Carter's Benefits

eNewsletter Volume 5, Issue 05 May 2012

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2013 HSA Limits Announced

In Revenue Procedure 2012-26, the IRS announced the inflation-adjusted increases for thresholds applicable to HSAs and high-deductible health plans (HDHPs) for 2013.

The new 2013 limits are as follows:

  • The maximum annual HSA contribution for self-only HDHP coverage will increase from $3,100 to $3,250. The maximum annual HSA contribution for family HDHP coverage will increase from $6,250 to $6,450. Age 55 catch-up contributions will continue to be at $1,000, per §223 of the Internal Revenue Code.
  • The minimum HDHP deductible will increase from $1,200 to $1,250 for self-only coverage and from $2,400 to $2,500 for family coverage.
  • The annual maximum for HDHP out-of-pocket expenses (deductibles, co-payments and other amounts) will be $6,250 for self-only coverage and $12,500 for family coverage, up from $6,050 and $12,100, respectively, in 2012.

These limits are effective for calendar year 2013. For HDHPs with non-calendar plan years, the minimum deductible and out-of-pocket limits are those that are in effect on the first day of the plan year, per Notice 2004-50,Q/A-86, .

A recent HSA/HRA study by the Employee Benefit Research Institute showed that in 2011 more than 8 million Americans have HSAs and/or HRAs, with more than $12 billion in assets. This indicates an increase of more than 500 percent since 2006. HSAs, in particular, have a triple tax benefit (contributions, earnings and medical-related distributions are tax free) and are portable. They can be used for current medical expenses or expenses in retirement years.

Recent News

  1. Interactive Health Plan Compliance Website is updated.
  2. Insurers Expected To Pay $1.3 Billion In Rebates This Summer Under ACA.
  3. GAO Finds Between 36 And 112 Million US Adults Have Pre-Existing Conditions.
  4. More People Are Choosing Health Savings Accounts.
  5. Website Provides Consumers With Reliable Estimate Of Area Dental Prices.
  6. Survey: Healthcare Costs Rising Less Rapidly.
  7. Blahous Report Says ACA Will Add Up To $530 Billion To Deficit.
  8. CMS Announces 27 New ACOs.
  9. HHS To Transfer $500 Million To IRS To Implement ACA.
  10. More Employers Tying Health Insurance To Medical Tests In US.

Interactive Health Plan Compliance Website is updated.
(for Laws other than Health Care Reform)

In 2006, the DOL launched an interactive website for employers to determine which laws pertain to their business (other than Health Care Reform) .

http://www.dol.gov/elaws/ebsa/health/employer/

Employers can go to this website and answer targeted questions about their business and benefits and determine which laws they are subject to and gain assistance on whether they are in compliance with those laws. The website prompts the user with Yes/No questions which are designed to determine if the plan and employer is in compliance. At the end of the Yes/No questions is a "Plan Compliance Results" page, which reports the requirements the employer's plan appears to comply with and which it does not.

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Insurers Expected To Pay $1.3 Billion In Rebates This Summer Under ACA.
The AP Share to FacebookShare to Twitter (4/27, Alonso-Zaldivar) reports in a story appearing on over 250 news sites, "More than 3 million health insurance policyholders and thousands of employers will share $1.3 billion in rebates this year, thanks to President Obama's health care law." That's according to a study by the Kaiser Family Foundation. In response, "Democrats are hoping they'll send an election-year message that Mr. Obama's much-criticized health care overhaul is starting to pay dividends for consumers. Critics of the law call that wishful thinking." The story also points out that "with employer coverage averaging about $5,400 a year for an individual, $15,100 for a family, $127 isn't a whole lot of money."

The Wall Street Journal Share to FacebookShare to Twitter (4/27, A2, Mathews, Subscription Publication) reports that under a new rule that is part of the Affordable Care Act, people who purchased their own health plans will get around $426 million in rebates from their insurance companies, while large employers will receive $541 million, and $377 million will go to small businesses.

The Washington Post Share to FacebookShare to Twitter (4/27, Aizenman) reports that the rebates, expected to total "about $1.3 billion by this August" are due to the law's requirement that insurers "spend at least 80 percent of the premiums they collect from customers on health-care claims or quality improvement efforts." Plans that exceed those limits "must refund customers the difference by Aug. 1."

