From The Staff

Employer-Sponsored Family Health Premiums Rise 3 Percent In 2014


September 10th, 2014

Average annual premiums for employer-sponsored family health coverage reached $16,834 this year, up 3 percent from last year, continuing a recent trend of modest increases, according to the Kaiser Family Foundation (KFF)/Health Research & Educational Trust (HRET) 2014 Employer Health Benefits Survey released today. Workers on average pay $4,823 annually toward the cost of family coverage this year. Health Affairs Web First article published today contains select findings from the KFF/HRET report.

This year’s increase continues a recent trend of moderate premium growth. Premiums increased more slowly over the past five years than the preceding five years (26 percent vs. 34 percent) and well below the annual double-digit increases recorded in the late 1990s and early 2000s. This year’s increase also is similar to the year-to-year rise in worker’s wages (2.3 percent) and general inflation (2 percent).

Annual premiums for worker-only coverage stand at $6,025 this year.  Workers on average contribute $1,081 toward the cost of worker-only coverage this year.

“The relatively slow growth in premiums this year is good news for employers and workers, though many workers now pay more when they get sick as deductibles continue to rise and skin-in-the-game insurance gradually becomes the norm,” Foundation President and CEO Drew Altman, said. Read the rest of this entry »

Rethinking Graduate Medical Education Funding: An Interview With Gail Wilensky


September 9th, 2014

A recent Institute of Medicine report has stirred controversy by proposing to significantly reshape the way Medicare graduate medical education funding is distributed. However, before the panel that wrote the report grappled with how the federal government should fund GME, it had to decide whether the federal government should be involved in the area at all.

“We struggled with the rationale [for a federal role] from the first meeting to the last time we convened,” Gail Wilenksy, who co-chaired the panel with Don Berwick, said in a recent interview with Health Affairs Blog.  After all, she said, the federal government “is not in the business of funding undergraduate medical education or other health care professions in any similar way, or funding other professions that are believed to be important to society and in shortage,” such as engineers, mathematicians, or scientists.

GME funding has been discussed at length in the pages of Health Affairs and will be the subject of a briefing sponsored by the journal tomorrow, Wednesday September 10. (Live and archived webcasts will be available for those who cannot attend in person.) Wilensky will offer opening remarks at the briefing. A summary of the GME report is provided in an earlier Health Affairs Blog post by Edward Salsberg, who will also participate in the briefing. Read the rest of this entry »

Think and Act Globally: Health Affairs’ September Issue


September 8th, 2014

The September issue of Health Affairs emphasizes lessons learned from developing and industrialized nations collectively seeking the elusive goals of better care, with lower costs and higher quality. A number of studies analyze key global trends including patient engagement and integrated care, while others examine U.S.-based policy changes and their applicability overseas.

This issue was supported by the Qatar Foundation and World Innovation Summit for Health (WISH), Hamad Medical Corporation, Imperial College London, and The Commonwealth Fund. Read the rest of this entry »

Health Affairs Event Reminder: Advancing Global Health Policy


September 5th, 2014

Please join us on Monday, September 8, when Health Affairs Editor-in-Chief Alan Weil will host a briefing to discuss our September 2014 thematic issue, “Advancing Global Health Policy.” In an expansion of last year’s theme, “The ‘Triple Aim’ Goes Global,” we explore how developing and industrialized countries around the world are confronting challenges and learning from each other on three aims: cost, quality, and population health.

A highlight of the event will be a discussion of international health policy—led by Weil—featuring former CMS and FDA administrator and current Brookings Institution Senior Fellow Mark McClellan and Lord Ara Darzi, surgeon, scholar, and former UK Health Minister. Additional panels will look at how countries are transforming chronic care, lowering costs, and redesigning delivery systems.

WHEN: 
Monday, September 8, 2014
9:00 a.m. – 12:30 p.m.

WHERE: 
National Press Club
529 14th Street NW
Washington, DC, 13th Floor

REGISTER NOW!

Follow Live Tweets from the briefing @Health_Affairs, and join in the conversation with #HA_GlobalHealth.

If you can’t come in person (we hope you will!), you can watch the webcast of the event.

