Friday, May 6, 2022

Compliance and Benefit News Updates, May 6, 2022

 Compliance Updates

IRS Information Letter Explains Requirements for Expenses to Qualify as Medical Care - “The IRS has released an information letter regarding the requirements for expenses to qualify as medical care under Code § 213. The letter responds to a request for guidance on when the cost of health and wellness coaching is medical care that can be reimbursed under health FSAs, HSAs, and other tax-favored accounts.”

Work From Home – SOS! Post-Pandemic Legal Hazards - “A Gallup poll last fall indicated that 61 percent of workers expect to work remotely at least part of the time in the future, and just 9 percent expect to work from home only minimally or not at all. With that in mind, employers and HR professionals must consider how to properly navigate the legal hazards stemming from our new normal. The following provides some key considerations in successfully managing a remote workforce.”

Cal/OSHA Approves Third Revised ETS and Clarifies Position on Some Lingering Questions - “California’s Division of Occupational Safety and Health (Cal/OSHA or “the Division”) Standards Board met on April 21, 2022, and formally approved the third readoption of its COVID-19 Emergency Temporary Standard (“3rd Revised ETS”)… Under Governor Newsom’s previous executive order that paved the way this readoption, the 3rd Revised ETS will become effective when the Office of Administrative Law completes its review and files it with the secretary of state, which is anticipated to occur before the end of the first week of May 2022, and will remain in effect through December 31, 2022.”

Which Federal Employment Laws Apply to My Company - There are a number of different federal employment laws that have their own rules for covered employers. Employers should be aware of the federal employment laws that may apply to their company. An employer’s size, or the number of employees, is a key factor in determining which federal employment laws the employer must comply with. Some federal laws, such as the Equal Pay Act (EPA), apply to all employers, regardless of size. However, other laws, such as the Family and Medical Leave Act (FMLA), only apply to employers that reach a certain employee count. Also, some federal laws, such as COBRA, include exclusions for certain types of employers (for example, churches). This Compliance Overview provides a high-level overview of key federal employment laws and explains which employers they apply to. Most states also have their own labor and employment laws. This summary does not address state labor laws, and it also does not address additional compliance requirements for companies that contract with the federal government or businesses in specific industries.

Benefit News

U.S. Hospitals Struggle to Absorb Pandemic-Era Rising Costs - "Labor costs per patient jumped by 19% in 2021 from 2019, and supplies rose by over 20% per patient during that period, according to the report. Nursing expenses shifted heavily toward travel nurses. The travelers’ share of nursing budgets rose to 39% in 2022 from 5% in 2019."

Spending on U.S. Medicines Rose 12% in 2021 Due to COVID-19 Vaccines and Therapies, Says IQVIA Institute for Human Data Science - Spending on medicines in the United States, at estimated net manufacturer prices, reached $407 billion in 2021, up 12% over 2020, as COVID-19 vaccines and therapeutics became widely available and added $29 billion in related spending. That’s according to a new U.S. Medicines Trends 2022 Report, released today by the IQVIA Institute for Human Data Science. In the same year, the non-COVID medicines market grew more slowly, at 5%, from the growing impact of biosimilars, which increased significantly, offsetting increased use of branded medicines.

HSA/HDHP limits for 2023 - HSA annual contribution limits for individual and family coverage will be $3,850 and $7,750, respectively. The HDHP minimum deductible for individual coverage will increase to $1,500, and $3,000 for family coverage. HDHP out-of-pocket maximum expense limits will be capped at $7,500 for individual coverage and $15,000 for family coverage.

Wednesday, April 13, 2022

Year Over Year Food Price Inflation

Here are the prices increases in various food categories that make up the Consumer Price Index report.

SOURCE U.S. Bureau of Labor Statistics as reported by the Detroit Free Press

Thursday, April 7, 2022

Obamacare's Twelfth Birthday, How It's Going with Armstrong and Getty

Spent a couple segments on the Armstrong and Gettys show this morning discussing Obamacare's accomplishments after twelve years. 


