CalCPA ProtectPlus

First in a series of interviews that will be displayed across the CalCPA Protect Plus social media sites. In this clip, Mr. Chuck Gielow, Chairman of the Board of the Group Insurance Trust, interviews Ms. Patricia Cochran, Co-Chair of the Health Care Conference and member of the Board of Trustees of the Group Insurance Trust. The Health Care Conference was held on January 30, 2013 by the Education Foundation of the California Society of CPAs. Ms. Cochran discusses the importance of the Health Care Conference to California CPAs and how the Group Insurance Trust can be of benefit to members of CalCPA in the health care field.

January 2013

The Group Insurance Trust of the California Society of CPAs has helped California CPAs and their employees and families with health care insurance needs since 1959 and its operations have grown over the years. In 2012, the Trust offered self-insured medical, dental and vision plans and health savings arrangements with total premiums of approximately $50 million.

As we enter 2013, the Trust is watching developments on both the federal and state levels in health care reform. There has never been a time of greater uncertainty in the health care marketplace.

The Trust’s new CEO, Ron Lang, follows health care reform proposals closely and has identified a number of proposals that may affect the Trust and those it serves. His understanding of this complex subject is very impressive. He is backed in his efforts by our experienced staff and contractors and keeps the Board of Trustees up to date on developments. As proposals become more tangible, the Trust will continue to monitor developments and take appropriate actions.

December 2012 was a bitter sweet time for me personally since I retired at the end of the year as Chairman of the Board after 15 years in that role. I became Chairman of the Trust in 1997 right after finishing my term as President and Chairman of the Board of CalCPA. This month caps off over 30 years of leadership in CalCPA, including the last 15 with the Trust. I suspect I will miss it. Thank you for the opportunities you have provided to me.
The Trust is in good hands. The 12 CPAs who make up the Board of Trustees have experience with the Trust ranging from two to more than 40 years.

I wish you all good health and prosperity in 2013 and the years ahead.

Gale L. Case, CPA, CFE
Chairman of the Board
Group Insurance Trust of the
California Society of CPAs

November 12th is World Pneumonia Day. This day of awareness was established in 2009 and is marked every year on November 12th in order to educate people about the causes, preventions, risks and treatments of pneumonia. This day also helps make us aware that pneumonia is the leading cause of death of children under the age of five (worldpneumoniaday.org).

It is important to learn about pneumonia and educate others to reduce our risk of getting it. One easy way to help prevent the illness  is to be vaccinated with the pneumonia vaccine Pneumococcal, in addition to your annual flu shot.   Under the new health care reform Preventive Care Guidelines these vaccines are fully covered by most health insurance companies. Please note that these vaccines may not be recommended for all individuals and you should check with your physician before obtaining any vaccination.

The following information about pneumonia is from the Centers for Disease Control and Prevention.

Pneumonia is an infection of the lungs that is usually caused by bacteria or viruses. Globally, pneumonia causes more deaths than any other infectious disease. It can often be prevented and can usually be treated.

Every 20 seconds, somewhere in the world, a child dies from pneumonia. Many of these deaths are preventable through vaccination and appropriate treatment.

What Is Pneumonia?

Pneumonia is an infection of the lungs that can cause mild to severe illness in people of all ages. Signs of pneumonia can include coughing, fever, fatigue, nausea, vomiting, rapid breathing or shortness of breath, chills, or chest pain. Certain people are more likely to become ill with pneumonia. This includes adults 65 years of age or older and children younger than 5 years of age. People up through 64 years of age who have underlying medical conditions (like diabetes or HIV/AIDS) and people 19 through 64 who smoke cigarettes or have asthma are also at increased risk for getting pneumonia. (continue reading…)

Banyan Administrators continue to provide us with beneficial information about several different aspects of the Health Care Reform and how it affects us as well as other interesting health care facts. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans.

The following information is from Banyan Administrators, LLC:

What You Need to Know About: Enhanced Women’s Preventive Services

On 7/14/2010, the Department of Health & Human Services (HHS) released the list of A and B services determined by the US Preventive Services Task Force. These preventive services were categorized by adult, women and pediatric services. In the Department of Labor’s (DOL) Interim Final Rules released on 7/19/2010, the DOL also stated that additional preventive services for women were still being debated for inclusion. On 8/1/2011, the DOL issued Interim Final Rules on Enhanced Women’s Preventive Services resulting in considerable media coverage particularly concerning oral contraceptives now being payable with no cost share, such as a copay. However, the actual implementation of the new preventive services provisions is more complicated and the rules are still subject to change.

