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March 6, 2015

Posts in "Insurance"

February 26, 2015

Republicans Miffed IRS May Exclude Occupations from Cadillac Tax

It may still be three years away, but the health care law’s “Cadillac Tax” is very much on the minds of some powerful Senate Republicans, who are miffed that the IRS is considering excluding some occupations from the levy. The 40 percent excise tax on high-cost health plans was designed to help pay for the law’s coverage expansion while discouraging overuse of generous health benefits and services that drive up medical spending. Unions, with their generous health packages, stood to be among the losers.
So the first IRS notice of rulemaking on how it intends to implement the tax caught the notice of some on the political right this week, by raising the possibility certain high-risk occupations could be excluded from applicable coverage. Senate Finance Chairman Orrin G. Hatch of Utah, along with Judiciary Chairman Charles E. Grassley of Iowa, sent a letter to Treasury Secretary Jacob J. Lew questioning whether the rule could provide carve-outs for occupations they maintain are mostly affiliated with organized labor is not the answer. As CQ’s Melanie Zanona reports, the letter requests that Lew answer how many of the employee categories referred to in the notice are unionized, which other consumers could be considered for an exemption and whether the department is contemplating delaying the regulation in any way.

The tax takes effect in 2018 and is one of the last provisions in the law that will be implemented.

February 25, 2015

HHS Auditor Prepares ACA Oversight Plan

The inspector general of the Health and Human Services Department  has devoted a large chunk of its annual work plan to monitoring the implementation of the Affordable Care Act, and this week released a health law oversight plan to focus on fraud, waste and abuse, program value, consumer safety and agency efforts to promote innovation. The IG expects 5-10 reports this year specifically focusing on the ACA.

The top priority will be reviews of insurance exchange operations and examination of exchange infrastructure, management and spending, plus the security of plan enrollment information. The IG also will examine internal federal and state process relating to an expanded Medicaid program, Medicare and Medicaid payment changes and program integrity, plus reviews of public health and preventive health grant programs

Initial reports planned for delivery over the next few months include a review of the accuracy of payments to health plans for premium tax credits and payments to federal insurance exchange contractors. Other reports this year include security reviews of state exchanges and an audit of grants to states to establish exchanges.


Early Bird Filers Gain Health Law Subsidy Reprieve

About 50,000 tax filers who were given incorrect information about subsidies they received under the health law and had already filed their 2014 returns won’t have to pay anything else they might owe because it was the government’s mistake.

Centers for Medicare and Medicaid Services officials announced last week that about 800,000 tax filers, which could be more than 1 million individuals, got incorrect tax statements. Principal Deputy Administrator Andy Slavitt said some of those people may have gotten tax refunds that were too big, while others didn’t receive all they were owed.

A Treasury Department spokesperson said Tuesday that people who have filed do not need to amend their returns. “The IRS will not pursue the collection of any additional taxes from these individuals based on updated information in the corrected forms,” said the spokesperson.

The remaining people affected, who have not yet filed their returns, should wait until they get corrected forms as early as next week.

But Treasury officials are encouraging people who have filed already to check if their refunds should have been bigger and re-file their taxes if need be to recoup the difference. If the taxpayer sees that the monthly premium for the local benchmark plan on the original form is less than the premium listed on the corrected form, it may be worth refiling.

“Individuals may want to consult with their tax preparers to determine if they would benefit from filing amended returns,” said the spokesperson.

The tax problem is separate from longstanding concerns about whether some consumers underestimate how much they would earn and took subsidy credits last year that were too generous. If someone claimed too much of a credit to discount the price of their insurance premium, that person will have to pay it back.

H&R Block Inc. estimated in an analysis Tuesday that about 52 percent of people who enrolled in private health insurance through marketplaces last year are learning that they got subsidies that were too high and have to pay them back. People have had to return an average of about $530, which decreased their tax refund by about 17 percent, the company said. On the flip side, about 33 percent of marketplace customers overestimated their income and are getting bigger refunds than they expected, with the average amount totaling $365 on average, an approximately 11 percent boost.

