Posted April 24, 2012 by Megan DiMartino
Ann Carrns, New York Times
If you’ve seen your health insurance premiums increase along with your deductible, you’re not alone. A recent study by the Commonwealth Fund shows just how much more consumers are paying for employer-provided health insurance.
Total premiums — the amount paid by both employers and workers combined — for family coverage rose 50 percent from 2003 to 2010, to nearly $14,000 a year, the study found. (The fund is a private foundation that researches health policy issues. The report includes an interactive map showing premium increases by state.)
Workers, meanwhile, are shouldering more of that burden. Their share of annual premiums increased by 63 percent over the same period. In 2010, employee premiums for family-plan coverage averaged about $3,700, up from roughly $2,300 back in 2003.
As a result, “many working families have seen little or no growth in wages as they have, in effect, traded off wage increases just to hold onto their health benefits,” the report found.
What’s more, employees are paying more for less, because of higher deductibles — the amount workers pay out of pocket before coverage kicks in. The average family deductible nearly doubled over the seven years studied, to almost $2,000 in 2010.
The study used annual employer data from the federal government to examine insurance cost trends in the 50 states and the District of Columbia.
Whether the rate of cost growth can be slowed, the report said, depends on the Affordable Care Act, which was passed in March 2010 and intended to go into effect over several years. The act has, for instance, rules to limit what insurance companies can spend on administrative costs and can be “a platform for further action,” the report said.
In November, however, the Supreme Court agreed to hear a challenge to the healthcare overhaul law, throwing some of its provisions into question. (Oral arguments were held this week, for an unprecedented 3 days).
“With rising costs and eroding coverage, much is at stake for the insured and uninsured alike as the nation looks forward,” the report concluded.
If you have employer-based health insurance, how are you handling increases in your premiums and deductibles?
Posted April 18, 2012 by PHaynes
Key Dates for Self-Funded Plans to Keep in Mind
- 07-15-2012 Comments due to the IRS
- 08-08-2012 Public Hearing
- 10-01-2012 $1 per life fee assessed for plan years ending on/after 10-01-2012.
- 07-31-2013 Date upon which a 1/1 Plan must file an IRS Form 720 and pay fee
The Affordable Care Act (PPACA) includes a provision imposing an annual assessment on insurers and group health plans to fund a Patient-Centered Outcomes Research Institute (PCORI), which will assist patients, clinicians, purchasers and policy-makers in making informed health decisions by advancing comparative clinical effectiveness research.
The Institute is funded by a trust fund, which, in turn, is partially funded by fees paid by issuers of health insurance policies and sponsors of self-insured health plans. This “comparative effectiveness research fee” applies to policy/plan years ending on or after 10/1/2012.
Proposed regulations were published on April 12 and, although not yet final, this Proposed Rule provides more information on calculation, reporting and payment of the fee. Read the IRS’ proposed rules here: http://www.gpo.gov/fdsys/pkg/FR-2012-04-17/pdf/2012-9173.pdf
The fee applies to fully insured and self-funded medical plans covering U.S. residents; expatriate plans are excluded. It also applies to individual/family plans, voluntary/mini-med plans and retiree-only plans.
Health Reimbursement Accounts (HRAs) linked to a self-insured health plan are exempt; the employer will pay one fee for the medical plan only. But if the HRA is linked to an insured health plan, the employer will pay the fee for the health plan and the carrier will pay for the insured plan – two fees will be collected.
The fee does not apply to Medicare, Health Savings Accounts (HSAs) or ERISA excepted benefits (such as non-bundled dental and vision).
Fees, Payment and Reporting
The initial annual fee is $1 per average covered life. The fee is not assessed only upon employees, but includes a complicated series of calculations designed to capture the total number of covered lives (including spouses and dependents). The fee increases to $2 in 2013, then to an amount indexed to national health expenditures until 2019, when it is scheduled to end.
Reporting and payment using IRS Form 720 is required by July 31 of the calendar year immediately following the last day of the policy or plan year. For example, the fee for the policy or plan year ending on December 31, 2012 must be filed by July 31, 2013. Liability for a plan year ending on June 30, 2013 must be filed by July 31, 2014.
Comment Period and Public Hearing
Comments are due on 7/15/2012 (90 days after official publication). There will also be a public hearing on August 8, 2012. Anyone wishing to present oral arguments must submit written or electronic comments, an outline of topics to be discussed and the time to be devoted to each topic by July 30, 2012.
Fee Calculation Methodologies
Employers and health plans may choose one option from the following:
- Actual Count Method: Add the total number of covered lives for each day of the policy year and divide by the number of days in the policy year.
