Thursday, December 16, 2010

UHC announces new retail pharmacy network and member engagement program

Beginning January 1, all UnitedHealthcare (UHC) customers will automatically be part of a new retail pharmacy network. UHC projects any member disruption due to a pharmacy not participating in the network to be less than 1% and will not occur until March 1, 2011. Affected members will be sent a letter on February 1, notifying them that their current pharmacy is no longer a network pharmacy and providing a list of three network pharmacies in their area.

UHC is also introducing their At-the-Pharmacy engagement program, which encourages pharmacists to speak with members about lower-cost medications. UHC will provide pharmacies with benefit-specific information on lower-cost options for 22 targeted medications, as well as how much the member can save.

For more information, click to access the full News Release from UHC.

Monday, December 13, 2010

Federal judge rules individual mandate unconstitutional

U.S. District Judge Henry E. Hudson declared a key provision of the Obama administration’s health reform law unconstitutional Monday in Richmond, VA.

Hudson is the first federal judge to strike down the law, siding with the suit brought by Virginia Attorney General Ken Cuccinelli II (R). The lawsuit is one of 25 legal challenges to the law, including one filed by 20 states in Florida, which remains pending. In two other lawsuits, judges in Michigan and Lynchburg, VA, have found the same provision to pass legal muster.

Hudson rejected the argument that the government has the authority under the Commerce Clause to require individuals to buy health insurance, stating “neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.”

Hudson’s ruling will deal a significant political blow to the current legislation, as much of the law’s framework hinges on an individual mandate to purchase health insurance. The mandate is not set to take effect until 2014.

The Virginia lawsuit would ordinarily be heard next by the Fourth Circuit Court of Appeals; however, Cucinelli has indicated he would like to move directly to the U.S. Supreme Court. It is not yet clear whether the White House will agree to this request. Regardless, the case will ultimately be determined by the Supreme Court.

Friday, December 10, 2010

BCBSNC issues member letters regarding FDA withdrawal of propoxyphene

On December 2, BCBSNC mailed letters to approximately 18,300 commercial members who have had a prescription for a medication containing propoxyphene in the past six months.

Medications containing propoxyphene (e.g., Darvon and Darvocet), a narcotic-like pain reliever, were withdrawn from the U.S. market by the U.S. Food and Drug Administration on November 19, 2010. This action was taken because of data from a new study that evaluated the effects that increasing doses of propoxyphene have on the heart. The results of the study showed that propoxyphene, taken at therapeutic doses, resulted in significant changes to the electrical activity of the heart that can increase the risk for serious abnormal heart rhythms.

Patients currently taking Darvon or Darvocet should talk to their doctor right away about possible alternatives to treat their pain.

For more information, click to access the Sample Member Letter and Frequently Asked Questions.

Thursday, December 9, 2010

Health reform allows for simple cafeteria plans for small employers

The Patient Protection and Affordable Care Act (PPACA) modified cafeteria plan regulations to allow “simple cafeteria plans” for employers with 100 employees or less, effective for plan years beginning after December 31, 2010. Prior to passage of PPACA, IRS rules governing cafeteria plans did not include self-employed individuals in the definition of “employee.” As such, sole proprietors, partners, shareholders of 2% or more in S-corporations and members of limited liability companies were unable to participate in cafeteria plans.

With simple cafeteria plans, owners of small businesses may now participate as individuals, making it more likely they will offer these plans to their employees. The new law has created a “safe harbor” for qualified small employers from certain nondiscrimination requirements applicable to cafeteria plans as long as certain eligibility, participation and minimum contribution requirements are met.

Eligibility Requirements
• Employers who averaged 100 or fewer employees in the previous 2 years can qualify for a simple cafeteria plan
• Companies not in existence for the previous 2 years must reasonably expect to average 100 or fewer employees during the current year
• Once an employer meets this eligibility requirement and establishes a simple cafeteria plan for any year, it will continue to be treated as an eligible employer for subsequent years until the year after the first year it averages 200 employees or more
• Aggregation rules are used to prevent the employer from creating additional subsidiaries to avoid the limitation on the number of employees

Participation Requirements
• Employees who worked at least 1,000 hours in the previous year must be eligible to participate
• Every eligible employee must have the ability to elect any benefit available under the plan
• Employees under age 21, employees with less than one year of service with the company, employees covered under a collective bargaining agreement and nonresident aliens working outside the US may be excluded from participating

Contribution Requirements
To establish a cafeteria plan, employers must make a contribution for every qualified employee, whether or not the employee makes a salary deferral to the plan. A “qualified employee” includes any employee who is eligible to participate in the plan and who is not a highly compensated employee or a key employee.

The contribution amount must be determined based on one of the following:
• A uniform percentage that is at least 2% of the employee’s compensation; or
• An amount not less than the lesser of (a) 6% of the employee’s compensation for the plan year, or (b) twice the amount of the salary reduction contributions of each qualified employee.

If the employer relies on the satisfaction of (b), it cannot contribute to highly compensated employees or key employees at a rate greater than the matching contribution it provides to all other employees. The employer must also use the same method to calculate the minimum contribution for all non-highly compensated employees.

Safe Harbor from Nondiscrimination Testing
Once an employer meets the contribution and eligibility requirements above, the plan is treated as meeting the following nondiscrimination tests, as applicable:
• The eligibility test in Code Section 125(b)(1)(A)
• The contributions and benefits test in Code Section 125(b)(1)(B)
• The key employee concentration test in Code Section 125(b)(2)
• The nondiscrimination requirements for group term life insurance in IRS Section 79(d)
• The requirements for self-insured medical expense reimbursement plans in IRS Section 105(h)
• The dependent care assistance requirements in IRS Section 129(d) paragraphs (2), (3), (4) and (8)

Further guidance is needed to determine whether the safe harbor also applies to the health reform requirement that fully insured group health plans must now comply with Code Section 105(h)(2) requirements.

For more information, click to access our Legislative Brief on Simple Cafeteria Plans. We suggest employers consult with their tax advisor before establishing a simple cafeteria plan.

Friday, December 3, 2010

IRS issues final guidance on small employer tax credit

On Thursday, the IRS released final guidance for small employers eligible to claim the new small business tax credit for the 2010 tax year. The release includes a one-page form and instructions small employers will use to claim the credit for 2010.

The following new documents are posted on IRS.gov:
• New Form 8941, Credit for Small Employer Health Insurance Premiums
Instructions to Form 8941
Newly revised Form 990-T
Notice 2010-82

The instructions and Notice 2010-82 are designed to help small employers correctly figure and claim the credit.

Thursday, December 2, 2010

Webinar on compliance obligations for 2011

Senn Dunn Insurance invites you to participate in a webinar on January 6th, from 1:00 - 2:00 PM Eastern.
Reserve your seat now at: https://www1.gotomeeting.com/register/309228953

2010 was a wild year for employee benefit and human resource managers. While health reform dominated most of the attention, there were a number of other benefit compliance issues employers struggled to deal with. This session will review a variety of compliance issues from 2010, and will provide a preview of potential new compliance obligations in 2011 as we begin the new year.

Topics will include:
• Spousal carve-out and surcharge issues
• Domestic partner coverage
• Children’s Health Insurance Program (CHIP) employer notice requirements
• Health reform issues specific to 2011

Presenter: Bob Radecki, President, Benefit Comply, LLC
Bob Radecki has more than 25 years experience in the HR and employee benefits industry helping employers deal with difficult benefit and compliance matters. Previously, Bob founded and served as President of A.E. Roberts Company, a nationally recognized compliance consulting and training firm. He has served as the principal HIPAA consultant to a number of health insurance companies, and is recognized as a leading expert on a variety of benefit compliance issues including COBRA, FMLA, Health Reform and more. Bob has been the featured speaker at numerous industry events and conferences, and has published a number of articles concerning various compliance issues.

Wednesday, December 1, 2010

Senate rejects repeal of Form 1099 provision from health reform law

The Senate fell six votes short of repealing health reform’s Form 1099 provision yesterday, by a vote of 61-35. According to the Patient Protection and Affordable Care Act (PPACA), businesses will be required to file a Form 1099 for every vendor that sells them more than $600 in goods. The measure was added to the health reform law as a way to collect as much as $19 billion in additional tax revenue to offset the cost of new insurance mandates.

Proponents of repeal have stated that they will introduce the measure again after the 112th Congress convenes in January.

Tuesday, November 23, 2010

HHS releases guidance on health reform MLR requirement

On Monday, November 22nd, the Department of Health and Human Services (HHS) released regulations detailing the medical loss ratio (MLR) requirement of the Patient Protection and Affordable Care Act (PPACA). The MLR rule requires that insurance companies spend at least 80 cents per premium dollar on medical care and quality, 85 cents per premium dollar for large group plans.

The regulations follow the National Association of Insurance Commissioners recommendations on deducting federal and state taxes from the MLR. They also allow “mini-med” plans to follow a different calculation formula than other plans in 2011.

Insurance companies that do not meet the medical loss ratio standard will be required to provide rebates to customers, with the first round of rebates beginning in 2012.

For more information on the MLR rule, view the Medical Loss Ratio Fact Sheet or the HHS Regulations.

