A federal judge in Florida has struck down the Obama administration's requirement that nearly all Americans buy health insurance, and questioned the constitutionality of the entire health care law.
"I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the Act with the individual mandate," wrote U.S. District Judge Roger Vinson, the second federal jurist to rule against law that Obama signed last year.
Two other judges have sided with the administration on the issue that may well wind up in the Supreme Court.
Obama and his aides said the requirement that all Americans, known as the individual mandate, is essential to financing the plan -- and that is exactly the reason opponents of the health care law have targeted it in a series of federal lawsuits. The law requires nearly all Americans to have health insurance in 2014, or face fines.
Vinson, appointed by President Ronald Reagan in 1983, drew a case filed by GOP attorney generals within hours of the law's signing in March; eventually 26 states joined in the lawsuit.
Congressional Republicans who fought the health care bill last year hailed the ruling.
Senate Minority Leader Mitch McConnell, R-Ky., sakid the decision confirms that "the health spending bill is a massive overreach and Democrats 'exceeded the bounds' of Congressional authority." Sen. Orrin Hatch, R-Utah, praised the ruling, saying that "Congress does not have the legal authority to tell Utahns and other Americans that they must buy health insurance or else."
For the entire article click here
Monday, January 31, 2011
Bill would repeal employer health care coverage mandate
WASHINGTON—The health care reform law mandate that requires employers to offer coverage to employees or pay a penalty would be repealed under legislation introduced by Sen. Orrin Hatch, R-Utah.
“The employer mandate would force businesses to let people go or raise the cost of doing business to such an extent that they don’t start hiring,” Sen. Hatch said in a statement last week. “Let’s repeal this job-crushing provision so businesses can (get) back in the business of hiring,” he said.
Sen. Hatch’s proposal, S. 20, has 23 co-sponsors, all Republicans.
Effective in 2014, the health care reform law will require employers with more than 50 employees to offer qualified health care coverage or pay an annual assessment of $2,000 for each employee working at least 30 hours a week. In computing the amount of the assessment, the first 30 employees are excluded.
For the full article click here
“The employer mandate would force businesses to let people go or raise the cost of doing business to such an extent that they don’t start hiring,” Sen. Hatch said in a statement last week. “Let’s repeal this job-crushing provision so businesses can (get) back in the business of hiring,” he said.
Sen. Hatch’s proposal, S. 20, has 23 co-sponsors, all Republicans.
Effective in 2014, the health care reform law will require employers with more than 50 employees to offer qualified health care coverage or pay an annual assessment of $2,000 for each employee working at least 30 hours a week. In computing the amount of the assessment, the first 30 employees are excluded.
For the full article click here
Thursday, January 20, 2011
House Passes Repeal of Health Care Law
WASHINGTON—After a spirited debate, the House of Representatives Wednesday approved, on a near party-line 245-189 vote, legislation to repeal last year’s health care reform law. Just three Democrats voted in favor of the measure.
The vote on the measure, H.R. 2, introduced by Majority Leader Eric Cantor, R-Va., with 181 cosponsors, is largely symbolic, fulfilling a campaign promise made by GOP leaders during the 2010 congressional elections.
Few observers expect the Democratic-controlled Senate to join the House. Still, the House action marks the beginning of efforts to amend the law. Republicans and Democrats are united, for example, on stripping a provision from the Patient Protection and Affordable Care Act that requires employers to furnish 1099 reporting statements if they do more than $600 of business with a corporate vendor starting in 2012. Small employers in particular complained that the reporting burden is too great.
Republicans are looking for Democratic support to repeal provisions that will require most employers to offer coverage or pay a $2,000-per-full-time-employee penalty and mandate that individuals enroll in a qualified plan or face financial penalties, beginning in 2014.
Republicans also are exploring ways to deny funding to federal agencies charged with developing regulations to help implement the law.
The democratic controlled Senate has already vowed to block any chance of repeal there and President Obama has also promised a veto were a repeal to make it to his desk.
The vote on the measure, H.R. 2, introduced by Majority Leader Eric Cantor, R-Va., with 181 cosponsors, is largely symbolic, fulfilling a campaign promise made by GOP leaders during the 2010 congressional elections.
