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Archive for January, 2013

South Dakota legislation would restrict sale of multi-state health plans

January 30th, 2013 Comments off

South Dakota lawmakers advanced a bill that would restrict the marketing of multi-state health plans (MSPs) to the state’s health benefit exchange, barring their sale outside the exchange market.  Senate Bill 139 would also require MSPs be sold exclusively by state licensed insurance producers and mandates producers be paid commissions on a par with similar plans sold outside the exchange.

Section 1334 of the Patient Protection and Affordable Care Act requires at least two MSPs be offered in each state exchange.  The MSPs will be phased in over a four-year period starting when the exchanges begin operating in 2014, when MSPs must be in 60 percent of the states.

Regulated by both the federal government and the states, MSPs are intended to increase competition and consumer choice, particularly in less populous states such as South Dakota where there are fewer health plans available.  However, existing plan issuers and producers in these states likely fear MSPs will have a disruptive impact on the market and potentially crowd out smaller players by virtue of their interstate heft and superior economies of scale.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Aetna Offers Individual Plans to Costco Members in California | Aetna News Hub

January 26th, 2013 Comments off

WALNUT CREEK, Calif.–(BUSINESS WIRE)–Aetna (NYSE: AET) is now offering individual health insurance plans to Costco members in California. The Costco Personal Health Insurance program, of which there are five plans to choose from, offers broad major medical benefits; dental options; an extensive network of doctors and hospitals; and a variety of helpful services, tools and information, tailored to meet the needs of Costco members.

In addition to California, the Costco Personal Health Insurance program is also available to Costco members in Arizona; Connecticut; Georgia; Illinois; Michigan; Nevada; Pennsylvania; Texas; and Virginia. Aetna plans to expand the program to other markets in the coming months.

via Aetna Offers Individual Plans to Costco Members in California | Aetna News Hub

This is a shrewd strategy.  According to some media accounts, Costco members in 2012 had average household incomes of $96,000 — slightly above the $92,200 that equated to 400 percent of the federal poverty level of a family of four that year.  That’s a critical threshold because it’s the eligibility cutoff for advance income tax credits the Affordable Care Act authorizes to subsidize premiums for coverage purchased on state health benefit exchange marketplaces.  Aetna clearly sees Costco as a key distribution channel for its plans that will not be sold on the state exchange marketplaces.

Update: California Costco members won’t have this option.  In mid-June 2013, Aetna announced it would pull out of the individual market in California in 2014.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

ACA definition of full time work: Twilight of the Industrial Age work week?

January 26th, 2013 1 comment

In 1938, the U.S. Fair Labor Standards Act (FLSA) set the full time work week at 40 hours. The 40-hour work week became a hallmark of the modern Industrial Age. Over the decades since then and especially since 1985, our socio-economy has shifted toward the next phase: a more automated and sedentary Information Age economy.

In this new economy, people move around a lot less.  Consequently, many health experts agree, the health of the population has worsened, expanding waistlines and health care costs to treat complex and chronic conditions that are largely preventable with more activity and exercise. As a society, we are negotiating the transition from the Industrial to the Information Age with a large degree of difficulty as shown by the deteriorating overall health status of the population.

It is therefore interesting to note the Patient Protection and Affordable Care Act (ACA) at Section 4980H(c)(4) reduces the 40-hour work week standard to 30 hours for the purpose of defining a full time worker under ACA’s large employer “shared responsibility” mandate requiring large employers to provide employer-sponsored health coverage. While the policy intent is likely to get large employers (defined as having 51 or more workers) to cover a greater portion of their work forces and thus expand health coverage, this little noticed provision could offer a larger, longer term benefit if it becomes a new standard work week in the emerging Information/Internet socio-economy. Especially if it is accompanied by a widespread social realization and acceptance of the notion that people would greatly benefit from one to two hours of sustained activity on most days – especially for those engaged in knowledge and information work that has them mostly seated for the balance of their waking hours.

But would the 10 fewer hours worked each week translate into lost productivity that would truly harm the economy and standard of living? Or would the 30 hours that are spent working be more productive ones such that working 10 less hours would be largely offset?  And if people used the extra time for daily activity (yes, housework counts) and exercise, how much savings could be realized in bending the infamous health care utilization cost curve and would they outweigh any cost associated with working a shorter work week? This is an enormously important question considering the high cost of poor health to the U.S. economy. Finally, for knowledge workers is measuring the hours worked even the right metric to gauge their productivity given the view that the results are what really count?

