A majority of large U.S. employers are planning to change their 2011 health care benefit programs in the wake of both health care reform and expected large health care cost increases, according to a new survey by the National Business Group on Health (NBGH).NBGH, Washington, found that 53% of employers taking part in its survey were still planning to make changes to their benefit plans despite uncertainty about how to comply with the Patient Protection and Affordable Care Act (PPACA).

Another 19% are going to scale back changes they had planned to make, while an equal number are making no changes. Remaining respondents were still undecided as they continued to review the final regulations.

Among employers that said they would be making specific changes to their health benefit plans to comply with the new law, 70% said they would remove lifetime dollar limits on overall benefits, while 37% said they would change to annual or lifetime limits on specific benefits.

Also, 26% would remove annual dollar limits on overall benefits, while 13% would remove pre-existing condition exclusions for children.

The survey, covering 72 of the nation’s largest corporations with more than 3.7 million employees, was conducted in May and June.

Health care reform has forced employers to assess their health care benefit strategies and decide whether to comply with the law or lose grandfathered status, said Helen Darling, president of NGBH. But they are still mindful that controlling rising costs is among their highest priorities.

“They have to foot the bill, not the government,” Darling commented.

Surveyed employers estimated their health care benefit costs would rise an average of 8.9% next year, compared with an average increase of 7% this year. To help control those increases, 63% plan to boost the percentage employees contribute to the premium, up from 57% who did so this year, while 46% plan to raise out-of-pocket maximums next year, compared with 36% this year.

Other survey findings:

—61% will offer a consumer-directed health plan (CDHP) in 2011.

—64% will offer is a high-deductible plan combined with a health savings account.

—Among employers offering a CDHP, 20% will move to a full replacement plan in 2011, from 10% this year.

—5% plan to drop retiree health coverage in 2011, while 60% are considering doing so.

—41% offer premium discounts for completing health assessments, while 22% offer premium discounts for participating in stop-smoking programs.

—25% plan to raise the copay or coinsurance for retail pharmacy prescription drug benefits, while 21% plan to do the same for mail-order pharmacy benefits.

A copy of the survey by NBGH can be found here

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The U.S. Department of Health and Human Services has unveiled an innovative new on-line tool that will help consumers take control of their health care by connecting them to new information and resources that will help them access quality, affordable health care coverage. Called for by the Affordable Care Act, HealthCare.gov is the first website to provide consumers with both public and private health coverage options tailored specifically for their needs in a single, easy-to-use tool.

“HealthCare.gov helps consumers take control of their health care and make the choices that are right for them, by putting the power of information at their fingertips,” said HHS Secretary Kathleen Sebelius. “For too long, the insurance market has been confusing and hard to navigate. HealthCare.gov makes it easy for consumers and small businesses to compare health insurance plans in both the public and the private sector and find other important health care information.”

HealthCare.gov is the first central database of health coverage options, combining information about public programs, from Medicare to the new Pre-Existing Conditions Insurance Plan, with information from more than 1,000 private insurance plans. Consumers can receive information about options specific to their life situation and local community.

In addition, the website will be a one-stop-shop for information about the implementation of the Affordable Care Act as well as other health care resources. The website will connect consumers to quality rankings for local health care providers as well as preventive services.

“This website is unlike any government website you have ever seen or used before,” said HHS Chief Technology Officer Todd Park. “It was developed with significant consumer input and is remarkably easy to navigate. This is despite the sheer volume of content it offers consumers: billions of health care choices through the insurance finder and more than 500 pages of new content, all of which is designed to grow with ongoing consumer feedback and as our health care system improves.”

As the health care market transforms, so will HealthCare.gov. In October, 2010, price estimates for health insurance plans will be available online. In the weeks and months ahead, new information on preventing disease and illness and improving the quality of health care for all Americans will also be posted. The website also includes a series of opportunities where users can indicate whether pages were helpful to them and we will continue to seek user feedback to grow and strengthen the site.

“People need to see what choices are offered, what options cost, and how coverage works in practice,” said Karen Pollitz, Deputy Director for Consumer Support, Office of Consumer Information and Insurance Oversight. “Today HealthCare.gov takes an important first step in that direction. In the coming months and years, we will add pricing and plan performance information so that consumers can see and understand and make meaningful choices about their health coverage.”