Here are my show notes for those who want to read more on the topic.  

Thursday, March 24, 2022

A Litany of COVID Vaccination, Abortion and Gun Legislation Proposed in California

Over the next few weeks, California's legislature will be voting on a myriad of newly proposed laws impacting healthcare, individual rights, and employer responsibility.  Here is a brief summary of some of them:  

From CalMatters:  

Taken together, the adoption of these bills would make California an outlier among states — and give it the country’s strictest COVID-19 regulations. Other states are considering various mandates and legislation related to COVID-19, but none appear to have the coordination of this effort, steered by some of the most powerful legislators in Sacramento.

“These bills all attempt to bring cohesion, consistency and clarity to our overall approach and response to the pandemic,” said Democratic Sen. Josh Newman of Fullerton, a member of the group.

The bills:
    • SB 871 would require all children 0 to 17 to get the COVID-19 vaccine to attend child care or school;
    • SB 866 would allow kids 12 to 17 to get the COVID-19 vaccine without parental consent;
    • SB 1479 would require schools to continue testing and to create testing plans;
    • SB 1018 would require online platforms to be more transparent about how information is pushed out to consumers;
    • SB 1464 would force law enforcement officials to enforce public health orders;
    • AB 1993 would require all employees, including independent contractors, to show proof of COVID-19 vaccine to work in California - defeated on March 29th;
    • AB 1797 would make changes to the California Immunization Record Database;
    • AB 2098 would reclassify the sharing of COVID-19 “misinformation” by doctors and surgeons as unprofessional conduct that would result in disciplinary action.  
Critics said the bills infringe on the health privacy of children, interfere with how doctors work, impose a burden on businesses and workers, and rely on vaccines that do not in many cases prevent the transmission of COVID-19.

Other legislation on tap in the Golden State:  

  • AB 1594 encourages California residents to sue gun makers, distributors of ghost guns, and "assault weapons" if they fail to "enforce reasonable controls, ... and take reasonable precautions to ensure that the [gun manufacturer] does not sell, distribute, or provide a firearm-related product to a downstream distributor or retailer of firearm-related products who fails to establish, implement, and enforce reasonable controls.  The bill would also prohibit a firearm industry member from manufacturing, marketing, importing, offering for wholesale, or offering for retail sale a firearm-related product that is likely to create a substantial and unreasonable risk of harm to public health and safety." 
  • Another bill proposed by Assembly Member Scott Wiener of San Francisco, "would render unenforceable in California any out-of-state court judgments seeking to remove children from their parents’ custody because they have received gender-affirming surgeries, hormone therapy, and other transgender medical care." 
  • Under SB 1142, taxpayer funds could be spent to help low-income California residents obtain abortions.  More significantly, the fund would be available to help out-of-state residents get abortions as well.  The legislation proposes, " the commission shall not require the submission of any identifying personal information about individuals receiving practical support services as part of an application for a grant [for an aborition] or reporting of expenditures and activities using grant [abortion] funds under this article." 

  • In order to "make capitalism more sustainable and humane," U.S. House Representative Mark Takano (CA) has proposed legislation that would reduce the standard workweek from 40 hours to 32 hours. 

Tuesday, March 1, 2022

Top 10 Most Expensive Chronic Diseases for Healthcare Payers

From  HealthPayerIntelligence

The top 10 most expensive chronic diseases for healthcare payers eat up significant healthcare dollars. ...Healthcare spending reached a total of $4.1 trillion in 2020, based upon estimates from CMS. Spending is expected to continue to grow at an average of 5.4 percent through 2025, with chronic diseases treatment comprising a significant portion of that spending. Based on the latest data from the CDC and presented in descending order, here are the top 10 most expensive chronic diseases for healthcare payers to treat.

