On Friday, December 28, 2012 the Internal Revenue Service (IRS), one of a few federal agencies tasked with implementing federal health reform, released guidance on the employer shared responsibility (or better known as the “employer mandate” or the “pay or play” provisions) provisions under the Affordable Care Act (ACA). The guidance, published in the form of a Notice of Proposed Rulemaking (NPRM), addresses a number of issues tightly linked to an array of practical considerations related to the employer mandate.
Despite their being, ostensibly, simple questions, these issues prove complex from both an employer compliance and federal agency implementation standpoint. These include defining a “large employer,” determining “full-time” status for employees, clarifying the meaning of “dependents,” and determining what constitutes “affordable” coverage.
The guidance also tackles several stickier questions such as how and whether to count foreign or seasonal workers, as well as how to calculate the full-time status of employees who work unusual hours, such as teachers or airline pilots.
Three safe harbors relating to the provision of “affordable” coverage to employees in order to avoid exposure to the mandate penalties are also included in the guidance. Transition relief is offered in recognition of certain employers’ needing time to bring their plans into compliance.
The rule’s preamble reveals that there remain a number of complex issues IRS has yet to solve, and requests comments, which are due on March 18, 2013. A public hearing on the proposed rules will be held on April 23, 2013.
The NPRM can be found here. A Q&A summary of the rule has been released by the IRS and is available by clicking here. The Health Affairs blog has made available a helpful summary post penned by health reform expert Tim Jost, which can be accessed by clicking here.
Posted on: 3 Jan, 2013
Today, November 20, 2012, the US Department of Health & Human Services (HHS) released guidance, the first of its kind, on provisions of the federal health reform law relating to employer-sponsored workplace wellness programs.
The federal health reform law, also known as the Affordable Care Act, creates new incentive structures and builds on current workplace wellness policies and programs in an effort to promote healthier workplaces and encourage further development of employer-sponsored wellness initiatives.
The proposed rule addresses standards for both participatory wellness programs – programs generally available without regard to one’s health status – and health-contingent wellness programs, which typically require participants to meet certain health outcomes goals in order to receive a reward.
Under the rule, employers may increase the maximum reward amount under health-contingent wellness programs from 20 percent to 30 percent of the cost of health coverage. The maximum reward may be further increased to 50 percent for programs intended to prevent or reduce tobacco use.
The proposed rule would also require health-contingent wellness programs to follow a set of standards to avoid penalties. These include:
-Programs must be reasonably designed to promote health or prevent disease, meaning that 1) there must be available reasonable means of qualifying for a reward for any employee who does not meet a standard based on the measurement, test, or screening, and 2) there must be a reasonable chance of improving health or preventing disease and not be overly burdensome for individuals.
-Programs must be reasonably designed to be available to all similarly situated employees, meaning that there must be available alternative means of qualifying for the reward if an employee’s medical conditions make it unreasonably difficult to attain the health outcome.
-Individuals who might not qualify to attain rewards through traditional courses of action must be given notice of the opportunity to qualify for the same reward through other means. The proposed rule offer new sample language that employers can use in communicating the availability of these rewards.
The complete guidance can be found by clicking here.
These rules are part of a broader set of health reform guidance released by the federal government today. Rules on health insurance market dynamics, including a prohibition on pre-existing condition exclusions and actuarial value of health plans, as well as rules pertaining to coverage for essential health benefits were also released. A summary of these can be found here.
Posted on: 20 Nov, 2012
With the presidential election fast approaching, a number of health policy media and research outlets have published a variety of resources on not only the role of health policy in this election, but also where the candidates stand on the issue.
The two presidential camps recently outlined their visions for federal health reform in the New England Journal of Medicine. President Obama’s piece can be found by clicking here. Governor Romney’s is here.
Two health services researchers and commentators, Austin Frakt of Boston University and Aaron Carroll of Indiana University, compare and contrast the candidates’ competing visions in a JAMA Viewpoints article that can be accessed here.
