| Greetings! We
hope that you are off to a healthy New Year! Please take a few moments to read
this month's newsletter. This issue's articles pertain to Health Care Reform,
Medicare Issues, New Regulations regarding the Genetic Information Nondiscrimination
Act, Changes to Blue Cross of Rhode Island and Guardian, and more! If you have
any questions regarding this information, please do not hesitate to contact us.
As
part of the Patient Protection Affordable Care Act the following rules are now
effective: - A provision that limits what health insurers
can do with the money their customers send in as premiums.
This
rule requires that insurers spend at least 80 percent of this money on the customers
themselves. The companies must either spend this money to pay insurance claims
or use it for activities that improve customers' health. For policies that are
sold to large groups instead of small companies and individuals, the number is
even higher: 85 percent. The remaining 15 or 20 percent of the money can be used
for a company's salaries, marketing and overhead - or kept as profit...Insurance
companies say this could cause them to cut back on the services they offer, or
even pull out of states where administrative costs are higher. - A
provision that provides prescription-drug discounts for seniors in Medicare's
"doughnut hole."
The doughnut hole is
a controversial gap in the Medicare prescription-drug benefit passed in 2003.
In 2010, for instance, Medicare paid for part of the cost of drugs - until the
total cost of the drugs hit $2,830. After that, seniors were responsible for 100
percent of the cost of their drugs, until they had spent $3,610 of their own money.
That was the other side of the doughnut hole, and federal insurance kicked in
again. This provision will give Medicare recipients stuck in the doughnut hole
a 50 percent discount on the price of brand-name prescription drugs. Health-care
activists are worried, however, that drugmakers will jack up their prices. In
that case, customers would receive 50 percent off that higher number - which might
not be much less than what they were paying before. - A
rule giving seniors free screenings for cancer and other diseases.
Nearly
all Medicare beneficiaries will be able to receive for free all "preventive
services" screenings given an A or B rating by the U.S. Preventive Services
Task Force. That could include mammograms, colorectal cancer screening, bone mass
measurement and nutritional counseling. Medicare will also provide one free "wellness
visit" per year for patients who want a checkup. - The
creation of the Center for Medicare and Medicaid Innovation.
This
new agency is aimed at slowing down the rapid rise of health-care costs. It is
supposed to foster innovation in both caring for patients and processing their
payments and claims. Taken from "New
health-care rules to take effect" by David A. Fahrenthold, Washington
Post.
A recent analysis has shown that the amount
an individual pays in Medicare and Social Security taxes does not even come close
to covering the full value of the medical expenses they can expect to incur as
seniors. The payment of Medicare taxes amounts to three times more than the value
of Medicare expenses an average-wage earning couple can expect to have. Similiarly,
an average-wage earning couple can also expect to receive about ten percent less
in Social Security benefits, than what they paid in taxes during their working
years. Many believe that their Medicare and Social Security
payroll taxes are going towards their own benefits after retirement, however,
those taxes are being used for those currently enrolled in the programs. Whether
or not the taxes employees pay now towards Medicare and Social Security are going
to be available for them when they retire is becoming a major question of concern.
Currently, Medicare covers 46 million seniors and disabled people. When the last
of the baby boomers reach 65, in about 20 years, Medicare will cover more than
80 million people. Unfortunatly, the ratio of workers paying taxes to support
the program will go down from 3.5 for each person receiving benefits, to 2.3. The
rapid rise in health care costs is somewhat to blame for the gap between Medicare
tax and Medicare benefits. Recent debt-reduction proposals may cause major changes
to the Medicare program, and some plans propose to phase out Medicare completely,
and replace it with a fixed payment plan, giving future retirees the option to
buy a private plan of their choice instead. Taken from
"Analysis
Illustrates Big Gap Between Medicare Taxes and Benefits" by Ricardo Alonso-Zalfivar,
The Washington Post.
