Thursday, October 31, 2013

Modification of “Use-or-Lose” Rule For Health Flexible Spending Arrangements (FSAs)

In a significant modification of the nearly 30-year-old “use it or lose it” rule, employers will be allowed to modify flexible spending accounts to permit employees to carry over to the following year up to $500 in unused account balances, the U.S. Treasury Department and the Internal Revenue Service said today.  

However, the Treasury Department did attach a condition to the easing of the use it or lose it rule.

Employers will have a choice of either allowing employees to carryover up to $500 or offering the 2½-month grace period that is currently offered, but not both.   

To utilize the new carryover option permitted under this notice, a §125 cafeteria plan offering a health FSA must be amended to set forth the carryover provision. The amendment must be adopted on or before the last day of the plan year from which amounts may be carried over and may be effective retroactively to the first day of that plan year, provided that the §125 cafeteria plan operates in accordance with the guidance under the notice and informs participants of the carryover provision, and provided further that a plan may be amended to adopt the carryover provision for a plan year that begins in 2013 at any time on or before the last day of the plan year.   

A § 125 cafeteria plan that incorporates a carryover provision may not also provide for a grace period in the plan year to which unused amounts may be carried over. Accordingly, if, pursuant to the carryover provision, a plan permits amounts that were unused in a plan year to be carried over to the following plan year, the plan is not permitted to provide for a grace period that occurs in that following plan year. 

For example, a calendar year plan permitting a carryover to 2015 of unused 2014 health FSA amounts (as determined at the end of the run-out period in early 2015) would not be permitted to have a grace period in 2015, but would be permitted to have had a grace period during the first 2 1⁄2 months of 2014. 

Link to the regulations

According to Sec. Sebelius Those with Affordable Care at Work are Barred from Obamacare Exchanges - A Halloween Visit with Armstrong & Getty

A brief visit with Jack and Joe to comment on Secretary Sebelius' testimony in front of the House yesterday. She does not understand PPACA - she commented repeatedly that it would be illegal for an employee with "affordable" care at work to go into the health exchanges/marketplace. Oh boy, this is sad and scary. Not qualifying for subsidies does not make it illegal to buy in the exchange.

Here is a media account of her words:   

This is from CBS in Washington D.C.: (emphasis added)
... Rep. Cory Gardner, R-Colo., questioned Sebelius why she won’t drop her coverage for Obamacare. 
“I am not eligible for the exchange,” Sebelius replied
Rep. Billy Long, R-Mo., asked Sebelius if she would “commit to forego your government program to go into the exchanges like everybody else?” Asking again, “If you can, will you?’ 
Sebelius replied that she “will take a look at it,” and then added to Waxman, “I would gladly join the exchange if I didn’t have affordable care in my workplace.” 
Before addressing Waxman’s statement, Sebelius could be heard saying, “Don’t do this to me,” to an aide next to her. ...

And from the Washington Times:  
... Rep. Cory Gardner, Colorado Republican, wanted to know if Mrs. Sebelius would enroll herself in a health care plan on one of the Obamacare exchanges. 
She refused because she has employer-based coverage from the federal government.
“I would gladly join the exchange if I didn’t have affordable coverage in my workplace,” she testified. 
But Mrs. Sebelius appeared to confuse the law when she told lawmakers, “If I have available employer-based coverage, I am not eligible for the market.” tells users that if they are eligible for job-based insurance, they “can consider switching to a marketplace plan” but may put their subsidies at risk. ...
Finally, Buzzfeed put together a wonderful montage of her testimony in 15 seconds.  She clearly did not have a great day. (Hat tip: Jennifer Moore):

Spousal Coverage Fading Fast

  • A growing number of employers are levying a surcharge on the spouses of employees who sign up for health care coverage if they are eligible for them in their own workplace.
  • The change in spousal benefits is part of a broader effort by employers to look for ways to cut the cost of benefits. 
    • The average cost of providing health care for a family was $16,351 this year, a 4 percent rise from 2012, according to a survey by Kaiser Health. 
    • Employees, on average, paid $4,565 of that total.
  • 4% don’t allow spouses to join their plans if they have their own employee-sponsored health care benefits. 
  • Another 8% of companies said they’d follow suit next year.
  • On the flip side, experts say that certain types of employers, such as banks, insurance companies, hospitals and companies with large numbers of female workers might find that a spousal surcharge hurts their ability to recruit and retain talent.
Source: Dan Berman at BenefitsPro, Hat Tip: Ryan Kennedy.   

Wednesday, October 30, 2013

White House Rounding Error Fails to Account for Full ObamaCare Damage: White House ObamaCare Math: 29.5-Hour Week = 30

The White House sees no sign that ObamaCare is affecting Americans' work hours. But its data have a problem: Government economists count workers limited to 29.5 hours as 30-hour-per-week workers.

That's no small rounding error in this case.

Employers, as AFL-CIO President Richard Trumka recently said, are "restructuring their workforce to give workers 29- and-a-half hours " to dodge ObamaCare's health coverage mandate.

Anecdotes abound about employers cutting workers' hours to 29.5 or even 29.75 — just below the 30-hour workweek at which ObamaCare penalties kick in for employers who don't offer health care coverage. ...

The White House used Current Population Survey data to show that ObamaCare is not affecting the number of workers clocking 30- to 34-hour workweeks. The CPS is the monthly household survey used to calculate the unemployment rate.

But the Obama administration left out an important detail: The interviewers for the survey are instructed to round up.

Use whole numbers (Count 30 minutes or more as a whole hour," the interviewers are told.

That means the White House has no clue how many of the 5-million-plus workers who are reported to be clocking 30-hour weeks are actually working 29.5 hours, though there are surely more than there used to be. ...

Read Full Story At Investor's Business Daily:

How PPACA's Risk Adjustment, Reinsurance, and Risk Corridors Could Melt Down the Federal Budget

This is from Megan McArdle writing at Bloomberg

[T]here are deep-in-the-weeds protections baked into the Affordable Care Act: risk adjustment, reinsurance, and risk corridors.

These programs -- collectively called the “three Rs” -- aid insurers if they wind up enrolling a population that is sicker and more expensive than projected. They do a crucial bit of policy work: we want plans competing on efficiency and quality, not their ability to attract the healthiest patients.
The programs have related functions, but risk corridors will play the biggest role if the individual mandate does get delayed. Their entire purpose is to stabilize premiums during the first three years of Obamacare, when it’s especially difficult for insurers to price plans.

Here’s how it works: exchange plans (QHPs) projected how much their risk pool would cost overall in 2014, their “target” cost. If they’ve significantly miscalculated -- or, say, if a mandate delay causes adverse selection that they couldn’t have predicted -- HHS will take action:

"The risk corridor mechanism compares the total allowable medical costs for each QHP (excluding non-medical or administrative costs) to those projected or targeted by the QHP. If the actual allowable costs are less than 97 percent of the QHP’s target amount, a percentage of these savings will be remitted to HHS (limiting gain). Similarly if the actual allowable cost is more than 103 percent of the QHP’s target amount, a percentage of the difference will be paid back to the QHP (limiting loss)."

