Making Wellness Work On A Shoestring Budget

May 28, 2012
With tight budgets preventing many businesses from investing in wellness consulting resources, a tight budget doesn’t mean your company, church, or other group can’t have a thriving wellness program.  Wellness is a culture.   While the resources and advice of consultants and bells and whistles can be helpful sometimes, the inability to afford them doesn’t mean that your organization or group can’t have a healthy and effective wellness program. 
 
The key to promoting wellness in your workplace, organization or community is to promote a culture of healthy eating, movement and lifestyles.  Establish the culture by leading the way.  Make healthy food choices available at meetings.  Require or urge your leadership to model good eating behavior.  Have a healthy pot luck and challenge employees to bring and share their tastiest, healthy dish.   
 
Encourage leaders and others to incorporate movement into the day.  Walking meetings and other inexpensive activities can help promote health with very little cost.  Encourage employees to walk in walk-a-thons, participate in running groups, walk or skip to lunch, take the stairs,  participate in sports leagues or other similar activities. 
 
Don’t overlook the wealth of available free resources.  Project COPE”s Play For Life Program relies upon a host of free often government provided resources.   Many great wellness tools are available from NIH and other government sources at little or no cost including the newly released NIH and the Weight of the Nation resources just made available by NIH here.
 
Project COPE: Coalition On Patient Empowerment & Coalition For Responsible Health Care Quality

Project COPE: Coalition on Patient Empowerment & the Coalition for Responsible Health Care Quality  are coalitions of individuals and organizations that share the belief that every American and American organization has a stake, and something to contribute to our ability to find and implement the best options for ensuring that the U.S. health care system provides quality, affordable health care.

Health care impacts every individual and every organization in America.  Consequently, every American citizen and organization including but not limited to health care providers, employers, insurer, and community organizations should take part.    The government, health care providers, insurers and community organizations can help by providing education and resources to make understanding and dealing with the realities of illness, disability or aging easier for a patient and their family, the affected employers and others. At the end of the day, however, caring for people requires the human touch.  Americans can best improve health care by not waiting for someone else to step up or speak up. 

Project COPE urges and invites each individual and organization speak up to help communicate and act to make health care work for themselves, their families and others when you can and share your input to help preserve and continue to develop real meaningful improvements to our health care system by joining Project COPE: Coalition for Patient Empowerment here by sharing ideas, tools and other solutions and other resources. 

Other Helpful Resources & Other Information

We hope that this information is useful to you.   If you found these updates of interest, you also be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available here . 

Wellness is a culture.   While the resources and advice of consultants and bells and whistles can be helpful sometimes, the inability to afford them doesn’t mean that your organization or group can’t have a healthy and effective wellness program. 
 
The key to promoting wellness in your workplace, organization or community is to promote a culture of healthy eating, movement and lifestyles.  Establish the culture by leading the way.  Make healthy food choices available at meetings.  Require or encourage your leadership to model good eating behavior.  Have a healthy pot luck and challenge employees to bring and share their tastiest, healthy dish.   
 
Encourage leaders and employees and others to incorporate movement into the day.  Walking meetings and other inexpensive activities can help promote health with very little expense.  Encourage employees to walk in walk-a-thons, participate in running groups, participate in sports leagues or other similar activities.
 
Don’t overlook the wealth of available free resources.  Project COPE”s Play For Life Program relies upon a host of free often government provided resources.   Many great wellness tools are available from NIH and other government sources at little or no cost including the newly released NIH and the Weight of the Nation resources just made available by NIH here.
 
The key to wellness is getting started and keeping going.   Making healthy living part of your culture can pay big benefits in health and absentee savings, increased productivity and workforce retention.  What are you waiting for?  Get moving!
Other Helpful Resources & Other Information
 
We hope that this information is useful to you.   If you found these updates of interest, you also be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available here . 

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

Review & Update Health Plan Mental Health Coverage As DOL Supplements Guidance On Health Plan Mental Health Parity Rules

May 23, 2012

Group health plans and health insurers subject to the mental health parity requirements of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) have extra guidance about the effect of these requirements on utilization management and copayment requirements.  As the Labor Department and other federal agencies celebrate Mental Health Awareness Month, plan sponsors, administrators and fiduciaries should review and update their plans to comply with the current requirements and tighten administration and other documentation to position decisions for defensibility against growing scrutiny.

