1099 PPACA Reporting Requirements Under Fire

Senate Finance Committee Chairman Max Baucus, D-Mont., and Senate Majority Leader Harry Reid, D-Nevada, have introduced a bill to repeal the expanded 1099 reporting requirements under PPACA.  As  the law stands,  businesses are required to file a 1099 report with the Internal Revenue Service listing vendors with whom they have paid $600 or more during the tax year.  The provision, which goes into effect on 2012, is projected to raise $19 billion over 10 years.

Businesses have complained that the new reporting rules would be too time-consuming for them to meet.  Baucus and Reid said this week they hope to pass a repeal of these rules with strong bipartisan support. They have attracted one Republican co-sponsor: Sen. Scott Brown of Massachusetts.

Last week, House Republicans passed a repeal of the overall health care reform bill, but an overall repeal of the health care reform law is not expected to go far in the Democratic-controlled Senate.

During his State of the Union address on Tuesday evening, President Obama indicated he was willing to fix the 1099 reporting requirements. “Now, I’ve heard rumors that a few of you have some concerns about the new health care law,” he said. “So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.”

We will keep you apprised of any developments as they occur.

Federal Government to Help Fund Health Insurance Exchanges

Kathleen Sebelius, the U.S. Health and Human Services Secretary announced a new funding opportunity for state grants to help states implement health insurance exchanges (HIEs).  Sebelius told reporters on a conference call that her department will be vigilant about checking states’ budgets submitted with applications and will focus on keeping states’ expectations realistic about how much funding they will receive.  The amount available for funding is not known.

To date, 48 states and the District of Columbia have received planning grants of approximately $1 million each for HIEs, which are viewed as a key element of the Patient Protection and Affordable Care Act.

HIEs are designed to bring new transparency to the market so that consumers will be able to compare plans based on price and quality, giving American consumers insurance choices. They will also increase competition among insurers.

Those moving ahead with HIE plans can apply for multi-year funding. The option to states that are making progress in a step-by-step approach can apply for funding for each project year.

Private Health Insurance Cooperatives are also available as an option to HIE’s.

Debit Card Rules Change for Over the Counter Medications

The United States Treasury Department recently  released Notice 2011-05 allowing consumers to use debit cards tied to Flexible Spending Accounts (FSA) and Health Reimbursement Accounts (HRA) at pharmacies to pay for over-the-counter (OTC) medicines or drugs that are prescribed by a doctor or other health professional.

The current guidance modifies Notice 2010-59 and permits the use of FSA and HRA debit cards for OTC drug purchases provided:(1) a prescription is presented to the pharmacist;(2) the OTC medication is dispensed according to state prescribing laws and an Rx number is assigned;(3) records of the sale are maintained by the pharmacist and made available to the employer on request; and(4) the debit card system will not accept a charge for an OTC medication unless an Rx number has been assigned

Anthem Blue Cross of CA – April 2011 (small group rate & benefit changes)

After a 4.7% average January 2011 increase, the April 2011 Small Group Rate Change averages 3.3%:

EmployeeElect Total
PPO 2.1 %
HMO 2.0 %
CDHP 8.2 %

EmployeeChoice – 7.3%
BeneFits – 4.4%
Total – 3.3 %

The Rate increases for the 51-99 EmployeeElect portfolio is identical to Small Group for April.  However, the TOTAL rate for these plans will vary slightly.
*These rate adjustments are averages and will vary by plan and region.

The Increases will be as follows: 

   The HMO Plans will receive an average increase of 2.0%
The PPO Premier Plans will receive an average increase of 1%
   The PPO CopayPlans will receive an average increase of 1.7%
   The Solution PPO Plans will receive an average increase of 3.5%
   The GenRxPPO Plans will receive an average increase of 3.3%
   The Elements Hospital PPO Plans will receive an average increase of 3.8%
   The EPO Plans will receive an average increase of 1.0%
   The LumenosH.S.A. 100% Plans will receive an average increase of 9.5%
   The LumenosH.S.A. 80% Plans will receive an average increase of 7.6%
   The LumenosHIA+Plans will receive an average increase of 5%

The April, May & June 2011 renewal increase on EmployeeElect plans will average 13.1%.


New PPO Plans added April 2011

Health CAN Increase Wealth!

In order to maintain comprehensive employee health benefits while controlling rising health care costs, employers are now increasing their reliance  on an array of wellness programs aimed at creating a healthier workforce.

As wellness incentives are now part of the Patient Protection and Affordable Care Act, this is a trend that should continue to gain attention.  According to a survey from the National Business Group on Health and Fidelity Investments, many employers have implemented these programs without first developing an integrated strategy that clearly outlines targets and goals.

The survey revealed three key findings:

1. Employers are investing in numerous health improvement programs.

2. Few employers set measurable goals or are able to calculate the return on their investment in these programs.

3. Employers underestimate the investments they make in health improvement programs.

The survey shows that employers have invested in an average of 21 different health improvement programs, administered by several different vendors.  Programs include disease prevention, lifestyle change, condition management and educational campaigns.

Employers are spending roughly the same on programs that help maintain and improve health, such as prevention and lifestyle efforts, as on programs that help manage health after onset of an illness or disease.

The challenge for employers is determining what the right mix of spending is. For example, a strategy focusing on condition management is logical if an employer has a large population that has particular chronic diseases or illnesses.  However, if the employer’s workforce is relatively healthy, then focusing more heavily on lifestyle modifications might be a wiser investment, considering the impact that likely lifestyle changes could have on the health of the workforce as it ages.

Measure The Program Goals

In the study 35% of employers indicated they have measurable goals and/or targets. As a result, few employers know the return on their investment across all their health programs, and many (42%) rely on a collection of vendor assessments to measure success.  As a result, it is difficult for employers to assess the success of their program.  Employers should consider determining the outcomes that they want before they decide on the programs. Knowing your intended focus should help to determine which types of programs you should implement.

Employers should include common sense metrics, such as number of health screenings, adherence to medications for chronic conditions or percentage of the population that is tobacco-free.  If you have a population with a high prevalence of a particular disease such as asthma, focusing on decreased emergency room visits among a constant population in the program is a logical program choice.

Track Your Investment

Accurately tracking the investment in health improvement is perhaps an employers greatest challenge, since many programs are often bundled with other services. The study quantifies the employer investment in health improvement, based on employer responses about which programs they offered and market data on the cost of these programs.

It is estimated that employers spend an average of 1.8% of medical claims on health improvement programs. These investments were consistent across companies of different sizes.

The 1.8% estimate represents the average level of investment that employers are currently making. However, the level and focus of investment that is right for one employer may not be appropriate for another employer, and individual company characteristics should be considered when deciding how to invest.

Investing in employee health has the potential to reap substantial benefits for employers, but there are numerous challenges – including coordination of multiple programs, communication to engage people in the program, and development of measurable outcomes and accurate financial calculations – that must be addressed before the best outcomes can be realized.

Employers who are able to identify desired outcomes, and implement strategies and programs to achieve these outcomes, will ultimately be the ones that see improvement in their workforce’s health profiles.

For additional information about implementation of Wellness Programs, please contact Gary Whiddon at (888) 474-6627 or at gary@hpo.biz.   Mr. Whiddon has received his well workplace certification from WELCOA (Wellness Council of America), and can assist you with any questions you may have.