How benefits can help employees suffering in Irma’s wake

As employees seriously impacted by hurricanes Harvey and Irma begin to come to grips with the devastation, they might be wise to take advantage of several existing benefits, industry experts say. In addition, HR and benefits managers may need to create some new ones immediately to help employees get back on their feet.

Here is an overview of some benefits that can be used to help employees.

Supplemental PTO

“Some employees will need extra time, possibly several days, to deal with the aftermath of a natural disaster,” says Zack Pace, senior vice president of the benefits consulting unit of insurance firm CBIZ. “Documented programs could prove useful in catastrophic storm-related situations,” he adds. The can include unpaid as well as paid leave programs.

It is not unreasonable to require employees to exhaust accrued PTO before granting them extra paid days off. A careful balancing act will be needed, however. It’s important to avoid, in effect, favoring employees who had already exhausted their PTO before the storm, against those employees that had not yet tapped theirs.

That might be accomplished by granting extra emergency PTO after a specified numbers of days away from work have been taken. That way, employees who had already used up vacation days would not appear to enjoy a windfall relative to employees who had not yet done so.


Another important benefit under these circumstances is telecommuting, notes Pace.

“If you don’t currently allow it, now might be a good time to start one, and if you already allow telecommuting on a restrictive basis, you might want to liberalize it,” he says.



Employees with school-aged children whose schools have been closed might be scrambling to make emergency child-care arrangements. A temporary liberalization of telecommuting benefits may be required to accommodate such employees, as well as employees who need to stay home (assuming their homes are habitable) to supervise contractors making repairs.

Employees whose homes were severely damaged might have had to take up residence with relatives beyond commuting distance to the workplace could also benefit from a liberalized telecommuting policy.

Financial counseling

Even well-insured storm damage victims will take a big financial hit with home repairs and replacing destroyed property. Homeowner insurance deductibles can be high. In addition, many employees may discover their insurance policies don’t provide the protection that thought they did.

Often this can lead to employees’ seeking a hardship distribution from their 401(k). Although the IRS has indicated that a major hurricane like Harvey or Irma do satisfy permissible hardship withdrawal criteria, that isn’t always the best course of action for employee. “If an employee requests a hardship withdrawal, in my mind that’s an immediate referral to the EAP for financial counseling,” says Robert Lawton of Lawton Retirement Plan Consultants.

“Employees need to understand the implications, such as the fact that after all the taxes they’ll have to pay, between the penalties, state and federal income taxes, they’ll probably only wind up being able to keep about half of what they take out,” he says. “And that money can never go back into the plan.”

A plan loan might be a better option for the employee — or not. “It’s a slippery slope toward giving advice when employers try to explain these decisions to employees, and that’s not the employer’s role,” Lawton warns. “That’s why it’s important for the employee to be referred to a financial counselor.”

Emotional health support services

Experiencing a severe natural disaster — even when direct personal loss is limited — can take an emotional toll on employees. That can range from very mild symptoms to those akin to post-traumatic stress disorder (PTSD). It behooves employers to promote their employee assistance plan benefits to encourage those who might benefit from counseling to take advantage of the opportunity, experts say.

“It is to both the employees’ and employer’s benefit to help workers manage the impact of natural disasters and critical incidents,” says Ann Clark, founder and CEO of benefits firm ACI Specialty Benefits. “Research indicates that when employees are exposed to a critical incident that is dealt with inappropriately, these employees are more likely to experience an increase in personal and health-related problems, and are at greater risk of using more sick days, having lower productivity or leaving their employment following the critical incident.”

Group legal and disability insurance

Employees that have taken advantage of group legal benefits might be able to tap that resource to learn about their legal rights if they run into issues with their insurance company, or landlord if they are being required to pay rent for a home that’s uninhabitable due to storm damage.

Finally, employees who sustained personal injuries in the storm severe enough to keep them from being able to work for an extended period might be able to take advantage of disability income benefits.

  • September 12 2017, 7:42pm EDT

5 common COBRA compliance pitfalls to avoid

Staying on top of health insurance regulations may feel like an uphill battle for brokers and their small business clients, but the costs and penalties for being out of compliance can be disastrous.

So what are some of the everyday compliance pitfalls to watch out for? This is the first in a series of articles that will explore common compliance challenges and how to avoid them.

Image result for consolidated omnibus budget reconciliation act

Let’s begin with one of the more commonplace issues: Federal COBRA administration.