Total transfer depends on how badly the insurer miscalculated:

Basically, today’s worst-case scenario is that takes months to fix and the mandate is delayed until 2015, resulting in widespread adverse selection. Insurers wouldn’t recoup all losses, but the risk corridor program provides their bottom line with a substantial buffer. Importantly, it doesn’t need to be budget neutral; if the math demands it, the government can pay out more than it collects through the program. This could be expensive -- the CBO scored the health law as though risk corridors were budget neutral -- but it could also be offset by foregone subsidies.

I don’t find this reassuring. These mechanisms were not put in place to prevent a death spiral, and they aren’t designed to do that. Rather, they were put in place to prevent an entirely different problem: insurers trying to cherry-pick healthy people out of the pool (by, say, offering a policy that comes with a free gym membership). The idea is that there’s a huge tax on excess profits -- and a subsidy for losses -- so that it doesn’t make sense to expend a lot of energy trying to get a better patient mix. 

...The Affordable Care Act’s insurance market reforms have created a system prone to what Charles Perrow dubbed “Normal Accidents.” By "normal," he didn’t mean “minor” -- the lead exhibit was Three Mile Island. Rather, he meant something like “hard to avoid.” The system is both complex and tightly coupled: All the pieces are interdependent, so a failure in one part is apt to cascade throughout the market. This is not a system where you want to start pulling out one piece to see how well the rest can get along without it.

The administration clearly understood this -- right up to the point where a major component failed. Now it's apparently planning to keep the reactor running with as many pieces as possible in the hopes that none of it will unexpectedly blow up. This is not sound policy thinking, or even sound political thinking, and I think that all of us who care about keeping insurance available for ordinary Americans should try to talk them out of it -- for their good, as well as our own. ...

Tuesday, October 29, 2013

October 29, 2013 Visit with Armstrong & Getty re: 105(h) Discrimination Testing, Loss of Grandfathered Plans and Americans Losing Coverage Due to ObamaCare

Jack, Joe and Craig discuss why so many folks are losing their health insurance nationwide, how difficult it is to actually retain "Grandfathered" status under ObamaCare and what the upcoming I.R.C. 105(h) discrimination testing could mean for group health plans.

Only 23% of Docs in New York Will Take an ObamaCare Exchange Plan

From Carl Campanile at the New York Post

...Only 23 percent of the 409 physicians queried said they’re taking patients who signed up through health exchanges.

“This is so poorly designed that a lot of doctors are afraid to participate,” said Dr. Sam Unterricht, president of the 29,000-member organization. “There’s a lot of resistance. Doctors don’t know what they’re going to get paid.”

Three out of four doctors who are participating in the program said they “had to participate” because of existing contractual obligations with an insurer or medical provider, not because they wanted to.

Only one in four “affirmatively” chose to sign up for the exchanges.

Nearly eight in 10 — 77 percent — said they had not been given a fee schedule to show much they’ll get paid if they sign up. ...

Why Extra Belly Fat Means Triple the Likelihood of Dementia Later in Life

New research shows the liver and hippocampus (the memory center in the brain) share a craving for the same protein, and the liver wins out when there's extra belly fat involved.  

Your liver could be "eating" your brain, new research suggests.

People with extra abdominal fat are three times more likely than lean individuals to develop memory loss and dementia later in life, and now scientists say they may know why.

It seems that the liver and the hippocampus (the memory center in the brain), share a craving for a certain protein called PPARalpha. The liver uses PPARalpha to burn belly fat; the hippocampus uses PPARalpha to process memory.

In people with a large amount of belly fat, the liver needs to work overtime to metabolize the fat, and uses up all the PPARalpha — first depleting local stores and then raiding the rest of the body, including the brain, according to the new study.

The process essentially starves the hippocampus of PPARalpha, thus hindering memory and learning, researchers at Rush University Medical Center in Chicago wrote in the study, published in the current issue of Cell Reports. ...

Link to full story from Christopher Wanjek writing at Scientific American.

Monday, October 28, 2013

Half a Milllion Californians Could Lose Their Health Plan Under Obamacare Next Year

This is from Debra Saunders writing at the San Francisco California Chronicle:
This Kaiser Health News story has been reverberating across the Internet because it starts to put together the numbers of private health-plan insureds who are receiving cancellations. (This is a small group of Californians; a majority get their health care through employer plans, Medicare or MediCal.) I’ve written about the issue here and here. From the story: 
Florida Blue, for example, is terminating about 300,000 policies, about 80 percent of its individual policies in the state. Kaiser Permanente in California has sent notices to 160,000 people – about half of its individual business in the state. Insurer Highmark in Pittsburgh is dropping about 20 percent of its individual market customers, while Independence Blue Cross, the major insurer in Philadelphia, is dropping about 45 percent.
On Forbes’ Avik Roy’s blog, Josh Archambault crunched the numbers and concluded, “More Americans in 3 States Have Had Their Insurance Canceled Under Obamacare than have filed an exchange account in all 50.” 
According to this link as of December 2012, there were 491,977 covered lives in individual health care plans regulated by the state Department Insurance that are not grandfathered under the Affordable Care Act. (If they bought a plan after March 2010, their coverage is not grandfathered.) This is a 2012 number, but if the number of people with private coverage hasn’t changed much in the last ten months, that’s half a million Californians who will lose their coverage. According to this link (hit the Enrollment Summary Report) from the state office that regulates managed care providers, there were about 50,000 individual and 60,000 PPO policies that were not grandfathered at the end of the year, which would add another 110,000. (Department of Managed Health Care has not returned my call to confirm these number. In that stories report that Kaiser sent out cancellation notices to 160,000, this number seems low to me.) Either way, you get to 600,000 or more.


Forget President Obama’s 2009 promise, “Nothing in this plan will require you or your employer to change the coverage or the doctor you have.” It’s not true. 
California Association of Health Plans president Pat Johnston told me that by law providers must cancel non-grandfathered individual policies. (It is my understanding some folks will lose their coverage at year’s end, others might be able to extend into 2014 through the end of a covered year.) This probably means premiums hikes for people who “not only were they healthy, they also probably were very savvy shoppers.” This is a small corner of the insurance market; others may well save money under the Affordable Care Act. But for the people kicked off their individual California plans, Johnston said, it may well be that ”if you’re outside that subsidy range, you’re on your own.”...

109 Million Americans on Welfare and only 102 Million Hold a Full Time Job

Clearly not sustainable.  This is from the Census Bureau's latest data on 2011.  

109 million Americans are getting some form of means tested (welfare) government benefit. This does not include Medicare, Social Security or Unemployment. It does include:
  • 82,457,000 people in households receiving Medicaid, 
  • 49,073,000 beneficiaries of food stamps, 
  • 20,223,000 on Supplemental Security Income, 
  • 23,228,000 in the Women, Infants and Children program, 
  • 13,433,000 in public or subsidized rental housing,
  • 5,854,000 in the Temporary Assistance for Needy Families program, and 
  • People getting free or reduced-price lunch or breakfast, state-administered supplemental security income and means-tested veterans pensions. 
Conversely, only 101,716,000 people who worked full-time year round in 2011.  

