Wednesday, March 25, 2009

DOL Posts Cobra Sample Notices

Just a note that the Department of Labor recently posted some updates regarding the new COBRA subsidy provisions (link directly below).

The updates may be helpful for your accounts that administer COBRA themselves. They include the following:

- Model notices

- FAQs for Employers on the COBRA Premium Reduction

- Expanded FAQs for Employees on the COBRA Premium Reduction

- Updated FAQs for Employees on General COBRA Provisions

Tuesday, March 10, 2009


SCHIP Reauthorization Results in Additional Requirements for Group Health Plans

On February 4, 2009, President Obama signed into law the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA). This law extends and expands the state children’s health insurance program (CHIP).

New Disclosure RequirementThe law amends the Internal Revenue Code, ERISA and the PHSA to require group health plan administrators to disclose information about plan benefits to states upon request when a plan participant or beneficiary is covered under Medicaid or CHIP. This information is intended to allow states to determine eligibility, the cost-effectiveness of providing premium assistance for the purchase of coverage under the group health plan, and to provide supplemental benefits. The Department of Health and Human Services (HHS) and the Department of Labor (DOL) are to establish a working group and develop a model coverage coordination disclosure form for plan administrators to complete. States may not request the model coverage coordination disclosure form until the first plan year that begins after the date on which the form is first issued.

New Special Enrollment RequirementsThe law also creates additional special enrollment rights. Group health plans will now be required to permit employees and dependents who are eligible but not enrolled for coverage to enroll upon termination of the employee or dependent’s Medicaid or CHIP coverage or if the employee or dependent become eligible for a premium assistance subsidy under Medicaid or CHIP. In both instances, the employee must request coverage under the plan within 60 days after the termination or determination of subsidy eligibility. These new special enrollment rights are effective April 1, 2009.
New Employer Notification RequirementThere are additional new notification requirements for employers that maintain group health plans in states that provide Medicaid or CHIP assistance in the form of premium assistance subsidies. These employers will be required to provide written notices to their employees, informing them of the potential opportunities for premium assistance in the states in which they reside to help pay for health coverage for employees or dependents. The new law directs HHS to develop national and state-specific model notices by February 4, 2010 to enable employers to comply with the notice requirement. Employers may provide these notices along with other plan materials (for example, eligibility notice, open enrollment materials, or when furnishing the SPD). The notice requirement is effective for plan years beginning after the date on which the model notices are first issued.

Premium AssistanceUnder CHIPRA, the premium assistance available for employer-sponsored insurance can be paid directly to the employer, or the employer can opt-out of receiving payments directly resulting in the state providing premium assistance directly to employees. The amount of premium assistance available is the incremental premium cost difference between coverage for the employee only and coverage for the employee plus the eligible child/children.

Penalties for Non-ComplianceThe law provides for civil penalties of up to $100 per day for failure to comply with the new notice and disclosure requirements.

Friday, March 6, 2009

Helpful Links For Spendulus Package

[Official Guidance] American Recovery and Reinvestment Tax Act of 2009: Conference Report (PDF) 577 pages. COBRA provisions start on page 396. (U.S. House of Representatives)

[Guidance Overview] Immediate Action Needed to Implement Stimulus Act Changes to COBRA Coverage 7 pages; excellent. Excerpt: "[D]ecisions and procedures include . . . . Identifying all potential [assistance-eligible individuals, or 'AEIs') -- employees who were covered by the group health plan whose employment was involuntarily terminated (other than for gross misconduct) beginning September 1, 2008 (and their covered spouses and dependents) -- and their last known addresses; Identify which of these individuals are AEIs currently receiving COBRA coverage and which are entitled to the special enrollment period; Adopting the method when developed by the Secretary of Treasury for permitting 'high-income individuals' to permanently waive the premium subsidy. . . . ."

(Butzel Long) [Guidance Overview] American Recovery and Reinvestment Act of 2009 Affects Group Health Plans, Even If Fewer Than 20 Employees Excerpt: "The Act provides a subsidy for COBRA coverage and imposes a number of requirements on employers, administrators and insurers. This bulletin summarizes the subsidy as well as the enrollment provisions, notice requirements and employer filing requirements established by the Act. . . . The Act's provisions apply to coverage under both the federal COBRA law and any state 'mini-COBRA' laws (i.e., state continuation laws applicable to employers with fewer than 20 employees). "

(Thompson Hine) [Guidance Overview] Stimulus Package Includes 65% COBRA Premium Subsidy Excerpt: "Although the Act omits language from the House bill that would have mandated an extension of COBRA coverage through age 65, it does require employers and other plan sponsors to facilitate this federal subsidy of COBRA premiums. The subsidy will cover 65% of the monthly premium, for a period of up to nine months."