Read the rest of this entry »

Projected Slow Growth In 2013 Health Spending Ahead Of Future Increases


September 3rd, 2014

Insurance Coverage, Population Aging, and Economic Growth Are Main Drivers of Projected Future Health Spending Increases

New estimates released today from the Office of the Actuary at the Centers for Medicare and Medicaid Services project a slow 3.6 percent rate of health spending growth for 2013 but also project a 5.6 percent increase in health spending for 2014 and an average 6.0 percent increase for 2015–23. The average rate of projected growth for 2013–23 is 5.7 percent, exceeding the expected average growth in gross domestic product (GDP) by 1.1 percentage points.

Increased insurance coverage via the Affordable Care Act (ACA), projected economic growth, and population aging will be the main contributors of this growth, ultimately leading to an expected 19.3 percent health share of nominal GDP in 2023, up from 17.2 percent in 2012.  This compares to the Office of the Actuary’s 2013  report, published in Health Affairs, predicting an average growth rate of 5.8 percent for 2012–22.

Every year, the Office of the Actuary releases an analysis of how Americans are likely to spend their health care dollars in the coming decade. The new findings appear as a Health Affairs Web First article and will also appear in the journal’s October issue. Read the rest of this entry »

Health Affairs Forum: Graduate Medical Education Governance And Financing


August 29th, 2014

Please join us on Wednesday, September 10, for a Health Affairs forum to discuss, Graduate Medical Education That Meets the Nation’s Health Needs, a recent report from the Institute of Medicine (IOM) Committee on the Governance and Financing of Graduate Medical Education (GME). Health Affairs Founding Editor John Iglehart will host the event.

For the past two years, the committee – co-chaired by former CMS and HCFA administrators Donald Berwick and Gail Wilensky – conducted an independent review of the governing and financing of the GME system, and the report is a roadmap for policymakers for repairing and improving its deficiencies. The Health Affairs forum is one of the first opportunities interested parties will have to gather in a public setting to discuss and debate the committee’s proposals.

WHEN
Wednesday, September 10, 2014
9:00 a.m. – 12:00 p.m.

WHERE
National Press Club
529 14th Street NW
Washington, DC, 13th Floor

REGISTER NOW

Follow Live Tweets from the briefing @Health_Affairs, and join in the conversation with #HA_GME. Read the rest of this entry »

Exhibit Of The Month: Income-Related Disparities Associated With Negative Health Outcomes


August 29th, 2014

Editor’s note: This post is part of an ongoing “Exhibit of the Month” series. Readers who’d like to highlight other noteworthy exhibits from the same issue are encouraged to make their pitch in the comments section below.

Much is known about income-related disparities when it comes to preventative care and chronic conditions, but less so about the associations between poverty and negative health outcomes.

In “Geographic Clustering Of Diabetic Lower-Extremity Amputations In Low-Income Regions Of California,” published in the August issue of Health Affairs, authors Carl Stevens et al. identify diabetic amputation “hot spots” in low-income urban and rural areas of California (Exhibit 2).

Based on California data from 2009, they isolated 7,973 lower-extremity amputations in 6,828 adults with diabetes. They compare this to a corresponding map of poverty rates in the same region based on households who reported incomes below 200 percent of the poverty level (Exhibit 3). Read the rest of this entry »

Health Policy Brief: The Relative Contribution Of Multiple Determinants To Health Outcomes


August 22nd, 2014

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) examines factors that can contribute to health status. In the United States, less than 9 percent of health expenditures go to disease prevention, and there is little support for social services, such as programs for older adults, housing, and employment programs.

This brief focuses on “multiple determinant” studies that seek to quantify the relative influence of some of these factors on health. It is part of a larger project, supported by the Robert Wood Johnson Foundation, which aims to create a structure for conducting analyses that demonstrate the value of investments in nonclinical primary prevention and their impact on health care costs.

Read the rest of this entry »

Health Affairs Briefing: Advancing Global Health Policy


August 22nd, 2014

Please join us on Monday, September 8, when Health Affairs Editor-in-Chief Alan Weil will host a briefing to discuss our September 2014 thematic issue, “Advancing Global Health Policy.”  In an expansion of last year’s theme, “The ‘Triple Aim’ Goes Global,” we explore how developing and industrialized countries around the world are confronting challenges and learning from each other on three aims: cost, quality, and population health.

