So we hurry up and wait.
That is perhaps the most apt description of how self-insured employers and their business partners have adapted to the new health care law and the ongoing reform process it has triggered.
For obvious reasons, we saw a flurry of activity immediately after the passage of PPACA to first determine what was actually in the legislation and then to move forward with compliance planning. This stage seems to have largely passed and now we are in an extended waiting period until 2014, which is when the health insurance exchanges are scheduled to come on-line and the next wave of regulatory requirements, such as the employer mandate, are upon us.
With that timeline framed, let’s take a look at where things stand today and possible legislative/regulatory developments over the next three years.
Clearly there is curiosity with regard to self-insured employer reaction to PPACA as we approach the first anniversary of the law’s enactment. A recent outreach effort to employers of various sizes generated feedback that concluded the law has not created any significant hurdles for them to continue to self-insure, at least in the short run.
The biggest issue seems to be whether or not employers want to retain grandfather status of their health plans. Although unscientific, the feedback suggests it is almost an even split regarding grandfather status decision.
We also received feedback on other issues such administrative burdens, plan design changes, wellness programs and stop-loss cost. When this information was aggregated, the observation is that while there is general discomfort with adapting to the new law, employers are sticking with self-insured health plans, at least for time being.
More on the longer term employer view later, but first we need to stay focused on health care reform developments that will play out in the coming weeks and months, which could influence events before 2014.
Separate HHS and DOL reports dealing with self-insured health plans will likely be released this month and despite efforts to ensure that the regulators are fully educated about self-insurance, there is probably a better than average chance that these reports will contain negative commentary.
Key members of Congress and their staff have already been briefed in advanced about possible biased findings, and we have been generally encouraged by the supportive responses. That said, we could very well see self-insured health plans being one of the focal points in future legislative developments if official government reports conclude that such plans impede overall health reform implementation efforts.
The most likely threat would be legislation to restrict smaller employers from self-insuring, similar to a provision actually included in an early version of the PPACA legislation that SIIA was able to have stripped.
As previously reported, the IRS is also looking to define stop-loss insurance, which was an unanticipated consequence of the health care law. We expect a face-to-face meeting any day to get a better understanding of the agency’s thinking and I will be sure to publish a recap of this meeting, so be sure to check back regularly.
It was interesting to hear President Obama’s comments at the National Governors Association meeting this week that he is agreeable for moving up the timeline for states to be available to apply for waivers to the health care law if they develop their own reform plans that achieve the same access and affordability outcomes as the administration anticipates through PPACA implementation.
This offer was made in response to complaints from numerous governors that the new health care law will greatly increase costs to the states due to expanded Medicaid obligations. And of course, it was classic Obama rhetoric – a politically appealing sound bite that doesn’t square with reality.
Of course, the hitch with this offer is that a state-based plan must meet an artificially high bar for outcomes in order to be approved, so the reality is that it is unlikely that any waivers will actually be granted. As such, it is probably premature to be concerned about ERISA preemption issues, but we will certainly keep an eye on things.
In a bit of positive news, some of our reliable sources in Congress have signaled a renewed interest in association health plan (AHP) legislation, which would include a self-insurance option. They tell us, however, that the one hurdle to overcome is the perception that AHPs would contribute to adverse selection and therefore compromise larger health care reform objectives.
We are working to address these concerns now, so stay tuned for a possible return of AHPs as a serious topic for discussion on Capitol Hill.
Then there are the legal challenges to PPACA. Just today, Florida Federal Judge Robert Vinson put the Obama on notice that they have seven days to file an motion for expedited appellate review of the individual mandate constitutionality question or 26 state will be allowed to hold off on any PPACA implementation actions pending a final ruling by the Supreme Court. This has made things even more interesting.
There will be more short term health care reform legislative/regulatory developments for sure, but I thought it would be useful to highlight those on the radar screen today.
Now let’s return to the longer view of PPACA from the self-insured employer perspective. The real uncertainly arrives in 2014 when companies are required to provide health coverage or pay a penalty (play or pay).
From talking with several employer representatives, we have learned that most companies have been running numbers to test both scenarios, but are generally keeping tight-lipped about any conclusions at this early date. So essentially, the self-insurance marketplace has moved quickly to adapt to the new health care regulatory environment and now the waiting begins for potentially bigger shoes to drop going forward and the resulting reaction from self-insured employer and there business partners.
Settle in…it’s going to be a long ride.
Thursday, March 3, 2011
attention all PA title insurers...time to escheat!
April 15 is the deadline to report and deliver unclaimed property to the Pennsylvania Treasury. Here are a few things to keep in mind as you prepare your company’s report:
All owner accounts with a last known address in Pennsylvania should be reported to the Pennsylvania Treasury. Companies incorporated in Pennsylvania should report all “unknown” owner accounts to the Pennsylvania Treasury
All owner accounts with a last known address in Pennsylvania should be reported to the Pennsylvania Treasury. Companies incorporated in Pennsylvania should report all “unknown” owner accounts to the Pennsylvania Treasury
attention all PA title insurers...time to escheat!
