Carter's Benefits

eNewsletter Volume 4, Issue 7 July 2011

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2012 HSA Limits Approved

The IRS has announced the Health Savings Account (HSA) limits for 2012.

2012 Health Savings Account Index Figures
 
2011
2012
Maximum contribution levels
Individual coverage
$3,050
$3,100
Family coverage
$6,150
$6,250
Catch-up contribution allowed for those 55 and over
$1,000
$1,000
Maximums for HDHP out-of-pocket expenses
Individual coverage
$5,950
$6,050
Family coverage
$11,900
$12,100

Click here for a chart containing historical HSA index figures dating back to 2004.

Recent News

  1. Another Healthcare Lawsuit Set For Oral Arguments In Appeals Court.
  2. Healthcare Law's Rate Increase-Review Provision Kicks In September 1st
  3. Administration Unveils Rules For Third-Party Review Of Denied Claims.
  4. High-Deductible Health Insurance Plans Becoming More Popular.
  5. HHS Announces Lower Premiums For PCIP Program.
  6. Op-Ed Makes Case For Expanding HSAs.
  7. Proposed Changes to the HIPAA Privacy Rule
  8. Study Predicts Up To 30% Of Companies Will Stop Offering Health Insurance.
  9. Texas Quietly Planning For Health Insurance Exchange.
  10. Administration Officials Unveil New Prevention Initiative.
  11. Administration Unveils Rules For Third-Party Review Of Denied Claims.
  12. Sixth Circuit Panel Upholds Healthcare Reform Law.

Another Healthcare Lawsuit Set For Oral Arguments In Appeals Court.
CQ (5/25, Norman, Subscription Publication) reports, "There's yet another health care lawsuit lurking out there that's now set for oral argument in an appeals court. And on Tuesday, attorneys general from 14 states filed a brief supporting opponents of the law who filed the challenge." This brings to "five the number of suits that either have already been argued in a federal appeals court or are scheduled for oral arguments later this year." The states that filed a brief yesterday are "Texas, Florida, Alabama, Indiana, Kansas, Maine, Michigan, Nebraska, North Dakota, Ohio, Pennsylvania, South Dakota, Washington and Wisconsin."

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Healthcare Law's Rate Increase-Review Provision Kicks In September 1st.
The New York Times (5/24, Carrns, Subscription Publication) "Bucks" blog reported that starting "Sept. 1, double-digit increases in health insurance premiums for individuals and small businesses will be subject to a review and possible rejection by state and federal officials." The change, which is part of the Affordable Care Act, is "meant to make sure that premium increases are justified." Conversely, according to the "federal government, some states already have the authority to challenge health insurance rate increases -- but rarely ever do it." However, a few states, "perhaps emboldened by the new law," are starting to "balk at premium increases." For example, Rhode Island recently "ruled that BlueCross BlueShield members who buy their own insurance should see premiums rise by no more than 1.9 percent."

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Administration Unveils Rules For Third-Party Review Of Denied Claims.
The AP (6/23) reports, "The Obama administration says most Americans will soon have the right to appeal to a third party referee when their health insurer denies a claim for a medical service." The regulations "released Wednesday carry out provisions of President Barack Obama's health care law. Insurers generally give customers a couple of chances to appeal internally, but access to outside review varies."
        The Washington Post (6/23, Goldstein) reports that the new rules change "the standards in ways that disappointed leading advocates for health-care consumers." The regulations "are intended to guarantee patients nationwide the same rights to appeal if their insurers do not cover care that they consider necessary. The federal standards...replace a patchwork of separate state policies." HHS "officials issued the rules 11 months ago, but they have been working to fine-tune them amid a blizzard of lobbying. Insurers and employers have been urging limited rights to appeal, while consumer groups have been arguing for stronger patient protections."
        The Wall Street Journal (6/23, Adamy, Subscription Publication) says that the Administration is delaying the effective date of these rules until January 1 of 2012. They were supposed to take effect in July.
        CQ (6/23, Reichard, Subscription Publication) reports that the regulations give "states until January 1, 2012 to adjust their insurance regulations to comply with a health law requirement that health plans establish a process for enrollees to appeal claim denials within the company and to take their complaints to an external review board if need be."