A highlight of the event will be a discussion of international health policy—led by Weil—featuring former CMS and FDA administrator and current Brookings Institution Senior Fellow Mark McClellan and Lord Ara Darzi, surgeon, scholar, and former UK Health Minister. Additional panels will look at how countries are transforming chronic care, lowering costs, and redesigning delivery systems.

WHEN: 
Monday, September 8, 2014
9:00 a.m. – 12:30 p.m.

WHERE: 
National Press Club
529 14th Street NW
Washington, DC, 13th Floor

REGISTER NOW!

Follow Live Tweets from the briefing @Health_Affairs, and join in the conversation with #HA_GlobalHealth. Read the rest of this entry »

The Latest Health Wonk Review


August 15th, 2014

At Wright on Health, Brad Wright offers some health policy insight in his August recess edition of the Health Wonk Review. Brad highlights the Health Affairs Blog post by Jon Kingsdale and Julia Lerche on the “one-two punch” threatening the ACA’s second open enrollment period, as well as a variety of other great posts.  Read the rest of this entry »

Contributing Voices

Medicare Advantage: Stars System’s Disproportionate Impact On MA Plans Focusing On Low-Income Populations


September 22nd, 2014

The Centers for Medicare & Medicaid Services (CMS) evaluates Medicare Advantage (MA) health plan performance through a five Star Rating System. A close analysis of the Star System finds compelling evidence that organizations focusing on low-income individuals encounter systematic challenges due to the characteristics of the populations they serve.

These challenges result in lower ratings in the Star System, even for MA plans that are effectively serving low-income beneficiaries, threatening the viability of these plans and endangering the health of the most vulnerable. Starting in 2012, pursuant to provisions in the Affordable Care Act of 2010 (ACA), performance on the Star System also affects plan viability due to new payment incentives provided by the law for high performance.

We looked at trends in the Star Ratings from 2011-2014 and individual measure scores for each MA health plan contract to determine if plans focusing on low-income populations (contracts with 50 percent or more Dual Eligible Special Needs (D-SNP) enrollment or 50 percent or more of Part D Low Income Subsidy (LIS) eligible individuals) and the beneficiaries they serve are adversely affected by the Star Ratings System.

Dual eligible beneficiaries are individuals who are dually eligible for Medicare and Medicaid. Beneficiaries who qualify for the Part D Low-Income Subsidy are individuals with incomes below 150 percent of the Federal Poverty Level (FPL). Read the rest of this entry »

Bundled Payments: Do They Put Innovation At Risk?


September 22nd, 2014

While the United States health care system is quickly shifting focus from volume to value, bundled payments have emerged as a promising lever for containing costs and improving quality of care. This model, designed to offset some of the downfalls of traditional fee-for-service payments, reimburses providers based on a predetermined cost of an episode, or group of related services.

The model calls for providers to take on some financial risk while meeting quality standards, especially in areas of well-defined procedures like hip and knee replacements. Now, many are beginning to experiment in other high-cost medical areas, such as behavioral health and oncology.

But what is the impact of bundled payments on medical advancement and innovation? Bundled payments are here to stay, but there remains serious apprehension among innovators adjusting to this evolving landscape. NEHI (Network for Excellence in Health Innovation) brought stakeholders together this July to create a conversation in which experts discussed how bundled payments already have, and will, impact patients’ access to innovation. Read the rest of this entry »

Implementing Health Reform: Complicated ACA Tax Forms Could Cause Problems


September 21st, 2014

Editor’s note: In addition to the update below, this post has been updated to clarify who must file IRS form 8965.

September 22 Update: In another ACA-related development, on September 19 the Seventh Circuit federal court of appeals in American Physicians and Surgeons v. Kiskinen upheld the lower court’s dismissal of a challenge to the administration’s delay of the employer mandate.  The plaintiffs in the case represent physicians who only accept payment in cash and do not accept health insurance. They argued that the administration’s decision to delay the implementation of the employer mandate while at the same time moving ahead with the individual mandate would result in more individuals having to pay for health insurance out of their own pockets (rather than getting it free from their employers) and thus fewer individuals purchasing care from the plaintiff doctors in cash.  They claimed that this injured them sufficiently that they had standing to challenge the administration’s employer mandate delay decision, which they claimed was an incursion by the executive on the power of Congress, violating the constitutional separation of powers principle.

