Servwell Insurance Services - News

As you sign up for coverage this fall, here's what to look for:

Thu, 14 Oct 2010 08:21:58 -0800

Extension Of Young Adult Coverage

All health plans must permit adult children to remain on their parents' plans until age 26. It makes no difference if the young adults are married or financially independent. As long as children don't have an offer of coverage from their own employer, parents can keep them on their plan.

If you want to put an adult child on your plan, you'll be given an opportunity to do so during a special enrollment period. At most companies that will coincide with open enrollment, say benefits consultants. Even if it doesn't, insurers and employers are required to notify you of the special enrollment period. Look for that notice.

Under the law, plans can't charge more for adult children than for dependents younger than 19. But they can increase the cost of family coverage overall, and many will do so, according to an employer survey released last week by the benefits consulting firm Mercer. The survey found that more than half of employers that plan to shift more costs onto employees' shoulders will do so by disproportionately increasing the cost of family coverage compared with employee-only coverage.

As part of their efforts to rein in costs, employers are also more likely than before to ask employees to verify that dependents are eligible for coverage, say experts. More than 40 percent of ineligible dependents are children younger than 19, says Karen Frost, health and welfare practice leader for human resources consultant Hewitt Associates.

Often the eligibility change is part of the fallout from divorce. Children may no longer live with or be financially dependent on the parent whose insurance covered them, for example, potentially making them ineligible under plan rules. "Most of the time, employees are covering ineligible dependents because they don't know the rules" of their plan, says Frost.

This can also be true for adult children on their parents' plans.

Prohibition On Coverage Exclusions For Children With Preexisting Conditions

Employer plans can no longer refuse to cover children younger than 19 because they were born with or develop a serious medical condition. The ban on coverage exclusions also applies to new individual policies purchased for a child.

However, even though the new law allows adult children to remain on their parents' plan until age 26, once they are 19 they could be refused coverage for a preexisting condition, says Tracy Watts, a partner at Mercer.

A similar ban on coverage exclusions for adults goes into effect in 2014.

Restriction On Annual Dollar Coverage Limits

In general, employer plans can't impose annual coverage limits of less than $750,000 for "essential" health benefits, including hospital services, drugs, emergency services and maternity and newborn care. The maximum limits increase every year and they are eliminated in 2014. These limits apply to new individual policies, too.

Additional provisions take effect on or after Sept. 23 for new plans offered by employers or purchased by individuals since March 23. These include requirements that insurers:

*Cover the full cost of preventive services that have the highest recommendation of the U.S. Preventive Services Task Force.

*Allow women to see an OB-GYN without a referral.

*Do not make plan members pay higher co-payments or coinsurance for out-of-network emergency services.

The fight to obtain relief for mini-med plan

Tue, 05 Oct 2010 12:15:16 -0800

The fight to obtain relief for mini-med plans from the Affordable Care Act’s (ACA) MLR calculation took an encouraging but not yet conclusive turn last week. Although many insurers (including Aetna) have obtained their waivers as to restricted annual limits, no such plan or product could ever meet the 85 percent MLR requirements of ACA. Aetna has led an ad hoc coalition of employers, insurers and agents in fighting for an exemption from the MLR calculation based on the unique characteristics of mini-med plans. A Wall Street Journal story revealed that a major employer (McDonald's) was contemplating dropping mini-med coverage for 30,000 of its employees, an example of the new law's unintended consequences. The story further led HHS and the White House both to issue a press statement and host a conference call with some members of the coalition late in the week. Aetna took the lead in providing the Administration with information (data, policy and legal documents) in support of its position that the issue could be quickly resolved by exempting mini-med plans from the MLR calculation and thereby preserving coverage for 1.4 million citizens. A decision from HHS is pending.

Schwarzenegger signs major health care bills

Fri, 01 Oct 2010 08:39:50 -0800

SACRAMENTO, Calif. (AP) - Gov. Arnold Schwarzenegger has signed seven major health care-reform bills, including legislation establishing an insurance exchange that will allow consumers to comparison-shop for coverage.

The governor's action on Thursday makes California the first state to implement an oversight board for insurance exchange marketplaces since the new federal law was enacted earlier this year.

Additional bills in the package prohibit insurers from denying coverage to children because of a pre-existing condition and allow young adults to stay on their parents' health care plans until age 26.

The legislation aims to bring the nation's most populous state in line with federal reforms scheduled to take effect in 2014.

(Copyright 2010 by The Associated Press. All Rights Reserved.)