Friday, October 25, 2013

Revealed: Obamacare subscribers have no reasonable expectation of privacy and their details will be shared with 2,000 employees

  • Verbal sparring erupted over whether Obamacare website vendors violated medical privacy laws by collecting personal information from applicants
  • One Democrat on the panel insisted that since no medical histories were required to apply, there was no violation of the 'HIPPA' law
  • The HHS Department's own website declares that every American's 'name, address, birth date, Social Security Number' must be protected
  • A company chief testified that 2,000 of his employees have access to such information submitted with Obamacare insurance applications
  • Hidden text in the 'source code' of the Obamacare website says users are waiving their privacy rights, and that their personal data 'may be disclosed or used for any lawful Government purpose. 
  • Full text: The Daily Mail

Thursday, October 24, 2013

HHS Predicted Obamacare Exchange Sign Up Would Take 28 Minutes

The Department of Health and Human Services (HHS) estimated consumers would take an average of 28 minutes to sign up for Obamacare, according to a notice the agency sent to the White House in February.

The American Action Forum revealed Thursday that HHS earlier this year predicted consumers would need less than 30 minutes to complete online applications for the health care insurance marketplace. HHS reported those projections to the Office of Management and Budget (OMB).

The process has not proven so easy in practice. Since its rollout on Oct. 1, the Obamacare exchange has been plagued with technical issues and “glitches,” resulting in few enrollees and long wait times. Obamacare “success stories” applaud the rare cases in which people were able to sign up over a period of several days....

Source: Elizabeth Harrington at the Washington Free Beacon.

'Most Transparent Administration Ever' Asks Blue Shield/Blue Cross Not to Reveal Exchange Enrollments

FARGO – The Obama administration asked North Dakota’s largest health insurer not to publicize how many people have signed up for health insurance through a new online exchange, a company official says.

During a Monday forum in Fargo for people interested in signing up for coverage via the exchange, James Nichol of Blue Cross Blue Shield of North Dakota told the crowd his company received the request from the federal government earlier Monday. Nichol is a consumer sales manager for the company.

Still, a spokeswoman from Blue Cross Blue Shield says about 14 North Dakotans have signed up for coverage since the federal exchange went live Oct. 1. That brings total statewide enrollment to 20 – less than one a day.... 

Source: Kyle Potter at Inforum,  Fargo,  ND.

WellPoint/Anthem Blue Cross Report Their Medical Trend to be Just 6%

That should make for some fun negotiation when they hand out 10% increases.  This is straight from their press release as reported by the Wall Street Journal:  (Hat tip, Ryan Kennedy)
Benefit Expense Ratio: The benefit expense ratio was 84.9 percent in the third quarter of 2013, a decrease of 50 basis points from 85.4 percent in the prior year quarter, primarily due to improvements in the Medicare business. The Company also experienced modest declines in the ratios for its Commercial business and its California Medicaid operations. These improvements were partially offset by the inclusion of Amerigroup business in the current year quarter, as this business carries a higher average benefit expense ratio than the consolidated Company average, and increased benefit expense in the cost-plus Federal Employee Program ("FEP"). 
Medical claims reserves established at December 31, 2012, developed in-line with the Company's expectation during the first nine months of 2013. 
Medical Cost Trend: The Company now expects that underlying Local Group medical cost trend will be in the range of 6.0 percent, plus or minus 50 basis points, for the full year 2013. Unit cost increases and utilization have been lower than anticipated through the first nine months of 2013. 
Days in Claims Payable: Days in Claims Payable ("DCP") was 40.0 days as of September 30, 2013, a decrease of 0.5 days from 40.5 days as of June 30, 2013. The decline was due primarily to changes in the timing of claims payments between periods.

Staggering: What Runaway Retirement Benefits Have Done to Detroit, Statistics

On Detroit from Reuters. Staggering:
  • More than one-third of the city's residents live below the government poverty line
  • There are some 78,000 abandoned structures 
  • Just 40 percent of the street lights work
  • The population has shrunk to less than 700,000, from a peak of 1.8 million in 1950
  • Only 53 percent of property owners paid their 2011 property taxes 
  • Half of the city's liabilities stem from retirement benefits, including $5.7 billion for healthcare and other obligations, and $3.5 billion involving pensions

New, Improved Obamacare Program Released On 35 Floppy Disks

Some fantastic satire from good folks at the Onion:    
WASHINGTON—Responding to widespread criticism regarding its health care website, the federal government today unveiled its new, improved Obamacare program, which allows Americans to purchase health insurance after installing a software bundle contained on 35 floppy disks. 
“I have heard the complaints about the existing website, and I can assure you that with this revised system, finding the right health care option for you and your family is as easy as loading 35 floppy disks sequentially into your disk drive and following the onscreen prompts,” President Obama told reporters this morning, explaining that the nearly three dozen 3.5-inch diskettes contain all the data needed for individuals to enroll in the Health Insurance Marketplace, while noting that the updated Obamacare software is mouse-compatible and requires a 386 Pentium processor with at least 8 MB of system RAM to function properly. 
“Just fire up MS-DOS, enter ‘A:\>dir *.exe’ into the command line, and then follow the instructions to install the Obamacare batch files—it should only take four or five hours at the most. You can press F1 for help if you run into any problems. And be sure your monitor’s screen resolution is at 320 x 200 or it might not display properly.” Obama added that the federal government hopes to have a six–CD-ROM version of the program available by 2016. 

Wednesday, October 23, 2013

Death Spiral: Why ObamaCare Has Less Than a Month to Fix the Exchanges

Because the Exchanges are exceedingly difficult to navigate, only those with extraordinarily high incentive are getting through and enrolling.  And who are those folks?  The ones insurers can't cover by themselves.  It is adverse election at its worse where the cost of insurance has been driven excessively high by wait-times and burocrat-tech nightmares.   

... what we have now is a situation where only the extremely persistent can successfully complete an application. And who is likely to be extremely persistent?

  1. Very sick people.
  2. People between 55 and 65, the age band at which insurance is quite expensive. (I was surprised to find out that turning 40 doesn’t increase your premiums that much; the big boosts are in the 50s and 60s.) 
  3. Very poor people, who will be shunted to Medicaid (if their state has expanded it) or will probably go without insurance. ... 

Tuesday, October 22, 2013

October 22nd Visit with Armstrong and Getty re: Death Spiral in Exchanges & Medicaid Enrollment

If the website is not fixed by about Thanksgiving the ObamaCare Exchange adverse selection death-spiral might be enough to blow things up permanently.  Right now the only people who have the patience and time to get through on the Exchanges and buy a policy are the sickest, oldest and poorest among us.

