latest developments

Update: Halfway to Health Reform

Over the weekend, the House passed extensive health care reform that if enacted would radically reshape the American health care system. The final vote was 220-215, with a single Republican supporting the bill’s passage.

That brings us the halfway point of the legislative process. Well, maybe one-third since the final House and Senate bills would have to first be cobbled together before heading to President Obama’s desk.

The House bill does include a public health insurance option that would compete with private insurers as well as equally controversial employer coverage mandates for businesses with payrolls in excess of $500,000. The Senate bills introduced so far do not include employer mandates, and it’s unclear if a bill with such provisions could ever pass the Senate.

The diverse opinions on the public option, employer mandates, abortion funding and the trillion dollar price tag set up a legislative showdown in the Senate, with less than five weeks to pass their version in order to meet an unofficial goal of completing the entire process before the end of the year.

For our clients (and Americans in general), each day’s news brings myriad new questions. What we can do as brokers is continue to remain dialed in to the events on Capital Hill so we can be poised for change and proactive in our approach leading up to any final legislation.

Whether we’re talking about the current system, an insurance marketplace exchange or a public alternative to private carriers, it’s clear there’s going to be plenty for individuals, employees and employers to navigate. Our job is to know what’s available inside and out, help clients sort through choices and ultimately select the best possible coverage based on their status and situation.

The need for that type of help is perhaps the only thing in the world of health insurance that’s not about to change.

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Health Reform Latest: Words, Bills & Dollars

To say the legislative process has been “messy” would be an understatement. But despite all the heated rhetoric, we still seem to be moving closer to some form of health care reform day by day.

One of the main questions at this point is whether any degree of bipartisan consensus is possible, or if the Democratic majority will attempt to push a bill (or bills) through to passage on their own … either through a filibuster-proof 60-vote senate majority or the complicated “budget reconciliation” course of last resort, which theoretically would only require 50 senators for passage. Many people are uneasy about this approach.

Of course the other dominant question is whether the bill ultimately heading to President Obama’s desk will include a “public option” to compete against the offerings of private insurance companies. According to the latest reports out of Washington, the life of the public option is largely now a numbers game. This is the most volatile element of the legislative process at the moment, so we’ll keep an eye on the latest. We could know significantly more as early as Friday.

Meanwhile, the latest figures show health care advertisements on television have topped $100 million, illustrating how high the perceived stakes are for many parties and industries that would be affected by reform.

There are still many, many moving parts and how all the pieces of the puzzle fit together is not yet clear. Right now we are waiting on the Senate Finance Committee to complete its work so senate leaders get begin cobbling all the different versions of bills together into a package to take to the senate floor. The floor debate could last weeks (or longer) depending on how things go.

At this point as insurance brokers, we see our job as staying up to date on everything that could affect our current clients and having a firm grasp of what the re-formed health insurance landscape will look like (so we can properly advise new and renewing clients). One thing seems clear: No matter what health care looks like, there will be a need for expert help navigating all the choices and plans and key details—and matching people and groups with the programs that best suit their specific needs. That’s what we’re here for.

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Health Reform Update: Are We Moving Too Fast?

Health care reform is moving at a lightning pace, so we thought we’d provide another update on all the latest developments. We reached a major milestone, as two House committees approved reform legislation. That’s never happened before, and an overhaul of our health care system has never been so close.

… or so far away. As Reuters reports, there’s a long way to go and many hurdles to overcome. The biggest recent “pitfall” has been a report out of the non-partisan overseer Congressional Budget Office, which declared that the most recent iteration of the Democratic health care proposal wouldn’t actually curb escalating health care costs. Then, there was the news that Massachusetts was backpedalling from universal health coverage. (Mass. was often cited as evidence that health care reform can succeed.)

President Obama came forward Friday to address any growing concerns and voice vociferous support for speedy reform. And while the path to comprehensive reform is daunting and the best direction for Americans still unclear (especially small business employers), it would seem unwise to bet against the president getting this done before 2010.

While there are significant differences between the national and Massachusetts model, what the Bay State’s woes illustrate is that perhaps it’s not in our country’s best interests to rush through reform intended to meet or beat a self-imposed deadline. Maybe if Massachusetts is taking major steps backward, it’s an indication that they moved too quickly in the first place and some important elements slipped through the cracks. Now, some feel if national reform doesn’t pass this year, it never will. But whether or not that’s true (there’s no way for us to really know), it shouldn’t have to be that way.