Judge Frank Easterbrook, speaking for the unanimous panel, decided that the causal connection argued by the plaintiffs was too attenuated to support standing and meet the constitutional requirement of the existence of a case or controversy.  In particular, he noted that the Supreme Court has rejected attempts by one person to litigate other people’s taxes.  Easterbrook observed that someone who has in fact been deprived of health insurance by the failure of the administration to enforce the employer mandate might be a more appropriate plaintiff to challenge the administration’s decision.

A couple of observations about the decision are in order. First, the media story about ACA decisions is often that Democratic judges support the ACA, Republican judges accept challenges to it.  All three judges on this panel—Judges Easterbrook, Posner, and Bauer—are prominent Republican appointees.

Original post: In a few months, millions of Americans will be filing either form 8962 to reconcile the advance premium tax credit they received with the tax credit they were actually due, or form 8965 because they claim an exemption from the shared responsibility (individual mandate) provision of the Affordable Care Act.

By the close of open enrollment in April, 6.7 million Americans had chosen a qualified health plan with premium tax credits,  and many more have since enrolled in a QHP through a special enrollment period and received tax credits.  Each of them will need to file a form 8962.  The Congressional Budget Office estimates that 30 million Americans are potentially subject to the shared responsibility requirement, and that 23 million of them may qualify for an exemption. Many of the 23 million will have to file a form 8965.

On September 15, 2014 the Internal Revenue Service released draft instructions for form 8965.  On September 17, 2014, the IRS released draft instructions for form 8962.  It is difficult to overstate how complicated these instructions are.  The tax credit and individual responsibility provisions of the ACA were complicated to begin with, but have become ever more complex as new exceptions and special rules have been created as implementation of the legislation has proceeded.  Many of the mostly low income Americans who will be completing these forms are marginally literate, at least in English, and have been accustomed to filing very simple tax forms like the 1040-EZ (which cannot be used by an individual claiming a tax credit) or perhaps not to filing taxes at all.  They are likely to be confused, frustrated, even angry, and certainly bewildered, completing these forms.  It is to be hoped that most of them will be assisted by well-trained tax preparers. Read the rest of this entry »

Relative Value Health Insurance And Pay For Performance For Insurers: Complements, Not Substitutes


September 19th, 2014

Background

The quest for value dominates contemporary health policy.  Value, properly defined, is not about cost-savings but about the balance of costs and health benefits — improving the average cost-effectiveness of health interventions.  In choosing which care is funded, insurers are a crucial but commonly neglected driver of health system value.

Insurers can increase health system value by covering fewer cost-ineffective interventions or covering more cost-effective interventions.  Perhaps the earliest attempt to reform insurance, managed care, attempted to pursue both goals, but by the time it was implemented it widely focused (or was perceived to focus) on cost-containment.

A recent insurance reform proposal, known as Relative Value Health Insurance (RVHI), received considerable attention, for instance, in The Upshot, The Incidental Economist, and Forbes.  RVHI enables insurers to reduce their contractual obligation to cover “usual and customary” care.  This and similar earlier proposals rely on the insurers’ natural incentive to cut costs.  Less well-covered, however, are proposals to alter the very incentives of insurers to improve health, which we will call “pay-for-performance-for-insurers” (P4P4I).  Read the rest of this entry »

Different Parts Of The Same Elephant: Medicaid Research And State Expansion Decisions


September 19th, 2014

Debates about Medicaid expansion betray an underlying fundamental disagreement not only about the Affordable Care Act (ACA) but about the Medicaid program itself. Medicaid, unlike Medicare, lacks the near-universal buy-in to the fundamental value of the program to beneficiaries’ health and well-being. As a means-tested (read welfare-related) program, Medicaid raises concerns and disagreements regarding work (dis)incentives, labor market effects, the “deserving” poor, and how this relates to the construct of health care as a right and a public good.

