPL insurers and healthcare providers:

CA Proposition 46: The end of an era for noneconomic caps?
CA Proposition 46: Undoing tort reform?

Liability, Medmal , , , ,

IRS allows more mid-year group health election changes for cafeteria plans

October 21st, 2014

By Employee Benefit Research Group

Sponsors of group health plans under a cafeteria plan (under tax code section 125) may amend the plan to permit participants to make mid-year election changes in two new instances, under recently issued Internal Revenue Service (IRS) guidance. In Notice 2014-55, the IRS expands the situations under which participants may revoke a group health coverage election mid-year, but does not permit such changes for healthcare flexible spending arrangements (health FSAs).

Notice 2014-55 allows the group health plan sponsor to accommodate participants who want to prospectively revoke an election during a plan year in two situations:

1. The participant’s hours have been reduced to the point where they are expected to work fewer than the 30-hour threshold for “full time” work of the Patient Protection and Affordable Care Act (ACA). The change in election is permitted even if the reduction in expected hours worked does not result in the employee ceasing to be eligible under the group health plan.
2. The participant voluntarily chooses to drop employment-based coverage to purchase exchange coverage without having a period of dual or no coverage.

In the first situation, participants must represent to the employer that they will be enrolled in “minimum essential coverage” by the first day of the second month following the revocation date. In the second situation, they must represent that they will be enrolled in exchange coverage by the date immediately following the loss of employment-based coverage. A plan sponsor may rely on participants’ “reasonable” representations of their enrollment statements.

An election to revoke coverage on a retroactive basis is prohibited.

In general, section 125 cafeteria plan sponsors must amend the plan by the last day of the plan year for which the change is effective and operate the plan in accordance with the guidance. For 2014, however, Notice 2014-55 permits plan sponsors to adopt the amendment applicable to the start of the 2014 plan year by the end of the 2015 plan year. Notification to plan participants about the amendment is required.

For additional information about the IRS’s guidance permitting these cafeteria plan changes, please contact your Milliman consultant.

Benefit news , , ,

November 5 deadline nears for obtaining a Health Plan Identifier (HPID)

October 21st, 2014

By Employee Benefit Research Group

Sponsors of most self-insured group health plans are reminded that, if they have not yet done so, they must obtain a health plan identifying number (HPID) by November 5, notwithstanding the lack of clarity in some key areas in the final regulations and related guidance from the Centers for Medicare and Medicaid Services (CMS). The HPID requirement applies to all “controlling health plans,” although those with $5 million or less in annual receipts have an additional year—until November 5, 2015. A controlling health plan controls its own business activities, actions, or policies, or is controlled by an entity, such as an employer, that is not a health plan. An employer may obtain an HPID for each of its controlling health plans using a single-employer identification number (EIN).

Health flexible spending accounts (FSAs), health savings accounts (HSAs), and health reimbursement arrangements (HRAs) that cover only deductibles or out-of-pocket costs do not require an HPID. An HRA may require an HPID if it meets the definition of a “group health plan.”

The intended purpose of HPIDs is to streamline and administratively simplify electronic transactions, including claims for benefits, premium payments, benefit enrollment/disenrollment, and payment authorizations.

In general, an employer may authorize third-party administrators to obtain an HPID on its behalf for the self-insured group health plan; insurance carriers are responsible for obtaining the HPID for fully insured plans.

For information about obtaining an HPID, see the following CMS web pages:

A Quick Reference Guide to Obtaining a Controlling Health Plan HPID
Frequently Asked Questions
Health Plan and Other Entity Enumeration System Data Elements
HPID User Manual

The CMS guidance thus far leaves many questions unanswered, leaving plan sponsors to rely on legal counsel or other advisers in attempting to comply in good faith. For example, employers that provide health and life insurance under a single plan (i.e., as filed by one Form 5500) for former employees/retirees will have to consider if only one HPID is necessary for both the current and former employee coverages. Similarly, if a group health plan sponsor tracks different benefit options under a plan, the guidance is not clear if each option is a “subhealth” plan requiring individual HPIDs or if the options must be treated as part of a single plan with one HPID. In addition, the guidance is not clear about single or multiple HPIDs in situations involving an employer that provides coverage in multiple geographic regions through several preferred provider organizations (PPOs) or health maintenance organizations (HMOs).

For additional information about HPIDs, please contact your Milliman consultant.

Benefit news , , , ,

Regulatory roundup

October 20th, 2014

By Employee Benefit Research Group

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Trends in employment-based health insurance coverage
The U.S. Bureau of Labor Statistics (BLS) has published an article in its journal, Monthly Labor Review, examining employer-sponsored health insurance trends. The article highlights data from the BLS’s National Compensation Survey showing that access to employer-provided health insurance declined from 1991 to 2002, chiefly because of narrower access among part-time workers. Then, from 2003 to 2012, access exhibited a significant further drop and participation also fell significantly. Over the latter period, nonunion workers, part-time employees, and lower-wage workers, as well as those employed at small establishments, had a lower incidence of employer-provided health insurance.

To read the entire article, click here.

Benefit news ,

2015 cost-of-living adjustments for Medicare benefits

October 16th, 2014

By Employee Benefit Research Group

The U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) has announced cost-of-living adjusted figures for Medicare Part A and Part B for 2015. In April this year, CMS announced the updated amounts for the Medicare Part D standard prescription drug benefit for 2015. As a convenience, those figures are also provided in this Client Action Bulletin.

Benefit news , , ,