Really, we’ve waited this long, so it would be wonderful if we could fully deliberate all the reform possibilities and be as sure as possible that we’re doing this right. Someone said to me recently that what’s happening right now with this accelerated timeline feels like Congress is “trying to force a watermelon through a garden hose.” It’s true that these are really big changes, so there’s a whole lot to thoughtfully consider and not a lot of time to do it in.

It’s still extremely early in the process, and there’s still plenty of reason for optimism. Hopefully, moving forward in the wake of the CBO report and the news out of Massachusetts, the emphasis will be on taking the time to do reform right, rather than getting reform done by a particular date.

Just know that if you’re a current Stephenson-Welsh client, we’ll keep following all the news out of Washington and blogging about anything that has a direct impact on your insurance.

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Answering Your Health Care Reform & Benefits Questions

While negotiations in Congress are certainly still ongoing, we thought it would be a good time to talk about the most recent health care reform proposals—and through doing so answer some frequently asked questions.

Let’s start by simply stating the obvious: We have a broken system. There are too many uninsured people in this country, too many people struggle to obtain adequate coverage and the process is so complicated that without a good broker it’s an immense challenge to secure the very best, most affordable plan for you and your family.

The solution with the most steam is mandated health coverage for all Americans (or more realistically 95 percent of all Americans). The outline recently released by Sen. Ted Kennedy (D-Mass.), as The Washington Post puts it, calls for “sweeping health-care legislation that would require every American to have insurance and would mandate that employers contribute to workers’ coverage.”

Democrats are not alone. This week, Sen. Judd Gregg (R-N.H.) reportedly broke ranks with his Senate colleagues with a proposal requiring that individuals own health insurance.

And while coverage for all Americans is certainly appealing, it’s the second part about mandated contributions that has many groups—from insurers to doctors to employers—concerned and keeping a watchful eye. What would it really mean for employers to contribute to workers’ coverage … and how would it work? Would this guaranteed health care be guaranteed by the government? Guaranteed through a person’s employer? Through a public health option?

There are a lot of uninsured individuals who don’t have coverage through their employer, so how do you make similar plans available to all individuals and families—especially those who don’t have health coverage through their employer?

These are all questions to which we have some clues, but it’s still too early to tell. What is clear is that the Obama administration is deeply committed to health care reform this year. In that same WaPo article the president is quoted as telling members of Organizing for America, “If we don’t get it done this year, we’re not going to get it done.”

That kind of urgency necessarily leads to a discussion of cost. Analyses of a recent Democratic House proposal estimated a need to cut 2 trillion dollars over the next 10 years to pay for a dramatic overhaul of the health care system. President Obama this week, according to the reporting of Politico.com, “summoned Democrats from two key Senate committees to the White House on Tuesday to make clear that the bill must control health costs and not add to the deficit.”

The goal is affordable health care plans for everyone, but where does that money come from and who’s going to pay for it?  That’s the big challenge right now. That’s what everyone on the Hill is trying to figure out, while those groups who would suffer under changes are mounting opposition.

I’m not here to characterize the current proposals as good or bad for Americans. In fact, there’s not enough concrete information at this stage to even make that judgment. My concern as a father, a broker and an American citizen is the potential for rushing into a new program too quickly and then have “buyer’s remorse.”

If this is done too quickly we could look back and realize our options or the quality of benefits has been compromised. For example, no legislation should prevent an American from being able to choose his or her own doctor. No legislation should effectively “penalize” those who have taken the steps to secure coverage by forcing them into inferior changes. There’s no evidence that a current proposal would create such limitations, but that’s just the type of unintended consequences that can occur from a rush to action. I just hope that through deliberation, we can put the right plan in place. At Stephenson Welsh, we strongly believe in continuing a private health care system that supports the freedom to choose your own doctors—one in which those who need coverage most are not denied the coverage they need.

It’s a good thing that reforms are being discussed. It’s just essential that we go about this in a thorough, deliberative way.

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Recent Survey: Health Benefits Not on the Chopping Block

According to a recent survey by Workscape, the vast majority of employers are not reducing health care benefits or forcing workers to shoulder more costs despite the state of the economy. Only 20 percent of responding companies reported a reduction or reconstitution of benefit offerings.

The fact that most companies are not decreasing their commitment to employer-sponsored health benefits, even though they are often the costliest of benefits, underscores the critical role of such plans in the overall compensation mix,” said Tim Clifford, President and CEO of Workscape. “Most organizations realize that in order to survive the recession and be poised for growth when the economy rebounds, employees must remain healthy and have peace of mind knowing that their families are protected.”