February 24, 2015

IRS Offers Guidance on Health Insurer and Cadillac Plan Taxes

The Internal Revenue Service is offering guidance on two complicated tax topics initiated by the 2010 Affordable Care Act. The health law is partially funded by an annual fee on health insurers. The fee has been in place since 2013 and new rules set to be published on Thursday set regulations for the fee for 2015. The tax is not applicable to employers who self-insure, non-profit insurers and voluntary employee benefit groups. The new rule notice offers guidance on the tax agency’s effort to clarify the definition of an entity covered by the tax. Last week, Louisiana Republican Rep. Charles Boustany, Jr. blasted the whole idea of the insurer fee as one of the ways the health law increases the cost of insurance premiums. Boustany touted legislation repealing the fee.

Separately,the health law seeks to cull the use of expensive health plans that add to health system spending. On Monday, the IRS issued a notice describing the process it will use to determine a new excise tax on high-cost, employer-sponsored plans. The tax adds a 40 percent charge on “excess benefits” in plans often dubbed “Cadillac” plans. The excise tax is due to start in 2018. The IRS is seeking comments on how the tax agency will define applicable coverage, the amount categorized as “high cost” and dollar limits on coverage.

February 23, 2015

CMS Releases Wide-Ranging Exchange Rule

Next year’s open enrollment period for people buying insurance in health law marketplaces will run from Nov. 1 through Jan. 31, 2016, under a 476-page rule released late Friday that affects the plans created under the statute.

The rule is a catch-all regulation affecting many aspects of the federal marketplace. The regulation touches on protections for insurers that prevent them from experiencing deep financial losses, user fees for the federal marketplace, cost-sharing subsidy information, changes to medical loss ratio calculations, new requirements for provider networks and directories and small business marketplace rules.

Many of the provisions of the rule were finalized as the Centers for Medicare and Medicaid Services proposed last year.

The total maximum out-of-pocket costs that a person with marketplace coverage would have to pay in 2016 is $6,850 for individual coverage and $13,700 for family coverage. The final rule requires plans to have updated provider directories.

The rule will help consumers get medications that are not on a plan’s formulary, or official list of medicines, by changing the process by which a consumer can request coverage and requires an external review of a request if the health plan denies the initial request.  It also clarifies that cost-sharing for drugs obtained through the exceptions process must count toward the annual limit on a consumer’s out-of-pocket costs. The rule also ensures that issuers’ formularies are developed based on expert recommendations.

Mulling Implications of Not Renewing CHIP Funding

The State Children’s Health Insurance Program (CHIP) is poised for a possible rocky-road ahead if Congress does not renew funding later this year. The CHIP program is a means-tested program providing health insurance coverage to low-income children and pregnant women. It is a joint project to the federal government and the states. Federal regulations set basic requirements and the states can design their own programs. In 2013 CHIP enrollment totaled 8.4 million and federal and state CHIP expenditures totaled $13.2 billion.

Federal funding for the CHIP program expires on Sept. 30, 2015 and funding renewal is a high bipartisan congressional priority but debate on a re-authorization bill is likely to extend to close to the deadline. If lawmakers are unable to agree on a renewal bill, the portion of federal CHIP funding assigned to the ongoing effort to expand Medicaid will be covered through regular Medicaid funding, but other state CHIP programs are subject to funding restrictions covered by ‘maintenance of effort’ rules included in the Affordable Care Act. The program maintenance rules require states to maintain current eligibility levels for CHIP children.

The Congressional Research Service recently provided lawmakers with a report (CQ subscription) describing the impact to maintenance of effort rules for ongoing CHIP programs if funding expires in September. The report notes:

The states are provided a couple of exceptions to the MOE requirement: (1) states may impose waiting lists or enrollment caps to limit CHIP expenditures, and (2) after September 1, 2015, states may enroll CHIP-eligible children in qualified health plans in the health insurance exchanges. In addition, in the event that a state’s CHIP allotment is insufficient to fund CHIP coverage for all eligible children, a state must establish procedures to screen children for Medicaid eligibility and enroll those who are Medicaid eligible. For children not eligible for Medicaid, the state must establish procedures to enroll CHIP children in qualified health plans in the health insurance exchanges that have been certified by the Secretary of Health and Human Services to be “at least comparable” to CHIP in terms of benefits and cost sharing.

