• HHS expands coverage of tobacco cessation counseling
• New web tool enables search for health coverage options

• NAIC approves form for medical loss ratio reporting

• Preventive care provision will drive increase in health care consumption
• Increase cost sharing by employees predicted for 2011
• It’s not too soon to start employer health reform compliance efforts

HHS expands coverage of tobacco cessation counseling

Medicare coverage has been expanded by HHS to include evidence-based tobacco cessation counseling. Previously, Medicare had covered tobacco counseling only for individuals diagnosed with a recognized tobacco-related disease or showed signs or symptoms of such a disease. Under the new coverage, any smoker covered by Medicare will be able to receive tobacco cessation counseling from a qualified physician or other Medicare-recognized practitioner. In addition, all beneficiaries will continue to have access to smoking-cessation prescription medication through the Medicare prescription drug program (Part D).

The new benefit will cover two individual tobacco cessation counseling attempts per year, with each attempt including up to four sessions, with a total annual benefit of eight sessions per Medicare patient. This final coverage decision will apply to services under Parts A and B of Medicare and does not change the existing policies for Part D, or any state-level policies for Medicaid or the Children’s Health Insurance Program.

HHS plans to issue guidance shortly regarding the new benefit for pregnant women to receive Medicaid-covered tobacco cessation counseling. This new Patient Protection and Affordable Care Act (PPACA) (P.L. 111-152) benefit, requires states to make coverage available to pregnant Medicaid beneficiaries by October 1, 2010.

Also under PPACA, effective January 1, 2011, Medicare will cover other preventive care services, such as certain colorectal cancer screening and mammograms at no cost to beneficiaries. PPACA also gives beneficiaries access to a no-cost annual physical exam so they can partner with their doctors to develop and update personal prevention plans, which will be based on their current health needs and risk factors.

HHS Press Release, August 25, 2010.

New web tool enables search for health coverage options

A new web tool from HealthCare.gov helps individuals and small employers search for coverage options in their geographic regions, the U.S. Department of Health and Human Services (HHS) has announced. The Insurance Finder “widget” enables anyone with a website or blog to embed a tool on their site allowing users to begin the process of searching for public and private health coverage options.

The tool asks users two initial questions: “select a state” and “which best describes you,” which includes these options: family/children, healthy individual, individual with medical condition, pregnant woman, person with disability, senior, young adult (younger than age 26), and small employer/self employed.

Users then click on “next steps,” and are redirected to a page on HealthCare.gov that continues with the insurance finder process based on answers to their specific questions. Based on the requester’s answers, the coverage finder produces a menu of potential coverage choices personalized for the user.

For example, if a small employer is interested in new coverage available in a specific state, entering a specific zip code will list information on insurance carriers who provide health care coverage in that geographic area. The information that can be included for each plan are found in links to services provides, a provider network, and drug coverage under the plan. Price estimates are scheduled to be available on the site in October.

“HealthCare.gov is a valuable resource for small businesses, consumers, and their families to search for coverage options and understand the new benefits under the Affordable Care Act,” observed HHS Secretary Kathleen Sebelius.

To view the widget, visit http://www.healthcare.gov/stay_connected.html.

NAIC approves form for medical loss ratio reporting

The National Association of Insurance Commissioners (NAIC) Executive Plenary Committee has approved final implementation of a medical loss ratio (MLR) “blanks” to implement Public Health Service Act 2718 as added by the Patient Protection and Affordable Care Act (PPACA).

Blanks are the actual forms submitted by insurance companies to report financial information to state regulators. Regulators will then review this data to calculate the required medical loss ratio and any rebate required under the new federal law.

The instructions on the form could change, depending on the definition of medical loss ratio that the NAIC eventually adopts and has certified by the secretary of the Department of Health and Human Services.

America’s Health Insurance Plans (AHIP) has criticized the proposal for failing to include fraud prevention and detection.

