Carter's Benefits

eNewsletter Volume 3, Issue 2 February 2010


Are you in compliance For 2010?

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New Benefit Plan Requirements for 2010


The Genetic Information Nondiscrimination Act of 2008 (GINA)
The Departments of Labor, Health and Human Services and Treasury issued an interim final rule to implement the Genetic Information Nondiscrimination Act of 2008 (GINA) on October 1,2009; it went into effect on December 7. The new law and rule prohibits group health plans from discriminating on the basis of genetic information and strictly limits the collection by employers of any information that could possibly contain genetic information. Unfortunately, the rules extend these prohibitions to family-history questions on health-risk assessment forms used to place people in appropriate employer-based wellness and disease management programs or providing any incentive or reward for employees who complete a Health Risk Assessment.

This is an interim final rule, which means while it could be changed for 2011, its requirements are in effect for the 2010 plan year. Since its effective date was just December 7, it is very important to make sure that you are not unintentionally out of compliance.

The majority of employer-sponsored health benefit plans are based on the calendar year, and many calendar-year plans have already distributed Health Risk Assessments that include questions about family medical history as part of their open-enrollment materials for the 2010 plan year. These plans may or may not have had expectations of getting these documents back before January 1, 2010,
and may have had rewards already planned and promised to employees for completion to be distributed after the start of the new plan year. If this is the case, please take steps to correct your wellness or disease-management programs right away!

What can you do to protect yourself? Destroy any documents which contain or collected "family medical history". Change any future Health Risk Assessment forms you may be using so that you no longer collect "family medical history". There appears to be nothing that prohibits the Health Risk Assessment and Wellness programs at this time, however collection "family medical history" or genetic information is in violation of the new law.

Mental Health Parity (MHPAEA)
For most group benefit plans, the Wellstone-Domenici Mental Health Parity and Addiction Equity Act went into effect on January 1 for calendar-year plans. The law applies to employers of more than 50 people that provide mental health and substance abuse services as part of their employee benefits program. While large employers are not required to provide those benefits to employees, those that do may not impose any stricter financial requirements on mental health or substance abuse coverage than the predominant financial requirements for medical and surgical coverage under the plan.

Generally, this means plans may not have higher cost sharing provisions for mental health and substance abuse benefits (e.g., deductibles, co-payments and out-of-pocket requirements) than those that apply to medical and surgical coverage. In addition, plans may not have stricter annual and lifetime dollar limits or any more restrictive coverage limits on the number of office visits or similar restrictions on the duration of coverage for mental health or substance use services than there are for medical or surgical treatments generally.

And if the plan provides out-of-network benefits for medical and surgical services, then it also has to provide them for mental health and substance abuse, and they cannot be subject to stricter financial requirements or treatment limitations than those that apply to out-of-network medical and surgical services.

On Friday, January 29, the Departments of Health and Human Services, Labor and Treasury jointly issued significant new interim final regulations for implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

The regulations are 154 pages long and will require detailed reviews of applicable plan documents and insurance policies, as well as current processes regarding management of mental health benefits, claims, and the relationship Plans have with outside organizations that provide and manage mental health and substance abuse benefits.

These are "interim” final regulations, meaning that they are essentially final but are nonetheless subject to later changes as the result of the official 90-day public comment period.

For purposes of enforcement, regulators have emphasized that they will take into account a health plan’s good faith efforts to comply with a reasonable interpretation of the statute for violations that may occur with implementations by the original Act deadline (plan year renewals on or after October 3, 2009). The interim final regulation generally applies to group health plans and health insurance issuers for plan years beginning on or after July 1, 2010.  Collective bargaining entities have a different applicability provision to align with their agreements.

The interim final rules provide substantial clarification as to the definitions and tests that must be used in establishing parity between mental health and substance use and medical/surgical benefits with respect to financial requirements and treatment limitations, as required under MHPAEA. 

What does this mean to you? If you are a fully insured plan in Texas you fall into two groups. Employers with fewer than 50 employees and this law is not applicable, or you have more than 50 employees and the likely hood of your carrier already making these changes is great assuming you are a fully insured plan. If however, you have more than 50 employees and you are self funded, you need to look at your plan and make sure it is in compliance. Regardless of which category you fall into, a 2nd pair of eyes looking at your plan is always a good thing.

