• Lowered their health risks:  CDHP customers lowered their risk of developing or worsening a chronic condition. According to the study, when employers fully transitioned to offering only a CDHP option, individuals improved their health risk profile by 10 percent in the first year compared to customers in a traditional plan option.
• Reduced total medical costs:  CDHP medical cost trend was 16 percent lower than traditional plans during the first year. Over five years, cumulative cost savings averaged $9,700 per employee enrolled in a CDHP compared to employees who remained in a traditional health plan. Cost reductions were achieved without employers shifting out-of-pocket health expenses to their employees.
• Received higher levels of care:  CDHP customers had consistent or higher use of over 400 evidenced-based medical best practices (than their counterparts in traditional plans.  CDHP customers also sought preventive care, such as annual office visits and mammograms, more frequently than customers enrolled in a traditional plan.
• Were more engaged in health improvement: Through proper plan design plan and the use of incentives,  CDHP customers were more likely to have completed a health risk assessment and participated in their health coaching program than those enrolled in a traditional plan.
• Were more savvy consumers of health care:  CDHP customers enrolled in their pharmacy management program were more likely to choose generic medications and had 14 percent lower pharmacy costs compared to those in a traditional plan. In addition, CDHP customers used the emergency room at a 13 percent lower rate than individuals enrolled in HMO and PPO plans.
• More likely to compare cost and quality:  CDHP customers were twice as likely to use myCigna.com online cost and quality information to help them select a doctor or to review potential medical costs than customers enrolled in traditional plans.

“Each year the evidence increasingly shows that properly designed consumer-driven health plans can lower health risks, reduce medical costs and drive engagement,” said Cigna Chief Medical Officer, Dr. Alan Muney.

Please contact Gary Whiddon at Health Plans Online for more information on Consumer Directed Health Plans.  He can be reached at (888) 474-6627 or gary@hpo.biz.

• Health Savings Accounts (HSAs) .
• Medical Savings Accounts (MSAs)
• Flexible Spending Arrangements (FSAs) .
• Health Reimbursement Arrangements (HRAs)

 Exemption for small employers. Employers filing fewer than 250 Forms W-2 for the preceding calendar year are not required to report the aggregate cost of coverage.

Stand-alone dental and vision plan reporting. The Notice clarifies that the standard for determining whether the cost of coverage under a dental plan or vision plan is included in the aggregate cost is the same standard for determining whether such coverage is an excepted benefit under HIPAA. Thus, certain stand-alone dental and vision plans may be exempt from the reporting requirement.

Excess reimbursement for highly compensated individuals. The reporting requirement does not apply to the cost of coverage includible in income under Section 105(h) of the Internal Revenue Code, or payments or reimbursements of health insurance premiums for a 2% shareholder-employee of an S corporation that is required to include the premium payments in gross income.

Coverage under employee assistance program or similar program. An employer that does not charge a premium for an EAP, wellness program or on-site medical clinic to COBRA-qualifying beneficiaries is not required to include the cost of such coverage in the aggregate reportable cost. For arrangements that are not subject to any federal continuation coverage requirements (such as church plans), the employer is not required to include the cost of such coverage on the Form W-2.

Optional reporting of exempted benefits. Employers may, for convenience, include in the aggregate reportable cost the cost of coverage that is not required to be included (e.g., cost of coverage under a Health Reimbursement Account, provided that certain conditions are satisfied.

Reporting non-applicable employer-sponsored coverage. Employers may use any reasonable method to determine the relative allocation of cost for benefit programs that make available both applicable employer-sponsored coverage (e.g., group health plans) and other coverage (e.g., long‐term disability programs).

Employee election changes after year-end. The aggregate reportable cost for a calendar year reported on a Form W-2 may be based on the information available to the employer as of December 31 of the calendar year, without regard to any election or notification made or provided in a subsequent calendar year that has a retroactive effect on a previous year’s coverage.

Payroll periods crossing two taxable years. The Notice provides employers with various options for reporting the aggregate reportable cost for a payroll period that spans two taxable years.

Hospital indemnity/specified disease insurance. Employers are required to include the cost of coverage in the aggregate reportable cost on Form W-2 if the employer makes any contribution to the cost of coverage that is excluded from the employee’s income, or if the employee purchases a policy on a pre-tax basis under a cafeteria plan. However, if the employer provides the opportunity for employees to purchase an independent, non-coordinated fixed indemnity policy and the employee pays the full amount of the premium with after-tax dollars, the cost of coverage provided under that policy is not required to be reported on Form W-2.

Third-party sick pay. The aggregate reportable cost is not required to be reported on a Form W-2 furnished by a third-party sick pay provider. However, a Form W-2 furnished by the employer to an employee must include the aggregate reportable cost, regardless of whether that Form W-2 includes sick pay, or whether a third-party sick pay provider isfurnishing a separate Form W-2 to report sick pay.

Plans that currently allow a health care FSA election of more than $2,500, must amend plan documents before Jan. 1, 2013, and change employee communications.

To simplify administration of this change, sponsors of non-calendar year plans may want to adopt the new limit as of the first day of the plan year rather than waiting until Jan. 1, 2013. For example, if the current plan year begins May 1 and ends April 30, the plan sponsor may:

• Communicate the change to employees.
• Amend their plan documents to implement the new $2,500 maximum election.
• Initiate  the changes to the contribution effective May 1, 2012, rather than wait until the mid-plan year in Jan. 1, 2013

A plan may not, as a routine matter, approve significantly shorter stays for inpatient mental health and substance abuse treatment than it does for inpatient medical or surgical care, even if extensions of those stays are subject to review.