It also appears that as many as 90% of the "new applicants" in the Exchanges are nothing more than Medicaid folks who did not know they were likely already eligible for Medicaid.  I.e. there are no new dollars rolling in and nothing is being sold.  We've just launched a multi-billion dollar marketing platform to bestow the benefits of Medicaid.

Standing on Weekdays Burns Calories Like Running 10 Marathons a Year

We've already talked a lot about how sitting all day is killing us, but what you might not know is just how good simply standing for a few hours a day can be. A new study found remarkable health benefits of standing versus sitting.

The BBC and the University of Chester conducted a simple experiment with a small group of ten volunteers. The volunteers were instructed to stand for at least three hours and wore throughout the day an accelerometer (to measure movement), as well as heart rate monitors and glucose monitors. The researchers took measurements on days when the volunteers stood and compared them to days when they sat.

The results:

  • On standing days, the volunteers' blood glucose levels went back to normal much more quickly after eating a meal compared to on the days when volunteers sat. High glucose levels have been  inked with increased risks of heart disease and diabetes.
  • Standing caused the volunteers to have a much higher heart rate (around 10 beats per minute higher), which adds up to burning about 50 calories more per hour versus sitting. Over a year, that adds up to about 30,000 more calories or 8 pounds of fat.

"If you want to put that into activity levels," Dr Buckley says, "then that would be the equivalent of running about 10 marathons a year. Just by standing up three or four hours in your day at work."

This was just a small, simple study, of course, but it's just another indication that getting up out of your chair is good for you, particularly if you want to lose or maintain weight. (And, yes, of course, this isn't an excuse not to regularly exercise.) Ready to get started? Check out our standing desk resources, and for even more fitness while working, consider a treadmill desk or do yoga at your standing desk.

Calorie burner: How much better is standing up than sitting? | BBC News

Monday, October 21, 2013

Most New ObamaCare Enrollees Are Actually Just Going Into Medicaid Not Private Exchanges

We have all heard that enrollment is woefully low. But now we are finding out that the he overwhelming majority if those enrollees are simply low income folks pushed into Medicaid.   

This is from David Freddoso

... In terms of getting more people insured, it might seem like a minor detail. But the private insurance exchanges, a centerpiece of Obamacare, need a very large number of people to sign up if they are to be viable insurance pools. By the Obama administration’s estimate, they need about 7 
million people to sign up for the exchanges nationwide. (They also estimate they need 2.7 million of those to be young/healthy types, a separate but related issue.) There is a separate goal of enrolling another 8 million poor people in Medicaid.

Yesterday, The Washington Post suggested that at least 185,000 people have signed up for Obamacare:. That sounds promising for the program even if it’s still well short of the pace needed to meet the goals. And then Oregon has just reported 56,000 enrollments. So isn’t everything going just fine?

In fact, no. When you see state enrollment numbers, you have to ask yourself this question: How many of those people are actually becoming Obamacare private insurance exchange customers, as opposed to people who (1) were always eligible but are just signing up for Medicaid for the first time, and (2) people who are newly eligible for Medicaid under the expanded coverage thresholds in some states?

In Oregon, that 56,000 number you’re hearing today is all Medicaid. Their online exchange doesn’t even work yet. The state bulked up its Medicaid rolls by targeting food stamp recipients. So great, those folks have some kind of insurance (whether or not a doctor will see them), but it tells us nothing about the private health insurance exchanges — the middle class version of Obamacare — or how they’re going to fare.

Something similar is happening in many other states as well. Minnesota, for example, said it had 3,800 applicants. But when you scratch the surface, only 406 of these are Obamacare exchange applicants — again, most of the signups were low-income customers who were steered to Medicaid instead.  

Washington State is Obamacare’s biggest success story so far. But it has only about 3,000 people actually enrolled in the private exchange plans. Nearly 90 percent of enrollees so far are going to Medicaid instead. Although it isn’t completely clear from their confusing presentation of the numbers, it appears they have as many as 25,000 exchange applicants in all, if you include people who have applied but haven’t paid. Even so, that’s half the number people have been bragging about from Washington. So even the best success story is perhaps less exciting than believed. 

California, has put 600,000 new people on Medicaid, but their last hard number of actual, completed applications for the exchanges was under 17,000. That’s over a week old, but I’m still skeptical when I see them say that 100,000 “are in some stage of applying for insurance on the marketplaces.” Why all those weasel words? Have those people completed applications — in which case California is doing great — or have they merely entered their zip code and started looking at plans? California may not release any reliable numbers on their exchange enrollment until next year.

Then there are the real hard cases. Wisconsin had supposedly drawn less than 100 private exchange enrollments — although it will at least be shifting thousands of Medicaid patients into the program, which could give its exchange a better chance at the volume it needs for survival. Colorado had 305 enrollees as of the other day (226 enrollments). Maryland enrolled “more than 1,120″ as of this week. Alaska had supposedly enrolled no one at all — not one person — as of late last week. ...

Remember that in the Exchanges Blue Shield does Not Mean The Blue Shield You think It Does

Nor does Health Net mean Health Net and so on and so forth.  

Nor can you or your doctor's office even tell you if they are or are not in the Exchange plans.  

This is from Fabrizio Costantini for The New York Times:

... Since the new health insurance exchanges opened for business on Oct. 1, millions of people who have visited the online sites have been unable to enroll because of technical problems and software glitches. But many people who are getting through the log-in process are encountering a different set of problems when they try to determine whether policies sold through the exchanges will provide the doctors, hospitals or drugs they need.

Most of the 15 exchanges run by states and the District of Columbia do not have provider directories or search tools on their Web sites — at least not yet — so customers cannot easily check which doctors and hospitals are included in a particular plan’s network. Most allow customers to search for providers by linking to the insurers’ Web sites, but the information is not always accurate or easy to navigate, health care experts say.

At this stage, even many doctors are uncertain about whether they are contracted with exchange plans from state to state because the plans — and even some of the insurers — are so new....

Saturday, October 19, 2013

'The federal healthcare exchange was built using 10-year-old technology that may require constant fixes and updates for the next six months and the eventual overhaul of the entire system'

The federal health care exchange was built using 10-year-old technology that may require constant fixes and updates for the next six months and the eventual overhaul of the entire system, technology experts told USA TODAY.

The site could be perfect, but if the systems from which it draws data are not up to speed, it doesn't matter, said John Engates, chief technology officer at Rackspace, a cloud computer service provider.

"It is a core problem in the sense of it's fundamental to this thing actually working, but it's not necessarily a problem that the people who wrote can get to," Engates said. "Even if they had a perfect system, it still won't work."

Recent changes have made the exchanges easier to use, but they still require clearing the computer's cache several times, stopping a pop-up blocker, talking to people via Web chat who suggest waiting until the server is not busy, opening links in new windows and clicking on every available possibility on a page in the hopes of not receiving an error message. With those changes, it took one hour to navigate the enrollment process Wednesday.

Those steps shouldn't be necessary, experts said.