In conjunction with its marking of Mental Health Awareness month in May, the Department of Labor’s Employee Benefits Security Administration (EBSA) recently updated its guidance and resources about the MHPAEA.  The updated resources include:

  • New Mental Health Parity webpage, available here; and
  • Understanding (and Common Misunderstandings Related to) Implementation of the Mental Health Parity and Addiction Equity Act of 2008, available here.

This new guidance supplements a growing list of guidance concerning the interpretation and enforcement of the MHPAEA by the U.S. Departments of Health and Human Services (HHS), Labor and the Treasury (the Departments).  On November 17, 2011, the Departments jointly published more FAQs that share insights on how the MHPAEA requirements impact certain common copayments and utilization review arrangements historically used by plans and insurers.  The new FAQ guidance here provides more clarification about the meaning of the interim final rules implementing MHPAEA the Departments jointly issued on February 2, 2010, and earlier FAQ guidance published on June 30, 2010 and December 22, 2010 as applied to these practices.

For group health insurers and group health plans subject to its provisions, MHPAEA generally requires that insurer or plan:

  • Cannot impose financial requirements and treatment limitations on mental health and substance use disorder benefits that are more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits; and
  • Cannot impose separate financial requirements or treatment limitations that are applicable only to mental health or substance use disorder benefits.

Insurers, plan sponsors, fiduciaries and administrators also should consider the potential implications of various other federal requirements on the design and administration of mental health and substance abuse coverage and benefits under their programs.   For example, the express reference to mental health and substance abuse benefits as included within the definition of “essential benefits” for purposes of the Affordable Care Act requires additional consideration of the effect of the Affordable Care Act’s annual and lifetime limit and other mandates relating to essential benefit coverage be evaluated and addressed.  In addition, specific attention should be devoted to the potential effects of the Affordable Care Act’s independent review and other rules concerning the processing and payment of health benefit claims by non-grandfathered health plans.

Along with considering the potential implications of these emerging requirements, health insurers, group health plans and those involved in their design and administration also should verify that their eligibility and other program terms or practices do not inappropriately violate the nondiscrimination rules of laws such as the Americans with Disabilities Act, the Health Insurance Portability & Accountability Act, the Genetic Information Nondiscrimination Act or other laws and that their plan and those involved in its administration are properly safeguarding the confidentiality of sensitive information about mental health , substance abuse or other health information about covered persons or their family.   Learn more here.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

Comments Off on Review & Update Health Plan Mental Health Coverage As DOL Supplements Guidance On Health Plan Mental Health Parity Rules | Claims Administration, Employee Benefits, Employers, ERISA, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: , , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

Health Plan BCBST To Pay $1.5 Million In 1st OCR Enforcement Action Prompted By HITECH Breach Report

March 13, 2012

Resolution Agreement Also 1st Announced With Health Plan

Health plans and other covered entities beware and prepare!  Health plans and other covered entities that report large breaches of unsecured protected health information to the Department of Health & Human Services (HHS) Office of Civil Rights and face potential civil monetary penalties (CMPs) for violating the Privacy & Security Rules of the Health Insurance Portability & Accountability Act of 1996 (HIPAA). 

The HIPAA investigation and exposures to CMPs likely to result following the report of a large breach of unsecured protected health information is demonstrated by a new Resolution Agreement announced March 13, 2012 by OCR.

 Blue Cross Blue Shield of Tennessee (BCBST) has agreed to pay the U.S. Department of Health and Human Services (HHS) $1,500,000 and to take certain other actions specified in a corrective action plan to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules.  The BCBST Resolution Agreement is particularly significant, both as:

  • The first reported enforcement action directly resulting from the filing by a covered entity of a breach report required by the Health Information Technology for Economic and Clinical Health (HITECH) Act Breach Notification Rule; and
  • The first reported resolution agreement reached with a covered entity that is a health plan.

