It was announced that the sum total of all MLR rebates for 2011 will be about $323 million.

Based on the total insured population, that means that the average rebate is less than $2 a person.

While MLR limits are generally seen as a good thing for employers, one has to wonder if as much has been spent creating these regulations, trying to understand the regulations and fighting the regulations as has been saved.

Medical Loss Ratio HHS Announcement 2.16.2012

This provision of PPACA requires large employers with 200 or more full time employees to automatically enroll new employees in one of the employer’s health benefit plans, subject to waiting period rules, and to continue the coverage of existing employees in a health plan, unless an employee opts out. Previously, DOL had indicted that employers would not be required to conform to this rule until regulations were issued and that these regulations would be completed by 2014.

With Technical Release 2012-01, DOL now says its regulations on this issue will not be ready by 2014 and that employers will not be required to comply with the automatic enrollment provision until these final regulations are effective.

Employees Cannot Opt Out of Medicare Part A Without Also Rejecting Social Security Benefits

The U.S. Court of Appeals for the D.C. Circuit has upheld a lower court ruling (Hall v Sebelius; see the Alert of 8/11/11) that individuals over age 65 cannot opt out of Medicare Part A coverage if they want to receive their Social Security payments.

Several employees, who were receiving Social Security benefits, sued on the grounds that they suffered harm due to the Medicare Part A coverage because private insurers reduce the benefits they can receive once they become covered by Medicare Part A. They said they wanted to receive the benefits they would be entitled to under their employer’s group health plan.

The Appeals Court found that the law provides that individuals over age 65 are automatically covered by Medicare Part A when they are covered by Social Security benefits. While recognizing that the law permits a person to reject Medicare Part A, the Court concluded that such a rejection can only flow from a refusal to seek Social Security benefits, because the law does not permit an individual to reject the Medicare Part A coverage unless they also opt not to receive Social Security payments.

The EEOC has published a final rule imposing recordkeeping requirements on employers covered by Title II of the Genetic Information Nondiscrimination Act of 2008 (“GINA”).

Title II of GINA prohibits employers from using genetic information to make employment decisions; restricts employers’ ability to acquire employees’ genetic information; and prohibits retaliation against employees who complain about genetic discrimination. Employers covered by GINA include all private employers, state and local governments, and educational institutions with 15 or more employees. GINA also covers private and public employment agencies, labor organizations, and joint labor-management training programs.

Under the final rule, GINA-covered employers must retain all personnel and employment records made or used in the course of their business for one year from the later of the date that the record is made or the date that related personnel action is taken. The types of records required to be retained under the final rule include, but are not limited to:

• Requests for reasonable accommodations;
• Application forms;
• Hiring, promotion, demotion, transfer, layoff and termination records; and
• Records on pay rates,
• compensation, tenure, selection for training or apprenticeship, and other terms of employment.

The final rule also requires employers to retain documents relevant to charges filed under GINA until final disposition of those charges. It is effective on April 3, 2012.

Today, the Departments of Treasury, Labor and Health and Human Services released guidance and final regulations under PPACA regarding the issuance of Summary of Benefits and Coverage (SBC). This guidance covers only the initial year of applicability.

The requirements to provide an SBC, apply for disclosures to participants and beneficiaries who enroll or re-enroll in group health coverage through an open enrollment period (including re-enrollees and late enrollees) beginning on the first day of the first open enrollment period that begins on or after September 23, 2012.

The sample notices do not provide language related to minimum essential coverage and whether the plan’s or coverage’s share of the total allowed costs of benefits provided under the plan or coverage meets applicable minimum value requirements since these regulations are yet to be fully defined and finalized.

The Departments intend to issue updated materials for later years. They recognize that, beginning January 1, 2014, new market reforms will take effect, which are expected to prompt additional changes to the SBC.

To view the Legislative Brief, click the following link:
Health Care Reform Summary of Benefits and Coverage Feb 2012

To view the template for the Summary of Benefits and Coverage and the glossary, visit: http://cciio.cms.gov/resources/other/index.html#sbcug

To view the Final Rule, visit: http://www.ofr.gov/inspection.aspx

For more information on the rules announced today, visit: http://www.healthcare.gov/news/factsheets/2011/08/labels08172011a.html

On December 16, 2012, The Center for Consumer Information and Insurance Oversight, a division of HHS, issued the Essential Health Benefits Bulletin. Included in this guidance was CCIIO’s proposal that essential health benefits be defined by a benchmark plan selected by each state. Attached is a Legislative Brief that highlights the Bulletin.

The first footnote in the CCIIO’s Bulletin states: Self-insured group health plans, health insurance coverage offered in the large group market, and grandfathered health plans are not required to cover the essential health benefits.

Essential Benfits Health Reform Feb 2012

On January 31, 2012, 360 CBA hosted a webcast on Health Reform. It provided a detailed review of where things stand today, and what plans need to do to keep current. If you weren’t able to make our webinar Updating Health Reform, contact your 360 CBA representative and they can instruct you on how to download it.

Under the Premium Rate Review requirement of the Patient Protection and Affordable Care Act (“PPACA”), the Department of Health and Human Services (“HHS”), in conjunction with the states, must develop a process for reviewing “unreasonable” health insurance premium increases, including “unreasonable” increases in the individual and small group health market. (See the Alert of December 8, 2011.) If a state lacks the authority for such a review, PPACA delegates the review to HHS. (A small group market is generally defined under a state’s insurance law. If no such definition exists, it will generally include employers with 50 or fewer employees.)

HHS has now ruled that one insurer, Trustmark Life Insurance Co, operating in Alabama, Arizona, Pennsylvania, Virginia and Wyoming has proposed unreasonable premium rate increases. (HHS has previously notified all states that any year to year rate increases at or above 10% would trigger an “unreasonable” rate review.) This insurer had proposed small group rate increases ranging from 13% to 27% in five of the ten states that HHS had previously found to be lacking the authority to review increased premium rates themselves.

In its ruling, HHS outlined that under its review program, a rate increase may be excessive if:

• it would result in a Medical Loss Ratio (“MLR”) that is below the federal requirement of 80%;
• any of the assumptions on which the increase is based are not supported by substantial evidence; or
• the choice of assumptions or combination of assumptions on which the rate increase is based is unreasonable.

In determining the proposed increases to be unreasonable, HHS relied on the findings of “independent experts,” concluding that the MLR in each of the five states would be below the federal 80% requirement. HHS also found, that the assumptions used to support the rate increase were unreasonable because they were based on national experience rather than state-specific experience. HHS determined that it was “not appropriate to exclude the state-level experience.”

Under phase two of PPACA’s premium rate increase rules, effective September 2012, individual states can set specific premium rate review triggers above or below the HHS 10% level to reflect their own unique local markets.

The Massachusetts Department of Revenue has issued TIR 12-2 which provides the 2012 penalties for not complying with the Massachusetts Health Care Reform Act’s individual health insurance coverage mandate. The maximum individual penalty in 2012 for failure to have “creditable” insurance coverage will be $105 per month ($1,260 for the entire year).

The penalty is based on one half of the lowest cost Commonwealth Choice Bronze plan available through the Connector. However, the Department of Revenue adjusts the penalty based on age and income. For example, individuals who are age 26 or less will have a maximum penalty of $83 per month ($966 per year) while those who earn less than 150% of the federal poverty level ($16,344 for an individual) will not be subject to any penalty.

The December Benefits Buzz discusses:
• Trends in Employee Benefit Offerings
• Supreme Court Review of Health Reform
• Flu Season Preparedness

December 2011 Benefit Buzz