"I have never seen a website — in the last five years — require you to delete the cache in an effort to resolve errors," said Dan Schuyler, a director at Leavitt Partners, a health care group by former Health and Human Services secretary Mike Leavitt. "This is a very early Web 1.0 type of fix."

"The application could be fundamentally flawed," said Jeff Kim, president of CDNetworks, a content-delivery network. "They may be using 1990s technology in 2.0 world."

Outsiders acknowledged they can't see the whole system, but they said they feared HHS built a system that will need an expensive overhaul that would cause more headaches for people trying to buy insurance.

"I will be the first to tell you that the website launch was rockier than we wanted it to be,'' HHS Secretary Kathleen Sebelius said Wednesday at Cincinnati State Technical and Community College, adding that people have until Dec. 15 to enroll to ensure coverage beginning Jan. 1.

HHS officials did not respond to a request about the nature of the problems. However, they reiterated that wait times have been reduced or even eliminated as they continue to work to fix the system. As of Thursday, the site had received 17 million unique visitors.

"We continue to work around the clock to improve the consumer experience on," HHS spokeswoman Joanne Peters said. "We are seeing progress: wait times to begin the online process have been virtually eliminated, and more consumers are creating accounts, completing applications and ultimately enrolling in coverage if they choose to do so at this time. However, we will not stop addressing issues and improving the system until the doors to are wide open."

Engates said HHS has been opaque about the problems, and the tech industry doesn't know the extent of the issues. "There's no secrets leaking out," he said. "I'm sure everyone's looking for something to change the direction of the conversation, but it's just not there."

"I think it's a data problem," Kim said. "It always comes down to that."

And if that's the case, the problems are beyond "rocky," he said. Instead, it would require a "fundamental re-architecture." In the meantime, "I think they're just trying to shore up as quickly as possible. They don't have time to start from scratch."

"If I was them, and I'm just conjecturing, I would probably come up with some manual way of saying, 'Only people with the last name starting with 'A' can sign up today," he said.

But come March 31, when the first enrollment period ends, the "shore up" period may become a "re-architecting" period, Kim said.

On a good note, he said, after looking at available code, the site is "very secure."

Clearing the cache, which has helped make it easier for some people to enroll, could ultimately strain the system more, Kim said. That's because a "cookie" is stored on a person's computer that contains data, such as the person's name and address, that can then be quickly accessed when that person gets on the website again instead of having to be retrieved from the government's server.

But as HHS fixes errors, the cookies may not correspond with the updated website, so rather than allowing someone to quickly log in, they instead cause an error message. And every time a person clears his computer's cache, the government's website has to work that much harder to grab more data.

Requiring people who may not be Web savvy to use the site in any way other than a step-by-step easy process defeats the point of the whole system, Schuyler said. That includes laws mandating that insurers provide clear explanations about policies to people may make sound decisions and understand what they're buying.

"Most consumers will have no idea what 'clearing the cache' is and this will just cause more confusion and frustration," he said.

So far, the site's problems have not driven away potential customers, according to a poll conducted by uSamp — United Sample Inc. The survey found that among the 832 people who attempted to log in, 38% received an error message, 50% were asked to try again later, 25% were unable to create an account, 31% were told the system was down, and 19% had no problems. About 83% said they would try again later, while 15% said they would wait until they heard the website was working well. About 70% of those who said they had no issues said they still waited to enroll because they want to think about their options. ... 

Friday, October 18, 2013

Questionable FMLA certification? Here’s How to Handle It

From Tim Gould at HR Morning:
Incomplete or unclear FMLA certifications – they’re among HR pros’ biggest pains in the butt. Here’s a quick refresher course on how to handle them.

You do have a number of options when you receive certification paperwork you feel doesn’t adequately document an employee’s serious medical condition.
The rules

There are essentially five problems an FMLA certification can have. It can either be:
  • Incomplete — defined by the DOL as certification in which “one or more of the applicable entries on the form have not been completed”
  • Insufficient — defined by the DOL as having information that is “vague, unclear or non-responsive”
  • Inauthentic — when a manager questions if the employee’s healthcare provider actually completed and signed the document
  • Unclear — when it’s difficult to understand a physician’s handwriting on the form or the meaning of his/her response, or
  • Invalid — when an employer has a reason to doubt the physician’s authority or the legitimacy of the certification. 
Incomplete or insufficient 
When a certification is deemed incomplete or insufficient, the DOL requires the employer to give the employee a written notice stating what additional information the employee needs to provide to make the certification complete and sufficient. 
The employee must then be given at least an additional seven calendar days to return the certification. 
If the employee fails to provide an updated, complete and sufficient certification within the established time frame, the employer may deny the employee’s FMLA request. 
Inauthentic or unclear 
When a certification is deemed to be unclear or lacking authenticity, it’s time to completely take the matter out of the hands of the employee’s manager/supervisor. 
The DOL says at this point only an HR professional, a leave administrator, another healthcare provider or a management official can contact the employee’s healthcare provider to authenticate or clarify the certification.
Three things your company — or its appropriate representative (from the list above) — can ask the employee’s healthcare provider:
  • If the information contained in the FMLA certification was completed or authorized by him or her
  • Questions to clarify the handwriting on the form, and
  • Questions to clarify the meaning of the provider’s response on the form.
Warning: The DOL explicitly says, “Under no circumstances may the employee’s direct supervisor contact the employee’s health care provider.” 
If an employer has a reason to doubt the validity of a worker’s FMLA certification, it may require the worker to obtain a second medical certification. 
The employer can select the healthcare provider that will complete the certification — as long as it isn’t a provider the company employs on a regular or routine basis. 
If the second opinion differs from the original certification, the employer can request a third opinion — but this time the provider must be selected by both the employee and the employer. The third opinion is final and must be the one used by the employer for the purposes of accepting or denying an employee’s FMLA leave request. 
The employer is also responsible for paying for the second and third opinions, as well as any travel expenses incurred by the employee, or his or her family members to obtain those opinions. 
In addition, while waiting for the opinions, the employee is provisionally entitled to FMLA leave.
Source: DOL’s Fact Sheet #28G.

Thursday, October 17, 2013

ObamaCare Rollout Commemorative Stamps

99.6% of ObamaCare Exchange Vistors Leave Site Without Enrolling

Obamacare has a 99.6 percent rating—and not in a good way.

A paltry 36,000 people managed to enroll in the federal online health-insurance marketplace in its first, software-glitch-ridden week of operation, a grim new analysis found Wednesday.

That's "far fewer than one percent of all visitors to" for the week ended Oct. 5, wrote Matt Pace, managing director of research firm Millward Brown Digital, on a blog post entitled "A Bleak First Week."

In fact, the firm found 99.6 percent of's visitors left before enrolling in coverage, a sobering statistic given the Obama administration's goal of signing up 7 million people on new government-run health exchanges by 2014. is offering a menu of health insurance plan options to residents of the 36 states that are not operating their own health exchanges. Previously released data from the states running their own exchanges—a number of which are struggling with tech problems of their own—also suggests a very low level of enrollment so far.