AHIP has recommended the following to the NAIC:

• “Structure the quality framework in a way that allows for the recognition and encouragement of new quality and care improvement initiatives and does not limit permissible programs to those that are currently in the market today.
• “Reconsider the exclusion of fraud prevention and detection because of its importance to the vital and universally recognized goals of improving health care quality and patient outcomes. Currently, retrospective review is excluded, yet it is a key tool in targeting the dangerous overutilization of services, falsification of medical records, and medical identity theft.
• “Reconsider the exclusion of costs associated with the ICD-10 implementation. The effort to convert to ICD-10 codes will improve the ability of health plans to share clinical data among clinicians for quality improvement and care coordination activities, thereby promoting a better understanding of diagnoses and procedures at institutional settings of care to allow better treatment and quality improvement.
• “Reevaluate the exclusion of concurrent utilization review and the implications this will have on programs designed to improve patient safety and to assure that consumers receive the right care, at the right time, and in the right place. These tools play an important role in addressing growing concerns over variations in imaging use across geographic regions and the potential overuse of imaging services.
• “Reevaluate the exclusion of individual coverage from the wellness and health promotion guidance. The new legislation envisions a transition to wellness-centered care and calls for a pilot wellness program in the individual market. Therefore, it would appear to be inconsistent to prohibit incentives from being offered to consumers purchasing coverage on their own at the same time they are offered to employers in small and large groups.
• “Adopt a standard methodology to address needed MLR transition rules to promote stability of health plan choices in the individual and small group markets and avoid a potential disruption of coverage for millions of Americans prior to implementation of the 2014 market reforms.”

For more information on the NAIC proposal, visit http://www.naic.org/index_health_reform_section.htm.

Preventive care provision will drive increase in health care consumption

While financial uncertainties drove many Americans to rein in their consumption of health care services during the recession, the Patient Protection and Affordable Care Act will remove patient out-of-pocket costs for preventive care services under many plans beginning in 2011 and drive an increase in the use of these services, according to Towers Watson.

"In this economic climate, many Americans have delayed or avoided visits to the doctor because they were concerned about the costs they might have to incur," said Randall Abbott, a senior health care consultant with Towers Watson. "Now, covered individuals and their families will not face even nominal financial barriers to preventive care services."

Many employer-provided health plans have promoted low-cost or no-cost preventive care for years, but the new law broadens the range of services covered and establishes a uniform standard for services grounded in the recommendations of the United States Preventive Services Task Force and other similar bodies). Under the new provision, insurers and self-funded health plans must cover regular wellness visits based on the patient's age and gender as well as a range of recommended screenings. New additions to coverage for most employees and their families will include depression, supplemental pregnancy, and HIV and other sexually transmitted diseases screenings as well as HPV tests for females. It also includes recommendations to take aspirin to prevent heart disease and fluorides for children.

"Historically, America's health care system has been focused on the treatment of illness, and this provision is an essential first step to reframe the industry, proactively focusing on the preservation of health," notes Harlan Levine, a physician and senior health care consultant with Towers Watson. "The legislation promotes free preventive care and emphasizes the importance of early detection and regular doctor visits in helping both adults and children stay healthy."

Plans that are not considered grandfathered under the law must provide these benefits at 100% beginning in plan years starting on or after Sept. 23, 2010. For most employer plans, this is January 1. Towers Watson anticipates that fewer than half of large employer health plans will retain grandfathered status, because most will be making plan design and contribution changes that will exceed the limits permitted by the grandfathered plan rules.

Implementing the new preventive care benefits will not be painless, according to Towers Watson: Insurers and employers will face cost increases of 1% to 2%. With an annual 2010 average per covered employee health cost of just over $10,000, this means employers will see an increase of $100 to $200, which will be in addition to expected average annual cost increases of 8% to 10%. Many employers will be scrambling to communicate these new benefits to employees in time for open enrollment in early fall.

Insurers and administrators will face the additional challenge of modifying their claim payment systems by January 1 or establishing processing guidelines for their examiners. "Because there has not been a single standard for the administration of preventive benefits, many employers have taken it upon themselves to define these benefits," says Greg Mansur, senior health care consultant with Towers Watson. "This adds to the complexity of implementation for many regional and national claim payers, and employers should really take the time not only to understand the impact on their plans, but also to test their administrator's capabilities before January 1." For more information, go to: http://www.towerswatson.com.

Increase cost sharing by employees predicted for 2011

Current employees can expect to shoulder more of the expense related to health coverage in 2011, according to an annual survey by Aon Consulting.