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

January 24th, 2013 Comments off
 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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California state building boondoggle squanders millions, presents workshifting opportunity

January 23rd, 2013 Comments off

The Sacramento Bee today has an item on the California State Board of Equalization’s longstanding problems with its high rise building in downtown Sacramento. The state continues to throw good money after bad trying to remedy the problems that according to the Bee story include leaking windows, burst water pipes, toxic mold and faulty elevators. Another $4 million will be allocated for the latest remediation project on top of $65 million spent over the building’s 22-year lifespan.

It’s time to make lemonade from this big lemon. How? By putting the workers assigned to the building into a workshifting program that allows them to work from their homes or other locations in their communities (such as distributed workplaces) where they can be productive. That would save the taxpayers yet more wasted millions while at the same time getting workers out of a less than healthy environment and freeing them up from wasted, stressful commuting time each day. That additional free time can also benefit the state’s finances by giving those workers more time to engage in health promoting behaviors that can lead to better health outcomes and reduced heath care costs.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Employer health benefit exchange notice requirement takes effect March 1

January 20th, 2013 1 comment

Effective March 1, 2013, employers must notify new and existing employees in writing about their state’s health benefit exchange and advance premium tax credits available through the exchange to help them purchase individual coverage.

The requirement is contained in Section 218b of the federal Fair Labor Standards Act of 1938.  The U.S. Department of Labor (DOL) is charged with issuing regulations providing more specific guidance on the notice but has not yet done so.  Section 218b requires the following information be included in the notice:

  1. A description of the services provided by the exchange and the manner in which the employee may contact the exchange to request assistance.
  2. If an employer provides employer-sponsored health coverage that does not provide minimum actuarial value (60 percent of expected costs for benefits provided under the plan), the employee may be eligible for a premium tax credit and reduced cost sharing (deductibles, copayments, and coinsurance) if the employee purchases individual coverage through the exchange.
  3.  If an employee purchases a qualified health plan through the exchange, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for federal income tax purposes.

Update: On January 24, DOL issued guidance stating employers are not required to comply with the employee notification requirement until the rules are issued.

In the meantime, DOL said it is considering “model, generic language” among alternative methods for employers to comply with the notice requirement, adding that forthcoming guidance will provide employers flexibility and adequate time to comply with the requirement.  DOL added it expects the timing for distribution of notices will be the late summer or fall of 2013 to coordinate with the exchange open enrollment period beginning October 1, 2013.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Creating an organizational wellness culture for the 21st Century

January 16th, 2013 Comments off

BenefitsPro.com has posted an item forecasting four employer wellness trends for 2013 featuring Stephanie Pronk of Aon Hewitt.  Pronk emphasizes a point for every employer interested a healthier workforce and lower healthcare costs: that employee wellness cannot be seen simply in the context of the work site, but must create a lifestyle change.  “When you think about why safety programs are so successful in organizations, it’s because they’re engrained in the culture,” Pronk is quoted as saying. “It’s part of the way they do their work every day, so we need to work at health and wellness in the same way. We need culture changes to support healthy behaviors in the long term.”

A major health safety hazard of the information and Internet economy of the 21st Century is holding onto outdated 20th Century practices that assume knowledge work can only be performed in a central office location between 8:30 and 5, Monday through Friday.  That forces knowledge workers into a sedentary existence that can lead to and aggravate chronic conditions associated with lack of exercise.  Riding the commute-to-cubicle treadmill (in a seated position) also sucks valuable time out of their lives, leading many to justifiably claim they lack the time for meaningful, regular exercise and even sufficient sleep.  And that’s not even counting the adverse impact on employee engagement and retention.  The commute-to-cubicle treadmill isn’t merely a job – it’s a default lifestyle – and an unhealthy one.