SOURCE: HHS press release, July 1, 2010.

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Wellness programs come in all shapes and sizes. But regardless of plan design there are five common components that set the successful programs apart from the rest.

At their core, wellness programs require constant monitoring and periodic adjustments. The programs that get mediocre results are the ones that are left to run on autopilot. That’s why it’s crucial to:

1. Know thine enemy. You have to know what’s driving your biggest claim costs on your healthcare plan – both among employees and their dependents.
2. Create realistic expectations. With wellness, what an employer gets will almost always depend on how much it spends, how well it plans and how well it sustains communications with participants and the vendor.
3. Maintain strong communications. The wellness initiatives that achieve the greatest success are those which are communicated aggressively from the get go and are sustained. Repetition is your friend when doing employee education.
4. Integrate wellness with other benefits. Real-life experience has shown that you should consider your employee assistance programs (EAPs) an extension of the wellness program. You should also consider issues like absenteeism, disability and worker’s compensation to be pieces of the wellness puzzle.
5. Practice what you preach. The key to ensuring employee buy-in is for management to lead the program by setting a positive example. If senior managers are unwilling to participate and address their own health issues, don’t expect many employees to take the program seriously.

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Under the Patient Protection and Affordable Care Act (PPACA), both fully-insured and self-funded group plans that provide dependent coverage must provide coverage until age 26 for dependent children regardless of student or marital status. The new requirement is effective for plan years beginning on or after Sept. 23, 2010. This meant that many children, especially those graduating school this summer, would lose eligibility under their plan’s current eligibility definition and would have a gap in coverage before being permitted to re-enroll under the new PPACA definition of eligible dependent. To resolve this issue, many insurance carriers including Humana, Blue Cross Blue Shield, United Healthcare and Wellpoint have all issued statements indicating that they will work with employers to continue coverage for any dependent children currently enrolled in the plan until age 26, regardless of the plan’s next renewal date.

• Humana
• Blue Cross Blue Shield
• UnitedHealthcare
• Wellpoint

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The findings from the 8th Annual Study of Employee Benefits Trends point to the apparent resilience of workplace benefits in this recession, and reveal that, as employers and employees continue to deal with the effects of the economic downturn, they are focused on the long term. Most employers have not reneged on their benefits commitments and employees continue to depend on their workplace benefits for protection and stability.

However, this year’s Study also reveals a benefits landscape that has been altered as a result of the recession experience. Employees must deal with the financial risks that were exposed when their 401(k) balances precipitously declined and their jobs became uncertain. Employers must seek ways to maintain a competitive advantage for their benefits programs in the context of greater focus on employee productivity and cost control.

Despite these challenges, employers and employees appear to be working toward a common goal: Securing financial health & wellness. Through employer-sponsored wellness programs, automatic enrollment features for retirement savings plans, voluntary benefits and protection products, employers are taking steps to help their employees act on their best intentions.

This year’s Study provides new insights that can help employers identify opportunities to realize the full potential of their benefits programs and to maximize the return on their benefits investment.

Key Highlights from the Study.

Employers Say That:

1. The importance of controlling costs has increased and is now their most important
   benefits objective.
2. The focus on employee retention is somewhat reduced, but is still the second most
   important objective despite the weak job market.
3. Employee productivity remains the third most important objective, but the steady
   increase in importance since 2007 continues.
4. Programs that help foster employee health & wellness and financial security are
   effective in improving employee productivity.
5. Active employer engagement in their qualified retirement plans is increasing and is
   necessary to help employees realize adequate income in retirement. There is emerging
   interest in automatic enrollment, automatic escalation and default annuitization in larger
   companies to help employees act on their intentions to save.
6. They have not increased their focus on providing financial advice, guidance and
   retirement education, despite employee interest, perhaps reflecting the economic
   pressures of the last year.
7. Voluntary benefits can cost-effectively enhance a benefits program, yet few are increasing
   the number offered or prioritizing this as a strategy.