These notable enforcement firsts prove both the importance  the HITECH Breach Notification Rule’s significance as an OCR HIPAA enforcement tool, and the readiness of OCR to sanction health plans that breach HIPAA’s Privacy or Security Rules.

The OCR investigation that lead to the BCBST settlement began in response to the submission by BCBST of a notice required under the Breach Notification Rule of the theft of 57 unencrypted computer hard drives from a leased facility in Tennessee, which contained the protected health information (PHI) of over 1 million individuals.  Read more details here.

The Breach Notification Rule requires covered entities to report an impermissible use or disclosure of protected health information, or a “breach,” of 500 individuals or more to HHS and the media as well as an annual consolidated report of smaller breeches to HHS.[1] 

To resolve being officially sanctioned for HIPAA violations stemming from these findings under the strengthened enforcement rules and sanctions enacted as part of the HITECH Act, BCBST has agreed to pay $1,500,000 and adopt other corrective actions detailed in a corrective action plan.

Enforcement Actions Highlight Growing HIPAA Exposures For Covered Entities

The BCBST Resolution Agreements, like the 1st-ever $4.3 million HIPAA CMP that OCR imposed against Cignet Health of Prince George’s County, Md. (Cignet) in 2011 and a series of high dollar Resolution Agreements OCR has announced against various health care providers over the past few years highlight the significance of the HITECH Act amendments to HIPAA’s enforcement and CMP rules, as well as use of  its Breach Notification Rule as a tool in OCR’s investigation and enforcement efforts.

“This settlement sends an important message that OCR expects health plans and health care providers to have in place a carefully designed, delivered, and monitored HIPAA compliance program,” said OCR Director Leon Rodriguez. “The HITECH Breach Notification Rule is an important enforcement tool and OCR will continue to vigorously protect patients’ right to private and secure health information.” 

BCBST’s breach notification report clearly prompted the investigation that lead to the Resolution Agreement.  The opening of the investigation in response to the BCBST Breach Notification report reflects the need for covered entities to be prepared to respond to an investigation when these reports are made.  OCR officials previously have stated that it is the practice of OCR to conduct an investigation into all breaches of the protected health information of 500 individuals or more reported to it under the Breach Notification Rule. 

The BCBST Resolution Agreement provides yet another reminder to covered entities and their business associates of the need to carefully and appropriately manage their HIPAA responsibilities. See HIPAA Heats Up: HITECH Act Changes Take Effect & OCR Begins Posting Names, Other Details Of Unsecured PHI Breach Reports On Website.  Covered entities are urged to heed these warning by strengthening their HIPAA compliance and adopting other suitable safeguards to minimize HIPAA exposures.  For more tips, see here.

[1] The Breach Notification Rule also requires that covered entities report smaller breaches annually to OCR as part of a consolidated disclosure.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

Comments Off on Health Plan BCBST To Pay $1.5 Million In 1st OCR Enforcement Action Prompted By HITECH Breach Report | Claims Administration, Employee Benefits, Employers, ERISA, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: , , , , , , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

Portion of Health Care Costs Paid By Government Programs Rose As Employer Provided & Other Private Health Care Coverage Declined In 2010

January 9, 2012
Declining enrollment in private insurance resulted in continuing growth in government financing of health care expenditures in 2010 according to the Annual Report of National Health Expenditures (Report).  The Report notes that since 2007, the economic recession and legislative changes led to a noticeable change in the shares of health care spending financed by businesses, households, and governments.
 
The federal government financed 29 percent of the nation’s health care spending in 2010, an increase of six percentage points from its share in 2007 of 23 percent, and reached $742.7 billion.  Part of that increase came from enhanced Federal matching funds for State Medicaid programs under the American Recovery & Reinvestment Act which expired in 2011.   
 
U.S. health care spending grew 3.9 percent in 2010 to $2.6 trillion or $8,402 per person according to the Report.   Review the details of the Report here.

