Employer Compliance Alert!

NEW RULE REQUIRES NON-UNION EMPLOYERS TO NOTIFY EMPLOYEES OF THEIR RIGHT TO UNIONIZE

The National Labor Relations Board (NLRB) has just issued a final rule obligating the vast majority of private sector employers to notify employees of their rights under the National Labor Relations Act (NLRA). The purpose of the notice is to inform employees of their rights to organize, form, join or assist a union; to bargain collectively with their employer; and to discuss their wages, benefits, and other terms and conditions of employment with their co-workers or a union. The new rule covers not only union workplaces, but also non-union workplaces.

The rule will pose new challenges for non-union employers and make it harder for all employers to defend themselves against allegations of unfair labor practices. For example, an employer’s failure to properly comply with the rule will toll the six-month statute of limitations period for filing a charge against the employer for unfair labor practices. An employer’s knowing violation of the rule can also be used against the employer as evidence of unlawful motive in anti-union discrimination and other unfair labor practice litigation.

Employers should take immediate steps to determine whether they are subject to the rule. Covered employers must be in full compliance by November 14, 2011. Human resource professionals, executives, and supervisors should be trained on how to properly respond to employees’ questions about their NLRA rights, as well as how to properly address union-related activities in the workplace.

The notice of rights that employers must post under the new rule is not yet available, but employers should periodically check the NLRB website for additional details.

Health Care Reform Update: HRA Limits; Federal Exchanges; Health Care Survey

Thanks to our partners at UBA for supplying us with our most recent Health Care Reform Update:


CCIIO Exempts HRAs From Applying for Annual Limit Waivers
The U.S. Center for Consumer Information and Insurance Oversight (CCIIO) has issued guidance with respect to the application of the existing annual limit waiver criteria to Health Reimbursement Arrangements (HRAs). This supplemental guidance exempts HRAs that are subject to the restricted annual limits as a class from having to apply individually for an annual limit waiver.

An HRA in effect prior to Sept. 23, 2010 is exempt from applying for an annual limit waiver for plan years beginning on or after Sept. 23, 2010 but before Jan. 1, 2014. These HRAs still must comply with the record retention and Annual Notice requirements to participants and subscribers set forth in the supplemental guidance issued on June 17, 2011.

The guidance can be found at: http://cciio.cms.gov/resources/files/final_hra_guidance_20110819.pdf.

HHS's Big Problem with the Federal Fallback Exchange
When the Department of Health and Human Services (HHS) released the first regulation providing guidance to the states on forming a health benefit exchange in July, one thing many health policy wonks noticed right away is that it contained no specifics on how a federal fallback exchange might work. Finally, last week a Politico report shed some light as to why HHS might be so reticent with the details.

HHS has virtually unlimited funding to help states create their own exchanges, but a quirk in the Patient Protection and Affordable Care Act (PPACA) is that it did not appropriate any funds to HHS for the federal government to develop its own infrastructure to fulfill the PPACA requirement to create and operate exchanges in all the states that do not establish their own. According to Politico, "A federal exchange will have the same authority states do to impose fees on insurance sold through the exchange once it is open for business. But there is no money coming in until people start purchasing insurance, and there is a great deal of work to be done to prepare to open the doors of federal exchanges."

Buck Releases HCR Impact Survey of Health Care Organizations
Some of the key findings from a newly released Buck Consultants national survey of healthcare organizations regarding the impact of health care reform:

• 79 percent of the survey respondents indicated that reform will increase health care costs in the country (with 43 percent indicating that costs will increase significantly); only 20 percent believe it will reduce costs.
• More than 70 percent believe the hospital industry and employer benefit plans will be worse off.
• 48 percent believe their families will be worse off, and only 21 percent believe they will be better off.
• 41 percent believe quality will decrease nationally, while 39 percent think quality will improve.
• 45 percent believe patients will be worse off versus 44 percent who believe they will be better off.
• 60 percent believe the country will be worse off because of health care reform, while 34 percent think it will be better off.
• 72 percent think health care reform will adversely affect employer health plans.
• 57 percent of the respondents lost grandfathering for some or all plans in 2011, and we anticipate that nearly 100 percent of employer plans will lose grandfathering by 2014.
• The primary reason (65 percent) for loss of grandfathering was that plan design changes were implemented with plan savings that exceeded the additional cost of complying with the health care reform requirements
• 75 percent expect cost increases of 1 percent or more due to reform in 2011.
• 58 percent expect higher costs due to reform in 2014.
• 71 percent expect higher employer costs due to reform long term.
• More than 90 percent of the survey respondents anticipate passing on some or all of these additional costs to employees through higher employee contributions or reduced coverage.

