Partners Benefit Group, Inc. is pleased to introduce a new service to our clients!
As DOL Audits are up, PBG Helps you Prepare Comprehensive and Consolidated Plan Documents and Summary Plan Descriptions
The Department of Labor requires all employers have an up-to-date comprehensive plan document. This document must cover all ERISA governed plans, policies, and procedures. In addition, this document must also be up-to-date with rapidly developing legislative changes. These documents must be made available, free of charge to all employees.
Partners Benefit Group, Inc. in conjunction with its legal counsel has developed this comprehensive document to offer clients along with our array of other services.
If you are interested in having Partners Benefit Group, Inc. produce an up-to-date document for your company, please contact your account manager.
Pricing will be available from PBG shortly.
Back in January, Harvard Pilgrim and Tufts Health Plan began exploring the possibility of merging the two companies and spent six weeks of due diligence discussing the potential transaction.
Eric Shultz, President and CEO of Harvard Pilgrim stated "As a result of this process, we have now determined that we are stronger as individual competitors than one company. Both organizations will continue their work to keep high quality health care accessibile and affordable..."
The President and CEO of Tufts Health Plan, James Roosevelt, Jr., commented on the complexity of the merger on an operational level, explaining that the differences in the existing processes would be too difficult to effectively combine. He said, "Based on the information we have received in the due diligence process, we now believe this decision is in the best interest of those we serve: our members and customers."
Harvard Pilgrim Health Care and Tufts Health Plan are ranked highest in the nation for customer service and quality. Harvard Pilgrim is ranked at the top serving Massachusetts, Maine, and New Hampshire, and Tufts comes in second serving Massachusetts and Rhode Island.
To read the full press release, please click here .
To our Readers:
We thought we would share the following article by Janet Trautwein, CEO of The National Association of Health Underwriters:
In recent testimony before the House Budget Committee, Medicare's chief actuary, Richard Foster, was asked whether President Obama's new health care law would allow Americans to keep their existing coverage. His response? "Not true in all cases." In fact, the health care law is not only causing many businesses to drop or scale back their insurance plans; it's preventing them from creating jobs.
A new survey of nearly 2,400 insurance agents and brokers, who interact daily with employers who provide health insurance, hammers home the stark reality of the new law. More than half of brokers report that some of their clients have dropped coverage altogether as a result of health reform. Seventy percent have watched employers decrease the amount of coverage they provide, and a whopping 90 percent of firms have increased premiums for their employees.
Health reform also has caused employers to lay off workers or avoid hiring new ones. Forty percent of brokers state that their clients have eliminated jobs, and 57 percent have seen businesses reduce hiring. The country's half-million licensed health insurance agents and brokers are feeling the pinch as well. More than 70 percent have witnessed their business incomes decline as a result of reform's new rules.
These reductions in income haven't led to savings for consumers, as the law's proponents claimed they would. Instead, 21 percent of agents have been forced to cut jobs themselves, and 26 percent have had to reduce the services they provide to their clients. Why are so many jobs disappearing, both inside and outside the insurance industry? The primary culprit is the law's medical loss ratio (MLR) requirement, which mandates that insurers spend at least 80 percent to 85 percent of premium dollars on medical claims. Proponents of these rules believe that they'll force insurance companies to spend more on patient care, and less on administration and profits.
Unfortunately, there's not much fat to trim from insurers' budgets. The health insurance industry posted a slim 2.2 percent profit margin in 2008 - one-fifth the margin enjoyed by the securities industry, and one-tenth that of the pharmaceutical sector. Further, the MLR rules are quashing competition in the insurance marketplace. Iowa-based Principal Financial Group, for instance, has decided to stop offering health insurance altogether, as it can't afford to comply with the new regulations. Its 840,000 customers will have to find new policies, and consumers will have one less choice for insurance.
Insurance commissioners in Maine, Nevada, Kentucky, and New Hampshire already have applied for waivers from the MLR rules, as they're concerned that the regulations will destroy their insurance markets. Only two insurers sell individual policies in Maine - and one is threatening to pull out if the state does not receive a waiver. Without a semblance of competition, prices will skyrocket. As prices rise, fewer and fewer businesses will be able to afford health insurance for their employees, or to hire new ones. Many groups have run the numbers and discovered that they can't live within the health care law's constraints. More than 1,000 organizations, from small towns to labor unions to chain restaurants such as McDonald's, have received waivers from the federal government from the law's minimum annual benefit requirement. Without them, they'd have to quit providing insurance to their employees, or lay off scads of workers, as each additional employee would simply cost too much to insure.
Health reform was supposed to expand Americans' access to coverage. Thus far, it's accomplished just the opposite.