Employees Say That They:

1. Intend to delay retirement. A full 59% of employees now plan to work past age 65.
2. Did not cut back on their benefits participation in the workplace, despite tight budgets.
   They value benefits as part of their financial safety net, and the workplace is the primary
   source for obtaining those benefits.
3. Are more satisfied with their benefits than at any time since 2007, before the recession,
   and they accept that they may need to pay more to get more in the new economy.
4. Feel hopeful about their short-term financial outlook, but still have significant concerns
   about their personal financial situations and admit that those concerns affect their
   workplace productivity.
5. View wellness programs as very worthwhile and connect successful participation to
   better health and productivity.
6. Remain very interested in having their employers provide financial advice, guidance and
   retirement education as they seek ways to realize predictable income for retirement.
7. Are more cautious, and have an increasing appetite for investment options that offer
   more safety than the potential of high returns, at least for now.

Full study can be found here: http://www.metlife.com/assets/institutional/services/insights-and-tools/ebts/Employee-Benefits-Trends-Study.pdf

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Here are some of the features of the legislation.

HOW MANY COVERED: 32 million uninsured. Major coverage expansion begins in 2014. When fully phased in, 94 percent of eligible non-elderly Americans would have coverage, compared with 83 percent today.

COST: $938 billion over 10 years, according to the Congressional Budget Office.

INSURANCE MANDATE: Almost everyone is required to be insured or else pay a fine, which takes effect in 2014. There is an exemption for low-income people.

INSURANCE MARKET REFORMS: Starting this year, insurers would be forbidden from placing lifetime dollar limits on policies, from denying coverage to children because of pre-existing conditions, and from canceling policies because someone gets sick. Parents would be able to keep older kids on their coverage up to age 26. A new high-risk pool would offer coverage to uninsured people with medical problems until 2014, when the coverage expansion goes into high gear. Major consumer safeguards would also take effect in 2014. Insurers would be prohibited from denying coverage to people with medical problems or charging them more. Insurers could not charge women more.

MEDICAID: Expands the federal-state Medicaid insurance program for the poor to cover people with incomes up to 133 percent of the federal poverty level, $29,327 a year for a family of four. Childless adults would be covered for the first time, starting in 2014. The federal government would pay 100 percent of costs for covering newly eligible individuals through 2016.

If the Senate approves a package of changes this week, a special deal that would have given Nebraska 100 percent federal financing for newly eligible Medicaid recipients in perpetuity would be eliminated. A different, one-time deal negotiated by Democratic Sen. Mary Landrieu for her state, Louisiana, worth as much as $300 million, remains.

TAXES: To make up for the lost revenue, the bill applies an increased Medicare payroll tax to the investment income and to the wages of individuals making more than $200,000, or married couples above $250,000. The tax on investment income would be 3.8 percent. If the Senate follows through, it would impose a 40 percent tax on high-cost insurance plans above the threshold of $10,200 for individuals and $27,500 for families. The tax would go into effect in 2018.

PRESCRIPTION DRUGS: Gradually closes the “doughnut hole” coverage gap in the Medicare prescription drug benefit that seniors fall into once they have spent $2,830. Seniors who hit the gap this year will receive a $250 rebate. Beginning in 2011, seniors in the gap receive a discount on brand name drugs, initially 50 percent off. When the gap is completely eliminated in 2020, seniors will still be responsible for 25 percent of the cost of their medications until Medicare’s catastrophic coverage kicks in.

EMPLOYER RESPONSIBILITY: Employers are hit with a fee if the government subsidizes their workers’ coverage. The $2,000-per-employee fee would be assessed on the company’s entire work force, minus an allowance. Companies with 50 or fewer workers are exempt from the requirement.

SUBSIDIES: The aid is available on a sliding scale for households making up to four times the federal poverty level, $88,200 for a family of four. Premiums for a family of four making $44,000 would be capped at around 6 percent of income.

HOW YOU CHOOSE YOUR HEALTH INSURANCE: Small businesses, the self-employed and the uninsured could pick a plan offered through new state-based purchasing pools called exchanges, opening for business in 2014. The exchanges would offer the same kind of purchasing power that employees of big companies benefit from. People working for medium-to-large firms would not see major changes. But if they lose their jobs or strike out on their own, they may be eligible for subsidized coverage through the exchange.