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High-Deductible Health Insurance Plans Becoming More Popular.
USA Today (5/30, Kennedy) reported that in 2007, about "4.5 million people had high-deductible plans, but by 2010, 10 million people had signed up for the plans," according to an America's Health Insurance Plans survey of its members. In exchange for a "high deductible -- a maximum $3,000 deductible for individuals and a $6,000 deductible for families," subscribers can save about "$85 to $100 a month on premiums." But, they need to "understand those lower premiums can mean higher doctors' bills," noted AHIP President Karen Ignagni. However, a recent Rand Corporation study found that "even as healthcare costs continued to rise, people on high-deductible plans paid substantially less than did those on traditional plans." Rand also found that people with high-deductible plans "received less preventive care," regardless of their income level.

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HHS Announces Lower Premiums For PCIP Program.
The AP (6/1) reports, "The government is cutting premiums by up to 40 percent in 17 states and implementing other changes to make it easier for people with pre-existing medical conditions to get health insurance." This announcement "comes as enrollment in the Pre-Existing Condition Insurance Plan continues to lag far behind expectations, often because people can't afford the premiums or find it too hard to meet enrollment requirements." The program is part of the healthcare law, which President Obama signed last year, and it "offers health insurance to people with medical problems at prices the average healthy person would pay, although that's not necessarily cheap."
        USA Today (6/1, Kennedy) reports that the lower premiums will lead to "savings for people across the country," according to Sebelius. For instance, "in Florida, the average monthly payment for a person older than 55 is $390. After July 1, it will drop to $234 a month." In addition, "people who would like to enroll in the program...no longer need to provide a letter from an insurance company denying them coverage." They simply "need a letter from a doctor saying they have a medical condition." But, the "rule that a person may not have had health insurance for the past six months still applies."
        The Los Angeles Times (6/1, Levey) reports, "The administration is directly slashing premiums in the District of Columbia and most of the 23 states that have elected to have the federal government run their health plans. The remaining 27 states, which each run their own plans, will be able to reduce premiums as well."
        The Wall Street Journal (6/1, Adamy, Subscription Publication) says that many consumers had shied away from the program largely due to costs. The Administration hopes that the new changes will make the program more attractive to people with pre-existing conditions.
        The Hill (6/1, Baker) explains in its "Healthwatch" blog that the "high-risk pools were designed to provide a temporary option for people who haven't been able to get insurance because of a pre-existing condition. Insurance companies will be required to sell insurance to everyone beginning in 2014, regardless of their health status." To date, however, enrollment rates have been lower than anticipated.
        The Huffington Post (6/1, Delaney) reports that in fact, "only 18,000 Americans have signed up for the PCIP. Officials initially said it would reach hundreds of thousands by the time the program is phased out in 2014, when it will become illegal for insurance companies to discriminate against the sick."
        The National Journal (6/1, McCarthy, Subscription Publication) reports, "Starting July 1, 2011, people applying for coverage can simply provide a letter from a doctor, physician assistant, or nurse practitioner dated within the past 12 months stating that they have or, at any time in the past, had a medical condition, disability, or illness," HHS stated.
        CQ (6/1, Norman, Subscription Publication) reports that Richard Popper, the CMS official who oversees the program, "told reporters Tuesday that the people are being enrolled 'at an increasing rate, but we know we have the capacity to cover even more people so we're making these adjustments today.'" Popper added that "HHS officials cannot waive other eligibility requirements that are spelled out in the statute, such as a rule that people must be without insurance for six months before qualifying for the risk pool."
        Also covering the story are Reuters (6/1), McClatchy /Kaiser Health News (6/1, Galewitz), the Arizona Republic (6/1, Alltucker), Fort Worth Star Telegram (6/1, Fuquay), Miami Herald (6/1, Singer), Palm Beach Post (FL) (6/1, Singer) "On Call" blog, and the Las Vegas Review-Journal (6/1, Milliard