The New York Times Share to FacebookShare to Twitter (4/27, Carrns) "Bucks" blog notes that "almost a third of people who bought their own health insurance last year will get rebates averaging $127." It points out that "the percentage of consumers eligible for rebates varies widely by state, and by insurer within each state. ... In Texas, for instance, 92 percent of individual insurance customers are expected to get rebates," but in Hawaii, no insurers are expected to give rebates.

The Los Angeles Times Share to FacebookShare to Twitter (4/27, Levey) reports that rebates will be "anywhere from a few dollars to more than $150 for some 15 million consumers nationwide." The study found "486 health plans nationwide that will be required to pay rebates, with the largest number in the so-called individual market serving people who do not get health coverage through work. Nearly a third of all consumers in this market, which is widely seen as the most trouble-plagued in the country, will be eligible for a rebate."

The Boston Globe Share to FacebookShare to Twitter (4/27, Borchers) reports, "Massachusetts health insurance companies will pay $45 million in rebates," and "the rate of rebates issued by Massachusetts insurers, especially in the individual and small-group markets, is among the highest in the nation."

The Hartford (CT) Courant Share to FacebookShare to Twitter (4/27, Sturdevant) reports, "Connecticut employers and individuals are due a total of $14.6 million in health-insurance rebates this summer in a first ever payoff resulting from federal health care reform." Yet "most Connecticut residents are not eligible for a rebate because the federal reform rules apply only to fully-insured companies."

Reuters Share to FacebookShare to Twitter (4/27, Morgan) reports that most of the money from the rebates is expected to go to employers as opposed to consumers. As the story notes, the rebates come from premiums paid in 2011 on health plans representing almost 16 million beneficiaries.

Further coverage appears in The Hill Share to FacebookShare to Twitter (4/27, Baker) "healthwatch" blog, NPR Share to FacebookShare to Twitter (4/27, Rovner) "Shots" blog, CQ Share to FacebookShare to Twitter (4/27, Norman, Subscription Publication), the Miami Herald Share to FacebookShare to Twitter (4/27, Dorschner), the Minneapolis-St. Paul (MN) Business Journal Share to FacebookShare to Twitter (4/27, Grayson, Subscription Publication), Bloomberg News Share to FacebookShare to Twitter (4/26, Wayne), Kaiser Health News Share to FacebookShare to Twitter (4/27, Appleby), the Orlando Sentinel Share to FacebookShare to Twitter (4/27, Jameson), and the Fort Worth Star Telegram Share to FacebookShare to Twitter (4/27, Jacob).

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GAO Finds Between 36 And 112 Million US Adults Have Pre-Existing Conditions.
The Hill Share to FacebookShare to Twitter (4/27, Baker) reports that a new report from the Government Accountability Office notes that "somewhere between 36 million and 112 million adults have pre-existing conditions." As the article explains, "President Obama's healthcare law requires insurance companies to cover people with pre-existing conditions," which marked a change from when insurance companies would be able to deny coverage to those with pre-existing conditions or offer plans not covering those conditions. According to the GAO, "hypertension, mental health disorders and diabetes are the most common ailments that could lead insurers to deny coverage."

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More People Are Choosing Health Savings Accounts.
Reuters Share to FacebookShare to Twitter (4/20, Stroud) reports that increasing numbers of people have been choosing to purchase health savings accounts lately. According to Reuters, enrollment in these plans has grown exponentially over the past year, as evidenced by the fact that there were 11.4 million health savings accounts a year ago, up from a little more than one million in March 2005. The story notes that these accounts allow consumers to set aside pre-tax dollars in a special account and use it for out-of-pocket medical expenses that come up when consumers have high-deductible plans.

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Website Provides Consumers With Reliable Estimate Of Area Dental Prices.
The Kaiser Health News Share to FacebookShare to Twitter (4/17, Andrews) "Capsules" blog reported, "Dental coverage often maxes out at just a few thousand dollars a year or less and typically covers only half of the cost of major procedures like crowns and root canals," leaving consumers with hefty out-of-pocket expenses. To provide consumers with "a reliable estimate of prices" in their area, the nonprofit company Fair Health hosts a free, regularly updated website Share to FacebookShare to Twitter that "contains medical Share to FacebookShare to Twitter and dental Share to FacebookShare to Twitter claims from insurers and third-party administrators covering 126 million people. With the database, people can look up out-of-network reimbursement amounts for procedures in their area."