And just this week, the New England Journal of Medicine published two relevant Perspective pieces, each featuring experts’ competing arguments on the merits of one candidate’s reform plan over the other’s. Gail Willensky’s article, describing the shortcomings of Obamacare, is available here. A piece describing Governor Romney’s reform plan, penned by faculty from Brown University and Harvard University, is available here.
Lastly, the October Visualizing Health Policy piece, a joint effort between JAMA and the Kaiser Family Foundation, offers a snapshot of how health care-related issues are shaping the election. This infographic can be accessed here.
Posted on: 12 Oct, 2012
NEBGH’s Solutions and Innovations Center (SIC) recently released a report that examines the ways in which hospitals and health plans in the region can collaborate to reduce preventable hospital readmissions. A result of a unique collaboration between area hospitals, health plans, and employers, and sponsored by Boehringer Ingelheim and Merck, the report sheds light on breakdowns that occur in the health care system that often result in high readmissions rates in New York, New Jersey, and Connecticut. Tackled in the report are a series of issues that underlie the readmissions issue, including that: by working together, hospitals and health plans could more effectively address readmissions, yet historically this type of collaboration is limited; stakeholders are taking a variety of approaches to reducing readmissions, which leads to complications in standardizing processes and metrics; and the current fee-for-service reimbursement system discourages the adoption of strategies that can reduce preventable readmissions. The report reflects the findings of a multi-stakeholder panel of area hospitals, health plans, and employers convened by NEBGH.
NEBGH will be hosting a webinar on the hospital readmissions crisis and the findings of the report on September 19th at 12:00pm. Visit www.nebgh.org/events for more details.
Posted on: 21 Aug, 2012
Today, June 28, 2012, the Supreme Court of the United States upheld the federal health reform law’s individual mandate, asserting that it is permissible under Congress’s taxing power. This element of the law was at the heart the legal challenge to the reform package.
Chief Justice John Roberts, appointed to the court by President George W. Bush, joined the left-leaning side of the court (Justices Kagan, Breyer, Sotomayor, and Ginsburg) in the 5-4 decision that allows the the Affordable Care Act, President Obama’s signature domestic policy initiative, to continue to be implemented in largely its original form. Because the mandate stands, the court did not need to decide on other parts of the law. The majority opinion noted, however, that they would not accept the mandate as valid under the Commerce Clause of the Constitution. Instead, they accept the mandate as a tax per Congress’s power to tax and spend.
Today’s ruling also sets limits on the other major question the court faced – the constitutionality of the law’s Medicaid expansion. The judges ruled that the expansion can indeed move forward, but struck down the provision that empowered the federal government to withhold existing Medicaid funds from a state if the state did not comply with the expansion.
Today’s ruling thrusts health care into the spotlight only five months before the November presidential election.
Posted on: 28 Jun, 2012
Today, April 12, 2012, Andrew Cuomo, Governor of New York State, issued an Executive Order (EO) establishing a statewide health insurance exchange. This action punctuates an over year-long debate in the state over how to authorize the creation of this new marketplace under the federal health reform law. The EO places the exchange inside the state Department of Health, which is charged with working with the state Department of Financial Services to take “all necessary steps to effectuate the Exchange, and expedite its ability to perform those functions necessary to carry out the requirements and serve the goals of the Affordable Care Act.” Regional advisory committees are another hallmark of the EO. These deliberative bodies, consisting of consumer representatives, small business representatives, health care providers, agents, brokers, insurers, labor organizations, and other stakeholders, will make recommendations – especially through their geographically distinct lenses – on the establishment and operation of the exchange.