Health Care Reform: Implementation Update -- Aetna version

Thu, 23 Sep 2010 09:36:13 -0800

Health Care Reform: Implementation Update
Dear Valued Broker,

Today, the first health care reform requirements go into effect. Here’s a quick review of the changes and what we’re doing to make sure your customers’ plans are ready when they renew. You can also find more detail on these topics under Timeline and Q&As on the Health Care Reform page on aetna.com.

Covering dependent children to age 26
All plans must cover dependent children up to the age of 26. This is regardless of the dependent’s marital status, financial dependence, student status, or employment status. Grandfathered plans do not have to cover dependents who are eligible for employer coverage other than through their parents. Our insured plans also will comply with any state laws that already require coverage beyond age 26.

(Aetna’s Individual and Small Group plans added this coverage earlier this year. Larger groups had the option of adding it at that time.)

We’re adding notices to all of our enrollment kits, so your customers’ employees know they can add these dependents to their plan.

100 percent coverage of preventive care services
All plans (except grandfathered plans) will provide coverage with no member cost sharing for recommended preventive care services, when provided in network.

We have developed a list of covered preventive services. The list is based on our interpretation of the preliminary final guidance released by the Department of Health and Human Services (HHS) in July 2010. We will cover services on this list without cost sharing in our insured plans. We’re also sharing the list with our self-funded plan sponsors.

You can see the list in this communication that your customers can share with their plan members. It explains the preventive services covered without cost share. (Please see this version for members of Traditional Choice plans only.)

Finally, we’re providing doctors in our network with information. This will help make sure they know about our preventive health coverage.

Annual and lifetime limits
We have removed lifetime and annual dollar limits for essential benefits, both in and out of network, from all of our plans. (See the exception below for limited benefit plans). Annual frequency limits can still apply.

We have based these changes on our assessment of which benefits are essential. We will update this assessment as needed once HHS provides additional information.

Limited Benefit Plans: There is an exception for limited benefit plans (such as Aetna’s Affordable Health Choices plans). HHS has agreed to waive the restricted annual benefit limits for qualified limited benefit plans until other affordable options become available in 2014. We are applying for an annual waiver for our Affordable Health Choices plans. We expect to get word soon.

Emergency services out of network
We foresee little change in the way we cover emergency services in most of our plans. Aetna already applies an in-network cost-share to out-of-network emergency services. We also don’t require preauthorization for these services.

HHS had originally defined a payment formula for out-of-network emergency claims. However, in guidance issued September 20, 2010, HHS accepted our proposal that the formula not apply if the member is held harmless for any balance billing. This will enable us to continue our current payment practices. Today, we pay the out-of-network provider based on the plan’s out-of-network allowance. This allowance varies by plan. We hold the member responsible only for the in-network cost share. We tell members to contact us if an out-of-network provider balance bills them for an emergency service. If this happens, we reimburse the member for the balance billed amount.

We are expanding this hold harmless approach to our Traditional Choice and Open Choice plans. These are the only plans where it was not previously in effect. We are making our EOB messaging clearer regarding the fact we will hold member harmless. We also are developing appropriate language for our plan documents.

Grievance and appeals
The law has a number of requirements around grievances and appeals. These include turnaround times for urgent care claims, expanded availability of external review, providing notices in a culturally/linguistically appropriate manner, and other provisions. Grandfathered plans are not required to meet these requirements.

Aetna is working on updates to our systems and processes to bring our plans into compliance. We are working with our language vendor to identify language needs and provide information in a culturally/linguistically appropriate manner. We are also expanding the availability of external reviews as required.

In guidance issued September 20, 2010, HHS granted a good faith grace period until July 1, 2011 for the implementation of changes to urgent care claim turnaround times, EOBs and language requirements for notices. Those changes require system and process modifications which were not possible by the September 23, 2010 effective date. While enforcement action will not occur prior to July of 2011, we will become compliant as soon as possible.

Pre-existing conditions
We are removing the ability for plans (except grandfathered plans) to limit or exclude benefits or coverage based on pre-existing conditions for enrollees under the age of 19.

Choice of health care professionals
The law says health plans must allow members to choose any participating primary care provider. Plans must allow women to access ob/gyns without a referral or preauthorization, and allow pediatricians to be named as a child’s primary care provider. Aetna plans already include all of these provisions, and no changes are needed.

We hope this is a helpful summary of the changes coming to ensure your customers’ plans are ready at renewal. Please contact your Aetna representative if you have any questions.

Sincerely,

Aetna.

Please contact us, service@servwellinsurance.com or your representative if you have any questions.

How to Determine Whether Your Policy is Grandfathered

Tue, 07 Sep 2010 10:43:16 -0800

If you enrolled in your policy on or before March 23, 2010, your policy maybe grandfathered. Your agent or customer service representative is the best source for specific information about whether your policy is grandfathered. Please consult them if you are considering changes to your policy since any grandfathered status might be affected by policy changes.