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Survey: Healthcare Costs Rising Less Rapidly.
The Hill Share to FacebookShare to Twitter (4/12, Baker) "Healthwatch" blog reports, "Healthcare costs aren't growing quite as rapidly as they have in the past, according to new research from Buck Consultants." The research "predicts that health insurance costs will rise this year by less than 10 percent - the first time growth has been that low in more than a decade." The results "could undermine Republicans' argument that President Obama's healthcare law is driving costs higher."

"Costs for all types of medical plans are expected to increase by 9.9 percent in 2012, according to a survey by Buck Consultants, a division of Xerox," the Des Moines Register Share to FacebookShare to Twitter (4/12, Belz) reports. "This is the first time since 2001 that the survey has projected cost increases less than 10 percent for any type of plan, so a 9.9 percent increase can almost be seen as a victory." The study "surveyed 129 insurers and administrators across the US covering approximately 109 million people" and "found costs are projected to increase more than a percentage point slower than the year before."

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Blahous Report Says ACA Will Add Up To $530 Billion To Deficit.
Coverage continues today of Medicare trustee Charles Blahous' report charging that the Affordable Care Act will increase the deficit substantially and that CBO's methods do not show this because its accounting rules count some savings twice and because it must assume that Congress actually will follow through on the cost-saving measures in the law. Most of the coverage is devoted to Blahous' argument although nearly all of it gives some coverage to the Administration argument that Blahous is violating standard government accounting rules and specifically to a blog post by Jeanne Lambrew, deputy assistant to the president for health policy. Bloomberg News Share to FacebookShare to Twitter (4/11, Faler) reports that Balhous argues that the Affordable Care Act "will add as much as $530 billion to the US budget deficit over the next decade," and that "Blahous rejected estimates by the Congressional Budget Office that the 2010 law will improve the government's finances," because "lawmakers are unlikely to enforce many of its cost-saving provisions," and "are double-counting savings used to finance expanded coverage to the uninsured that would be needed to shore up Medicare even without the" ACA. The Administration says Blahous "relies on 'new math' that ignores rules used to decide how much legislation probably will cost." Reuters Share to FacebookShare to Twitter (4/11, Crawley, Heavey) offers similar coverage.

The Washington Times Share to FacebookShare to Twitter (4/11, Cunningham) explains that CBO's report "relies on a standard, decades-old accounting method to reach its projections." The article focuses on a debate over the value of CBO and Medicare trust fund accounting rules.

Modern Healthcare Share to FacebookShare to Twitter (4/11, Daly, Subscription Publication) reports, "Blahous' calculations run counter to traditional federal scorekeeping that allowed the nonpartisan Congressional Budget Office to estimate that the law would cut deficits by $143 billion in its first 10 years and would extend the solvency of Medicare by 10 years."

The Hill Share to FacebookShare to Twitter (4/11, Pecquet) reports in its "Healthwatch" blog, "The Obama administration is playing defense" because of the report in which "Blahous revisits the Republican claim that the administration 'double counted' Medicare savings when scoring the budgetary impact of the law." The story explains, "The crux of the issue is whether the same Medicare savings can be used to pay for the health law's subsidies and other benefits while simultaneously strengthening Medicare's long-term fiscal outlook."

CQ Share to FacebookShare to Twitter (4/11, Attias, Subscription Publication) reports, "The Obama administration disputed" Blahous' study and quotes the blog post by Jeanne Lambrew saying, "In another attempt to refight the battles of the past, one former Bush administration official is wrongly claiming that some of the savings in the Affordable Care Act are 'double-counted' and that the law actually increases the deficit," adding, "This claim is false."

Fox News' Special Report (4/10, Baier) reported that White House press secretary Jay Carney "attacked the report saying, 'This is obviously a partisan analysis. It does not comport with the official presentations put forward by the CBO.'"

