Although Congress will likely extend the COBRA subsidy under the American Recovery and Reinvestment Act of 2009 (ARRA), they did not pass legislation in time to avoid the subsidy’s March 31, 2010, expiration date.
Short-term extension legislation, which would have provided another month of eligibility for the COBRA subsidy program, was not approved by the Senate last week before the U.S. S
enate and House of Representatives adjourned for a two-week recess.
Congress will reconvene on April 12, 2010, to consider an extension of unemployment and COBRA benefits retroactive to April 1.
Without an extension, employees laid off after March 31, 2010, will not be eligible for the COBRA premium subsidy. The subsidy pays 65 percent of an individual’s COBRA premiums for up to 15 months.
The final stages of health care reform have essentially formed a two-act play. In the first act, on March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA), HR 3590. In the second act, the Health Care and Education Tax Credit Reconciliation Act of 2010, HR 4872 (Sidecar Bill), currently awaits the President's signature after passing both houses last week.
The Sidecar Bill makes technical corrections to the PPACA. All told, these two pieces of legislation will drastically change the health care landscape in the years to come. Health FSAs and cafeteria plans will be affected. There is no direct change to COBRA.
The following is a time line of some (but certainly not all) of the relevant provisions that will most directly affect the services provided by Infinisource (assuming that the President signs the Sidecar Bill):
Changes for plan years starting after September 23, 2010.
- Lifetime plan limits. Group health plans and insurance carriers may not impose lifetime limits on the value of essential benefits for any participant or beneficiary. The Department of Health and Human Services (HHS) will issue guidance on what is considered an essential benefit.
- No rescission of coverage. Group health plans and insurance carriers cannot rescind coverage except where fraud or intentional misrepresentation occurs.
- Preventive care. First-dollar coverage must be available for preventive care, which at a minimum includes immunizations and screenings for infants and children.
- Adult children coverage. If a plan covers dependent children, it must continue to do so for unmarried and married children until age 26. The tax exclusion has been adjusted accordingly. For plans already in existence on March 23, 2010, the age 26 limit only applies if the child is not eligible for other coverage. This exception ends in 2014.
- Nondiscrimination testing. The Subsection 105(h) tests that previously applied only to self-insured plans (e.g., health reimbursement arrangements [HRAs] and Health FSAs) apply to fully-insured plans.
- Pre-existing condition exclusions (PCE), Part I. For children under age 19, plans cannot have a PCE.
Changes starting on January 1, 2011.
- Over-the-counter drugs. Over-the-counter medicines or drugs are not eligible for reimbursement under a Health FSA, HRA or HSA without a doctor's prescription.
- HSA Excise Tax. The excise tax for non-medical HSA distributions increases from 10 percent to 20 percent.
- New safe harbor for small employer cafeteria plans. The Subsection 125 nondiscrimination rules do not apply for cafeteria plans (and some plans offered through a cafeteria plan, such as group term life insurance, self-insured medical and dependent care assistance) if certain requirements are met. For example, all non-excludable employees must be eligible to participate, and the employer must make a minimum level of contribution. Eligible employers must have 100 or fewer employees during either of the two preceding years (provided it is a full year).
Changes starting on March 23, 2012.
- New explanation of coverage document. The plan administrator (self-insured plans) o
r the insurance carrier (fully-insured plans) must give a coverage summary to all applicants and enrollees, at initial enrollment and open enrollment. This is in addition to the Summary Plan Description (SPD). HHS will provide standards by March 23, 2011. The document can be no more than four pages long and address covered benefits, exclusions, cost sharing and continuation. A $1,000 penalty applies for each failure to provide.
Changes for plan years starting or after January 1, 2013.
- Health FSA limit. Contributions are capped at $2,500 each year, indexed for Consumer Price Index (CPI) starting in 2014. The effective date for noncalendar plan years is currently unclear.
- Medicare Retiree Drug Subsidy (RDS) tax deduction. Employers offering retiree drug coverage have long been able to receive a 28 percent subsidy on the costs. The RDS has been tax deductible. That will end as of this effective date.