This Week: HHS Budget Hearings Shadowed by Exchange Enrollment Tax Woes

Congress returns from a recess break and this week dives into an examination of fiscal 2016 spending bill requirements. Health and Human Services Secretary Sylvia Burwell will defend HHS agency funding at Wednesday and Thursday House committee hearings. However, Burwell will likely be quizzed mostly on other topics such as health exchange enrollment estimates plus exchange development and contingency planning. Burwell will also get an opportunity to explain a recently announced expanded enrollment period for people who didn’t comply with the health law’s individual mandate in 2014 and the release of erroneous subsidy data to 800,000 tax filers currently preparing their 2014 tax forms. A House hearing this week will focus on the tax implications of the exchange enrollment process. Also, a Senate hearing on Thursday reviews medical and public health preparedness.

The Senate Commerce, Science and Transportation Committee on Thursday is scheduled to mark up legislation (S 142) sponsored by Democratic Sen. Bill Nelson of Florida that would direct the Consumer Product Safety Commission to issue a childproof packaging rule for liquid nicotine, which is used to refill electronic cigarettes.

Today, the US Department of Agriculture and the Department of Health and Human Services formally published a notice seeking public feedback on the 2015 Dietary Guidelines Advisory Committee Scientific Report. The new guidelines seek to change public behavior on sugary drinks and continues an effort to reduce meat consumption.

February 20, 2015

HHS Offers Enrollment Reprieve

Health and Human Services officials said on Friday that the department will give consumers who face a tax penalty for not having health care coverage in 2014 almost another seven weeks, from March 15 through April 30, to buy health insurance this year.

The original deadline for buying insurance was Feb. 15, although people who did not finish their application have until Feb. 22 to complete it.

HHS officials also said that the administration sent 800,000 people incorrect information in January about the subsidies they got in 2014, which would affect their tax refunds. The administration will send out corrected forms in March.

By Paul Jenks Posted at 11:12 a.m.

February 19, 2015

IRS Offers Some Relief on Employer Coverage Reimbursement

The administration has quietly bowed to pressure from small businesses on taxing employers who offer cash reimbursement to employees to purchase health insurance. The IRS and Department of Labor reminded taxpayers last year that premium reimbursement through health reimbursement accounts does not absolve the employer from the requirement to offer health coverage. The employer will still be subject to an excise tax for failure to provide coverage.

On Wednesday, the IRS announced transition relief from the tax until June 30, 2015. The tax agency justified the delay due to the slow development of small business insurance exchanges and some employers may need more time to obtain group health coverage. Iowa Republican Sen. Charles E. Grassley quickly welcomed the tax enforcement delay and Louisiana Republican Rep. Charles Boustany, Jr. urged a permanent delay of the tax.

February 12, 2015

Study: Higher Share of Plans Charging Patients Higher Fees for Certain Drugs

More health insurance plans on the exchanges are placing drugs to treat complex diseases at the highest cost-sharing tier in 2015 when compared to the previous year, according to a new analysis from the Avalere Health consulting firm.

“Enrolling in a plan that places all medications for a particular disease on the specialty tier can mean significant out-of-pocket costs for consumers, particularly if they do not qualify for cost sharing reductions,” said Caroline Pearson, vice president at Avalere, in a press release. “Plans that place some drugs in a class on lower tiers may allow consumers to find lower cost alternatives.”

Avalere found that some plans placed all of the drugs within five classes of medication on the specialty drug tier – which could mean higher co-insurance and costs for patients. The medications included those to treat multiple sclerosis, two classes of drugs to treat HIV/AIDS, and two classes of cancer drugs.

The report shows that 51 percent of exchange plans put all multiple sclerosis agents, including generics, in the highest tier in 2015, up from 42 percent in 2014. Meanwhile, 29 percent of plans – nearly double the amount in the previous year — placed protease inhibitors and available generics used for HIV/AIDS patients on the specialty tier, compared to 16 percent in 2014.

