Princeton HR Employee Benefits Blog

Cut Medicare, waste, fraud, or education funding? Where should the Super Committee find $1 trillion?

2011-11-08T10:53:00.000-08:00

Government officials continue to look for corners to cut in the wake to today’s dire debt crisis and now, Washington’s super committee has announced that up to $1 trillion in national spending cuts must be made by 2013. As a result of strong resistance to medical benefit cuts by senior citizen groups like the AARP, along with a resistance by politicians to raise taxes, American children may be positioned to suffer the most from the cuts.

If negotiators cannot reach a budget consensus soon, our nation’s automatic spending cuts could kick in, resulting in as much as a 3.5 billion budget cut for the Department of US Education including 1.3 billion in title 1 funding, according to a study by Federal Funds Information for States. The cuts could force states to decrease spending on institutions of higher education, causing state college students to pay higher tuition as well. Congressman James Jones has called the situation “a generational war,” and notes that those advocating for young people lack the political clout that Medicare does as an organization.

A recent study commissioned by Fight Fraud First made up by AARP and other groups found that a majority of voters want Medicare funding left untouched and found that voters instead believed that the government should cut waste, fraud, and abuse in Medicare as well as Medicaid spending. Social security and Medicare for the elderly together cost more than 1 trillion per year and account for 1/3 of the national budget, but speculators agree that the outlook for an agreement on Medicare cuts is slim. "We know without a shred of doubt that we’re bequeathing a lower living standard to the next generation based on the path we’re on,” said House Budget Committee Chairman Paul Ryan, “The sooner we grapple with this the more likely we are to avert that.”

Report by Melissa CenkerAny opinions expressed within this and all posts are the opinions of the third parties quoted and do not necessarily represent the opinions of Princeton HR Solutions, Melissa Cenker, or Melissa Cenker Consulting

Debate over Mandates in “Essential Benefits Package” Continues

2011-10-26T10:17:00.000-07:00

As the Institute of Medicine continues to struggle to complete the “Essential Benefits Package,” they are now calling on the Department of Health and Human Services (HHS) to seek public input. This week, the HSS began gathering feedback from a wide variety of coalitions and interest groups in order to establish the specific mandates that will be included in the mandatory coverage guidelines under federal healthcare law. Once established, private insurers will be required to follow all included mandates to gain access to federally subsidized insurance exchanges by 2014.

As stated by Dan Daly, executive director of the essential health benefits coalition, the Essential Benefits Package and all mandates within are being established “in order to ensure workers can get the health coverage they need,” but not all parties remain optimistic about the initiative. The debate over what should be included in the package is expected to remain heated throughout the upcoming years, putting interest groups at odds with each other as they each struggle to be heard and the question of what will become of current mandates from individual states remains.

Groups like the End Obesity Action Fund, the National Health Council (which advocates for people with chronic diseases and disabilities), and the Habilitations Benefits coalition have already begun to petition the HSS to include representative mandates. Orrin Hatch, a republican member of the senate finance committee’s subcommittee on health care urged HHS secretary Sebelius to “examine these mandates with care and to understand that these mandates are a lead weight around the necks of families and businesses at a time of economic uncertainty and high unemployment” in a recent statement.

While the HHS has stated that it believes flexibility and affordability should remain paramount, it remains unclear how either will be established. Last week, the IOM issued recommendations involving the methodology for establishing the specific mandates but has not yet issued any specifics. Many expect health insurance premiums to rise until all issues with the Essential Benefits Package are resolved.

Report by Melissa Cenker

Any opinions expressed within this and all posts are the opinions of the third parties quoted and do not necessarily represent the opinions of Princeton HR Solutions, Melissa Cenker, or Melissa Cenker Consulting

Healthcare Premiums Continue to Rise in Era of Increasing Mandates

2011-10-19T09:22:00.000-07:00

“This year, the average premium for a family hit $15,073,” reported Forbes contributor Sally Pipes in her most recent article for the magazine. Pipes, who is also president, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute, wants the public to bear in mind that the new number represents a $1,303, or 9%, increase from that of 2010.

The Kaiser Family Foundation, who is responsible for the research behind the 2011 average, also noted that health insurance rates were up 5% in 2009 and up 3% in 2010. What’s worse? The Pipes article suggests that there really is no relief in sight.