As many agents know, COBRA mandates that employers offering insurance must extend coverage to former employees and dependents following the loss of that coverage for up to 18 months. But COBRA requirements can be difficult to follow, and compliance mistakes can cost a broker and their client big money in statutory fines, excise tax penalties, civil lawsuits, regulatory audits and more.

Top errors
Unfortunately, when it comes to COBRA, it is very simple to misstep. Here are the five most common pitfalls to watch for:

1) Miscalculating employee counts: This may seem deceptively easy, but too often companies incorrectly count their employees. For example, COBRA rules count part-time as a “fraction of an employee” equal to the number of hours that employee works divided by full-time hours. An example would be two part-time employees working 20 hours getting counted as one full-time employee. Accurate counts are important especially for businesses in farming, construction, real estate, retail and other industries that often rely on part-time and seasonal workers. Brokers must help ensure counts are accurate, which includes making clients aware of the requirement and working closely with trusted tax advisers and/or compliance experts to assure alignment with mandates.

2) Types of plans subject to COBRA: The mindset that COBRA only applies to medical, dental and vision can be an expensive one, so change it. The regulation covers any plan maintained by an employer to provide healthcare benefits to employees. This means that certain wellness programs, flexible spending accounts, health retirement accounts, executive reimbursement plans and more also fall within COBRA. So make sure to review and address the full spectrum of the proffered benefits plans to assure compliance.

3) Failure to notify of qualifying events: The fines for notification failure are steep, and the potential exposure to costly legal claims from former employees even steeper. Liability can even exist if an individual is not harmed. Qualifying events, such as an employee termination, require specific notices with mandated content and specific time frames. Agents who are unsure about details are wise to turn to COBRA experts to guide them through the notification process. This will protect them and their clients.

4) Employer notification requirements: Non-compliance with general notices is the No. 1 most frequent civil penalty with COBRA. For instance, a group health plan must provide a general notice describing COBRA rights to an employee and adult dependents covered under the plan within the first 90 days of coverage. It must be sent at the appropriate time — new employee becomes covered under a plan, employee adds dependents to plan upon marriage or open enrollment, etc. — and clearly spell out basic information about COBRA, as well as employer and employee/dependent responsibilities, rights and obligations. Additionally, general notices such as this must be archived. Not following procedures could put a plan out of compliance, result in significant penalties and might expose a business (and its consultants) to legal liabilities. Make certain to follow procedures, and then document, document, document.

5) Rate determination period: COBRA requires plan premiums to be set and then fixed for a 12-month period. This provides qualified beneficiaries with some assurance not only of the COBRA premium amount but also that it will not be subject to frequent fluctuations. However, this period can cause hardship for employers that have mid-year plans and/or a premium change occurs. If the premium goes up outside of the determination period, then the employer is on the hook to cover the increase. These costs can add up significantly, so make sure to be aware of them.

Remember to be vigilant and focused when it comes to COBRA directives and obligations, and turn to trusted compliance advisers and experts when needed. Because even an unintentional error can cost an employer a bundle, and a broker their client.

Next time, the focus will be on pitfalls to avoid around ERISA plan documentation. Stay tuned.

Marc McGinnis

McGinnis is vice president of national sales for The Word & Brown General Agency.

Deadline Looms for Insurers to File Rate Proposals

Regulators grapple with uncertainty in the health-care system as they embark on the review process

Anthem Inc. has said it wouldn’t offer exchange plans in Maine next year if the federal government stops cost-sharing reduction subsidies.
Anthem Inc. has said it wouldn’t offer exchange plans in Maine next year if the federal government stops cost-sharing reduction subsidies. PHOTO: ASSOCIATED PRESS

A deadline for insurers to file 2018 prices for health insurance sold through Affordable Care Act exchanges arrives Tuesday, but state regulators are still struggling to make decisions about pricing and coverage amid uncertainty in federal health policy.

The upshot is confusion in what is typically an orderly, regimented regulatory process for reviewing insurance offerings that will go on sale to consumers on Nov. 1.

States are taking different approaches, based on their best guesses about what Congress and President Donald Trump’s administration might do regarding the health-law marketplaces, though several state regulators said in interviews that they are leaning toward approving hefty rate increases.

According to actuarial firm Milliman Inc., at least 32 states have requested that insurers prepare alternative premiums for different scenarios, Most of those states are still holding off on a final decision on which rates to choose.

“The uncertainty makes it very difficult to navigate, and it’s not going away,” said Eric A. Cioppa, superintendent of the Maine Bureau of Insurance.

Insurer Anthem Inc. has said it would stop offering exchange plans under Obamacare, as the law is known, in Maine next year if the federal government stops payments known as cost-sharing reduction subsidies.

