Winthrop & Gray’s Health Care Reform reminders

2011
Insurance Reforms

New uniform coverage documents and standard definitions developed (applicable in 2012).

Minimum medical loss ratios required.

Medical Reforms

Medicare Advantage cost-sharing limits take effect.

Medicare beneficiaries who reach the "donut hole" get a 50 percent discount on brand-name drugs.

Primary care doctors and general surgeons practicing in underserved areas, such as inner cities and rural communities, get a 10 percent Medicare bonus.

Medicare Advantage plans begin restructuring of payments and freeze 2011 payments at 2010 levels.

Other

The voluntary long-term care insurance program starts. The program provides a cash benefit to help those with disabilities stay in their homes or pay nursing home costs. Benefits start five years after paying the coverage fee.

Increased funding for community health centers to provide care for many low-income and uninsured people.

Costs for over-the-counter drugs not prescribed by a doctor excluded from being reimbursed through an HSA or FSA.

Employers may report the value of health care benefits on employee W2 tax statements (optional for 2011 tax year; mandatory thereafter).

Start of new annual fees on pharmaceutical manufacturing sector.

2012
Health System Changes

Hospitals, doctors, and payers encouraged to join forces in "accountable care organizations."

Hospitals with high rates of preventable readmissions facing reduced Medicare payments.


2013
Taxes/Deductions

Individuals making $200,000 a year or couples making $250,000 would have a higher Medicare payroll tax of 2.35 percent on earned income - up from the current 1.45 percent. A new 3.8 percent tax on unearned income, such as dividends and interest, also added.

Contributions to flexible spending accounts (FSAs) limited to $2,500 a year - indexed for inflation. And the threshold for deducting medical expenses on taxes goes from 7.5 percent to 10 percent of income.

Medical device manufacturers have a 2.9 percent sales tax on medical devices, with exemptions for some, like eyeglasses, contact lenses and hearing aids.

No more deduction for expenses allocable to Medicare Part D subsidy for employers who maintain prescription drug plans for their Medicare Part D-eligible retirees.


For more information on how Health Care Reform may impact your care or your business
contact Allen Beach at Winthrop & Gray Company 800-258-1598.

Public Sector vs. Private Sector!!!

Why is there a huge debate in the State of Michigan between the public sector and private sector?

Please click here and you'll have your fact based reasons why. It's time for a drastic change in how our public sector employed citizens are compensated.

We just cannot afford bloated compensation packages for this sector anymore. Not only are the Tea Party groups revolting but so are all Michigan's hard working private sector tax payers.

It's time the burden of sacrifice is shared by the public sector
citizens as well as the ruling class of politicians that support them.

Please go to www.itpp.us for more facts and information about the Public  Sector vs. Private Sector battle that is taking place in Michigan and throughout our great country.

IRS Issues Interim Guidance on Informational Reporting of Employer-Sponsored Health Coverage

IRS Issues Interim Guidance on Informational Reporting of Employer-Sponsored Health Coverage; Reporting is Voluntary for All Employers for 2011 and Small  Employers for 2012


WASHINGTON - The Internal Revenue Service today issued interim guidance to employers on informational reporting on each employee's annual Form W-2 of the cost of the health insurance coverage they sponsor for employees. The IRS is also requesting comments on this interim guidance. The IRS emphasized that this new reporting to employees is for their information only, to inform them of the cost of their health coverage, and does not cause excludable employer-provided health coverage to become taxable; employer-provided health coverage continues to be excludable from an employee's income, and is not taxable.


The Affordable Care Act provides that employers are required to report the cost of employer-provided health care coverage on the Form W-2. Notice 2010-69, issued last fall, made this requirement optional for all employers for the 2011 Forms W-2 (generally furnished to employees in January 2012). In today's guidance, the IRS provided further relief for smaller employers (those filing fewer than 250 W-2 forms) by making this requirement optional for them at least for 2012 (i.e., for 2012 Forms W-2 that generally would be furnished to employees in January 2013) and continuing this optional treatment for smaller employers until further guidance is issued.
 
