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Pension Guarantee Benefit Corporations and Cobra Benefits

Pension Guarantee Benefit Corporations and Cobra Benefits

  • The American Recovery and Reinvestment Act extends COBRA periods for PBGC recipients if the COBRA-qualifying event is a involuntary termination or a reduction in hours
  • The COBRA benefit period will be for the employee’s life. Plus, surviving dependents will have an additional 24 months.
  • The Cobra period ends once you are Medicare eligible

Questions can be directed to the Federal Department of Labor and/or www.pbgc.gov

 

FSA vs. HSA

What is an FSA?

 

  • Used to pay for medical expenses not paid for by insurance for example this deductibles, copayments, and coinsurance
  • Can also be used for qualified medical expense, such as dental and vision expenses and over the counter drugs
  • “Use it or lose it”  money must be spent by the end of the year or the money is lost

 

Healthcare Reform Impact on FSAs

  • Beginning in January 2011 over the counter drugs will require a prescription in order to be FSA eligible such as Advil
  • Beginning in January 2013 a new maximum dollars allowed into account beginning in 2013 of $2500

 

What is an HSA?

  • Must also be enrolled in a high deductible health plan
  • Unlike a FSA the funds roll over year to year if not spent.
  • Account is owned by the individual
  • may be used for any qualified medical expense.

 

Healthcare reform impacts on HSAs

  • Beginning in January 2011 – over the counter drugs will require a prescription in order to be FSA eligible such as Advil
  • Beginning in 2011, non qualified expenses will have a higher tax penalty. In 2011 the penalty moves from 10% to 20%  

Questions From Our Readers

Q: I am a healthy self-employed 48 year old that has had no health insurance for the past 7 years. I had been considering catastrophic insurance before the health insurance reform passed. I will probably qualify for subsidy under the new plan, but I’m wondering if it would penalize me or affect my qualification by already having some insurance? Also, is it possible to determine if I will qualify for a subsidy and to estimate what my cost for health insurance will be under the mandate?

 

A: Great question.  The answer is no.  By getting insurance today, even if only catastrophic, you do not impact any benefits you will receive in 2014 when the insurance exchanges kick in and the subsidies become available.

The subsidies will be based on your income levels as a percentage of the poverty level at the time.   It will be a sliding scale with eligibility for a subsidy decreasing as you get to 400% of the poverty level.   You can go to www.healthcare.gov to see where you fall on the income ladder.  The costs are not out yet but stay tuned.

 

 

Q: Hi Andrew. My husband and I never miss you on doctor radio on Thursdays. My son, who has a few medical problems, has an insurance plan in our state, but he recently moved to across the country. Is there a comparable plan or pool for people with pre-existing conditions in every state? An insurance broker there quoted him a plan for about $12000 per year with a high deductible. Can he keep his current insurance if he still owns property here? Or is he just out of luck?

 

A: He will have to go online to find out if his current state has a high-risk pool.    The Department of Health will have the rules.   That being said, most high risk pools are for those who cannot get insurance on their own.

Keeping the current insurance will be tough if he is not a legal resident of the state.   So if he is really moved, and it’s not for school, he will need to find new health insurance.   Did he move for a job?  If so, do they offer insurance?   While this problem goes away in 2014, it remains a big issue for many Americans who want to move to a new state.   Thinking about health insurance is usually not something people consider when making such a big decision.  Have him call into the show and I will talk to him.  His options are somewhat limited.  I wish I had a better answer.

Thanks for listening.   We are here to help.

 

 

Q: Right now, I have health insurance through my employer. I was wondering if I change employers, can their insurance company deny me coverage because I have a pre-existing condition?

 

A: Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), you are entitled to certain protections when you change jobs and enroll in your new employers health insurance plan.  First, I want to point out that some states have additional protections (above and beyond the Federal HIPAA rules) so you should check with your state department of health website or the National Association of Insurance Commissioners at www.naic.org.

First, if you have coverage now and you have not broken your coverage for at least 63 days, your employer must enroll you in their group health plan.  The below information applies when you have not had insurance with your previous employer for at least 63 days or are just starting work again after being without a job (and health insurance in a group plan).

In general, if the new employer’s health plan provides coverage to its employees but denies benefits to you because of your preexisting condition, then HIPPA applies.   Under HIPAA, your employer can only look back 6 months for a condition that was present before you enrolled in the insurance plan.  If you have not sought treatment for the preexisting condition in the past 6 months, then your employer cannot deny you coverage.    If you have sought treatment in the past 6 months, then the employer can (at their choice) hold back on the coverage for that condition only – all other illnesses would be covered.  The good news here is that if you have had treatment in the past 6 months, the exclusion period for the condition is 12 months.  Meaning, after 12 months, you will be covered.  Keep in mind, many large employers may not impose any waiting period but they have a right to do so if they apply the policy to all employees.