Those payments, which Mr. Trump, a Republican, has threatened to halt, reimburse insurers for money they advance to reduce health-care costs for low-income ACA enrollees.

A White House spokesman said the president “is working with his staff and his cabinet to consider the issues raised by” these payments. Anthem, which has already announced retreats from several exchanges, declined to comment.

After federal officials pushed back an earlier deadline, insurers are supposed to submit their rate filings for 2018 exchange plans to state and federal regulators by Tuesday. Regulators then have until Sept. 20 to complete their reviews and approve rates. Insurers are due to sign final federal contracts to offer plans by Sept. 27.

Some insurers said they are moving forward with plans to participate in the 2018 marketplaces but holding off on final decisions until the late-September cutoff.

“We’re keeping our options open,” said David Holmberg, chief executive of Highmark Health, which sells exchange coverage in Pennsylvania, West Virginia and Delaware. “There has to be a clear set of rules for 2018 for us to participate.”

Other big insurers, including Molina Healthcare Inc., have said they are still considering leaving more exchanges. Health Care Service Corp., a major exchange insurer, said in a statement it has filed proposed rates in all of the states it is serving that account for the uncertainty around the cost-sharing payments, but it “will make final decisions in late September” about the scope of its offerings.

A Senate committee is set to begin hearings Wednesday on legislation intended to stabilize the exchanges created under the 2010 law, which will be tough to pass in time to affect the 2018 marketplaces. Any bill is likely to include funding for cost-sharing payments.

The Congressional Budget Office estimates that if the payments end, insurers would decline to offer exchange plans in regions representing around 5% of the U.S. population next year and would raise premiums on average about 20% on the middle-tier “silver” plans. The cost-sharing subsidies are tied to silver plans.

Maryland’s insurance commissioner, Al Redmer, Jr., recently approved steep rate increases. But the rates didn’t include an extra bump for the potential loss of the federal cost-sharing payments, Mr. Redmer said. “The law is the law, and we have to assume it won’t change,” he said.

That could leave insurers in a squeeze, said Chet Burrell, chief executive of the state’s largest exchange insurer, CareFirst BlueCross BlueShield. If the payments stop when insurers haven’t accounted for the extra expense in their rates, he said, “the losses become very, very serious” and “that then threatens the viability of the market.”

Mike Kreidler, Washington state’s insurance commissioner, said he hasn’t made a final decision on rates, but he anticipates the cost-sharing payments will continue.

“I feel like I’m being a pessimist if I go in there and assume they’re going to yank the rug out from under us,” said Mr. Kreidler, a Democrat, who is slated to testify in Wednesday’s Senate hearing. “I can’t believe anyone would do anything so incredibly dumb.”

But several state regulators said they were reluctantly moving toward allowing insurers to raise rates by an extra margin to make up for the potential loss of the cost-sharing payments, if the payments weren’t guaranteed by Congress in the next few weeks.

“I would be afraid if I didn’t [approve an extra rate margin], the insurers would decide not to participate in the market,” said Julie Mix McPeak, Tennessee’s insurance commissioner, who is also testifying in the Senate hearing.

In Mississippi, insurance commissioner Mike Chaney, a Republican, said he too was leaning toward approving the extra increases if the federal payments remained up in the air. If the state’s lone remaining exchange insurer were trapped with the extra costs, without an offsetting increase in rates, he said, he fears that “next year I would not have a carrier at all who would market in the state.”

One key question is whether states and insurers will be able to alter rates if circumstances change.

Maryland’s Mr. Redmer said he would consider allowing an extra rate increase if the cost-sharing payments stopped. Mississippi’s Mr. Chaney said if he allowed rate increases because of the risk of losing cost-sharing payments, he believed he should be able to approve a rate cut in his state if the federal money does come through.

But other state officials said they didn’t believe the ACA allowed for rates to change once coverage has taken effect in January.

Asked about the potential for rate changes in the fall or next year, a spokeswoman for the Centers for Medicare and Medicaid Services, a federal agency, said insurers can’t change their rates after the Sept. 5 submission unless a state, through its rate-review process, requires a revised filing.

Write to Anna Wilde Mathews at

Appeared in the September 5, 2017, print edition as ‘Insurers Face Deadline on Rates.’

Senate panel to begin bipartisan hearings on stabilizing health insurance market

WASHINGTON – Senators looking for ways to stabilize the individual health insurance market will hear from governors and state health insurance commissioners at their first bipartisan hearings next month.