According to a recent study by the National Business Group on health, employers expect premiums to rise 7.2% by 2012, and Kaiser Family Foundation says that we can expect to see health insurance premiums double within the next decade. To offset costs, according to Kaiser, 50% of employers will need to shift greater shares of health insurance costs to employees.

Pipes believes that ObamaCare is to blame for the continuing rise in health benefit costs to both employers and their employees. “ObamaCare drives up the cost of insurance by piling mandates and required coverage benefits onto every single policy,” she notes.

Whether for or against the new healthcare mandates, with premiums on the rise and an ever changing industry, employers will have to continue to do a great deal of homework when it comes to shopping for business health insurance coverage and managing employee benefits.

Report by Melissa Cenker
Any opinions expressed within this and all posts are the opinions of the third parties quoted and do not necessarily represent the opinions of Princeton HR Solutions, Melissa Cenker, or Melissa Cenker Consulting

Medicare Slow to Recognize and Act on Prescription Drug Abuse by Beneficiaries

2011-10-11T20:46:00.000-07:00

According to last week’s New York Times report, Medicare may be “subsidizing drug abuse” by several of its beneficiaries. Investigators from the Government Accountability Office have reported that Medicare has been slow to act on and recognize recent findings that show thousands of Medicare beneficiaries are shopping around for doctors who fill prescriptions for large quantities of painkillers and other narcotics far exceeding what any patient can safely use.

The GAO is recommending that Centers for Medicare and Medicaid Services Administrator Dr. Donald M. Berwick “consider limiting patients who abuse prescription drugs to one prescriber per pharmacy.” The new regulation has been proposed in order to lessen the burden on working tax payers and business owners, many of which are already overburdened by the cost of their own health benefits.

Jonathan D. Blum, deputy administrator of the Centers for Medicare and Medicaid Services responded to the GAO’s request by stating that “greater use of electronic health records and the electronic transmission of prescriptions to drugstores could reduce fraud and abuse by making it easier to keep track of patients’ medication history.” Still, Medicare officials are reluctant to impose the requested regulation due to the fact that it “could jeopardize patients’ access to healthcare. The GAO presented their findings and evidence of abuse to the senate last Tuesday and is awaiting resolution.

Report by Melissa Cenker
Any opinions expressed within this and all posts are the opinions of the third parties quoted and do not necessarily represent the opinions of Princeton HR Solutions, Melissa Cenker, or Melissa Cenker Consulting

Rising Health Care Costs Burdening Families in New Jersey as well as Nationwide

2011-10-07T09:16:00.000-07:00

Findings from a recent study conducted by Rand Corp show that rising health care costs are hitting families much harder than many people realize. According to the research firm, although monthly household income was up $1,910 from 1999 in 2009, the average American family was left with just $95 more per month to spend by the end of the same ten year period. With costs of living on the rise, the discrepancy between household income and net dollars available for spending continues to alarm researchers. “These sobering facts provide further evidence that lowering health care costs is one of the most important challenges of our time,” concluded Rand Corp researchers upon the study’s release.

Despite these alarming findings, health care costs for families and business owners continue to rise in New Jersey, Pennsylvania, and across the country. Another study, conducted by consulting firm Aon Hewitt on families in Houston Texas, found that the average employee in Houston will pay $2,516 for health-insurance premiums next year, up from $2,277 in 2011. The firm also expects that families will see a spike in co-payments and deductible expenses as businesses are forced to share more of the costs of health benefits with employees.

Now more than ever, both large and small business owners need to choose wisely when it comes to health benefits for employees. Finding the most cost-effective quality plan options is important. Consulting a New Jersey benefits consultant can help keep business expenses at a minimum and improve employee retention and quality of life.

Report by Melissa Cenker
Any opinions expressed within this and all posts are the opinions of the third parties quoted and do not necessarily represent the opinions of Princeton HR Solutions, Melissa Cenker, or Melissa Cenker Consulting

New Guidance on W-2 Reporting Requirement

2011-04-08T07:20:00.000-07:00

The IRS published new guidance on the W-2 reporting requirement that sheds much-needed light on this requirement of Health Care Reform, including:

Employers who issue fewer than 250 Forms W-2 for the 2012 tax year are not required to report the cost of coverage on their 2012 W-2s; these employers will not be required to report the cost of coverage until the 2013 tax year.
Employers are not required to issue a Form W-2 to individuals they are not otherwise required to provide a W-2 for, such as a retiree or former employee receiving no compensation.
Employers are not required to report the cost of coverage on any W-2 issued before January 2013.
Detailed information on what coverage is included in the cost of coverage and how to calculate the aggregate cost of coverage.