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Op-Ed Makes Case For Expanding HSAs.
In a Forbes (6/2) "On the Cutting Edge" op-ed, Peter Ferrara, director of policy for the Carleson Center for Public Policy and Senior Fellow for Entitlement and Budget Policy for the Heartland Institute, argued that "the only solution to" the problem of rapidly rising medical costs "is to unite the decision over what healthcare to purchase and consume with the economic responsibility to pay the costs, so costs can be weighed against benefits in healthcare consumption." He went on to argue and even expand the case for health savings accounts (HSAs), saying that "empowering the patient to weigh the costs against the benefits and make this decision about his own health care would be morally unobjectionable" and more economically sound than relying upon a third party (i.e., insurance company, HMO, or government program) to pay for healthcare.

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Proposed Changes to the HIPAA Privacy Rule
On May 31, 2011, HHS announced a Notice of Proposed Rulemaking concerning the accounting of disclosures requirement under HIPAA, which is now available for public comment. The proposed rule would give individuals the right to receive a report on who has electronically accessed their protected health information. Under the current law, covered entities are required to track access to electronic protected health information; however, they are not required to share this information with individuals. Under the proposed rule, people could obtain this information by requesting an access report, which would document the particular persons who electronically accessed and viewed their protected health information. Comments on the proposed rule must be submitted to HHS before August 1, 2011.

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Study Predicts Up To 30% Of Companies Will Stop Offering Health Insurance.The National Journal (6/7, Armbinder, Subscription Publication) reported, "The more a company knows about coming changes to the nation's health care laws, the more likely it is to consider radically restructuring the way it provides insurance to employees, according to a study by the consulting firm McKinsey and Co." In fact, "the study, which is being circulated among Republicans, predicts that as many as 30 percent of companies will stop offering health insurance benefits, reduce the level of benefits, or offer benefits only to certain employees." Should this prediction come to pass, "the number of Americans who could see changes to their health insurance would be far more than the 9 million to 10 million estimated by the Congressional Budget Office."
        The Los Angeles Times (6/7, Cevallos) "Booster Shots" blog reported, "Still, American workers will likely have some sort of health coverage through their employers, if not through new health insurance exchanges, the McKinsey report says." The blog entry noted that the majority of employers, however, will probably choose a solution somewhere in the middle between dropping coverage entirely and keeping benefits as they offer them now. The Wall Street Journal (6/8, Adamy, Subscription Publication) and Reuters (6/8) also cover the story.
        Grace-Marie Turner, president of the Galen Institute, in an op-ed for the Wall Street Journal (6/8, Subscription Publication) titled, "No, You Can't Keep Your Health Insurance," also cites the McKinsey findings, and calculates that up to 78 million people in the US will lose their employer-provided health insurance as a result of the federal reform law. Turner urges Congress to repeal the law before it fully takes effect.

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Texas Quietly Planning For Health Insurance Exchange.
The New York Times /Texas Tribune (6/10, A19A, Ramshaw, Subscription Publication) reports that despite Texas Gov. Rick Perry's (R) "stated opposition to a federally-mandated health insurance exchange and the state's participation in lawsuits aimed at overturning federal health reform, officials at the Texas Department of Insurance acknowledge that since last fall, with the help of a $1 million grant from the United States Department of Health and Human Services, they have been working quietly to plan for a health insurance exchange." The article quotes John Greeley, a spokesman for the Texas Department of Insurance, as saying, "We've been going full speed ahead on implementation, doing the due diligence so that we can be on time with what the law says." Meanwhile, "Lucy Nashed, a spokeswoman for Mr. Perry, said the governor is aware of the grant, which she said is exploratory and does not require Texas to set up an exchange."