(Spencer Fane) [Guidance Overview] New Federal Laws Affecting Group Health Plans (PDF) 5 pages. Excerpt: "This bulletin provides a summary of two federal laws that will impact group health plans. The American Recovery and Reinvestment Act of 2009 has been passed by the House, and is expected to be passed by the Senate and signed by President Obama no later than Presidents' Day. The Children's Health Insurance Program Reauthorization Act of 2009 was signed into law on February 4, 2009."

(Thompson Hine LLP) [Guidance Overview] H.R. 1 Contains COBRA Provisions Excerpt: "Looks like that huge stimulus package has some COBRA provisions in it, after all. The U.S. House of Representatives, on a largely party line 246-183 vote, approved legislation that includes a provision that would provide a 65% federal COBRA premium subsidy for nine months for employees who are laid off between September 1, 2008, and December 31, 2009. According to Business Insurance, the legislation would, among other things, require employers to locate employees laid off since September 1, 2008, who declined COBRA to tell them they have a new right to opt for the coverage - with the government picking up 65% of the premium."

(; free registration required) Employers Prepare for Surge in COBRA Enrollees Excerpt: "Employers will have to scramble to comply with federal legislation providing a federal subsidy of COBRA health insurance premiums to laid-off employees. Employees who were laid off from Sept. 1, 2008, through Dec. 31, 2009, will be eligible for a 65% federal subsidy of their COBRA premiums under provisions in the massive economic stimulus bill."

(Business Insurance) 'Evidence-Based Medicine': Rationing Care and Hurting Patients (PDF) 16 pages. Excerpt: "At first glance, this concept seems to make sense. Any term with the word 'evidence' automatically confers a sense of scientific authority. Assuming that to be true, the United States Congress and some state legislatures have begun adding 'evidence-based' requirements to health care laws. Several laws even link physician payment for medical services to compliance with EBM in an initiative called 'pay for performance.' Of concern to patients and doctors, the terms 'evidence-based medicine' and 'evidence-based guidelines' are often not defined in these laws, access to individualized care is not preserved, and the integrity of medical decisionmaking has not been protected."

(American Legislative Exchange Council) Assessing the Future Basis of Drug Pricing (PDF) 2 pages. (Milliman)

The real story on Health Care Reform

Charles Krauthammer has offered tremendous insights into what is really happening with Health Care Reform. Do not miss this column as he is dead on accurate with his assessment.
At the very center of our economic near-depression is a credit bubble, a
housing collapse and a systemic failure of the entire banking system. One can
come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies,
insufficient regulation of new and exotic debt instruments, the easy money
policy of Alan Greenspan's Fed, irresponsible bankers pushing (and then
unloading in packaged loan instruments) highly dubious mortgages, greedy
house-flippers, deceitful homebuyers.

The list is long. But the list of causes of the collapse of the
financial system does not include the absence of universal health care, let
alone of computerized medical records. Nor the absence of an industry-killing
cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could
perversely make the case that, if anything, the proliferation of overeducated,
Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque
mathematical models and debt instruments helped get us into this credit
catastrophe in the first place.

He is one of the few syndicated columnists worth reading and he too has discovered the mischief in Obama's health care plan and he knows where all this is heading.

I have always enjoyed The Hunt For Red October. Remember the scene where the admiral (played by Fred Thompson) asks Jack Ryan (Alec Baldwin, a choice Tom Clancy undoubtedly had no input on selecting) what the Russian sub commanders plan is? "The average Russian doesn't take a shit without a plan and a senior commander especially does not act rashly." Well neither does OBAMA. He has a plan. It is Tom Daschle's plan as I wrote about previously.

I am incredulous people can actually view yesterday's health care summit as an open forum on reform. Now in coming weeks when people object to the coming proposals they will be vilified as obstructionists, kulaks( you know the American 21st century version that earns more than $250K) or enemies of the revolution out of touch with the common working people. Well down here in Texas we are common people Mr President and we speak plainly without a teleprompter and I say to you now don't piss down my back and tell me its raining.

Wednesday, March 4, 2009

Just Saying...

Our Congress has begun to set a new direction for the U.S. economy. According to the Wall Street Journal, (Feb. 26, 2009, page A12), to cover all this planned centralization of power into Washington, D.C., would require taxing every “dime” over $75,000 of all 2006 wage earners, using the most recent year that complete data is available. That amount would barely cover the $4 trillion. Do you think the promises are worth the cost?