National Health Expenditures 2010 Highlights

U.S. health care spending grew 3.9 percent in 2010.  Coupled with record slow growth of 3.8 percent in 2009; the 2009-2010 represents the two slowest rates of growth in the fifty-one year history of the National Health Expenditure Accounts.  The Report reflects the following breakdown of these expenditures;

  • Hospital Care: Hospital spending increased 4.9 percent to $814.0 billion in 2010 compared to 6.4-percent growth in 2009. Average annual growth in hospital spending between 2007 and 2010 was 5.5 percent. CMS reports this increase was slower than the trend between 2003 and 2006, when spending increased an average of 7.4 percent per year.  Growth in private health insurance spending for hospital services, which in 2010 accounted for 35 percent of all hospital care, slowed considerably in 2010.  The Report states that these trends occurred at the same time median inpatient hospital admissions declined and emergency department and outpatient hospital visits grew more slowly than in 2009.
  • Physician and Clinical Services: Spending on physician and clinical services increased 2.5 percent in 2010 to $515.5 billion, a deceleration from 3.3-percent growth in 2009. The 2010 deceleration reflects a decline in utilization, driven by a drop in total physician visits between 2009 and 2010 and a less severe flu season than in 2009.
  • Other Professional Services: Spending for other professional services, which includes providers of services such as physical therapy, chiropractic medicine, and mental health, decelerated slightly in 2010, increasing 3.6 percent to $68.4 billion after growth of 3.8 percent in 2009.
  • Dental Services: Spending for dental services increased 2.3 percent in 2010 to $104.8 billion compared to growth of only 0.1 percent in 2009. Out-of-pocket spending for dental services (which accounts for over 40 percent of dental spending) increased 0.5 percent in 2010 following a decline of 5.2 percent in 2009.
  • Other Health, Residential, and Personal Care Services: Spending for other health, residential, and personal care services grew 5.3 percent in 2010 to $128.5 billion, a deceleration from growth of 7.7 percent in 2009. This category includes expenditures for medical services delivered in non-traditional settings (such as schools or community centers), ambulance providers, and residential mental health and substance abuse facilities.
  • Home Health Care: Spending growth for freestanding home health care services slowed in 2010, increasing 6.2 percent to $70.2 billion following growth of 7.5 percent in 2009, as Medicare and Medicaid spending growth slowed in 2010.
  • Nursing Care Facilities and Continuing Care Retirement Communities: Spending for freestanding nursing care facilities and continuing care retirement communities increased 3.2 percent in 2010 to $143.1 billion, a deceleration from growth of 4.5 percent in 2009, driven by slower growth in Medicare and Medicaid spending.
  • Prescription Drugs: Retail prescription drug spending grew only 1.2 percent to $259.1 billion in 2010, a substantial slowdown from 5.1-percent growth in 2009. The slowdown was driven by slower growth in the volume of drugs consumed, a continued increase in the use of generic medications, loss of patent protection for certain brand name drugs, fewer new drug introductions, and a substantial increase in Medicaid prescription drug rebates.
  • Durable Medical Equipment: Spending for durable medical equipment, which includes items such as eyeglasses, contacts and hearing aids, increased 7.3 percent to $37.7 billion in 2010 after increasing 0.8 percent in 2009.
  • Other Non-durable Medical Products: Spending for other non-durable medical products, such as over-the-counter medicines, reached $44.8 billion, an increase of 2.6 percent in 2010, the same rate of growth as in 2009.

 Health Spending by Major Sources of Funds

The Report indicates that the portion of health care expenditures financed by private health insurance continued to decline as private health plan enrollment declined.  As a result, the proportion of health care expenditures paid by government programs continued to rise.  The federal government financed 29 percent of total health spending in 2010, a substantial increase from its share of 23 percent in 2007. Meanwhile, the shares of the total health care bill financed by state and local governments (16 percent), private businesses (21 percent), and households (28 percent) declined during the same time period.  Specifically, the Report indicates the following:

  • Medicare: Medicare spending grew 5.0 percent in 2010 to $524.6 billion, a deceleration from growth of 7.0 percent in 2009. Spending for fee-for-service (FFS) Medicare grew 5.0 percent in 2010 following growth of 4.5 percent in 2009. Medicare Advantage (MA) spending increased 4.7 percent in 2010, a steep deceleration from 15.6-percent growth in 2009 that resulted from an adjustment to payment rates in 2010.
  • Medicaid: Total Medicaid spending grew 7.2 percent in 2010 to $401.4 billion, a deceleration from 8.9-percent growth in 2009, driven primarily by slower growth in enrollment. Federal Medicaid expenditures increased 8.9 percent, while state Medicaid expenditures grew 3.9 percent. This difference in growth was due to approximately $41 billion in enhanced federal aid to states—a result of increased Federal Medical Assistance Percentages (FMAP) mandated by the American Recovery and Reinvestment Act of 2009 (ARRA).
  • Private Health Insurance: Growth in total spending for private health insurance premiums slowed in 2010 to 2.4 percent from 2.6 percent in 2009, continuing a deceleration that began in 2003. Growth in aggregate benefit payments also slowed, from 3.7 percent in 2009 to 1.6 percent in 2010. The slowdown reflects a decline in private health insurance enrollment, increases in cost sharing, and a shift by some consumers to plans with lower premiums. However, for the first time in seven years, growth in total premiums exceeded growth in total benefits; as a result, the private health insurance net cost ratio increased from 11.4 percent in 2009 to 12.1 percent in 2010.
  • Out-of-Pocket: Out-of-pocket spending grew 1.8 percent in 2010, an acceleration from growth of 0.2 percent in 2009. Faster growth in 2010 partially reflects higher cost-sharing requirements for some employers, consumers’ switching to plans with lower premiums and higher deductibles and/or copayments, and the continued loss of health insurance coverage.

The Report found household health care spending equaled $725.5 billion in 2010 and represented 28 percent of total health spending, slightly lower than its 29 percent share in 2007.  Growth in total private health insurance premiums slowed in 2010 to 2.4 percent from 2.6 percent in 2009, continuing a slowdown that began in 2003.  Despite this deceleration, for the first time in seven years, the growth in premiums exceeded the growth in insurer spending on health care benefits, with the net cost of insurance increasing by 8.4 percent or $11.3 billion in 2010. Out-of-pocket spending by consumers increased 1.8 percent in 2010, accelerating from 0.2-percent growth in 2009. 

The state and local government share of total health spending declined from 18 percent in 2007 to 16 percent in 2010 and totaled $421.1 billion, in part due to the temporary assistance in the Recovery Act.

 Project COPE: Coalition On Patient Empowerment & Coalition For Responsible Health Care Quality

Project COPE: Coalition on Patient Empowerment & the Coalition for Responsible Health Care Quality  are coalitions of individuals and organizations that share the belief that every American and American organization has a stake, and something to contribute to our ability to find and implement the best options for ensuring that the U.S. health care system provides quality, affordable health care.

Health care impacts every individual and every organization in America.  Consequently, every American citizen and organization including but not limited to health care providers, employers, insurer, and community organizations should take part.    The government, health care providers, insurers and community organizations can help by providing education and resources to make understanding and dealing with the realities of illness, disability or aging easier for a patient and their family, the affected employers and others. At the end of the day, however, caring for people requires the human touch.  Americans can best improve health care by not waiting for someone else to step up or speak up. 

Project COPE urges and invites each individual and organization speak up to help communicate and act to make health care work for themselves, their families and others when you can and share your input to help preserve and continue to develop real meaningful improvements to our health care system by joining Project COPE: Coalition for Patient Empowerment here by sharing ideas, tools and other solutions and other resources. 

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

Senator Tells IRS To Fix Proposed Health Care Exchange Premium Tax Credit Regulations

December 16, 2011

U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, says the premium subsidy provisions of the Patient Protection & Affordable Care act (Affordable Care Act) does not authorize the Internal Revenue Service (IRS) to allow individuals purchasing coverage through a federal health insurance exchange to receive the tax credits and subsidies authorized under new Internal Revenue Code § 36B to offset the cost of being mandated to buy health insurance created under Affordable Care Act Section 1311.  

