Government Releases Final Interim Guidance on Several PPACA Provisions

The Departments of Health & Human Services, Labor, and Treasury issued new regulations that better define the following PPACA provisions.  These provisions are effective for all plan years beginning AFTER 9-23-10.

No Pre-Existing Condition Exclusions for Anyone Under Age 19  

Plans are prohibited from denying coverage to anyone under the age of 19 based on a pre-existing condition. This ban includes both benefit limitations and coverage denials. These policies apply to all individual market and group health insurance plans. The requirement will be extended to all ages starting in 2014. Grandfathered individual plans are exempt from this requirement.

No Arbitrary Rescissions of Insurance Coverage

Insurers and plans will be prohibited from rescinding coverage – for individuals or groups of people, except in cases involving fraud or an intentional misrepresentation of material facts

No Lifetime Dollar Limits on Coverage

 Insurers and employers are prohibited from imposing lifetime dollar limits in all health plans and insurance policies issued or renewed on or after September 23, 2010.

Restricted Annual Dollar Limits on Coverage
The rules will phase out the use of annual dollar limits on “essential health benefits” over the next three years until 2014 when the Affordable Care Act bans them for most plans. The limits can only apply to essential health benefits; however, the rule does not provide any further detail on the definition of “essential health benefits” beyond that provided in the law.

  • Plans issued or renewed beginning September 23, 2010, will be allowed to set annual limits no lower than $750,000
  • Beginning September 23, 2011, minimum limit will be raised to $1.25 million
  • Beginning September 23, 2012, minimum limit will be raised to $2 million
  • Beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited

These limits apply to all employer plans and all new individual plans, not grandfathered plans.  For more details and clarification, please refer to the HHS website at

P&C & Workers’ Comp: Lawn care contractors and landscapers

P&C & Workers’ Comp: Lawn care contractors and landscapers
During the warm summer months lawn care and landscaping businesses are in full bloom, working to beautify private and public outdoor areas.

Lawn care contractors and landscapers perform an array of services such as ground design and preparation, planting seeds, shrubs and trees, sodding, grounds maintenance, and spraying for insect control.
The Hartford provides BOP, General Liability, Commercial Auto, Worker’s Compensation and Property for these businesses.Key coverages with The Hartford:

  • Herbicide/Pesticide Coverage
  • Per Project Aggregate
  • Automatic Additional Insured
  • Snow Removal Coverage
  • Large Equipment Schedules available through Inland Marine

Other carriers for lawn care and landscaping include Travelers, Liberty Agency Underwriters, Zurich, CNA and OneBeacon.

Monoline Workers’ Compensation is also available with ACE, AIG and AmTrust.

ARRA Subsidy Not Extended

ARRA Subsidy Not Extended

For people laid off from their jobs prior to May 31, 2010, the Federal Government has picked up 65% of the cost to pay for health insurance premiums.    Under the federal COBRA law, a laid-off worker can stay on his employer’s plan a total of 18 months, but the employee must pay the entire cost of the coverage. The COBRA subsidy – initially part of the 2009 stimulus package – provided the majority of the premium costs for people who lost their jobs, and thus made it possible for many to retain their health coverage.

Starting June 1, 2010, the newly unemployed aren’t eligible to get the subsidy at all. The proposal to extend subsidies to those laid off through the end of the year is languishing in Congress, a casualty of worries about the deficit in an election year.  Congress extended the subsidies four times since February 2009, but the latest effort stalled before the Memorial Day recess. Congress may again consider extending the subsidy when members return next week, but it’s unclear how long such a proposal would take to make its way through Congress and what support there would be for it.

So what you do now if you are newly unemployed?

  • Remain on COBRA, paying the full cost;
  • Condsider state HIPAA eligible plans; each state offers one for people with pre-existing conditions whose coverage on COBRA has expired.  The premiums are often very expensive, and in order to qualify people must meet exacting criteria- They must have had COBRA for 18 months, have been covered the entire time, have a pre-existing condition that would preclude them from getting other coverage and must be able to pay the higher premium such a plan would charge;
  • State Funded assistance plans such as Medicaid or Healthy Families (subject to qualifications);
  • Individual plans, it is suggested that you price the plans available in the marketplace to determine if one may be more affordable than COBRA. 