Friday, November 19, 2010

Grandfathered status amended to allow for change in carriers

On November 15th, the Departments of Treasury, Labor, and Health and Human Services announced they are amending the Interim Final Regulations (IFR) on grandfathered health plan status. The amendment allows employers to switch insurance carriers and/or change their funding from Administrative Services Only (ASO) to fully insured without losing grandfathered status.

Under the amended rules, employers that offer the same level of coverage through a new carrier can remain grandfathered as long as the changes do not result in significant cost increases, a reduction in benefits or the other prohibited changes specified in the IFR.

This amendment is effective November 17, 2010 and is not retroactive, nor does it apply to individual policies. As such, insured plans that changed insurance carriers or self-funded plans that became fully insured prior to November 17, 2010 will still lose grandfathered status.

The original IFR stated that changing insurance carriers would cause an insured group health plan that was in effect on March 23, 2010 to lose its grandfathered status.

Friday, November 12, 2010

BCBSNC releases letter to assist groups in communicating Part D creditable coverage

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) created an ongoing notification requirement for groups with subscribers or dependents eligible for Medicare, even if the group doesn't offer retiree drug coverage.

It is the employer group's responsibility to provide member notification of their plan's status as creditable or non-creditable under Medicare Part D. It is recommended that groups consult the CMS website for updates.

BCBSNC has created the following Creditable Coverage Communication to assist groups in communicating information to Medicare eligible retirees about the group’s drug coverage and whether it is creditable.

The letter includes:
• General information about the MMA requirements
• A list of BCBSNC standard prescription drug plans and estimates of whether they are creditable, non-creditable or inconclusive
• A list of BCBSNC standard high deductible health plans with integrated prescription drug benefits and estimates of whether they are creditable, non-creditable or inconclusive

Friday, November 5, 2010

Webinar on Section 105(h) non-discrimination rules for fully-insured health plans

Senn Dunn Insurance invites you to participate in a webinar on November 30th, from 1:00 - 2:00 PM Eastern.
Reserve your seat now at: https://www1.gotomeeting.com/register/988142104

The Patient Protection and Affordable Care Act (PPACA) requires that fully-insured plans which lose grandfathered status comply with the requirements of section 105(h)(2) of the Internal Revenue Code. The 105(h) rules prohibit health plans from discriminating in favor of highly compensated individuals. These rules already apply to self-funded plans, but will now also apply to fully-insured plans, which have lost grandfathered status, effective on the first plan year beginning after September 23, 2010.

The penalty applicable to an employer who sponsors a fully-insured plan which violates the 105(h) rules is severe. The employer would be liable for an excise tax of up to $100 per day per employee “discriminated against.” This session will help employers understand the rules and what they need to do to make sure their benefits, eligibility, and contribution structure are in compliance.

Presenter: Bob Radecki, President, Benefit Comply, LLC
Bob Radecki has more than 25 years experience in the HR and employee benefits industry helping employers deal with difficult benefit and compliance matters. Previously, Bob founded and served as President of A.E. Roberts Company, a nationally recognized compliance consulting and training firm. He has served as the principal HIPAA consultant to a number of health insurance companies, and is recognized as a leading expert on a variety of benefit compliance issues including COBRA, FMLA, Health Reform and more. Bob has been the featured speaker at numerous industry events and conferences, and has published a number of articles concerning various compliance issues.

Thursday, November 4, 2010

Assistance Fund helps insured cover prescription co-pays

The Washington Post /Orlando Sentinel (11/3, Santich) reports that earlier this year, Edward Hensley and Jeff Spafford "launched the Assistance Fund, a national charity that covers pricey prescription-drug costs for those who have insurance but can't afford their co-pay," which may run up to thousands of dollars for certain medicines.

The charity serves an unmet need, as many pharmaceutical "companies typically have their own patient-assistance programs for the uninsured, options for the insured are more limited." The Assistance Fund will help "patients who earn up to seven times the federal poverty standard—income of $22,050 for a family of four." The charity has raised $20 million in donations, mostly from large corporations, including drug manufacturers. Currently, the fund is helping some 3,000 Americans, a number that Hensley and Spafford would like to greatly increase in 2011.

For more information, visit http://theassistancefund.org/.

Thursday, October 28, 2010

Updated information on Medicare primary payment notice process from BCBSNC

On October 22, Blue Cross Blue Shield of North Carolina (BCBSNC) added clarifying information to their September 10th Employer News Article on the Medicare Primary Payment Notice (PPN).

Specifically, BCBSNC updated their answer to the following question:
What will occur if employers do not complete and return the PPN worksheets to MSRPC?

If you do not complete and return the worksheet to the MSPRC within 45 days of the issue date of the letter, a demand (referred to as a Medicare Secondary Payer demand) will be sent for repayment for all of the claims associated with the beneficiaries and corresponding coverage dates identified in this notice. If the MSPRC does not receive the correct coverage information from employers or BCBSNC, then the Medicare Secondary Payment (MSP) demands that are issued may be incorrect. You can avoid having to submit multiple valid documented defenses by correcting errors on the PPN.

Please be aware that an MSP demand may be issued regardless of whether or not a PPN worksheet is submitted by BCBSNC or the employer. The purpose of the PPN is to verify eligibility and coverage. In some cases, Medicare beneficiaries are covered under types of policies (such as retiree, COBRA or long term disability policies) where Medicare is still considered the "primary" payer. In other cases, Medicare beneficiaries are covered under types of policies where Medicare is not the "primary" payer. The PPN process is intended to improve the accuracy of Medicare Secondary Payer (MSP) demands, rather than to eliminate them.

For more information, please see our original August 31st post on this topic, the MSPRC Presentation or the Sample PPN.

Friday, October 15, 2010

Judge to allow challenge against individual mandate to proceed

A federal judge in Florida on Thursday ruled that the main legal challenge to the new health care law by officials from 20 states could move forward. US District Judge Roger Vinson stated that he was not persuaded that the individual mandate requiring Americans to purchase health insurance is constitutional.

As Vinson has formally rejected the federal government’s motion to dismiss the suit, it will proceed to a full hearing on December 16th.

Wednesday, October 13, 2010

BCBSNC announces new iPhone app to access health information

Today BCBSNC announced the launch of HealthNAV, a new mobile application designed to help customers access information and manage their personal health care. The free app is now available for download by customers with an Apple iPhone, iPad or iPod Touch.

The app features four functions including an urgent care finder, a prescription drug finder, customer service access and a health notes section.

For more information, see the BCBSNC News Release.

Tuesday, October 12, 2010

IRS releases draft Form W-2 and delays implementation for employers

The IRS today issued a draft Form W-2 for 2011, which employers use to report wages and employee tax withholding. The IRS also announced that it will defer the new requirements for employers to report the cost of coverage under an employer-sponsored group health plan, making that reporting optional for employers in 2011.

The Treasury Department and the IRS have determined that this relief is necessary to provide employers time to make changes to their payroll systems and procedures to comply with the new reporting requirement. The IRS will be publishing further guidance later this year. The IRS continues to stress that the amounts reportable are not taxable.

For more information, please refer to the IRS Brief, IRS Notice 2010-69, and the Draft Form W-2.

Thursday, September 30, 2010

HHS posts update on claims submission process for Early Retiree Reinsurance Program

The Department of Health and Human Services (HHS) has posted an ERRP Update on their website regarding preparations for receiving plans’ retiree lists and claims data submissions for the Early Retiree Reinsurance Program (ERRP).

HHS states they will be ready to begin accepting retiree lists in early October, and plans are encouraged to begin preparing for the consolidation and submission of that information. HHS has not yet specified what information should be submitted in the retiree list, but it is likely to include the following member information:
• Social security number
• Name (first, last and middle initial)
• Gender
• Date of birth
• Relationship to early retiree
• Date of retirement (or of coverage under the early retirement plan)

The guidance further clarifies the ERRP reimbursement policy by describing the types of medical items and services which are generally excluded from Medicare coverage. These medical items and services will not credit the program’s cost threshold and will not be reimbursed.

The update also specifies that HHS will begin accepting summary-level claims data in mid-October. HHS also makes reference to submitting more detailed claims information at a later date. It is not yet clear what the format or frequency of either submission type will be.

Friday, September 24, 2010

Senate rejects repeal of 1099 provision in health reform law

In a series of procedural votes, the Senate chose not to move forward on two amendments that sought to completely or partially repeal a tax reporting provision in the new health reform law.

Respective amendments offered by Sens. Mike Johanns (R-Neb.) and Bill Nelson (D-Fla.) each sought a different solution for paring down the reform law's 1099 provision, which in 2012 will require any business that purchases more than $600 worth of goods or services from another business to submit a 1099 tax form to the Internal Revenue Service.

The requirement is expected to save $17 billion over 10 years, but lawmakers and business groups have called for its repeal, claiming it would put a huge tax burden on small businesses. “Even the White House now admits they went too far and their mandate will hurt small businesses,” said Senate Republican Leader Mitch McConnell (R-Ky.).

Nelson, who had suggested exempting businesses with 25 or fewer employees from the requirement, argued that Johann's approach would “gut the reform bill” in order to pay for the repeal.

Neither amendment achieved the 60 votes necessary to proceed to a final vote for possible inclusion in the Small Business Jobs Act.