April 15 is the deadline to report and deliver unclaimed property to the Pennsylvania Treasury. Here are a few things to keep in mind as you prepare your company’s report:
All owner accounts with a last known address in Pennsylvania should be reported to the Pennsylvania Treasury. Companies incorporated in Pennsylvania should report all “unknown” owner accounts to the Pennsylvania Treasury
All owner accounts with a last known address in Pennsylvania should be reported to the Pennsylvania Treasury. Companies incorporated in Pennsylvania should report all “unknown” owner accounts to the Pennsylvania Treasury
Friday, February 25, 2011
Overriding an NAIC "Veto" In Congress
It’s not often that the self-insurance/ART industry successfully pushes back against the National Association of Insurance Commissioners (NAIC) on an important legislative/regulatory matter, but I am pleased to report one initial small victory.
For the past few years, I have been involved in lobbying for federal legislation that would modernize the Liability Risk Retention Act (LRRA). This legislative initiative has included three basic objectives: 1) allow risk retention groups to write commercial property coverage; 2) establish standardized corporate governance standards, and 3) create a new federal arbitration mechanism that RRGs can utilize in cases of disputes with non-domiciliary regulators.
This last objective has attracted predictable opposition from the NAIC and individual regulators warning that such federal oversight would compromise state-based regulation of insurance. This is a canard, of course, because our approach actually strengthens state regulation by allowing for the validation of decisions made by an RRG’s domiciliary regulator.
In spite of the this common sense analysis, the NAIC has demonstrated de facto veto power in Congress on getting LRRA legislation passed with an arbitration provision, blocking bill introduction last year in the Senate. Apparently, however, this veto power now has some limits.
It was recently confirmed that Senator Jon Tester (D-MT) will introduce LRRA legislation this session including the arbitration provision. This is notable because Senator Tester had resisted supporting this initiative during the last Congress in deference to home state insurance regulator Monica Lindeen who had been pressing the NAIC party line.
We are not sure why Senator Tester has chosen to change course on this, but the heavy lobbying by many of his constituents, including the Montana Captive Insurance Association (MCIA), has certainly contributed to this positive momentum.
Of course, this is just one development in a lengthy and difficult process to get the legislation passed and signed into law. But the fact that the NAIC has not been able to successfully exercise a veto at this early stage confirms that it is possible for our industry to make good things happen despite state regulator angst.
We fully expect to bump up against NAIC opposition as the congressional session continues. Stay tuned to see how the balance of power tilts.
For the past few years, I have been involved in lobbying for federal legislation that would modernize the Liability Risk Retention Act (LRRA). This legislative initiative has included three basic objectives: 1) allow risk retention groups to write commercial property coverage; 2) establish standardized corporate governance standards, and 3) create a new federal arbitration mechanism that RRGs can utilize in cases of disputes with non-domiciliary regulators.
This last objective has attracted predictable opposition from the NAIC and individual regulators warning that such federal oversight would compromise state-based regulation of insurance. This is a canard, of course, because our approach actually strengthens state regulation by allowing for the validation of decisions made by an RRG’s domiciliary regulator.
In spite of the this common sense analysis, the NAIC has demonstrated de facto veto power in Congress on getting LRRA legislation passed with an arbitration provision, blocking bill introduction last year in the Senate. Apparently, however, this veto power now has some limits.
It was recently confirmed that Senator Jon Tester (D-MT) will introduce LRRA legislation this session including the arbitration provision. This is notable because Senator Tester had resisted supporting this initiative during the last Congress in deference to home state insurance regulator Monica Lindeen who had been pressing the NAIC party line.
We are not sure why Senator Tester has chosen to change course on this, but the heavy lobbying by many of his constituents, including the Montana Captive Insurance Association (MCIA), has certainly contributed to this positive momentum.
Of course, this is just one development in a lengthy and difficult process to get the legislation passed and signed into law. But the fact that the NAIC has not been able to successfully exercise a veto at this early stage confirms that it is possible for our industry to make good things happen despite state regulator angst.
We fully expect to bump up against NAIC opposition as the congressional session continues. Stay tuned to see how the balance of power tilts.
A Fresh Look at Mandating Health Insurance Coverage
Requiring individuals to maintain health insurance coverage is a good idea. There, I said it despite my libertarian leanings.
Yes, an individual mandate may be unconstitutional. And the prospect for more government control is not appealing but there is a strong case to be made that this is perhaps the one redeemable provision (in concept) within the 3,000-page health care law.
The obvious advantage is that by creating a health care system where everyone has insurance you dramatically expand the risk pool, which is a proven way to drive down costs especially when more younger and healthier individuals are covered.