- Snapshot Method: Add the totals of lives covered on one date in each quarter of the policy year (or more dates if an equal number of dates is used for each quarter) and divide by number of dates on which a count was made. The date(s) for each quarter must be the same (e.g., 1st day of quarter, last day of quarter, or 1st day of each month).
- Member Months Method: The sum of the totals of lives covered on pre-specified days in each month of the reporting period) as reported on the National Association of Insurance Commissioners (NAIC) Supplemental Health Care Exhibit filed for that calendar year. The average number of covered lives under the policies in effect for the calendar year equals the member months divided by 12.
- State Form Method: An insurer not required to file NAIC annual financial statements may calculate covered lives for the calendar year using a form filed with the insurer’s state of domicile and a method similar to the member months method, if the form reports the number of covered lives in the same manner as member months are reported on the NAIC Supplemental Health Care Exhibit.
Supreme Court Decision Looms
The U.S. Supreme Court’s decision on PPACA’s constitutionality (among the other items/issues that were debated) is due by the end of the court’s current term, June 30th. Assuming PPACA remains the law of the land, the next step for this fee will be the close of the comment period (July 15, 2012), a public hearing August 8, 2012 and then IRS Form 720 completion and payment of the fee in July of 2013 (for 1/1 plans). Please contact your Account Executive or Account Manager for additional information or assistance.
- IRS Proposed Rule (61 pages) – link expired
- IRS Form 720 (Note – this link is to the 2012 Form 720, which has no place to enter the number of covered lives yet. The 2013 form will).
- IRS Notice of proposed rulemaking and notice of public hearing (scheduled for August 8, 2012), Federal Register, April 17, 2012.
- IRS Notice 2011-35, Request for Comments on Funding of Patient-Centered Outcomes Research through Fees Payable by Issuers of Health Insurance Policies and Self-Insured Health Plan Sponsors
Posted April 18, 2012 by Megan DiMartino
Join us for this complimentary, educational webinar and learn about upcoming changes and requirements for Summary Plan Descriptions (SPDs). Every qualified plan covered under Title I of ERISA is required to have an SPD. This must be written in a manner intended to be understood by the average participant, and must summarize a plan’s terms and operation for participants, beneficiaries and alternate payees, as well as explain their rights under the plan. Recent court cases have highlighted the risks of having inaccurate, poorly written or incomplete SPDs. Expert speaker Attorney Patrick Haynes will give a brief overview on the basic content requirements, and address a recent court case, Cigna vs. Amara, illustrating how SPD deficiencies can create significant legal challenges and potential financial consequences for plan sponsors, plan administrators and their advisors. Webinar highlights will include:
* Legal Requirements of what must be included in the SPD to remain compliant
* Timelines for Delivery
* Conflicts Between Plan Language and SPD, Which Controls?
* Remedies Available for Misinformation in SPD
* Consequences of Misleading Plan Communications
Space is limited.
Reserve your Webinar seat now at: https://www1.gotomeeting.com/register/912286449
Posted April 10, 2012 by Megan DiMartino
It’s been a busy time in the group benefits and healthcare reform field, and we’ve covered a lot of ground with blogs, articles, webinars, and more. Let’s recap on a few of our most popular topics regarding healthcare expenditures, employee communications, and the efficacy of wellness plans.
- Chronic Diseases May Up Out-of-Pocket Costs for Insured
- Employee Communication Enhancement & Benefits Administration
- How to Cut Healthcare Costs & Make Wellness Work
For more, check back on our blog, our webinars page, or contact us today.
Posted April 4, 2012 by Megan DiMartino
Offering a dedicated call center and customer service line to handle the employee benefits questions you receive will not only make life easier for your employees, but allow your HR department to focus on the bigger picture. Using dedicated teams and access points provides us with a variety of metrics to measure the quality of service and performance for your business. We monitor calls by team and by representative to ensure that your employees are serviced to your standards.
The existence of the call center, the 800 number, and dedicated email address are widely communicated in all benefit communication materials, including open enrollment workbooks, payroll stuffers, educational material and employee ID cards. The customer service call center has convenient hours of operations to ensure employees have time to address any benefit issues they may have. AP Benefit Advisors Customer Service Representatives are extremely experienced in assisting employees, averaging over 10 years of experience in employee benefits customer service.
Employees calling AP Benefit Advisors with benefit questions speak to a human operator, on average, within 35 seconds. Our team of dedicated representatives has made it possible for our overall customer satisfaction rate to be in the 99th percentile, well above the industry average.