With its “employer mandate”—i.e., the requirement that applicable large employers make an offer of group health coverage to substantially all full-time employees or face the prospect of a penalty—the Affordable Care Act (ACA) opened a fault line in the previously monolithic market for group health insurance. There is large cohort of American workers who, before the ACA, were not offered major medical coverage under an employer-sponsored group health plan. These employees are sometimes referred to as the “contingent” workforce. They include part-time, seasonal and temporary employees, as well as employees whose work schedules are generally irregular or intermittent. Found predominantly though not exclusively in industries such as staffing, restaurants, media and advertising, transportation and hospitality, among others, these workers tend to be on the lower end of the pay scale. They also often have significant “deferred” health issues (a euphemism for undiagnosed conditions owing to lack of previous access to health care). The ACA provided “applicable large employers” (those with 50 or more full-time and full-time equivalent employees) with an incentive to cover these workers.

Continue Reading The Rise of the Group Health Insurance Captive

March Madness presents one of those occasions where your employees’ diets and exercise may fall by the wayside, and by the wayside, we mean potentially off a cliff.  And when this happens, your workforce is increasing not just their weight and risk of disease, but it may also increase your cost to employ them.  The productivity time you’re losing when they stop working to watch the games is nothing compared to the loss of productivity and increased health care costs due to poor health.

Continue Reading March Flabness: Wellness Programs, the ADA, and the Rising Costs of Employer-Provided Health Coverage

The stunning failure of the U.S. House of Representatives to pass the American Health Care Act (AHCA) (which we previously reported on here) has political and policy implications that we cannot forecast. Nor is it clear to us whether or when the Trump administration and Congress will make another effort to repeal and replace, or whether Republicans will seek Democratic support in an effort to “repair,” the Affordable Care Act (ACA). And we are similarly unable to predict whether and to what extent the AHCA’s provisions can be achieved through executive rulemaking or policy guidance. The purpose of this post is not to assess why the AHCA failed, or to speculate on the outcome of any future legislative efforts to repeal and replace the ACA, but rather to offer some thoughts about how the AHCA’s failure will impact employers in the near term. As our title suggests, the news may not be all that bad.

Continue Reading The Future of the Affordable Care Act Week 8: An Employer’s Guide to the Collapse of the American Health Care Act (Spoiler Alert—the News is Not all Bad)

On April 6, 2017, Mintz Levin will be hosting its Third Annual Employment Law Summit at the Princeton Club in New York City.   This half-day seminar will feature as its keynote speaker Liz Vladeck, the Deputy Commissioner for the Office of Labor Policy and Standards at the NYC Department of Consumer Affairs.  Deputy Commissioner Vladeck will discuss NYC’s new Office of Labor Policy and Standards, its initiatives, and enforcement of the expanding universe of NYC employment laws (including the new Freelance Workers Act and the pending Fair Workweek legislation).  The seminar will also offer various segments on the most important workplace issues of the day, including how the new Trump Administration will impact workplace law, employee cybersecurity issues, equal pay issues during the employment life cycle, dealing with the difficult employee, the latest in employee benefits, and more – it’s a program that you will not want to miss, so register now.

This event is intended for HR professionals, in-house counsel, and senior executives.

For more information and to register, click here.

A recent report from the nation’s top actuaries takes a sobering look at the challenges policy makers face in creating a viable individual (i.e., non-group) health insurance market—a critical component of any plan to replace the Affordable Care Act. Published by the American Academy of Actuaries, the report, entitled An Evaluation of the Individual Health Insurance Market and Implications of Potential Changes outlines, without a hint of partisanship, the necessary conditions for a sustainable individual market, examines the extent to which those conditions are currently being satisfied, and discusses the implications of proposed changes to either improve the ACA insurance market reforms or (as is most likely the case) replace them with an alternative approach.