"Unfortunately, what started as a fire hose of interest, resulted in only a small trickle of actual health-care enrollments," Pace wrote....

Full story from CNBC.

Wednesday, October 16, 2013

ObamaCare Propoganda to Appear in Your Favorite TV Shows

... Hollywood Health & Society, a program with the USC Annenberg Norman Lear Center got a $500,000 grant this week from The California Endowment to help TV writers tell better stories about the new health insurance law.

Why try to get your public health message into fictional story lines? People learn from TV," says Marty Kaplan, the director of the Norman Lear Center. "Even if they know it is fiction, even if they know if writers can make stuff up, especially in the realm of medicine and public health, if a doctor says something to a patient, people tend to think that someone has checked that, that it’s true,” Kaplan says.

Kaplan’s group works to make sure that at least some of what comes out of doctors' mouths is real, or at least real-ish. Hollywood Health & Society has worked with nearly 100 TV shows -- everything from "Mad Men" to "Desperate Housewives" to "Dr. Vegas" and "The Bold and the Beautiful." The Center has access to the megaphone that is Hollywood.

And that’s appealing to The California Endowment, which gave the $500,000 grant. Hollywood Health & Society will reach out to TV writers and editors says Daniel Zingale, Senior V.P. of Healthy California at The California Endowment. “They’ll be giving them content, storylines, information, so that people watching those programs will learn about Obamacare and useful information about how to get enrolled.”...

Source: Adrienne Hill at the Healthcare Marketplace.

Tuesday, October 15, 2013

CIGNA to Brokers: Don't Use Exchanges for a Month Because We Think Subsidy Calcs are Wrong

... For instance, one major insurance carrier, Cigna, sent a notice Wednesday to insurance brokers instructing them to wait until November to try to sign up customers who might qualify for a subsidy, according to Joseph Mondy, a Cigna spokesman. He said that the company does not yet trust the reliability of the part of the exchange that is supposed to calculate the tax credits that will, for the first time, help some Americans pay for private health coverage.

Cigna is one of the insurers that has built its own online “portal” for brokers to use, but that portal must communicate with the federal exchange to find out about a potential subsidy.
Cigna is selling health plans via the federal exchange in four states: Arizona, Florida, Tennessee and Texas. Mondy said the carrier has seen “multiple enrollments” coming through for the same customer on the same day.

A Blue Cross Blue Shield plan in a Southern state said that it has also gotten simultaneous reports of the same consumers enrolling as of Jan. 1 and cancelling as of Dec. 31, 2014.

“It’s a glitch that . . . needs to be fixed,” said a spokesman for the plan, who, like most insurers interviewed, spoke on the condition of anonymity to avoid antagonizing the Obama administration.
Compounding the confusion, these electronic enrollment files are missing a critical element that they were built to include: a time stamp that would let a health plan track whether a consumer’s last step on the site was to actually sign up. ...

Excerpted from the Washington Post, by Amy Goldstein and Ariana Eunjung Cha.  

Exchange Automation Debacles: a welcome letter, a cancellation letter, a welcome letter, a cancellation letter, and repeat...

Bob Laszewski interviewed by Ezra Klein, Hat tip, Dr. John Goodman


The insurance industry is literally receiving a handful of new enrollments from the 36 Obama administration-run exchanges. It’s really 20 or 30 or 40 each day through last week. And a good share of those enrollments are problematic. One insurance company told me, “We got an enrollment from John Doe. Then five minutes later we got a message from CMS disenrolling him. Then we got another message re-enrolling him.” On and on, up to 10 times. So insurers aren’t really sure if the enrollments they’ve got are enrollments they should have.

And remember, the insurers have automated all this. They don’t have a clerk sending out a welcome letter and an enrollment card. So if you just let the computer run, it could theoretically issue a welcome letter, a cancellation letter, a welcome letter, a cancellation letter, etc. Now, they’re not doing this right now because it’s all screwed up. They can manage a few dozen per day by hand. But when you’re talking about thousands or tens of thousands or hundreds of thousands, it becomes completely unmanageable.

Serious Flaw: Why the Exchanges Will Raise Healthcare Prices

Ignore the inevitable startup glitches. The new health-insurance exchanges will work just fine -- in the sense that all government health-care programs work: Many people will ultimately become dependent on them for coverage. That won’t mean the exchanges have fulfilled their promise, however.

Forget the superficial comparisons to a commodity exchange, an online retailer or even a bulletin board. The health exchanges won’t resemble any other marketplace. Over time, rather than encourage insurance providers to offer ever more attractive and affordable policies, the exchanges are poised to push up the cost not only of insurance but also of health care itself. That means, if the history of U.S. health-care policy is any guide, the exchanges’ very “success” will have the effect of limiting access to care for the 30 million people who are estimated to remain uninsured.

Why are things set to go so badly? Because the architects of the health-care exchanges have relied on three crucial assumptions, all of which are probably wrong.

First, they have assumed that if insurers are prevented from competing on benefit design or on underwriting, they will compete on price. But why should they compete at all?

Limited Competition

The exchanges embody what seems like a simple trade: In return for many new customers, insurers accept broad restrictions on their freedom to design and market policies. The biggest requirement is that they agree to insure at the same policy price any and all customers, regardless of their health (with only small formulaic adjustments for age and smoking). From a consumer point of view, that sounds great, and indeed it’s one of the most popular elements of the Affordable Care Act. But from the insurer’s perspective, it courts disaster. With too many sick or high-risk people in its pool an insurer can lose money. So the insurer’s smartest approach is to set premiums high enough to make a profit even if it winds up with a lot of sick beneficiaries.

Competition among insurers is supposed to counteract this incentive, but the exchanges can perversely limit competition. The same pricing transparency that makes it easy for consumers to shop enables insurers to make sure they don’t charge less than their competitors do. This is how airlines take advantage of their electronic exchanges. It’s not as if insurance is currently a competitive market; even most private companies have trouble getting more than one bid for employee coverage. Rather than compete aggressively for customers, insurers can use exchanges to informally divide the market among themselves at high premiums.

Understanding Health Insurance Exchanges

The designers of the health-care exchanges have also assumed that consumers, by shopping for the best deal, will drive down premiums. However, a major flaw in the design of insurance subsidies will insulate almost all of the initial customers -- the estimated 20 million subsidized households -- from concern about how much their policies cost.

Now, it’s not supposed to work this way. Only those Americans who don’t get insurance at work and who have income that puts them between 100 percent (138 percent in Medicaid expansion states) and 400 percent of the federal poverty level are eligible for exchange subsidies. As income rises within this bracket, the subsidy shrinks. But in practical terms, everyone who is subsidized has an infinite subsidy that will make them insensitive to premium levels.

How can that be? Let’s take an example. A family of four at 138 percent of the poverty level ($32,499) has its premium capped at 3.29 percent of income or $1,071. The rest is subsidy. So, if the cost of a silver plan is $10,000, the subsidy for this family is $8,929. A family at 400 percent of the poverty level ($94,200) has to pay up to 9.5 percent of its income for a plan, or $8,949. So the same $10,000 premium carries a subsidy of only $1,051.