Under the Affordable Care Act (the federal health reform law), each state must establish a statewide health insurance exchange by January 1, 2014. These new marketplaces within the broader health insurance market will facilitate enrollment into coverage for individuals and employees of participating small businesses. The federal government will fund completely the development and design of state exchanges, until 2015, when these entities must be financially self-sustaining. Estimates from the Urban Institute, in a study commissioned by New York State, note that the advent of the statewide exchange will spur reductions in health insurance premiums. Individuals are estimated to see their costs drop by 66 percent, and small businesses are expected to see premium relief of 22 percent. New York State has the option to open the exchange to large employers (firms with 100+ employees) beginning in 2017.
The Governor’s press release announcing the Executive Order, as well as the text of the Executive Order, can be found by clicking here.
Posted on: 12 Apr, 2012
The U.S. Supreme Court has concluded its hearing of six hours of oral arguments on various provisions of the federal health reform law. The case is seen widely as the most politically consequential cases since Bush v. Gore in 2000. A ruling from the Justices is expected to be issued in June, 2012, just in time for the heat of election season. Experts have noted that the ruling could come down in a variety of ways, including an inability to rule on the merits of the law because of the application of the Anti-Injunction Act, a 19th-century law that prohibits the courts from asserting an opinion on a tax law before a tax has actually been assessed.
In the meantime, transcripts and audio recordings of the oral arguments have been made available online and can be found in the below links.
Posted on: 28 Mar, 2012
Today, March 26, at 10:00am the United States Supreme Court will open oral arguments on various provisions of the health reform law. The entire law, in and of itself, is not being argued, but rather, four separate questions, each related to separate pieces of the law. The arguments will stretch six hours – an almost unprecedented amount by Supreme Court standards – over the next three days. Although the Supreme Court has decided not to allow television cameras in the courtroom, they will make recordings of the arguments available shortly after arguments conclude each day.
Here’s a brief guide to what the issues are and when the arguments will be made.
What it is: This issue revolves around the central question of whether or not the court can even issue a ruling on the Affordable Care Act (ACA). Under the Anti-Injunction Act, passed in 1867, a tax cannot be challenged until it has actually been assessed and someone has had to pay it. Penalties under the ACA don’t come into effect until 2015. This question provides the court with the opportunity to kick the can on the ACA until after this year’s elections, possibly diffusing its status as a front-line political issue.
When it happens: Monday, March 26, 10:00 – 11:30am
THE INDIVIDUAL MANDATE
What it is: The most hotly-contested of the challenges to the ACA, this provision of the law requires most Americans to carry health insurance coverage beginning in 2014. The legal question centers on whether or not Congress impose such a regulation under the Commerce Clause of the Constitution. Opponents of the law will argue that a decision not to purchase health insurance is economic inactivity and therefore cannot be regulated by the federal government. Supporters of the law will argue that everyone eventually will need health care services and thus the decision not to purchase health insurance indeed has economic effects. Experts have predicted that health insurance costs will skyrocket without a mandate because without one, balancing insurance risk pools will be a major challenge.
When it happens: Tuesday, March 27, 10:00am – 12:00pm
What it is: Because of the complex political process Congress used to approve the ACA, a clause that would have kept intact the rest of the law from individual provisions that were invalidated by the courts went missing. The Supreme Court will hear arguments on whether the rest of the law should stand if they strike down either the individual mandate or the Medicaid expansion. The Department of Justice, representing the Obama administration, will argue that if the individual mandate is struck down, the guarantee issue and community rating provisions must go with it. Their chief contention is that the mandate is essential to making insurance markets work. Opponents of the law go one step further. They argue that if one provision falls, the entire law must go down with it.
When it happens: Wednesday, March 28, 10:00 – 11:30am
What it is: The ACA expands Medicaid to cover everyone under 138% of the federal poverty level (FPL). Medicaid is run as a joint federal-state program, and states are arguing that this provision of the law is too expensive to implement and that the federal government is being coercive because the program is so deeply ingrained in the fabric of state budgets. Supporters of the law note that Medicaid is a voluntary program and that states can pull out whenever they wish.