Plan sponsors should be aware of these interpretations of the rules not only in  regard to plan design, but with regard to their own (and their vendor’s) administrative practices.

Once thing that can also help you is knowing more about the following common dental procedures:

Extractions

Teeth may need to be pulled in the event of dental pain or infection.  A certain amount of blood and pain is to be expected, so anesthesia can be used to reduce pain.  You can also use an MP3 player to deaden any sound.  Remember that any blood you se is mixed with your saliva, so it actually looks like you are bleeding more than you actually are!

Fillings

Cavities are small holes in teeth caused by germ-containing plaque, is treated by removing the surrounding area and filling the hole with materials to rebuild the tooth.  If cavities are not treated early, the bacteria will continue to eat away at the tooth, possibly resulting in a need for a root canal.  One way to lessen fear of the drilling and filling is to bring an MP3 player or similar device to listen to music while your dentist is working.

Root Canal

During a root canal, damaged tissue is cleaned out from inside a tooth. It’s a long procedure (sometimes lasting about two hours), but it can save your tooth. You can also bring along an MP3 player or you can break the treatment down into more manageable time periods.

X-Rays

X rays are designed to help your dentist find little problems before they become worse.  It can become a problem is you have a strong gag reflex or fear of radiation exposure.   Your dentist can use a little topical anesthesia to help control your gag reflex during this short dental procedure. It also may help to remember that the actual radiation exposure from dental X-rays is relatively minimal compared with the radiation exposure you get naturally each day.

Crowns

Crowns are used to protect a worn-out or weakened tooth.  The worst part of the procedure is the gag-inducing mold made of your tooth to shape the crown.  One way to alleviate this problem is to sit upright and use a faster-setting mold.

Dental Implants

Implants are used to replace missing teeth. They look natural and are stable as they are molded to your bone below your gums.  If you are afraid you can consider anesthesia.

Below are some suggestions to assist you and your employees in making the best decision(s) regarding plan choices at open enrollment:

• Allow employees adequate time to think about the choices and/or discuss the options with their family or providers.  One day or a weekend simply isn’t enough time.  Studies suggest that employees who are given three weeks to make a choice are 50% more likely to remain satisfied with their decision.
•  Hold open enrollment meetings as far in advance as possible to the plan or carrier change.
• Provide enough information regarding the plan choices available.  Research shows that employes can make an informed decision once they have an effective benefits education, with their personal questions addressed.  If at all possible provide printed information or access to information online.
•  Personalized benefit statements can also help an employee to determine the amount they spend on insurance, and if this needs to be adjusted in light of their health care needs.
•  Give employees the opportunity to ask personal or specific questions related to their health care needs.  Perhaps the enroller can remain on site to answer questions, or the employees can contact someone on their own time to ask questions.  Make someone available to your employees.

Our staff at HealthPlansOnline.com can assist you and your employees with health plan choices and enrollment.  Please contact us at (888) 474-6627.

“Child obesity is impacting employers today and will into the future as these children become the workforce of tomorrow,” says Helen Darling, president and CEO of NBGH, whose members include 329 large U.S. employers. “Parents have an enormous impact on the childhood obesity epidemic. The good news is that employers can play a critical role in fighting the childhood obesity epidemic by helping families develop healthy lifestyles at work and in the home”.

A recent survey of 83 of the nation’s largest companies conducted by the National Business Group on Health identifies the following programs employers currenlty have in place to help fight childhood obesity:

- One third of employers (33%) offer online weight management tools to children.

- More than one in four employers (28%) offer telephonic or online coaching for weight management to children

Beyond promoting healthy lifestyles in the home, employers will soon face a growing demand for obesity treatment in children.

“With the new guidelines for screening under The Patient Protection and Affordable Care Act, many more children nationally will be identified as overweight or obese,” says LuAnn Heinen, vice president and director of NBGH’s Institute on Innovation in Workforce Well-being. “Employers can provide tools and resources to support and empower employees and work with health plans and community resources to develop and promote new approaches to childhood obesity prevention and treatment.”

Employer toolkit expanded

NBGH also announced that it has updated its employer toolkit, “Childhood Obesity:  It’s Everyone’s Business,” to include examples of family-focused wellness programs that four forward-thinking companies are doing to fight childhood obesity. The toolkit also includes a new section on how employers can design their benefit programs to ensure that they are in accordance with new screening guidelines required by PPACA and support obesitytreatment options for children.

The employer toolkit was developed and updated with support from the U.S. Department of Health and Human Services, Health Resources Services Administration’s Maternal and Child Health Bureau. It’s available free of charge and can be found at www.businessgrouphealth.org.

Gary Whiddon is a wellness consultant affiliated with WELCOA university and can assist you in forming a wellness program for your employees.  Please contact him at (888) 474-6627 for information on setting up a prgram for your employees.

The intent of Uniform Benefit Summaries is to provide individuals with standardized information so they can review medical plans, compare insurers and make decisions about medical plan choices.  The proposed rule provides additional guidance on the information that must be provided to all individuals enrolling in a medical plan on or after March 23, 2012.

This provision applies to individual and employer-sponsored medical plans, regardless of grandfathered status or funding. It does not apply to retiree-only plans or to standalone dental and vision plans.