Changes for plan years starting or after January 1, 2014.
- Annual plan limits. Group health plans and insurance carriers may not impose any annual limit.
- Exchange plans offered through cafeteria plans. Before 2017, only small employers (up to 100 employees) may participate in the Health Exchange. Before 2016, a state may cap participation to employers with 50 or fewer employees. These employers can use their cafeteria plan to allow participants to pay for Exchange-related coverage that is offered by the employer.
- PCEs, Part II. Plans cannot have any PCEs.
- No health status discrimination. The PPACA basically codifies existing HHS HIPAA regulations with one exception. The maximum incentive amount for a wellness program is increased from 20 percent to 30 percent of plan cost, and the government has discretion to increase it to 50 percent.
- Cost-sharing. Out-of-pocket (OOP) expenses and deductibles cannot exceed those applicable with the HSA-eligible high-deductible health plans.
- Reduced waiting periods. Plans can impose waiting periods that are 90 days or less.
- Individual mandate. Individuals who do not enroll in qualifying coverage are subject to an excise tax. They generally pay the greater of a flat dollar amount (2014: $95, 2015: $325, 2016 and beyond: $695) or a percentage of income (2014: one percent, 2015: two percent, 2016 and beyond: 2.5 percent). There is a hardship exemption for those with incomes below a certain level.
- Employer mandate. Employers with 200 or more full-time employees must automatically enroll all new hires. All employers must provide an Exchange-related notice to new hires. Failure to provide health coverage results in a monthly penalty equal to 1/12 of $2,000 after disregarding the first 30 employees. Therefore, a penalized business with 32 employees would pay a monthly tax equal to two times $183.33 (1/2 of $2,000), or $366.66.
Changes starting on January 1, 2018.
- Cadillac Plan tax. A 40 percent tax is imposed on the monthly value of coverage over 1/12 of $10,200 (single) and 1/12 of $27,500 (family) coverage, indexed to the CPI plus one percent in 2019, then simply CPI thereafter. Allowances are made for retiree coverage, multiemployer plans and high cost states
The passage of HR 3590 will have little impact on Health Savings Accounts (HSAs), but here are two changes to be aware of:
- Effective January 1, 2011, tax free HSA dollars may no longer be used to purc
hase over-the-counter drugs not prescribed by a doctor.
- Effective January 1, 2011, the tax on HSA distributions that are not used for qualified medical expenses will increase to 20% from 10%.
After the Senate’s Health Care Reform bill was passed by the House of Representatives on March 21, 2010, the health insurance and health care industries are faced with many questions about how the bill may change the way we conduct business.
We Are Focused on the Future
BlueCross BlueShield of Tennessee has been preparing for and modeling the implications of health care reform since President Obama first introduced the effort.
- Over the past two years, key leaders have been meeting to assess and model the different scenarios that could play out through health reform legislation.
- We have worked with other industry leaders to adapt this modeling to our various lines of business and market segments and developed plans. We are prepared to act when the final details of health reform legislation are known.
Impact to Our Stakeholders
It is our understanding that the prescribed changes apply to all health plans and plans governed by ERISA; however the timing may differ. We strongly encourage ERISA plan administrators to engage counsel to determine the necessary steps and timelines required to be fully compliant. Considering that many provisions in the Senate bill will be amended in the upcoming Reconciliation bill, we are currently most interested in the
key provisions that may have an immediate impact on the way in which we operate and serve our stakeholders.
Some of the key provisions we are monitoring closely – all expected to go into effect immediately to six (6) months from enactment – are:
- Eliminating pre-existing condition exclusions for individuals under age 19
- Reducing pre-existing waiting periods and look-back provisions
- Prohibiting lifetime and annual dollar limits on benefits paid
- Including full coverage of preventive health services with no cost-sharing to members
- Expanding dependent coverage to include coverage until dependent is 26 years old
- Adding consumer transparency and disclosure requirements applicable to Exchange-participating plans (e.g., claim payment policies, rating practices, cost-sharing, etc.)