W-2 Reporting Requirements includes the full details of this new guidance, which can be found under 'Forms' at our website: www.princetonhrsolutions.com.

Health Care Reform - 2010 Changes

2010-09-15T08:01:00.001-07:00

The Patient Protection and Affordable Care Act (PPACA) includes provisions expected to have an impact in 2010. Visit the "Top 5 Things to Know" for Small Employers and explore Healthcare Reform website for complete information. We have provided a brief description of three important changes below:

Extension of Dependent Coverage:
Effective September 23, 2010, all health plans will need to cover dependent children up to age 26. Please see US Department of Health and Human Services Q & A regarding coverage for additional information. Coverage is available to the members' child regardless of their marital status, financial dependence, residency, or school status. It is important to note that "grandfathered" plans can exclude adult children who have access to other employer-based coverage. This exception expires for plan years beginning on or after January 1, 2014. It is also important to note that dependent coverage is only extended to the child, not the child's dependents (i.e. if the 25-year daughter of a covered employee is married, the insurer is only required to cover the daughter, NOT the son-inlaw). Any applicable state extensions still apply (i.e. NJ covers dependent children until age 31)

Small Employer Tax Credit:
If you have up to 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit of up to 35% (up to 25% for non-profits) to offset premiums paid. Please see IRS FAQ on Small Business Health Tax Credit. Starting in 2014, the tax credit goes up to 50% (up to 35% for non-profits) for qualifying businesses.

Early Retiree Reinsurance Program:
This program can benefit employers who contribute toward health benefits for early retirees (age 55 and older, but not yet Medicare eligible) and their spouses, surviving spouses and dependents. Please note that this program does have significant requirements, such as having programs and procedures in place likely to generate cost savings for participants with chronic and high-cost conditions (i.e. disease management programs) and having policies and procedures in place to detect fraud, waste and abuse. Please see ERRP website for additional information/requirements.

This information should be considered a summary and is not considered legal or compliance guidance.

Source:
www.healthcare.gov
www.hhs.gov
www.irs.gov
www.errp.gov

W-2 Reporting Under Health Care Reform

2010-08-31T09:23:00.000-07:00

Beginning with 2011 tax year, health care reform requires employers to report the value of employer-sponsored health care coverage on employee W-2 forms. Employers are not required to provide a specific breakdown of various types of coverage, but must report on aggregate cost.

Please note that this does not affect the employee's gross income and they will not be taxed on the value of this coverage as part of his/her regular earnings.

What's included?
Employers should include the value of the following:

Medical plans (including HRA)
Executive physical benefits
Prescription drug coverage
On-site clinics
Medicare supplemental policies
EAPs (except referral-only programs)
Health Care FSA - employer contributions only
Dental and Vision, unless stand-alone plans (i.e. employees may elect without requirement to also enroll in Medical)

What's not included?

Long Term Care, Accident or Disability Income benefits
Specific disease, indemnity, etc. coverage if not excludable from employee's gross income
Specified illness or disease policies (i.e. cancer policies) where full premium is paid by the employee on an after-tax basis
Hospital (or other) Indemnity insurance policies where the full premium is paid by the employee on an after-tax basis
Archer MSA or HSA contributions of the employee or the employee's spouse
Salary reduction contributions to a Health FSA

Source:
HR Daily Advisor powered by BLR
US Senate; 111th Congress, 2nd Session, H.R. 3590, "The Patient Protection and Affordable Care Act"

Welcome to PHRS Employee Benefits Blog!

2010-08-31T08:46:00.000-07:00

This blog is powered by Princeton HR, an employee benefits and insurance firm specializing in working with individuals and small to mid-sized companies in NJ and PA. We work to provide timely information on benefit issues that matter - check back often for updates!

We welcome your questions/comments!

Notice of Disclaimer: We are not attorneys and cannot provide legal advise. This content is for informational purposes only and is not designed to render legal advice or legal opinion.