What Information Must be Included

Insurers and self-insured employers must provide a Summary of Benefits and Coverage (also referred to as an ‘SBC’ in the proposed rule) to individuals who apply for and enroll in medical plans. The Summary of benefits and Coverage is a required document that must be provided in the standard format.

There are four standard components:

• A four-page Benefit Summary (double sided)
• Medical Scenarios called “Coverage Examples” that  are patterned after the Food and Drug Administration food labels. They estimate customer costs based on the specific plan’s benefits for three medical scenarios – Maternity, Breast Cancer Treatment and Managing Diabetes
• A standard glossary of medical and insurance terms
• A phone number and website where individuals can get additional information including documents such as Certificates, Summary Plan Descriptions (SPDs) and policies

HHS asked the National Association of Insurance Commissioners (NAIC) to propose a format for the four components in the Summary of Benefits and Coverage. Here is a link to the documents proposed by NAIC: http://www.naic.org/committees_b_consumer_information.htm

The information on the NAIC website is not a guideline or example. It is the exact wording, format and layout that must be used. Insurers and employers will just insert plan details into the predetermined rows and columns.

The Benefit Summary must be a freestanding document and may not be incorporated into any other document. Supplemental
communication materials may be provided with it. Currently produced documents will not satisfy the requirements of the regulation.

The Coverage Examples must include three pre-defined medical scenarios: Maternity, Breast Cancer Treatment and Managing Diabetes. These scenarios are intended to show typical services and cost sharing under the plan. The numbers would be based on client-specific plans and costs. The estimates are based on national average costs and in-network benefit levels.

Who is Responsible for Providing the Information

For fully insured plans and HMOs, the insurer is responsible for producing and distributing the summaries. For self-insured
plans, the responsibility lies with the employer.

What is the Required Timing

Summaries must be provided when an employer or individual requests information about a plan, applies for coverage or enrolls in
a plan. They must also receive a summary if there are plan changes or if the individual has a HIPAA special enrollment event that prompts a new enrollment opportunity.

People enrolled in a health plan must be notified of any significant changes to the terms of coverage reflected in the Summary of
Benefits and Coverage at least 60 days prior to the effective date of the change. This timing applies only to changes that become effective during the plan or policy year but not to changes at renewal (the start of the new plan or policy year).

How Benefit Summaries will be Delivered

Summaries are required both before and after enrollment and may be delivered in paper and/or electronic format. There are
specific requirements for group vs. individual plans.

Penalty for Non-Compliance

The penalty for ‘willful’ non-compliance is up to $1,000 per enrollee for each failure to comply.

Next Steps

Comments on this proposed rule – including the specific request for expatriate plans – are due 60 days from the published date.

Authorized under provisions of the Patient Protection and Affordable Care Act, these guidelines, developed by a committee of the Institute of Medicine of the National Academies, expand the previous list of preventive services that must be covered without charging a copayment, coinsurance or a deductible to include:

• Well-woman visits
• Screening for gestational diabetes for all pregnant women
• Human papillomavirus DNA testing for all women 30 years and older
• Annual sexually transmitted infection counseling for all sexually active women
• Annual counseling and screening for HIV for all sexually active women
• FDA-approved contraception methods, sterilization procedures and contraceptive counseling
• Breastfeeding support, supplies, and counseling, including costs for renting breastfeeding equipment
• Domestic violence screening and counseling

New health plans and non-grandfathered plans and issuers are required to provide coverage consistent with these guidelines in the first plan year (in the individual market, policy year) that begins on or after August 1, 2012.  It is possible that your current health plan covers these services now, but may have a copay or co-insurance percentage.

1. Bumps on the head- every new walking toddler (or those that are already walking or running) hit their heads and get a few bumps and bruises during the early years. If your child gets right back up after the impact and stops crying after some serious soothing, an ice pack and some TLC is probably all she needs. Go to the ERor call 911 if your child loses consciousness or has an indentation in her head for emergency medical attention.

2. Mouth injuries – Why do all parents panic over mouth injuries?  The mouth is rich in blood vessels, so cuts and scrapes bleed a lot (and it’s often hard to see where all that blood is coming from at first). Applying ice, having her suck on an ice pop or  drink some cold water will soothe and stop bleeding.  Go to the ER when there is a gaping wound or a cut that won’t stop bleeding after you’ve applied ice is a true emergency.

3. Fever – Most fevers, even high ones, are just a sign that your toddler is fighting off an infection, but many parents worry that a fever signals something worse.  The American Academy of Pediatrics says Moms and Dads need to make a feverish tot comfortable, instead of trying to bring the temperature down to normal. Don’t be alarmed if that pain reliever doesn’t bring down her temperature right away. Instead, keep giving your little one plenty of fluids (and hugs) and check in with your pediatrician.  Go to the Pediatrician when your child has a fever higher than 102.2°F or has had a fever for more than 24 hours (for a child younger than two) or 72 hours (for kids two and older). Go to the ER if your child’s fever is 102.2°F and she has a stiff neck, can’t stop crying or vomiting, is so lethargic it’s difficult to wake her up, or has a blue tongue or blue lips or nails (which means she’s not getting enough oxygen). Also go to the ER when a baby under three months has a fever of 100.4°F.