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Administration Officials Unveil New Prevention Initiative.
The Washington D.C. Examiner (6/17, Rabinovitz) reports, "In an hour-long press conference Thursday morning June 16, 2011, HHS Secretary Sebelius, US Surgeon General Regina M. Benjamin and a team of government officials announced the first ever National Prevention Strategy, a blueprint for America to become a healthier and more fit nation." Noting "the need for the United States to move from a focus on sickness and disease to one based on prevention and wellness, the speakers addressed the basic ways that the United States must move forward to create a healthier country." HHS Secretary Kathleen Sebelius said, "This National Prevention Strategy, called for under the Affordable Care Act, will help us transform our health care system away from a focus on sickness and disease to a focus on prevention and wellness. ... We know that prevention helps people live long and productive lives and can help combat rising healthcare costs."
        CQ (6/17, Norman, Subscription Publication) reports that because many deaths in the US are "related to chronic disease and rampant obesity among children and adults, federal officials say it's urgent to act in a comprehensive way. Heart disease, cancer, chronic lower respiratory disease, strokes and unintentional injuries are responsible for 66 percent of all deaths." Sebelius said that this "strategy builds on improvements in prevention made in the law...and will apply across federal agencies," which "are all committed to working together."
        The NPR (6/17, Thrasybule) "Shots" blog reports that about "17 federal agencies are expected to be involved in executing the plan, which was developed by the National Prevention Council. The plan would draw on a wide range of health workers, institutions, community-based organizations and government agencies for help."
        HHS Allocates Additional $4 Million For Prevention Grants. The Hill (6/17, Baker) reports in its "Healthwatch" blog, "The Health and Human Services Department announced new funding opportunities Thursday for community-based healthcare programs." The department said that "$4 million is available to 'community-based organizations.'"
        CQ (6/17, Adams, Subscription Publication) reports that "groups can apply for grants for a wide variety of projects," such as "tobacco prevention or cessation; anti-obesity efforts; prevention and control of high blood pressure and high cholesterol; social and emotional wellness, such as identifying mental health problems, and safe physical environments." CDC Director Thomas Frieden said, "It is critical that we sustain our work to develop and extend effective programs that address leading causes of death such as heart disease, cancer, and stroke." ... "These funds will allow us to build on successful program models that have helped people lead healthier lives and help us save millions in health care costs in the future."

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Administration Unveils Rules For Third-Party Review Of Denied Claims.
The AP (6/23) reports, "The Obama administration says most Americans will soon have the right to appeal to a third party referee when their health insurer denies a claim for a medical service." The regulations "released Wednesday carry out provisions of President Barack Obama's health care law. Insurers generally give customers a couple of chances to appeal internally, but access to outside review varies."
        The Washington Post (6/23, Goldstein) reports that the new rules change "the standards in ways that disappointed leading advocates for health-care consumers." The regulations "are intended to guarantee patients nationwide the same rights to appeal if their insurers do not cover care that they consider necessary. The federal standards...replace a patchwork of separate state policies." HHS "officials issued the rules 11 months ago, but they have been working to fine-tune them amid a blizzard of lobbying. Insurers and employers have been urging limited rights to appeal, while consumer groups have been arguing for stronger patient protections."
        The Wall Street Journal (6/23, Adamy, Subscription Publication) says that the Administration is delaying the effective date of these rules until January 1 of 2012. They were supposed to take effect in July.
        CQ (6/23, Reichard, Subscription Publication) reports that the regulations give "states until January 1, 2012 to adjust their insurance regulations to comply with a health law requirement that health plans establish a process for enrollees to appeal claim denials within the company and to take their complaints to an external review board if need be."

[back to the index]