As created under the Affordable Care Act, Internal Revenue Code (Code) § 36B grates a refundable tax credit for certain individuals purchasing qualifying health insurance coverage from a qualified health plan.  According to Senator Hatch, IRS proposed regulations here to implement Code § 36B would violate its provisions by allowing individuals that buy coverage through federal exchanges to claim premium tax credits because the express language of the statute only calls for amounts paid for coverage from “State” exchanges to count when calculating the amount of the credit.  Read more details here.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

New Guidance On Fiduciary Duties In Handling ACA Group Health Plan Premium Rebates Highlight Advisability Of Tightening Funding Terms & Fund Handling Practices To Manage Fiduciary Risks

December 13, 2011

Group health plan sponsors and fiduciaries need to exercise care to properly handle any premium rebates, if any, received by from insurers to comply with the medical loss ratio rules enacted as part of the Patient Protection and Affordable Care Act (Affordable Care Act) to avoid violating the plan assets and other fiduciary responsibility rules of the Employee Retirement Income Security Act of 1974 (ERISA), according to Technical Release No. 2011-04, Technical Release on Fiduciary Requirements for Handling Medical Loss Ratio (MLR) Rebates (“Technical Release”) published December 2, 2011.

As amended by the Affordable Care, Section 2718 of the Public Health Service Act (PHSA) requires that health insurance issuers:

  • Publicly report on major categories of spending of policyholder premium dollars, such as clinical services provided to enrollees and activities that will improve health care quality;
  • Establishes medical loss ratio (MLR) standards for issuers; and
  • Requires issuers to provide rebates to enrollees when their spending for the benefit of policyholders on reimbursement for clinical services and health care quality improving activities, in relation to the premiums charged (as adjusted for taxes), is less than the MLR standards.

Employers or other sponsors that are group policyholders on insurance contracts covered by the MLR rules are likely to receive any rebates due because Department of Health and Human Services (HHS) final regulations implementing these MLR requirements published December 7, 2011 require issuers to pay any MLR rebates “to the policyholder.”  

In anticipation insurers’ payment of these rebates, the Employee Benefit Security Administration (EBSA) is cautioning employers and other ERISA-covered group health plan sponsors and plan fiduciaries that premium rebates received from an insurer pursuant to these HHS MLB regulations may be plan assets required to be handled in accordance with ERISA’s plan assets and other fiduciary responsibility rules.

In the December 2, 2011 Technical Release, EBSA reminds plan sponsors and fiduciaries that premium rebates distributed pursuant to the Affordable Care Act’s MLR standards with respect to a group health plan are likely to be plan assets protected by ERISA’s fiduciary responsibility rules.  Accordingly, the Technical Release cautions that plan sponsors or other parties receiving or exercising discretion over the rebated amounts that are ERISA plan assets generally should see that rebated amounts are handled in accordance with the fiduciary responsibility and trust requirements generally applicable to ERISA plan assets.

Determination whether the premium rebate is a plan asset generally requires a careful evaluation of whether the plan has a beneficial interest in the rebate and certain other factors.  According to the Technical Release, a distribution such as the rebate to a group health plan will be a plan asset if the plan has a beneficial interest in the distribution under ordinary notions of property rights.  While the identity of the policyholder – the employer or other plan sponsor versus a trust or plan – is one important consideration, the Technical Release warns that this is not the only factor.

The Technical Release says the fact that the employer is the policyholder or the owner of the policy would not, by itself, indicate that the employer may retain the distributions. Rather, determining who is entitled to the distribution requires careful analysis of a broad range of factors including:

  • The terms of the governing plan documents;
  • The funding sources of the policy;
  • The parties’ understandings and representations; and
  • Other relevant facts and circumstances.

If the rebate is an ERISA plan asset, employers or others receiving a premium rebate payment and others with discretion over the use and handling of the rebate should take steps to ensure that they can demonstrate the rebate is handled and expended in accordance with ERISA’s fiduciary responsibility requirements. Among other things, this means that rebated amounts should be:

  • Held in trust unless the plan fiduciaries verify that an exception applies;
  • Used only for the exclusive purpose of providing benefits to participants in the plan and their beneficiaries and defraying reasonable expenses of administering the plan;
  • Handled in accordance with the fiduciary responsibility provisions of ERISA section 404 and the prohibited transaction provisions of ERISA section 406;
  • Held in trust in accordance with ERISA section 403; and
  • Not allowed to inure to the benefit of any employer.