The FDA restricts use of diabetes drug Avandia

The Food and Drug Administration announced Thursday that access to the diabetes drug Avandia will be restricted to patients with Type 2 diabetes whose condition cannot be controlled with other medications.

The drug has been linked to increased risks of cardiovascular events, such as heart attack and stroke, in patients taking the drug.

Also Thursday, the European Medicines Agency recommended that Avandia be taken off the market. The EMA is Europe’s counterpart to the U.S. Food and Drug Administration (FDA), and is responsible for the approval of all drugs and medical devices sold in Europe. This decision must be ratified by the European Commission before going into effect.

BCBSNC introduces Blue Points promotions for members

Blue Cross Blue Shield of North Carolina (BCBSNC) is introducing three promotions for their Blue Points wellness rewards program.

Blue Points Mailings
Beginning September 8th, two direct mail pieces were sent to the homes of all eligible Blue Points subscribers, approximately 750,000 households. Two different versions were mailed but each household will receive only one version.

Each version is designed to encourage members, whether they’ve used Blue Points before or not, to log into the program and receive 100 free bonus Blue Points. The promotion code Easy100 is provided in each mailing for the members to use.

Blue Points Scratch-off Card
Blue Points scratch-off cards are designed like a lottery card—the member scratches off a silver film to see how many bonus points they win. Members can win points for the following amounts:
• 100 points = $1.00
• 250 points = $2.50
• 500 points = $5.00
• 1000 points = $10.00

These cards are available through Senn Dunn for active group members and will expire on 12/31/10.

Blue Points 5K at the SAS Championship
BCBSNC is sponsoring the inaugural Blue Points 5K on Saturday, September 25 at 8:00 am at Prestonwood Country Club in Cary. Runners will run on the cart path of the golf tournament course before the pros tee off at 10:00 am. Participation in the race grants you access to the tournament on Saturday and there is no need to purchase a Grounds Pass ticket.

If you are interested in participating, you can register online or register on race day. The registration tables open at 7:00 am.

The SAS Championship is a Champions Tour series event. For more information, visit http://saschampionship.com/.

Thursday, September 23, 2010

Early health reform provisions go into effect

Today, September 23, 2010, marks the effective date that some of the earliest provisions of the Patient Protection and Affordable Care Act (PPACA) will go into effect with the start of your new plan year. For example, if your plan renews on January 1st, these provisions will not be effective until January 1st, 2011.

As a reminder, below are the major changes that go into effect:
• Dependent coverage for eligible dependents extended up to age 26
• Restrictions of rescissions other than for fraud or intentional misrepresentation of an important fact on applications
• No pre-existing condition exclusion for children under age 19
• No lifetime dollar limits on health benefits and restricted annual dollar limits
• Ban on discrimination in favor of highly compensated workers*
• Preventive services with no cost-sharing*
• New requirements for internal claims and appeals and external review processes for all health plans and health insurance carriers*
• Right to designate a primary care provider and access to emergency services, pediatricians and OB/GYNs*

*not applicable to grandfathered health plans

These changes are being implemented by your insurance carrier to ensure requirements of the law are met. Remember, the provisions go into effect at the start of your new plan year.

Friday, September 17, 2010

Prescription drugs no longer available in 90-day supply at retail pharmacies through UHC

Effective August 1, 2010, UnitedHealthcare (UHC) members can receive a 3-month supply of certain maintenance medications through mail order only. Previously, members could receive a 3-month supply of these medications at any UHC network retail pharmacy.

To continue receiving a 3-month supply, members must mail order their medication or refill the prescription monthly at a network retail pharmacy. Members should be reminded that over 300 generic prescriptions are available in a 90-day supply for as little as $10 at several national chain retail pharmacies, including Wal-Mart, Target, Walgreens and CVS. This option may be less expensive than mail order through UHC depending on your medication.

PPACA event for small and mid-size employers

The Triad Association of Health Underwriters (TAHU) is hosting a special event on the Patient Protection and Affordable Care Act (PPACA) and its implications for small and mid-size employers. The purpose of this seminar is to educate stakeholders on the impact of the PPACA provisions on employer sponsored health plans. While most federal and state regulations have yet to be written, this seminar will share the most up-to-date information available. All business owners, CEOs, CFOs, HR professionals and CPAs who are responsible for employee benefit decisions are encouraged to attend.

The event will be held:
Monday, October 11, 2010
2:30 - 4:00pm
Embassy Suites, 204 Centreport Dr, Greensboro

This event is open to the public and space is limited. Click HERE to RSVP and reserve your seat!

BCBSNC announces formulary changes effective October 1

Effective October 1, 2010, several drugs will be moved from Tier 2 to Tier 3 of BCBSNC's commercial prescription drug formulary (for under-65 individual and group members). This may result in a higher copay for BCBSNC members taking these medications. Beginning this week, BCBSNC will mail letters about this change to approximately 38,000 impacted members.

Click HERE to view the formulary changes, frequently asked questions and sample member letter.

Friday, September 10, 2010

Further guidance issued on the use of FSA, HRA and HSA funds on over-the-counter drugs

On September 3, the IRS released further clarification on the health reform provision restricting the use of Flexible Spending Account (FSA), Health Reimbursement Account (HRA) and Health Savings Account (HSA) funds for over-the-counter (OTC) medications.

While some OTC items will maintain their current eligibility status, OTC drugs, medicines and biologicals will now require a prescription from a health care provider effective January 1, 2011. Additionally, participants will no longer be able to purchase these items with their debit card. These OTC items will have to be purchased using some other method and the participant will have to submit a Reimbursement Request Form with the receipt and prescription to be reimbursed.

The IRS uses the following example to illustrate proper substantiation: “A customer receipt issued by a pharmacy which identifies the name of the purchaser (or the name of the person for whom the prescription applies), the date and amount of the purchase and an Rx number satisfies the substantiation requirements for over-the-counter medicines or drugs, as does a receipt without an Rx number accompanied by a copy of the related prescription.”

Until further IRS guidance regarding the definition of medical expenses is released, it is likely that the following OTC products will no longer be eligible without a prescription:
• Acid Controllers
• Digestive Aids
• Allergy & Sinus
• Feminine Anti-Fungal/Anti-Itch
• Antibiotic Products
• Hemorrhoidal Preps
• Anti-Diarrheals
• Laxatives
• Anti-Gas
• Motion Sickness
• Anti-Itch & Insect Bite
• Pain Relief
• Anti-parasitic Treatments
• Respiratory Treatments
• Baby Rash Ointments/Creams
• Sleep Aids & Sedatives
• Cold Sore Remedies
• Stomach Remedies
• Cough, Cold & Flu

Special Temporary Statutory Change
In order to allow retailers some time to adjust their inventory systems, the IRS reports that it “will not challenge the use of Health FSA and HRA debit cards for expenses incurred through January 15, 2011. However, on and after January 16, 2011, over-the-counter medicine or drug purchases at all providers and merchants (whether or not they have an inventory information approval system (IIAS) must be substantiated before reimbursement may be made.” Participants should be prepared to obtain receipts and manually submit claims for reimbursement as some merchants may not be ready to allow for the January 15, 2011 statutory change for debit card purchases.

Additional Information for Clients of Flores & Associates
Flores is updating all plan communication materials with this change in mind to be ready for the enrollment of 2011 calendar year plans. Any groups with plans that renew before January 1, 2011 will need to insure that their participants are aware of the change in order to appropriately budget for their FSA. For groups that have already enrolled plans that extend past the January 1, 2011 date, Flores will be preparing an electronic notification to be e-mailed to all participants notifying them of this change before the end of the year.

Thursday, September 9, 2010

Disclosure requirement for grandfathered health plans

To maintain grandfathered status, a plan must include a statement, in any plan materials provided to a participant or beneficiary describing the benefits provided under the plan, that the group believes it is a grandfathered health plan within the meaning of the Patient Protection and Affordable Care Act (PPACA). The plan must also provide contact information for any questions or complaints.

This requirement applies to the first plan year that begins on or after September 23, 2010. The following model language can be used to satisfy this disclosure requirement:

This [group health plan or health insurance issuer] believes this [plan or coverage] is a “grandfathered health plan” under the Patient Protection and Affordable Care Act (the Affordable Care Act). As permitted by the Affordable Care Act, a grandfathered health plan can preserve certain basic health coverage that was already in effect when that law was enacted. Being a grandfathered health plan means that your [plan or policy] may not include certain consumer protections of the Affordable Care Act that apply to other plans, for example, the requirement for the provision of preventive health services without any cost sharing. However, grandfathered health plans must comply with certain other consumer protections in the Affordable Care Act, for example, the elimination of lifetime limits on benefits.

Questions regarding which protections apply and which protections do not apply to a grandfathered health plan and what might cause a plan to change from grandfathered health plan status can be directed to the plan administrator at [insert contact information]. [For ERISA plans, insert: You may also contact the Employee Benefits Security Administration, U.S. Department of Labor at 1-866-444-3272 or www.dol.gov/ebsa/healthreform. This website has a table summarizing which protections do and do not apply to grandfathered health plans.] [For individual market policies and nonfederal governmental plans, insert: You may also contact the U.S. Department of Health and Human Services at www.healthreform.gov.]