On March 24, 2011 The Equal Employment Opportunity Commission finally issued the final regulations and guidelines for the Americans with Disabilites Act Amendenments Act (ADAAA) which has clarified some of the major concerns employers have had regarding the law. These regulations will answer how "automatic disabilities" are defined, how "working" is analyzed as a major life activity, and how condition, manner, and durations may be relevant in determining whether an impairment is a disability, and the length of time a condition must last to be a protected disability. Richard Meneghello and Myra Creighton of Fisher & Phillips LLP have compiled the following summary of the major highlights of the finalized regulations for Employee Benefit News :
Guidance on "actual" disabilities
The ADAAA's main goal was to ensure that the determination of whether an individual had a disability should not be the primary focus of a lawsuit; instead, it should be whether the employer complied with its obligations under the law. The regulations maintain this focus by retaining the broad definition of "disability," but provide helpful guidance that will aid employers in confirming whether disability status is present.
Length of time
The EEOC declined to define "substantial limitation" other than to state that it is less than the previous "prevents or significantly restricts" standard. Moreover, an impairment does not have to last at least six months to be an actual disability. The EEOC opines that an impairment that lasts at least a few months can be a disability, but that those that last a short time will not be - unless "sufficiently severe."
"Substantial limitation"
The regulations reinstate the "condition, manner and duration" concepts for evaluating the disability determination that had existed in the old regulations, but were in line to be shelved with the 2009 proposals. Under the new ADAAA, in determining whether an employee is substantially limited in a major life activity, employers should now compare them to "most people in the general population" in the following respects:
· the condition under which they perform the major life activity;
· the manner in which they perform the major life activity;
· how long it takes them to perform the major life activity and how long they are able to perform it;
· the difficulty, effort, or time required to perform the major life activity; the pain experienced when performing the major life activity; and
· the adverse effects of mitigating measures (such as prosthetics, medications, etc.).
Individualized assessments
The new regulations confirm one of the principal hallmarks of the ADAAA - that all impairments require an individualized assessment to determine whether they rise to the level of "disability." The 2009 proposals were often criticized for creating a series of "categorical" disabilities that would automatically qualify under the ADAAA; the refined regulations eliminate these while acknowledging that certain obvious impairments "consistently" qualify - deafness, blindness, missing limbs, cancer, diabetes, HIV, multiple sclerosis, and a number of other impairments.
"Working" as a major life activity
The EEOC moved its discussion of this controversial major life activity to its Interpretative Guidance, noting that it should get no greater treatment than other major life activities, especially since it should only be considered in "rare" circumstances. In the guidance, the agency reinstated the test which clarifies that an individual would need to be restricted from a "class or broad range" of jobs in order to trigger protection, an uncommon scenario.
"Regarded As" disabilities remain challenging
The final regulations offer no relief, and in fact seemingly make it easier for workers to establish coverage under the "regarded as" prong of the disability definition. The new rules make clear that the focus in such cases will be on how the worker was treated by the employer, rather than on what an employer believed about the worker's condition.
The ADAAA states that the only kind of impairment that cannot form the basis of a "regarded as" claim is one that is "transitory and minor." The final regulations offer few bright line rules about defining this standard, but do provide some guidelines.
First, a condition is considered transitory if the impairment lasts or is expected to last less than six months. Second, the analysis of whether an impairment is "minor" must be an objective inquiry. Third, the defense is not available if the employer simply believes the impairment is transitory and minor. Rather, the impairment must actually be one that is transitory and minor. Finally, the employer bears the burden of proving this defense at all times in litigation.
To review the final regulations in full, please click here .
Source.
The Departments of Health and Human Services have approved over 1,000 requests for "mini-med" waivers which will allow companies to cap annual payouts at a lower level than dictated by the Health Care law. Additionally, over the next two years, many states will seek waivers from two of the Health Law's central provisions: the medical loss ratio, which limits profits and administrative costs by requiring insurers to spend at least 80% of premiums on medical costs, and the "maintenance-of-effort" provision, barring states from dropping Medicaid eligibility before the program's expansion beginning in 2014. The Obama Administration has also begun advocating the "State Innovation Waivers" which will allow states to opt of the mandated purchase of health insurance if coverage and affordability can be matched.
Politico reports that "so far, the mini-med waivers which allow people to keep insurance ploans that have an annual payout on benefits of less than $750,000 affect a realtively small group of the privately insured...The Obama Administration contents certain waivers and adjustments are necessary to ensure an orderly transition toward 2014 when most of the major health reform provisions come online...the key is to strike a balance between enforcing the new law's provisions while avoiding disruption to insurance markets' and individuals' coverage."
Opponents to Health Care Reform view the waivers as evidence that the law is fundamentally flawed because it already requires so many exceptions. The New York Times writes, "Waivers are usually seen as a way to deal with exceptional circumstances in which the enforcement of a law might cause hardship. But with the new health care law, exceptions like these have become increasingly common. They provide wiggle room in a law originally thought to be strict and demanding."
