Carolina First Associates, LLC

8/25/10–The Catawba County Chamber of Commerce Presents: "What Every Employer Really Needs to Know About Health Care Reform... Surviving the Chaos"

Sponsored by:
Carolina First Associates and Western Piedmont Association of Health Underwriters
Wednesday, September 1, 2010
SALT Block Auditorium
7:45 Registration
8:00 a.m. – 12:00 Noon
NO charge to attend- Limited capacity
RSVP required: 828 328-6000 Ext 228 or
On-line at - www.catawbachamber.org

7:45 – 8:00 Sign in and Registration

8:00 – 8:10 Welcoming remarks

                            Lori Alala, Partner, Carolina First Associates, Conference Sponsor
                            Immediate Past President, Western Piedmont Association of Health
                            Underwriters
                            Introduction of Keynote Speaker

8:10 – 10:00 Peter Stein, Vice President of Congressional Affairs
National Association of Health Underwriters (NAHU)

“Surviving the Chaos”

10:00 – 10:15 Break

10:15 – 11:45     Business Panel: “The Health Care Law’s Impact on Business”
                           Johnny Davidson, Davidson, Holland and Whitesell
                           Lori Alala, Carolina First Associates
                           Roy Watson, Blue Cross and Blue Shield
                           Dr Clare Gray, Catawba Valley Medical Center
                           Roger Baker, Cooperative Christian Ministries
                           Jason Sharpe, Dedicated Transportation
                           Jay McFarland, Mike Johnson Toyota
                           Joe Lampron, People’s Bank
                           Brian Magargle, Constangy, Brooks & Smith, LLC

11:45 – 12:00 Congressman Patrick McHenry, 10th Congressional District
The Impact on the Heath Care Law and the November Elections

The HITECH Act
The HITECH Act is the Health Information Technology for Economic and Clinical Health Act. It was enacted on February 17, 2009, as part of the American Recovery and Reinvestment Act of 2009 (ARRA). The HITECH Act makes some significant changes to the privacy and security requirements of the Health Insurance Portability and Accountability Act of 1996 (the HIPAA Privacy and Security Rules), which are applicable to group health plans.

For example, group health plans (also known as Covered Entities under HIPAA) must now notify individuals of a breach of unsecured protected health information (PHI). Covered Entities may also have to comply with new rules regarding giving individuals access to their own PHI.

Content of the Privacy Notice
Covered Entities are required to provide a notice of privacy practices to each individual who is the subject of PHI. The HITECH Act changes will affect a Covered Entity’s privacy practices and therefore the content of its privacy notice. If your health plan’s privacy practices are changing as a result of the HITECH Act, your notice should be revised as well.

You can contact your CFA representative for more information on the HITECH Act, or for a sample privacy notice that incorporates the changes.

Deadline for Distributing the Privacy Notice
Under the HIPAA Privacy Rule, a revised privacy notice must be provided to all enrollees at the time of enrollment and also within 60 days of a material revision to the notice. Note that, while the Privacy Rule requires that the notices be provided to all "enrollees," the preamble to the Rule explains that providing the notice to the "named insured" or "employee" is acceptable.

After the privacy notice is first sent, Covered Entities must provide notice every three years that a privacy notice is available and how enrollees may obtain a copy. Sending a revised privacy notice will reset the three-year notice requirement. For example, if Covered Entity changed its privacy practices and revised its privacy notice effective February 17, 2010, the revised notice should be distributed by April 18, 2010.
Please contact your CFA representative with any questions on distributing the privacy notice.

11/29/09–Reid Bill Will Compound Economic Crisis- By Lori Alala

The Reid Health Care Bill will not successfully accomplish the objectives as stated by the Obama Administration. In fact, this 2,074 page proposition will cost the tax payer 2.5 trillion over the next 10 years.
Along with an increase in taxes, our senior citizens would experience a decrease in Medicare benefits because of the $464.6 billion cut predicted by the Congressional Budget Office. The bill would impose additional taxes on private health plans, making premiums more expensive, as well as penalize health savings accounts, create additional loss of jobs and compound the current economic crisis.
The employer mandate included in the bill would be an additional burden on employers that would exacerbate the current financial hardships so many small businesses are experiencing. Yet the individual mandate included in this legislation does not impose a harsh enough penalty to deter adverse selection. This leniency will only lead to individuals enrolling in a health plan when a medical crisis occurs as opposed to when they should enroll under the legislative guidelines, and with the proposed deletion of pre-existing waiting periods, there would be no protective measure in place to discourage this type of behavior.
In North Carolina, everyone has access to health care coverage. For children, there is the State Children’s Health Insurance Plan, and for others, the Inclusive Health High Risk Pool. Accessibility is not an issue in North Carolina. Affordability is an issue. There are many measures that could be put in place to provide some sense of financial comfort for those facing this type of hardship, such as tax credits for those who cannot afford private plans. We should not do away with a system that is in need of “selective” repair, or, according to the Washington Post, one where 83 percent of Americans are satisfied with the quality of health care they receive, and 81 percent are satisfied with their health insurance coverage.
It seems ridiculous to impose such costly legislation when the majority of Americans are happy with their current plans. The focus needs to be on reducing the cost of health care, thus reducing the cost of health insurance premiums. Wellness initiatives and incentives need to be considered as part of the solution along with tort reform.
It has been stated that the intent of a public option plan is to create competition in the market place, when in fact the program would result in disaster. Americans would be faced with higher taxes, job losses and physician offices closing resulting in rationed health care. If the public option reimburses providers at Medicare and Medicaid rates, providers would not be able to stay in business. This simply contributes to the impending economic state of our country. The end result would not prove better than our current system.

