Thursday, June 28, 2012

Surpreme Court Upholds Reform, But Verdict May Hold Surprises

THURSDAY, June 28 (HealthDay News) -- After the U.S. Supreme Court's announcement Thursday that it would uphold most of the 2010 Affordable Care Act, many legal experts were quick to register their surprise at the decision -- and their sense that perhaps the battle over health-care reform was not yet finished.
The complicated 5-to-4 decision allows the law to proceed with its goal of covering more than 30 million uninsured Americans. That includes the controversial "individual mandate" provision, which requires most consumers to buy health care insurance or face a penalty. The court held that the mandate fell under the category of a tax, and as such was constitutional and could stand.
That came as a surprise to Stephen Presser, a professor of legal history at Northwestern University School of Law in Chicago. He had predicted that the Supreme Court would find the health-reform law unconstitutional and the whole package would go down.
"I had thought that the issue of whether [the individual mandate] was a tax was over and done with," Presser said. "This strikes me as a disappointing decision, which fails fully to preserve the limitations on the Constitution of the federal government," he added.
"It's disappointing that all the proponents of the Act had steadfastly said that this was not a tax. That this was not a bill to raise revenues, that this was not a bill to increase health care costs. Had it acknowledged that it was in fact a tax, it's much more doubtful that it would have passed, given the thin margin that it did pass by, it may have made a difference. So what the court has done is salvaged the Act in a Constitutional sleight of hand," Presser said.
But Renee Landers, a professor of law at Suffolk University Law School, had betted on the other side -- that the mandate could still survive -- and today's decision justified her confidence.
"It was hard to stay with that opinion the last few weeks though because everybody was so busy hedging their bets," she said. She was somewhat surprised at one of the four dissenters: "I thought [Justice Anthony] Kennedy would go over for it, but he didn't."
However, she wasn't surprised that Chief Justice John Roberts backed the majority decision.
"I think at the end that Roberts was motivated by that overturning an act of Congress is a really significant action by the court even though not [entirely] unprecedented, and if at all possible the court should work to uphold the Constitution," Landers said.
The decision did limit the expansion of Medicaid as proposed under the law.
"What they said was that the part of the expansion that would penalize states -- that would withdraw all Medicaid funding from the states if they didn't go along with the expansion -- is invalid," Landers explained. "The expansion still exists, but a state can either sign onto it or not and won't lose all its current Medicaid funding if it doesn't go along with the expansion."
While some states are already expanding their Medicaid roles and others are happy to cooperate because of the federal funding they'll receive, she said, "there are always those states who are very parsimonious -- not generous -- in granting Medicaid benefits to adults. So basically, this decision will have the effect of limiting the impact of the law in getting more adults insurance coverage."
Another expert, Robert Field, a professor of law in the department of health management and policy at Drexel University's School of Public Health, weighed in and found that each side may have gained from the decision.
"I do think this is potentially a win for both sides, although the losers in the case may not immediately see it this way," Field added. "I think [President Barack] Obama wins politically. He gets around the charge that [Republican Mitt] Romney had been making that he wasted all his political capital on something that was unconstitutional."
And for conservatives, "there is no new precedent that expands Congress' power" when it comes to the Medicaid provision, Field added.
"[The Justices are] saying that Congress can expand Medicaid and can offer states a carrot to expand it, but they cannot follow the carrot with a stick that would take away their entire Medicaid programs if they don't agree to the expansion," Field explained. "The carrot is the 90 percent to 100 percent of the expansion that Congress will pay. However, the law had said that if the states don't go along with that they could lose funding for their entire Medicaid program. Now that wouldn't happen. The worse that would happen to them is their programs will stay as they are."
Gregory Magarian, a professor at Washington University School of Law in St. Louis, believed that the entire law would pass by a narrow margin, but on a different basis.
"The result is what I was expecting on the mandate, but the way they got to it is not at all what I was expecting," Magarian said. "It sounds to me that the court was trying to be as cautious as it could in wading into the constitutional issues. What it found was the narrowest way to uphold the mandate and therefore uphold the rest of the Act. I think the result is the right result under my best understanding of the law so I'm very happy with what the court did. But it really is a curveball in terms of how they got there."
So, is this the end of the battle over health care reform? Probably not: the fight may simply switch venues, the experts said.
Today's decision by the Supreme Court settled the constitutionality of the Affordable Care Act, and now "Congress is free to change the provisions of the statute that the Court has said is constitutional," according to Landers.