If you enrolled in your policy after March 23, 2010, you do not have a grandfathered policy.

POIZNER REACTS TO INDUSTRY LAWSUIT TO HALT CONSUMER PROTECTIONS AGAINST ILLEGAL RESCISSIONS

Fri, 27 Aug 2010 12:31:14 -0800

Dept of Insurance Press Release -

Aug. 20: Sacramento, Calif., - The California Department of Insurance issued the following press release:
Poizner Calls Insurers' Lawsuit "Appalling" in Attempt to Continue Illegal Rescissions. Insurance Commissioner Steve Poizner today responded to an insurance industry lawsuit to block regulations that prevent the practice of unfair rescissions in the individual health insurance industry.

"I find it unconscionable that insurers would sue to keep the Department from stopping the horrific practice of illegal rescissions," said Commissioner Poizner. "Sometimes I think representatives in this industry have their heads permanently stuck in the sand. Illegal rescissions are a repugnant industry practice. In this current environment, this lawsuit is simply short-sighted and morally wrong."

Earlier this year, Commissioner Poizner introduced historic regulations to prevent the practice of unfair rescissions in the individual health insurance industry. Rescissions are retroactive cancellations of coverage after a patient becomes sick with an often expensive-to-treat illness. These regulations, effective August 18, 2010, mark California's first-ever regulatory steps to clarify rescission laws, preventing the industry practice of unfairly rescinding health insurance policies.

Previously, insurance companies took advantage of ambiguity in existing laws to inappropriately rescind health insurance policies for individuals when they need health insurance coverage the most after filing claims for medical treatment. Poizner's regulations would ensure that insurance companies perform all underwriting before accepting a policyholder and receiving premiums.

The regulations would also prohibit insurers from conducting certain rescission focused investigations after the policyholder becomes sick or injured. The rescission regulations do not prohibit insurers from addressing fraud by health insurance applicants so long as the insurer has done its work in reviewing the application prior to issuing the policy.

Commissioner Poizner has taken a series of decisive steps against improper rescissions since taking office in 2007, cracking down on the three largest individual health insurance companies in the state Health Net, Anthem Blue Cross and Blue Shield for engaging in the practice with enforcement actions and settlements to ensure that these companies do not illegally rescind policies in the future.

The settlements, which cover 85 percent of the market, will not be affected by this lawsuit. Poizner also obtained offers of reinstated coverage for 4,000 customers whose policies CDI alleges were illegally rescinded.

Seniors Turning 65 in California

Thu, 26 Aug 2010 10:19:53 -0800

In California, an average of 16,000 seniors turn 65 every month. By the end of this year that number will reach 25,000!

CALIFORNIA MOVES CLOSER TO PRIOR APPROVAL OF HEALTH RATES

Thu, 19 Aug 2010 12:55:52 -0800

BestWire Services -

Aug. 17: A bill to impose mandatory rate review on health plans in California moved a step closer to passage after the Appropriations Committee advanced it to the full Senate.

The Senate committee voted 7-4 to require prior regulatory approval before health insurance premiums, co-payments or deductibles could be increased. Under A.B. 2578, health maintenance organizations and health insurers would have to follow the same rules that apply to automobile and homeowners insurance policies under 1988's Proposition 103.

The restrictions would apply to health maintenance organizations and most Blue Cross Blue Shield plans, which are regulated by the Department of Managed Health Care, as well as other insurance plans, which fall under the Department of Insurance. The bill sponsored by Assemblymen Dave Jones, D-Sacramento, and Mike Feuer, D-Los Angeles would require insurers to justify overhead costs and proposed rate increases.

"In California, we've had positive experiences in 22 years of rate regulation," Jones said. Given "excessive, double-digit" increases in recent years, rate review is "one of the most critical missing pieces from the national health care reform legislation," he said.

Jones is the Democratic nominee for insurance commissioner. He faces Republican Mike Villines in the November general election. Prior approval makes health plans a target, but does not address ever-higher costs of care, including medical equipment and costs providers must absorb. California hospitals lost $12.2 billion in uncompensated care in 2009 due to "bad debt" charity care and underfunding of Medi-Cal, the state Medicaid program, said Jan Emerson, spokeswoman for the California Hospital Association.

"Once you regulate the health plans, then you go down the slippery slope of regulating what the hospitals and the providers may charge," she said.

While addressing costs is also important, Jones said true medical costs have been increasing 3-4%, a fraction of insurance rate increases, according to federal Department of Labor statistics.

State regulators have full authority to audit health insurers, and they do so for solvency standards and legal compliance, said Patrick Johnston, president of the California Association of Health Plans.

