Ordinarily, this blog addresses current events in the health insurance and health care spaces. But this week I’m making an exception and informing about a provision of the Affordable Care Act (ACA) that is not set to take effect until 2018. Many of the clients, colleagues, friends and audiences I encounter are talking (if not worrying) about the so called Cadillac tax…now!
Accordingly, this week;s post is meant to provide some background on this provision, if not for those merely worrying about it, but for those that are long term planners. Please keep in mind that final regulations addressing the Cadillac tax have not been released to date. Here is what we know…
Last week (02/20/2014), the ACA’s “trinity” of compliance and enforcement (i.e., departments of Health/Human Services; Labor; Treasury) jointly issued both FINAL and PROPOSED regulations pertaining to the ACA provision addressing new hire waiting period limitations. This week's post will focus primarily on the FINAL regulations.
Let me start by defining what it is that we received guidance on – the so called “90 day waiting period limitation”. The waiting period is the period of time allowed to pass before health insurance coverage can become effective for an otherwise eligible employee (and his/her dependents).
There is an old expression – “Figures don’t lie, liars do figure”. We all rely on data for various purposes, and the health care industry is no exception in its use of data to explain, defend, describe, or refute various measures. In fact, there is a relatively quiet movement underway to establish health care standards to better enable providers to utilize a standardized, “best practices” method of delivering care. If you want to understand this movement better, google – “patient centered outcomes research institute” or PCORI, and check it out. (By the way, the Affordable Care Act (ACA) requires health insurers and self funded plans to fund the PCORI at a rate of $2 per insured member per year in 2014.)
This past Monday (February 10, 2014) the Treasury Department issued long awaited FINAL REGULATIONS pertaining to the Affordable Care Act’s (ACA) “employer mandate”, aka “employer shared responsibility”; or “pay or play”. There is a great deal of information and guidance contained in these regulations, thus, I will not attempt to address all of it in this post. Rather, I’ll provide some of the highlights, and embed some links to direct you to more comprehensive details.
It is imperative that readers/stakeholders understand there are two (2) aspects to this release:
1. A delay of the employer mandate for otherwise affected employers with 50-99 full-time employees until – “the first plan year beginning on or after JANUARY 1, 2016”.
From the time the Affordable Care Act (ACA) was signed into law on March 23, 2010, after having been passed by congress on a 100% partisan basis by the Democrat party, the Republican party has largely expressed opposition to the law. In fact, the Republican controlled House of Representatives has passed upwards of 40 bills seeking to completely repeal the ACA. However these bills never made it to the Democrat controlled Senate floor for a full vote, and thus “died on the vine”. Perhaps no other issue facing our country has seen the level of opposition and discourse than has health care “reform”.
We’ve all heard the expression – “time is of the essence”. But a recent blog post I came across compelled me to share the incredible application of this expression to the health care industry. Not only does effective triage and initial diagnosis portend better outcomes, it also has a significant impact on efficiency and costs. And let’s face it, at a time when health care consumes nearly a fifth of our nation’s gross domestic product (GDP), finding ways to cut health care costs is critical.
So it got my attention when Dr. Sorensen reported in his blog that – “It is in the first 15 minutes of a medical encounter that up to half of all medical costs are set in motion.
These are three (3) of the more than 18 new taxes, fees, and deduction changes that have been created/implemented in order to fund the Affordable Care Act (ACA), aka Obamacare. The later two (2) have not yet been imposed/collected, but the bell rings this year (2014) for their collection and remittance to Uncle Sam. This week I thought I would delve into the ear marking of some of this revenue, and what many are calling the ACA’s “insurance company bailout”.
The ACA contains three (3) separate and distinct “bailout programs” embedded within it’s 2,700 pages. They are the Reinsurance Program (temporary), Risk Adjustment Mechanism,
Those of us in the health care industry (both delivery and financing) are pleasantly surprised, albeit cautiously optimistic, to learn that health care spending has slowed rather dramatically in recent years. In fact, for the first time ever, the percentage of our Gross Domestic Product (GDP) attributable to health care has decreased from 17.3% in 2011 to 17.2% in 2012 ($2.8 trillion). Fellow health care stakeholders may find it interesting that in 1960; health care consumed a mere 5% of our nation’s GDP. Put another way, in 2012 health care spending grew by 3.7%, which is virtually identical to the spending percentage growth in 2009, 2010, and 2011. By contrast, in 2002, health care spending grew by a whopping 9.7%.
Happy New Year to all my friends, colleagues, and subscribers throughout the land! As you may have noticed, this blog went dormant over the holidays, which was as much a relief for my readers; I’m sure, as it was for me. So now here we are in 2014, and back to business, and weekly blog posts!
I thought I’d start the new year off with a brief update on what’s happening with the public health insurance marketplaces/exchanges. Last month involved a flurry of activity, guidance and extensions announced just prior to the holidays. Here’s the latest;
As the 2014 open enrollment season comes to a close (bringing an overwhelming sense of relief and joy to HR professionals and Benefits Brokers/Consultants throughout the land!), I thought I’d review the major Affordable Care Act (ACA) related compliance issues addressed in preparation for the new (benefits) year.
1) Early plan renewal; 12/1/13: Since many of the ACA related changes affect plans & on their first plan anniversary date on or after January 1, 2014;, several health insurers offered (and many employers accepted) to change plan anniversary dates to 12/1/13.
