Employers that currently receive a federal subsidy for providing retiree prescription drug coverage will no longer be able to take a deduction for those retiree drug expenses with respect to that subsidy as of 2013 under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010.
Click here to view the full article.
The Facts
Health care reform requires non-grandfathered group health plans and health insurance coverage to provide first-dollar coverage of certain preventive services furnished by in-network providers. This requirement is effective with the first day of the first plan / policy year beginning on or after September 23, 2010.
Coverage is mandatory for four general categories of preventive services, referred to as recommended preventive services. The U.S. Department of Health and Human Services (HHS) will maintain a complete and up-to-date list of recommended preventive services on its website.
Coverage is not required for recommended preventive services furnished by out-of-network providers, and cost-sharing obligations also may imposed. HHS also has adopted regulations addressing cost-sharing requirements for office visits (and other health care services) furnished at the same time as a recommended preventive service.
What’s at Stake
Group health plans and health insurance issuers offering non-grandfathered plans and policies need to evaluate their plans / policies to assess whether changes are needed, both to comply with this new coverage mandate and to promote in-network provider utilization.
Steps to Consider
Medical management techniques to administer benefits for recommended preventive services are permitted, and group health plans and health insurance issuers will want to consider what techniques may be appropriate. An additional consideration is whether the claims submission and payment provisions need to be modified to implement the cost-sharing regulations for office visits and other health care services provided at the same time as recommended preventive services.
On July 7, 2010, in a recess appointment, President Obama appointed Don Berwick, M.D., M.P.P., to lead the Centers for Medicare and Medicaid Services (CMS). Dr. Berwick is a pediatrician, Harvard professor, and president and chief executive officer of the Institute for Healthcare Improvement. As administrator of CMS, Dr. Berwick will play a pivotal role in the implementation of health reform legislation.
The president's use of his recess appointment power obviates the traditional U.S. Senate confirmation process, which would have included a confirmation hearing at the U.S. Senate Committee on Finance (Finance Committee), at which legislators could ask questions of the nominee, and, if the Finance Committee reported the nomination, a subsequent Senate floor vote which would have provided all Senators an opportunity to discuss the nominees' record and vote for or against his confirmation. The recess appointment avoids what would likely have been an extremely partisan and drawn out confirmation battle. Indeed, congressional Republicans—with an eye toward the rapidly approaching November 2010 congressional elections—seemed bent on using the Berwick confirmation process as a referendum on health reform legislation. While the recess appointment effectively installs Dr. Berwick at CMS without Senate confirmation, a recess appointment lasts only as long as the current Congress, which extends through 2011. This means that, in order to serve beyond 2011, Dr. Berwick would need Senate confirmation in 2012, or another recess appointment.
To learn more about Dr. Berwick's background and extensive experience, see McDermott's previous blog post.
Concern about the recess appointment was not confined to the Republican side of the aisle. Both Senator Max Baucus (D-MT), chairman of the Finance Committee, and Senator Charles Grassley (R-IA), the ranking Republican on the Finance Committee, expressed dismay. Senator Baucus said he was “troubled that, rather than going through the standard nomination process, Dr. Berwick was recess appointed. Senate confirmation of presidential appointees is an essential process prescribed by the Constitution that serves as a check on executive power….by ensuring that crucial questions are asked of the nominee – and answered.” Senator Grassley protested the recess appointment as well, saying, “The administration has taken advantage of the fact that there's no check on its power, with one-party control of Congress and the White House.” He continued, “This recess appointment follows a pattern. Health care legislation was written behind closed doors. Broad new regulations have been written within the bureaucracy and issued without any public comment period. It really flies in the face of the President's pledge to have the most transparent administration ever.”
Despite the controversy regarding the appointment, Dr. Berwick does enjoy support from past CMS administrators, including those appointed by both Democratic and Republican administrations. He also receives support from numerous providers and other organizations, and he has a long history of working to improve both the quality and efficiency of health care—one of the principal aims of health reform legislation.