4. Vomiting-  Persistent vomiting is another common reason parents head to the ER. But vomiting is usually caused by a stomach bug or infection and isn’t serious in and of itself. A bigger danger is dehydration, so be sure to offer your tot extra fluids (or Pedialyte), even if she just takes a sip at a time, as well as liquid-based foods like soups, fruits, and fruit pops. Most stomach bugs that cause vomiting last only 24 hours, so if your child is throwing up for more than a full day, call your Doctor. Call the pediatrician or go to the ER if there are signs of dehydration, such as : dry mouth, lack of tears, and dry diapers (or not much pee in the potty). Call your doctor or 911 if your child is vomiting after she’s hit her head, or is throwing up greenish fluid, blood, or what looks like coffee grounds (blood mixed with stomach acid).

5. Skin Rashes – Most rashes are not dangerous.  Some are caused by allergies, while others are symptoms of viruses like fifth disease. It is recommended that your pediatrician  check out a nasty or weird-looking rash, most rahses are not a cause for alarm.  Go to the ER if your tot breaks out in a rash and has trouble breathing at the same time. Another rash that warrants an emergency room visit and a call to the doctor is petechiae, which is flat purplish dots caused by broken blood vessels that are usually a sign of a serious infection or bleeding problem.

Please always remember that there may be increased charges on your insurance coverage for emergency room visits.  Please consult your plan booklet for information regarding the benefits available.

1. ASK YOUR FRIENDS AND WORK COLLEGUES WHO THEY SEE FOR MEDICAL CARE.  Your firends and work associates will often be the most honest, as they do not stand to gain from any recommendation, and will often care enough about your welfare to be honest about any faults or issues the provider may have.

2. ASK YOUR CURRENT PHYSICIAN.  This works best if you need a specialist, or if you ar transitioning a child from a pediatrician to an internist or GP.  Doctors usually know the scuttlebutt on who is the best in their fields.

3. CONTACT A TEACHING HOSPITAL.  As with #2 above, they usually know who is a good physician.

4. USE THE INTERNET.  There are many websites devoted to physician reviews, such as ratemds.com and vitals.com.  Keep in mind that most people comment on these sites when they are dissatisfied with a provider, and not to commend one.  It would be good to know if there are many complaints, so you can avoid this doctor.

5. CONTACT AN ADVOCACY GROUP.  Organizations such as The American Cancer Society will be able to advise who is the best in their field, as they work closely with physicians and are on top of the latest research and advancements.

6. DO A BACKGROUND CHECK.  Contact the Federation of State Medical Boards at fsmb.org  for information on licensing and complain history.  Also check out the American Board of Medical Specialties at abms. org to check board certification status.

7. GO WITH YOUR GUT. Since you may be spending a lot of time with this person, you have to feel that you are a team and that you can work together.  You know who you feel a kinship with, and who you dislike.  If you don’t like the doctor, don’t use him/or her as your provider!  Can you imagine being sick and vulnerable, having your health and future in the care of someone you don’t like?

Of course, any doctor you choose doesnt have to be your provider for the rest of your life.  As your needs change you may also want to reconsider your choices.  Do not be afraid to change doctors.  As in life, not every relationship is meant to be permanent.  If you were meant to stay with the same doctor all of your life, there would be many elderly patients at the pediatrician’s office. 

Searching for the “Best” Rx price has never been easier! Simply visit www.PillBot.com and type the name of the medication in a box like below and click submit. You may also conduct your search alphabetically at PillBot.com.

I did a search on the cholesterol drug, Zocor.  Here are the results.  The first line  shows 30 pills each 80 mg for $115.87 or $3.82 per pill.

 Whether you’re choosing among group health plans offered by your employer or shopping for individual health insurance coverage, there are seven mistakes to avoid.

 1. Your doctor isn’t in the network. You’ll pay more to use health care providers who aren’t in your health plan’s network, so check to see if the doctors and other professionals you want are included. A plan that tightly restricts you to a local network might be sufficient if you need care only in your area, but it won’t benefit a kid away at college or meet all your needs if you spend a lot of time on the road.  Make sure any specialists you need are also covered by the plan.  Don’t assume a specialist is in the network just because your primary care doctor gave you the name.

 2. You pay huge insurance premiums to save a few bucks on the co-pay.  Don’t focus so much on getting a low co-pay and fail to look at how much extra premium you will pay for it.  Evalute the need for the extra premium cost.  If you go to the doctor only a couple of times a year, is it worth hundreds of dollars extra on the premium just to get a lower co-pay?

3. The drugs you take aren’t covered.  If the plan provides prescription-drug coverage, check to see if your medications are included on its formulary, which lists the preferred drugs that are either included or covered at a better copay.  Check to see if  the plan provides discounts if you mail-order prescription drugs in bulk.

4. You are overinsured.  In addition to comprehensive health plans, many employers offer supplemental insurance policies, such as cancer or critical illness insurance, that pay a lump sum of cash after diagnosis. Such policies can provide valuable protection, but they might not be unnecessary if you already have excellent under your medical insurance and short-term and long-term disability insurance plans. 

6. Your policy doesn’t cover maternity care.  Most employer-sponsored plans cover maternity and prenatal care, thanks to federal and state laws in place.  Individual plans do not require maternity coverage.  Starting in 2014, individual and small-group plans sold through state health insurance exchanges must include pregnancy and newborn care, along with other essential benefits.

 7. You don’t check your health plan for changes.  During your annual open enrollment, check the details of your current health plan to be aware of any changes that may impact your health care needs. Don’t assume the plan is still the same. Coverage levels, costs and networks could change from one year to the next, even if the plan is offered by the same insurer.

A good Health Insurance Advisor or Broker will help you sort through the plans available and help you find the plan that best suits your needs.  Please call our office at (888) 474-6627 and we will be happy to help you find the right plan for you and your family.