In summary, you are good to go and should not worry about your new job.  Thanks for sending in this email – I will read it on the show tomorrow as I think its important information to share with others.

 

 

Q: Two years ago my adult son had a policy that was voided when he moved from one county to another in our state due to non-payment of one premium (the bill was not forwarded to the new address). He has been without insurance since. He is unemployed and both therapist and psychiatrist told him to get on disability and Medicaid due to his medical diagnoses and need for heavy medications. He has been denied both after applying. I’m going broke paying his medical bills. I have called other insurance companies and they won’t cover his conditions. The state plan is highly expensive. What now?

 

A: Yes, there is hope.  Under healthcare reform, individuals who have been denied health insurance because of a pre-existing condition and have been without insurance 6 months can apply to either their state’s high risk pool or the federal high risk pool if the state does not have a program.   In your state, the program is run by the U.S. Department of Health and Human Services.  You can go online and apply at healthcare.gov

The rates are market based for a healthy individual and run about $365 a month for the insurance and the plan has co-pays and deductibles.  This is going to be your best option.  There are no subsidies for the premiums beyond the rates being established by the high risk pool.  True relief will not come until 2014, but this is a very good start for people like your son.

Go to www.healthcare.gov and select your state.  They will give you all the information needed for your son to apply.  Good Luck!

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A Call for Action

A federal judge today decided to allow a legal case against the healthcare reform law to proceed in the courts. By not agreeing to dismiss the case the judge, Henry Hudson of federal district court, has basically said Congress exceeded its authority when passing the healthcare reform law’s individual mandate. This mandate requires all Americans to carry healthcare insurance. I am not really interested in the politics behind the decision but it is worth mentioning Judge Hudson was appointed by President George W. Bush.

 

Here is what is important. Like it or not, we will never be able to make sure all Americans have health insurance and its associated protections unless everyone is in the system paying premiums. The old, the young, the healthy, and the sick. Everyone has to participate. Yes, it is a tax. Yes, it allows the government to tell us we all have to do something we may not want to do. It is the only way to make sure the system is in balance. Healthcare represents 16% to 17% of our economy. It is far too big, expensive and complex to propose simple and easy fixes. It requires radical change. Change that says we all have to pay into the system for the good of society. Yes it is hard and difficult to implement but we cannot back away from our responsibility to help those who need access to healthcare and simply cannot afford insurance (or seeing their doctors).

 

After doing my radio show each week with Allison Vogel and Matt Penziner for 2 years, listening to good and hard working Americans suffer, I am no longer willing simply say “sorry – that’s how it is” – we can do better and we must. Many will ask, what can I do? You can continue to make sure you vote for those who support and supported healthcare reform this coming November. Send a message that the status quo will no longer do. As I have said before, healthcare is not political. I am not a liberal although many will accuse me of being one. I am a believer in good healthcare and access for all Americans. To me it is about sensible solutions to a very big and complex problem. We have a choice. Make it known.

 

This Week’s Headlines

This week, there have been numerous articles that discuss the Health Care bill, how it will affect certain groups, and how people perceive it.  Here are a few of those articles and the key points they address.

 

Towers Watson Study – Employers not dumping healthcare coverage for employees

· 661 large employers survey

· 94% believe health care reform will increase costs, but most expect to continue offering subsidized benefits to workers

· 80%  plan to pass the increases on to employees

· 74% percent anticipate reducing health benefits and programs.

· Higher  insurance co-payment or deductible hikes or more high-deductible plans,

· Nation survey spanned several industries and involved companies with a median size of 5,600 employees

· Survey found employers plan to continue offering health promotion and wellness programs

· 43 % of employers offering retiree benefits expect to reduce or eliminate them.

· 96% of respondents plan to reduce costs

· Healthcare Connect Key Editorial Point: costs were going up before reform

 

 

NY TIMES

Study points to Health Law’s Penalties

· By Mercer (3,000 employers surveyed)

· If a company offers coverage but requires any full-time employees to pay premiums more than 9.5 percent of their household income, the coverage is deemed unaffordable = employer penalty

· 1/3 of employers had some workers for whom coverage might be “unaffordable”

· Employers with fewer than 50 employees are exempt

· Employers rarely have access to information on their employees’ household income, which may include the earnings of a spouse or children, interest from savings accounts and dividend income from stocks and mutual funds

· If an employer’s health plans is deemed unaffordable – employee may qualify for a federal tax credit/subsidy to buy coverage in the exchanges. To claim credit – employee discloses income information to the exchange. exchange notifies employers if any of their workers qualify for subsidies.