On this latter note, high deductible plans should certainly be an option to fulfill a coverage requirement.
Proponents of an individual mandate cite the auto insurance analogy to support their position that there is precedent for compelling individuals to take responsibility for financial risk but they get caught flat-footed with the counterpoint that driving a car is voluntary activity and therefore it is appropriate for government to establish conditions unlike health insurance where there is no such activity.
But let’s take a closer look at this comparison.
If someone gets in an automobile accident and does not have insurance, their car will not be towed into an automotive emergency room and fixed without consideration to ability to pay. Rather, The car will remain damaged, or totaled until such time the owner can pay to repair or replace it. The financial liability is not shifted to anyone else.
Now if the driver gets admitted to the hospital as a result of this accident they will get “repaired” regardless of their ability to pay. And if they aren’t able to pay the cost will be shifted to other health care payers, including self-insured employers.
This fact should give even libertarians pause in opposing an individual mandate because a person’s decision not to maintain insurance has an adverse impact on the larger population and compromises the principal of self-reliance. After all, when is the last time you heard of someone refusing essential treatment because they knew they could not pay?
Requiring health insurance coverage would also benefit the self-insurance industry because more individuals would chose to enroll in their employers’ group plans, thereby expanding the risk pools for employers while increasing revenue potential for service providers.
To be sure, the way the individual mandate provision as incorporated in the PPACA is flawed, largely because the specific penalties and incentives will not likely achieve the desired results. But that is not to say that this approach should be rejected outright. Properly structured, an individual mandate could help put our health care system on the right track.
It’s unfortunate that President Obama and the Democratic Congress wrapped so much bad stuff around this targeted health care reform approach that we will likely never know how it may have worked.
Yes, an individual mandate may be unconstitutional. And the prospect for more government control is not appealing but there is a strong case to be made that this is perhaps the one redeemable provision (in concept) within the 3,000-page health care law.
The obvious advantage is that by creating a health care system where everyone has insurance you dramatically expand the risk pool, which is a proven way to drive down costs especially when more younger and healthier individuals are covered.
On this latter note, high deductible plans should certainly be an option to fulfill a coverage requirement.
Proponents of an individual mandate cite the auto insurance analogy to support their position that there is precedent for compelling individuals to take responsibility for financial risk but they get caught flat-footed with the counterpoint that driving a car is voluntary activity and therefore it is appropriate for government to establish conditions unlike health insurance where there is no such activity.
But let’s take a closer look at this comparison.
If someone gets in an automobile accident and does not have insurance, their car will not be towed into an automotive emergency room and fixed without consideration to ability to pay. Rather, The car will remain damaged, or totaled until such time the owner can pay to repair or replace it. The financial liability is not shifted to anyone else.
Now if the driver gets admitted to the hospital as a result of this accident they will get “repaired” regardless of their ability to pay. And if they aren’t able to pay the cost will be shifted to other health care payers, including self-insured employers.
This fact should give even libertarians pause in opposing an individual mandate because a person’s decision not to maintain insurance has an adverse impact on the larger population and compromises the principal of self-reliance. After all, when is the last time you heard of someone refusing essential treatment because they knew they could not pay?
Requiring health insurance coverage would also benefit the self-insurance industry because more individuals would chose to enroll in their employers’ group plans, thereby expanding the risk pools for employers while increasing revenue potential for service providers.
To be sure, the way the individual mandate provision as incorporated in the PPACA is flawed, largely because the specific penalties and incentives will not likely achieve the desired results. But that is not to say that this approach should be rejected outright. Properly structured, an individual mandate could help put our health care system on the right track.
It’s unfortunate that President Obama and the Democratic Congress wrapped so much bad stuff around this targeted health care reform approach that we will likely never know how it may have worked.
"political junkie"
The New York head of nationwide title insurance company First American Financial Corp. has left under a cloud of suspicion over his conduct as an executive.
Steven Napolitano, the president, chairman and CEO of First American Title Insurance Company of New York, the wholly owned New York City office, left his postFeb. 15 after speaking with companyhonchos who flew in from Santa Ana, Calif.,
Steven Napolitano, the president, chairman and CEO of First American Title Insurance Company of New York, the wholly owned New York City office, left his postFeb. 15 after speaking with companyhonchos who flew in from Santa Ana, Calif.,
"political junkie"
The New York head of nationwide title insurance company First American Financial Corp. has left under a cloud of suspicion over his conduct as an executive.
Steven Napolitano, the president, chairman and CEO of First American Title Insurance Company of New York, the wholly owned New York City office, left his postFeb. 15 after speaking with companyhonchos who flew in from Santa Ana, Calif.,
Steven Napolitano, the president, chairman and CEO of First American Title Insurance Company of New York, the wholly owned New York City office, left his postFeb. 15 after speaking with companyhonchos who flew in from Santa Ana, Calif.,
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