Using a question-and-answer format, Notice 2011-28 also provides guidance for employers that are subject to this requirement for the 2012 Forms W-2 and those that choose to voluntarily comply with it for either 2011 or 2012. The notice includes information on how to report, what coverage to include and how to determine the cost of the coverage.
The 2011 Form W-2, prior IRS Notice 2010-69 deferring the reporting requirement for 2011, and Notice 2011-28 containing the new guidance are available on IRS.gov.

Labor Law Protects Employees' Rants on Facebook

 Here's a recap of the case: After a dispute in the workplace involving a customer complaint, employee Dawnmarie Souza posted a negative remark about her supervisor on her personal Facebook page. This drew supportive responses from coworkers. Those responses then led to more negative comments from Souza about the supervisor.

Souza's employer, the American Medical Response (AMR) ambulance firm, suspended her and later terminated her because of her Facebook postings.

The AMR blogging and Internet posting policy included these statements:

"Employees are prohibited from posting pictures of themselves in any media, including but not limited to the Internet, which depicts the Company, in any way, including but not limited to any Company uniform, corporate logo or an ambulance, unless the employee receives written approval... in advance of the posting...

"Employees are prohibited from making disparaging comments or discriminatory or defamatory comments when discussing the Company or the employee's superiors, co-workers, and/or competitors."

The NLRB filed an unfair labor practice complaint against the Connecticut company.

The NLRB asserted the National Labor Relations Act (NLRA) gives all employees the right to discuss with other employees such work issues as pay, benefits, and working conditions. These discussions on work conditions and work issues are protected activities. In the case against AMR, the NLRB argued an employee's comments about a supervisor and about an employer, posted on a social media site like Facebook, is protected concerted activity when it involves comments and responses between coworkers.

The NLRB alleged the ambulance company illegally terminated Souza for violating the company's policy prohibiting employees from describing the company "in any way" on the Internet without company permission. The NLRB described the company's policy as overly broad.

A settlement is reached: In a private settlement between AMR and Souza, the employer has agreed to back off from its restrictions on employees' expressions of workplace issues outside the workplace.

The NLRB issued this statement about the settlement:

"Under the terms of the settlement... the company agreed to revise its overly broad rules to ensure that they do not improperly restrict employees from discussing their wages, hours and working conditions with co-workers and others while not at work, and that they would not discipline or discharge employees for engaging in such discussions.

"The company also promised that employee requests for union representation will not be denied in the future and that employees will not be threatened with discipline for requesting union representation." [The employee in the case, Dawnmarie Souza, was a member of the Teamsters union and the Teamsters represented her before the NLRB.]

Meaning to employers: The settlement between AMR and the NLRB strengthens the NLRB's position that employers can overreach in attempts to prevent employees from discussing matters relating to their work.

[NOTE: Information and guidance in this story is intended to provide accurate and helpful information on the subjects covered. It is not intended to provide a legal service for readers' individual needs. For legal guidance in your specific situations, always consult with an attorney who is familiar with employment law and labor issues.]

IRS ISSUES W-2 HEALTH CARE COST REPORTING GUIDANCE.

(PLANSPONSOR.com) - The Internal Revenue Service has issued interim employer guidance about reporting on employees' W-2 the cost of the health insurance coverage they sponsor for employees.

The IRS is also requesting comments on this interim guidance. The IRS emphasized that this new reporting to employees is for their information only, to inform them of the cost of their health coverage, and does not cause a taxable event.

The tax agency said except as provided in a question-and-answer section of the IRS document, all employers that provide applicable employer-sponsored coverage during a calendar year are subject to the reporting requirement under § 6051(a)(14).

The Affordable Care Act provides that employers are required to report the cost of employer-provided health care coverage on the Form W-2. Guidance issued last fall made this requirement optional for all employers for the 2011 Forms W-2 (generally furnished to employees in January 2012), the IRS said. In the latest guidance, the IRS provided further relief for smaller employers (those filing fewer than 250 W-2 forms) by making this requirement optional for them at least for 2012 (i.e., for 2012 Forms W-2 that generally would be furnished to employees in January 2013).

