Today, HHS released a new “guidance bulletin” stating what they intend to propose in upcoming regulations defining how actuarial value will be determined. I’ve copied the relevant section (from page 9) on HSAs below. The AV bulletin can also be found here: AV bulletin

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Treatment of Health Savings Accounts and Health Reimbursement Arrangements in Calculating Actuarial Value

Section 1302(d)(2)(B) of the Affordable Care Act directs the Secretary to issue regulations under which employer contributions to a health savings account (within the meaning of section 223 of the Internal Revenue Code of 1986) may be taken into account in determining the level of coverage for a plan of the employer. Calculation of the AV of high-deductible health plans (HDHP) linked to a health savings account (HSA) or a health plan linked to a health reimbursement arrangement (HRA) poses a special challenge. Simply calculating the AV of the HDHP based on the insurance product could understate the value of coverage and some HDHPs could fall below the level of a bronze plan based on the HDHP alone. Yet accounting for the total coverage provided by the combination of the HDHP and the full value of the HSA or HRA could overstate the AV because, empirically, only a portion of these accounts are used toward health in a given year. The AV calculation should, therefore, reflect an appropriate adjustment to these contributions. We intend to propose that for purposes of calculating the AV of an employer health benefit plan, the annual employer contribution to the employee’s HSA associated with a qualifying HDHP and the amount made available for the first time in a given year under a HRA that is linked to an employer health benefit plan shall be considered part of the benefit design of the health plan. In calculating the AV of the combined HDHP and HSA or combined employer health benefit plan and HRA, the calculation would assume that the employer contribution to the HSA or HRA is used by the employee to pay for cost-sharing. Accordingly, these amounts would be credited to the numerator of the AV calculation. This means that the AV calculator would include any current year HSA contributions and amounts first made available under an HRA as an input into the calculator that can be used to determine the AV of an employer health benefit plan. For example, if a HDHP with a $3,000 deductible has an AV of 55 percent and the employer provides an HSA contribution of $1,000, that contribution would be applied towards the numerator of the AV calculation. However, because generally only a portion of an HSA is used in a year for health services, HSA contributions would be adjusted so that the employer receives the same credit for HSA contributions in the numerator of the AV calculation as it would receive for the same amount of first-dollar insurance coverage. The same rule would apply for amounts first made available under an HRA. In the individual market, we intend to propose that HSA contributions paid directly by the individual would not count towards AV.
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As I read this, it is not yet possible to tell whether employee contributions made via payroll deduction (which are treated as “employer contributions” for tax purposes) would be treated as “employer contributions” for purposes of calculating AV. HHS clearly states in the last sentence that they do not intend to include individual HSA contributions in the AV of HDHPs purchased in the individual market. They are currently silent on whether an insurance carrier could build HSA contributions into their premiums (and the AV of the HDHP) and “pass them along” to the HSA account, as the federal government does for federal employees.

CMS says it welcomes public input on this bulletin. Comments on AV should be sent to ActuarialValue@cms.hhs.gov and cost-sharing reductions to CostSharingReductions@cms.hhs.gov .

I urge all of you to read this section carefully and submit comments/questions to HHS. What is interesting is that that are willing to consider including some HSA contributions in the numerator of the Actuarial Value, but not include these same contributions in the numerator of the medical loss ratio.

Roy Ramthun, "Mr. HSA"
HSA Consulting Services, LLC

Anyone who had has the experience of shopping for health insurance knows it’s not an easy task. Figuring out ways to keep premiums affordable can be a major struggle. Shopping for apples-to-apples coverage with several carriers is nearly impossible and premiums for similar plans are vastly different from one carrier to the next.

So what’s a person to do?

Purchasing health insurance requires a “think outside the box” approach. Here are three simple tips to help you along the way:

1. Consider shopping for a much higher deductible than you are accustomed to. Shop for plans that have a $10,000 deductible or more. It may shock you as to how drastically lower premiums will be. Too much risk for you? We will show you a way to combat that next. (If you would like to see a rate for a higher deductible in comparison please visit: High Deductible Quote for an instant online rate.)