Under the federal Patient Protection and Affordable Care Act, insurers will be required to justify certain increase proposals considered "unreasonable" by state regulators and the U.S. Department of Health and Human Services.

Each state, and the District of Columbia, is eligible for a $1 million grant to work on its process for reviewing and giving approval to premium requests.

It is the initial portion of an eventual $250 million grant program to strengthen state review processes. New York Gov. David A. Paterson signed legislation in June to restore prior approval for health plans in the Empire State. prior approval of health premiums to state insurance regulation for health insurers and health maintenance organizations. Since 2000, the state has implemented file-and-use.

The New York State Insurance Department will have the authority to review rate applications and their underlying calculations and may approve, modify or reject them.

In July, Insurance Commissioner Steve Poizner announced that all health insurance rate filings for the individual market will be posted on the Department of Insurance website and that consumers can receive e-mail notifications of new filings. The rate filings of the state's four largest insurers will also be analyzed by an outside actuary, Poizner said.

HEALTH PROGRAM FOR UNINSURABLE COMING SOON

Wed, 11 Aug 2010 10:46:38 -0800

Ventura County Star -

Aug. 10: The chance of health coverage after eight years of being labeled uninsurable, it's the numbers that stress out the Newbury Park real estate agent who once had liver problems. One of the first waves of federal healthcare reform will sweep into California sometime in September when a new government insurance program begins for people who can't get coverage because of pre-existing conditions. Applications for the program, funded by the federal government and run by California's Managed Risk Medical Insurance Board, will be accepted later this month.

In Ventura County, premiums for the program will range from $127 for children 14 and younger to $720 for people 60 to 64. Mars, who is 55 and was last insured before she had two large abscesses removed from her liver, would face monthly premiums of $564. "Crazy," she said. An advocate of reform, Mars still plans on applying for the program though she's not sure she can afford it. "I'm happy that at least there's an option for people."

The program is aimed at people who have been uninsured for at least six months and have a health condition that blocks them from private insurance. It will be funded by $761 million in federal money over three-plus years and is designed as a bridge to 2014, when reform will mean people with pre-existing conditions can no longer be denied coverage or be charged more for it.

The rates incite sticker shock for some, especially those 50 and older. Janelle Endy of Simi Valley is 59, has a thyroid condition and has been unemployed for more than two years. The $564 premium won't come close to representing an option.

"Oh no. I'm not even collecting unemployment," she said, noting her benefits expired. For others, the costs are relative. Michelle Vickers, a 25-year-old Ventura hairstylist, suffered problems related to lupus and ended up in a hospital for several hours with a bill that even after being reduced totaled about $5,000.

If she qualifies for the new high-risk pool, her premium would be $180 a month. That intrigues her. "If it did cover what I needed that would be totally fine," she said. The coverage will be comprehensive and will include an annual deductible of $1,500 and a yearly out-of-pocket maximum of $2,500, said Jeanie Esajian of the California Managed Risk Insurance Board, which will administer the program.

The prices may seem high but they comply with the federal reform law asserting they can't be higher than the standard rate charged individuals in the commercial market, she said. Setting prices lower would have meant that fewer people would have been covered, Esajian said. Analysts estimated as many as 25,000 Californians will be covered in the pool at any one time. That compares to a maximum of 7,100 people covered in the state's existing high risk pool.

In that state program, a 42-year-old Ventura County resident pays a premium of $657.50. In the new federal program, the premium for a person the same age would be $304. "I definitely think it will help people," said Gerald Kominski, associate director for UCLA Center for Health Policy Research, noting the current insurance system often blocks the people most in need of insurance from getting it. The new program won't come close to ending the problem, but it will help.

"I think these high-risk pools are a good bridge and a good first step," he said. The insurance will help the middle class, including business owners who can't afford coverage because they have a condition such as diabetes, said Lisa Safaeinili, executive director of the Westminster Free Clinic in Thousand Oaks. But the prices will mean it likely won't touch the growing flood of low-income people who currently rely on free clinics, low-cost county programs and similar safety nets, she said. "This will still be unattainable," she said.

Small Business Health Care Tax Credit. 3 Simple Steps

Wed, 04 Aug 2010 15:00:04 -0800

Millions of small employers will receive postcards from the IRS beginning the week of April 19 that alert them to the new Small Business Health Care Tax Credit and encourage them to check their eligibility. Even if you don't receive a postcard, your business still may be eligible.

Eligibility Rules

Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
Average annual wage. A qualifying employer must pay average annual wages below $50,000.
Both taxable (for profit) and tax-exempt firms qualify.

Amount of Credit

Maximum Amount. The credit is worth up to 35 percent of a small business' premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.