You may be able to combine any of the options above, for example, individual plans for some family members and COBRA for others.

One option we do not suggest is not having any health coverage.  In the event of an illness or accident, you are exposing yourself to a great financial risk.  This would be far more expensive in the long run.

The future of the subsidy is in doubt.  Should the ARRA subsidy be extended again, we will advise.

2009 Disability Study Released

The Council for Disability Awareness (CDA) conducts an annual review of long-term disability claims among the U.S. working population. They seek to identify trends in LTD and Workers’ Compensation claims.

The CDA states that $8.1 billion in long-term disability insurance claim payments was paid to disabled individuals in 2009.  This is a 2.9% increase over 2008 claim payments.

Most claims payers have found that the recession has not effected claims in any significant way. Most companies report little change in claim incidence or termination rates., however  insured lives declined by 2.2% from 2008 to 2009, reflecting job losses and layoffs in the broader economy and 1.2% fewer employers providing group long-term disability programs in 2009.  The economy has created an awareness on the part of employees to save and plan for a possible financial loss due to disability.

Currently, about 100 Million of the workforce do not have private disability insurance.  Of those with private insurance, there was a slight increase in claim payments in 2009 as compared to 2008.  The majority of claim payments were not work related, and the majority of claimants were over age 60, divided equally between men and women.  Fewer new claims were reported in 2009, reflecting the decrease in employed individuals.

For those individuals without private disability insurance, the Social Security Administration offers disability payments to those individuals who meet the strict criteria for claim payments. 7.8 million workers are currently receiving disability benefits under the SSDI program. This represents a 12% increase in the last decade.  SSDI benefits applications swelled in 2009: more workers are applying for SSDI claim payments than at any time in history. Applications for SSDI benefits rose to 2.8 million in 2009, 21.4% higher than the previous record in 2008. Over the past 10 years, the number of applications for SSDI benefits rose by 135% while the percentage of applications approved (the approval rate) dropped from 52% in 1999 to 35% in 2009. The upward trend in new claim applications is expected to continue in 2010.

SDI claim approval rate continues to decline: The SSDI percentage approval rate for applications has been trending downward since the late 90s. (The approval rate is the percentage of workers who apply for SSDI benefits whose initial claims are approved.) 35% of workers applying for SSDI disability claim payments in 2009 were approved; 10 years ago, the approval rate for workers applying for disability was 52%. Approval rates in the past 5 years (ranging between 35% and 39% during 2005–2009) represent the lowest five out of the past 15 years. The highest approval rate in the past 15 years was the 52% in 1998. The 15-year median approval rate is 44.6%.

The overall rate of disability is increasing among both men and women workers; in 1999, 3.6% of covered workers were receiving SSDI payments, while in 2009, 5.1% were receiving SSDI payments. The reasons cited for this increase include the aging of the U.S. workforce and the recent poor economic conditions. The rate of disability is rising faster for women than men, with a total of $110 billion paid in 2009, more than two times the amount paid in 1999.

2008 Social Security “Quick Facts”

  • 52: this is the average age of a disabled worker receiving SSDI benefits.
  • 2.8 million: this is the number of disabled workers in their 20s, 30s and 40s receiving SSDI benefits.
  • 1.9 million: this is the number of disabled workers’ spouses and children who also received SSDI payments in 2008.
  • $1,064: this is the average monthly SSDI benefit for all disabled workers.
  • More than 90%: this is the amount of disabled workers receiving SSDI who do not qualify for workers’ compensation.
  • 3 in 10: these are the chances of a young worker today becoming seriously disabled before reaching retirement.

Over the Counter Drugs May no Longer be Covered Under an FSA

As of January 1, 2011 over the counter medicines and drugs will no longer be covered under a Flexible Spending Account (FSA) unless a letter of medical necessity is obtained from a physician.  The exception to this is insulin, or health related supplies.  Prescription medications will continue to be eligible, although some items may require additional substantiation regarding necessity.

According to a study conducted by a large health debit card provider, losing the tax-deductible status for OTC medicines will affect only a small percentage of employee medical FSA reimbursements.  It is suggested that participants continue to make their elections as conservatively as possible, and not drastically reduce their contributions