  1. Heart disease and stroke costs in the US total $363 billion per year
  2. Diabetes care cost $327 billion in 2017
  3. In the US, the total cost of arthritis was an estimated $304 billion
  4. Excessive alcohol use cost the US economy $249 billion, or roughly $2.05 per drink
  5. Cancer care is estimated to cost $240 billion
  6. The United States spends $147 billion on healthcare related to obesity and roughly $117 billion on costs associated with inadequate physical activity
  7. Alzheimer's and related dementia, $244 billion
  8. Smoking, $225 billion
  9. Tooth decay, $45 billion
  10. Epilepsy, $8.6 billion


Wednesday, February 16, 2022

California Adopts COVID Sick Leave—Again

California has passed a new version of Supplemental Paid Sick Leave (SPSL) that will take effect on February 19, 2022, and apply retroactively back to January 1, 2022. The law expires on September 30, 2022. The law applies to employers with 26 or more employees. FAQs should be available soon on the Labor Commissioner’s webpage. Below are the key points from the statute.

Employee Eligibility

All employees of covered employers are immediately eligible, regardless of status, hours worked per week, or length of employment.

Amount of Leave

This new SPSL provides two separate banks of leaves: one that employees can access for numerous reasons related to COVID (we’ll call this Standard SPSL) and another they can access only when they or a family member test positive for COVID-19 (we’ll call this Positive Test SPSL).

Full-time employees (as defined by the employer) and those who have worked, or were scheduled to work, an average of 40 hours (or more) over the two weeks before their leave are entitled to 40 hours for Standard SPSL and an additional 40 hours for Positive Test SPSL.

Part-time employees are entitled to the number of hours they are usually scheduled to work in a week. If they have a variable schedule, they are entitled to seven times the average number of hours they worked each day in the previous six months (or the entire duration of employment if they’ve worked less than six months) or, if they have worked for seven days or less, the number of hours they have worked before taking leave. The same calculation applies to their bank of Standard SPSL hours and their bank of Positive Test SPSL hours.

No employee is entitled to more than 80 hours of SPSL between January 1, 2022, and September 30, 2022.

Use of Leave

Employees can take Standard SPSL if they are unable to work or telework because:
  • They are subject to a quarantine or isolation period related to COVID-19 according to an order or guidance of a public health authority.
  • They have been advised by a health care provider to isolate or quarantine due to COVID-19.
  • They are attending an appointment for themselves or a family member to receive a COVID-19 vaccine or a vaccine booster.
  • They are experiencing symptoms or caring for a family member experiencing symptoms, related to a COVID-19 vaccine or vaccine booster (for each shot, the employer can limit leave to three days or 24 hours, inclusive of time spent getting the shot, unless the employee provides verification from a health care provider that symptoms are ongoing).
  • They are experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  • They are caring for a family member who is isolating or quarantining because of COVID-19 according to an order or guidance of a public health authority or their health care provider’s advice.
  • The covered employee is caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.

Employees can use their Positive Test SPSL hours if they are unable to work or telework because:
  • They test positive for COVID-19
  • A family member they provide care for tests positive for COVID-19

Employers can’t require employees to:
  • Exhaust their Standard SPSL hours before using their Positive Test SPSL hours;
  • Use their state-mandated paid sick leave (PSL), vacation, PTO, or any other leave benefit before or instead of using SPSL for a covered reason; or
  • Use SPSL prior to providing paid leave under any Cal-OSHA COVID-19 Emergency Temporary Standard (e.g., in lieu of exclusion pay).
  • Use a certain amount of leave or use leave when they don’t want to. Employees have the right to choose when to use their SPSL and how much to use.

Rate of Pay

Non-exempt employees should be paid at their regular rate of pay for the workweek during which they use leave. If their rate of pay is not determinable just by looking at the week in question, divide the employee’s total wages (not including overtime or premium pay) by the employee’s total non-overtime hours worked in the full pay periods in the 90 days before they take leave. Exempt employees should be paid at the same rate you pay them for other forms of paid leave.

