Kapnick  Health Care Reform Update  
A Week in Review

 

 

People helping people...it's what we do best                          Vol. 2 |  Issue 3

December 2011

 

 


Kapnick
Introduces it's
NEW "Health
Care Impact Analysis Tool."
Click Here to learn More


More Health Care Reform (HCR) Links

Please contact
your designated
Client Executive for more information regarding 
these topics.

 

Week of 12/19/2011 - 12/23/2011: 
click here to view all HCR materials 

Health Care Reform – Supreme Court Readies to Hear Arguments on the Health Care Reform Legislation

The Supreme Court is getting ready to hear arguments about the constitutionality of the individual mandate under the health care reform legislation.  There are three main areas that are key to the arguments:

 

1.       Whether the law’s individual mandate is constitutional. That mandate, effective in January 2014, requires individuals to enroll in a qualified health care plan or pay a financial penalty.
 

2.       Whether the entire law can stand if the individual mandate is to be found unconstitutional.
 

3.       Whether a challenge to the individual mandate can be decided before penalties for not having coverage are imposed.
 

A hearing date for oral arguments has not been set, but a decision in the case is expected by the end of the court’s term in June.

 

Health Care Reform – Final Medical Loss Ratio (MLR) Guidance Issued

Health and Human Services (HHS) and the Department of Labor (DOL) have issued regulations and related guidance on the MLR rules (issued late last year). The biggest news in the guidance is the change in the rules on who receives the rebates. Under the final regulations, insurers must provide the rebates for individuals covered by group health plans subject to ERISA to the policyholder—typically the employer sponsoring the plan.  Any portion of a rebate that constitutes plan assets must be used for the exclusive benefit of plan participants and beneficiaries, and ERISA fiduciary principles must be followed in choosing how to use that portion of the rebate.

 

As a reminder the MLR rules require insurers to report plan costs for the purpose of calculating the medical loss ratio (the percentage of premium dollars spent on reimbursement for clinical services and activities to improve health care quality).  Large group insurers must spend at least 85 percent and individual and small group insurers must spend at least 80 percent of premium dollars on claims and activities to improve health care quality.  Beginning August 2012, health plans must provide rebates to enrollees if their medical loss ratio does not meet the minimum standards for a given plan year.

 

For more information on the MLR rules see the links below.

 

MLR Final Regulations:  http://www.gpo.gov/fdsys/pkg/FR-2011-12-07/pdf/2011-31289.pdf

DOL Technical Release:  http://www.dol.gov/ebsa/newsroom/tr11-04.html

Final Rule Fact Sheet:  http://cciio.cms.gov/resources/factsheets/mlrfinalrule.html

 

 

 

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As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. Kapnick Insurance Group.

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