· Employers offering unaffordable coverage – subject to a penalty of $3,000 a year for each full-time employee who gets government assistance to buy insurance in an exchange. The max penalty is $2,000 times the total number of full time employees in excess of 30

· Retailers and restaurant with large numbers of low-wage workers may be most affected

· Cost of coverage for an employee alone or the cost of family coverage, which is usually higher. The government plans to issue regulations to explain what happens when a worker can afford individual but not family coverage (Rules not defined)

· To avoid the penalty for unaffordable coverage, employers could respond in several ways.

1. Increase their contributions to premiums

2. Reduce the workers’ share of premiums but recoup the money in other ways

3. Increasing co-payments or deductibles

4. They could offer lower-cost health plans, with less generous coverage

 

KHN – Kaiser Health News

Health Law’s “Grandfather” clause could deprive consumers of key benefits

· “Grandfathered” health plans exempt from several consumers protections, including a prohibition on charging co-payments, cost-sharing for certain preventative health services

· Congress included the provisions to give employers and insurers time to transition to the new la

· Plans that give up their grandfather status must abide by all consumer protections in the new law

· law does not give a date when the status expires

· Grandfather plans subject to some consumer protection

A. Dependant coverage for children until age 26

B. A ban on pre-existing condition exclusions for children this year and everyone in 2014

C. A prohibition on lifetime insurance limits

D. Grandfathered health plans will be blocked from retroactively cancelling coverage after a policy holder gets sick

· Grandfathered plans exempt from some consumer protections

A. Including health plans cover certain treatments associated with clinical trials

B. Limits annual out-of-pocket cost. In addition, grandfathered plans won’t have to meet new rules limiting how much premiums can vary based on age and tobacco use.


USA TODAY


· SCHIP – Children’s Health Insurance

· $10 B Available to states through 2013

· Requires state funds

· Less than 50% of states have accessed the funds

· 15 states scaled back existing programs by raising premiums/increasing waiting periods/complicating the sign up process



THE HILL

Report: Healthcare law tax credits encourage small businesses to stay small, not hire

· National Center for Policy Analysis shows that tax credits in the new healthcare law could negatively impact small-business hiring decisions.

· New law provides a 50 % tax credit to companies offering health coverage that have fewer than 10 workers who, on average earn $25,000 a year. The tax credit is reduced as more employees are added to the payroll

· Reduction in tax relief to be a cost concern for companies looking to hire additional workers

· Business Owners who decide to hire an extra worker look at the worker’s salary, and the cost of losing the tax credit

· CBO – the study states that the credit reached its optimal point at 13 workers, with relief peaking at $36,400 for qualifying business

· Tax credits are available to businesses until 2016, 2 years after the healthcare exchanges are up and running.


BOSTON.COM

Insurers may slash rates to hospitals – National trend to follow

· Massachusetts health insurers say they want to freeze or slash payments to some hospitals and large physicians groups this year.

· Insurers believe they have widespread backing from politicians, regulators, and employers to aggressively push back against large price increases, even if it means some unhappy providers drop out of insurers’ networks

· Blue Cross Blue Shield of Mass. the state’s largest insurer, this month sent letters to hospitals and large physician groups putting them on alert

· Contract negotiations between health insurers and hospitals always have been tense and long, and often disappointing for those providers with little market clout. But hospitals and doctors groups with top name brands, large numbers of patients, or geographical dominance have been able to substantially raise their prices, sometimes with the backing of employer

· Blue Cross executives said their negotiating strategy will depend on a hospital’s situation

NY TIMES –

Young Americans Big Gains

· 1/3 of the estimated 45 Million Americans without insurance are young adults 19-29 (13.7M)

· This group will gain most when law goes into effect in 2014 according to The Common Wealth Fund (private research foundation)

· Either through Medicaid/Exchanges/Staying Parents policies

· 2014

A. 7.1 M <133% of poverty level – MCAID

B. 5.6 M Through exchanges (w/subsidies)

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Since When is Fixing a Problem a Liberal Cause?

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This was a very big week for health care in this country. As we all know by now, President Obama signed the Senate Finance Committee Bill into law. The reconciliation process is underway and within a few weeks, this country will be taking a big step forward in transforming our nation’s health care delivery system. I have been writing my blog for quite some time on the importance of health care reform and have always tried to explain why health care reform is so important. I have never been shy in expressing my view that reforming the current system is not only good for the country, but the best way to prevent a total collapse of the health care in system general.

Over the next few weeks and months, I will continue to explain how health care reform is going to impact you, the American consumer, insurers, hospitals, doctors, pharmaceutical companies and device manufacturers. Everyone one will see changes down the road. However, today is about making something very clear: I am not a liberal. Why is it that when someone sees a problem, tries to explain it, and offers a suitable solution, he or she is considered a liberal? To me, health care reform is not about being a conservative or a liberal. It is about fixing something that is broken in our country.