The paper offers an unvarnished explanation of the impact of the relevant actuarial principles that informed the ACA and that must be negotiated in the process of its replacement. Any policy maker hoping to expand (or at least to expand access to) health insurance coverage, control rising health care costs, and increase the quality of medical outcomes—the three goals of the ACA—would be well advised to read this paper. The actuarial principles expounded in the paper appear to transcend law and politics and any ACA replacement plan that fails to take them in account may face significant, if not insurmountable, hurdles in achieving its objective.

Continue Reading The Future of the Affordable Care Act Week 6: Focus on the Individual Health Insurance Market

This week continues our survey of key Republican proposals to “repeal and replace” the Affordable Care Act (ACA).  In the past two weeks, we have reviewed the Trump/Pence transition plan, entitled “Healthcare Reform to Make America Great Again,” and House Speaker Paul Ryan’s proposal, entitled “A Better Way.”  This week we take up the Empowering Patients First Act and the Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015. The former is intended to replace the ACA; the latter to repeal the ACA’s key features. Congressman Tom Price (R-GA) is the sponsor of both bills.

Continue Reading The Future of the ACA Week 5: The Rep. Tom Price Plan(s)

The Trump campaign promised to “repeal and replace” the Affordable Care Act. On the campaign trail, candidate Trump was particularly critical of the ACA’s individual mandate, the subsidization of premium charges to older individuals by younger individuals, and the coverage mandates on insurance products offered on the exchanges. In contrast, he was in favor of keeping the ban on imposing pre-existing condition limitations and allowing dependents to remain on their parents’ coverage to age 26. So we are not without some clues as to the details of the ACA’s replacement.

As the campaign promise morphs into legislation, there are some sources that give us a sense of what the future has in store for the regulation of the U.S. health care system. These include:

This post examines the Trump/Pence transition plan. In the next two posts, we will turn our attention to the Ryan and Price plans. All three plans share common features. The particular elements and terms of these plans have been the subject of much study and commentary. Much less is known about how these components will fit together. Nevertheless, we expect that these plans taken together contain many if not most of the elements of the ACA’s replacement.

Continue Reading The Future of the ACA (Week 3): The Trump Plan, “Healthcare Reform to Make America Great Again”

The Affordable Care Act is the single most important piece of Federal social legislation in the United States in more than a generation, but with the election of Donald J. Trump as President its fate is now uncertain. Its core policy concerns and principal goals, i.e., to expand medical coverage, increase the quality of medical outcomes, and constrain costs, nevertheless remain. What is about to change is the “means whereby” these goals might be accomplished.

Even before the new administration takes office, there is at least one thing that seems certain: there will be no going back to the status quo ante. While the law was the subject of withering criticism by candidate Trump and his proxies, their mantra was and remains “repeal and replace.” At the end of the process, it is unlikely that we be back at March 23, 2010 (the date of the ACA’s enactment). We will instead be somewhere else. What remains to be seen is the extent to which the replacement resembles the ACA. This post and those that follow will endeavor to chart the arc of the replacement process. In the weeks and months that follow, we plan to report on, and, with the help of a roster of knowable guests, examine both the process and the outcome.

Continue Reading The Future of the Affordable Care Act (Week 1): Assessing the New Normal

We reported in a recent post on proposed regulations dealing with, among other things, the treatment of hospital indemnity or other fixed indemnity insurance products in the group market. This post takes a closer look at the future of these products under the proposed rules and in light of a recent case, Central United Life v. Burwell, which struck down a final Department of Health and Human Services regulation requiring policyholders to certify that they had Affordable Care Act (ACA)-complaint minimum essential coverage in addition to fixed indemnity coverage for the latter to qualify as an excepted benefit. While the regulation in issue in Central United Life governed the individual market, the case’s reasoning could inform the final regulations governing hospital and fixed Indemnity policies in the group market.

We conclude that, in the absence of some significant changes to the proposed regulations, the market for hospital and fixed Indemnity policies is headed for some upheaval.

Continue Reading Hospital and Fixed Indemnity Policies; Excepted Benefits; Supplemental Coverage under Recently Proposed Treasury Regulations; and Central United Life v. Burwell