8/19/09–President Obama discusses health reform in Raleigh

Last week President Obama held a town hall meeting in Raleigh to discuss his vision for health care reform. The debate continues in Washington on the overall cost of health reform and how to finance the packages being considered.

There is no better time than now to link to the educational Web site, NCHealthReform.com, to catch up on the latest news. Please note the weekly legislative update and daily news headlines from across the country. NCHealthReform.com delivers news, opinion and a close look at what's happening in Washington.

Please get involved and educate yourself on this critical issue. Visit NCHealthReform.com now.

3/13/09–BCBS Off-Cycle/ Re-Renewal

Due to current economic conditions, some of our employer groups are seeking ways to decrease their health care costs. To that end, groups may request an off-cycle re-renewal, where they change their BCBSNC health plan prior to their normal 12-month renewal cycle. Re-renewals are one way to help retain group customers that may otherwise choose another carrier, or terminate their employee benefits plan altogether.

BCBSNC can still only accommodate these requests on an exception basis. We would like to summarize key points that you must provide to your groups regarding this process.

Important Points about Off-Cycle Re-Renewals

The exception process for re-renewals applies to groups of 1-50.
The re-renewal process requires that a group complete the renewal process again, or for new groups to renew earlier than the end of the contract. As a result, all of the rating factors (age/sex, risk, location and trend) will be re-assessed for the new renewal date.
The medical risk factor for re-renewal groups may increase or decrease up to 15 percent.
We cannot project the rating outcome for a re-renewal prior to a group going through the process. Therefore, we are unable to guarantee that rates will be lower (or higher) once the re-renewal is complete.
Groups must understand that, in most cases, they will have to reduce their benefits further in order to achieve a lower price point than they currently have.
Once the re-renewal is processed, those new rates are final and the previous rates are no longer available for renewal.
We cannot grant carry-over credit to members within the group for deductible or coinsurance met during the period prior to the re-renewal. Deductible and coinsurance will start over as of the re-renewal date.
Re-renewals must be requested for a prospective (future) effective date. Timeframe for delivery will be with the current renewal month schedule. Contact your BCBSNC sales team member to determine the expected date of delivery of the re-renewal.
Groups will not be allowed to request an off-cycle renewal later than five months prior to their renewal date; i.e., if a group will renew effective 10/1/09, then the group cannot request a re-renewal anytime after 5/1/09. (The reason for this stipulation is that the 10/1/09 renewal will be processed in early June 2009.)
Groups will only be allowed an off-cycle renewal once in a 12 month cycle.

Please refer to this FAQs document for all of the important information you need to know about off-cycle re-renewals.

3/13/09–COBRA Update

On February 17, 2009, President Obama signed into law H.R. 1, the American Recovery and Reinvestment Act of 2009 (ARRA). Among many other provisions designed to encourage economic recovery, Title III of ARRA expands the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) Continuation Coverage to provide a 65 percent federal subsidy toward an eligible worker’s COBRA premium for up to 9 months. The provisions in ARRA providing this subsidy are effective as of the date of the President’s signing. A brief summary of the newly enacted COBRA subsidy follows.

What Is The COBRA Subsidy?

Eligible workers will receive a 65 percent subsidy toward their COBRA continuation premium for up to 9 months. The Treasury Department will administer the subsidy, providing employers or health plans, if they administer COBRA benefits, with a credit against payroll taxes for the cost of the subsidy. The subsidy would terminate the date the individual becomes eligible for any new employer-sponsored health care coverage or Medicare coverage.

For What Coverage Is The Subsidy Available?

The federal subsidy is available for COBRA continuation coverage and for state programs providing comparable continuation coverage. The subsidy is not available for coverage under a health flexible spending arrangement.

Who Is Eligible For The COBRA Subsidy?