GOVERNMENT-RUN PLAN: No government-run insurance plan. People purchasing coverage through the new insurance exchanges would have the option of signing up for national plans overseen by the federal office that manages the health plans available to members of Congress. Those plans would be private, but one would have to be nonprofit.

ABORTION: The bill tries to maintain a strict separation between taxpayer dollars and private premiums that would pay for abortion coverage. No health plan would be required to offer coverage for abortion. In plans that do cover abortion, policyholders would have to pay for it separately, and that money would have to be kept in a separate account from taxpayer money. States could ban abortion coverage in plans offered through the exchange. Exceptions would be made for cases of rape, incest and danger to the life of the mother.

GOP HEALTH CARE SUMMIT IDEAS: Following a bipartisan health care summit last month, Obama announced he was open to incorporating several Republican ideas into his legislation. But two of the principle ones — hiring investigators to pose as patients and search for fraud at hospitals and increasing spending for medical malpractice reform initiatives — did not make it into the legislation. The legislation incorporates only one, an increase in payments to primary care physicians under Medicaid, an idea mentioned by Sen. Charles Grassley, R-Iowa.

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The Equal Employment Opportunity Commission (EEOC) issued an informal letter regarding an employer that required a health risk assessment as a condition of eligibility for reimbursement under the employer’s health reimbursement arrangement (HRA). If an employee did not complete the assessment, the employee was not eligible for reimbursements under the HRA. The Americans with Disabilities Act (ADA) permits a wellness plan to ask disability-related questions only if the plan is voluntary and individuals are not penalized for nonparticipation. The EEOC stated that the assessment would violate the ADA because it asked disability-related questions and penalized individuals for not completing the assessment. The EEOC has not taken a formal stand on this issue, but this informal letter is in line with previous EEOC informal letters prohibiting a plan from basing enrollment in a group health plan on completion of a health risk assessment.

Click here for more information

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Employer and employees have a new resource that can be used to help battle obesity in the workforce. Earlier this year, the Centers for Disease Control and Prevention unveiled LEANworks!, a web site full of free resources for employers to develop wellness programs to address obesity. The site, www.cdc.gov/LEANWorks, includes research reports, case studies, ROI information, and an obesity calculator. It features how -to information about assessing the needs of the workforce, developing an effective program, setting goals, budgeting, and strategies for implementing and promoting the program.

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Achieving comprehensive health reform has emerged as a leading priority of the President and Congress. President Obama has outlined eight principles for health reform, seeking to address not only the 45 million people who lack health insurance, but also rising health care costs and lack of quality. In Congress, a number of comprehensive reform proposals have been announced as the debate proceeds over how to overhaul the health care system.

This interactive side-by-side compares the leading comprehensive reform proposals across a number of key characteristics and plan components. Included in this side-by-side are proposals for moving toward universal coverage that have been put forward by the President and Members of Congress. In an effort to capture the most important proposals, we have included those that have been formally introduced as legislation as well as those that have been offered as draft proposals or as policy options. It will be regularly updated to reflect changes in the proposals and to incorporate major new proposals as they are announced. This side-by-side offers a summary of the major components of these proposals; detailed descriptions of provisions relating to the Medicare and Medicaid programs can be found online.

Click here to access the comparison

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The law was named after Michelle Morse, a college student who suffered from cancer and continued her course load, against the advice of doctors, in order to remain covered by health insurance.

Michelle’s law provides that a group health plan may not terminate a college student’s health coverage simply because the child takes a medically necessary leave of absence from school or changes to part-time status. The leave of absence must:

• Be medically necessary;
• Commence while the child is suffering from a serious illness or injury; and
• Cause the child to lose coverage under the plan.

To take advantage of the extension, the child must have been enrolled in the group health plan on the basis of being a student at a post-secondary educational institution immediately before the first day of the leave. Coverage must extend for one year after the first day of the leave (or, if earlier, the date coverage would otherwise terminate under the plan). The student on leave is entitled to the same benefits as if they had not taken a leave. If coverage changes during the student’s leave, then this new law applies in the same manner as the prior coverage.