The hearings, set for Sept. 6-7, will focus on stabilizing premiums and helping people in the individual market in light of Congress’ failure to repeal and replace the Affordable Care Act, or Obamacare.

“Eighteen million Americans, including 350,000 Tennesseans – songwriters, farmers, and the self-employed – do not get their health insurance from the government or on the job, which means they must buy insurance in the individual market,” said Sen. Lamar Alexander, the Tennessee Republican who chairs the Senate Health, Education, Labor and Pensions Committee.

“My goal by the end of September is to give them peace of mind that they will be able to buy insurance at a reasonable price for the year 2018,” Alexander said.

Sen. Patty Murray, D-Wash.

(Photo: H. Darr Beiser, USA TODAY)

Washington Sen. Patty Murray, the committee’s top Democrat, said the path to making health care work better for patients and families “isn’t through partisanship or backroom deals.”

“It is through working across the aisle, transparency, and coming together to find common ground where we can,” she said.

The attempts at a bipartisan approach to fixing health care mark a change in strategy after the failure last month of Republican efforts to repeal and replace Obamacare. The GOP bill was pieced together behind closed doors by a small group of Republican senators, with no input from Democrats and no public hearings.

Alexander has said lawmakers must find a way to stabilize the individual insurance market because millions of Americans will be unable to buy insurance unless Congress acts.

At the hearings, the committee will hear from state insurance commissioners and governors because they are closest to the problem and can suggest steps that Congress can take to help make insurance available at affordable prices, Alexander said.

“Any solution that Congress passes for a 2018 stabilization package will have to be small, bipartisan and balanced,” he said.

It also should give states more flexibility in approving insurance policies and fund the cost-sharing reduction payments to help stabilize premiums for 2018, he said.

Murray said it’s important for the committee to hear from state leaders because they “understand full well the challenges facing health care today, and many have been outspoken about how the uncertainty caused by this administration has impacted the individual insurance market and therefore families’ premiums for 2018.”

, USA TODAYPublished 11:29 a.m. ET Aug. 22, 2017

Simplifying the healthcare payment system

With employers and employees expected to carry a rapidly increasing portion of out-of-pocket healthcare spend, enterprises and employees alike are in need of new tools that reduce the complexities of healthcare billing, help navigate rising cost and make more educated plan and benefit choices.

To help their clients in this endeavor, brokers may want to take a look at a new product that attempts to simplify the healthcare payment and saving system. By utilizing a collaboration of healthcare, benefits and financial networks, Medxoom has initiated the first wave of its app to deliver mobile-first bill payment and financing for users.

Tito Milla, co-founder of Medxoom, says the app is meant to give price awareness to employees who might not know that their health plan, doctor’s office or their prescriptions are not the cheapest choice within the options provided to them.

Bloomberg/file photo

“When you look at the market today, the growth of out-of-pocket spending has grown to over 250% since 2006,” Milla says. “The average is well above $1,000 across the country and for employers with under 200 employees, the number jumps to $2,000.”

Milla adds that when it comes to billing systems for provider networks, traditionally their payout comes from insurance companies with a 95% to 96% success rate. However, for patient responsibility 30% to 50% of network billing comes from the employee, rather than the insurance carrier, depending on the practice.

“The more the cost shifts to the patient, the more it becomes a billing issue for the doctors,” Milla says. “We are a mobile first platform and we are about making healthcare payments simple.”

With the freedom to not be tied down to one specific doctor and their electronic or paper format of payment, Medxoom provides users with the ability to make payments to any provider with any type of health plan, including PPOs, HMOs and HDHPs — with access to HSAs should the employee have one available.

Jordan Hackmeier, managing partner at Jeff D. Hackmeier & Associates INC. out of Miami, is one of the brokers who has partnered with Milla and the Medxoom team to share the app with his clients. Hackmeier says his firm is piloting the app with a small physicians group and plans to pilot the app with a second client with a 50 to 90 employee base.

“The employers are finding value in this product by the way it provides clarity by explaining what their deductible is, what’s left to be paid, why the employee is still paying out-of-pocket. What is most exciting is how they can still add on more and more features,” Hackmeier says. “It appears to me that this product is going to be something that is going to solve a lot of problems in the healthcare industry.”

One feature Hackmeier says is appealing to him is Medxoom’s ability to offer a loan option to users who lack the funds to pay their medical bills immediately. “If you can’t pay $5,000 to satisfy your deductible at your hospital, Medxoom partners with lenders who will loan you the money,” Hackmeier says.