New BCBSNC processes for late payments and reinstatement

Please note the following process changes BCBSNC has made regarding late premium payments.

Overdue Payment Notice
Effective September 10, BCBSNC will begin notifying groups of their account status earlier. For groups that have not yet paid their premiums for the current month, a notice will be mailed on the 10th day of the month. Currently, this notice is mailed on the 21st. Claims for services rendered after the paid-through date will be suspended as of the 10th day of the month. Employees will still be able to fill prescriptions during the claim suspension period.

Additionally, the BCBSNC Overdue Payment Notice has been revised to include more detail regarding the employer group’s legal and contractual obligations to their employees with health benefits.

Termination Letter
For groups that have not paid their premiums for the previous month of coverage, BCBSNC will continue to mail notices of termination 37 days from the first day of the month for which payment is due. The BCBSNC Termination Letter has been revised to provide clear guidelines and accurate information about the termination.

Due to new process efficiencies, BCBSNC will begin processing terminations (for non-payment) 38 days from the first day of the month for which payment is due. Today terminations are processed between the 45th and 50th day from the first day of the month in which payment is due.

Reinstatement Policy
BCBSNC has revised and clarified its reinstatement policy, effective October 1, 2010, as follows:
• Requests must be made within 30 days from the date of the group’s cancellation letter.
• Only one reinstatement per group will be permitted in a 12-month period.
• A group cannot have had more than one instance of non-sufficient funds within the last 12-month period.
• The group must be able to pay to the current billed period noted in BCBSNC’s systems.
• Payment must be in the form of a cashier’s check or money order and received within 3 business days of the approval to reinstate.

Tuesday, September 7, 2010

HHS issues guidance on waiver from annual limit requirements for mini-med plans

Late last week, the Department of Health and Human Services (HHS) ruled that a plan or insurer may apply for a waiver from the annual limit requirements for the plan year beginning between September 23, 2010 and September 23, 2011.

Waiver applications must be submitted to HHS (by mail or e-mail) at least 30 days before the beginning of the plan year, and will be processed within 30 days of receipt. However, for a plan year that begins before November 2, 2010, the application must be submitted 10 days before the beginning of the plan year. HHS will process the application no later than 5 days in advance of such a plan year.

The waiver will only last one year and a plan or insurer must reapply for any subsequent plan year prior to January 1, 2014, when the waiver process will expire in accordance with future guidance issued by HHS.

The waiver must include:
• The terms of the plan for which a waiver is sought;
• The number of individuals covered by the plan;
• The current annual limits and rates of the plan;
• A brief description of why compliance with the restricted annual limits would result in a significant decrease in access to benefits or a significant increase in premiums paid by those covered, along with supporting documentation; and
• An attestation, signed by the plan administrator or CEO of the insurance issuer, certifying (1) that the plan was in force prior to September 23, 2010; and (2) that the application of the restricted annual limits would result in a significant decrease in access to benefits or a significant increase in premiums paid.

For more information, click to access the HHS Sub-Regulatory Guidance.

Requirement for federal external review process for self-funded plans

In July, the IRS, DOL and HHS issued an Interim Final Rule (IFR) containing expanded rules for internal claims and appeals of those claims. The IFR also covers a state-based external review process, but did not provide complete guidance on the required federally-based external review system.

On August 23, the DOL published Technical Release 2010-01, which creates a safe harbor that will apply to non-grandfathered, self-funded plans that are subject to the federal external review process for plan years beginning on or after September 23, 2010. This interim safe harbor will apply for plan years beginning on or after September 23 until superseded by future guidance on the federal review process that is currently being developed, to be released by July 1, 2011.

While the safe harbor is in effect, the DOL and IRS will not penalize any plan that complies as follows:

Compliance with NAIC Uniform External Review Model Act
The DOL and IRS will not take enforcement action against any plan that complies with the procedures set forth in the Technical Release 2010-01, based on the Uniform Health Carrier External Review Model Act from the National Association of Insurance Commissioners (NAIC).

Compliance with state external review processes
Alternatively, self-insured employers who do business in a state that already has an external review requirement can be exempt from federal requirements if they agree to comply with the state’s existing external review process AND the state agrees to apply its program to self-insured employers.

For more information, click to view the DOL Fact Sheet, NAIC Uniform Health Carrier External Review Model Act, and the Interim Final Rule.

Friday, September 3, 2010

2010 Mid-Market Survey Seminar cancelled, details on webinar to follow

Thank you to all who participated in our 2010 Employee Benefits Mid-Market Survey! We would like to inform you that we have decided to share the survey results via webinar. As a result, we have cancelled the seminar scheduled for September 16.

A member of your Senn Dunn team will coordinate delivery of your complimentary Individual Custom Report to you prior to the webinar. Details on the webinar date and time will be provided shortly.

We look forward to reviewing the local and national survey results with you!

Enrollment opportunity due to elimination of lifetime dollar limits

Under the Patient Protection and Affordable Care Act (PPACA), health plans can no longer limit overall plan lifetime dollar amounts for plan benefit years beginning on or after September 23, 2010.

According to the interim final rule, plans must provide a notice and enrollment opportunity to otherwise eligible individuals who reached a lifetime limit prior to the effective date of these rules.

The plan must provide the notice and enrollment opportunity by the first day of the first plan year that begins on or after September 23, 2010. Below is model notice language that employers should provide to employees in conjunction with their open enrollment period.

Model Notice
The lifetime limit on the dollar value of benefits under [Insert name of group health plan or health insurance issuer] no longer applies. Individuals whose coverage ended by reason of reaching a lifetime limit under the plan are eligible to enroll in the plan. Individuals have 30 days from the date of this notice to request enrollment. For more information contact the [insert plan administrator or issuer] at [insert contact information].

For your convenience, we have created a template Enrollment Opportunity Notice to address both the lifetime dollar limit and adult children enrollment opportunities. You can use this notice to communicate these opportunities to employees.

For more information on lifetime and annual dollar limits, please refer to the previous post: Agencies issue guidance on several reform provisions, including annual and lifetime limits.

Thursday, September 2, 2010

Adult children enrollment opportunity notice requirement

Under the Patient Protection and Affordable Care Act (PPACA), adult children up to age 26 can be covered under their parents’ health plan for plan benefit years beginning on or after September 23, 2010.

As part of the interim final rule, plans are required to provide newly eligible children a special 30-day enrollment period, including written notice of the opportunity to enroll in the plan.

The plan must provide the notice and enrollment opportunity by the first day of the first plan year that begins on or after September 23, 2010.

Notice of this enrollment right may be provided to an employee on behalf of the employee’s child and can be provided with other enrollment materials. Below is model notice language that employers should provide to employees in conjunction with their open enrollment period.

Model Notice

Individuals whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 are eligible to enroll in [insert name of group health plan or health insurance coverage]. Individuals may request enrollment for such children for 30 days from the date of notice. Enrollment will be effective retroactively to [insert date that is the first day of the first plan year beginning on or after September 23, 2010]. For more information contact the [insert plan administrator or issuer] at [insert contact information].

Grandfathered Plans
Grandfathered plans may exclude otherwise eligible adult children under age 26 until 2014 if they are eligible for insurance coverage through their employer or, if married, through their spouse’s employer. This stipulation should be added to the notice provided by grandfathered plans.

For your convenience, we have created a template Enrollment Opportunity Notice to address both the lifetime dollar limit and adult children enrollment opportunities. You can use this notice to communicate these opportunities to employees.

For more information, please refer to the previous post: Interim final rule released on provision extending dependent coverage to age 26.

BCBSNC to implement changes to prescription drug prior review and restricted access lists

Effective October 1, 2010, Blue Cross and Blue Shield of North Carolina (BCBSNC) is implementing changes to their prior review/certification and restricted access drug lists in an effort to continue providing high-quality, cost-effective health care. All of the drugs impacted are covered as part of a member’s prescription drug benefit.

All users of the following drugs will be subject to the new prior review/certification requirement:
• Naproxen/esomeprazole (Vimovo ®) – for chronic arthritis conditions in patients at risk of gastric bleeding
• Dalfampridine (Ampyra®) – used to improve walking in patients with multiple sclerosis
• Antinarcoleptic Agents (Provigil®, Nuvigil®) – for certain wake-sleep disorders

New users of the following drugs will be subject to the new prior review/certification requirement:
• Disease-modifying drugs for multiple sclerosis (Betaseron®, Extavia®, Avonex®, Rebif®, Copaxone®)
• Oral drugs for pulmonary arterial hypertension (Letairis®, Tracleer®, Revatio®, Adcirca®
• Cyclosporine ophthalmic (Restasis®) – for moderate to severe dry eyes

Members using one of the nonpreferred brand-name tetracyclines (Doryx® or Solodyn®) will be required to have their physician submit written certification to BCBSNC stating that the member has previously tried at least one of the preferred medications.

Communications to Providers and Members
BCBSNC participating providers were notified of these changes in July. BCBSNC will mail letters to impacted members in early September. Because prior review/certification will only be required for new users of the drugs listed in the second bulleted item above, no member notification will be sent to members who are already taking one of these medications.