2. To offset that high deductible, consider purchasing a Critical Illness Rider, which attaches to your major medical policy. Critical Illness riders pay a CASH benefit for conditions like: Cancer, Heart, Stroke, Coma, Kidney, etc. and this CASH benefit can be used to pay off your entire deductible and even leave you with additional monies for other expenses, such as loss of income. Riders can be purchased to cover your deductible and you can even purchase more, up to $100,000 in CASH coverage if you wish. Believe it or not, these premiums are very affordable.

3. Also to help offset risk, consider purchasing an Accident Rider to attach to your major medical policy. Like Critical Illness Riders, Accident Riders pay a CASH benefit for any accident or injury such as: cuts, burns, broken bones, strained and pulled muscles, etc. This CASH benefit can be used to pay your entire deductible in the event you or your family is injured. If you have children, especially ones in sports, this is a must-have rider. These premiums are even more affordable.

So what types of claims will you then need to worry about? Since health care reform passed, additional benefits have now been added so you will not have to pay out of pocket for:

- Adult and child wellness exams, such as: checks-ups, immunizations, lab work, mammograms, pap smears, PSA’s, EKG’s, etc. They are all covered at 100% with NO deductible. Why purchase a lower deductible when it’s covered regardless?

- Additionally, there are no lifetime maximums: After your deductible, you are covered at 100% until infinity now. There are no lifetime caps like $2 million, $3 million, etc. If you have a $20 million medical bill, your insurance must now cover it.

- With a high-deductible policy you will have to pay for such claims as: office calls for a cold/flu, asthma, skin disorders (other than cancer) and other forms of illness. However, most people would rather save $300, $400, or more per month and pay the occasionally office call themselves. Another bonus, you WILL still be receiving the insurance companies discounted rate for office calls and will not have to pay full price. To see exactly what these plans cover please visit: Free Health Insurance Quote

Doing the same thing over and over again and expecting a different result……
well you know the rest. Thinking “outside the box” can not only save you money, but can also provide you with even better coverage than you had before.

If you have questions about this article or are shopping for insurance, please call JLBG Health at 1-800-800-5735 or visit Online health insurance rates

The Patient protection and Affordable Care Act (PPACA) guidelines must be enacted by September 23rd, 2010 (6 months from the date it was passed).

September 23rd guidelines:

-Dependent children will be permitted to remain on their parents' insurance plan until their 26th birthday.

-Insurers are prohibited from discriminating against any individuals under the age of 19 based on pre-existing medical conditions.

-Insurers are prohibited from charging co-payments or deductibles for Level A or Level B preventive care and medical screenings on all new insurance plans. For full list see article below.

-Individuals affected by the Medicare Part D coverage gap will receive a $250 rebate, and 50% of the gap will be eliminated in 2011. The gap will be eliminated by 2020.

-Insurers' abilities to enforce annual spending caps will be restricted, and completely prohibited by 2014. This is also called unlimited lifetime maximums.

-Insurers are prohibited from rescinding policyholders when they get sick unless fraud was committed on the application.

-Insurers are required to reveal details about administrative and executive expenditures.

-Insurers are required to implement an appeals process for coverage determination and claims on all new plans.

-Indoor tanning services are subjected to a 10% service tax.

-Enhanced methods of fraud detection are implemented.

-Medicare is expanded to small, rural hospitals and facilities.

-Companies which provide early retiree benefits for individuals aged 55–64 are eligible to participate in a temporary program which reduces premium costs.

-A new website installed by the Secretary of Health and Human Services will provide consumer insurance information for individuals and small businesses in all states.

-A temporary credit program is established to encourage private investment in new therapies for disease treatment and prevention

Effective by January 1, 2011

-Employers must disclose the value of the benefits they provided beginning in 2011 for each employee's health insurance coverage on the employees' annual Form W-2's.

