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Report to Congress on the Impact on Premiums for Individuals & Families with Employer-Sponsored Health Insurance

The “Department of Defense and Full-Year Continuing Appropriations Act, 2011” required this report to Congress on the impact of sections 2701 through 2703 of the Public Health Service (PHS) Act, as amended by the Affordable Care Act (ACA) on the premiums paid by individuals and families with employer-sponsored health insurance. Specifically, the Chief Actuary of the Centers for Medicare & Medicaid Services (CMS) is to provide an estimate of the number of individuals and families who will experience a premium increase and the number who will see a decrease as a result of these three provisions.

Section 2701 of PHS Act is titled “Fair Health Insurance Premiums” and requires adjusted community rating for plan years beginning on or after January 1, 2014. Specifically, premium rates in the individual and small group market charged for non-grandfathered health insurance coverage may only be varied on the basis of the following four characteristics:

• Individual or family enrollment.
• Geographic area – premium rates can vary by the area of the country.
• Age – premium rates can be higher for an older applicant than that for a younger applicant, but the ratio of premiums cannot exceed 3:1 for adults.
• Tobacco use – premium rates can be higher for smokers, but the ratio cannot exceed 1.5:1.

Section 2702 of the PHS Act requires the guaranteed issuance of health insurance coverage in the individual and group market subject to specified exceptions. This means that insurers that offer coverage in the individual or group market generally must accept all applicants for that coverage in that market. Under section 2703 of the PHS Act, group and individual health insurance coverage
must be guaranteed renewable at the option of the plan sponsor or individual, subject to specified exceptions. These three sections do not apply to grandfathered health insurance coverage.

Read the full report here.

Contact Steven Cosby with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

Form W-2 Reporting of Employer-Sponsored Health Coverage

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan. Reporting the cost of health care coverage on the Form W-2 does not mean that the coverage is taxable. The value of the employer’s excludable contribution to health coverage continues to be excludable from an employee’s income, and it is not taxable.

This reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage.

Read the full report here.

Contact Steven Cosby with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

Form W-2 Reporting of Employer-Sponsored Health Coverage

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan. Reporting the cost of health care coverage on the Form W-2 does not mean that the coverage is taxable. The value of the employer’s excludable contribution to health coverage continues to be excludable from an employee’s income, and it is not taxable.

This reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage.

Read the full report here.

Contact Steven Cosby with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

The Cost-Effectiveness of Using Financial Incentives to Improve Provider Quality: A Framework and Application

Published in Health Economics, 14 Aug 2013

Despite growing adoption of pay-for-performance (P4P) programs in health care, there is remarkably little evidence on the cost-effectiveness of such schemes. We review the limited number of previous studies and critique the frameworks adopted and the narrow range of costs and outcomes considered, before proposing a new more comprehensive framework, which we apply to the first P4P scheme introduced for hospitals in England.

We emphasize that evaluations of cost-effectiveness need to consider who the residual claimant is on any cost savings, the possibility of positive and negative spillovers, and whether performance improvement is a transitory or investment activity.

Our application to the Advancing Quality initiative demonstrates that the incentive payments represented less than half of the £13m total programme costs. By generating approximately 5200 quality-adjusted life years and £4.4m of savings in reduced length of stay, we find that the program was a cost-effective use of resources in its first 18 months.

Read the full report here.

Contact Steven Cosby with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

More Employers Contributing to HSAs, HRAs

Workers with health savings accounts and health reimbursement accounts are getting a little help from their employers.

So much, in fact, that the percentage of employers contributing to their employees’ health accounts reached its highest level in years, according to the Employee Benefit Research Institute.

Nearly three-quarters (71 percent) of workers with a HSA or an HRA reported that their employers contributed to the account in 2013, the highest level since EBRI began surveying health account holders in 2005.

That, and other findings about health accounts, comes from the latest annual EBRI/Greenwald & Associates Consumer Engagement in Health Care Survey.

Read the full report here.

Contact Steven Cosby with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.