Sixth Circuit Panel Upholds Healthcare Reform Law.
In what is widely viewed as a major victory in the healthcare reform battle, a three-judge panel of the US Circuit Court of Appeals for the 6th Circuit in Cincinnati, OH, has upheld the constitutionality of a key part of the healthcare reform law – the requirement that Americans purchase health insurance. The ruling is the first of three expected soon from appeals courts that heard arguments on the new law in recent months, including the 4th Circuit in Richmond and the 11th Circuit in Atlanta. The ruling was reported in major newspapers and wire services, but was only carried on one network newscast.
        NBC Nightly News (6/29, story 2, 0:30, Williams) reported, "The White House did get a victory today, earlier today, a Federal appeals court in Ohio upheld the most controversial portion of the Obama health care law, the mandate that all Americans must buy health insurance. It's now the fourth Federal court to find the law constitutional. Two other courts said Congress exceeded its powers, the issue will almost certainly wind up being decided by the Supreme Court."
        USA Today (6/30, Biskupic) reports that the ruling "gives the administration a significant victory," because "it is the first by an appeals court and constitutes the first time that a Republican-appointee has voted to uphold the law."
        The Washington Post (6/30, Markon) reports that by a 2-1 vote, the panel "upheld the most contentious provision of the health-care overhaul law, ruling that Congress can require Americans to carry insurance coverage. 'We find that the minimum coverage provision is a valid exercise of legislative power by Congress under the Commerce Clause,' Judge Boyce F. Martin Jr., a Democratic appointee, wrote for the majority." Martin was joined by Republican appointee Jeffrey Sutton. The ruling "was hailed by the Justice Department and administration allies, who called it an important bipartisan test of the law's ability to withstand numerous legal challenges," while opponents of the law downplayed its importance and noted that challenges are expected to end up before the Supreme Court.
        The New York Times (6/30, Sack, Subscription Publication) reports, "As they look ahead to the Supreme Court, the law's defenders can take encouragement from the concurring opinion written by" Judge Sutton, who is "typically considered conservative on questions of constitutional reach. After acknowledging the difficulty of pinpointing the limits on Congress's power to regulate interstate commerce, Judge Sutton wrote, 'In my opinion, the government has the better of the arguments." He added, "Not every intrusive law is an unconstitutionally intrusive law.'"
        The AP (6/30) reports, "The Thomas More Law Center, based in Ann Arbor, Mich., argued before the panel that the law was unconstitutional and that Congress overstepped its powers. The government countered that the measure was needed for the overall goal of reducing health care costs and reforms such as protecting people with pre-existing conditions. It said the coverage mandate will help keep the costs of changes from being shifted to households and providers." White House adviser Stephanie Cutter "called the ruling 'another victory' for millions of Americans and small businesses benefiting from the overhaul."
        Bloomberg News (6/30, Harris, Stohr) reports, "Robert Muise, who argued the case for the Thomas More center in Cincinnati, said by phone that his group will ask the high court to take the case. 'This case ultimately needs to be decided by the US Supreme Court,' Muise said, adding that his organization will file its petition for review as quickly as possible."
        Politico (6/30, Haberkorn) reports, "The court ruled that the mandate regulates economic activity with a substantial effect on interstate commerce, and thus is legal. The court also agreed with the federal government that Congress had reason to think that allowing people to go uninsured would allow for "free riders" to take advantage of the system - and other taxpayers."
        The Washington Times (6/30, Dinan) reports, "The majority specifically rejected opponents' claims that the law falls outside of Congress' power because it regulates economic 'inactivity' -- the act of not buying insurance -- rather than activity. 'The text of the Commerce Clause does not acknowledge a constitutional distinction between activity and inactivity, and neither does the Supreme Court. Furthermore, far from regulating inactivity, the provision regulates active participation in the health care market,'" Judge Martin wrote. Also covering the story are the Wall Street Journal (6/30, Bravin, Subscription Publication), Reuters (6/30, Pelofsky, Vicini), The Hill (6/30, Baker) "Healthwatch" blog, National Journal (6/30, Fox, Subscription Publication), CQ (6/30, Reichard, Subscription Publication), and PBS NewsHour (6/30, Jacobson).

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How does Carter's Benefits help ?
We continue to stay on top of changes in this industry. In a consultative role, Eddie Carter has begun hosting live seminars to update employers and Human Resource Managers on these changes. If you would like to host a meeting with your local community or civic organization, please contact me for details.

Eddie Carter, Consultant Eddie Carter,
Benefit Consultant
Questions@CartersBenefits.Com
 
 
If you have questions or would like more information please give us a call or send us an email.  Our email address is Questions@CartersBenefits.Com
 
 

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