Employers can limit pay for SPSL to $511 per day per employee and $5,110 total per employee.

Offsetting an Employee’s SPSL Hours

Employers who provided an employee with another form of COVID-specific paid leave on or after January 1, 2022, can count those hours toward the employee’s SPSL entitlement. The leave provided must have been available for a reason covered by SPSL. The offset does not apply if an employee used their state-mandated paid sick leave (PSL), PTO, vacation, or other non-COVID leave.

There are two likely scenarios where an offset will apply: If an employer is voluntarily providing COVID-specific leave, separate from PSL and their regular PTO program; or if the employer has provided paid leave under a city- or county-mandated COVID-specific leave law.

Leaves Taken Between January 1 and February 18, 2022

If an employee took leave between January 1, 2022, and February 18, 2022, for a qualifying reason under the new SPSL, but was not paid for this leave in the amount required under this law, they have the right to request a retroactive payment equal to the amount required.

After the employee makes the oral or written request, the employer will have until the payday of the next full pay period to pay the retroactive SPSL.

An employee who used PSL or another type of paid time off for a qualifying reason between January 1 and February 18 will be entitled to request, orally or in writing, that those hours be converted to SPSL. Hours that were used from another bank (e.g., PSL or PTO) should be credited back to the employee.

Documentation from Employees

Employees are entitled to take Standard SPSL immediately upon oral or written request and may not be required to provide medical certification or proof of their need for leave.

Employers can require proof of an employee’s positive COVID-19 test to confirm their need for additional paid leave via Positive Test SPSL. While the law says an employer can also require proof of a family member’s positive test, the EEOC (Equal Employment Opportunity Commission) believes that this is prohibited by the federal Genetic Information Nondisclosure Act. We are hoping the state (or the EEOC) will provide guidance on this conflict.

Employers can require employees who take Positive Test SPSL to provide a negative test five or more days after their positive test before returning to the workplace. If this is required, the employer must pay for it.

Mandatory Notice

Employers must post a state-provided notice in a conspicuous location in the workplace. Employers whose workforces are remote, or partly remote, should ensure that those employees see the poster, either by sending it via email or posting it online. That notice should be made available next week on the Labor Commissioner’s webpage. We recommend checking this page frequently for the notice as well as promised FAQs.

Employers must also notify employees of how much SPSL they have used each pay period on their itemized wage statements or on a separate writing at the time wages are paid (even if that number is “0”). This requirement won’t be enforced until the next full pay period following February 19, so you have some time to work with your payroll department or provider to set this up.

Of note, last year’s version of SPSL required that employers show employees the remaining balance of their SPSL. Presumably, they have changed this rule because an employee’s balance is unknown—it will depend on whether they ever qualify for Positive Test SPSL, and for many employees, their balance will also depend on how many hours they have worked before taking leave.

2022 Healthplan Compliance Deadlines

Tuesday, February 15, 2022

Why America Has So Few Doctors

This is a great summary in the Atlantic

[The United States] has the longest, most expensive medical-education system in the developed world, and among the lowest number of physicians per capita. ...

Starting in the late 20th century, medical groups asserted that America had an oversupply of physicians. In response, medical schools restricted class sizes. From 1980 to 2005, the U.S. added 60 million people, but the number of medical-school matriculants basically flatlined. Seventeen years later, we are still digging out from under that moratorium. The U.S. is one of the only developed countries to force aspiring doctors to earn a four-year bachelor’s degree and then go to medical school for another four years. (Most European countries have one continuous six-year program.)