Employers that are truly committed to helping their staff members adopt healthier lifestyles must give them the freedom and responsibility to do so by giving them control over their daily schedules.  As this blog has noted previously, recently released research has shown the potential of schedule control to support health promoting behaviors – and by extension, healthier lifestyles.  Schedule control enables knowledge workers to function whenever and wherever they are productive with the proviso that they stay in communication with their team and management and fulfill their job functions and tasks. It’s an elegant, low cost wellness program that leverages the power of today’s Information and Telecommunications Technology (ICT) and truly represents the kind of organizational cultural change for the 21st Century that Pronk correctly observes is necessary to achieve a healthier workforce.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Little noticed ACA provision has big implications for state health benefit exchange affordability

January 5th, 2013 Comments off

Individuals and families who purchase health coverage through state health benefit exchanges using advance tax credit subsidies under Section 1401 of the Patient Protection and Affordable Care Act will pay no more than 2 to 9.5 percent of their income towards premiums. Section 1401 delineates a sliding scale range of income maximums in six brackets and percentages for each level.

In 2015 and future years, however, those percentages could rise under a little noticed and discussed provision at Section 1401 amending Section 36B(b)(3)(A)(ii) of the Internal Revenue Code. It states the maximum income amounts “shall be adjusted to reflect the excess of the rate of premium growth for the preceding calendar year over the rate of income growth for the preceding calendar year.” Then for calendar years 2018 and beyond, should premium tax credits and cost sharing reductions reach .504 percent of the gross domestic product for the preceding calendar year, the maximum income amounts are subject to an additional bump.

In 2011, the Congressional Budget Office (CBO) interpreted the clause to mean that “the maximum percentages of income that enrollees at a given income level will have to pay will increase over time.” By how much, exactly? “CBO and JCT (Joint Committee on Taxation) interpret that adjustment (relative only to premiums) as being equal to the difference between (1) the percentage change in average premiums for private health insurance for the nonelderly nationwide between the prior year and the year before that and (2) the percentage change in average U.S. household income.” (Final U.S. Treasury Department Regulations issued in May 2012 governing the Premium Tax Credit are silent on the provision)

CBO explained the need for the adjustment mechanism as follows: “Because private health insurance premiums generally grow faster than income, the regular indexing provision will keep the share of the premium paid by an enrollee at a given income level and the government roughly constant from year to year.” A report issued last month by the Commonwealth Fund noted that between 2003 to 2011, premiums for family coverage increased 62 percent across states—rising far faster than income for the middle- and low-income families comprising the population expected to buy coverage through the exchanges.

In conclusion, this means if premiums continue to rise as most observers expect, those purchasing subsidized coverage through state benefit exchanges won’t be protected from those increases and will have to pay a larger share of their incomes toward premium rates. (I apologize for a previous post in 2012 that asserted otherwise) This has enormous implications for the exchanges since they must offer affordable coverage in order to attract and retain sufficiently large numbers of enrollees in order to restore a functional individual health insurance market.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Time for sustained exercise to bend the healthcare cost curve — and promote better thinking

January 1st, 2013 2 comments

Knowledge workers earn their livings analyzing, abstracting and communicating.  In today’s Information/Internet economy, all too many knowledge workers needlessly do so working under legacy Industrial Age 8-5 office schedules, spending even more time each day relatively immobile than sleeping.  Add to that another 1-3 hours spent sitting in a daily commute to a central office location.  Month after month, year after year of this occupational lifestyle sets the stage for the development of preventable chronic conditions such as diabetes, hypertension and obesity that drive the health cost curve and the health insurance crisis.

But that’s not all.  Lack of physical movement can also dull the knowledge worker’s most important tool: their brain.  This Sacramento Bee article cites research linking physical activity to the brain’s ability to perform learning and memory tasks.

The clear conclusion to be drawn is sustained exercise could produce dividends for organizations by not only lowering their healthcare and insurance costs, but also the added bonus of better and more creative thinking.  For knowledge organizations, affording workers control over their schedules and time for sustained exercise probably is likely the most cost effective “workplace wellness” program going.  A key program component is ditching outmoded Industrial Age commuting and office hours and becoming a more virtual organization and maximizing the use of Information and Communications Technology (ICT).  Knowledge work can be done anywhere, and some of the most creative thinking happens during and after sustained exercise.  That requires freeing up time for it every work day by getting people out of their cars and cubicles.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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