Individuals who have been involuntarily terminated from employment between September 1, 2008 and December 31, 2009 and who have annual incomes of less than $125,000 (single) or $250,000 (joint filers) for the taxable year in which the subsidy is received (i.e., either 2009 or 2010) are eligible for the COBRA premium assistance, along with their families. If the premium subsidy is provided to an individual whose income exceeds $145,000 (single) or $290,000 (joint), then the amount of the premium subsidy for all months during the taxable year must be repaid. For taxpayers with income between $125,000 and $145,000 (or $250,000 and $290,000 for joint filers), the amount of the premium subsidy for the taxable year that must be repaid is reduced proportionately.

Do Any Special Enrollment Rights Exist?

Qualified individuals who initially decline COBRA coverage prior to the enactment of ARRA would be given an additional 60 days after they receive notice of the special election period to elect to receive the subsidy. The election period begins on the date of the enactment of ARRA. The special election opportunity is also available to a qualified beneficiary who elected COBRA coverage but who is no longer enrolled on the date of enactment, for example, because the beneficiary was unable to continue paying the premium.

Federal COBRA law provides that a group health plan must allow an eligible individual to choose to continue with the coverage in which the individual is enrolled as of the qualifying event. However, ARRA allows group health plans to provide a special enrollment right to allow eligible individuals to elect different coverage under the plan in electing COBRA continuation coverage. Further, even though the premium subsidy is only for 9 months, the different coverage elected must generally be permitted to be continued for the applicable required period (generally 18 months or 36 months, absent a COBRA terminating event).

What Are The Notice Requirements?

COBRA notices must include information on the availability of the premium assistance and must be provided to all individuals who terminated employment during the applicable time period, not just to individuals who were involuntarily terminated. The Department of Labor has 30 days after the enactment of ARRA to issue model notices.

How Is The Subsidy Administered?

The subsidy is generally administered as a reimbursement. The entity to which premiums are payable will be reimbursed by the amount of the premium for COBRA coverage that is not paid by an eligible individual on account of their 65 percent premium reduction. An entity is not eligible for subsidy reimbursement, however, until it has received the reduced premium payment from the eligible individual. The entity to whom the federal reimbursement is payable is either (1) the multiemployer group health plan, (2) the employer maintaining the group health plan subject to federal COBRA, or (3) the insurer providing coverage under an insured plan.

The entity that is eligible for reimbursement may elect to offset its payroll taxes for purposes of reimbursement. To the extent that such entity has liability for income tax withholding from wages or FICA taxes with respect to its employees, the entity is reimbursed by treating the amount that is reimbursable to the entity as a credit against its liability for these payroll taxes. That is, the credit for the reimbursement is treated as a payment of payroll taxes. Any reimbursement for an amount in excess of the payroll taxes owed is treated in the same manner as a tax refund. Entities wishing to claim reimbursements will be required to file certain reports, including an attestation of the involuntary termination of employment of each covered employee for which reimbursement of premiums is claimed.

What Is The Effective Date Of The COBRA Subsidy?

These provisions are effective for periods of coverage beginning after the date of the enactment of ARRA. For group health plans using calendar months as the period of coverage, the subsidy applies beginning March 1, 2009. Additionally, eligible individuals who pay 100 percent of the premium required for COBRA for any month during the first 60-day coverage period after enactment will be reimbursed.

Is The Subsidy Retroactive?

Although the subsidy is available to employees who were terminated starting September 1, 2008, the subsidy itself is not retroactive. It will apply only to periods of coverage beginning on or after March 1, 2009.

What Compliance Actions Should Be Taken Now?

At a minimum, the following compliance actions should be undertaken as soon as possible:

Review records to identify employees who were involuntarily terminated from employment since September 1, 2008;
Update COBRA materials to comply with the new requirements;
Determine whether to permit individuals to elect a different health plan option when electing COBRA coverage;
Review severance policies to revisit the issue of any employer COBRA premium contributions;
Notify the appropriate individuals of their new rights and responsibilities under ARRA;
Develop processes and procedures for the administration of the COBRA subsidy; and
Keep informed about the status of the soon to be released model forms and regulations.

Where Can I Get More Information?

For a copy of the new law, ARRA, see: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.00001:

For general information regarding COBRA, see: http://www.dol.gov/dol/topic/health-plans/cobra.htm

Your CFA representative is also available to assist you with any questions.

3/3/09–BCBS Waives Probationary Periods

Effective immediately, BCBSNC will begin waiving probationary periods for employees re-hired within 90 days of being laid off from that company. In this situation, the employee will be eligible for coverage on the date of re-hire. Note that BSBS is not changing their rules regarding pre-existing condition exclusions. If the employee has had a break in coverage greater than 63 days, the employee will still be subject to pre-existing condition exclusions. Please see the PDF below for more information about this change.

employer_news_new_rehire_policy.pdf

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