Michelle's Law-Coverage for College Students
Michelle's Law, which was signed in 2008, also went into effect on January 1 for calendar-year plans. It applies to most group plans if they cover dependents and use student status as a means of determining whether or not an individual is a dependent. This measure prohibits group health plans from terminating a college student who is on medical leave from school or has had to reduce their college status to part time for medically necessary reasons for one year after the first day of the medically necessary leave of absence, or until the date coverage otherwise would terminate under the terms of the plan (like exceeding the plan's age limits).

Children's Health Insurance Program Reauthorization Act of 2009 (CHIPA)
The passage of CHIPA last year created special enrollment rules, effective April 1, 2009, that require employers to amend their plans to allow special enrollment rights (similar to a qualifying event under HIPAA) for individuals who become eligible for state-paid coverage under CHIP or lose their CHIP eligibility.

COBRA Premium Subsidy
The temporary 65% federal subsidy of COBRA health insurance premiums for workers and their families who were involuntarily terminated between September 1, 2008 and December 31,2009, began to phase out last month. Employers are responsible for advancing the premium subsidy and receive a federal tax credit as reimbursement. The reduced-cost premiums originally only lasted for nine months so those who started getting subsidized coverage in March-the first full month after the stimulus bill was signed-lost their subsidy in December.

On Dec. 19, 2009, President Obama signed the Department of Defense Appropriations Act, 2010 (DoDAA) into law, which extends and expands the COBRA premium subsidy that was created under ARRA. The extension means new compliance obligations for employers and carriers. Eligibility for the subsidy now runs through February 28, 2010 and the duration of the subsidy can be up to 15 months.

Last year the Texas legislature extended State Continuation coverage from 6 months to 9 months for employers who have less than 20 employees and who are not eligible for COBRA.

Protecting the Privacy of Medical Information
Privacy and security rules under HIPAA were extended this year so that they now cover all business associates of entities covered by HIPAA, including health care plans as well as third party administrators and other vendors. The potential civil penalties for HIPAA violations were also substantially increased, and a tiered penalty structure based on categories of violations became effective on November 30, 2009, and applies to violations occurring on or after February 18 ,2009.

Also, interim final rules on the breach notification requirements and guidance on encrypting/decrypting protected health information became effective September 23, 2009, but the Department of Health and Human Services has announced it will not begin enforcement of the rules for failure to provide notifications that are discovered before February 22, 2010. Until then, covered entities are expected to attempt to comply and HHS will help covered entities through technical assistance and voluntary corrective action.

How does Carter's Benefits protect your data?
First we maintain the entire collection of data from our clients, prospects, and business associates on an encrypted drive. The encryption we use is the best on the market. We use and recommend PGP "The Leader in File Encryption", for the encryption of hard drives, network file shares, and email. PGP is cost effective, and secure. Normally we do not advertise or plug other products or services, but keeping your data secure and safe is of utmost importance to us. So important that we sought out the best source to protect this data. If you would like to know more about PGP or their products, you can visit their website directly at

* from January 2010 Issue Health Underwriter, by Jessica Waltman Senior Vice President of Government Affairs, NAHU

Interesting Facts
from Mercer's 2009 National Survey of Employer Sponsored Health Plans

A clear distinction emerges between what large employers and small employers are doing to contain health care costs. Large employers (those with 500 or more employees) are relying more on health management strategies, while small employers are depending on plan design changes and cost-sharing.

Smaller employers have to depend on plan design changes and cost-sharing to keep their cost down. They have fewer resources to throw at the problem, and their costs are likely to be driven by their demographics, not by their claims.

Facts discovered:

Average cost per employee in 2009
Small (Under 500 employees): $8,452
Large (Over 500 employees): $9,286
All Employer: $8,945

Use of Behavior Modification rose from 39% in 2008 to 51% in 2009

Adoption of CDHPs (Consumer Driven Health Plans or HSA Qualified Plans)
18% forecast in 2010
15% in 2009
9% in 2008

5.5% Costs were up in 2009, the lowest annual increase in a decade

Plan Enrollment percentage breakdown in 2009
PPO/POS: 69%
HMO 21%
Indemnity: 1%

This year employers expect costs to rise 9% if they renewed their 2009 plans
and 6% if they changed the plan design or their vendor.

* from January 2010 Issue Employee Benefit Adviser, Article entitled "By The Numbers".


If you have questions or would like more information please give us a call or send us an email.  Our email address is Questions@CartersBenefits.Com

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