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Monday, June 11, 2012

Overwhelming Majority of Employees To Continue Health Coverage in 2014

The overwhelming majority of employers say they will continue to offer health care plan coverage to employees in 2014 when key provisions of the health care reform law kick in, according to a survey of benefit professionals.

More than 85% of employers responding to an International Foundation of Employee Benefit Plans survey say they either definitely will or are very likely to continue coverage in 2014, while nearly 10% said they are somewhat likely to continue coverage.Just 1% said they definitely will not offer coverage, while nearly 4% said are somewhat unlikely or very unlikely to offer coverage in 2014.Retaining and attracting employees were the top reasons employers say they will continue coverage in 2014, even though—assuming they dropped their health care plans—federal premium subsidies would be available to their lower- and middle-income employees to buy coverage in state insurance exchanges.

Top reasons cited

When asked to provide their two top reasons for maintaining coverage, just over 55% of respondents said retaining current employees and attracting future talent were the top reasons they will keep their plans and just over 53% said maintaining and/or increasing employee satisfaction and loyalty was the top reason for retaining coverage.“These employers recognize that offering health care coverage is an important benefit that helps retain current employees, attract future talent, and increase employee satisfaction,” Michael Wilson, International Foundation CEO said in a statement.Results are based on the responses of 968 individuals, including benefit and human resource managers, general and financial managers and other professionals.Just over 9% cited retention of tax advantages as a reason for keeping coverage and just over 7% said a top reason for keeping coverage was to avoid tax penalties. Under the Patient Protection and Affordable Care Act, employers will, starting in 2014, be liable for a nontax-deductible $2,000 per full-time employee penalty if they do not offer coverage.

To view the original article click here





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UnitedHealth to Keep Reforms, Whatever Court Decides

By Lewis Krauskopf

(Reuters) - UnitedHealth Group Inc, the largest U.S. health insurer by market value, said it would maintain the health coverage protections included in President Barack Obama's healthcare law regardless of how the Supreme Court rules on the legislation.
 The Supreme Court is expected to decide later this month whether to strike down all or portions of the law, Obama's signature domestic policy achievement that was passed in 2010.

The provisions UnitedHealth will maintain include continuing to provide coverage for dependents up to age 26 under their parents' plan.  The company will also continue to offer certain preventive healthcare services without requiring a co-payment, which include annual check-ups, screening for high-blood pressure and diabetes, and immunizations.

UnitedHealth will also continue to forgo lifetime dollar coverage limits on policies.  "The protections we are voluntarily extending are good for people's health, promote broader access to quality care and contribute to helping control rising health care costs," UnitedHealth Chief Executive Officer Stephen Hemsley said in a statement. "These provisions make sense for the people we serve and it is important to ensure they know these provisions will continue."

The law, known as the Affordable Care Act, represented the biggest overhaul to the $2.6 trillion U.S. healthcare system in nearly 50 years.  UnitedHealth's vow applies to provisions that have already begun, although many of the more sweeping changes in the legislation have yet to take effect.  It is designed to eventually expand coverage to more than 30 million uninsured Americans, by establishing insurance exchanges and broadening the Medicaid program for low-income Americans.

The provision allowing children to stay on their parents' plans up to age 26 is perhaps the single most popular component.  The law likely enabled about 6.6 million young adults to join their parents' health insurance plans last year, according to a recent report from The Commonwealth Fund, a non-profit organization that analyzes healthcare issues.  Should the law be struck down, Republican lawmakers may seek to reinstate the extension of young adults dependent coverage.