1.  Does this health care reform provision apply to “grandfathered” plans?

No, grandfathered plans do not need to comply with this provision. If, in the future, your health plan loses its grandfathered status, this reform will apply to your plan.

A grandfathered plan can voluntarily choose to comply with the provision and when the 2010 list of preventive services were released in July, 2010, some grandfathered plans did choose to comply and provide some, if not all, of the preventive services on the list with no cost share to the participant. The DOL rules for enhanced women’s preventive services does not address this scenario so the opinion is that a grandfathered health plan can still voluntarily decide to provide some, or all, of the services listed with no cost share to the participant.

2.  What are the enhanced women’s preventive services?

In addition to the 15 women’s preventive services issued on 7/19/2010 that included anemia screenings, mammography screenings, cervical cancer screenings, etc., 8 additional preventive services have been added:

• Well-woman visits, annually
• Gestational diabetes screenings for pregnant women between 24 and 28 weeks of gestation and at first prenatal visit for pregnant women at high-risk of diabetes
• Human papillomavirus testing beginning at age 30 and no more frequently than once every 3 years
• Counseling for sexually transmitted infections, annually
• Counseling and screening for HIV, annually
• Contraceptive methods and counseling, as prescribed
• Breastfeeding support, supplies and counseling in conjunction with each birth
• Screening and counseling for interpersonal and domestic violence, annually (continue reading…)

It’s been more than a year since the Group Insurance Trust contracted with Banyan Administrators, LLC for administrative services, and from early on, subscribers and Trust staff have been consistently pleased with Banyan’s expertise and responsiveness.

Staffed by a service center team where all members are fully licensed in California, three full-time and two part-time dedicated agents are on hand every day from 8 a.m. to 5 p.m. to handle member comments, inquiries, and billing. Two additional full-time staff members respond to incoming emails, faxes, and forms. Tom Zimmerman, Banyan’s Insurance Group Leader, provides a long list of issues that representatives commonly address, including “billing, coverage, claims, COBRA and CalCOBRA, enrollment, eligibility, forms, ID cards, open enrollment changes, quotes, plan changes, and underwriting.”

He adds that whenever the Banyan team is responding to members, they make secure handling of personal data a high priority. Banyan employs both a web encryption system and a password protected email system. The latter can be set up for incoming as well as outgoing emails, so if members need to supply vital information, they should contact Banyan before emailing the data to arrange for a secure transfer.

Performance Stats

As part of its contract with the Trust, Banyan is required to keep statistics on its performance in handling member calls, and the results are impressive. Since November 2009, the average phone response time has been 29 seconds and the average includes two open enrollment periods when calls were very heavy. Better still from a customer point of view, 95 percent of all email or telephone inquiries were resolved on the initial contact. In addition, Banyan’s average time to review and process incoming paperwork is less than two days with an accuracy rating of better than 99 percent on premium invoices and enrollment changes. (continue reading…)

A year after the President signed the Patient Protection and Affordable Care Act (ACA) into law, it is very clear that Americans are still unsure of the law and they just do not understand it. It is visible by reading the news articles, watching the news on television and by just talking to people around you – that there is still confusion – despite the attempts to educate Americans via such sites as www.healthcare.gov.

The latest Kaiser Family Foundation tracking poll shows that “more than half (53%) of Americans continue to report that they are confused about the law”. This same report done last April just shortly after the bill was signed, showed that 55% were confused about the law – so the numbers really haven’t improved much. Also the recent poll said that 52% of the public feel that “they do not have enough information about the health reform law to understand how it will impact them personally”.

According to the Kaiser poll, people are still split on their feelings about the law – 42% favor it and 46% view it unfavorably. The poll shows the strong divide between partisan lines – showing that 71% of Democrats support the law, 82% of Republicans oppose the law and independents have a split vote – 37% favor and 49% do not favor the law.

Click here to read the full Kaiser Family Foundation tracking poll.

The poll was performed between March 8^th to the 13^th and it covered a nationally representative random sample of 1,202 adults ages 18 years and older. The margin of error is plus or minus 3 percentage points.