When it happens: Wednesday, March 28, 1:00 – 2:00pm
AHIP has summarized in one chart the possible effects of repealing the individual mandate might have on insurance coverage projections. The New York Times Room for Debate page features various scholars commenting on the Supreme Court’s review of the ACA. The National Review features its own symposium on the court’s review. The New England Journal of Medicine has posted its version of an overview of the legal challenges.
Posted on: 26 Mar, 2012
The Supreme Court of the United States is set to undertake its review of the federal health reform law next week. In an unprecedented move, the court will be devoting six hours – more than time given to a case than any other since 1966 – of oral arguments to it. At the heart of the case are four issues. The first, to be argued on March 26, is the applicability of the Anti-Injunction Act, an 1867 law which bars federal courts from ruling on the constitutionality of tax laws before payments have been made. On March 27, the court will hear arguments on the law’s central issue – the individual mandate and Congress’ power to regulate commerce and levy taxes. Arguments will conclude with on March 28 with 90 minutes devoted to the severability of the mandate from the rest of the law, and 60 minutes to state sovereignty in Medicaid expansion.
A plethora of resources have been published in attempts to simplify and digest the case for the general public. A few of these are below.
A New England Journal of Medicine Perspectives piece providing a broad overview of what’s at issue in the case is available here. A primer for the oral argument, courtesy of Kaiser Health News, can be accessed here. The New York Times primer is available here. And, the Supreme Court’s official page on its review of the law can be found here.
Posted on: 19 Mar, 2012
The federal Center for Consumer Information and Insurance Oversight (CCIIO) today, March 12, 2012, published a final rule on health insurance exchanges under the Affordable Care Act. This next step in the regulatory process combines policies from two separate proposed rules that were released in the summer of 2012, and includes standards for the establishment and operation of an exchange, certification of health insurance plans to participate in exchanges, determination of an individual’s eligibility to enroll in an exchange, enrollment in qualified health plans (QHP), and employer eligibility to participate in the Small Business Health Options Program (SHOP) Exchange. Over 24,000 public comments were received in response to the proposed rules.
State flexibility is a hallmark of the 644-page final rule, allowing states plasticity to craft insurance marketplaces that fit local needs and trends.
Brokers, agents, and other third-party administrators will be allowed to work with states’ exchanges. Tim Hill, a CCIIO official, encouraged states to partner with third-party entities to help market and distribute exchange-based products and noted that states will be allowed to decide how their exchange compensates participating brokers and agents.
In light of the political challenges many states have faced in establishing their exchanges, the final rule offers states more time to set up their marketplaces. The reform law requires that the federal exchange be installed in states where the exchange does not demonstrate complete readiness by Jan. 1, 2013. The long-awaited rule, however, allows for “conditional approval” of an exchange if it is “advanced in its preparation” by Jan. 1, 2013 and is likely to be fully ready by Oct. 1, 2013. And, states that aren’t ready for the 2014 launch date can apply to operate their own exchange in later years.
Small Business Health Options Program (SHOP) exchanges, the arm of a state’s exchange serving small businesses, will allow employers multiple options in how they offer employees coverage. Employers can select a level of coverage from which employees can choose a plan. They can also offer their employees the option of choosing any plan from the exchange that they would like, allowing them the flexibility to select a plan that fits their needs and budget. The rule requires the exchange to provide participating employers with a single bill and the ability to pay using a single check. Minimum participation rules will be met through overall coverage in any SHOP plan rather than participation in any one QHP.
The final rule preserves states’ ability to determine the size of small businesses that can participate in SHOP. States can allow firms with either 1 to 50 or 1 to 100 employees to participate until 2016. Beginning in 2016, all firms with fewer than 100 employees will be allowed in SHOP. States have the option to expand it even further in 2017 or later.
CCIIO officials noted on a conference call that specifics regarding how a federal exchange might work in states that aren’t ready or aren’t willing to operate their own exchange are still being worked on.
Posted on: 12 Mar, 2012