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CMS Announces 27 New ACOs.
The Washington Post Share to FacebookShare to Twitter (4/11, Kliff) "Wonkblog" reports, "The Center for Medicare Services announced this afternoon that it has signed up 27 health care systems for the Accountable Care Organization program." Jonathan Blum, Medicare's deputy director, said, "For anyone who doubted the ACO program last year, today's results should give them tremendous confidence that physicians do want to participate in this."

Kaiser Health News Share to FacebookShare to Twitter (4/11, Gold, Torres) reports that these "ACOs will serve an estimated 375,000 beneficiaries in 18 states." Meanwhile, "the Centers for Medicare and Medicaid Services is reviewing another 150 applications from additional ACOs."

CQ Share to FacebookShare to Twitter (4/11, Reichard, Subscription Publication) reports, "The agency previously announced contracts with 32 'pioneer' ACOs, which differ from entities in the standard program in that they are willing to incur financial penalties if they do not meet specific standards for controlling spending and improving quality."

The Hill Share to FacebookShare to Twitter (4/11, Pecquet) "Healthwatch" blog reports that Marilyn Tavenner, acting administrator of CMS, said, "We are encouraged by this strong start and confident that by the end of this year, we will have a robust program in place, benefiting millions of seniors and people with disabilities across the country."

Modern Healthcare Share to FacebookShare to Twitter (4/11, Subscription Publication), which also prints Tavenner's above quote, reports, "The new ACOs must adhere to 33 quality measures for care coordination and patient safety, appropriate use of preventive health services, improved care for at-risk populations, and the patient and caregiver experience of care." Government Health IT Share to FacebookShare to Twitter (4/11) also covers the story.

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HHS To Transfer $500 Million To IRS To Implement ACA.
The Hill Share to FacebookShare to Twitter (4/10, Baker) reports in its "Healthwatch" blog, "The Obama administration is quietly diverting roughly $500 million to the IRS to help implement the president's healthcare law." While, "Republican lawmakers have tried to cut off funding to implement the healthcare law," the Administration "has moved aggressively to get important policies in place" and to do so is making use of a Department of Health and Human Services "$1 billion implementation fund," which "HHS plans to drain...by September" with "roughly half" going "to the IRS." That will "leave less money for HHS," but allows the IRS "to make the healthcare law a smaller part of its public budget" so that it has claimed that it will not use requested implementation funds to "pay for any new employees" while it intends to "hire more than 300 new employees next year" to help it implement the ACA.

The Washington Post Share to FacebookShare to Twitter (4/10, Kliff) in "Ezra Klein's Wonkblog" cites the Hill story above in reporting that the move, "is unlikely to score many political points," though "policy wise, it probably makes a lot of sense," because "Treasury is probably on equal footing with Health and Human Services in making the Affordable Care Act work." The IRS will enforce "a tax penalty, as part of the individual mandate" and will "administer subsidies to low and middle-income Americans, to assist with the purchase of health insurance."

According to Fox News' Special Report (4/9, Baier), the President is "quietly diverting a lot of" federal funds "to help enforce his healthcare law." Fox's Mike Emanuel went on to report that the Administration is "in the process of sending more than a half billion dollars to the IRS to implement the healthcare law even as the Supreme Court is deciding its constitutionality, and some House Republicans say that is outrageous." Emanuel noted that the IRS is "responsible for some key aspects of the law, including the controversial individual mandate." White House press secretary Jay Carney: "This about enabling the IRS to provide tax breaks to...individuals to assist them in acquiring health insurance, or, in the case of small businesses, providing health insurance."

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More Employers Tying Health Insurance To Medical Tests In US.
USA Today Share to FacebookShare to Twitter /Kaiser Health News (4/2, Appleby) reports, "Now, more employees are being asked to roll up their sleeves for medical tests - and to exercise, participate in disease-management programs and quit smoking to qualify for hundreds, even thousands of dollars' worth of premium or deductible discounts." Those supporting medical tests "say such plans offer people a financial incentive to make healthier choices and manage chronic conditions such as obesity, high blood pressure and diabetes, which are driving up health care costs in the USA" even though "studies of the effect of such policies on lifestyle changes are inconclusive." However, "advocates for people with chronic health conditions, such as heart disease and diabetes, fear that tying premium costs directly to test results could lead to discrimination."

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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
 
 
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