-Insurers will be required to spend 85% of large-group and 80% of small-group and individual plan premiums (with certain adjustments) on health care or to improve health-care quality, or return the difference to the customer as a rebate. Although we are still waiting on additional clarifications from HHS at present these do not include any administration costs, salaries, benefits, rent, or commissions. This is NOT 20% profit. Future rate increases or decreases will be based on this formula.

-Companies will be required to issue 1099 forms to any vendor of services or rental property to which the business has paid more than $600. Form 1099 is also sent to the IRS. Under the existing law, businesses issued the Form 1099 only to individuals who provided services or property to a business. The health care law included the same form be issued to corporations as well, and that the form be issued to individuals and corporations that provide property to the business.Only business related payments are reportable, personal payments not.There are a number of exceptions, for example: payments for merchandise, telephone, freight, storage, payments of rent to real estate agents are excepted.The health care bill mandate aims to collect lost revenue from companies that under-report on their tax returns. The provision is expected to raise $17 billion over 10 years.

-The Centers for Medicare and Medicaid Services is responsible for developing the Center for Medicare and Medicaid Innovation and overseeing the testing of innovative payment and delivery models.

Grandfather status:

All health insurance policies issued before March 22nd, 2010 will be grandfathered (exempt) from most of the requirements. Plans issued between March 22nd and Sept 22nd, 2010 will not have these benefits included now but they MUST be brought to compliance and added by 1/1/11. Any significant changes made to a grandfather policy, IE: increasing the deductible, increasing out of pocket maximums, will result in the loss of grandfathered status.

Later developments:

2014:

-All insurance companies will have to guarantee issue coverage (no one can be turned down) regardless of health conditions.

-Health insurance Exchanges will be set up that will provide assistance to buy insurance based on % of Federal poverty levels.

The Patient Protection and Affordable Care Act (PPACA) rules must be implemented by September 23rd, 2010 by all health insurance carriers.

One of the provisions of this act is that preventative services (wellness) treatment must be covered by insurers with no deductible or co-pays, and with no maximums allowed.

These guidelines are set forth by the US Preventative Task Force (USPSTF)

Most insurers will have to cover recommendations A and B by the Task Force.

Many of the A and B recommendations are:

-The USPSTF recommends that women whose family history is associated with an increased risk for deleterious mutations in BRCA1 or BRCA2 genes be referred for genetic counseling and evaluation for BRCA testing.
Grade: B Recommendation.

-The USPSTF recommends biennial screening mammography for women aged 50 to 74 years.
Grade: B recommendation.

-The USPSTF recommends that clinicians discuss chemoprevention with women at high risk for breast cancer and at low risk for adverse effects of chemoprevention. Clinicians should inform patients of the potential benefits and harms of chemoprevention.
Grade: B Recommendation.

-The USPSTF strongly recommends screening for cervical cancer in women who have been sexually active and have a cervix.
Grade: A Recommendation.

-The USPSTF recommends screening for colorectal cancer (CRC) using fecal occult blood testing, sigmoidoscopy, or colonoscopy, in adults, beginning at age 50 years and continuing until age 75 years. The risks and benefits of these screening methods vary.
Grade: A Recommendation.

-The USPSTF strongly recommends that clinicians screen all adults for tobacco use and provide tobacco cessation interventions for those who use tobacco products.
Grade: A Recommendation.

-The USPSTF strongly recommends that clinicians screen all pregnant women for tobacco use and provide augmented pregnancy-tailored counseling to those who smoke.
Grade: A Recommendation.

-The USPSTF recommends one-time screening for abdominal aortic aneurysm (AAA) by ultrasonography in men aged 65 to 75 who have ever smoked.
Grade: B Recommendation.

-The USPSTF recommends the use of aspirin for men age 45 to 79 years when the potential benefit due to a reduction in myocardial infarctions outweighs the potential harm due to an increase in gastrointestinal hemorrhage.
Grade: A recommendation.