The recently enacted health care reform laws create a new broad-based $500,000 annual deduction limit on all compensation paid by certain health insurers and their related companies to all employees and other individual service providers. There are no special exceptions for certain types of deferred compensation, performance-based compensation or commissions. The new limit generally applies to compensation paid in 2013 and later tax years.
Click here to view the full article.
The U.S. Departments of Health and Human Services, Labor and the Treasury have issued interim final rules on pre-existing condition exclusions, lifetime and annual limits, rescission of coverage and patient protections. Employers and insurers should review their current health plan designs to ensure compliance with these interim final rules.
Click here to view the full article.
Today the Early Retiree Reinsurance Program (ERRP) Application was posted on the Health and Human Services (HHS) website. Applications are being accepted as of today, June 29, 2010. The ERRP will stop accepting applications once it appears that the $5 billion appropriated for the program will be exhausted; therefore, it is imperative that employers interested in participating in the ERRP submit their application as soon as possible. The link to the application and instructions are as follows:
http://www.hhs.gov/ociio/Documents/application.pdf
http://www.hhs.gov/ociio/Documents/application_instructions.pdf
In addition, HHS published some Dos and Don’ts with respect to your submission of the application, the link is as follows:
http://www.hhs.gov/ociio/Documents/errp_dos_donts.pdf
For more details, please click here.
The U.S. Departments of the Treasury, Labor, and Health and Human Services recently issued long-anticipated Interim Final Rules defining the term “grandfathered health plan” and clarified other health care reform requirements. Various mandated benefit requirements of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, apply differently to grandfathered health plans than to non-grandfathered plans. Employers will need to carefully review their benefit plan offerings to determine whether the benefits of maintaining grandfathered status outweigh the restrictions on plan design and cost-sharing imposed by these Interim Final Rules.
Click here to view the full article.
Interim final rules on grandfathered health plans recently issued by the U.S. Departments of the Treasury, Labor, and Health and Human Services clarifies the departments’ position with respect to the application of certain group health plan mandates to very small health plans, including retiree-only plans.
Click here to read the full article.
The Facts
Health insurance issuers face immediate deadlines as well as long-term timeframes for implementing health care reform. Several initiatives are underway, such as the Early Retiree Reinsurance Program. Other market reforms, including lifetime and annual dollar limit restrictions, apply to new issues and renewals beginning September 23, 2010, although limited exceptions may exist for grandfathered plans.
Quickly following are federal review of premium rate increases and medical loss ratio (MLR) standards (along with the risk of mandatory rebates if exceeded). Multiple, and differing, statutory provisions, such as the small groups definitions, add complexities.
What’s at Stake
Implementing these reforms raises several common questions and issues:
Steps to Consider
In addition to monitoring the release of regulations and other guidance, health insurance issuers should consider strategies for implementing reforms for which there is minimal guidance. Consistency as to approach, coupled with a good faith defense of actions taken following critical legal analysis, may mitigate some of the potential risks. Developing a schedule for immediate requirements is advisable, while keeping in mind the longer-term reforms that take effect upon launch of health insurance exchanges.
On May 6, 2010, McDermott Will & Emery reported on the Patient Protection and Affordable Care Act’s new Early Retiree Reinsurance Program (the Program) interim final regulations. The Program went into effect on June 1, 2010. A prerequisite for participation in the Program is for a plan sponsor to submit a timely application for certification to the Secretary, or the Secretary’s designee.
On June 1, 2010, a draft application and set of instructions for the Program was posted to the website of the Office of Management and Budget. A final application will be available at a later date in June, prior to the date on which the U.S. Department of Health and Human Services (HHS) will begin accepting applications, and will be posted on the HHS Office of Consumer Information and Insurance Oversight’s website. McDermott will keep you informed when this final application is posted.
In the meantime, if you have any written comments on the interim final regulations, the Firm can forward your input to HHS on an anonymous basis. The comment deadline is June 4, 2010.
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