Few observers expect the Democratic-controlled Senate to join the House. Still, the House action marks the beginning of efforts to amend the law. Republicans and Democrats are united, for example, on stripping a provision from the Patient Protection and Affordable Care Act that requires employers to furnish 1099 reporting statements if they do more than $600 of business with a corporate vendor starting in 2012. Small employers in particular complained that the reporting burden is too great.
Republicans are looking for Democratic support to repeal provisions that will require most employers to offer coverage or pay a $2,000-per-full-time-employee penalty and mandate that individuals enroll in a qualified plan or face financial penalties, beginning in 2014.
Republicans also are exploring ways to deny funding to federal agencies charged with developing regulations to help implement the law.
The democratic controlled Senate has already vowed to block any chance of repeal there and President Obama has also promised a veto were a repeal to make it to his desk.
Thursday, January 13, 2011
Revisions regarding OTC Drugs Effective 1/16/11
The Internal Revenue Service on Dec. 23, 2010, issued IRS Notice 2011-5allowing the continued use of health flexible spending account (FSA) and health reimbursement arrangement (HRA) debit cards for the purchase of over-the-counter (OTC) medicines and drugs for which the taxpayer has obtained a prescription.
The guidance does not address health savings account (HSA) debit cards, in part because FSA and HRA purchases must be substantiated at the point of sale while HSA purchases are self-substantiated, with documentation saved by the purchaser and presented in the event of an IRS audit; inappropriate or "nonqualified" HSA distributions would then be subject to income tax plus a 20 percent penalty.
However, the accompanying frequently asked questions issued by the IRS note that under the Patient Protection and Affordable Care Act "only prescribed medicines or drugs…and insulin (even if purchased without a prescription) will be considered qualifying medical expenses and subject to preferred tax treatment" for FSAs, HRAs and HSAs.
New Procedures:
Effective Jan. 16, 2011, in accordance with the guidance, the use of FSA and HRA debit cards to purchase OTC medications must comply with procedures reflecting those that pharmacies (as well as mail-order and web-based vendors) follow when selling prescribed medicines or drugs. These include requirements that:
• Prior to purchase, the prescription for the OTC medicine or drug is presented to the pharmacist or other authorized vendor.
• The OTC medicine or drug is dispensed in accordance with applicable law and regulations.
• The debit card system does not accept a charge for an OTC medicine or drug unless an Rx number has been assigned.
• The pharmacy or other vendor retains a record of the prescription number, the name of the purchaser (or the name of the person for whom the prescription applies), and the date and amount of the purchase.
• All of these records are available to the employer or its agent on request.
If all requirements are met, the debit card transaction will be considered fully substantiated at the time and point of sale.
In addition, the guidance clarifies that:
• The prescription requirement applies to OTC medicine and drug purchases made on or after Jan. 1, 2011, and not to purchases made in 2010 even if reimbursed after Dec. 31, 2010.(As noted above, Jan. 16, 2010 is the date on which FSA and HRA debit card over-the-counter purchases must comply with all point of sale substantiation procedures.)
• The requirement applies only to OTC medications. It does not apply to other health care expenses such as medical devices, eyeglasses and contact lenses.
The guidance does not address health savings account (HSA) debit cards, in part because FSA and HRA purchases must be substantiated at the point of sale while HSA purchases are self-substantiated, with documentation saved by the purchaser and presented in the event of an IRS audit; inappropriate or "nonqualified" HSA distributions would then be subject to income tax plus a 20 percent penalty.
However, the accompanying frequently asked questions issued by the IRS note that under the Patient Protection and Affordable Care Act "only prescribed medicines or drugs…and insulin (even if purchased without a prescription) will be considered qualifying medical expenses and subject to preferred tax treatment" for FSAs, HRAs and HSAs.
New Procedures:
Effective Jan. 16, 2011, in accordance with the guidance, the use of FSA and HRA debit cards to purchase OTC medications must comply with procedures reflecting those that pharmacies (as well as mail-order and web-based vendors) follow when selling prescribed medicines or drugs. These include requirements that:
• Prior to purchase, the prescription for the OTC medicine or drug is presented to the pharmacist or other authorized vendor.
• The OTC medicine or drug is dispensed in accordance with applicable law and regulations.