-The USPSTF recommends the use of aspirin for women age 55 to 79 years when the potential benefit of a reduction in ischemic strokes outweighs the potential harm of an increase in gastrointestinal hemorrhage.
Grade: A recommendation.

-The U.S. Preventive Services Task Force (USPSTF) recommends screening for high blood pressure in adults aged 18 and older.
Grade: A Recommendation.

-The U.S. Preventive Services Task Force (USPSTF) strongly recommends screening men aged 35 and older for lipid disorders.
Grade: A Recommendation.

-The USPSTF recommends screening men aged 20 to 35 for lipid disorders if they are at increased risk for coronary heart disease.
Grade: B Recommendation.

-The USPSTF strongly recommends screening women aged 45 and older for lipid disorders if they are at increased risk for coronary heart disease.
Grade: A Recommendation.

-The USPSTF recommends screening women aged 20 to 45 for lipid disorders if they are at increased risk for coronary heart disease.
Grade: B Recommendation.

-The USPSTF recommends screening for asymptomatic bacteriuria with urine culture for pregnant women at 12 to 16 weeks' gestation or at the first prenatal visit, if later.
Grade: A Recommendation.

-The U.S. Preventive Services Task Force (USPSTF) recommends screening for chlamydial infection for all sexually active non-pregnant young women aged 24 and younger and for older non-pregnant women who are at increased risk.
Grade: A Recommendation.

-The USPSTF recommends screening for chlamydial infection for all pregnant women aged 24 and younger and for older pregnant women who are at increased risk.
Grade: B Recommendation.

-The U.S. Preventive Services Task Force (USPSTF) recommends that clinicians screen all sexually active women, including those who are pregnant, for gonorrhea infection if they are at increased risk for infection (that is, if they are young or have other individual or population risk factors; go to Clinical Considerations for further discussion of risk factors).
Grade: B Recommendation.

-The U.S. Preventive Services Task Force (USPSTF) strongly recommends screening for hepatitis B virus (HBV) infection in pregnant women at their first prenatal visit.
Grade: A Recommendation.

-The USPSTF recommends screening for hepatitis B virus (HBV) infection in pregnant women at their first prenatal visit.
Grade: A Recommendation.

-The U.S. Preventive Services Task Force (USPSTF) strongly recommends that clinicians screen for human immunodeficiency virus (HIV) all adolescents and adults at increased risk for HIV infection (go to Clinical Considerations for discussion of risk factors).
Grade: A Recommendation.

-The USPSTF recommends high-intensity behavioral counseling to prevent sexually transmitted infections (STIs) for all sexually active adolescents and for adults at increased risk for STIs.
Grade: B Recommendation.

-The U.S. Preventive Services Task Force (USPSTF) strongly recommends that clinicians screen persons at increased risk for syphilis infection.
Grade: A Recommendation.

-The USPSTF strongly recommends that clinicians screen all pregnant women for syphilis infection.
Grade: A Recommendation.

-The USPSTF recommends screening for type 2 diabetes in asymptomatic adults with sustained blood pressure (either treated or untreated) greater than 135/80 mm Hg.
Grade: B Recommendation.

-The USPSTF recommends intensive behavioral dietary counseling for adult patients with hyperlipidemia and other known risk factors for cardiovascular and diet-related chronic disease. Intensive counseling can be delivered by primary care clinicians or by referral to other specialists, such as nutritionists or dietitians.
Grade: B Recommendation

-The USPSTF recommends routine screening for iron deficiency anemia in asymptomatic pregnant women.
Grade: B Recommendation.

-The USPSTF recommends that clinicians screen all adult patients for obesity and offer intensive counseling and behavioral interventions to promote sustained weight loss for obese adults.
Grade: B Recommendation.