HSA rule changes effective in 2011

The enactment of the Patient Protection and Affordable Care Act (PPACA) is expected to have little impact on Health Savings Accounts (HSAs), except for the following changes:

Reimbursement for over-the-counter drugs and medicines
Beginning January 1, 2011, the list of qualified medical expenses for HSAs will exclude over-the-counter drugs unless the drug is a prescribed drug or insulin.

Additional tax on HSA distributions used for ineligible expenses
Beginning January 1, 2011, the additional tax on disbursements from HSAs that are not used for qualified medical expenses will be increased from 10% to 20% of the disbursed amount.

For more information, please refer to our previous post: Health reform to restrict the use of FSA, HRA and HSA funds on over-the-counter drugs.

Tuesday, August 31, 2010

Senate to vote on repeal of Form 1099 health reform provision

The Senate is scheduled to vote on September 14 on two amendments to an unrelated bill that would alter the 1099 provision. One amendment would exempt businesses with fewer than 25 employees, raise the reporting threshold to purchases above $5,000, and exclude those purchases made with a credit card, while the other amendment would eliminate the provision completely.

The original provision would require businesses to file 1099 tax forms on any purchases of goods or services above $600. The provision was designed to prevent tax evasion and was projected to raise $17.1 billion over 10 years.

While Democrats have been reluctant to consider repealing or modifying such a substantial funding source for health reform, the uproar from small businesses has caused members of Congress from both parties to take notice.

For more information on the provision, please see our initial post: Form 1099 tax change in health reform law exposed.

New primary payment notice process implementation with BCBSNC

The Medicare Secondary Payer Recovery Contractor (MSPRC) is implementing a new Primary Payment Notice (PPN) process, effective this month, to improve the accuracy of Medicare Secondary Payer (MSP) demands. On August 30, the MSPRC will begin issuing PPNs ahead of MSP Demands, to both the impacted employer and the insurer/TPA.

What is a Primary Payment Notice?
The Primary Payment Notice, or PPN, is a notice to employer groups to advise them that the Centers for Medicare & Medicaid Services (CMS) has identified instances where Medicare may have mistakenly made a primary payment when other primary insurance exists. Enclosed with this notice is a PPN worksheet that lists Medicare beneficiaries and corresponding coverage dates. The notice requests employer groups to review the worksheet, make corrections and additions as necessary, and mail or fax the completed worksheet to the MSRPC.

BCBSNC will also receive a copy of the PPN notices and worksheets that our employer groups receive.

What will BCBSNC do with the copy of the PPN notices they receive from the MSRPC?
BCBSNC will complete the worksheet (review the form, check the "insurer" box, and enter the appropriate information), and we will fax or mail it in to the MSRPC. BCBSNC will work with employer groups to ensure that the worksheets we submit are correct.

What will occur if employer groups do not complete and return the PPN worksheets to MSRPC?
If employer groups do not complete and return the worksheet to the MSPRC within 45 days of the issue date of the letter, a demand (referred to as a Medicare Secondary Payer demand) will be sent for repayment for all of the claims associated with the beneficiaries and corresponding coverage dates identified in this notice.

The PPN is considered a courtesy before a demand is issued and is not considered a valid, documented defense to a MSP demand.

Does the MSPRC require that both copies of the PPN worksheets (the copies sent to both the employer and BCBSNC) are completed and returned?
No; MSPRC does not require both copies.

Can employer groups send their PPN worksheets to BCBSNC, so that BCBSNC can submit the PPN worksheets on the group’s behalf?
Yes; employer groups can do this; however, BCBSNC encourages employer groups to complete and send these worksheets to the MSPRC. Employer groups can contact BCBSNC, so that they can verify coverage information and assist employer groups in completing these worksheets.

As always, the MSP mailbox, MSP.ReqCorrsub@bcbsnc.com, is available to employer groups for status requests, questions, and correspondence submissions.

My employer group just received a PPN and PPN worksheet from the MSRPC. What should the employer group do?
Employer groups should review the worksheet, make corrections and additions as necessary, and then contact BCBSNC, so that they can verify coverage information. Employer groups should then mail or fax the completed worksheet to the MSRPC.

Key points about the PPNs and PPN worksheets:
• A PPN worksheet should be reviewed by both the insurer and the employer and completed within 45 days from date of letter. This will ensure all parties involved in the process are aware of the data being reported to the COBC (Coordination of Benefits Contractor). The certification statement on the PPN worksheet must be completed and signed in order for the COBC to report changes to the COBC. The PPN Worksheet does not have to be signed by both the employer and insurer, but the MSPRC would like to receive both copies from insurer and employer.
• The MSPRC will report changes to the COBC on the employer’s and insurer’s behalf, based on the PPN received.
• A PPN cannot be accepted once a MSP Demand has been issued and will not be reported to the COBC by the MSPRC. In addition, responding to the PPN does not mean that a MSP Demand will not be issued.
• An employer's response that the Insurer/TPA has authorization to respond on the employer's behalf is not a valid response to a PPN.
• Employers must report current and accurate information to the insurer regularly.
• Employers must provide the Insurer with a correct address for MSP correspondence and Section 111 reporting.
• The MSPRC will not acknowledge or respond to the PPN.
• PPNs only serve as verification of coverage.
• The MSPRC will accept PPNs by fax and mail. The MSPRC will not accept PPNs by phone.
• The MSPRC will be reducing MSP Demand issuance while rolling out the PPN program for the next few months.

For more information, click to view the MSPRC Presentation and Sample PPN.

Monday, August 16, 2010

Tobacco cessation drug coupon currently available

Chantix is a prescription medicine to help adults 18 and over stop smoking. It is currently available at a $30 discount to some patients at participating pharmacies by presenting the coupon referenced below.

If your health plan does not currently cover the full cost of tobacco cessation medications, this offer may be able to assist your employees with their out-of-pocket costs (including copayments) associated with the prescription. The coupon is limited to $30 or the copay amount, whichever is less.

Click to access the Chantix Coupon. This offer expires December 31, 2010.

BCBSNC to reduce administrative costs through data entry outsourcing

On August 12, Blue Cross and Blue Shield of North Carolina (BCBSNC) announced that it will outsource certain claims data entry work as part of an ongoing effort to reduce administrative costs.

The outsourcing will result in the elimination of 80 to 90 jobs over the next nine months and an estimated $1.6 to $2.1 million in annual savings to the company. Jobs impacted do not involve customer service calls or direct contact with BCBSNC customers.

BCBSNC has selected SOURCECORP for this outsourcing based on their extensive experience in records management, business processing outsourcing and consulting. The Dallas-based company has 4,100 clients, including 14 health plans. The work being outsourced will be done by SOURCECORP employees in North Carolina and the Philippines.

This step is part of a larger BCBSNC initiative to reduce its current operating costs by 20% by 2014 in an effort to keep premiums competitive and invest in improvements.

For more information, click to access the BCBSNC News Release.

Thursday, August 12, 2010

Senn Dunn presents the 2010 Employee Benefits Mid-Market Survey & Seminar

Why take the survey?
• Receive a complimentary Individual Custom Report
• Benchmark your plan design to make better informed plan decisions
• Attend the survey seminar for a comprehensive review of local and national survey results

How can I participate?
Simply click to access the survey: 2010 Employee Benefits Mid-Market Survey

Then join us for the 2010 Survey Seminar, conducted by an independent actuarial consulting firm, to review local and national survey results:

Employee Benefits Benchmarking, Best Practices & Strategies
September 16th, 2010
8:00*-10:30 AM
Deep River Event Center
606 Millwood School Road
Greensboro, NC 27409

*registration and refreshments from 8:00-8:30 AM

RSVP to Susan Shanahan at sshanahan@senndunn.com or 336.346.1317 by Wednesday, September 1st.

The use of this seal is not an endorsement by the HR Certification Institute of the quality of the program. It means that this program has met the HR Certification Institute's criteria to be pre-approved for recertification credit.

Friday, August 6, 2010

Virginia judge refuses to dismiss state’s lawsuit against health reform

On August 2, U.S. District Court Judge Henry Hudson denied a motion submitted by the Obama administration to dismiss a Virginia lawsuit that claims the individual mandate in the federal health reform law is unconstitutional.

Filed by Virginia Attorney General Ken Cuccinelli on March 23, the lawsuit argued that Congress exceeded its power to regulate interstate commerce in the new legislation and that the individual mandate requiring individuals to obtain health coverage or pay a penalty violates the Constitution’s 10th Amendment.

Hudson’s ruling means that the suit will move forward to a hearing scheduled for October 18. While the ruling has no direct impact on a larger challenge filed by 20 states in Florida, it may be indicative of how similar suits will be handled.

Friday, July 30, 2010

Agencies issue interim final regulations for internal appeal & external review of denied claims

On July 23rd, the Internal Revenue Service (IRS) and the Departments of Labor (DOL) and Health and Human Services (HHS) published interim final regulations regarding processes for internal claims and appeals, as well as external review processes, for insured and self-insured, non-grandfathered group health plans as required by the Patient Protection and Affordable Care Act (PPACA).

The regulations establish minimum standards for a new federal external review process that will be applicable to all ERISA-covered, self-insured group health plans. The rules also establish standards for a group health plan’s internal claim and appeal process, expand the types of decisions to which the appeal procedures apply and modify existing DOL claims procedure regulations.