[Information Source, Image Source]

By Doug Hessel 

Are you confused about California’s tax situation for newly eligible children under the new Federal Health Care reform rules? Welcome to the club.

Some practical advice: Don’t sweat it, but know it can get complicated and will require some attention from HR and Payroll.

So here’s a little more information for those puzzled about imputing income requirements for newly eligible dependents covered by benefit plans.

First, a little background…

If one believes the press about California’s lead on implementing the new Federal Patient Protection and Affordable Care Act (PPACA) healthcare reform rules, it’s not a leap to assume that the state’s tax rules would work in step with the federal rules about making medical coverage tax-free for families with kids now covered.

But that didn’t happen, yet.

Last year, according to the Sacramento Bee, the California legislature decided not to act to coordinate the state and federal tax codes on this issue because the provision was included in broader tax legislation that didn’t even make it to the governor’s desk. So no state tax break for now. However, help may be on the way with AB 36, a bill currently proposed that would specifically exempt employer contributions to young adult coverage from state personal income taxes.

What are the practical consequences?

The current lack of  a coordinating law will force employers to impute state income tax for those covering newly eligible adult children under medical, dental and vision plans.

For the time being, the rules defining tax dependents under IRC 152 will continue to be the state’s position in determining whether benefits can be provided on a tax-free basis. If a child meets the definition under the code—link attached—no imputed income requirement exists.  Adoption cases and divorces can complicate the issue of whether a child is a tax dependent and may require the advice of a qualified CPA to answer.

Employers will need to impute income for employees covering adult children 24 or older for state tax purposes, unless the adult children meet the “qualifying relative test” under IRC Section 152. Also, employees covering previously ineligible children age 19-24 (because they didn’t meet the full-time student status defined in IRC 152) will need to be identified and imputed income allocated.

A number of methods determining the imputed income amount can be used, though current guidance is to apply what the benefit would cost in an “arm’s-length transaction.”  Please remember imputed income applies to any medical, dental and vision plans in which the newly eligible child is enrolled. (continue reading…)

Banyan Administrators have been providing us with beneficial information about several different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans.  Over this past week, Banyan has provided answers to many questions regarding how the Health Care Reform Cadillac Tax will affect you. We are sure you will find the following information from Banyan Administrators valuable. This article is part 2 of 2. If you missed last week’s article, click here.

Health Care Reform Cadillac Tax

What You Need to Know Now About: The Cadillac Tax

Another component of the Patient Protection and Affordable Care Act (PPACA) commonly referred to as the Health Care Reform Act is a tax on benefit-rich or “gold-plated” insurance plans. This tax is often referred to as “The Cadillac Tax” and, although it is not scheduled to go into effect until 2018 and may see several revisions in design before then, some plan sponsors are beginning to develop strategies to address it.

1.  I sponsor a grandfathered health plan. Am I subject to The Cadillac Tax?

Yes. The Cadillac Tax is applicable to both grandfathered and non-grandfathered health plans. 

2.  Are there any exceptions for certain groups of employees such as collectively bargained union groups?

During initial debate about implementing The Cadillac Tax for 2013, there was debate about excluding federal employees and union groups from the provision; however that was abandoned when the implementation of the tax was delayed to 2018. At this time, union groups will also be subject to the tax in 2018.

There are some adjustments to the current 2018 Annual Value Amounts for certain groups. For example, insurance plans that have an above average population of older workers or female workers may have higher 2018 Annual Value Amounts based on a still to be determined formula. The reasoning is that the higher cost to insure these groups is due to risk factors and not to benefit-rich plan designs.

This line of reasoning is also responsible for higher 2018 Annual Value Amounts for retirees and workers in high-risk professions (firefighters, coal miners, etc.). The amounts for these professions are set at $11,850 for an individual and $30,950 for a family plan. 

3.  How many plan sponsors might be subject to The Cadillac Tax?

Initially, when the tax was scheduled to go into effect in 2013 the CBO estimated that by 2016 19% of all workers would be subject to The Cadillac Tax.