Oncology’s antiangiogenics was the only class of drugs to see a slight dip in 2015, but still remains high with 60 percent of plans placing all the medications in the top tier. The study notes that there are no generics for these cancer drugs or two other classes of drugs identified in the report.

Some patient advocacy groups seized on the new information, which they maintain is a trend that started among plans in 2014 and grew this year.

“We believe some insurers are purposefully designing plans in such a way that discourages patients, particularly those with chronic health care conditions, from signing up for them,” said  Carl Schmid, deputy executive director of the AIDS Institute. “This is clear discrimination and a violation of the Affordable Care Act.”

Kevin Counihan, the CEO of the federal marketplace, said on a call with reporters that he had not yet seen the Avalere report but intended to read it soon.

The AIDS Institute is urging the federal government to enforce non-discrimination provisions in the 2010 health care overhaul by making medications more affordable to all patients and providing a clear picture of what exchange plans in 2016 will look like for patients.

But Avalere noted that the total cost impact to a patient varies on multiple factors, including subsidies, out-of-pocket limits and overall plan benefit design.

“Plans continue to innovate on benefit design in the exchange markets,” said Dan Mendelson, CEO of Avalere, in a press release. “These designs are calibrated to optimize enrollment by delivering low and stable premiums – the primary metric that consumers use to select a plan.”

February 6, 2015

Health Law Sign-Up Clock Ticks Down With Nearly 10 Million Enrolled

With almost 10 million people already slated to get insurance through federal and state marketplaces, Obama administration officials urged Americans who have not yet arranged their medical coverage for 2015 to do so ahead of a Feb. 15 deadline for health law enrollment.

“There is still time to sign up but the clock is ticking,” Health and Human Services Secretary Sylvia Mathews Burwell said on a Wednesday call with reporters.

Earlier in the day, Burwell told the Senate Finance Committee that almost 7.5 million consumers had selected a plan or were automatically enrolled through the federal exchange, while another 2.4 million had come into the system through state exchanges.

Burwell had some weeks back set the bar low for enrollment expectations, saying her goal was that at least 9.1 million people would enroll and pay their premiums early this year. That includes data from states that run their own enrollment websites.

The 7.5 million people who have signed up through the federal marketplace alone is up from a total of almost 7.3 million through the week of Jan. 23. HHS officials release a weekly snapshot of enrollment through, which enrolls people in 37 states.

Among the regions with the greatest activity in recent weeks on the federal marketplace have been the greater Miami-Fort Lauderdale-West Palm Beach area of Florida, with more than 630,000 plans selected, and metro Atlanta, with almost 300,000, HHS said in a Wednesday statement. About 87 percent of the people who have signed up so far through the site have qualified for financial assistance, Burwell said.

January 30, 2015

Feds Warn of Tax Consequences Linked to Individual Mandate

The Department of Health and Human Services is bringing out the stick – the specter of fines for failing to get covered — and partnering with tax preparers to help Americans make sense of federal tax forms about health insurance that are being mailed to most people by Monday.

Up to 4 percent of taxpayers – or more than 5.8 million– could face a penalty for not complying with the health care overhaul’s individual mandate in 2014, according to federal officials on a call with reporters on Wednesday. But the officials do not yet know how many people may face a fine for getting too much of a subsidy in buying coverage.

The fee for individuals who didn’t have coverage in 2014 is the higher of 1 percent of the person’s yearly household income or $95 per person ($47.50 per child under 18). Penalties increase every year: for 2015, it’s the higher of 2 percent of yearly household income or $325 per person.

The Treasury estimates for the number of people who could face a fine are higher than previous Congressional Budget Office projections. The percentage of people hit with the tax could be lower if people take advantage of any of more than a dozen different hardship exemptions from the penalty.

People who got federal subsidies will see their reported subsidies on the new 1095-A form, which HHS officials are in the process of sending. The form serves as evidence that the person had insurance and identifies the amount of subsidy. People who believe that the form’s information is wrong should call the federal call center hotline, said Kevin Counihan, the official in charge of the federal marketplace.