The Technical Release reminds plan sponsors and administrators that if the rebate is a plan asset, decisions about and actions taken to deposit in trust, allocate, apply, spend and other aspects of handling the plan’s portion of a rebate generally are subject to ERISA’s general standards of fiduciary conduct, prohibited transaction and trust requirements.  The Technical Release also provides guidance about allocation of the rebate under certain circumstances and certain other questions that are likely to arise in connection with the receipt of a rebate.  Insurers, brokers, consultants and others working with employers or other plan sponsors, administrators, or fiduciaries who may receive a rebate or otherwise involved in making funding decisions also may want to discuss the guidance and other fiduciary responsibility rules with their clients to help promote understanding and compliance.

Because violations of ERISA’s fiduciary responsibility rules can create personal liability, employer and other plan sponsors, plan fiduciaries and others participating in decisions or administration of a rebate exercise care in dealing with any rebate.  Many plan sponsors also may want to consider reviewing and tightening as warranted existing plan, trust, insurance policy, plan communications and other documentation to lower risks and promote desired characterization of rebates and other amounts paid into or with respect to their plans. 

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices or with other employee benefits, human resources, health care or insurance matters, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on leading health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

Mental Health Parity Guidance On Mental Health & Substance Abuse Copays, Utilization Management Limits Released

December 7, 2011

Group health plans and health insurers subject to the mental health parity requirements of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) have additional guidance about the effect of these requirements on utilization management and copayment requirements. 

The U.S. Departments of Health and Human Services (HHS), Labor and the Treasury (the Departments) on November 17, 2011 published additional FAQs that share insights on how the MHPAEA requirements impact certain common copayments and utilization review arrangements historically used by plans and insurers.  The new FAQ guidance here provides additional clarification about the meaning of the interim final rules implementing MHPAEA the Departments jointly issued on February 2, 2010, and previous FAQ guidance published on June 30, 2010 and December 22, 2010 as applied to these practices.

For group health insurers and group health plans subject to its provisions, MHPAEA generally requires that insurer or plan:

  • Cannot impose financial requirements and treatment limitations on mental health and substance use disorder benefits that are more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits; and
  • Cannot impose separate financial requirements or treatment limitations that are applicable only to mental health or substance use disorder benefits.

 The new FAQs share the Departments joint response to questions about their interpretation of the interim final rules on nonquantitative treatment limitations in various respects.  Among other things, the new FAQs reflect:

The new FAQs respond to various questions about the effect of the MHPAEA on various medical necessity and other utilization management practices that health plans and health insurers historically have applied mental health and substance abuse coverage’s. 

The FAQs generally reaffirm that group health plans and health insurers generally cannot apply stricter medical necessity or other utilization review for mental health or substance abuse treatments than the prevailing requirements generally applicable to medical surgical benefits under the plan or policy. 

The FAQ also provides insight into evidence that health insurers or health plan sponsors should consider and retain when designing fraud control or other medical management techniques to be defensible under the MHPAEA’s parity requirements.

Furthermore, the new FAQs also provide guidance about the viability and use of differences in clinical standards of care, length of stay, and other clinical standards to justify differences in the periods of coverage provided for mental and substance abuse coverage versus other types of treatments.

Finally, the FAQs also address when a group health plan or health insurer can require covered persons to pay a higher specialist copayment for mental health or substance abuse treatments than generally applies to care rendered to a non-specialist. 

Insurers, plan sponsors, fiduciaries and administrators also should consider the potential implications of various other federal requirements on the design and administration of mental health and substance abuse coverage and benefits under their programs.   For example, the express reference to mental health and substance abuse benefits as included within the definition of “essential benefits” for purposes of the Affordable Care Act requires additional consideration of the effect of the Affordable Care Act’s annual and lifetime limit and other mandates relating to essential benefit coverage be evaluated and addressed.  In addition, specific attention should be devoted to the potential effects of the Affordable Care Act’s independent review and other rules concerning the processing and payment of health benefit claims by non-grandfathered health plans.