Aon Consulting surveyed 1,079 employers nationwide in its 2010 Benefits Survey , and about 65% of employers plan to increase cost sharing next year for things such as deductibles, co-pays and out-of-pocket maximums. What’s more, 57% of companies say they will ask employees to contribute more for the overall cost of health care in 2011. The amount of cost sharing implemented by employers varies. On plan design (for example, deductibles, co-pays and out-of-pocket maximums), 46% of employers are shifting costs to employees equal to the overall renewal increase, while an additional 46% are shifting costs to workers that are less than the overall renewal increase. For overall health plan cost, 40% of employers say the additional worker contributions will be equal to the 2011 renewal increase, and 49% indicate that workers will be asked to pay less than next year’s renewal increase.

“We believe the new health reform law will increase health care costs by 2% 4% during the next three years,” said Tom Lerche, senior vice president with Aon Consulting. “In addition, we expect to see new costs related to excise taxes and potential cost shifting from reductions in Medicare reimbursement to providers, which will be on top of existing long-term medical trend inflation. These factors will lead many employers to consider increased employee contributions for health coverage, as well as plan design cost sharing.” To learn more about Aon Consulting’s 2010 Benefits Survey, go to http://www.aon.com/2010survey.

It’s not too soon to start employer health reform compliance efforts

Issue: The Patient Protection and Affordable Care Act (PPACA) is now law, but you are unsure where to begin your compliance efforts. What can you do now to get your company ready?

Answer: While many of PPACA's requirements don’t go into effect until 2014, here are some things employers can do now:

• Determine eligibility for small employer tax credit. Employers with 50 or fewer full-time employees (defined as employees who work 30 or more hours per week) are exempt from many PPACA requirements. But small employers should determine whether they are eligible for the small business tax credit. A partial tax credit is available to employers with 25 or fewer full-time employees and average wages of less than $50,000 per full-time employee. The full tax credit is available to employers with 10 or fewer full-time employees and average wages of less than $25,000. The tax credit phases out based on the number of employees and average salary.
• Apply for early retiree reinsurance. All employers that provide health care benefits to early retirees and their dependents should apply for the Early Retiree Reinsurance Program, which reimburses employers a portion of the cost associated with providing coverage for early retirees between the ages of 55 and 64. The program began on June 1, 2010, and expires at the end of 2013.
• Determine plan changes and costs. All employers that offer employer-sponsored insurance should contact their brokers to find out what changes will be required as a result of PPACA and how much those changes will cost them. Some changes that may need to be made include, but are not limited to, removing lifetime benefit limits, and allowing children to remain on insurance up to age 26.
• Decide whether to maintain grandfathered status. Employer-sponsored health care plans that were in effect on March 23, 2010, are grandfathered plans and exempt from many of PPACA's requirements until 2014. Accordingly, an employer with a grandfathered plan should evaluate whether it is more cost effective to maintain grandfathered status or comply with the new requirements. If an employer does choose to grandfather its health insurance plan, the employer's ability to make changes relating to copayments, premiums, benefits structures, etc. may be limited.
• Prepare for new W-2 reporting requirement. Employers that offer health insurance should prepare to report the value of the health care benefit on their employees W-2 forms, which is required in 2011.
• Establish process for employee notices. Employers should also create a program for providing new and current employees written information about health plans available through the state exchanges, the employer's plan, the availability of a premium tax credit, and the effect of an employee's decision to purchase health insurance through the exchange as opposed to through the employer. The written notice must be given to new employees at the time of hire starting in 2014, and to current employees no later than March 1, 2013.
• Prepare for automatic enrollment. Employers with 200 or more full-time employees that offer health insurance should prepare to enroll new full-time employees in coverage with adequate notice and the chance for the employee to opt-out. The automatic enrollment requirement begins in 2014.
• Evaluate whether to continue employer-sponsored plans. Lastly, employers should begin to analyze whether they will maintain employee-sponsored health care plans after 2013, or discontinue the benefit in favor employees receiving coverage through the exchange. Employers with 50 or more full-time employees will have to pay a penalty for failure to offer employer-sponsored health care but, depending on the situation, it may be less costly than maintaining coverage.

Source: CCH interview with Jonathan W. Emord, Emord and Associates, reported in CCH Employee Benefits Management Directions No. 473, August 10, 2010.