For example, a response to an urgent care claim must now be made within 24 hours of receipt of the claim, instead of within 72 hours as permitted under the current DOL regulations on ERISA plan appeals.

We will provide further guidance and information on this provision once the proposed regulations are passed and as more comprehensive updates are available. For more information, click to access the Interim Final Regulations.

Tuesday, July 20, 2010

Interim final regulation released on preventive care coverage requirement

The Departments of Health and Human Services, Labor and Treasury released an interim final regulation on July 14th, which expands on the requirement for health plans to cover preventive care with no cost-sharing as set forth in the Patient Protection and Affordable Care Act (PPACA).

PPACA requires that all plans provide first-dollar coverage of specific preventive services beginning on the first day of the first plan year following September 23, 2010. This requirement applies to all individual and group health plans, including self-funded plans, with the exception of grandfathered plans as long as they retain their grandfathered status.

Preventive services that must be covered at 100% include:
• Recommendations of the United States Preventive Services Task Force (USPSTF) with a grade A or B (click to access the Complete List of USPSTF Grade A/B Recommendations)
• Recommendations of the Advisory Committee on Immunization Practices (ACIP) as adopted by the Director of the Centers for Disease Control and Preventive (CDC)
• Guidelines supported by the Health Resources and Services Administration (HRSA)

For links to the above recommendations, click to access Recommended Preventive Services Summary on Healthcare.gov.

Not only do the rules outline which preventive services must be covered without cost-sharing, they also specify how cost-sharing will work under specific scenarios. For example:
• If a recommended preventive service is billed separately from an office visit, then cost-sharing may be applied to the office visit.
• If a recommended preventive service is not billed separately from an office visit and the primary purpose of the office visit is the delivery of such service, then cost-sharing requirements may not be imposed with respect to the office visit.
• If a preventive care screening or service results in a need for additional care or medication, cost-sharing can apply to the patient’s treatment.
• Out-of-network cost-sharing rules will apply to any recommended preventive services received from an out-of-network provider.
• If the federal recommendations do not specify the frequency, method, treatment or setting for the provision of a particular preventive service, the plan can determine reasonable coverage limitations.
• If a plan covers preventive services above and beyond the new federal requirements, the plan can impose cost-sharing requirements on those services.

Additionally, if a federal preventive care service recommendation changes, the plan is no longer required to provide first-dollar coverage on that service. For more information, click to access the Interim Final Preventive Regulations.

Thursday, July 15, 2010

Form 1099 tax change in health reform law exposed

An overlooked provision in the recently passed Patient Protection and Affordable Care Act (PPACA) is drawing attention due to its major financial and administrative implications for American businesses.

Scheduled to take effect January 1, 2012, Section 9006 of the law mandates that all companies issue 1099 tax forms to any individual or corporation from whom they buy more than $600 in goods and services in a tax year. Currently, the IRS Form 1099 is only used to document income for contract workers.

While the provision is seemingly unrelated to health care reform, it is intended to capture unreported income, which will generate more government revenue to help offset the cost of the health bill. The new requirement imposes a heavy administrative burden on businesses, expected to result in millions of additional forms being sent out each year.

The IRS has not commented on when it will release regulations on the new law or schedule public hearings. For more information, please view Health care law’s massive, hidden tax change from CNNMoney.com.

Wednesday, July 14, 2010

BCBSNC implements changes to Member Health Partnerships program

Effective July 1, Blue Cross Blue Shield of North Carolina (BCBSNC) has made several changes to their Member Health Partnerships (MHP) program to better engage members with chronic conditions.

Changes will be made in the following areas:
Enrollment. BCBSNC is discontinuing paper survey enrollment. Members may now join by phone at 1-800-218-5295, then press 1, and will be able to also enroll online beginning in September.
Materials. All members invited to join the program will receive a Chronic Care Guide. While many of the educational books are no longer available, members can sign up to receive tips about weight management or tobacco cessation by e-mail or phone. There is also a text messaging feature for the pregnancy program.
Identification. BCBSNC’s outreach efforts will be focused on members at the higher risk level. Nurses will be calling members who are considered “most impactable” and inviting them to engage in health coaching and join the MHP program. Additionally, the pregnancy program will now be self-refer only.
Re-engagement. BCBSNC will continue to monitor all members’ claims and will outreach accordingly. Members who are considered “most impactable” will receive a phone call from a health coach, who will work with them regardless of whether or not they enroll in the MHP program. Members who are identified for the program but are not considered “most impactable” will receive a mailed invitation. Members who do enroll in the Member Health Partnerships program will receive an annual mailing.

Members who join MHP will continue to receive targeted information and services, which can help them manage their specific health care needs. Customized benefits, such as nutritional counseling visits and numerous discounts are also available to members. Current MHP program participants will be automatically enrolled in the updated program.

Tuesday, July 13, 2010

Implications of the CLASS Act, a national long term care program

The health reform legislation included provisions known as the Community Living Assistance Services and Supports (CLASS) Act, which establishes a government-sponsored long term care plan. This program is aimed at establishing a basic level of long term care coverage for working Americans.

Key points
• Employers can elect whether or not they offer this program to employees
• Premiums will be paid through payroll deductions except for self-employed individuals and employees who want coverage but their employers do not offer the plan
• Mandatory five-year vesting period before any benefits are paid
• Requires that participants are working for at least 36 of the 60-month vesting period
• Premiums expected to range from $100-$240/month, but may be lower for full-time students and low-income individuals
• Pays a modest benefit of roughly $50-75/day based on the level of Activities of Daily Living (ADL) loss or cognitive impairment
• Only available for working individuals; family coverage is not available

While the CLASS Act is effective on January 1, 2011, the Secretary of Health and Human Services (HHS) is not required to define the CLASS benefits until October 2012, with enrollment to follow. For more information, click to access the Kaiser Family Foundation CLASS Act Summary.

Monday, July 12, 2010

Clarification on new W-2 reporting required by health reform legislation

According to the Patient Protection and Affordable Care Act (PPACA), employers will be required to calculate and report the aggregate cost of employer-sponsored health benefits on employees’ Form W-2s for taxable years beginning after December 31, 2010.

Most W-2s for tax year 2011 will be issued in January 2012; however, the new Form W-2s must be available no later than February 1, 2011, in the event that a terminating employee requests one at an earlier date.

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 W-2 reporting will be a way to track coverage values for the 40% excise tax on high-cost employer-based health plans (the so-called “Cadillac plan tax”), effective in 2018.

Employers only need to report the aggregate cost of benefits. They will not be required to provide a breakdown of the various types of coverage.

Benefits that must be reported 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 vision and is not required to also enroll in medical coverage)
• Executive physicals
• On-site clinics if they provide more than minimal care
• Medicare supplemental policies
• Employee assistance programs

Benefits exempt from reporting requirements:
• Long-term care, accident or disability income benefits
• Specific disease or illness policies
• Hospital indemnity policies in which the full premium is paid after-tax by the employee
• Archer MSA or HSA contributions of the employee or employee’s spouse
• Salary reduction contributions to a health FSA

For more information, click to access the W-2 Reporting Requirements Issue Brief from the National Association of Health Underwriters (NAHU).

Thursday, July 8, 2010

UHC expands Select Designated Pharmacy program to additional fully insured groups effective August 1

In an effort to better manage prescription drug costs and help members save money while providing affordable access to medications, UnitedHealthcare (UHC) is expanding their Select Designated Pharmacy program. As of August 1, 2010, the program will be implemented in CO, GA, ID, KS, MA*, MO, MS, NC*, SD, TN, TX* and VT (*2007 rider business only).

The program has not been expanded to fully insured customers in AR, CT, LA, MD, NY and NY. Additionally, customers with in-network only pharmacy coverage in AR, DE, GA, IA, ID, IN, MO, MS, MT, NC, ME, OK, RI, TN, TX, UT, VT, WV and WY will not be participating at this time.

About the program
The Select Designated Pharmacy program encourages members on select high cost Tier 3 medications to make lower cost medication and pharmacy decisions. It also requires members to use mail order pharmacy or switch to a lower cost medication for continuation of in-network benefits.

By switching to mail-order pharmacy, lower-tier medications, or both, members can save a significant amount of money. Since the program began, the average member savings is $25 per month, or $300 annually.

Select medications
The program targets 18 Tier 3 medications, representing just 1% of all retail prescriptions. Most medications in the program have multiple, lower-cost alternatives. Medications in the program may change as part of the semi-annual Prescription Drug List (PDL) schedule on January 1 and July 1. To view the current medication list as of May 1, 2010, click to access the UHC Select Designated Pharmacy Program Summary.

Member Outreach and Impact
Members taking affected drugs are allowed two prescription refills ('grace fills') at their retail pharmacy before they must select a new option to receive network coverage. After the first grace fill, members will receive a letter and a phone call explaining their options. During both grace fills, point-of-sale messaging at retail pharmacies will encourage pharmacists to engage with members about their coverage options. At any time, members can call member services to help facilitate this change.

Members on affected drugs who have non-network benefit coverage and choose to make no change will pay the full cost of the drug, and can file a paper claim for reimbursement as a non-network benefit. Effective August 1, 2010, in states where allowed, members who have in-network only pharmacy coverage and make no change will pay the full cost of the drug and cannot file a paper claim for reimbursement.