With the delayed implementation date of 2018, several studies and estimates have been performed and assuming just an average annual trend of 8%, the projection is in the range of 40%-60% of all plan sponsors will trigger The Cadillac Tax. Of course, all these projections assume the plan sponsor does not make any significant plan design changes like increased deductibles and other employee out-of-pocket costs and that the details of The Cadillac Tax as currently constituted for 2018 remain unchanged. (continue reading…)

Banyan Administrators have been providing us with beneficial information about several different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans.  Over the next couple of weeks, Banyan will be providing answers to many questions regarding how the Health Care Reform Cadillac Tax will affect you. We are sure you will find the following information from Banyan Administrators valuable.

Health Care Reform Cadillac Tax

What You Need to Know Now About: The Cadillac Tax

Another component of the Patient Protection and Affordable Care Act (PPACA) commonly referred to as the Health Care Reform Act is a tax on benefit-rich or “gold-plated” insurance plans. This tax is often referred to as “The Cadillac Tax” and, although it is not scheduled to go into effect until 2018 and may see several revisions in design before then, some plan sponsors are beginning to develop strategies to address it.

1.  Why was “The Cadillac Tax” included in the Health Care Reform Act?

There are two primary reasons for the inclusion of The Cadillac Tax in the Health Care Reform Act. The first is to stem the rise of health care costs. One belief is that excessively benefit-rich plan designs encourages higher utilization, even overuse, of health care services by the plan participants and, as a result, have a greater influence in driving escalating health care costs.

The second reason is to generate revenue to help pay for covering the uninsured.   The Congressional Budget Office (CBO) estimates that The Cadillac Tax will generate $149B over a 10-year period.

2.  What plan sponsors and plan designs are subject to The Cadillac Tax?

Beginning in 2018, if a benefit-rich insurance plan has an annual value of more than $10,200 for an individual and $27,500 for a family, then the insurance plan is subject to a 40% excise tax. 

The 2018 annual value amounts of $10,200 and $27,500 include medical, prescription drugs, administrative fees and also include employee and employer contributions to flexible spending, health reimbursement or health savings accounts.  Stand-alone vision and dental plans are not included in the calculation. However, there has been some recent confusion on the topic as it appears that the cost for a self-funded dental plan must be added to the calculation whereas a fully-insured dental plan does not. More guidance from the IRS/DOL is needed.

3.  How is the 40% excise tax calculated and who pays it?

The 40% excise tax is calculated on the amount above the annual value amount. For example:

A.     2018 Annual Value Amount – Individual     $10,200

B.     Insurance Plan’s Actual 2018 Annual Value Amount – Individual     $11,200  

C.     Difference Insurance Plan’s Amount v. Allowed Amount (B – A)     $1,000 

D.     40% Excise Tax – “The Cadillac Tax” (C * 40%)     $400 

The excise tax is paid by the plan sponsor and is paid for each participant in excess of the 2018 allowed amount so, in this example, if the plan sponsor has 500 participants with Individual coverage in the insurance plan at an 40% excise tax of $400 each participant, then the plan sponsor would pay a Cadillac Tax of $200,000.

Of course, although the plan sponsor is responsible for paying The Cadillac Tax, many may pass on some, if not all, of the cost on to the plan participants in some form such as higher employee contributions. 

4.  Will the Annual Value Amounts for Individual and Family change after 2018?

Yes, it is anticipated that the Annual Value Amounts for subsequent years will be indexed and will increase. At the moment, the expectation is that the amounts will increase, annually, by the medical inflation rate. Usually, this rate averages between 3%-5%. 

It should also be noted that some plan sponsors might find in 2018 that they do not trigger the tax, however, because their insurance plan costs continue to rise faster on an annual basis than the medical inflation rate that in a subsequent year such as 2019, 2020, etc., they will trigger the tax.

[Image Source, Information Source]

Maintaining a successful health plan demands constant attention to changing conditions and regularly updating plan designs. It means responding to an evolving market, adapting to public policy initiatives, and taking advantage of new medical developments. That’s why there are always changes for the Group Insurance Trust to announce during the annual open enrollment period. This year, with the passage of the Patient Protection and Affordable Care Act (“health care reform”) the number of changes are greater than usual and carry a more serious financial impact.

Following is an outline of the most important plan modifications subscribers will see this year. Some are in response to health care reform but not all.