Comprehensive option
Hunt Turner, co-managing director of Wood Gutmann & Bogart Insurance Brokers out of Tustin, Calif., is sharing Medxoom’s app with his clients on the West Coast, and says Medxoom is one of the more comprehensive options for healthcare apps on the market.

“I’ve seen platforms that are more transparency-driven through analytics, but not really tied specifically to HSAs,” Turner says. “My self-funded clients want to have the best information on the healthcare market and it has been a bit of a challenge to find a good comprehensive site.”

From both Hackmeier and Turner’s clients who are piloting the app at their companies, response has been mostly positive. “I think there is a learning curve just around understanding of what it does and doesn’t do because it is relatively new to consumers,” Turner says. “Those who immediately understand the technology are appreciative of the quick access to information.”

Milla says he and his partners are starting Medxoom in the smaller employer market and want to eventually ramp to the large employer market by the end of 2017, with the assistance of large regional brokers.

White House: Health-Insurer Payments Will Be Made in August

Move comes after Trump warned of halting monthly subsidies


The Trump administration said on Wednesday the federal government would make a set of payments to insurers for August, despite threats from the president that the funding would be halted following the failure of Senate Republicans to repeal most of the Affordable Care Act.

Governors and Democratic lawmakers have been urging President Donald Trump to continue the payments, known as cost-sharing reduction payments, because insurers have said they may pull out of the ACA’s insurance markets or raise premiums in 2018without the funding.

The nonpartisan Congressional Budget Office said in a report Tuesday that premiums for popular, midprice plans on the ACA exchanges would rise 20% next year without the payments.

The money compensates insurers for reducing out-of-pocket costs for some low-income consumers who sign up for plans on the exchanges. About seven million people qualified for the subsidies in 2017.

Some GOP lawmakers oppose the payments, saying the money was never appropriated by Congress and amounts to a bailout for insurers. Recent comments from Mr. Trump had led to questions about whether the next payment, expected around Aug. 22, would be made by the federal government.

“If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!” Mr. Trump tweeted on July 29 after Senate GOP lawmakers failed to pass a bill to repeal most of the ACA.

The future of the payments remains in question, spurring bipartisan efforts among some in Congress to ensure the funding is preserved.

Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.) are planning hearings on legislation to shore up the ACA markets. The legislation would likely continue the payments in 2018 while giving states greater flexibility on ACA implementation, a change that Republicans have sought.

“Congress owes struggling Americans who buy their insurance in the individual market a breakthrough in the health care stalemate,” Mr. Alexander said in a statement Wednesday after a White House spokesman said the insurer payments would be made in August.

Some Republicans panned the decision on payments and called again for the 2010 health law to be repealed.

“We cannot dig our hands into a hole $20 trillion deep to bail out insurance companies,” Rep. Mark Walker of North Carolina said Wednesday.

Write to Stephanie Armour at and Louise Radnofsky at

Appeared in the August 17, 2017, print edition as ‘Insurers to Receive Payments in August.’

Health Exchange Premiums Would Rise 20% in 2018 If Subsidies Ended, CBO Estimates

Deficit would increase by $194 billion through 2026 if subsidies halted because government would pay more in tax credits

A CBO report released Tuesday estimated that health law exchange premiums would rise 20% in 2018 if subsidies to insurers ended.
A CBO report released Tuesday estimated that health law exchange premiums would rise 20% in 2018 if subsidies to insurers ended.PHOTO: ASSOCIATED PRESS

Premiums for many insurance plans on the Affordable Care Act’s individual market would climb by 20% next year if the Trump administration halts billions of dollars in payments that go to insurers under the health law, the Congressional Budget Office estimated Tuesday.

The payments that help compensate insurers for reducing out-of-pocket costs have become the latest front in the battle over the health law, with President Donald Trump warning he could end the funding after Senate Republicans failed late last month to repeal the ACA.

Democrats, insurers and some governors have been urging Mr. Trump to preserve the payments in order to protect the stability of the individual insurance markets.

The report by the nonpartisan CBO and the Joint Committee on Taxation, a panel that includes House and Senate members, says the ACA markets wouldn’t implode without the funding, estimated at $7 billion this year. But it concludes that a decision by Mr. Trump to halt the payments would raise premiums for mid-priced plans and leave slightly more people without an insurer to choose from on the individual markets.

In an ironic twist, stopping the subsidies would also wind up costing the federal government more in the end, the report said. Higher premiums for mid-priced plans would require the government to pay larger tax credits to consumers to help offset coverage costs. The federal deficit would increase by $194 billion through 2026, the report said.

