Tucker E-Updates, July 2012
News and Industry Insights, Keeping You "Well-Informed"
How May We Help You?
View Our List of Services Here
About Tucker Administrators, Inc.
Tucker Administrators is a full-service TPA in Charlotte, NC. Founded in 1976, we provide a comprehensive portfolio of employee benefit products to serve the employer, broker and consultant community.
Why Tucker Administrators? Tucker Administrators is more than a claims payer. Our focus is on those factors that drive the total health risk management model, not just fixed costs. Large individual claims are the most expensive costs of a health plan. Our firm has the technology to focus on claims cost control. We use cutting-edge tools like predictive modeling, claims surveillance technology, wellness and clinically-based medical management with proven results that may slow or even reverse the rising trend of claims costs.
As business partner of inVentiv Medical Management, we are one of a select number of TPAs in the US to use a system to screen every one of our self-funded clients' claims and prescription data using more than 80,000 clinician-produced algorithms. The AWAC® engine has the capability to identify at-risk claimants before they become catastrophic, resulting in earlier diagnoses that are both life-saving and money-saving. Here is a list of our services:
- Total Self-Funded Health Plan Services
- Health Risk Assessment integrated with the group health plan
- Wellness Programs integrated with the group health plan
- On-Site Physician Programs
- Regulatory Compliance Support
- Group Employee Limited Self-Funded Plans
- Group Employee Fully-Insured Health Plans
- Group Employee Ancillary Plans
- FSAs-Medical, Dependent Care and Transportation
- Consolidated Billings Services
We can show you how to control plan costs while encouraging better health for your employees and their families. Call us at 704-525-9666, and visit our website at http://www.tuckeradministrators.com/
Health Reform Official Website
HIPAA (Privacy) Office of Civil Rights
IRS Retirement Plans Navigator
North Carolina Dept. of Insurance
Retiree Drug Subsidy Program, CMS
South Carolina Dept. of Insurance
Tricare; Military Health System
The International Foundation of Employee Benefit Plans (IFEBP) Supreme Court ACA Decision Reaction Survey
Despite the differing reactions among U.S. business sectors to the Patient Protection and Affordable Care Act Supreme Court ruling:
- 77% of surveyed organizations are very likely to provide health coverage in 2014
- 49% of the organizations are shifting their attention to wellness
- 32% are focusing on consumer-driven health plans
- 27% will shift costs to employees
- 26% will focus on value-based health care
The maximum salary reduction for an medical FSA will be capped at $2,500 starting in 2013. Some families may still have eligible FSA expenses that go above that. If one spouse is currently participating in their health FSA, check to see if the other spouse is eligible for a medical FSA as well. If so, each spouse can enroll in an FSA and fund it up to the $2,500 limit, thereby providing up to $5,000 in total contributions for the family.
The $2,500 limit will be indexed for cost-of-living adjustments for plan years beginning after December 31, 2013.
If you have any questions about this, please call us at 704-525-9666.
The Supreme Court’s decision confirms the constitutionality of the individual mandate. The fact that the Court upheld the mandate under Congress’ taxing power rather than the commerce or "necessary and proper" powers changes nothing about the language of the ACA or how the individual mandate will function. The mandate will go into effect in 2014 as Congress intended. Below is a flowchart of how the individual mandate will work.
Medicaid Expansion Revised
The Supreme Court’s decision on the Medicaid expansion does not change or invalidate the language in the ACA about the new eligibility group – it still exists in the law as a new mandatory coverage group beginning in 2014. However, the practical effect of the Court’s decision makes the Medicaid expansion optional for states because, if states do not comply with the Medicaid expansion, the Secretary may withhold only ACA Medicaid expansion funds; she may not withhold all or a part of a non-compliant state’s federal funds for the rest of the Medicaid program. In addition, the Court’s decision did not disturb other Medicaid-related provisions of the ACA. And, the Court’s decision leaves intact the existing Medicaid statute and the Secretary’s long-standing authority to withhold all or a portion of a state’s federal Medicaid funds for non-compliance with existing federal program rules.
Health Insurance Exchange Status
Many states have initiated planning activities and have been awarded federal grants to design the state-based health insurance exchanges that will serve as the marketplaces for people to purchase qualified health plans and gain access to premium tax credits and cost-sharing reductions.