• Maximum annual HSA contribution for self only coverage will be $3,100 (up from $3,050)
• Maximum annual HSA contribution for family coverage will be $6,250 (up from $6,150)
• Annual maximum out of pocket for self only coverage will be $6,050 (up from $5,950)
• Annual maximum out of pocket for family coverage will be $12,100 (up fro,m $11,900)

 Amounts that are remaining at 2011 levels: 

• Age 55 catch-up contribution will continue to be $1,000
• Minimum HDHP deductibles will remain at $1,200 for self only coverage and $2,400 for family coverage.

WASHINGTON – U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, today unveiled the Family and Retirement Health Investment Act of 2011, bicameral legislation to strengthen and expand Health Savings Accounts (HSAs) and Flexible Spending Arrangements (FSAs) for American workers and retirees. Companion legislation was introduced in the U.S. House of Representatives by U.S. Rep. Erik Paulsen (R-Minn.). “This legislation will provide American workers and retirees with a common-sense way of improving access to quality, affordable health care,” said Hatch. “These health plans empower Americans to take control of their health and well-being. Health Savings Accounts and Flexible Spending Accounts allow consumers to make informed decisions about their health care and will help restrain costs by putting people in charge of their health choices.” This year health care costs are expected to rise by eight percent, more than double the rate of inflation. HSAs and FSAs provide individuals with opportunities to put away tax free savings for everyday medical expenses. When Congress first made HSAs available, these plans only covered 454,000 lives. Today, more than 10 million people are covered under a health plan that is eligible for an HSA. The Family and Retirement Health Investment Act of 2011 will streamline these health care products and simplify them for American families, seniors, and entrepreneurs. Specifically, the legislation will: allow a husband and wife to make catch-up contributions to the same HSA remove the onerous new restrictions on the use of HSA and FSA dollars for the purchase of over-the-counter drugs allow individuals to roll-over up to $500 from their FSA accounts clarify the use of prescription drugs as preventive care that will not be subject to an HSA-eligible plan deductible reauthorize the use of Medicaid health opportunity accounts promote wellness by expanding the definition of qualified medical expenses to encourage more exercise and better diet allow seniors enrolled in Medicare Part A to continue contributing to their HSAs allow for the purchase of low-premium health insurance and long-term care insurance with HSA dollars

###

To see this press release on the Senate Committee on Finance website, click here.

  U.S. health insurance carriers will have to justify big premium rate hikes effective September, 2011  under new rules issued by the U.S. Health and Human Service Department   Insurers will have to publicly post proposed rate increases for the small group and individual markets. Any increase of 10% or more will have to undergo review by independent experts at the state or federal level, the agency said.

These rules were signed into law last year under health care overhaul.  HHS Secretary Kathleen Sebelius said her department will provide greater scrutiny of health insurance premium rises at a time when insurers are demanding premium increases, even as they enjoy lower costs and huge profits.

“Even though insurers are seeing lower medical costs as people put off care and treatment in a recovering economy, insurance companies continue to raise their rates. Often these increases come without any explanation or justification,” she added.

Results of reviews will be posted on the HHS Website, and insurers will be required to post that information on their sites as well, she said.

While federal regulators cannot set health insurance rates, Sebelius said a growing number of states have this authority.  Sebelius said her agency was working closely with states to undertake the review process. HHS will take over in cases where a state does not take up the responsibility.

The 10% threshold will be replaced in September 2012 by a state-specific threshold that takes into account trends in a state’s health care market.

Steve Larsen, director of HHS’s Center for Consumer Information and Insurance Oversight, said the current rule applies only to the individual and small group market but that the agency was seeking comment on applying the rules to groups that purchase coverage through associations.

Last week, Milliman released its annual Milliman Medical Index, and it shows that the average American family’s medical costs have doubled in less than nine years and increased 7.3 percent from 2010 to 2011. The results also show that hospital spending, which accounts for 48 percent of total health care spending, accounts for more than 60 percent of this year’s total increase. And, outpatient facility costs increased more than any other component. The medical index illustrates the complexity of the health care cost problem, while legislative remedies to date have focused principally on health plan rate review processes and medical loss ratio restrictions. Interestingly, a new Yahoo Finance analysis of quarterly financial data shows that the health plan sector of the health care system ranked only 143rd out 215 in terms of profit margin.

The study notes that even though hospital costs are only 48% of total health care spending, increases in facility spending accounted for 60% of this year’s total increase in costs. For the third year in a row, spending at outpatient facilities rose faster than any other component of patient care, climbing 10%. Milliman attributes the growth in cost to the fact that existing outpatient services have increased in price while new, more expensive services continue to emerge. Pharmacy costs also rose by 8%. Although a quarter of that increase came from broader usage of pharmaceuticals, most of the change came from higher average prices.

These rising costs present a challenge for insurers, which are facing more political pressure to keep premiums down. Indeed, the report calls health care reform “the elephant in the room” and predicts that insurers will become subject to greater scrutiny of their rates. “Premium rate reviews do nothing to directly influence the underlying drivers of health care cost, but can put pressure on insurers to find ways to keep medical costs down,” the report states.

MetLife’s new Study of Employee Benefits Trends is full of the latest – and sometimes surprising – insights about employers and their employees think about benefits. And, it delivers unique perspective on how the benefits landscape is changing.

Download the Study

For example, you know that successful companies depend on a strong foundation of loyal and productive employees.