Health Care Reform Mandates

Beginning January 1, every health plan must comply with the following provisions:

• All dependents up to age 26 are eligible for coverage
• No cost-sharing for in-network preventive services
• No pre-existing limitations for children under 19
• Prior authorization or higher cost-sharing disallowed for out-of-network emergency services
• New rules for appeals process
• Removal of lifetime maximum limits (copay and HSA plans)
• Removal of lifetime limits for hospice care (copay and HSA plans)
• Removal of annual limits on durable medical equipment (HMO plans)

Premium Rates

Naturally, all these mandated changes come at a price. Over the past seven years, the Group Insurance Trust has delivered single digit increases that were well below national and regional trends. However, a thorough analysis of the costs associated with these mandated benefits, plus unusually high claims experience in 2009, resulted in an increase to CalCPA ProtectPlus medical plan rates that is significantly higher than that of previous years.

Because each firm’s rates are based on a combination of factors, each firm’s increase is unique. Renewal packets, including rate information specific to each firm, were mailed to participating firms on November 1. If you did not receive your renewal package please contact Banyan Administrators, LLC at (877) 480-7923 immediately. (continue reading…)

Banyan Administrators have been providing us with beneficial information about several different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans.  Over the past few weeks, Banyan has provided answers to many questions regarding Medicare and how the reform affects you. If you missed the first two articles in this series, make sure to check them out – Article #1 and Article #2. We are sure you will find the information valuable.

The following information is provided by Banyan Administrators:

Arguably the greatest volume of reforms through the Patient Protection and Affordable Care Act (“Affordable Care Act”) signed into law on 03/23/2010 involve Medicare. Some of the provisions are direct reforms to Medicare while other provisions of the Affordable Care Act may have an indirect, but intentional, impact on the program. The following Q&A will give you an overview of the reforms to the Medicare program and how they are all intended to work together.

1.  What are the Medicare Part D reforms?

The first Medicare Part D reform is the closing of the “donut hole”. For Medicare Part D enrollees in 2010, coverage breakdowns as follows: 

• $2,830 – After the enrollee pays the first $310 in drug costs (the deductible), the plan pays 75% of the drug cost up to $2,830 with the enrollee paying the other 25%, then
• $2,831-$4,550 – The “donut hole” – The enrollee pays 100% of their drug costs up to $4,550, then
• $4,551+ – “catastrophic coverage” – The enrollee pays a $2.40 copay for generic drugs. For other drugs the enrollee pays either $6.00 or 5% of the drug cost, whichever is greater.

Beginning in 2010, the reforms going into effect to address the donut hole are: 

• 2010 – Enrollees in the “donut hole” received $250 rebate checks from Medicare
• 2011 – If an enrollee reaches the donut hole, they will be given a 50% discount on the total cost of the brand name drugs while in the gap. Medicare also will phase in additional discounts on the cost of both brand name and generic drugs.
• By 2020 – Effectively close the donut hole so that the plan pays 75% of the drug cost with the enrollee paying the remaining 25%.

The second Medicare Part D reform is the elimination of the Medicare Part D Subsidy paid to employers who sponsor a retiree drug plan.  (continue reading…)

Banyan Administrators have been providing us with beneficial information about several different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans.  Over the next few weeks, Banyan will be providing answers to many questions regarding Medicare and how the reform will affect you. We are sure you will find the information valuable.

If you missed the first article in this series that was posted last week, click here.

The following information is provided by Banyan Administrators:

Arguably the greatest volume of reforms through the Patient Protection and Affordable Care Act (“Affordable Care Act”) signed into law on 03/23/2010 involve Medicare. Some of the provisions are direct reforms to Medicare while other provisions of the Affordable Care Act may have an indirect, but intentional, impact on the program. The following Q&A will give you an overview of the reforms to the Medicare program and how they are all intended to work together.

1.  What is the future of Medicare?

What could not have been foreseen in 1965 when Medicare was created was that the United States was coming to the end of the post-World War II “Baby Boom”. More “Baby Boomers” are reaching Medicare eligibility than are being replaced in the work force by younger workers.  With Medicare being funded by FICA taxes, at some point, it mathematically becomes impossible to fund all the benefits for all the Medicare enrollees. (continue reading…)

Banyan Administrators have been providing us with beneficial information about several different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans.  Over the next few weeks, Banyan will be providing answers to many questions regarding Medicare and how the reform will affect you. We are sure you will find the information valuable.