The Medicaid program serves as a centerpiece of the ACA and of the nation’s health care safety net. The states that continue to oppose Medicaid expansion reveal an important and less acknowledged aspect of this debate: That there remains fundamental disagreement in the United States about whether to include Medicaid as a central and important component of the evolving health care financing and delivery system, or whether system transformation would involve a move away from or elimination of Medicaid, even as a safety net program. Alternatively, how does or might the Medicaid program maintain (or attain) sufficiently broad-based buy-in to withstand wide swings in political control at the federal and state levels? Read the rest of this entry »

Pediatric Asthma: An Opportunity In Payment Reform And Public Health


September 18th, 2014

Editor’s note: The post is informed by a case study, the third in a series made possible through the Merkin Initiative on Physician Payment Reform and Clinical Leadership, a special project to develop clinician leadership in health care delivery and financing reform. The case study will be presented on Wednesday, September 24 using a “MEDTalk” format featuring live story-telling and knowledge-sharing from patients, providers, and policymakers. 

The Clinical Challenge: A Chronic, but Manageable Illness

Asthma affects 7 million children – more than 10 percent of kids in the U.S. – and is the most common chronic childhood disease. Yet even with high levels of insurance coverage, 46 percent of pediatric patients have uncontrolled asthma. There are substantial gaps in appropriate prescribing and adherence to effective medications. In addition, a multitude of non-medical issues influence a child’s ability to control their asthma: low parental health literacy, poor quality housing, and environmental triggers such as pests, mold, and cleaning chemicals. As a result 800,000 kids visit the emergency department (ED) for asthma each year.

In 2007 (the latest year which data are available) the U.S. spent over $56 billion on asthma care, of which nearly $27 billion was spent on pediatric asthma. Medicaid is the primary payer for pediatric asthma related hospitalizations with 55 percent of the market. Better control may also mean lower medical costs, due to reductions in ED visits, admissions, and other health care utilization – patients with poorly controlled severe asthma cost nearly $5,000 more per patient per year compared to average pediatric asthmatic costs. Read the rest of this entry »

Reference Pricing And Network Adequacy Standards: Conflict Or Concord?


September 18th, 2014

With benefit designs and enrollee cost-sharing increasingly standardized across health plans under the Affordable Care Act (ACA), one of the remaining levers plans have to differentiate themselves — and to control premiums — is the size of their provider networks. Regulators have been caught in a crossfire between advocates of narrow networks who say they promote quality and keep prices down, and those who feel narrow networks could constrain access to necessary services.

Unfortunately, recent federal guidance — addressing, among other related items, the issue of “reference pricing” — blurs the distinction between in-network and out-of-network providers and may make it more difficult for regulators and consumers to understand the effective “size” of a particular network.

This confusion could undermine the goal of improving transparency in consumers’ health care choices and make it difficult for consumers to use prices in choosing providers. More troubling, expanded use of “reference pricing” under the guidance could leave patients paying unexpectedly large out-of-pocket amounts for services provided by ostensibly in-network providers.

Below, we characterize reference pricing as a “sub-network” contracting strategy, and we describe some of the implications of reference pricing and the guidance for consumers, regulators, plans, and providers. Read the rest of this entry »

Should We Be Done With Describing Health Disparities?


September 17th, 2014

A recent Health Affairs podcast featured a conversation with AcademyHealth president and CEO Lisa Simpson on health disparities along with Darrell Gaskin, the lead of one of the panel sessions at the 2014 National Health Policy Conference (NHPC), “Community Health and Disparity: Moving Beyond Description.” The conversation endorses interventions rather than descriptions as the future direction of health disparities research.

But should we be done with describing health disparities? In a paper we recently published online in the International Journal for Equity in Health, we show that the answer is: Not entirely.