The Select Designated Pharmacy program is not available in all states or for all in-network only customers. For more information, please view the UHC Select Designated Pharmacy Program Summary.

Thursday, July 1, 2010

BCBSNC implements health reform provision ahead of schedule

As of July 1st, BCBSNC will remove the pre-existing condition waiting period for all group members under the age of 19 regardless of when they enrolled. This change applies to eligible services received on or after July 1, 2010. There is no rate impact due to this change.

BCBSNC will be mailing letters this week to approximately 2,200 impacted groups (those with members who will have their pre-existing waiting period removed) to inform them of the change. Groups are encouraged to share this information with their employees.

Wednesday, June 30, 2010

Agencies issue guidance on several reform provisions, including annual and lifetime limits

On June 28th, the Departments of Health and Human Services (HHS), Labor and Treasury released an Interim Final Rule (or Regulation) addressing several of the initial reform provisions applicable to plan years beginning on or after September 23, 2010, including pre-existing conditions, annual and lifetime limits, rescission, choice of providers and emergency services.

The most noteworthy clarification was the Regulation’s explanation of the provision that prohibits annual and lifetime limits on essential health benefits.

The Regulation clarifies that:
• Annual and lifetime limits refer to total dollar limit and do not extend to specific treatment limits (such as day or visit limits).
• Prior to 2014, a plan may establish annual limits on essential benefits as follows: $750,000 for the 2011 plan year, $1.25 million for the 2012 plan year and $2 million for the 2013 plan year.
• Prior to 2014, limited medical plans or so-called “mini-med” plans could apply for a waiver if compliance with the new annual limits “would result in a significant decrease in access to benefits or would significantly increase premiums for the plan or health insurance coverage.”

For more information on the Regulation, click to access the Groom Law Group Memorandum or the Interim Final Rule.

Early Retiree Reinsurance Program application posted to HHS website

On June 29th, the Department of Health and Human Services (HHS) released the official application for the Early Retiree Reinsurance Program. To view the application, please click on the following link, Official ERRP Program Application. Other newly posted documents to the HHS website include: Official ERRP Application Instructions, Frequently Asked Questions and Application Submission Dos and Don’ts.

Please note that all qualified applications will be approved and applications will be processed in the order in which they are received. It is not critical to be the first application submitted as payments are made based on when claims are submitted, not when the employer’s application for the program was submitted.

HHS does have the authority to stop accepting applications, but only if it appears that the $5 billion in federal funding is insufficient, as program reimbursements are being paid out. Recent estimates suggest the $5 billion will last roughly two years.

Thursday, June 24, 2010

UHC Shared Savings Program change for fully insured groups

In the past, members who received services from non-network facilities, doctors or other health care professionals could see their claims reimbursed by one of two programs: either receiving discounted rates for those services though UHC’s Shared Savings Program or rates determined by a Medicare-based reimbursement methodology under UHC’s Maximum Non-Network Reimbursement Program (MNRP).

Effective August 1, the Shared Savings Program through UnitedHealthcare (UHC) will no longer provide discounts for certain non-network facility claims for fully insured plans. Claims that will no longer be eligible for the Shared Savings discounts are those that are eligible for adjudication under MNRP.

According to UHC, this change will help decrease costly non-network utilization and better manage rising health care costs for UHC customers. Shared Savings discounts will continue to be applied to claims from non-network doctors and other health care professionals where available.

These program changes do not affect whether a claim is paid at the network or non-network benefit level. Additionally, emergency and approved network gap facility claims will not be subject to MNRP processing and will continue to be processed at the network benefit level.

Member Impact
Less than 0.2% of UHC’s fully insured membership is expected to be affected by this change; however, those members who choose to use non-network facilities may experience higher out-of-pocket costs due to potential balance-billing by those facilities.

Members that used the same non-network Shared Savings Program facility two or more times in the last six months will receive a letter in June notifying them of these upcoming changes. The letter highlights the potential for increased out-of-pocket costs if they continue to receive services at non-network facilities.

For more information on MNRP, please click to view UHC’s Maximum Non-Network Reimbursement Program Summary.

Wednesday, June 23, 2010

Eastern Life and Health and Security Life merger complete

Effective June 21, 2010, Eastern Life and Health and Security Life has merged to become Security Life Insurance Company of America. The combined companies wish to assure clients that you will continue to receive the same quality of service that you enjoyed under the previously separate entities.

Security Life Insurance Company of America will be communicating these changes to policyholders this week.

Tuesday, June 15, 2010

HHS releases draft application for early retiree reinsurance program

The U.S. Department of Health and Human Services (HHS) has released a draft application, application instructions and a frequently asked questions document on the early retiree reinsurance program to help employers prepare for the application process and gather necessary data ahead of time. These documents can be accessed at the HHS Early Retiree Reinsurance Program section of the HHS website.

The official application is not scheduled to be released until later in June and HHS has not determined the specific date that they will begin accepting applications. However, they have confirmed that applications will begin being accepted no later than June 30, 2010.

We will continue to update you with the most recent information regarding the application process as we receive it.

HHS releases regulations for grandfathered health plans

On Monday the U.S. Departments of Health and Human Services (HHS), Labor and Treasury proposed interim final regulations for group health plans to maintain grandfathered status under the Patient Protection and Affordable Care Act (PPACA).

In addition to the guidance provided in the PPACA, these new regulations specify that grandfathered plans will lose their grandfathered status if they make any of the following changes:

Significantly cut or reduce benefits. Grandfathered plans must continue to cover care for major diseases and illnesses currently covered by the plan, such as diabetes, cystic fibrosis and HIV/AIDS.
Raise coinsurance amounts. Grandfathered plans cannot increase the plan’s coinsurance percentage if they wish to maintain their grandfathered status.
Significantly raise co-pay amounts. Grandfathered plans may increase co-pay amounts by no more than the greater of $5 or a percentage equal to medical inflation plus 15%.
Significantly raise deductibles. Grandfathered plans may increase deductibles by no more than a percentage equal to medical inflation plus 15%.
Significantly lower employer contributions. Grandfathered plans can decrease the percent of premium the employer pays by no more than 5%.
Add or tighten an annual limit. Grandfathered plans cannot tighten any annual dollar limit in place as of March 23, 2010. Grandfathered plans cannot impose a new annual dollar limit unless they are replacing a lifetime dollar limit with an annual dollar limit that is at least as high as their lifetime limit.
Change insurance carriers. Grandfathered plans cannot decide to buy insurance from a difference insurance company and maintain their grandfathered status. This regulation does not prevent grandfathered plans that provide their own insurance from switching plan administrators or to a collective bargaining agreement.

Employers that wish to remain grandfathered must also maintain plan documents and records to verify their plan's status as a grandfathered plan and provide a notice to participants and beneficiaries stating that the plan is grandfathered.

The interim final regulations also give regulators the flexibility to disregard plan changes adopted before June 14, 2010 that "modestly exceed" the allowable changes set forth in the new rules.

For more information on these regulations, please refer to the Interim Final Regulations, Groom Law Group Memorandum or the HHS Fact Sheet.

For the PPACA definition of and provisions for grandfathered health plans, please refer to our April 20 post, What is a grandfathered health plan?.

Saturday, June 12, 2010

Mental health parity regulations in effect beginning July 1

According to the Interim Final Rule published on February 2, 2010, the Federal Mental Health Parity Addiction and Equity Act (MHPAEA) will be effective on the first day of the plan year beginning on or after July 1, 2010. The implementation of these regulations comes nearly two years after MHPAEA was originally signed into law in October of 2008.

MHPAEA applies to groups that meet the Federal definition of “large group”, which includes:
• All fully insured and self-funded groups with 51 or more employees
• Groups with 2-50 employees if they had an average of 51 or more total employees during the prior calendar year (including seasonal and/or part-time employees)

The general requirement of MHPAEA states that plans must ensure that the financial requirements and treatment limitations applied to mental health and substance use disorder benefits are no more restrictive than those applied to medical or surgical benefits.

The Interim Final Rule updates the prior 1996 federal mental health parity law to now apply to both mental health and substance abuse disorder benefits. The 1996 law applied to annual and lifetime dollar maximums for benefits for mental health disorders only.

The Interim Final Rule does not mandate coverage of any mental health and substance use disorder benefits. However, a group plan must be in compliance with MHPAEA if it chooses to provide coverage for mental health and substance use disorder benefits. The group plan may define which conditions will and will not be covered, subject to state law mandates for fully insured plans.

For more information, click to access the Interim Final Rule or the MHPAEA Factsheet from The National Council for Community Behavioral Healthcare.

Friday, June 4, 2010

House passes benefits bill without COBRA subsidy extension

The House approved legislation on May 28, 2010, which would require 401(k) fee disclosures, provide relief for pension funds and extend unemployment benefits. The bill also included the so-called ‘doc fix’ that would keep physicians from facing a cut in Medicare payments; however, the planned extension of the COBRA premium subsidy was noticeably absent from the legislation.

Reports suggest that Democrats dropped the extension in order to gain enough votes for passage. According to CongressDaily, the bill would have provided $6.8 billion to extend the 15-month 65% subsidy through November 30, but was removed to appease the fiscally conservative ‘Blue Dog’ Democrats.