The notice also provides guidance for employers that are subject to this requirement for the 2012 Forms W-2 and those that choose to voluntarily comply with it for either 2011 or 2012. The notice includes information on how to report, what coverage to include and how to determine the cost of the coverage.
The IRS notice is at http://www.irs.gov/pub/irs-drop/n-11-28.pdf.

Information About the CLASS Benefit Plan

If you think you or someone you know needs assistance living in home assistants or nursing home care, this article is for you.

Health & Human Services (HHS) released a series of frequently asked questions on the Class (Community Living Assistance Services and Supports) Act. 

These questions and answers follow below:

About CLASS and long term care

What is CLASS?

CLASS (Community Living Assistance Services and Supports) is a new voluntary, federally administered insurance program created under the Affordable Care Act (ACA).

Most working adults age 18 or older will be able to voluntarily enroll in this new program either directly or through their employers, without answering questions about their health.

Those who enroll and meet the benefit eligibility requirements will receive benefits to purchase long-term services and supports such as (but not limited to) personal assistance, homemaker services, specialized transportation and assistive technology to help them address their care needs.

When will CLASS be available?

The Affordable Care Act (ACA) states that the Secretary of Health and Human Services has until October 1, 2012 to designate the CLASS benefit plan. Enrollment will not take place before the plan is announced, and no one will pay premiums until after they enroll.

Is CLASS an entitlement program?

No. CLASS is not an entitlement program. Some people will not be eligible to enroll and some people who enroll will never meet the requirements to receive benefits.

Enrollment in CLASS will be voluntary and will be available to most working adults. Pre-existing medical conditions will not disqualify someone from enrolling. Individuals who enroll will be eligible to receive benefits if they meet specific requirements regarding functional limitation, earnings, and premium payment. Enrollees pay the premiums. Benefits will be paid from premiums and earnings on those premiums. Taxpayer funds will not be used to pay benefits.

How is CLASS different from long term care insurance offered through an insurance company?

CLASS will be administered and insured through the Federal government. Enrollment will be available to most working adults. Unlike most long term care insurance offered by private insurers, pre-existing medical conditions will not disqualify someone from enrolling. In addition, CLASS enrollees will have to meet specific requirements regarding functional limitation, earnings, and premium payment in order to receive benefits. Details about these requirements will be announced by the HHS Secretary no later than October 1, 2012.

What is long term care?

Long term care refers to care that individuals may need for a long time because they are unable to take care of themselves due to an illness, disease, the aging process, or cognitive impairment (for example, Alzheimer's disease).

Most long term care is non-skilled personal care, such as help with everyday tasks, called Activities of Daily Living (ADLs):

Bathing,

Dressing,

Using the toilet,

Transferring (moving to or from a bed or chair),

Caring for incontinence, and

Eating.

The goal of long term care is to provide help with routine functions when being fully independent is not possible. Long term care can be provided at home, in a community setting or in an institution. Most people prefer to receive long term care at home.

Who needs long term care?

The need for long term care can strike anyone at any age. While many people who need long term care are age 65 or older, a person can need long term care services at any age. Forty percent of people currently receiving long term care are adults 18 to 64 years old.

Factors that increase your risk of needing long term care include:

Age - The risk generally increases as you get older.

Marital Status - Single people are more likely to need care from a paid provider.

Gender - Women are at a higher risk than men, primarily because they tend to live longer

Lifestyle - Poor diet and exercise habits can increase your risk.

Health and Family History - These can also impact your risk.

Will Medicare and/or my health insurance pay for any long term care services I might need?

Generally, no. Medicare pays for nursing home care and/or home care only under limited circumstances after a hospital stay and only for a limited time period. Medicare and health insurance pay for acute care, generally needed for a defined period of time with an expectation that you will recover or your condition will improve. Long term care is chronic care (ongoing and long-lasting). It is not acute care.

Enrollment in CLASS

Can I enroll in CLASS now?

No. CLASS is not available yet. By October 1, 2012, the Secretary of Health and Human Services will announce the details of the CLASS benefit plan. Enrollment will not begin until after this announcement.

Who will be able to enroll in CLASS?

Once enrollment begins, most working adults age 18 or older will be able to enroll.

