On June 19th the Department of Labor released final regs that offer new options for associations to sponsor health plans for their members. There’s no clear picture yet of what will emerge out of the new “Association Health Plan” (AHP) regs and how the new regs will impact health coverage options for small businesses. Here are a few of the highlights from what we know so far about the status and the market implications of the new AHP regs:
- Association plans will be treated as large employer plans. This frees them from some of the ACA provisions (i.e. Essential Health Benefits or EHB’s) that apply to small group and individual plans. AHP’s are still required to comply with the ACA and ERISA rules that apply to large employer plans (e.g. ACA – deductible/out of pocket, preventive care, annual and lifetime limits, minimum actuarial value, etc; ERISA – Cobra). And, fully insured plans must also comply with state mandated rules that apply.
- A major piece of the new AHP regs is that Individual states are maintaining their existing authority (as established under ERISA) and will continue to regulate AHPs as they currently do. This is expected to make multiple state AHP’s difficult to establish. AHPs will have to comply with the rules in the state where the employee is located regardless of where the policy originates.
- In general, states are being very deliberate in reviewing the new regs and appear to be slow-walking how they will respond to and assimilate these recent changes. Adding to the crawl is the fact that twelve (12) states have responded by filing suit and legally challenging the law.
- Also, from what we hear, there hasn’t been much reaction, interest or enthusiasm to jump in on the part of the established insurance carriers.
We’ll continue to monitor and report back with any significant developments. For those interested in peeling back the onion on the new regs, healthcare attorney Larry Grudzien has an informative webinar posted on his website that does a good job of diving into the details.
(Note: Yesterday in Part 1 we highlighted Gawande’s view of the three big systemic problems with healthcare. Today in Part 2 we’ll summarize his vision for the ABJ-HCE.)
Last week Amazon/Berkshire/JP Morgan Chase announced the appointment of renowned author, surgeon, and researcher Atul Gawande to head up their ambitious new healthcare endeavor (still unnamed, we’ll refer to it as ABJ-HCE for now). In a long form interview at the Aspen Ideas Festival Gawande expounded on his view of the problem facing the U.S. healthcare system and his thoughts on what the ABJ-HCE can do to make the whole system work better.
(So, Atul, what’s really up with your new gig dude?)
Here are few of Gawande’s thoughts on what he’s been charged to do, some of the resources he has to work with, and then his big picture leap.
First, in separate conversations with each, Messers Bezos, Buffett, and Dimon were very clear and very consistent about the three things they want Gawande to accomplish:
- Improve Patient Outcomes. Improve Patient Satisfaction. And, Improve Cost Efficiency.
- Create Scalable Models That Can Benefit All. (“what they discover has to be open to everybody”)
- Gear It to a Long-Term Horizon (He went on to say “part of our problem in healthcare is short-term ism”.)
On the resources he has to work with:
- “Resources won’t be a problem. Human behavior will be. Achieving scale will be.”
- ABJ-HCE will be an independent non-profit entity. No money will go back to Amazon, Berkshire, or JP. He reiterated that the only goal will be to improve, scale, and do it for the long haul.
- 1.2 million employees (plus dependents) representing a broad spectrum of people (fulfillment centers (Amazon), traditional and established industries (Berkshire), financial services (JP), geographically dispersed (many locations across the country)
- Interestingly, he mentioned that most of the people ABJ-HCE will be serving fall into the gap between Medicare and Medicaid. While these folks are not covered by either, Gawande said they are the ones paying the taxes to enable and that Medicaid is better coverage – no copays , no deductibles, no premium — than the ABJ-HCE employees could ever get.
So, netting it all out — it sounds like he has a boatload of financial resources, a critical mass of covered lives, a cross section of people that are geographically dispersed, under a not-for-profit operating mode and a long-term horizon.
And, he must deliver better outcomes, greater patient satisfaction, significantly reduce financial waste in the system, create scalable new models for better healthcare delivery (right care, right time, right way, right cost) and can then be shared with all.
In a future post, we’ll summarize the potpourri of other interesting and compelling Gawande related thoughts including the what, the why, and the how (with the help of changes in public policy) we get to a “consistent system where every human being has a regular source of care for most of their healthcare needs”.
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- Tom Barrett
- June 27, 2018
- cost, costs, coverage, employees, employers, federal, health plans, healthcare, insurance, medical, medicare, Obamacare, trends
- 0 Comments
The Centers for Medicare and Medicaid (CMS) recently announced that employers in the small group market that are currently still enrolled in Transitional Relief Plans (also known alternatively as Keep Your Plan, Grandmothered Plan, Pre-ACA Plan, etc.,) may keep their existing policies and plans for another year.
CMS stipulates that ultimately granting the extension is left to the discretion of state regulators and to the respective participating insurance carriers. Most — if not all – states and carriers are expected to grant the extensions and allow employers to keep the Transitional Relief Plans in place for another year.
The CMS announcement also noted that the Transitional Relief Plans will not be considered out of compliance.
This extension, first granted in 2014 and granted every year since, runs through December 31, 2019.
We’ll be following this closely with the insurance carriers and will keep all of our clients who currently have Transitional Relief Plans informed.
For more info click on the link below:
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- Tom Barrett
- April 20, 2018
- ACA, Centers for Medicare & Medicaid Services, CMS, coverage, deadline, employers, federal, healthcare, healthcare reform, insurance, Obamacare, ruling, states, Transitional Relief
- 0 Comments
In a CMS press release the Trump Administration announced yesterday, as expected, that beginning in 2019 individual states will have more control and greater flexibility in regulating the individual health insurance market and the Obamacare Marketplace (aka the Exchange). In a summary of the “final 2019 Payment Notice Rule” CMS highlighted provisions that were intended to increase flexibility, improve affordability, and decrease administrative burdens.
It’s likely that changes made at the individual state level will ultimately have some impact either directly or indirectly on employer sponsored health coverage, particularly the small group market. We will be monitoring this very closely for our clients and will report back, especially as we get closer to 2019 and more information becomes available.
In the meantime, here’s a sampling of the headlines and links to the respective articles following yesterday’s announcement by CMS:
Here’s a link to the CMS press release:
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- Tom Barrett
- April 10, 2018
- ACA, affordable care act, cost, costs, coverage, employees, employers, exchange, federal, health plans, healthcare, healthcare reform, insurance, mandate, medical, Obamacare, states
- 0 Comments