In this paper, using large, publicly available data, 2008, 2009, and 2010 Behavioral Risk Factor Surveillance System (BRFSS) Selected Metropolitan/Micropolitan Area Risk Trends (SMART) and 2008, 2009, and 2010 United States Birth Records from the National Vital Statistics System, we reported education-, sex-, and race-related disparities in four health outcomes (poor/fair health, poor physical health days, poor mental health days, and low birthweight) in each of the selected 93 counties in the United States representing about 30 percent of the U.S. population. Read the rest of this entry »

Is There A Doctor In The House? Survey Sheds Light On Physician Capacity, Morale, Shortages, And Patient Access


September 17th, 2014

There is ongoing debate over whether there are enough physicians to care for millions of new patients. According to the Association of American Medical Colleges, the United States currently faces a shortage of 20,000 physicians – a shortfall that could exceed 130,000 physicians by 2025. In addressing these challenges, it is critical to take into consideration the shifting patterns in medical practice configurations, changing dynamics inherent within physician workforce trends, and the potential impact on patient access to care.

The Physicians Foundation’s new survey of more than 20,000 physicians examines these issues and provides insight into physician capacity and morale, changing medical practice configurations, and shifting physician workforce trends and demographics.

Physician Capacity and Morale – What Does This Mean for Patient Access?

According to the new survey results, eight out of ten (81 percent) physicians describe themselves as either over-extended or at full capacity, while only 19 percent indicate they have time to see more patients. In fact, 13 percent of physicians no longer accept Medicare patients – this is up 49 percent in 2014 from 2012. Read the rest of this entry »

Implementing Health Reform: Resolving Income-Related Data Inconsistencies (Updated)


September 16th, 2014

September 19 Update: On September 18, 2014 the Internal Revenue Service issued a final rule and three revenue notices addressing Affordable Care Act topics. This rule and guidances are very technical and will only be described briefly here. Additionally, Marilyn Tavenner, the Administrator for the Centers for Medicare and Medicaid Services, gave an updated number for coverage through the Affordable Care Act health insurance exchanges in congressional testimony.

Deductibility by insurers of large compensation packages.  The final rule implements an ACA provision limiting the business expense tax deductibility of compensation paid by health insurers to officers, directors, employees, or other individuals who provide services to the insurers to $500,000 per year.  The final rule, 127 pages long including the preface, addresses in great detail the insurers, individuals, and compensation to which it applies.  It will not be analyzed here, other than to note that the IRS states in the preface that it is still examining the question of when stop loss insurance might be considered health insurance for the ACA, an issue raised in a 2012 request for information.  For the purposes of this rule, premiums paid for stop loss coverage to be health insurance premiums.

Section 125 plan election revocations.  Notice 2014-55  expands the situations in which changes will be permitted in elections for coverage under Section 125 cafeteria plans to permit individuals to move from group to exchange coverage.  Section 125 cafeteria plans allow employees to elect to use pretax compensation to pay for certain qualified benefits instead of taking the compensation as taxable income.  Among the benefits that can be covered through Section 125 plans is the employee share of employer-sponsored group health insurance premiums.  Normally an employee must make an election to do this at the beginning of a period of coverage, and the election remains irrevocable unless the plan allows a revocation for a reason that is permitted under the section 125 rules, such as where a change in the employee’s employment status results in a change in eligibility for employer coverage.

Notice 2014-55 permits plans to allow employees to revoke an election for a contribution to a Section 125 plan to cover group health plan premiums in two new circumstances.  First, an employee who moves from full-time (30 hours or more of service per week) to part-time status (less than 30 hours), may revoke his or her election for coverage, even if he or she remains eligible for group coverage, as long as the individual enrolls in new minimum essential coverage (such as qualified health plan coverage through an exchange) no later than the first day of the second month after the month in which the election is revoked.

Second, an individual who qualifies for enrollment in a qualified health plan through an exchange, either under a special enrollment period or open enrollment period, may revoke an election of Section 125 plan coverage with the revocation effective immediately preceding the QHP coverage, so there is no gap in coverage.  It should be noted that if the individual has an offer of affordable (costing not more than 9.5 percent of modified gross adjusted household income) and adequate (not less than 60 percent actuarial value) coverage from the employer, the individual would not qualify for premium tax credits or cost-sharing reduction payments from the exchange.

Measurement period changes.  Notice 2014-49 proposes an approach to be used when an individual whose full- or part-time employment status is being determined through the use of the look-back measurement method transfers from a position in which one measurement period applies to a position where a different measurement period applies, or where a large employer changes the measurement method it has been using (from a six-month to a twelve-month period, for example).