On Jan. 10, 2011, the final regulations under Title II of the Genetic Information
Nondiscrimination Act (GINA II), which were issued by the Equal Employment Opportunity
Commission, went into effect. GINA II applies to private
and state and local government employers with 15 or more employees, employment
agencies, labor unions, and joint labor-management training programs. It also
covers Congress and federal executive branch agencies. The term "covered
entity" is used in this article to refer collectively to all those subject
to Title II of GINA. Specifically, GINA (1) bars the use
of genetic information in employment decision-making; (2) restricts deliberate
acquisition of genetic information; (3) requires that genetic information be maintained
as a confidential medical record; and (4) places strict limits on disclosure of
genetic information. The newly issued final ruling is generally
consistent with, but not identical to, the previously issued regulations under
Title I. But key for those who offer or are considering offering health and wellness
programs to their workforce is that GINA II provides clearer and more specific
guidelines for compliance. Incentives and rewards The
important clarification GINA II brings to health and wellness program administration
is that, while employers may not offer an inducement for individuals to provide
genetic information, they may offer financial incentives to encourage participation
in health or genetic services and request family health history information -
if certain requirements are met: · First, the program
must be voluntary. The employee must provide prior, knowing, voluntary and written
authorization. The authorization can be in electronic form, but must be recorded
prior to asking for the genetic information, and the authorization must describe
the information being sought and the safeguards in place to protect its privacy. ·
"Bifurcated" HRAs must be offered, clearly stating that completing the
section of the questionnaire seeking genetic information is purely optional and
that any reward offered will be provided whether that portion is completed or
not. · Any wellness or disease management program
offered to address a particular disease or condition must be offered to all qualifying
workers, not just those who answered the genetic questions indicating risk for
that disease. · Any incentives to participate in
a wellness or disease management program must be available to all workers who
qualify for the program - those who volunteered genetic information and those
who did not. · If a covered entity contracts with
a third party to operate a wellness program or to provide other health or genetic
services, it must ensure that individually identifiable genetic information is
accessible only to the individual and the health care provider involved in providing
such services and not accessible to managers, supervisors, or others who make
employment decisions, or to anyone else in the workplace. For
a list of clarified terms to avoid misunderstanding, click here. To
review the final regulations of GINA II, click here. Taken
from "GINA
II Regs Provide Welcome Clarification", by Robert Mrizek, Employee Benefitnews.
Guardian
to Withdraw from Medical Business,
Focus on Non-medical Solutions Today,
Guardian announced plans to withdraw our medical insurance product line from all
states, pending regulatory approval. This means we will no longer quote any new
medical insurance business and we will work to wind down our existing medical
business over the next two years. This strategic decision allows us to have even
greater focus on our non-medical employee benefits offerings (dental, vision,
disability, life, critical illness and voluntary/worksite), where we are better
suited to provide you and your clients with valuable coverage solutions. What
products are impacted by this decision?
Guardian's group medical
plans (fully-insured and self-funded options), prescription drug plans, and individual
medical plans. What products are not impacted by
this decision?
All non-medical group product lines (dental, vision, disability,
life, critical illness and voluntary/worksite), retirement plans, Individual Life,
and Individual Disability offerings. We're working to make
the transition as easy as possible for our medical planholders.
To assist
our current medical planholders in finding replacement medical coverage, we have
worked out an arrangement with UnitedHealthcare, a recognized leader in the medical
insurance industry, to provide comparable transition medical plan options to those
impacted employers. Focusing on what we do best - non-medical
benefits solutions.
Our medical enrollment has steadily declined over
the past several years, and now represents less than 2% of Guardian's total group
membership. However, we have seen significant growth in our non-medical product
lines. Revenue from Guardian's dental, life, vision, disability, critical illness
and voluntary/worksite product lines has nearly doubled over the past 10 years,
and represents more than 95% of our total group sales. While it no longer makes
strategic sense for us to continue in the medical insurance business, we are confident
that you and your clients will continue to view Guardian as a valuable source
for non-medical benefits solutions. We have already built a
very strong, independent block of non-medical business, as less than 2% of our
non-medical business is currently packaged with our medical coverage. Withdrawing
from the medical business will allow us to focus our capital and resources on
providing even more competitive non-medical solutions to the marketplace. Should
you have any questions about this decision or if you would like to learn more
about the non-medical benefits solutions Guardian can offer you and your clients,
please speak with your Guardian Sales Representative. Thank
you for your continued business. Sincerely, Scott
Dolfi, EVP, Business & Operations
Sincerely,
Maria Eramo
Partners Benefit Group, Inc. | 