The assessment reflects the negotiating struggles still ahead over the ACA in Congress, where Republicans have already spent months on failed attempts to repeal and refashion former President Barack Obama’s 2010 health law. The demise of the repeal effort means the ACA will remain in place for the foreseeable future, but its markets remain fragile, with insurers promising to raise premiums or stop participating without the federal money, known as cost-sharing payments.

Now, Republicans must decide whether to work with Democrats to stabilize a law they have pledged for more than seven years to dismantle.

Already, some GOP senators are working with Democrats on a possible bill to preserve the payments to insurers. But some House Republicans opposed to the assistance, which they call a bailout for insurers, are digging in with another push for repeal.

The CBO and tax-panel report also highlights the power the Trump administration now holds over the law. Questions are mounting about whether the federal government will devote resources to the fall open-enrollment period for ACA insurance plans. And Mr. Trump has sounded intent on halting the payments, despite calls from some within his own party who fear a political backlash in the midterm elections if the premium costs rise.

“Regardless of what this flawed report says, Obamacare will continue to fail, with or without a federal bailout,’’ Ninio Fetalvo, a White House spokesman, said in a statement. He added: “No final decisions have been made about the CSR payments. We continue to evaluate the issues.”

Rep. Tom Reed (R., N.Y.,) co-chairman of a bipartisan House group that has advocated for authorizing the cost-sharing payments, called Tuesday’s CBO report “another log on the pile of pressure” on Congress to act. He said the adverse effects that CBO highlighted would disproportionately hit rural counties in GOP-held districts. “Politically and substantively, I just don’t understand how you could stand in front of a town hall and say, ‘I’m sorry I didn’t do anything, because ideologically I wanted to go a different route,’ ” he said.

Democrats seized on the report to assert that Republicans and the Trump administration were threatening to sabotage health insurance.

Sen. Brian Schatz (D., Hawaii) wrote on Twitter on Tuesday afternoon that “the president of the United States is causing health care premiums to go up because he’s mad. Let that sink in.”

The CBO report said that rising premiums would mean that more people would qualify for cost-sharing subsidies. Also, the larger premium tax credits would make buying coverage on the individual market more attractive: While the number of people uninsured would be about 1 million higher in 2018 than in an earlier estimate, it would then be 1 million lower in each year starting in 2020, the CBO estimated.

Premiums for the mid-priced plans on the exchange would be 25% higher by 2020, the CBO projected.

Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.) are planning hearings on legislation to shore up the ACA markets following failed GOP efforts to replace most of the health law. The legislation would likely continue the payments in 2018 while giving states greater flexibility in how to implement the ACA, a change that Republicans have sought.

The federal payments compensate insurers for reducing out-of-pocket costs for some low-income consumers who sign up for plans on the exchanges. About seven million people qualified for the subsidies in 2017.

Mr. Trump could choose to end the payments on his own. The cost-sharing subsidies also face a legal threat. House Republicans sought in a 2014 lawsuit to block the payments. A federal district judge in May 2016 ruled that the payments were improper. The Obama administration appealed, and payments to insurers have continued in the meantime.

In another sign the Trump administration may pare back parts of the health law, the Centers for Medicare and Medicaid Services has proposed canceling two Obama administration programs aimed at attaching a fixed price to medical services rather than allowing providers to bill for each individual service.

The payment model, known as bundled payments, were a pilot program under the ACA aimed at reducing medical spending by emphasizing results of care rather than volume.

CMS published a rule last week indicating it planned to cancel bundled payments for heart attacks and bypass surgeries along with an expansion of a joint-replacement payment program that would have included hip surgeries. Both payment programs were scheduled to take effect on Jan. 1.

Separately, the ACA’s markets are on increasingly stronger footing. Centene will offer health coverage on the ACA exchange in 2018 to all Nevada counties, Gov. Brian Sandoval said on Tuesday. The state had been facing the prospect of 14 bare counties.

The announcement means only two counties in the U.S. are at risk of having no insurers participating next year, according to the Kaiser Family Foundation. That’s a sharp drop from more than 40 counties that risked having no participating insurers on the exchanges a few months ago.

Write to Stephanie Armour at

Appeared in the August 16, 2017, print edition as ‘CBO Sees a Jump In Health Premiums.’

Updated Aug. 15, 2017 8:37 p.m. ET

Wall Street Journal –

A Short-Term ObamaCare Fix

An HHS rule change could revive part of the individual market.