• The debit card system does not accept a charge for an OTC medicine or drug unless an Rx number has been assigned.
• The pharmacy or other vendor retains a record of the prescription number, the name of the purchaser (or the name of the person for whom the prescription applies), and the date and amount of the purchase.
• All of these records are available to the employer or its agent on request.
If all requirements are met, the debit card transaction will be considered fully substantiated at the time and point of sale.
In addition, the guidance clarifies that:
• The prescription requirement applies to OTC medicine and drug purchases made on or after Jan. 1, 2011, and not to purchases made in 2010 even if reimbursed after Dec. 31, 2010.(As noted above, Jan. 16, 2010 is the date on which FSA and HRA debit card over-the-counter purchases must comply with all point of sale substantiation procedures.)
• The requirement applies only to OTC medications. It does not apply to other health care expenses such as medical devices, eyeglasses and contact lenses.
Monday, November 22, 2010
HHS Releases Final Medical Loss Ratio Regulations
The Obama administration today issued the final regulations on the much-discussed medical loss ratio — the proportion of premium dollars health insurers spend on patient care, compared to administrative expenses.
The health-care overhaul bill stipulates targets of 80% for small-business plans and 85% for large-company plans, but the industry had lobbied to make it easier in various ways for insurers to hit those benchmarks. (If they don’t, they’ll have to pay rebates to policyholders.)
But there weren’t any surprises, as the regs weren’t changed from those recommended by the National Association of Insurance Commissioners last month. One of the proposed amendments that didn’t make the NAIC’s final recommendations was a proposal to remove insurance-broker commissions from the administrative-cost bucket. But the NAIC said the health-care law made it pretty clear that those costs were intended to be classified as administrative, and so it skipped a vote on the amendment and instead created a subgroup to work with HHS on the issue.
Here are some additional articles on the issue:
HHS Release
Kaiser Health News
The health-care overhaul bill stipulates targets of 80% for small-business plans and 85% for large-company plans, but the industry had lobbied to make it easier in various ways for insurers to hit those benchmarks. (If they don’t, they’ll have to pay rebates to policyholders.)
But there weren’t any surprises, as the regs weren’t changed from those recommended by the National Association of Insurance Commissioners last month. One of the proposed amendments that didn’t make the NAIC’s final recommendations was a proposal to remove insurance-broker commissions from the administrative-cost bucket. But the NAIC said the health-care law made it pretty clear that those costs were intended to be classified as administrative, and so it skipped a vote on the amendment and instead created a subgroup to work with HHS on the issue.
Here are some additional articles on the issue:
HHS Release
Kaiser Health News
Tuesday, November 16, 2010
Grandfathered Health Plans Can Change Insurers
WASHINGTON—Employers are allowed to change insurers without their health care plans automatically losing grandfathered status under the health care reform law, federal regulators said Monday.
In a reversal of their previous position, the Departments of Labor, Treasury and Health and Human Services said forcing an employer to stay with an insurer to keep a health plan’s grandfathered status would give that insurer an unfair advantage.
“If an employer has to stay with the same insurance company to keep the benefits of having a grandfathered plan, the insurance company has undue and unfair leverage in negotiating the price of coverage renewals,” according to an HHS fact sheet.
In addition, “allowing employers to shop around can help keep costs down while ensuring individuals can keep the coverage they have,” HHS said.
Like the original rule, self-funded employers also will be able to change plan administrators without losing grandfathered status for their plans.
Grandfathered plans are shielded from certain health care reform law requirements, such as providing full coverage of preventive services.
The agencies noted that they received many comments on the initial rule that would have stripped grandfathered status for plans that changed insurers. The change in position was in response to those comments, HHS said.
Monday’s action came after federal regulators signaled in September that they intended to modify the original rule
To view the full article click here
In a reversal of their previous position, the Departments of Labor, Treasury and Health and Human Services said forcing an employer to stay with an insurer to keep a health plan’s grandfathered status would give that insurer an unfair advantage.
“If an employer has to stay with the same insurance company to keep the benefits of having a grandfathered plan, the insurance company has undue and unfair leverage in negotiating the price of coverage renewals,” according to an HHS fact sheet.