I run a very large physician group for NYU Langone Medical Center in New York City. I am the son of a retired physician and I host a radio show where I have the unpaid pleasure each and every week of taking calls from listeners and explaining how the current system works to help solve their problems. Whether people are stuck with health insurance problems, doctor/hospital bills they cannot pay, or something else, the radio show attempts to provide a path to solving the problem. Sadly, sometimes, there are problems that simply cannot be solved, such as helping someone find access to health insurance that they can afford.

After posting one of my more recent blogs, I was criticized for being part of the problem simply because I work for a hospital system. The fact is, I was merely trying to explain to people what a $20 aspirin is all about. I did not say it made sense. I did not say we should charge $20 for the aspirin. I even offered a solution to how it can work better. Yet I received many negative comments. All I was trying to do is explain how it works and clarify some really bad journalism I saw on the television networks. Last Sunday, during an interview with Jenna Wolfe on the Today Show, I had the privilege of explaining what to expect in the short term with the pending passage of health care reform. Later that day, there was a conservative blog posting stating I am radical Huffington Post Liberal.

Plain and simple, it is just not true. Our health care system is broken. There is no perfect legislation that could ever solve all the problems we have today and make everyone happy at the same time. This legislation is as good as it can get, for now. It is far from perfect and has plenty in it for everyone to hate. Like any new program, it will be reviewed and amended over time.

For me, health care reform has always been about protecting everyone, myself included, from a system that was failing. Sure, there are 30 million uninsured Americans (maybe 40 million, who really knows the number), but all of us are vulnerable. One job loss or one health calamity away from a potentially devastating financial crisis, we want to protect ourselves. Fearing a lack of health insurance does not make someone a liberal. It makes them practical. I have met many practical liberals and an equal number of practical conservatives. In the end, we simply have different views on various problems. Who decided reforming a dysfunctional system is a liberal cause? I have spoken to many conservatives on my radio show who have lost their jobs and cannot get health care insurance. They are still conservative but want health care insurance. They believe in reform but still vote republican. I think the point I am trying to make is whatever ones party affiliation; let us all try to see the good that is in the health care reform bill.

I will continue to blog about what works and what does not work (the good and the bad). I will be doing this from my various personal and professional perspectives as someone living and working within the health care system. People are always welcome to disagree with my perspective and I welcome the opportunity to speak with them on my radio show each Thursday from 12-2 pm (est). A Sirius/XM satellite radio account is not needed. Call 877-698-3627. Just try to understand what I am saying. If I am wrong, so be it, it is certainly not the first time. But one thing I can tell you for sure, I am not liberal and I am not conservative. I am happy in my place right down the middle.

Paying doctors Less is not always more

I have had heard over and over again that doctors make too much money and one of the best ways to reduce costs in the healthcare system is to cut their reimbursements.  Let me tell you why that is not the right answer.  We live in a country where we want and feel entitled to the best healthcare when we need it most – at times of sickness.  It is our physicians that we rely on to heal and protect us when we are most vulnerable.  I for one want to make sure we have the best and brightest individuals working in the most noble of professions.  Doctors study for many years and invest tremendous sums of money into their training and careers.  Most physicians end up with over $300,000 in educational debt by the time they complete medical school.  This is even more than the cost of a very nice house in most parts of the country.  Further, given the amount of time it takes for physicians to finish school and their training, many do not start making a living until they reach their mid-thirties.  It can take a very long time to pay that debt back.

It takes a very special person to invest that amount of time and money in their education to take care of us, perfect strangers.  But the dedication does not end there.  My father is a physician and I saw first hand how hard he worked to provide for his family.  He often worked 7 days a week.  I would go to the hospital with him on the weekends when he would check on his patients in the hospital.  I was at the dinner table when he returned the phones calls of sick patients after he got home from a full day of work.  He never questioned his role or responsibility in taking care of his patients.  Can we put a price tag on that amount of work?

There are certainly cases of extreme compensation in this country.  It is not limited to physicians.  Just think of our current banking system.  These extreme cases are distasteful.  There is no question.  But in medicine, these cases are the exception to the rule.  It is easy to feel uneasy when we hear or see people taking advantage of the system.  Ordering tests that may not be needed solely to generate additional income.  Yes, this happens and it’s terrible when it does.  Just remember, these situations are the exception, not the rule.  Most physicians spend endless hours being available to us.  We need to make sure we preserve as best we can the existing system so we can ensure they are there for us in the future.

I spoke to a group of physicians in training this morning on the future on healthcare in this country.  I assured them there would be changes.  I also assured them that Medicine remains one of the most noble professions.  I also told them they have a responsibility to participate in the reform process and contribute to the process and conversation to reduce waste and enhance efficiency in the system.  The process is just beginning and it will take years to changes.  Let’s just hope we continue to attract the best individuals to the profession.

FAQ

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