The other provisions UnitedHealth will maintain include providing clear ways for members to appeal coverage claim decisions; and the elimination of rescissions, which are generally considered to be retroactive policy cancellations, except in the case of fraud.  DeAnn Friedholm, director for health reform at Consumers Union, called UnitedHealth's actions "a positive step" and said she hoped other companies would follow suit should the law be struck down.

Several other large health insurers did not immediately respond to questions over whether they would also continue to offer the coverage provisions. Cigna Corp said it was "prepared to proceed as appropriate on behalf of our customers when the court deliberations reach their conclusion."

An insurance industry source said that other insurers are likely to keep some of these benefits in their policies if the entire law is overturned.

UnitedHealth, which serves more than 38 million members, said the protections are effective immediately and will be available to current and future plan members. The law also bars insurers from denying coverage to children up to age 19 with pre-existing medical conditions. UnitedHealth said that while it recognized the value of this provision, "One company acting alone cannot take that step, so UnitedHealthcare is committed to working with all other participants in the health care system to sustain that coverage."  The ban on denying coverage to those with pre-existing conditions will apply to adults starting in 2014, under the law.

Friedholm of Consumers Union said if a single company "declared they would take any comers, and their competitors do not, then they will immediately attract the sickest population, which would disadvantage them in trying to compete on prices."

"It requires a level playing field so that all the companies have to play by the same rule," Friedholm said.

In addition to the insurance protections and coverage expansion, the healthcare overhaul law adds new regulations and fees to the healthcare industry, particularly health insurance companies.

Insurers are required to spend a certain level of their premium revenue on medical care and face more stringent reviews of rate increases. At the heart of the Supreme Court case is a requirement in the law that individuals buy health insurance coverage or face a penalty, known as the individual mandate. Should the mandate alone be struck down, and the companies are required to cover people regardless of health status, the insurers have said people will buy insurance only when they become ill, causing premiums to rise.

 
(Reporting by Lewis Krauskopf in New York; Editing by Chris Gallagher and Tim Dobbyn)

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Friday, June 8, 2012

Despite Veto Threat, House Approves Changes to Use It or Lose It Rule

Defying a presidential veto threat, the House of Representatives on Thursday approved legislation that would ease a 28-year-old Internal Revenue Service rule that requires forfeiture of unused flexible spending account balances and eliminates restrictions on using FSAs and health savings accounts to pay for over-the-counter medications.


Under the measure, approved on a 270-146 vote, employers could amend their FSAs to allow employees to withdraw as taxable cash up to $500 in unused balances remaining at the end of the plan year or at the end of an FSA grace period, if an employer has that feature. In addition, H.R. 436 would overturn a health care reform law provision that bars FSA reimbursement of OTC medications without a prescription and imposes a 20% federal tax on HSA distributions for OTC medications obtained without a prescription.

Senate approval ‘unlikely’


President Barack Obama, though, may not have an opportunity to carry out his veto threat as the Senate may not even take up the proposal, some benefit observers say.“I don’t think the Senate will act,” said J.D. Piro, a senior vp at Aon Hewitt in Norwalk, Conn.Bundling the FSA provisions with the repeal of the excise taxes on medical devices makes the bill’s chances of winning Senate approval “very unlikely,” said Chantel Sheaks, a principal with Buck Consultants L.L.C. in Washington.Giving FSA participants the ability to receive up to $500 of unused balances would have only a modest impact on boosting plan participation and would be somewhat administratively burdensome on employers, Mr. Piro said.


To view the entire story click here

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Thursday, June 7, 2012

Obama to Veto FSA/HSA Legislation

WASHINGTON—President Barack Obama will veto legislation that would ease a 28-year-old Internal Revenue Service rule that requires forfeiture of unused flexible spending account balances and eliminates restrictions on using FSAs and health savings accounts to pay for over-the-counter medications, the administration said Wednesday.


Under the measure headed for a vote this week on the House floor, employers could amend their FSAs to allow employees to withdraw as taxable cash up to $500 in unused balances remaining at the end of the plan year or at the end of an FSA grace period, if an employer has that feature. If passed, the measure would be considered by the Senate.