Sen. Ron Johnson on Capitol Hill, Aug. 1.
Sen. Ron Johnson on Capitol Hill, Aug. 1. PHOTO: ASSOCIATED PRESS

Republicans in Congress haven’t repealed or replaced Obama Care, but the Trump Administration still has an obligation to help Americans facing higher premiums and fewer choices. One incremental improvement would be rescinding regulations on temporary health-insurance plans.

Sen. Ron Johnson (R., Wis.) this summer sent a letter to the Health and Human Services Department about an Obama rule on short-term, limited-duration health insurance plans, which as the name suggests offer coverage for certain periods, often insuring against hospitalizations or other unexpected events. A person could hold such a plan for 364 days, but a rule issued last year limited the duration of the policy to a mere 90 days, effective April 1.

The reason for the restriction is straightforward: coercion. These plans are useful options for someone who loses a job or is otherwise without coverage, and until recently an estimated 650,000 to 850,000 people were in the market at any given time, with an average policy duration of five or six months, as the Johnson letter notes. Yet the Obama Administration nixed this choice to push individuals into ObamaCare’s exchanges.

Mr. Johnson’s letter points out that HHS explicitly said in the Federal Register that stopgap plans might target the young and healthy, “thus adversely impacting the risk pool for Affordable Care Act-compliant coverage.” Recall that the law’s central conceit is that healthy individuals must be forced to subsidize the aging and sick, or the exchanges will tank.

The short-term plans don’t count as minimum coverage under the law’s individual mandate, which means policyholders are subject to the tax penalty. Yet the irony is that before the new rule, many individuals still chose to pay the penalty in exchange for the flexibility of benefits the short-term plans offered.

Health and Human Services could restore the duration length to a year and allow the plans to satisfy the coverage mandate. The point is to recreate some portion of the individual market that the Affordable Care Act destroyed. Short-term plans have traditionally been a small share of the insurance market, but perhaps more consumers will sign up as insurers continue to flee the ObamaCare exchanges and premiums continue to increase.

One question is political. Congress failed to replace ObamaCare, and Republicans fear they will now own all problems with the exchanges. The Trump Administration may thus be reluctant to revoke regulations that exist to sustain the ObamaCare status quo.

Yet no one expects this discrete change to topple ObamaCare, and the law’s dysfunctions will compound in any event. The damage from the GOP’s reform failure will continue to radiate in ways that are hard to predict, but the Administration’s best move now is to offer consumers as many health-care choices as possible.

Appeared in the August 15, 2017, print edition.

Aug. 14, 2017 7:27 p.m. ET


How employers should deal with health reform uncertainty

With the collapses of the GOP’s efforts to repeal and replace the ACA there’s real uncertainty right now around U.S. healthcare policy. And this comes at a time when employer and employee decisions about their 2018 benefit offering need to be made is quickly approaching.

Even in the face of this uncertainty, however, there are steps companies can take now to prepare for the longer term.

Prepare for how the IRS will respond to and enforce policy changes

One key concern is the enforcement of the ACA’s core requirement that companies offer health insurance to employees working over 30 hours per week. Under this requirement, employees that opt out of health insurance are required to pay a tax. What is still unclear, however, is whether or not the Internal Revenue Service will enforce the law as it is currently written.

The Department of Health and Human Services has already started sending notices to employers about such cases, while the IRS has yet to send related tax bills. Given the IRS was already having technical issues calculating taxes under the ACA before the current administration came to power, now it’s unclear if these bills will ever be sent.

[Image credit: Bloomberg]

[Image credit: Bloomberg]

Given the ambiguity of the situation, employers should remain compliant and continue to file all ACA-related paperwork until they are explicitly told otherwise by government officials.

Anticipate part-time workers to push for employer-sponsored health insurance

As government spending on healthcare continues to decline, employers should anticipate part-time employees who have previously received subsidies for purchasing health insurance via health exchanges will ask their employers to sponsor their health coverage.

To reduce federal regulation, the administration may seek to reduce or eliminate the subsidies that were put in place by the ACA for coverage purchased on the health exchanges, including withholding a class of payments to insurance companies called cost-sharing reductions (CSRs). This was a common goal of the House bill and the initial bill released by the Senate even while industry experts advise that removing CSRs will destabilize the individual insurance market.

With this in mind, we can expect that if the ACA marketplace collapses, given Trump continues to push for a reduction or elimination of CSRs, part-time and temporary staff will want alternative coverage with discounted insurance that is no longer available on the exchanges.

Evaluate potential changes to benefits if the employer mandate is repealed

Another key aspect of the ACA which is under debate is the requirement that employers with 50+ employees must offer full-time employees health insurance. It’s important for companies to start to consider now how they would react if the employer mandate were repealed.

Offering insurance to fewer employees or switching to less generous plan structures could help reduce employer expenses. Alternatively, employers can offer employees an array of plans, from “skinny” to more comprehensive options.

In the event the employer mandate is repealed, it is likely that many employers would keep their current insurance programs in place, at least in the short term.
This is largely due to offerings on the exchange not being comparable to the group health market.

This is why it would not be beneficial for organizations that employ a large number of low-wage workers to consider dropping insurance on the assumption that their employees will be able to buy subsidized policies on the exchanges.

Consider high-deductible plan options

Many aspects of the replacement bills being brought forth encourage policies that have more limited benefits and higher deductibles than typically offered under current law.

A possible response is to raise contribution limits for health savings accounts, which give participants a way to cover the higher out-of-pocket expenses that come with high-deductible health plans.

In an effort to retain employees and avoid having a mass exodus of workers leaving for companies with richer benefits, employers may choose not to increase the deductibles on their plan offerings. However, given the uncertainty and frequent changes in these policies, benefit managers should be prepared to reduce benefits if these changes to the ACA materialize.

Understanding the tradeoffs between keeping your current benefit design and moving to a plan that offers less coverage or higher deductibles can mean staying ahead of the curve in these uncertain times.

  • August 09 2017, 12:13pm EDT

Michael S. Grant

Michael S. Grant leads the Employee Benefits Services unit for Crystal & Company as Executive Managing Directo

Employers embracing health cost reduction measures

Large employers expect health benefits costs to increase 5% in 2018 and cost $14,156 per employee — a rise that is pushing companies to look at ways to rein in costs.

It will be the fifth consecutive year of 5% increases, according to the National Business Group on Health’s Large Employers’ 2018 Health Care Strategy and Plan Design Survey, released Tuesday. Of the predicted total cost for 2018, employers will cover almost 70%, while employees will be responsible for 30%. With the expected hike, employers are setting their sights on a robust set of services — from telehealth to on-site health clinics — to help curb rising costs.

“We’re seeing an increased focus on the consumer experience within the healthcare system,” says Brian Marcotte, NBGH’s CEO. “Employers have come to the conclusion that as much as [they’d] like for employees to be sophisticated consumers of healthcare, the system is way too complex, way too fragmented and they don’t touch it with enough frequency to ever be sophisticated consumers.”

Brian Marcotte, National Business Group on Health CEO

Brian Marcotte, National Business Group on Health CEONick Otto

He says that realization, combined with information from the new report, is leading employers to look at catered services to help employees understand benefits, understand their treatment options and to know where to go for care.

According to the survey, 66% of companies will offer medical decision support and second opinion services in 2018, an increase of 47% from this year. Additionally, the number of companies offering high-touch concierge services will jump from 28% this year to 36% in 2018.

Offerings of e-health services continue to grow. Virtually all employers (96%) will make telehealth services available in states where it is allowed next year, according to the study. Further, more than half (56%) plan to offer telehealth for behavioral health services, more than double the percentage this year.

Utilization of these programs also is growing, with NBGH reporting nearly 20% of employers experiencing employee utilization rates of 8% or higher.

An Rx for savings

For the second year in a row, specialty pharma continues to be the biggest driver of healthcare costs for employers.

“Managing these high cost drugs is a top priority for employers next year,” Marcotte says. To help control these spiking specialty pharmacy costs, 44% of employers say they will have site of care management tactics — ensuring medications aren’t administered at more costly settings —in place next year, a 47% increase over this year. Additionally, seven in 10 employers will use more aggressive utilization management protocols.

The NBGH study dovetails alongside another survey from Willis Towers Watson released recently, which also found employers are increasingly spending more on healthcare benefits.

The WTW study found that despite the uncertainty about the future of healthcare legislation, employer confidence in offering employee healthcare benefits has reached its highest level since the passage of the Affordable Care Act in 2010. Ninety-two percent of employers said they are “very confident” their organization will continue to sponsor health benefits in five years.

“Employers understand that there is no single strategy for success when it comes to healthcare, and it is critical to engage employees through education and communication that will create a win/win,” says Catherine O’Neill, a senior healthcare consultant at Willis Towers Watson. “The most effective health programs will include a broad range of strategies that encompass employee and dependent participation, program design and subsidy levels, and plan efficiency. The ultimate goal is to offer a high-value plan that manages costs for both employers and employees while also improving health outcomes.”

  • August 08 2017, 10:40pm EDT