The following information is provided by Banyan Administrators:

Health Care Reform – Medicare

What You Need to Know Now About: Medicare

Arguably the greatest volume of reforms through the Patient Protection and Affordable Care Act (“Affordable Care Act”) signed into law on 03/23/2010 involve Medicare. Some of the provisions are direct reforms to Medicare while other provisions of the Affordable Care Act may have an indirect, but intentional, impact on the program. The following Q&A will give you an overview of the reforms to the Medicare program and how they are all intended to work together.

1.  What is the history of Medicare?

As early as 1945, President Harry S. Truman proposed a government administered national social insurance program. It was not until the Social Security Act of 1965 signed into law by President Lyndon B. Johnson that the Medicare program was created. The first senior enrolled into the Medicare program was former President Harry S. Truman. Former First Lady Bess Truman was the second senior enrolled.

The first two programs created in 1965 were Medicare Part A and Medicare Part B. Since that time, Medicare Part C (1997) and Medicare Part D (2006) have been added.

Medicare Part A is hospitalization insurance providing coverage to the Medicare enrollee for inpatient hospital stays. Medicare Part A also pays for other facility-based skilled services such as care at a skilled nursing facility, but, on a limited basis. Most Medicare enrollees do not pay a premium for Medicare Part A coverage because they (or a spouse) have paid enough into the program through payroll taxes prior to retirement. Medicare enrollees do have to meet a Medicare Part A deductible before any benefits are paid. In 2010, the Medicare Part A deductible is $1,100 for an inpatient stay up to 60 days.

Medicare Part B is medical insurance providing coverage to the Medicare enrollee for outpatient services provided by a physician. Services include physician services, nursing services, x-ray, laboratory and diagnostic tests, vaccinations, renal dialysis, outpatient hospital procedures, etc. No benefit is provided for prescription drugs unless the drug is administered by a physician. Participation in Medicare Part B is voluntary if an eligible retiree wishes to participate; the premium amount will be deducted from his social security benefit. In 2010, Medicare Part B monthly premium, on average, is $100.50. The Medicare Part Benrollee also has to meet a $155 deductible and then pay 20% coinsurance.

In 2008, there were 45 million enrollees in Medicare making it the nation’s largest single health care payer in the nation. By 2030, it is expected that enrollment will reach 78 million. In 2008, Medicare spending reached $599 billion which was 20% of the total federal government spending. At $599 billion, Medicare is only surpassed by Social Security and defense spending. (continue reading…)

Banyan Consulting LLC has been providing us with beneficial information about different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans. 

To view this article in PDF format, click here.

The following information is provided by Banyan Consulting LLC:

What You Need to Know Now About:  Lifetime and Annual Limits

The Patient Protection and Affordable Care Act (“Affordable Care Act”) signed into law on 03/23/2010 includes changes to any limits on the benefit amount payable on a per participant basis by an employer-sponsored group health plan.  These provisions take effect on the first day of the first plan year following 9/23/2010.  Lifetime limits on a per participant basis will be prohibited.  Annual limits on a per participant basis will still be permitted on a restricted basis until 2014 when those, too, are prohibited.

1. Does the health care reform provision on Lifetime and Annual Limits apply to “grandfathered” health plans?

Yes, this provision applies to both grandfathered and non-grandfathered health plans.  Also, your plan’s funding arrangement, fully-insured or self-funded, does not impact your requirement to comply.

2. Currently, my employer-sponsored group health plan has a $1,000,000 lifetime maximum.  What do I need to do in order to be compliant?

Effective with the first day of your next new plan year after 9/23/2010, you must remove the $1,000,000 lifetime maximum and replace it with an unlimited lifetime maximum.

You will also need to determine if there has been any plan participants who had reached the $1,000,000 lifetime maximum and were dropped by the plan.  You will need to contact them, alert them of the new unlimited lifetime maximum, and offer them the opportunity to re-enroll into the health plan effective on the first day of your next new plan year after 9/23/2010.