OTC medications

In addition, H.R. 436 would overturn a health care reform law provision that allows FSA reimbursement of OTC medications without a prescription and imposes a 20% federal tax on HSA distributions for OTC medications obtained without a prescription. Those provisions are part of a broader bill, H.R 436, that would repeal a provision from the Patient Protection and Affordable Care Act that imposes new federal excise taxes on medical devices and boosts repayments of federal premium subsidies provided to low-income and middle-class uninsured individuals in situations in which the subsidies turn out to be higher than the individuals were entitled.It is those provisions that the administration opposes.“This excise tax is one of several designed so that industries that gain from the coverage expansion will help offset the cost of that expansion,” the Office of Management and Budget said in a statement.“In sum, H.R. 436 would fund tax breaks for industry by raising taxes on middle-class and low-income families. Instead of working together to reduce health care costs, H.R. 436 chooses to refight old political battles over health care. If the president were presented with H.R. 436, his senior advisers would recommend that he veto the bill,” OBM said.

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Friday, June 1, 2012

Flexible Spending Accounts: Clarifying all the Recent Buzz and Legislation


Recently there has been quite a bit of buzz out of Washington regarding Flexible Spending Accounts (FSA). Two different things have recently taken place: 




#1 - The Internal Revenue Service on Wednesday provided regulatory relief for health care flexible spending account participants and also said it is reconsidering its longtime use-it-or-lose-it rule for FSAs.



Under that relief, the IRS said participants in noncalendar-year plans can still make the maximum contributions to their FSAs during the first year that a mandated FSA contribution cutback goes into effect under the health care reform law.


The issue involves a provision in the Patient Protection and Affordable Care Act, which goes into effect on Jan. 1, 2013. Under that provision, the maximum annual contribution employees can make to their FSAs will be $2,500. Under current law, there is no annual limit, though employers typically limit annual contributions to $4,000 to $5,000


To read a full article about this guidance click here

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# 2 The House Ways and Means Committtee voted on three separate changes to the FSA/HSA legislation that will be explained below. The key things to remember regarding these items is that they haven't yet been heard by the whole House, so they have not been voted into law as of this post.



Use-it-or-lose-it


A decades-old Internal Revenue Service rule that requires forfeiture of unused flexible spending account balances would be eased, and health care reform law-imposed restrictions on using FSAs and health savings accounts to pay for over-the-counter medications would be eliminated, under separate bills approved Thursday by a panel of the U.S. House of Representatives.


Under the Medical FSA Improvement Act of 2011, H.R. 1004, cleared by the House Ways and Means Committee on a 23-6 vote, employers could amend their FSAs to allow employees to withdraw as taxable cash up to $500 in unused balances remaining at the end of the plan year or at the end of an FSA grace period, if an employer has that feature.


The distribution would have to be made no later than seven months after the close of the plan year.
The committee action coincides with an IRS announcement this week that it will consider modifying the 1984 use-it-or-lose-it rule that requires forfeitures of unused FSA balances at the end of a plan year or grace period.


Over-the-counter medications


The other bill—the Restoring Access to Medication Act, H.R. 5842—which the committee approved on a 24-9 vote, would overturn an unpopular provision in the health care reform law that restricts the use of flexible spending accounts and health savings accounts to reimburse employees for OTC medications.
Under that provision, FSA reimbursement is permitted only if the employee obtains a prescription for the medication, while in the case of HSAs, OTC reimbursement is permitted without a prescription but a 20% federal tax is imposed on the distribution.


The bill approved by the House panel would eliminate those OTC restrictions in the health care reform law.

Retiree HSA distributions


A third bill, H.R. 5858, approved by a 21-7 margin, would allow retired employees who are at least age 55 but not yet eligible for Medicare to withdraw funds tax-free from their health savings accounts to pay premiums in early retiree health care plans offered by their former employers.


The three bills are expected to be considered by the full House next week.