This is clearly good news for the industry and good news for most small businesses and employers. One way or another, employers are finding a way to make this work and doing everything possible to not cut health benefits. Forty-four percent of companies responding to the Workscape survey are opting for high deductible plans to offset costs, but all indications are they’re still funding those plans at 100 percent for employees. Some employers are taking steps to cut 401(k) or disability benefits. A small percentage of employers are going to higher employee contributions to pay for their benefits, although the vast majority are not.

The bottom line is to this point, employees’ health benefits are still sacred.

While disability and 401(k) plans as well as ancillary products may suffer cuts in the short term, that’s much better than the early predictions about how the steep recession would impact the health care sector. Instead of a catastrophic impact, this survey shows that employer-sponsored health benefits have withstood the economic downturn and are, in essence, considered the very last to go when a company is struggling financially.

As brokers, we think that’s absolutely the right decision. Health insurance is critically tied to employee satisfaction and is necessary for sustainability. In most industries, benefits are a retention tool. Most employers realize they need to offer quality health insurance to attract and retain quality employees. When considering two jobs that are of equal interest, a savvy talent will usually gravitate toward the superior benefit package. This is especially true in the small- to mid-market space and the technology sector.

When one employer offers quality benefits and another doesn’t, that makes the decision for the sought-after talent rather easy. There’s no way you’re going to recruit someone away from another organization without offering a quality benefits package, and there’s little chance of holding onto a top talent for long without benefits good enough to keep him or her put.

Our job as brokers is to work with clients to make sure offered benefits fit within their budget while still attracting or retaining key personnel. It makes little sense to offer an overly rich benefits package that you can’t afford. But it makes a great deal of sense to offer a solid health insurance plan to your employees at a fair price. There are high-quality yet value-priced health care options out there that are still going to make your employees happy. That’s what a good broker helps you achieve as part of the broker-client partnership.

Make sure you can have open, honest communication with your broker to say something like: “Hey, times are tough and we need to tighten our belt. What other strategies can we utilize to not break the bank while still offering good benefits?”

If you’re an employee considering a new company, talk to an experienced broker or experienced professional who can help you determine which benefit offering will best serve you.

If you’re an employer or small business owner, don’t destroy your business offering unaffordable, unsustainable benefits. There are affordable alternatives out there that will allow you to still offer quality benefits and retain top talent without breaking the bank. And if you don’t have an experienced HR department or have offered the exact same benefits to your employees for years, you better have a good broker take a look under the hood. Chances are you’re paying much more than is necessary, and without a sound strategy in place you’ll suffer though huge premium increases on outdated offerings.

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COBRA Implications of the American Recovery & Reinvestment Act

The American Recovery and Reinvestment Act (the Act) was signed into law by President Obama on February 17, 2009. The Act has wide-reaching ramifications, and we want to make sure you’re aware of the latest developments affecting health insurance.

The Act includes a subsidy for COBRA premiums for a period up to nine months for certain employees that were involuntarily relieved from their job from September 1, 2008, through December 31, 2009.

The COBRA subsidy covers 65 percent of the applicable COBRA premium, initially covered by the employer or the insurer and recouped through payroll tax credits. The remaining 35 percent will be the responsibility of the qualified beneficiary.

The COBRA subsidy becomes effective March 1, 2009. It imposes new COBRA administration and notice requirements on plan sponsors, in addition to those involved with the reimbursement process.

Download this PDF developed by one of our partners for more detailed information. The PDF is intended to provide initial guidance to plan sponsors. It is for informational purposes only and is not intended to interpret laws or regulations or to address specific client situations. The document will be revised as additional information becomes available from insurance carriers and government entities.

There are still many questions surrounding the Act and just how many of the elements will work. For those using Stephenson Welsh Insurance Services, we will continue to stay on top of all the latest developments associated with insurance coverages. We will keep you informed about any changes that might affect you and proactively bring to you any opportunities we see emerging.

The next update will likely come sometime after the U.S. Department of Labor report on this topic on March 19.

If you have any questions or need immediate attention, please call us toll-free (1-866-514-0144) or send us an e-mail.

To the best of our knowledge, based on available resources, the attached piece has been prepared with the intention of providing initial guidance to plan sponsors via the broker. It is for informational purposes only and is not intended to interpret laws or regulations or to address specific client situations. The information contained within may also change or be added to with new issuances by government agencies and/or insurance carriers. By redistributing this piece, Stephenson Welsh Insurance Services is released from all liability.

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