Will I have to pass underwriting to enroll in CLASS?

No. You will not be denied enrollment in CLASS because of a pre-existing condition or for any medical reason.

Will retirees be able to enroll in CLASS?

If they are fully retired (not working at all), they will not be able to enroll in CLASS.

I'm looking at private long term care insurance policies. Should I wait for CLASS instead?

It's important to plan for your potential long term care needs without delay. If you're nearing retirement, you should also note that one of the requirements to become eligible for benefits under the CLASS Program is to earn wages of a certain amount over a period of time after enrollment. Those planning to retire within the next few years may not be able to qualify for benefits under CLASS.

Should employers start withholding premiums for CLASS coverage from their employees' pay?

No. CLASS premiums will not be collected until enrollment begins. The Secretary of Health and Human Services will announce details about the CLASS benefit plan by October 1, 2012. Enrollment will not begin until after this announcement.

Will an employer have to offer CLASS participation to its employees?

No. Employers will be able to decide whether to participate in the CLASS automatic enrollment process for their employees.

Will I have to enroll in CLASS if my employer participates in the automatic enrollment process?

No. You will be able to opt-out of enrollment.

Will I be able to enroll even if my employer decides not to offer the CLASS automatic enrollment process?

Yes. If you meet the enrollment eligibility requirements, you will have the option to enroll individually.

Will I be able to enroll if I am self-employed?

Yes. If you meet the enrollment eligibility requirements, you will have the option to enroll individually. 

CLASS Benefits

How will someone become eligible to start receiving CLASS benefits?

In order to receive benefits, an enrollee must:

have an eligible functional limitation(for example, need help to perform everyday activities or have a cognitive impairment);

earn wages of a certain amount over a period of time after enrollment; and

pay premiums for at least 60 months, and comply with other premium payment requirements.

Details about all of these requirements will be announced by the HHS Secretary by October 1, 2012.

Will I be able to use my CLASS benefits to help pay for care in a nursing home or assisted living facility?

Yes. If you qualify for CLASS benefits, you will be able to use them to help cover the cost of care in a nursing home or assisted living facility, as well as care received at home. CLASS benefits can also be used for other types of supports and services, such as home modifications, assistive technologies, accessible transportation, and homemaker services, to name just a few.

How much will CLASS pay in benefits?

We have not yet determined the benefit plan. By October 1, 2012, the Secretary of Health and Human Services will designate a benefit plan, after taking into consideration the recommendations of the CLASS Independence Advisory Council. The CLASS Act requires that the benefit plan include a cash benefit averaging at least $50 per day, not subject to any lifetime limit.

What is the CLASS Independence Advisory Council?

The CLASS Independence Advisory Council is the Department's statutory public advisory body on matters of general policy in the administration of the CLASS Program. The President has not yet appointed the members of the Council. The time period for submitting nominations to the Council has ended.

Can taxpayer funds be used to pay CLASS benefits?

No. The law specifically prohibits the use of taxpayer funds to pay benefits.

CLASS Premiums

How much will CLASS coverage cost?

Premiums have not yet been established. By October 1, 2012, the Secretary of Health and Human Services will announce details of the benefit plan, including premiums, after taking into consideration the recommendations of the CLASS Independence Advisory Council.

Insurance News in Michigan

MICHIGAN: In his first budget, Governor Rick Snyder has proposed that the state's current HMO-use tax on Medicaid plans be replaced by a 1 percent assessment on paid health claims to raise approximately $400 million.

The paid claims would be an obligation on insured and self-insured entities. Details regarding this budget proposal, including operational issues and effective date, are unclear at this time. But the Michigan budget is predicated on the implementation of this provision. If it fails, then the remaining options will be reductions in Medicaid, largely in provider rates and health plan premiums.

In short if we tax the insurance companies for paying claims, premiums will have to increase to the insured to compensate the additional tax. Individuals should contact their elected representatives and voice their opinion. Insurance rates are already becoming unaffordable to individuals and businesses as it is. This is only a proposal at this stage, but unless action is taken this could become a progressive tax and one in which the public at large is unaware of.