In addition, “allowing employers to shop around can help keep costs down while ensuring individuals can keep the coverage they have,” HHS said.
Like the original rule, self-funded employers also will be able to change plan administrators without losing grandfathered status for their plans.
Grandfathered plans are shielded from certain health care reform law requirements, such as providing full coverage of preventive services.
The agencies noted that they received many comments on the initial rule that would have stripped grandfathered status for plans that changed insurers. The change in position was in response to those comments, HHS said.
Monday’s action came after federal regulators signaled in September that they intended to modify the original rule
To view the full article click here
Friday, October 29, 2010
Additonal Guidance on Grandfathered Plans Released
The U.S. government recently released several additional FAQs clarifying grandfathered status regulations for existing health plans that are hoping to avoid compliance with certain reform provisions next year.
The guidance confirms that the six conditions outlined in the interim final regulations released in June are the only conditions that plans must comply with to attain grandfathered status. If all of these conditions are met, existing health plans are exempt from certain provisions of the health care reform laws, such as providing free preventive care services and an external review process for appeals.
Those conditions are as follows:
• Benefits may not be substantially reduced or eliminated from the plan.
• Co-insurance cost-sharing percentages cannot be significantly increased.
• The deductible or out-of-pocket maximum must not increase by an amount exceeding 15 percent more than medical inflation.
• The copayment listed under the plan may not increase by an amount exceeding 15 percent or $5 more than medical inflation (the greater of the two options).
• The employer’s contribution to the plan’s cost cannot decrease by more than 5 percent.
• The insurer cannot impose annual and/or lifetime limits below a certain amount.
The guidance reiterates that grandfathered status will be determined on a singular basis; an employer might have one grandfathered benefits package that is exempt from those specific provisions, and another that is not grandfathered and subject to all provisions.
It also explores the effect that wellness program changes will have on grandfathered status. The guidance states that offering incentives such as premium discounts to wellness program participants will be permitted, but imposing penalties such as cost-sharing surcharges may violate the terms of maintaining grandfathered status.
There has been speculation that the administration may alter the regulations released in June to make it easier for employers to maintain grandfathered status. Currently, the regulations state that employers seeking grandfathered status for their plans cannot enter into a “new policy, certificate, or contract of insurance” after March 23, 2010, suggesting that changing carriers would eliminate the plan from grandfathered status even if benefits remain the same. This regulation may be adjusted in the near future to allow for carrier changes as long as the plan’s benefits remain relatively similar.
To read the FAQs in their entirety, click here.
The guidance confirms that the six conditions outlined in the interim final regulations released in June are the only conditions that plans must comply with to attain grandfathered status. If all of these conditions are met, existing health plans are exempt from certain provisions of the health care reform laws, such as providing free preventive care services and an external review process for appeals.
Those conditions are as follows:
• Benefits may not be substantially reduced or eliminated from the plan.
• Co-insurance cost-sharing percentages cannot be significantly increased.
• The deductible or out-of-pocket maximum must not increase by an amount exceeding 15 percent more than medical inflation.
• The copayment listed under the plan may not increase by an amount exceeding 15 percent or $5 more than medical inflation (the greater of the two options).
• The employer’s contribution to the plan’s cost cannot decrease by more than 5 percent.
• The insurer cannot impose annual and/or lifetime limits below a certain amount.
The guidance reiterates that grandfathered status will be determined on a singular basis; an employer might have one grandfathered benefits package that is exempt from those specific provisions, and another that is not grandfathered and subject to all provisions.
It also explores the effect that wellness program changes will have on grandfathered status. The guidance states that offering incentives such as premium discounts to wellness program participants will be permitted, but imposing penalties such as cost-sharing surcharges may violate the terms of maintaining grandfathered status.
There has been speculation that the administration may alter the regulations released in June to make it easier for employers to maintain grandfathered status. Currently, the regulations state that employers seeking grandfathered status for their plans cannot enter into a “new policy, certificate, or contract of insurance” after March 23, 2010, suggesting that changing carriers would eliminate the plan from grandfathered status even if benefits remain the same. This regulation may be adjusted in the near future to allow for carrier changes as long as the plan’s benefits remain relatively similar.
To read the FAQs in their entirety, click here.
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