However, this year’s Study reveals:

• A workforce that has grown more dissatisfied
   and disloyal, to the point where a startling one in
   three employees hope to be working elsewhere
   in the next 12 months.
• Yet, employers, perhaps focused on expense
   control and lulled by a period of low turnover,
   assume employees feel as loyal today as they
   did three years ago.

Benchmarketing Tool

Quickly compare benefits objectives and offerings — as well as employee attitudes — to those of similar companies and employee populations. View, print and download your results for your next presentation.

Take the Benchmarking Tool Tour!  Then visit the tool 

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

Hello Amigos!  I have just returned from an eight day cruise on the Mexican Riviera.  Before you get too jealous, let me tell you I returned with a horrible case of the flu.   Feel better now?      

While on a bus tour of Mazatlan, our driver, Carlos, was speaking about many of the buidings we saw on our drive.  He mentioned the private hospital and the public hospital.  I already knew that  Mexico has socialized medical care for its citizens.  I asked Carlos why there were two hospitals and what were the differences.  He explained that the private hospital was for those people who could not wait at least a week for care or needed a greater level of medical care.  The public hospital was for “everyone else”.  Naturally, there were costs associated with using the private hospital.   

I found this really interesting.  I have Canadian relatives who do come here for medical care, since they do not want to wait for care under the Canadian system.  I have never heard about a private versus public hospital system in Mexico.  I have since done some research on this and have found that there are a few levels of care available to Mexican citizens based on their employment status.  While the quality of care on Mexico has improved greatly in the past 40 years, it still lags behind the care provided in the United States.  For those citizens who can afford the best care and those who want control over the care they receive, the private hospitals are an option.

So what did I learn on my winter vacation?  That there is no place like home.  They may have better weather and margaritas in mexico, but we still have a better health care system.  Yes there is still a long way we have to go in regards to our insurance and health care systems, but we are still better off  in this country than our neighbors to the South.  Viva USA!!

The annual survey, based on interviews with 805 California employee benefit managers,  includes the following findings:  

• Sixty-nine percent of California employers  offer health coverage, identical to the national rate.
• Health Insurance Premiums increased 8.1% in 2010, compared with a 1.8 percent increase in overall consumer prices.
• Since 2002, premiums have increased 134.4%, more than five times the 24.5% rise in California’s overall inflation rate.
• Single coverage premiums in California average $5,463 annually, a great deal higher than the national average of $5,049. Premiums for family coverage were $14,396.
• Twenty-four percent of the employers surveyed paid 100% of the employee premium costs.
• Twenty-eight percent of California firms either reduced benefits or increased cost sharing for employees in 2010 as a result of the economic downturn, up considerably from the 15% who did so in 2009.
• Four percent of California employers now say they are very likely to drop coverage completely, compared to just 1% as recently as 2008.

So what may happen in the future regarding health care for employees?  Some employers report that they are “very likely” to increase the portion of premiums paid by employees.  Four percent of respondents report that they probably will drop health coverage, compared with one percent of employers stating this in 2008.

For the complete survey click here

• Over-the-counter (OTC) medicines and drugs will no longer be eligible for tax-free reimbursement from an HSA without a doctor’s prescription. This includes pain relievers, sleep aides, and cough medicines.
• Certain OTC purchases, such as insulin, bandages, and medical devices, continue to be eligible for tax-free purchase from an HSA without a prescription. Accountholders should always keep their receipts and save doctor’s prescriptions for OTC purchases with their tax records.
• The tax penalty for non-qualified distributions from an HSA will increase from 10 percent to 20 percent (for accountholders under age 65 and not disabled).
• Family insurance coverage may be extended to children up to age 26 but HSA distributions can only be made for qualified expenses incurred by tax dependents. If a tax dependent is listed on an accountholder’s federal income tax, typically their qualified expenses can be paid from the HSA.

2011 contribution limits

The Internal Revenue Service (IRS) 2011 annual contribution limits for HSAs are the same as the 2010 annual contribution limits. The 2011 minimum deductible and maximum out-of-pocket limits for HSA-compatible health plans also remain unchanged.

What is the best way to get rid of old or unwanted medications?

It is not recommended that you either flush them down the toilet or down the sink drain.  Modern water treatment plants are not fully designed to deal with medication disposal. The long-term health risks posed by consumption of even minute quantities of these medications in drinking water and the full extent of environmental damage remains unknown. 

It is also not a good idea to throw them in the trash.  Safety experts strongly discourage throwing old medications into the trash where your children or pets can find them. Your trash will end up in a local landfill, where your medications could still have the potential to leach out.   Instead, many municipal or local trash services now have local household waste facilities where you can safely drop off your medications for incineration. Call your local trash service for options in your area.

There may be hazardous waste disposal facilities or drug recycling programs in your area.  Look online for this information. You could also contact your local pharmacy or physician’s office to see if they have disposal facilities available.

No Change In Contribution Amounts from 2010

What Is changing effective January 1, 2011?

• Over-the-counter medicines and drugs will no longer be considered a qualified medical expense.
• The penalty for using HSA funds for other than a qualified medical expense increases from 10% to 20%.

Please review information from the websites below and develop your own communication pieces to advise your employees of the changes.  Sample language, and other resources are available at http://www.dol.gov/ebsa/

Annual and lifetime limit changes: http://www.dol.gov/ebsa/lifetimelimitsmodelnotice.doc

Revised dependent eligibility for older kids: http://www.dol.gov/ebsa/dependentsmodelnotice.doc

Primary care physician designation and OB/GYN self referral change: http://www.dol.gov/ebsa/patientprotectionmodelnotice.doc

Please also contact our office at (888) 474-6627 for any assistance we can provide.

