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Confused about how health care reform affects your company?  Do you know the changes that take place October 1st?  Are you informed about critical changes effective January 1, 2011?  If your broker is not keeping you up to date, call us at 972-424-2500.

For information you need to know, watch our presentation in myBrainshark!      

March 10, 2010

Health Care Reform - Editorial       by Tammy Woodard

President Barack Obama is hitting the road to sell health reform to the American public, delivering what aides have called a "closing argument." 

The final push for passage of health care reform has become an all-out assault on health insurance companies with Democrats and protesters in Washington criticizing the industry for what they declare as unfair practices and unreasonable profits.

However, as ABC News reported last night, the top insurance companies averaged only a 4% profit margin last year.  This is compared to a 20 percent margin for drug companies and 29 percent for biotech firms.  So, who are the corporate “bad guys” here? 

It was also reported that hospital costs in some areas of the country are rising by as much as 40%.  Yet, the President, Congress and others have done nothing to address this part of the health cost equation.   

If insurance company profits represent only about one-half of one percent of total health care costs, how is beating up on insurance companies, portraying them as the villain, going to bring the cost of health care down?  Take away insurers entire profit margin and you’ve done nothing to lower costs. 

Why isn’t Washington putting more emphasis on controlling the cost of health care (hospital, doctor, surgery, testing, drug costs) and on tort reform, which are two main reasons for high medical insurance premiums?  I’ll tell you why – because it’s more politically popular to bludgeon insurance companies than hospitals or doctors or lawyers, or even pharmaceutical companies.  By the way, 188 members of Congress are attorneys by profession (according to Congressmerge.com database).  Do you think that has any impact on why they have not included serious tort reform in the health care reform debate? 

Our firm is in favor of health care reform.  We need to lower medical premiums for our clients.  However, if we don’t pass legislation that actually brings down the cost that drives up premiums we have failed.  Do we only want the short term satisfaction that comes from giving corporate giants a gut punch, or do we roll up our sleeves and come up with long term solutions to lower the cost of health care?  What are we doing to lower the cost of prescription drugs, which make up around 25% of total medical claims?  What are we doing to bring down the cost of renal dialysis, which can cost a private insured plan more than $30,000 a month per patient, while Medicare (the government) pays only about $7,500, supposedly less than the actual cost of the care? 

We can all blindly push for a government run health care system and ignore the fact that it will raise our taxes to 50% or more, causing employers to cut jobs and workers to find ways to live on a lot less income.  We can support Congressional efforts to pass legislation that doesn’t lower costs, but sounds impressive on its 2400 pages.  Or, we can stand up and fight for real solutions that help us maintain an affordable world class health care system that includes personal and corporate responsibility. 

Perhaps instead of tackling health care reform, the American people should demand focus on eliminating government waste, lobbyist reform, term limits and ethics reform.  After cleaning up Washington we can intelligently undertake real problem solving.

December 23, 2009

President Signs COBRA Subsidy Extension Legislation

Woodard Benefits Group is reviewing the new subsidy extension. Complete information on implementation and compliance will be provided as soon as it is available.

Congress approved legislation over the weekend extending the federal subsidy of COBRA health insurance premiums and President Barack Obama signed it into law Monday afternoon.

Legislation Details
The extension legislation provides for the following benefits:

• Extends the premium subsidy eligibility period by two months, so it will end on February 28, 2010, rather than December 31, 2009.

• Extends the period of the 65 percent COBRA subsidy from nine months to 15 months.

• Establishes a transition period that applies to individuals who lost subsidies before the effective date of the Act because they received the maximum number of months of subsidies under the original subsidy provisions.

• Establishes new notification requirements by group health plans or other entities.

• Clarifies that eligibility and notice requirements for the subsidy are based on eligibility for COBRA due to loss of coverage because of qualifying event (involuntary termination of employment), both of which must occur during the eligibility period.

• Becomes effective as if included in the original COBRA subsidy provisions of the American Recovery and Reinvestment Act (ARRA).