About 3 to 5 percent of taxpayers – or up to more than 7 million people – got subsidies in 2014, federal officials said.

In the most recent monthly enrollment report, HHS officials said that so far this year, 87 percent of people getting coverage through the federal marketplace received subsidies. Last year, about 83 percent of people did.

The focus on the fine for foregoing insurance comes two days after the Internal Revenue Service announced it would waive certain late payment penalties for people who got bigger federal subsidies than they should have.

The IRS is not waiving the requirement that people pay back the subsidy overpayments, but said that because 2014 was the first year that the subsidies were in effect, the agency would not add on fines for not paying back the excess credits to the IRS by April 15 and for not making quarterly payments in 2014. Taxpayers have to report that they got too much money, though, and have to pay all other taxes as normally required by April 15.

Federal health officials aren’t talking about any plans to give people a chance to buy insurance after the Feb. 15 close of the open enrollment period to buy into plans under the health law.

“I’m sure that’s a question that if it arises, we’ll address it later,” said Centers for Medicare and Medicaid Services Principal Deputy Administrator Andrew Slavitt on the call. When pressed, he later said, “We’re not making a decision on that yet. It’d be a mistake for people to assume they had opportunities beyond Feb. 15. We think people need to come back in the next two to three weeks.”

He added that federal officials will deal with special situations once they get past Feb. 15.

By Rebecca Adams Posted at 9:19 a.m.

January 29, 2015

Pace of Sign-Ups on Federal Marketplace Slips

The latest weekly health law enrollment data from the federal marketplace provide another reminder of how deadlines motivate people to sign up for health insurance. As the monthly deadline passed, interest waned in the week ending Jan. 23, with 137,298 people choosing plans compared to 400,253 the week before.

The deadline for coverage that starts Feb. 1 was Jan. 15, which probably drove a lot of interest the previous week.

The next deadline is the last one for most people until the next sign-up period for coverage that starts in 2016. This year’s open enrollment season ends Feb. 15.

People who have a long list of changes in their personal circumstances, including a change in their family’s size or a move, could still sign up after the Feb. 15 deadline through so-called special enrollment periods.

Senate Committee Begins Health Law Adjustment Action

The Senate Finance Committee on Wednesday approved by roll call vote, 26-0, House-passed legislation (HR 22) to exempt veterans from employer health insurance mandate calculations under the Affordable Care Act. Senators on the committee expressed a desire to offer amendments when the bill reaches the floor. Democrats are plotting veterans’ minimum wage adjustments and Republicans are likely to seek mandate exemptions for other groups of people. Committee chairman Orrin G. Hatch, R-Utah, said he chose the most bipartisan bill he could find for the panel’s first markup of the 114th Congress. A separate set of more controversial bills (HR 30 and S 30) adjusting the mandate’s full-time workweek threshold awaits Senate committee action. The full-time workweek standard that triggers employer coverage requirements currently is set at 30-hours and the legislation seeks to expand it to 40-hours.

Separately, the Senate Health, Education, Labor and Pensions Committee approved by voice vote legislation (S 192) re-authorizing senior citizen social and nutrition assistance programs. Action on the long-delayed re-authorization of the Older Americans Act was assured by a new funding agreement.

January 26, 2015

40-Hour Workweek Bill Will Need More Democratic Support

The first GOP-led attempt this year at changing the Affordable Care Act is slowly advancing toward a Senate vote. Further action looms on legislation changing the health care law’s employer coverage threshold for a full-time worker from 30 hours to 40 hours per week. Earlier this month the House passed its measure (HR 30) adjusting the threshold by a vote of 252-172. Senate Republicans are aware of the need to gain Democratic support for the measure, in order to possibly over-ride an expected White House veto. Two Democrats, Joe Manchin of West Virginia and Joe Donnelly of Indiana are among the 34 backers of the Senate version of the bill (S 30). However, many more Democrats will be needed to overcome a presidential veto. Only 12 Democrats voted for the House version of the bill.

Last week, a Senate panel last week debated the merits of a bill and Democrats on Health, Education, Labor and Pensions Committee Democrats appeared unified and seemingly adamant in opposition to the bill.

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