Along with considering the potential implications of these emerging requirements, health insurers, group health plans and those involved in their design and administration also should verify that their eligibility and other program terms or practices do not inappropriately violate the nondiscrimination rules of laws such as the Americans with Disabilities Act, the Health Insurance Portability & Accountability Act, the Genetic Information Nondiscrimination Act or other laws and that their plan and those involved in its administration are properly safeguarding the confidentiality of sensitive information about mental health , substance abuse or other health information about covered persons or their family.   Learn more here.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

New Mental Health Parity Regulations Require Health Plan Review & Updates

January 31, 2010

By Cynthia Marcotte Stamer

Employer and union-sponsored group health plans and insurers generally must update their group health plans to comply with expanded federal “mental health parity” regulations (MHP Regulations) published on Friday, January 29, 2010 will require changes to most covered group health plans to comply with the new rules and to make adjustments to broader benefit provisions as appropriate to mitigate potential cost implications no later than the first plan year beginning after June 30, 2010.

Jointly published by the Treasury, Health & Human Services and Labor Departments and available for review here , the MHP Regulations interpret and implement federal rules prohibiting group health plans and their insurers from imposing certain special limits on benefits provided for mental health and substance abuse treatments not applicable to general medical or surgical benefits. 

The Paul Wellstone and Pete Domenici Mental Health Parity and Addition Equity Act of 2008, Public Law 110-343 (MHPAEA) expands the scope of prohibited restrictions on mental health benefits beginning after June 30, 2010.   Under the MHPAEA amendments, any covered group health plan that includes mental health and substance use disorder benefits along with standard medical and surgical benefits generally cannot apply more limited benefit limits, out-of-pocket cost limitations, prior authorization and utilization review or other benefit restrictions than apply to medical or surgical benefits.  In addition, group health plan utilization review, medical necessity and appropriateness and other rules and procedures used to decide mental health and substance abuse benefits generally must be based on the same level of scientific evidence used by the group health plan or insurer to determine medical and surgical benefits.

Before the MHPAEA amendments took effect, the Mental Health Parity Act of 1996 (MHPA) generally only prohibited group health plans from applying more restrictive aggregate lifetime and annual dollar limits on mental health benefits than applied to general medical or surgical benefits and did not extend these restrictions to substance use disorder benefits.

The MHP Regulations generally apply to group health plans of employers with 50 or more workers that offer mental health or substance use disorder benefits for plan years beginning on or after July 1, 2010.  Until then, covered group health plans and their insurers generally must continue to comply with the more limited mental health parity requirements imposed under the MHPA, as well as other federal group health plan mandates.

Federal law increasingly is curtailing the significant latitude that employers and unions once enjoyed in deciding the benefits, eligibility and other terms and conditions of their group health plans, including many significant changes that took effect or will take effect during 2009 and 2010.   You can learn more about some of these developments by reviewing the 2009 Health Plan Update presentation posted here.  In light of the liabilities and costs arising under these and other rules, plan sponsors, administrators, fiduciaries and executives with responsibility over these plans, their establishment, funding or administration should take prompt and prudent steps to verify that their plan documents, communications, agreements and practices are updated to minimize risks and avoid unanticipated expense.

If your organization needs assistance with monitoring, assessing, managing or defending these or other health or other employee benefit, labor and employment, or compensation practices, please contact the author of this article, Curran Tomko Tarski LLP Labor & Employment Practice Group Chair Cynthia Marcotte Stamer or another Curran Tomko Tarski LLP attorney of your choice.  Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group and a nationally recognized author and speaker, Ms. Stamer is experienced with assisting employers and others about compliance with health and other employee benefit, labor and employment laws, safety, compensation, insurance, and other laws.  She also advises and defends employers and other plan sponsors, fiduciaries, employee benefit plans and others about litigation and other disputes relating to these matters, as well as charges, audits, claims and investigations by the IRS, Department of Labor and other federal and state regulators. She has counseled and represented employers on these and other workforce matters for more than 22 years. Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.   For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Information & Resources

We hope that this information is useful to you. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to participate in the distribution of our Solutions Law Press HR & Benefits Update distributions here.  Examples of other recent updates that may be of interest include:

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©2009 Cynthia Marcotte Stamer. All rights reserved.

Comments Off on New Mental Health Parity Regulations Require Health Plan Review & Updates | Disease Management, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Mental Health | Tagged: , , , , , , , , , , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer