Tuesday, June 1, 2010

Benefits News - Week of June 1st

My apologies - I haven't posted in awhile and there's been quite a bit of news.

Health Care Reform

Legal Challenges: Two constitutional challenges have been levied against the new health care reform law - one by the state of Virginia and another 13 other states. However, a recent court case about indicates that the Supreme Court is likely to hold up the law. (U.S. vs. Comstock)

Excise Tax: A recent Towers Watson study estimates that in 2010 the average cost for single coverage will be $5,184 and family coverage will cost $14,988. If costs increase 8% annually, more than 60% of the employer plans Towers Watson analyzed would be hit by the tax in 2018.

Disclosure Requirements: By February 2011, HHS must develop new standards regarding health plan summaries. The law requires that these summaries be provided to all new hires and annually at open enrollment starting March 23, 2012. The summary must not exceed a 4-page length limit, but must include: definitions of standard insurance and medical terms, coverage description, including cost sharing for each of the categories of essential health benefits; coverage exceptions, reductions, and limitations; cost-sharing provisions such as deductibles, coinsurance, and co-pays; coverage continuation provisions, a “coverage facts label” that includes examples illustrating common benefit scenarios, such as pregnancy or chronic medical conditions, as well as any related cost-sharing; a statement as to whether the plan provides minimum essential coverage and ensures that its share of the total allowed benefit cost under the plan is no less than 60% of those costs; a statement that the outline is a policy summary and that consumers should consult the plan’s coverage document to determine the plan’s governing contractual provisions; and a contact number for additional questions and an Internet website where actual plan policies and certificates can be reviewed and obtained. No one is quite sure how all this information will fit within a 4-page limit.

Coverage for dependents up to age 26: Three-fourths of employers say they will wait until the effective date to comply with a provision requiring them to extend coverage to adult children up to age 26 according to a study by Towers Watson while 16% said that they would extend coverage early

Automatic enrollment: Employers will be required to notify employees of the plan’s auto-enroll provisions and their right to opt out of coverage.

Additional Fees: Effective Jan 1, 2013, a $2 per participant fee will be assessed against insured and self-insured plans.

Future Guidance: There will also be a large volume of guidance flowing from numerous agencies over the coming years as the government begins to implement this complex law.


Full enforcement of some recent HITECH Act changes to the HIPAA privacy and security laws is being delayed until the US Department of Health and Human Services (HHS) provides more guidance. The agency expects to soon issue rules on business associates’ liability, restrictions on selling protected health information (PHI) and using PHI for marketing, and strengthened individual rights to access electronic records and restrict PHI disclosure.

Flexible Spending Accounts

The IRS confirmed that expenses relating to banking cord blood are not considered "medical care expenses" and are therefore not eligible for tax favored status under a pre-tax health plan or flexible spending plan. http://www.irs.gov/pub/irs-wd/10-0017.pdf

Mental Health Parity

A coalition of managed behavioral healthcare organizations have filed a lawsuit against the DOL, HHS, and Treasury to block implementation of regulations issued to enforce provisions of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA)

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