Physician’s Certification and Notice

The group health plan must receive written certification by the child’s treating physician stating the child is suffering from a serious illness or injury, and the leave (or change of enrollment) is medically necessary. In addition, when sending any notice describing the plan’s student certification requirements for coverage, the plan also must include a description of the terms for continued coverage under this law.

Michelle’s Law is effective for plan years beginning on or after October 9, 2009.

Learn more at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h2851enr.txt.pdf

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WASHINGTON, D.C.—Premiums for employer-sponsored health insurance rose to $13,375 annually for family coverage this year—with employees on average paying $3,515 and employers paying $9,860, according to the benchmark 2009 Employer Health Benefits Survey released today by the Kaiser Family Foundation and the Health Research & Educational Trust (HRET).

Family premiums rose about 5 percent this year, which is much more than general inflation (which fell 0.7 percent during the same period, mostly due to falling energy prices). Workers wages went up 3.1 percent during the same period. Since 1999, premiums have gone up a total of 131 percent, far more rapidly than workers’ wages (up 38 percent since 1999) or inflation (up 28 percent since 1999). For the past few years, the annual rise in premiums has been more moderate than the double-digit growth experienced earlier this decade.

Read the full press release at: http://www.kff.org/insurance/ehbs091509nr.cfm 
Read the complete survey analysis at: http://ehbs.kff.org/

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While there is no provision to prevent employers from dropping coverage, committee staff members said most employers believe that providing coverage gives them a competitive advantage in attracting and retaining the best workers.

Under the proposal, businesses with fewer than 25 employees and average annual wages of less than $40,000 could receive credits up to 35 percent for tax years 2011 and 2012. Annual contributions to flexible spending accounts would be limited to $2,000 and FSA funds could not be used to buy over-the-counter medications without a prescription.

The Senate Finance Committee is scheduled to start debating the proposal on Sept. 22.

For a copy of the legislation, click here.

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One of the provision of the ARRA provides COBRA premium assistance for employees who are involuntarily terminated from Sept. 1, 2008, to Dec. 31, 2009. Qualified participants pay 35 percent of the COBRA premium, with the remaining 65 percent subsidized by the employer and reimbursed by the federal credit to the employer’s payroll taxes.

“From March 2009 to June 2009, monthly COBRA enrollment rates for Americans eligible for the subsidy averaged 38 percent, up from 19 percent for the period of September 2008 through February 2009,” Hewitt said. Industrial manufacturers experienced an 800 percent increase in COBRA enrollments following enactment of the subsidy, while construction, leisure, and retail businesses experienced a 300 percent increase in enrollments, Hewitt found.

Find out more about the analysis here.

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Those opposed of the bill claim that this type of legislation could not come at a worse time. With the down economy, many employers are struggling just to keep the doors open and this could place a heavier burden on employers. Those in favor of the bill claim that this is exactly the type of legislation needed to increase attendance. It would keep employees from feeling obligated to come to work when ill, and subsequently spread their illness to other employees. They could use their earned sick days to stay home, get well, and prevent other employees from getting ill. The bill is currently in the House of Representatives with no amendments as of yet.

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USERRA also makes major improvements in protecting service member rights and benefits by clarifying the law, improving enforcement mechanisms, and adding Federal Government employees to those employees already eligible to receive Department of Labor assistance in processing claims.

USERRA establishes the cumulative length of time that an individual may be absent from work for military duty and retain reemployment rights up to five years (the previous law provided four years of active duty, plus an additional year if it was for the convenience of the Government). There are important exceptions to the five-year limit, including initial enlistments lasting more than five years, periodic National Guard and Reserve training duty, and involuntary active duty extensions and recalls, especially during a time of national emergency. USERRA clearly establishes that reemployment protection does not depend on the timing, frequency, duration, or nature of an individual’s service as long as the basic eligibility criteria are met.

In addition, USERRA provides protection for disabled veterans, requiring employers to make reasonable efforts to accommodate the disability. Service members convalescing from injuries received during service or training may have up to two years from the date of completion of service to return to their jobs or apply for reemployment.