Friday, February 11, 2022

Free Cosmetic Surgery Offered In Massive Health Fraud Scheme

From ABC News:

The former executive director of a surgical center who helped her physician husband bilk insurance companies of $44 million for cosmetic procedures billed as “medically necessary” has pleaded guilty to health care fraud... For someone looking to trim some belly flab, downsize their nose or pump up their breasts, the deal was almost too good to turn down. Patients were promised free liposuction, nose jobs, breast augmentation and vaginal rejuvenation for free if they helped fudge the paperwork by signing 'testimonial' letters or declarations with false statements. Tummy tucks were listed on paperwork as hernia repair or abdominal reconstruction. Nose jobs were recorded as correcting a deviated septum. Breast jobs were supposedly to fix a 'tuberous breast deformity.' Linda Morrow admitted she coached employees to draft false documents, prosecutors said. Other documents were altered to cover up the true purpose of the surgery, according to court documents.


Only 14.3% of Hospitals Compliant with Price Transparency Rules After a Year | Meanwhile The Disclosures Made Reveal Price Disparities in Magnitudes of Ten

 This story really reminds me of this quote from James Madison:  

It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood: if they be repealed or revised before they are promulg[at]ed, or undergo such incessant changes, that no man who knows what the law is to-day, can guess what it will be to-morrow.

From Fierce Healthcare

Six months after finding only 5.6% of hospitals were in line with major price transparency requirements, an updated analysis from found hospitals’ compliance has increased to just 14.3%—with the country’s largest health systems serving as the worst offenders.

According to the report, only 0.5% of hospitals owned by CommonSpirit Health, Ascension and HCA Healthcare met the federal requirements. For-profit HCA, the largest of the three, was found by the group to fall short across every one of its 188 hospitals. ...

According to the report, 85.7% of the 1,000 hospitals did not post a complete machine-readable file of standard charges, while 4.1% did not post any standard charges file whatsoever. Additionally, 58.6% did not clearly publish payer-specific negotiated charges while 26.2% did not publish any discounted cash prices. ...

'The lack of compliance by hospitals is about more than simply the failure to follow the legal requirements,' the group wrote. 'It is also about the failure of hospitals to provide critically needed information to consumers so they can make better health decisions. Empowered with comparative price and quality information in advance of care, consumers, including employers and unions, can improve health outcomes while lowering costs by taking advantage of the benefits of competitive market efficiencies.' 

Yes, some of this is, of course, about the myriad of byzantine requirements making it incredibly difficult for businesses to follow, but I suspect an even larger portion of this is the hospital industry's unwillingness to shine even more of a light on this, from the Los Angeles Daily News:  

Consider the wild price fluctuations at these [Los Angeles area] hospitals for just one service: a standard outpatient non-contrast brain MRI (billing CPT code 70551). The price of this treatment at Cedars-Sinai varies by approximately ten times depending on the payer, from $367 for Blue Cross Blue Shield Medicare plans to $4,043 for commercial Kaiser plans.

The price for consumers with Blue Cross HMO coverage is $2,162, nearly half Kaiser’s price. These prices do not include additional facility and physician fees that patients must pay.

Brain MRI prices also vary wildly across nearby hospitals. The price disclosures indicate patients covered by a Blue Cross HMO at Torrance Memorial pay just $127 — 17 times less than Blue Cross HMO patients pay for the same scan at Cedars-Sinai just 20 miles away.

In other words, prices can vary by more than ten times for the same service at the same hospital with different insurance coverage. And prices can vary by more than ten times for the same service at different hospitals with the same insurance. Consumers lose either way.

If you include Medicaid prices — Huntington Hospital lists the Medi-Cal Los Angeles plan price for this same brain MRI at just $39 — prices can vary by 100 times.

Pomona Valley lists a cash price for this procedure: just $450. This reasonable price begs the question: What’s the point of paying thousands of dollars in healthcare premiums every month if hospitals charge insured patients thousands of dollars more than those paying cash? The Cigna price at Pomona Valley for the same treatment: $6,500.

Standalone, cash-based MRI centers in Los Angeles offer brain MRIs for as low as $225 with no additional facility fees. This cash discount demonstrates how health industry bureaucracy and profiteering drive up prices.