However, 12 states halted exchange planning while awaiting the Supreme Court’s decision on the constitutionality of the ACA, and another five states indicated that, while they would continue exchange planning, they would not pursue state exchange legislation until after the Court’s decision. Now that the Court has upheld the individual mandate, states that have delayed exchange planning have only a few months left to meet the November, 2012 deadline to submit a blueprint for approval to either run their own exchange or participate in a federal-state partnership exchange. If states do not establish their own exchanges, the default is a federal exchange or a federal-state partnership model. Regionally, SC made the decision not to create an exchange, TN, VA and NC are studying the options, and Georgia has had no significant activity.
Looking beyond the Supreme Court decision, the Patient Protection and Affordable Care Act (PPACA) imposes financial penalties on large employers who do not provide health insurance coverage, as well as financial penalties on employers who provide coverage that is considered “unaffordable.” This begins January 1, 2014.
Coverage is “unaffordable” if either one of the following two conditions is present.
1) The employee’s required contribution under an employer-sponsored plan exceeds 9.5% of the employee’s household income, OR
2) The employer-sponsored plan pays less than 60% of the cost.
Employers with 50 or more full-time employees (or full-time equivalents) on business days during the preceding calendar year are liable for a penalty tax if the employer fails to offer full-time employees the opportunity to enroll in an employer-sponsored plan AND any full-time employee having enrolled in coverage through a State Exchange is certified to receive a premium tax credit or “cost-sharing reduction.”
The penalty tax is calculated on a monthly basis by multiplying 1/12 of $2,000 by the number of full-time employees less 30. Only one 30-employee reduction per controlled group of employers is allowed. After 2014, the $2,000 amount will be adjusted for inflation.
The penalty is pro-rated by the number of months without coverage, though there is no penalty for a single gap in coverage of less than 3 months in a year. The penalty cannot be greater than the national average premium for Bronze level coverage in an exchange. After 2016, penalty amounts are increased annually by the cost of living.
Below is a flow chart that illustrates the conditions under which an employer will pay a penalty tax as part of the Employer Mandate.
The Patient Protection and Affordable Care Act (PPACA) requires that, for plan years beginning on or after August 1, 2012, non-grandfathered plans will be required to cover the following additional preventive care services for women with no cost-sharing:
- Annual well-woman visits
- Screening for gestational diabetes
- HPV DNA testing for women 30 years and older
- Sexually-transmitted infection counseling
- HIV screening and counseling
- Screening and counseling for Interpersonal and domestic violence
- FDA-approved contraception methods and contraceptive counseling
- Breast-feeding support, supplies, and counseling
An enforcement safe harbor is available to non-exempted, nongrandfathered group health plans established or maintained by non-profit organizations whose plans have not covered contraceptive services for religious reasons at any point from February 10, 2012 onward, consistent with any applicable State law (and any group health insurance coverage provided in connection with such plans). The safe harbor provides an additional year for these group health plans and group health insurance issuers (i.e., until the first plan year beginning on or after August 1, 2013).
Please call us at 704-525-9666 if you have any questions.
There is a new trend of doctors who dispense prescriptions right in their office, rather than sending the patient to the pharmacy to have their prescription filled. The bills go to the insurance carrier or plan. Some states governing workers' compensation rules allow physicians to sell and dispense drugs in their office at a significant markup. In a July 11, 2012 article in the New York Times*, the process is described: Middlemen companies help doctors set up office pharmacies by providing them with billing software and connecting them with suppliers who repackage medications for office sale. Doctors sell the drugs but do not collect payments from insurers. In the case outlined in the New York Times article, the company pays the doctor 70 percent of what the doctor charges, then seeks to collect the full amount from the insurance carriers or plan.
|The cost of a medication dispensed through a workers' compensation plan is pegged in some states to a benchmark, which is supposed to represent a drug's typical wholesale cost.|
The loophole that raises the price of physician-dispensed drugs often involves a benchmark average wholesale price (AWP). The cost of a medication dispensed through a workers’ compensation plan is pegged in some states to that benchmark, which is supposed to represent a drug’s typical wholesale cost. However, firms that supply doctors with medications buy them in bulk from wholesalers and repackage them for office sale. These repackagers can set a new AWP, one that is often many times higher than the original.
To give an idea how profitable this is, some equity firms are buying stakes in the business.
*Meier, B., Thomas, K., (July 12, 2012) Insurers Pay Big Markups as Doctors Dispense Drugs, New York Times