Insurer’s Perspective

But now look at those two families from the insurer’s perspective. A $10,000 plan already costs more than the maximum amount either family would pay. If the insurer raises the premium to $10,001, both families get $1 in additional subsidy. If it raises premiums to $11,000, both families get $1,000 in additional subsidy. In other words, no matter how much an insurer raises rates, a subsidized household pays zero more.

The second-cheapest silver plan is the benchmark for setting subsidies. How can insurers push up premiums artificially on this plan when there are platinum, gold and bronze plans also for sale? Again, easy. By law, these other plans differ from silver primarily by the amount of beneficiary cost-sharing. So the insurer can simply price a silver plan as high as possible, and then adjust the premiums for the other plans accordingly. If these prices end up being too high to attract any actual customers, who cares? Why would an insurer lose the opportunity to share 20 million price-insensitive customers just to compete for a smaller number (the Congressional Budget Office estimates 4 million by 2016) of low-profit price-sensitive ones?

There’s one more big assumption about the exchanges at work: that the price of health insurance passively mirrors the price of health care. But there’s plenty of evidence that insurance itself can drive up the cost of care -- when both insurers and beneficiaries are undisciplined in controlling prices. In what may be the single greatest source of unintended consequences in the Affordable Care Act, insurers are now required to spend at least 80 percent of revenue from premiums on care. Superficially, this means that if they set premiums too high, they will have to eventually refund much of the money that they don’t end up spending on care. But let’s say you’re running an insurance company. You can find ways to spend more money on beneficiaries’ health care -- say, with more generous definitions of free preventive care, more expansive rehabilitation services or higher reimbursement rates on doctors’ services -- and keep 20 percent of the all money you bring in. Or alternatively, you can spend less on care and give refunds. Easy choice.

Wrong Incentives

In the end, we have incentives for insurers not to compete, for customers not to care about price, and for insurers to drive up the cost of care. Not much of a marketplace, is it?

Of course, it’s still possible that unsubsidized people will flock to the exchanges (especially if many middle-income Americans lose access to coverage at work), rebalancing insurers’ competitive interests. Or that the growing cost-sharing in all insurance will continue to moderate overall demand for services. Or that insurers will figure out clever ways to segregate price-insensitive (subsidized) buyers from price-sensitive ones.

What’s more likely, though, is that the exchanges will fit into a long pattern of U.S. health-care policy: They will serve a constituency (a policy triumph) while driving up the cost of care (which will be blamed on external factors).

When Medicare was enacted in 1965, seniors spent about 10 percent of their income on health care and worried about the cost. Today, seniors spend almost double that -- about 17 percent of their income -- on health care and, of course, still worry about cost. Medicare exceeded its budget projections from day one, and its unlimited-entitlement structure led to an explosion in the volume of care. Nevertheless, the program is hailed as a great success in many corners, and its beneficiaries consider it irreplaceable.

The new exchanges will undoubtedly also be hailed as a success -- no matter how much havoc their perverse incentives cause.

From David Goldhill, Exchanges Will Raise U.S. Health-Care Costs - Bloomberg.

How PPACA Reduces Healthcare Employment, Revenue and Expertise

Hospitals spend less on operations — largely by squeezing labor costs — to make up for lost revenue when Medicare cuts hospital prices, according to a study published in the journal Health Services Research.

The study found that hospitals eliminate 1.7 full-time jobs for every $100,000 drop in Medicare revenue. Nurses accounted for one-third of the reduced workforce. The study did not look at any impact on quality of care.

The results suggest that hospitals have the flexibility to respond as Medicare continues to squeeze hospital prices under the Patient Protection and Affordable Care Act, said co-author Chapin White, a senior researcher with the Center for Studying Health System Change and former principal analyst for the Congressional Budget Office.

“When Medicare cuts prices, it looks like hospitals figure out how to operate in a lower-cost way,” he said in an interview.

Many hospitals are moving aggressively to tighten spending on labor and supplies and to streamline care in response to recent and anticipated reductions in rates from public and private payers.

Under the ACA, Medicare will pay hospitals 1.1% less a year over a decade, starting in 2011, than it would have paid without the law, the study said.

That's $321 less per patient after 10 years, using a definition that accounts for patients who were admitted and those treated as outpatients, according to the paper. That takes into account the likelihood that private payers will cut prices as Medicare does.... 

Source: Modern Healthcare.

What a Dying Empire Looks Like: Anxiety Over Job Security is a Protected Disability Under ADA

This is from Walter Olson at CATO:

In 2008 Congress passed something called the ADA Amendments Act, which reversed various Supreme Court decisions and expanded other rules and definitions so as to enable many more persons to claim status as disabled for purposes of filing discrimination lawsuits under the Americans with Disabilities Act.

I predicted the ADAAA would lead to bad consequences, but even I didn’t foresee what happened in this South Dakota federal case, as told by employment blogger Eric B. Meyer. The plaintiff is a teacher who had been given a poor evaluation and been put on a “performance improvement” plan.

It was right around this time that the teacher met with a physician’s assistant, who diagnosed the teacher with “anxiety and depression, likely stemming from her concerns about possibly getting fired.”

So, at the teacher’s request, the physician’s assistant wrote a letter to the school seeking a laundry list of accommodations, including:

  • restructuring her job to include only essential functions if stressful situations continue to negatively impact her 
  • encouraging her to walk away from stressful confrontations with supervisors; and 
  • providing coverage if she becomes overwhelmed with stress from the work environment and needs to leave.

The school responded to the full list of accommodation requests, agreeing to provide some, rejecting some, and requesting clarification as to others.

A month later, however, the school decided that her performance had not improved enough and decided to terminate her, after which she sued under the Americans with Disabilities Act (ADA). A federal court has now let her suit go forward, declaring that the teacher 

has come forth with sufficient facts to make a prima facie showing that her anxiety constitutes a disability under the ADA. This is especially the case when considering the relaxed standards imposed under the ADAAA for determining what constitutes a disability.

Thank you, U.S. Congress! At a time when the hiring prospects for new law school grads look grim, you’ve helped ensure that many, many lawyers will have gainful employment into the indefinite future. 

Monday, October 14, 2013

The Extent of the Problems with the Exchanges is 'enormous', 'Not Just a Glitch' and 'Awful' says Insurance Exec to NYT

From an insurance executive participating in the PPACA Exchanges to the New York Times over the weekend:
... Like many people interviewed for this article, the executive spoke on the condition of anonymity, saying he did not wish to alienate the federal officials with whom he works. “The extent of the problems is pretty enormous. At the end of our calls, people say, ‘It’s awful, just awful.' ” 
Interviews with two dozen contractors, current and former government officials, insurance executives and consumer advocates, as well as an examination of confidential administration documents, point to a series of missteps — financial, technical and managerial — that led to the troubles. ...
Confidential progress reports from the Health and Human Services Department show that senior officials repeatedly expressed doubts that the computer systems for the federal exchange would be ready on time, blaming delayed regulations, a lack of resources and other factors.
Deadline after deadline was missed. The biggest contractor, CGI Federal, was awarded its $94 million contract in December 2011. But the government was so slow in issuing specifications that the firm did not start writing software code until this spring, according to people familiar with the process. As late as the last week of September, officials were still changing features of the Web site,, and debating whether consumers should be required to register and create password-protected accounts before they could shop for health plans. 
One highly unusual decision, reached early in the project, proved critical: the Medicare and Medicaid agency assumed the role of project quarterback, responsible for making sure each separately designed database and piece of software worked with the others, instead of assigning that task to a lead contractor. 
Some people intimately involved in the project seriously doubted that the agency had the in-house capability to handle such a mammoth technical task of software engineering while simultaneously supervising 55 contractors. An internal government progress report in September 2011 identified a lack of employees “to manage the multiple activities and contractors happening concurrently” as a “major risk” to the whole project. ...

Friday, October 11, 2013

The Sickest 1 percent Account for 21 percent of US Healthcare Spending

  • Patients among the costliest 1 percent, whose ranks no one wants to join, consumed 21 percent of the nearly $1.3 trillion Americans spent on health care in 2010. 
  • That amounts to a cost of nearly $88,000 per person. 
  • 5 percent of patients accounted for 50 percent of all health-care expenditures. 
  • By contrast, the bottom 50 percent of patients accounted for just 2.8 percent of spending that year, according to a recent report by the federal Agency for Healthcare Research and Quality.
  • In 2010, the top 5 percent of males accounted for 55.7 percent of health care expenditures incurred by this subpopulation with an annual mean of $40,852. 
  • Among females, the top 5 percent were associated with 45.1 per of health care expenditures for this subgroup, with mean expenditures of $40,617.

Employer PPACA Reporting is Coming and You're Not Going to Like It

The proposed regulations are out. This is going to be a nightmare for many HR departments. The first reports are slated to begin in early 2016 based on 2015 plans.  Employers who don't have at least 75% of eligible employees covered under employer sponsored plans as required by most insurance contracts and 70% of employees covered under their plan as required by I.R.C. 105(h) will have no place to hide and be nudged to drop health care and push folks into the Exchanges.

This excerpt is from Seyfarth Shaw IRS Proposes Reporting Requirements for Plan Sponsors:
What information must be reported to the IRS?
Social Security Numbers:
Notably, the proposed regulations require reporting entities to make reasonable efforts to collect social security numbers (SSN).  Although the proposed regulations allow reporting entities to use a date of birth if a SSN is not available, this alternative should not be used unless the reporting entity has made reasonable efforts to obtain the SSN.  According to the preamble, this means that after an initial attempt to collect a SSN, a reporting entity must make two additional (consecutive) annual attempts.  If a reporting entity makes the two additional attempts, no penalty will be imposed for failing to provide all required information.  Many employers have been backing away from requiring employees to report social security numbers when enrolling in health coverage.  This new reporting requirement may require employers to shift gears and require this information during their next open enrollment.

The 6055 Report will allow taxpayers to establish, and the IRS to verify, the months during the year during which taxpayers had minimum essential coverage to satisfy the individual mandate.  Specifically, Section 6055 requires all providers of minimum essential coverage to report the following to the IRS:
    • The name, address, and employer identification number (EIN) of the employer plan sponsor;
    • the name, address, and taxpayer identification number (TIN) (i.e. social security number), of the primary insured, employee, former employee or related person (for example, a parent or spouse)  who enrolls for coverage (the “Responsible Individual”);
    • the name and TIN (i.e. social security number), of each other individual covered under the program; and
    • the months for which, each covered individual was enrolled in coverage and entitled to benefits (for at least one day). ...
What is the timing and manner of filing?
6055 Reports will be submitted to the IRS using IRS Form 1095-B, along with a transmittal form, IRS Form 1094-B, made available at a later date.  These forms must be filed with the IRS on or before February 28 (or March 31 if filed electronically) of the year following the calendar year to which they relate. Reporting entities must issue the 6055 Report to Responsible Individuals no later than January 31 of the year following the calendar year in which minimum essential coverage was provided. ...
The proposed regulations require each ALE member to report:
    • the name, date, and employer’s identification number (EIN) of the ALE member,
    • the name and telephone number of the applicable large employer’s contact person,
    • the calendar year for which the information is reported,
    • the number of full-time employees for each month during the calendar year,
    • a certification as to whether the ALE member offered its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an employer-sponsored plan, by calendar month,
    • for each full-time employee, the employee’s share of the lowest cost option of self-only coverage (that provides minimum value) offered under a plan, by calendar month, and
    • the name, address and TIN of each full-time employee and the months, if any, during which the employee was covered under the plan.
As stated above, the proposed regulations provide that plan sponsors of self-insured health plans must file a 6055 Report. The regulations confirm that in the context of a multiemployer plan, the plan sponsor (and entity responsible for issuing the report)  is the association, committee or joint board of trustees who establish or maintain a self-funded multi-employer plan. ...

California Limits Employers Ability to Self Fund Health Plans

Legislation designed to make it more difficult for smaller employers to self-insure by restricting their ability to obtain stop-loss insurance with very low attachment points was signed into law on Oct. 1 by California Gov. Jerry Brown.

S.B. 161, which takes effect Jan. 1, 2014, will prohibit stop-loss insurers in California from issuing policies with specific deductibles below $35,000 for self-funded employer plans. After Jan. 1, 2016, the law increases the minimum specific attachment point to $40,000.

Also under the law, starting Jan. 1, aggregate attachment points cannot be less than $5,000 times the total number of group members, 120 percent of expected claims, or $35,000 ($40,000 after Jan. 1, 2016). 

Starting April 1, 2014, and each April 1 thereafter, stop-loss insurers will have to report to the California Department of Insurance the number of small employer stop-loss polices they had issued that were in effect as of Dec. 31 of the previous year. 

Source: Thompson Information Services

The ACA will Cause a “Seismic Shift” Toward High-Deductible Health Plans

The ACA is ... expected to cause a “seismic shift” in HDHP enrollment. Small employers newly required to purchase employees’ insurance may well choose HDHPs as the least expensive coverage option. Larger employers might adopt HDHPs to achieve ACA-regulated premium levels and avoid the 2018 “Cadillac tax.”

For individuals without employer-based insurance options, ACA-instituted health insurance exchanges will provide coverage at four levels of generosity (bronze, silver, gold, and platinum) to 5 to 10% of Americans younger than 65…Cover Oregon, for example, estimates that cost sharing for Oregon families with incomes between 200 and 399% of the poverty level will include $5,000 deductibles, 30% coinsurance for many services even after reaching the deductible, and out-of-pocket spending maximums of $8,500 to $12,700.

Source: New England Journal of Medicine. Hat tip: John Goodman's Health Policy Blog.