For taxable years beginning after December 31, 2010, employers will be required to calculate and report the aggregate cost of applicable employer-sponsored health insurance coverage on employees’ Form W2s. 1 This new reporting requirement applies for employees’ tax years beginning after December 31, 2010. Because employees are entitled to request their Form W2 early if they terminate employment during the year, payroll systems need to be updated for this change by January 2011.

While most W2s for tax year 2011 will be issued in January 2012, W2s reflecting the new health insurance information must be available no later than February 1, 2011 for any terminating employee. It is important to note that the aggregate cost of an employee’s health benefits will not be included in the employee’s taxable income. The W2 reporting will be a way to track coverage values for the 40% excise tax (starting in 2018) on “high cost” employer based medical coverage above certain thresholds (the so called “Cadillac plan tax”) The coverage costs (whether under an insured or self insured plan) that must be reported under the new requirement include:

• Medical plans

• Prescription drug plans

• Dental and vision plans, unless they are “stand alone” plans (i.e., an employee may elect only dental or only vision and is not required to also enroll in medical coverage)

• Executive physicals

• Onsite clinics if they provide more than de minimis care (The term de minimis means (as provided by IRC Sec. 132(e)(1)) any property or service, the value of which is (after taking into account the frequency with which similar fringe benefits are provided by the employer to the employer’s employees) so small as to make accounting for it unreasonable or administratively impracticable. In other instances where the IRS was interpreting whether a medical clinic provided de minimis benefits, an on-site nurse who provided emergency services was considered a de minimis benefit, while a clinic at a hospital that provided full scale medical treatment was not considered de minimis).

• Medicare supplemental policies

• Employee assistance programs

If an employee enrolls in employer sponsored health insurance coverage under multiple plans, the aggregate value of all such health coverage (except certain benefits, discussed in section below) must be disclosed. For example, if an employee enrolls in employer-sponsored health insurance coverage under a major medical plan, a dental plan and a vision plan, the employer is required to report the total value of the combination of all of these health related insurance policies. For this purpose, employers generally use the same value for all similarly situated employees receiving the same category of coverage (such as single or family health insurance coverage).

Employers will not be required to provide a specific breakdown of the various types of coverage, but must only report an aggregate cost. For example, if an employee enrolls in medical, dental and prescription drug coverage, the employer only has to report the total value of all coverage, not a value for each individual benefit.

Benefits Exempt from Form W2 Reporting Requirements

The following employer provided benefits are not required to be reported on Form W2 under the new health care law:

• Long term care, accident or disability income benefits

• Specific disease or illness policies (such as cancer policies), and hospital (or other) indemnity insurance

policies where the full premium is paid by the employee on an after  tax basis

• Archer MSA or HSA contributions of the employee or the employee’s spouse

• Salary reduction contributions to a Health FSA

To determine the value of health insurance coverage, the employer will calculate the applicable premiums for the taxable year for such health coverage for the employee under the rules for COBRA continuation coverage under IRC Sec. 4980B(f)(4) (and accompanying Treasury regulations). The value that the employer is required to report is the aggregate premium calculated under the COBRA rules, not the portion of the premium that the employee has to pay. If the employer’s plan provides for the same COBRA continuation coverage premium for both individual coverage and family coverage, the employer plan would be required to calculate separate individual and family premiums and the employer would report the value of the coverage the employee received. For example, if one employee received family coverage, the employer would report the premium amount for family coverage for that employee. For another employee that receives individual coverage, the employer would report the premium amount for individual coverage.

This information is for educational purposes only.  Please refer to your tax advisor for additional infirmormation or guidance.

Under the Patient Protection and Affordable Care Act (PPACA), the interim final rule requires group health plans and insurers to establish a comprehensive appeals process for patients who appeal decisions on coverage, services and claim payments. The interim final regulations apply to self-funded health plans, but not to grandfathered plans under the PPACA.

The Departments of Health and Human Services, Labor and the Treasury issued the interim final rule, which will take effect on Sept. 21, 2010.

Health plans and insurers that are subjected to the regulations are required to establish an internal appeals process that:

• Allows consumers to appeal when a health plan denies a claim for a covered service or rescinds coverage;

• Gives consumers detailed information about the grounds for the denial of claims or coverage;

• Requires plans to notify consumers about their right to appeal and instructs them on how to begin the appeals process;

• Ensures a full and fair review of the denial; and

• Provides consumers with an expedited appeals process in urgent cases.

Under the regulations, a patient can have the case reviewed by an independent reviewer  if the appeal is denied by the health plan or insurer. 

Most states currently have external appeals handled by an independent agency, however, governing the process varies from state to state.  The interim final rule encourages a federal standard for external reviews.  For external appeals, federal regulators are encouraging states to adopt the guidelines created by the National Association of Insurance Commissioners. The interim final rule calls for states to implement the NAIC standards before July 1, 2011. The NAIC rules require:

• External review of plan decisions to deny coverage for care based on medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit.

• Clear information for consumers about their right to both internal and external appeals – both in the standard plan materials and at the time the company denies a claim.

• Expedited access to external review in some cases – including emergency situations or cases where their health plan did not follow the rules in the internal appeal.

• Health plans must pay the cost of the external appeal under State law, and States may not require consumers to pay more than a nominal fee.