- Establishing ceilings for Medical Loss Ratios by market segment
- Providing multiple patient protections based on choice of providers
As our commitment to you, we will continue to keep you informed as we evaluate our business practices and adapt them as necessary based on final passage. BlueCross BlueShield of Tennessee will remain focused on providing peace of mind to our members, providers and customers by offering high-quality, affordable health benefit plans.
3 TABLESPOONS UNSALTED BUTTER
¼ CUP FLOUR
LARGE ZIP LOCK BAG
1 ½ LB. CHICKEN FILLETS
1/8 TEASPOON PEPPER
1 CAN CREAM OF CHICKEN SOUP
½ CUP MAYONNAISE
1 ½ CUPS PANKO (JAPANESE BREAD CRUMBS)
1 CUP SHREDDED CHEDDAR CHEESE
PREHEAT OVEN TO 425 DEGREES. COAT 2 QUART BAKING DISH WITH COOKING SPRAY. CUT BUTTER INTO SMALL PIECES AND PLACE IN MEDIUM BOWL TO SOFTEN. PLACE FLOUR IN LARGE ZIP LOCK BAG. SEASON CHICKEN WITH PEPPER. ADD TO B
AG. SEAL BAG TIGHTLY AND SHAKE TO COAT. REMOVE CHICKEN FROM BAG; SHAKE OFF EXCESS FLOUR. ARRANGE CHICKEN IN BAKING DISH. COMBINE SOUP AND MAYONNAISE IN SECOND BOWL; SPREAD MIXTURE EVENLY OVER CHICKEN. STIR PANKO AND CHEESE INTO SOFTENED BUTTER, MIXING UNTIL CRUMBLY.
TOP CHICKEN WITH CHEESE MIXTURE; COVER DISH WITH FOIL. BAKE FOR 10 MINUTES. REMOVE FOIL. BAKE 10-15 MORE MINUTES OR UNTIL TOP IS GOLDEN AND INTERNAL TEMPERATURE OF CHICKEN REACHES 165 DEGREES. SERVE
1 (1 LB.) PORK TENDERLOIN, CUT IN ½ INCH SLICES
1/3 CUP FLOUR
½ TEASPOON SALT
¼ TEASPOON PEPPER
3 TABLESPOONS BUTTER
3 GREEN ONIONS
1/3 CUP DRY WHITE WINE
1 CUP HEAVY WHIPPING CREAM
¼ CUP DIJON MUSTARD
SALT AND PEPPER TO TASTE
COAT PORK SLICES WITH A MIXTURE OF THE FLOUR, SALT AND PEPPER. SHAKE OFF THE EXCESS. SAUTE 1/3 AT A TIME IN THE BUTTER IN A SKILLET FOR 2 MINUTES ON EACH SIDE; REMOVE TO A PLATTER. SLICE THE GRE
EN ONIONS, RESERVING THE WHITE AND GREEN PORTIONS SEPARATELY. SAUTE THE WHITE PORTIONS IN THE DRIPPINGS IN THE SKILLET FOR I MINUTE OR UNTIL TENDER. STIR IN THE WHITE WINE. COOK FOR 3 MINUTES OR UNTIL THE LIQUID IS REDUCED TO 2 TABLESPOONS. ADD THE CREAM. SIMMER FOR 5 MINUTES OR UNTIL THICKENED TO THE DESIRED CONSISTENCY. WHISK IN THE MUSTARD AND SEASON WITH SALT AND PEPPER TO TASTE. SPOON THE SAUCE OVER THE PORK. SPRINKLE WITH THE GREEN ONION TOPS.
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| LifeHorizons Termsetter – Guaranteed Level Term$1,000,000 Coverage, Select Plus, Monthly Bank Draft Rates
The Select Plus underwriting classification is not available to all applicants. Applicants are subject to the underwriting guidelines of The Cincinnati Life Insurance Company. This term life insurance plan is available in most states. Premiums are guaranteed for the initial guarantee period and are subject to change after the guarantee period.