Without an extension, employees laid off beginning June 1 would not be eligible for the subsidy. It is unclear whether a retroactive measure will be passed by Congress at a later date. The Senate is not expected to take up the legislation until after returning from their Memorial Day recess on June 7.

Wednesday, June 2, 2010

BCBSNC to implement unlimited lifetime benefit maximums

The recent health reform legislation, collectively known as the Affordable Care Act (ACA), prohibits lifetime dollar limits on any new or renewing plans with an effective date of September 23, 2010 or later.

In response to this legislation, Blue Cross and Blue Shield of North Carolina (BCBSNC) will amend their standard benefit offerings for new groups with effective dates of August 1 or later. As a result, limited lifetime maximum medical plans will no longer be quoted for groups with an effective date on or after August 1, 2010. Any group previously quoted with a limited lifetime maximum will be honored. Groups with an effective date after September 23 must be quoted with an unlimited lifetime maximum to comply with the ACA. Again, this change to unlimited lifetime maximums will be effective at the group's first renewal after September 23, 2010.

The ACA’s provision prohibiting lifetime limits also applies to self-funded groups. To comply with this mandate, unlimited specific stop loss will be standard for all BCBSNC self-funded groups effective immediately.

Wednesday, May 26, 2010

BCBSNC to update member discount programs

Blue Cross Blue Shield of North Carolina (BCBSNC) has implemented the following changes to their Blue365 discounts and vision discount programs:
• Blue365 will no longer include discounts for Curves and Kronos.
• Discounts for conventional/traditional LASIK and LASIK with IntraLase are no longer available.
• Discounts are still available for LASIK with custom/wavefront and LASIK with both custom and IntraLase though the fixed pricing rates for these procedures has increased slightly.

For more information on the discounts currently available through BCBSNC, log onto BCBSNC’s Member Services page via bcbsnc.com.

UHC prescription drug list updates effective July 1

Effective July 1, 2010, the new United Healthcare (UHC) Prescription Drug List (PDL) updates will take place. Members taking select maintenance medications impacted by a change will receive a letter in June. Lower cost alternatives will be listed along with a web address where they can find a more detailed reasoning for these changes. UHC will also communicate the updates to physicians and pharmacies.

Click to access the updated Advantage Prescription Drug List. For more information, please contact your Senn Dunn account manager or your UHC representative.

Please note not all PDL updates apply to all groups depending on state regulations, Riders and SPDs.

Tuesday, May 25, 2010

NextCare urgent care centers no longer in BCBSNC network

Effective May 13, 2010, NextCare Urgent Care Centers will no longer participate in the BCBSNC network.

Members may continue to use NextCare centers but benefits will be paid according to the members’ out-of-network benefits. Members can find in-network urgent care centers by using the provider search on the BCBSNC website.

We will continue to keep you updated on any changes in network status. As always, please feel free to contact us with any questions or concerns that arise.

Monday, May 24, 2010

BCBSNC to implement prior certification and restricted access drug changes

Effective July 1, 2010, Blue Cross and Blue Shield of North Carolina (BCBSNC) is implementing changes to their prior review/certification and restricted access drug lists.

The changes include:
The following injectable drugs, covered under BCBSNC medical benefits, will now require prior review by BCBSNC and written certification from a prescribing physician:
• Synagis® (palivizumab), used to prevent respiratory syncytial virus (RSV) prophylaxis in infants and children at risk
• Actemra® injections (tocilizumab), used to treat rheumatoid arthritis
• Stelara® injections (ustekinumab), used to treat psoriasis

The following angiotensin receptor blockers (ARBs), used most often for hypertension and covered under BCBSNC pharmacy benefits, are being added to the restricted-access drug list and will also require written certification from a prescribing physician:
• Atacand®, Atacand-HCT®, Avapro®, Avalide®, Benicar®, Benicar-HCT®, Teveten®, and Teveten-HCT®

The above ARBs will also move from Tier 2 to Tier 3, effective July 1, 2010. If the non-preferred ARB is authorized for them, members will pay a Tier 3 copayment.

Communication to Members and Providers
BCBSNC will mail letters to impacted members in late May. Click to access the Sample Member Letters. BCBSNC providers were notified of these changes in April.

Please note that most infants and very young children who receive Synagis® for one RSV season will not require it for a second season. Using past claims to identify patients who may require RSV prophylaxis for the upcoming RSV season will not be effective. For this reason, BCBSNC will not send letters to affected patients’ or patients’ caregivers.

Questions
Members with questions regarding these changes can contact their Senn Dunn Account Manager or call BCBSNC Customer Service at the toll-free number listed on their ID card.

Early retiree reinsurance program application not yet available

Although the Early Retiree Reinsurance Program will go into effect on claims incurred after June 1, applications are not expected to be made available from Health and Human Services (HHS) until mid- to late June. While details on the application process have not been released, HHS has confirmed that it expects more requests for reimbursements than the allocated $5 billion in funding can cover.

The Department has also confirmed that there will be a period of time between when the application is released and when they will begin accepting claims data submissions. As payments will be processed in the order claims are received, it is imperative that plan sponsors be prepared to respond quickly and thoroughly if they plan to participate in this program.

HHS released an interim final rule on the program in the beginning of May providing guidance on eligibility requirements. For more information, click to access the Early Retiree Reinsurance Program Interim Final Rule.

Friday, May 21, 2010

Tax-free treatment of health benefits for children under age 27 effective immediately

On April 27, the IRS issued Notice 2010-38, providing guidance on the tax exclusion for medical care reimbursement of adult children. These changes are a result of the recently enacted health reform legislation, collectively referred to in the notice as the Affordable Care Act.

The notice states that employers with cafeteria plans may permit employees to immediately make pre-tax salary reduction contributions to provide coverage for children under age 27, even if the cafeteria plan has not yet been amended with such a provision. Plan sponsors have until December 31, 2010 to amend cafeteria plan language to incorporate this change.

This immediate expansion will allow plan sponsors that wish to extend coverage to adult dependents now to do so without having to withhold additional federal taxes from employees to cover the value of the benefits if the amounts were deemed taxable income.

General Guidance from IRS Notice 2010-38
• The IRS will permit employers to amend their cafeteria plans retroactively to allow pre-tax salary reductions for adult children as long as the plan is amended by the end of 2010.
• The tax exclusion applies to employer-provided health coverage for an employee’s child who is not age 27 or older at any time during the calendar year.
• Employers may rely on an employee’s representation as to the child’s date of birth.
• For purposes of the tax exclusion, an adult child is defined as son/daughter, stepson/stepdaughter, adopted child or eligible foster child.
• Both married and unmarried adult children are eligible; however, the child’s spouse and/or children are ineligible.
• Plan participants who add an adult child dependent can increase their current year medical flexible spending account (FSA) elections due to current rules which allow election changes for change in status events.
• The tax exclusion expansion applies to plans that define eligibility based on Section 105(b), including medical FSAs and health reimbursement arrangements (HRAs).

Sunday, May 16, 2010

Interim final rule released on provision extending dependent coverage to age 26

On May 10, the Internal Revenue Service (IRS), Department of Labor (DOL) and Department of Health and Human Services (HHS) released an interim final rule on the dependent child coverage extension requirement in the Patient Protection and Affordable Care Act (PPACA).

The regulations were published in the Federal Register May 13, 2010 and are effective for plan years beginning on or after September 23, 2010.

Specifications of the Rule
• The following factors may not be used in defining “dependent” for purposes of eligibility under age 26: financial dependency, residency, student status, employment, eligibility for other coverage, or any combination of these factors
• Plans and insurers are not required to cover the children or spouse of an adult child
• Plans cannot vary benefits or cost based on the age of the child, except with respect to children who are age 26 or older
• Plans can charge more for each individual added to the plan as long as the charge is uniform and does not vary based on the dependent’s age
• Plans are required to provide newly eligible children a special 30-day enrollment period and must provide written notice of the opportunity to enroll
• Notice of this enrollment right may be provided to an employee on behalf of the employee’s child and can be provided with other enrollment materials
• Coverage for children enrolling under the special enrollment rules must take effect no later than the first day of the plan year for which the requirement is effective
• The mandate to cover dependent children up to age 26 must be extended to qualified beneficiaries under COBRA coverage as well
• If state laws impose stricter requirements than those imposed by the PPACA, the state laws are not preempted

Guidelines specific to grandfathered plans
• Grandfathered health plans may exclude an adult child for plan years beginning before 2014 if the adult child is eligible to enroll in an employer-sponsored health plan other than a group health plan of a parent
• For plan years beginning after 2014, a grandfathered health plan may not exclude an adult child, even if they have access to other employer-sponsored coverage

Areas needing further guidance
• The regulations do not include a definition of a “child” (such as the tax exclusion guidance in Notice 2010-38, which defines a “child” as son, daughter, stepchild, adopted child or foster child)
• It is unclear whether a child under age 26 who is receiving COBRA coverage under a former employer’s plan or a spouse’s employer’s plan must be given an enrollment opportunity under a grandfathered plan prior to plan years beginning in 2014

For more information, click to access the following Fact Sheet and FAQs from the US Department of Labor.