• Review by an independent body assigned by the State. The State must also ensure that the reviewers meet certain standards, keep written records, and are not affected by conflicts of interest.

• Emergency processes for urgent claims, and a process for experimental or investigational treatment.

• Final decisions must be binding so, if the consumer wins, the health plan is expected to pay for the benefit that was previously denied.

In a study conducted by StayWell Health Management, a health promotion vendor, employee participants who completed a telephone-based health coaching program lost an average of 3 pounds, compared to 1 pound for those who did not complete the program.  Additionally, employees who followed the advice offered in the health coaching program were more likely to improve their overall eating habits and their physical activity levels.

In the study, the company examined the benefits of long-term weight management versus short-term weight loss. The final study sample size included 1,298 participants from 10 different employers and focused on clients who offered programs between 2004 and 2006.

Health experts believe that individuals who want to lose weight should focus on a lifetime goal of healthy eating and exercising and not on weight-loss challenges and programs aimed at dropping pounds over a short period.  Even a small amount of weight loss can contribute to an improvement in health, such as lower blood pressure and decrease in wear on knees and back.

StayWell points to hardware store giant Lowe’s Home Improvement as an example of how a health coaching program can promote weight manangement.

The company, which employs about 240,000 workers, rolled out a health coaching program that offered phone-based, mail-based coaching or a six-week interactive program to help workers identify and change unhealthy behaviors.  A total of 3,461 pounds was lost by participants with an average weight loss of 9.25 pounds per person; and the average body mass index among all participants decreased from 35.3 kg/m2 at pre-assessment to 33.9 kg/m2 at post-assessment; a decrease of 3.9%.

The recent Health Care Reform legislation offers a financial incentive of 30-50% off premium costs to employees for participation in approved wellness programs beginning in 2014.

The Preventative Services include: 

Evidence-based preventive services,  such as breast and colon cancer screenings, screening for vitamin deficiencies during pregnancy, screenings for diabetes, high cholesterol and high blood pressure, and tobacco cessation counseling. 

Routine vaccines: those recommended by the Advisory Committee on Immunization Practices ranging from routine childhood immunizations to periodic tetanus shots for adults.

Prevention for children: including regular pediatrician visits, vision and hearing screening, developmental assessments, immunizations, and screening and counseling to address obesity and help children maintain a healthy weight as recommended under the Bright Futures guidelines, developed by the Health Resources and Services Administration with the American Academy of Pediatrics.

Prevention for women: Health plans will cover preventive care provided to women, with final guidelines for services covered to be issued by August 1, 2011.

• Premiums
• Benefits to comply with changes in state or federal law or PPACA
• Changes to provider network or prescription formulary
• Changes to third party plan administrator
• Changes to plan structure, i.e. switching from insured to self funded

 Increases in co-insurance percentage, changing insurers, employee contributions by more than 5% or elimination of benefits to treat a particular condition are among the changes that would cancel a plans grandfather status. 

 For a full list please refer to: www.healthcare.gov/news/factsheets/keeping_the_health_plan_you_have_grandfathered.html – 47k – 2010-03-23

DON’T WAIT UNTIL THERE IS AN EMERGENCY TO FIND A DOCTOR

Maintaining a  relationship with a primary care doctor going for routine visits is the best way to stay healthy and avoiding the need for emergency care.  There are low cost or free clinics, check with your community or city health care system for more information, or look online at http://findahealthcenter.hrsa.gov/.  If you lost insurance coverage, tell your physician about the change in your status and perhaps discounts can be negotiated for cash payment.

EMERGENCY ROOM VISITS

Please use the ER only for true life threatening emergencies.  For routine medical care, please go to a physician’s office or urgent care center.  Emergency rooms are higher in cost for routine care.  If you must visit the ER, please contact the billing department of the hospital as soon as possible after the visit to ask them to renegotiate the billing for cash payment, or to set up a payment plan.

CHILDREN ONLY HEALTH COVERAGE

The federal government and some states, including California, offer coverage for children when their parents cannot afford private coverage.    There are income qualifications that have to be met.  For more information go to: http://www.insurekidsnow.gov/.

PRESCRIPTION DRUGS

Your physician may be able to provide you with samples of prescribed medications.  Community medical clinics may also have low cost medicines. Pharmaceutical Research and Manufacturers of America, the drugmakers’ trade group, provides free and low-cost drugs through its Partnership for Prescription Assistance http://www.pparx.org/. Individual drugmakers often have their own programs that offer free or reduced-cost drugs as well.

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.

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

 According to the study, 15% of employees at most companies account for 78% of all medical costs. By increasing participation in  preventive healthcare programs, companies can start decreasing the costs for employees.

According to a study by The American Journal of Health Promotion, employers who invested in worksite heath promotion saw a 28% reduction in sick leave absenteeism, 26% reduction in use of health care benefits and a 30% reduction in workers’ comp claims and disability management.

 Insulin and all health related supplies (such as syringes) will continue to be an eligible expense.  Any OTC for which you have a physician’s prescription or letter of medical necessity will be covered as an exception.

According to a recent study, this change in law regarding FSA eligible expenses will not greatly impact the reimbursements for and tax advantages of FSA enrollment, as there will most likely be other expenses that could be used to fill any void. 

If you are enrolled in an  FSA or Health Savings Account, Health Reimbursment Account , please contact your health insurance broker or employee benefit advisor for information, or contact our office at (888) 474-6627.