-The USPSTF recommends that clinicians screen children aged 6 years and older for obesity and offer them or refer them to comprehensive, intensive behavioral interventions to promote improvement in weight status.
Grade: B recommendation.

-The U.S. Preventive Services Task Force (USPSTF) recommends that women aged 65 and older be screened routinely for osteoporosis. The USPSTF recommends that routine screening begin at age 60 for women at increased risk for osteoporotic fractures. (Go to Clinical Considerations for discussion of women at increased risk.)
Grade: B Recommendation.

-The USPSTF recommends interventions during pregnancy and after birth to promote and support breastfeeding.
Grade: B Recommendation.

-The USPSTF recommends that all women planning or capable of pregnancy take a daily supplement containing 0.4 to 0.8 mg (400 to 800 µg) of folic acid.
Grade: A recommendation.

-The USPSTF recommends screening for hearing loss in all newborn infants.
Grade: B Recommendation.

-The U.S. Preventive Services Task Force (USPSTF) recommends screening and behavioral counseling interventions to reduce alcohol misuse (go to Clinical Considerations) by adults, including pregnant women, in primary care settings.
Grade: B Recommendation.

-The USPSTF recommends screening of adolescents (12-18 years of age) for major depressive disorder (MDD) when systems are in place to ensure accurate diagnosis, psychotherapy (cognitive-behavioral or interpersonal), and follow-up.
Grade: B recommendation.

-The USPSTF recommends that primary care clinicians prescribe oral fluoride supplementation at currently recommended doses to preschool children older than 6 months of age whose primary water source is deficient in fluoride.
Grade: B Recommendation.

-The USPSTF recommends screening for congenital hypothyroidism (CH) in newborns.
Grade: A Recommendation.

-The USPSTF recommends screening for phenylketonuria (PKU) in newborns.
Grade: A Recommendation

-The U. S. Preventive Services Task Force (USPSTF) recommends screening for sickle cell disease in newborns.
Grade: A Recommendation.

-The USPSTF recommends screening to detect amblyopia, strabismus, and defects in visual acuity in children younger than age 5 years.
Grade: B Recommendation.

-The USPSTF recommends screening adults for depression when staff-assisted depression care supports are in place to assure accurate diagnosis, effective treatment, and follow-up.
Grade: B recommendation.

For a complete list of recommended preventative services by the USPATF go to: Preventative Service Recommendations







www.ahrq.gov/clinic/uspstfix.htm

One of the biggest questions facing us today is will new health care law result in lower health insurance premiums in the future or not?

As waive one of health care reform- Patient Protection and Affordable Care Act (PPACA) starts on Sept. 23rd, 2010 here are a few things we need to think about:

- Starting Sept 23rd, 2010 all insurance companies will be required to: provide unlimited lifetime maximums (prior most plans were $2, 3, 5 million etc.), cover dependents through age 26 even if they are not a full time student (prior was usually 23 if they WERE a full time student, 19 if not) and they must provide 100% coverage (no deductible or co-pay) for all the old and new wellness services under U.S. Preventive Services Task Force (USPSTF) guidelines. For a complete list of these new Type A and B recommendations visit: New Wellness Services List

As we have already seen by looking at premiums on Sept 22nd and then again the very next day on Sept 23rd, 2010 this will raise premiums in the average range of 13%.

- Also being calculated as we speak is something called MLR- or Minimum Loss Ratio. This will take full enactment in Jan 2011. MLR simply means that insurance companies must pay out 85% of their premiums in health care costs. This does NOT include: administration, mailing out ID cards and policies, processing the claims, overhead, salary, rent, benefits, or profit. If the insurance companies do not pay out this amount at least they will have to refund the money back to the policyholders. If they do pay out this amount or even more they will almost certainly ask the State governments for a premium increase in the following year.

So, if you stop and think about this for a minute you will see that all future health insurance premiums will be dictated by what the claims are. If claims are low policyholders will get a refund, if claims are high your premiums will continue to rise. The rules are set and only time will tell which one will happen.