A full copy of the survey results may be downloaded free of charge by registering at http://www.bucksurveys.com/.

Health Care Reform Update: Federal PCIP Broker Registration & HCR Affordability Test

We have teamed up with our partners at United Benefit Advisors to bring you the most recent Health Care Reform update:

Federal PCIP Broker Registration Process Open

In May, the Obama administration announced that the high-risk pool program created by PPACA would begin paying agents and brokers for successfully enrolling eligible people into the PCIP program this fall. The PCIP referral program is only open to the 23 states where the federal government runs the PPACA high-risk pool program. HHS will begin paying the $100 flat enrollment fee September 1.

Agents and brokers who wish to become involved can now register. To qualify to participate in the PCIP program, you must:

• be an insurance broker in good standing in your state,
• have your license confirmed through the NIPR database,
• have a valid federal tax identification number (FTIN) or social security number (SSN), 
• agree to accept payments through EFT, and
• submit a completed EFT form for electronic payment.

IRS to issue new health care reform law affordability test
The Internal Revenue Service said it will develop new rules that will make it easier for employers to determine if their health care plans are "affordable" and exempt from a stiff financial penalty mandated by the health care reform law. That notice is expected to be published in the Aug. 17 Federal Register.

In rules proposed Friday that were welcomed by employers, the IRS said it will develop a safe harbor in which coverage would be considered affordable so long as the premium contribution for single coverage did not exceed 9.5% of employees' W-2 wages, instead of employees' household income (which employers generally do not know). The IRS also affirmed that the 9.5% affordability test is to be applied only on single coverage, allowing employers to charge higher amounts for family coverage.

Contraceptives and ACA

On Monday, August 1st, HHS released an amendment to the ACA preventive services regulations that focuses on women’s health issues. They have indicated that non-grandfathered health plans need to provide the following items at no cost-sharing to the patient:

• Well-woman visits
• Contraception
• Screening and counseling for AIDS, HPV, sexually transmitted infections, gestational diabetes and domestic violence
• Breastfeeding supplies and counseling

Plans provided by religious institutions can be granted a waiver of these requirements if they conflict with the religious beliefs of the employer.

The regulations also allow that if a generic equivalent is available, plans can apply copays and/or deductibles to non-generic supplies.

It’s difficult to estimate the financial impact of these changes until the marketplace develops a reaction, but it’s clear that the regulations, like any benefit mandate, will have an initial cost increase. Long-term, overall costs are expected to decrease as fewer unplanned pregnancies, early detection of adverse infections and domestic situations, as well healthier newborns should emerge as positive results.

It’s important to recognize these requirements are to be effective with plan years starting on or after August 2, 2012. Carriers and plan sponsors will need to adapt their systems and processes during the next year to accommodate these changes, but we shouldn’t expect a lot of details to materialize on these changes for the next few months. As these decisions are communicated to TrueNorth, we’ll be sure to keep you informed.

Let us know if you have any questions on this.

TrueNorth Benefits Team
319.364.5193

HCR Update: Preventive Services; ERRP; Claims Review

We have partnered with our friends at UBA to bring you the latest Health Care Reform updates:


IOM Issues Recommendations for Required Preventive Services
A new report from the Institute of Medicine (IOM) recommends that eight preventive health services for women be added to the services that health plans will cover at no cost to patients under Public Health Service Act Sec. 2713, as added by the Patient Protection and Affordable Care Act of 2010 (PPACA).

At the HHS's request, an IOM committee identified critical gaps in preventive services for women, as well as measures that will further ensure women's health and well-being. The recommendations are based on a review of existing guidelines and an assessment of the evidence on the effectiveness of different preventive services. The committee identified diseases and conditions that are more common or more serious in women than in men or for which women experience different outcomes or benefit from different interventions.

The report suggests the following additional services:

• screening for gestational diabetes;
• human papillomavirus (HPV) testing as part of cervical cancer screening for women who are older than age 30;
• counseling on sexually transmitted infections;
• counseling and screening for HIV;
• contraceptive methods and counseling to prevent unintended pregnancies;
• lactation counseling and equipment to promote breastfeeding;
• screening and counseling to detect and prevent interpersonal and domestic violence; and
• yearly well-woman preventive care visits to obtain recommended preventive services.

For more information, visit http://www.iom.edu/Reports/2011/Clinical-Preventive-Services-for-Women-Closing-the-Gaps.aspx.

New Guidance Available for Early Retirement Reinsurance Program
The Centers for Medicare and Medicaid Services has published supplemental program guidance and has updated existing program guidance under the Early Retiree Reinsurance Program (ERRP).

The supplemental guidance further clarifies ERRP reimbursement policy by identifying certain International Classification of Diseases, Ninth Revision (ICD-9) diagnosis codes that are not acceptable as principal diagnosis codes and procedure codes that are not acceptable under Medicare. Therefore, medical items and services associated with ERRP claims that include any such diagnosis codes as a principal diagnosis code or procedure codes will not be credited toward the ERRP cost threshold and will not be reimbursed. The guidance related to the ICD-9 codes applies to every reimbursement request, regardless of whether the reimbursement request was initially submitted before or after the publication of the guidance, July 18, 2011.

CMS has also updated existing program guidance, Claims Ineligible for Reimbursement under the Early Retiree Reinsurance Program. CMS has incorporated additional excluded Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) codes to this guidance document.

• These codes have also been added to the downloadable CSV file on the Regulations and Guidance page at http://www.errp.gov/.
• The additional ineligible procedures are listed at http://www.errp.gov/download/ERRP_Additional_Ineligible_Procedures_and_Diagnoses.pdf

EBSA Issues Amendments to Interim Final Rules and Model Notices on Internal Claims and Appeals and External Review Processes
The U.S. Department of Labor, Department of Treasury and Department of Health and Human Services released a correction of amendment to interim final rules with request for comments. The full text is available at http://www.gpo.gov/fdsys/pkg/FR-2011-07-26/pdf/2011-18820.pdf.

The amendment to the interim final rule is effective July 22, 2011. Public comments on the amendment to the regulations must be submitted on or before July 25, 2011.

The agencies also released additional guidance and revised model notices related to the amended interim final rules.

• Technical Release 2011-02
• Revised Model Notice of Adverse Benefit Determination
• Revised Model Notice of Final Internal Adverse Benefit Determination
• Revised Model Notice of Final External Review Decision

Health Care Reform Update: State Exchanges

Thanks to our partners at UBA, we are able to provide you the latest in Health Care Reform Updates:

Health Exchange Risk Programs Would Protect Insurers and Consumers

Health and Human Services Department officials have coupled the health exchange regulation released on Monday with another proposed rule designed to minimize the impact of covering sick, expensive patients on insurance companies. The federal government proposed to give insurers higher payments for patients whose claims cost more than average so insurers don't have an incentive to avoid covering high-cost patients.

The 103-page regulation includes three components that would encourage insurers to cover high-risk policy holders just as they would those who are healthy:

• A permanent risk adjustment formula that would pay insurers higher rates for sicker patients, such as those with chronic conditions. The adjustment would apply to those in the individual and small group markets inside and outside of the exchanges.
• A three-year reinsurance program that would establish a nonprofit entity to handle temporary payments for insurers that cover patients with high medical claims in the individual market.
• A three-year risk corridor program that would give insurers inside the exchanges more certainty by limiting losses and gains. Insurers whose claims are at least 3 percent higher than projected would get more federal funding, while those whose costs are at least 3 percent less than projected would get fewer federal dollars.

The first component, the risk adjustment program, is the only one of the three components that is permanent. Payments will essentially transfer money from plans that cover mostly low-cost individuals to those whose enrollees have higher costs. The federal government or the states would calculate the payment formulas.

The reinsurance and risk corridor programs were made temporary because lawmakers felt that over time, more people would enter the new exchange program, insurers would have a better understanding of the risks of covering enrollees, and the market would mature.

The law requires that each state establish a reinsurance program to "help stabilize premiums for coverage in the individual market during the first three years of exchange operation," which are 2014-16. The money will come from all insurance plans and third-party administrators of self-insured group plans which will contribute funds to a nonprofit that will dole out additional money to insurers who have higher claims. Any insurance company in a state's individual market that was not grandfathered under the law -- including plans outside of the exchange -- could be eligible for the higher reimbursements. The law calls for states to collectively assess and disperse a total of $10 billion in 2014, $6 billion in 2015 and $4 billion in 2016 for reinsurance in addition to collecting other funds from insurers such as $2 billion in 2014-15 and $1 billion in 2016 for the general treasury.

The risk corridor program, which will be administered by the federal government instead of the states, would apply to insurers in the exchange's individual and small group markets during the first three years that the exchange is operating.

The three mechanisms are intended to help smooth the transition and provide more stability in the marketplace for insurers who end up with more sick people, or sicker people, than other insurers as well as for insurers who might not be able to predict their risk in the first couple of years. Risk corridors also could cap the profits of some insurers.

States could choose to change the details of reinsurance or risk adjustment from those set out by the federal standards. Any state that decides to make changes would need to publish a notice at least one year before the benefit year begins, and by March in the calendar year before the effective date.

The public has been given 75 days to comment on the proposal.

Milliman Identifies Key Questions That Will Drive the Creation of State Healthcare Insurance Exchanges
Milliman, Inc., today identified a series of considerations for states, health plans, and employers as they look toward the 2014 state exchange implementation deadline set forward in the Patient Protection and Affordable Care Act (PPACA) and reiterated in regulations issued by Health & Human Services on July 11. "The possibility that exchanges could serve a larger role in the rate review process introduces questions about interaction between state insurance departments and exchanges. Perhaps most importantly from an actuarial perspective, we are still awaiting regulations on essential benefits and other key aspects of pricing, which will be pivotal in dictating the design of plans in the exchange."

Some of the questions that still remain include:

• How firm is the deadline? Exchanges are supposed to be established by the open enrollment period that begins on Oct. 1, 2013. However, the regulations indicate that some states could miss the 2013 deadline and then receive regular or conditional approval for an exchange in subsequent years.
• How will essential benefit regulations shake out? Many of the plan design and cost considerations that will influence the insurance policies sold through an exchange begin with the question of which benefits are offered and at what level. The exact nature of insurance policies sold through exchanges will remain vague until these regulations are introduced.
• What rating role will be played by exchanges? The exchange regulations suggest that exchanges may have a larger role in the rate review process, on top of a full review currently performed by state departments of insurance. Is there redundancy and, if so, how will that redundancy be reconciled?
• Yet another complexity involves methodologies used for rating individuals versus rating families. The discussion in the exchange regulations is not conclusive and leaves open a variety of different approaches that may allow flexibility or may just foment confusion.
• What about smaller insurers? The regulations indicate that health plans sold through the exchange can no longer determine their own geographic area, which introduces a new rating wrinkle. The same areas must be used within and outside of the exchanges. What should a health plan do if a state introduces a geographic area that is larger than the area served by a health plan?
• How will federal exchanges operate? The federal government will create an exchange for any state that does not create its own exchange by the deadline, but the federal exchange concept remains undefined.
• Who will pay for federal exchanges? Will federal exchanges need to be financially self-sufficient, as is the case with state-run exchanges?
• What should we expect from "Navigators"? Navigators are entities intended to help consumers make insurance purchasing decisions in the exchange. To date, little detail on Navigators exists.
• The regulations help by clarifying that Navigators must be in place by the exchange's first open enrollment period on Oct. 1, 2013.
• The proposed rules now require that an exchange include two types of entities as Navigators.
• The proposed rules ensure that a community-based or consumer-focused group will fill one of these slots.
• Navigators will need to demonstrate an existing relationship to consumers before appointment.
• Brokers and agents may act as Navigators as long as they are not receiving compensation from a qualified health plan.
• How will exchanges interact with CO-OPs? PPACA allows for the creation of Consumer Operated and Oriented Plans (CO-OPs), but details of these plans are still unclear because CO-OP regulations are still pending. CO-OPs in theory will be sold on exchanges but they have some unique requirements; how will this interaction take place?
• What does success look like? The criteria for determining the success of an exchange are still unclear. Presumably there will be milestones for measuring such criteria, but these too are undefined.
• The regulations also do not get into quality measurement, though quality will likely feed success criteria; forthcoming regulations will pick up on the quality topic.

These details will have to come into focus before states can establish the proper exchange governance framework, before health plans can begin to establish their approach to rating and before employers can make purchasing decisions. To add additional complexity, the answers to some of these questions may vary from one state to another or otherwise be influenced by local dynamics, including the existing regulatory environments in each state and geographic cost variation.

HCR Update: External Claims & Appeals; Workplace Health Funds

We have worked with our partners at UBA to provide you the most recent Health Care Reform Update:

EBSA Issues Amendments to Interim Final Rules and Model Notices on Internal Claims and Appeals and External Review Processes

The U.S. Employee Benefit Security Administration (EBSA) and Department of Health and Human Services (HHS) issued amendments to the Interim Final Rules implementing the requirements regarding internal claims and appeals and external review processes for group health plans and health insurance coverage in the group and individual markets under provisions of the Patient Protection and Affordable Care Act (PPACA).

These rules are intended to respond to feedback from stakeholders on the interim final regulations and to assist plans and issuers in coming into full compliance with the law through an orderly implementation process. Public comments on the amendment to the regulations are requested and must be submitted within 30 days.

The amendments focus primarily on six issues:

• Expedited notification of benefit determinations involving urgent care
• Additional notice requirements with respect to notice of adverse benefit determinations or final internal adverse benefit determination
• Deemed exhaustion of internal claims and appeals processes
• Providing notices in a culturally and linguistically appropriate manner
• Duration of transition period for State external review processes
• Scope of the Federal External Review Process

Some highlights:

Urgent care decisions
One change involves the amount of time health care plan enrollees have to be notified of an urgent care coverage decision.

• Last year, regulators said enrollees would have to be notified of an urgent care decision within 24 hours of receipt of a claim.
• But in a joint amendment to the 2010 regulations published in Friday's Federal Register, the Health and Human Services, Labor and Treasury Departments said they will allow plans to make notification of coverage decisions within 72 hours, closely following a Labor Department rule. Regulators, though, noted that the 72-hour limit is a maximum "and that in cases where a decision must be made more quickly based on the medical exigencies involved, the requirement remains that the decision should be made sooner than 72 hours after the receipt of the claim," according to the rules published in Fridays' Federal Register.

Notifications in languages besides English
The latest rules also amend a requirement that notices of available and external claims appeal processes and review be provided in a "culturally and linguistically appropriate manner."

• Under the previous rules, the requirement to provide notices in a language other than English was based on the percentage of plan enrollees who were literate in a common non-English language. For plans that cover more than 100 participants, the threshold was 10 percent of plan participants, or 500 participants, whichever was less.
• Under the latest rules, the requirement applies if at least 10 percent of the population residing in a county where an employer's health care plan enrollees reside are literate in the same non-English language. Currently, 255 U.S. counties meet this standard, including 78 of which are in Puerto Rico, according to the rules.

 The agencies also released additional guidance and revised model notices related to the amended interim final rules.

• Technical Release 2011-02 
• Revised Model Notice of Adverse Benefit Determination
• Revised Model Notice of Final Internal Adverse Benefit Determination
• Revised Model Notice of Final External Review Decision
• Updated List of Consumer Assistance Programs, as of May 23, 2011

$10 Million in Affordable Care Act Funds to Help Create Workplace Health Programs
The U.S. Department of Health and Human Services announced today the availability of $10 million to establish and evaluate comprehensive workplace health promotion programs across the nation to improve the health of American workers and their families. The initiative, with funds from the Affordable Care Act's Prevention and Public Health Fund, is aimed at improving workplace environments so that they support healthy lifestyles and reduce risk factors for chronic diseases like heart disease, cancer, stroke, and diabetes.

Funds will be awarded through a competitive contract to an organization with the expertise and capacity to work with groups of employers across the nation to develop and expand workplace health programs in small and large worksites. Participating companies will educate employees about good health practices and establish work environments that promote physical activity and proper nutrition and discourage tobacco use -- the key lifestyle behaviors that reduce employees' risk for chronic disease.

Project funds will support evidence-based initiatives to build worksite capacity and improve workplace culture in support of health. Examples of such strategies include establishing tobacco-free campus policies, promoting flextime to allow employees to be more physically active, and offering more healthy food choices in worksite cafeterias and vending machines. A core principle of the initiative is to maximize employee engagement in designing and implementing the programs so they have the greatest chances of success.

Organizations interested in submitting proposals for the Comprehensive Health Programs to Address Physical Activity, Nutrition, and Tobacco Use in the Workplace can find more information at www.fbo.gov. The application deadline is Aug. 8, 2011. A separate funding opportunity is available for a national evaluation of the initiative and can also be found at www.fbo.gov.