Maine is the first of the states granted a 3-year reprieve from the provision of the law stating that 80% of insurance premiums must be spent by the insurer on medical costs. This requirement was lowered to 65% in Maine after discovering that a higher rate would most likely leave thousands of individuals without insurance. Five other states have applied for similar waivers and dozens more are considering application.
Administration Officials argue that taking a flexible approach to the law and offering such waivers have saved many employers from increased premiums and have prevented them from dropping coverage altogether.
Read the full articles from Politico and The New York Times here.
"The interim final rules on grandfathered plan status, issued in June 2010, provided that if an employer entered into a new policy, certificate or contract of insurance after March 23, 2010, the policy, certificate or contract of insurance would not be grandfathered.
For example, if an employer changed health insurance carriers after March 23, 2010, the group health plan would have ceased to be a grandfathered plan, even if the plan would have otherwise satisfied the grandfather rules, such as the rules prohibiting elimination of benefits and specific increases in cost-sharing. Under the amended regulations, a plan can retain its grandfathered status under PPACA if it changes its carrier or enters into a new policy, certificate or contract of insurance with its existing carrier, provided that the plan has not made any other changes that would cause it to lose grandfathered status. The regulations also state that if a plan has entered into a new policy, certificate,or contract of insurance, the plan must provide the new health insurance issuer with documentation of plan terms under the prior health coverage, such as a copy of the summary plan description describing the benefits, cost-sharing, employer contributions and annual limits under the plan.
Importantly, the new rule applies to changes in insurance policies or carriers that become effective on or after Nov. 15, 2010. For this purpose, the effective date is the operative date, not the date a new policy, certificate or contract of insurance is entered into. For example, if an employer entered into an agreement with a new health insurance issuer on Sept. 28, 2010, for a new policy to be effective on Jan. 1, 2011, the employer may change carriers without losing the plan's grandfathered status. In the preamble to the regulations, the agencies state that their decision to eliminate this particular rule was based on four principal concerns submitted by the public during the comment period:
1. Treat fully insured group health plans differently from self-insured group health plans, which are permitted to change third-party administrators without losing grandfathered status;
2. Do not take into consideration circumstances in which a group health plan changes its issuer involuntarily, such as when an issuer withdraws from the market;
3. Unnecessarily restrict the ability of issuers to reissue policies to current plan sponsors for administrative reasons unrelated to any change in the underlying terms of the health insurance coverage, such as when an issuer consolidates a policy with its various riders or amendments; and
4. Give carriers undue and unfair leverage in negotiating the price of coverage renewals with the sponsors of grandfathered health plans, and this interferes with the health care cost containment that tends to result from price competition.
Although the amendments were issued late last year after most employers already had made significant changes to their health plans for the 2011 plan year, it has a significant impact on fully insured group health plans that have entered into new contracts of insurance or changed insurance carriers.
In December 2010, the agencies provided additional relief to employers sponsoring fully insured group health plans by delaying the application of the nondiscrimination requirements under Section 105(h) of the Internal Revenue Code to such plans. The nondiscrimination requirements under Section 105(h) of the Code generally prohibit discrimination in favor of highly compensated individuals as to eligibility and benefits and have historically only applied to self-insured group health plans. PPACA incorporates the substantive nondiscrimination requirements under Section 105(h) and applies them to fully-insured group health plans, effective for plan years beginning on or after Sept. 23, 2010 to Jan. 1, 2011 for calendar year plans. Under PPACA, fully insured plans that have retained grandfathered status would not be required to comply with Section 105(h) nondiscrimination requirements until grandfathered status is lost. The agencies issued guidance delaying the application of the Section 105(h) nondiscrimination requirements to fully insured group health plans until "after regulations or other administrative guidance of general applicability has been issued" by the agencies. The agencies recognized that, based on the public comments submitted in response to a previous request from the agencies regarding this provision of PPACA, plan sponsors are uncertain how to apply these nondiscrimination requirements to fully insured group health plans. Primarily, this is because of the statutory language under PPACA, which requires that rules "similar to" the Section 105(h) nondiscrimination requirements be applied to fully-insured plans. Therefore, fully insured group health plans will not be required to comply with the Section 105(h) nondiscrimination requirements until the agencies release guidance explaining how to apply these requirements to fully insured plans. This guidance is welcomed relief for employers sponsoring fully insured group health plans that have lost grandfathered status, as the penalties for non-compliance with this provision of PPACA include an excise tax of $100 for each day."
Excerpt taken from "Employers' Concerns Over PPACA Carry Some Weight" by Kate Bongiovanni.
Sincerely,
Maria Eramo
Partners Benefit Group, Inc. |