USERRA provides that returning service-members are reemployed in the job that they would have attained had they not been absent for military service (the long-standing “escalator” principle), with the same seniority, status, and pay, as well as other rights and benefits determined by seniority. USERRA also requires that reasonable efforts (such as training or retraining) be made to enable returning service members to refresh or upgrade their skills to help them qualify for reemployment. The law clearly provides for alternative reemployment positions if the service member cannot qualify for the “escalator” position. USERRA also provides that while an individual is performing military service, he or she is deemed to be on a furlough or leave of absence and is entitled to the non-seniority rights accorded other individuals on non-military leaves of absence.

Health and pension plan coverage for service members is provided for by USERRA. Individuals performing military duty of more than 30 days may elect to continue employer sponsored health care for up to 24 months; however, they may be required to pay up to 102 percent of the full premium. For military service of less than 31 days, health care coverage is provided as if the service member had remained employed. USERRA clarifies pension plan coverage by making clear that all pension plans are protected.

The period an individual has to make application for reemployment or report back to work after military service is based on time spent on military duty. For service of less than 31 days, the service member must return at the beginning of the next regularly scheduled work period on the first full day after release from service, taking into account safe travel home plus an eight-hour rest period. For service of more than 30 days but less than 181 days, the service member must submit an application for reemployment within 14 days of release from service. For service of more than 180 days, an application for reemployment must be submitted within 90 days of release from service.

USERRA also requires that service members provide advance written or verbal notice to their employers for all military duty unless giving notice is impossible, unreasonable, or precluded by military necessity. An employee should provide notice as far in advance as is reasonable under the circumstances. Additionally, service members are able (but are not required) to use accrued vacation or annual leave while performing military duty.

The Department of Labor, through the Veterans’ Employment and Training Service (VETS), provides assistance to all persons having claims under USERRA, including Federal and Postal Service employees.

Answers to Frequently Asked Questions For Reservists Being Called To Active Duty may be viewed at: http://www.dol.gov/ebsa/faqs/faq_911_2.html.

To access a copy of the final rule and poster, visit http://www.dol.gov/vets/programs/userra/poster.htm.

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 The issue facing business owners is that they must pay 65 percent of the COBRA premium and then file for reimbursement through a payroll tax credit.  Employees pay the other 35 percent.  This discounted rate could potentially cause a dramatic increase in COBRA election by former employees.

 To avoid substantial penalties, employers were required to mail out COBRA notices by April 18, 2009 to eligible employees who had been laid off since September 1, 2008.  This new regulation affects most companies with 20 or more employees.

Some companies are worried that the federal requirement could cause cash flow problems because of the up-to-three-month delay for reimbursement.  And cash flow problems could cause some financially strapped companies to lay off more employees, freeze or cut salaries, or eliminate some benefits.

How the new COBRA rules work:

• The federal government will provide a 65 percent subsidy for up to nine months of the COBRA premium retroactive to March 1 for certain terminated employees.
• To be entitled to the subsidy, employees must have been involuntarily terminated between September 1, 2008, and December 31, 2009, and must be eligible for COBRA.
• A special election period exists for individuals involuntarily terminated on or after last September 1 who had not elected COBRA.  They will have 60 more days after receiving the notice to elect coverage, which is retroactive to March 1 if they lost their jobs before then.
• The employer pays the 65 percent on the employee’s behalf and is then reimbursed through a payroll tax credit.  Large companies may be reimbursed either weekly or monthly, but smaller employers must file for the credit with their quarterly payroll taxes.
• The employee must pay 35 percent of COBRA before the employer can request reimbursement of the other 65 percent.  Employers that do not charge the full COBRA premium will not be entitled to reimbursement of 65 percent of the maximum COBRA premium.

 For more information, visit www.irs.gov/pub/irs-drop/n-09-27.pdf or www.dol.gov/ebsa/cobra.html

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The Staff One HR Outsourcing Business Stimulus Program is designed for businesses with fewer than 750 employees. Participants in the program will receive a wide array of HR services that are typically only available to FORTUNE 500 companies.

For additional details on the program, companies can visit www.staffone.com/stimulus. To qualify for the program, companies must contact Staff One prior to April 15, 2009 and become a client by June 1, 2009. Existing clients are not eligible for the program.

To read the full press release, click here.

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