3. Do the lifetime and annual maximum changes apply only to in-network providers?

The Interim Final Regulations issued by the Department of Labor on 6/23/2010 are not entirely clear on this subject; however, the interpretation of the regulations is that there is no distinction for network participation.  The lifetime and annual limits are on a per participant basis and provider network affiliation does not factor into the reform provision. (continue reading…)

Today marks the 6^th month anniversary of the signing of the health care reform bill (Affordable Care Act).  President Obama will mark this anniversary of the law’s enactment by meeting with individuals and employers from across the United States and learning from them how the new legislation has benefited them personally or their company. These stories, along with vital information about the Affordable Care Act, will be presented in a new website provided by the White House, www.WhiteHouse.gov/HealthReform. Today, President Obama will also recognize the implementation of the new Patient’s Bill of Rights that is a part of the Affordable Care Act.

Due the complexity of the many changes the Affordable Care Act will bring to us over the next several years, many Americans are still confused as to what changes will occur and when. Below is a list of the protections provided under the Patient’s Bill of Rights, which will be take effect today, September 23, 2010. We will do our best to keep you up to date as more rules of the Affordable Care Act come into effect.

Starting September 23, 2010 Insurers Will No Longer Be Able to:

Discriminate Against Children with Pre-Existing Conditions:

For most plans, discrimination against children (under age 19) with pre-existing conditions will be banned.   In 2014, no one seeking coverage can be discriminated against because of a pre-existing condition. It is estimated that up to 72,000 uninsured children who have been denied coverage due to a pre-existing condition, are expected to gain coverage. Coverage for up to an estimated 90,000 children will no longer exclude benefits because of a pre-existing condition.   

Drop Your Coverage Without Proving Fraud:

Insurance companies can no longer stop your coverage due to an illness or a mistake on your application. Approximately 10,700 people’s coverage, that is dropped each year when they become ill or make an error on their application, will now be protected under the new law.  (continue reading…)

Banyan Administrators have been providing us with beneficial information about different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans. 

To view this article in PDF format, click here.

The following information is provided by Banyan Administrators:

Another component of the Health Care Reform Act signed into law on 3/23/2010 is that beginning with the 2011 tax year, employers must report the aggregate cost of applicable employer-sponsored health insurance coverage on employees W-2 forms.  General information about this requirement has been provided, however, the Department of Labor (DOL) has not yet issued Interim Final Rules on this provision of the Health Care Reform Act.

1. When does an employer have to be ready to be in compliance with this new reporting requirement?

Employers must be prepared to accurately report this information on an employee’s 2011 W-2 form as early as February, 2011.  Although employers will be sending most of the 2011 W-2 forms to the employees in January, 2012, if an employee terminates employment in 2011, they do have the right to request an early 2011 W-2 form.  Employers must be prepared for this possibility. (continue reading…)

Banyan Consulting LLC has been providing us with beneficial information about different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans. 

To view this article in PDF format, click here.

The following information is provided by Banyan Consulting LLC:

One component of the Health Care Reform Act signed into law on 3/23/2010 requires minimum coverage, without employee cost-sharing, for services rated A or B by the US Preventive Services Task Force.  Beginning with the first day of the first plan year beginning on or after 9/23/2010, plans can no longer require a copay or apply a deductible or coinsurance to these services.  On 7/14/2010, the Department of Health & Human Services (HHS) released the list of A and B services determined by the US Preventive Services Task Force.

1.  Does this health care reform provision apply to “grandfathered” plans?

No, grandfathered plans do not need to comply with this provision.  If, in the future, your health plan loses its grandfathered status, this reform will apply to your plan.

2.  What are the A and B rated preventive services?

The A and B rated preventive services are segmented into 3 categories which are:

•  Adult Covered Preventive Services
•  Women (including Pregnant Women) Covered Preventive Services
•  Children Covered Preventive Services

There is still some debate on additional services for women that, most likely, will not be resolved until August, 2011.  There is lobbying from organizations such as Planned Parenthood, for example, who want birth control to be included in the preventive services category.  More information is sure to follow. (continue reading…)

 Banyan Consulting LLC has been providing us with beneficial information about different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans. 

The following information is provided by Banyan Consulting LLC:

With the passage of the Patient Protection and Affordable Care Act on March 23, 2010, effective January 1, 2011 over-the-counter (OTC) medicine will no longer be eligible for reimbursement from a Flexible Spending Account (FSA), Health Reimbursement Account (HRA) or Health Savings Account (HSA) unless accompanied by a prescription or medical necessity statement from a medical provider.  The new regulation only applies to OTC medicine so many OTC supplies that are, currently, eligible for reimbursement through an FSA, HRA or HSA will not be affected. To read more, click here.