Under the ACA, large employers must offer minimum essential coverage to full-time employees or face a tax, but they do not have to offer coverage to part-time employees.  The problem then becomes determining when an employee is part- and when full-time.

One of the methods that can be used for this determination is the look-back measurement method.  Under this approach, an employee whose full- or part-time status is not clear at the time of hiring is assigned to a measurement period during which employee’s hours are tracked to determine if the employee in fact works 30 or more hours a week.  Once the measurement period is completed, the employee is assigned (after a permissible brief administrative period) to a stability period that must last at least as long as the measurement period during which the employee is considered full- or part-time, depending on the status identified during the measurement period.

An employer is allowed to use different measurement periods for different categories of employees.  The employer can also change measurement periods. Under the approach proposed by the guidance, an employee who has been employed for a full measurement period at the time of transfer or change of measurement period, and thus has had his or her status as a full- or part-time employee determined for a stability period, retains his or her status through the end of the associated stability period.  The status of an employee who is not yet in a stability period (or administrative period) at the time of transfer or change is determined using the measurement period applicable to the second position to which the individual transfers (or the new period the employer adopts), but including hours of service in the first position or approach in applying that measurement period.  The guidance explains different complications of this basic approach and includes a number of examples.  This guidance is currently only proposed, but employers can rely on it until a final guidance is published.

PCORI fees.  Finally, Notice 2014-56 sets the fee that insured and self-insured must pay for the Patient-Centered Outcomes Research Institute (PCORI), for the period from October 1, 2014 until September 30, 2015, at $2.08 per covered life, an 8 cent increase over the prior year.

An update on exchange coverage.  In one other development, CMS Administrator Marilyn Tavenner stated at a legislative hearing on September 18 that 7.3 million Americans were enrolled in qualified health plans through the health insurance exchanges as of August 15.  Although CMS had announced in May that over 8 million individuals had chosen a plan through the exchanges, there was considerable speculation as to how many of these individuals actually paid their premiums and thus effectuated coverage and how many might have subsequently dropped coverage or lost coverage for failure to keep their premiums up.

The 7.3 million number presumably includes those who enrolled initially and have paid their premiums, plus individuals who have subsequently enrolled through special enrollment periods.  It is below the initial 8 million number not only because some of those who signed up for plans initially did not pay their premiums, but also because some of the initial enrollees have subsequently become employed and  obtained employer coverage or have moved to Medicaid because their income has decreased.  Enrollment in the exchanges, however, remains quite healthy.

Original post: On September 15, 2014, the Centers for Medicare and Medicaid Services (CMS) announced a second deadline in its efforts to resolve data inconsistencies remaining from the 2014 open enrollment period.  This second deadline is for the submission of documentation to resolve income inconsistencies for exchange enrollees.  The first deadline was announced in August, when CMS sent final letters to about 310,000 federal marketplace (exchange) enrollees whose enrollments raised citizenship or legal-immigrant status issues, informing them that they must provide verification documents by September 5 or be terminated from coverage as of September 30.

CMS received hundreds of thousands of documents in response to the August request, reducing the number of individuals with citizenship and immigration data-matching issues from 966,000 as of May 31 to 115,000 as of September 14.  These individuals will be terminated as of September 30, 2014, but under the revised bulletin 11, they will be reinstated retroactively if they subsequently produce the documents needed to verify their citizenship or legal alien status. They may also purchase insurance outside the exchange.  Insurers are legally required to offer coverage to individuals who reside in their service area, regardless of citizenship or alien status.

Under the procedure announced on September 15, CMS is sending final notices to individuals enrolled through the federally facilitated exchange who still have income-related data-matching issues, informing them that they must send required information to verify their income as of September 30, 2014 or their premium tax credits and cost-sharing reduction payments will be modified to reflect information reflected in data sources otherwise available to CMS.  For example, if an enrollee’s 2012 tax return reported income higher than that reported by the enrollee on his or her application for advance premium tax credits and cost-sharing assistance, and the enrollee failed to provide verification of the claimed income, the enrollee’s premium tax credits and cost-sharing reduction payments would be modified as of November 1 in accordance with the income reflected in the tax return. Read the rest of this entry »

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