The action allows workers who have used up their original nine months eligibility to receive six more months of the 65 percent subsidy, and those who did not choose to continue with COBRA coverage once they timed out to rejoin the system, pay premiums retroactively and receive the subsidy and maintain COBRA continuation.  Workers who are involuntarily terminated through February 28, 2010, can now qualify to begin the subsidy and receive it for 15 months. (It also means that workers terminated after February 28, 2010, will not qualify unless Congress takes further action.) 

These new changes in the premium subsidy program will also apply to those who are not eligible for COBRA, but instead are eligible only for state continuation coverage.

The original federal subsidy, included as part of the ARRA, provided a 65 percent premium subsidy starting in March to those who involuntarily lost a job in September 2008 or afterward, and was scheduled to be available only to workers who lost their jobs through the end of this year.

The unemployed who started receiving the subsidy when it was first available in March saw it lapse on December 1, and employees losing their jobs after December 31 were not eligible for the federal help without this Congressional action extending the benefits.

Further Review

Review of the extension and all the requirements, time frames, notifications, and details about retroactive premium payments is in progress and more information will be coming as soon as it is available. Several other bills are pending in both the House of Representatives and the Senate that would further extend the premium subsidy or make other changes to the current law or these newly passed provisions.

December 22, 2009

Health Care Reform Myth #1

Myth:  Higher health care costs are the result of continually rising insurance premiums, inflating the price of health care.

This is absolutely false.  Insurance is a means of financing health care costs. Therefore, premiums have to track the underlying cost of health care services. Those underlying costs have been rising and insurance premiums have simply kept pace.

Health care costs drive insurance premiums, not the other way around. Over the last decade, health care costs have risen about 7.7 percent a year on average, and insurance premiums have also risen at 7.7 percent.* The overall rise in health care costs is a result of higher rates of chronic conditions such as obesity, diabetes and heart disease, the use of more expensive technologies and procedures, and cost shifting by the government – that is, doctors and hospitals charge privately insured patients more to offset the losses that come from Medicare/Medicaid underpayments that do not cover costs. Other drivers of cost include waste and fraud, lawsuits and the rising cost of malpractice insurance, and a system of paying providers by procedure, which many believe leads to unnecessary care.

Where, in the proposed health care legislation, has Congress provided solutions to address the higher rates of chronic diseases, the explosion of obesity, diabetes and heart disease, the cost and usage of expensive medical technologies, the epidemic of medical malpractice lawsuits, and the fact that the private insured must pay higher medical premiums to make up for the fact that medical providers LOSE money on Medicare/Medicaid patients?

*CMS, National Health Expenditures Data, 2009

November 3, 2009

The Medicare Modernization Act (MMA) mandates that certain entities offering prescription drug coverage, including employer and union group health plan sponsors, disclose to all Medicare eligible individuals with prescription drug coverage under the plan whether such coverage is "creditable." This information is essential to an individual's decision whether to enroll in a Medicare Part D prescription drug plan. If your business offers a prescription drug plan to Medicare eligible individuals, you are required to:

• Determine if your plan provides “creditable coverage”
• Communicate the creditable or non-creditable status of your plan to Part D eligible individuals at least once a year by no later than Nov. 15, 2009.

 Click here for CMS Medicare Part D Disclosure Model Form

September 1, 2009

The Department of Labor has released the Model Notices used to notify qualified beneficiaries of the additional rights and benefits available to them through The American Recovery and Reinvestment Act of 2009.  If an employee lost coverage due to involuntary termination of employment, he or she may be eligible for a 65% COBRA premium reduction.  

The model general notice is included here for your use.  You will need to review and modify where indicated in the bracketed text.  The notice must be sent to all individuals who experienced a qualifying event from September 1, 2008 through December 31, 2009 (the end of this year).  You should send this notice through the end of this year.

One point that was clarified in the Fact Sheet is that a notice about the availability of the new premium reduction must be given to ALL individuals who had a qualifying event from September 1, 2008 through December 31, 2009, not just to those individuals who were involuntarily terminated.  

For more information on the COBRA subsidy and regulations, please visit http://www.dol.gov/ebsa/COBRA.html.  This information is not intended, nor should it be construed as, legal advice.  Employers should always consult legal counsel for questions regarding benefit law and procedures.

Click here to download the full version of the COBRA General Notice