Reprinted with permission from BNA's Health Care Daily Report.
By: Florence Olson
Related Attorney: Denise Hanna
Related Practice: Health Care
The recently enacted health care reform law has created unprecedented opportunities for expanding workplace programs for wellness, disease prevention, and chronic disease management, health care law attorney Denise Hanna said April 20.
The big picture emerging from the most significant health care legislation of the past 45 years shows that Congress is intent on redesigning health care payment and delivery systems to reward health care providers for quality health care and cost savings, said Hanna, a partner in the Washington law office of Locke Lord Bissell & Liddell. She spoke at a webinar sponsored by the American Bar Association's health law section.
Employers are permitted to offer greater incentives to employees for participating in wellness and prevention programs, Hanna said in an overview of law changes under the Patient Protection and Affordable Care Act of 2010 (Pub. L. No. 111-148) as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. No. 111-152). To qualify under rules promulgated by the Health and Human Services Department, health plans also must cover preventive services, screenings, and immunizations without copays.
The new law further authorizes:
- $200 million in grants for employees of small businesses to participate in comprehensive workplace wellness programs,
- grants to allow state and local health departments to design community-based public health interventions and screenings for people age 55-64, and
- a $25 million child obesity demonstration project.
The laws expand business opportunities for companies to provide wellness and prevention programs to employees and to new health care exchanges that will be created in 2014.
The greater availability of health care insurance subsidies for middle-class individuals will bring millions of new participants into the health insurance market, Hanna said. “We could even see employees drop low-value group coverage for better coverage offered through the exchanges at higher premiums,” she said.
Companies that immediately develop and market low-cost insurance products to appeal to young and healthy individuals could develop brand loyalty, making it easier for insurers to keep those individuals as participants in 2014 when the exchanges must offer qualified health insurance plans, Hanna said.
Tax Credits for Small Employers
Small employers are eligible for tax credits, effective Jan. 1, 2010, to offset the cost of purchasing health insurance. Under the new laws, small businesses will receive “the group discounts that only large employers now receive and tax breaks to help them buy it,” Sidney Welsh, a partner at Arnall Golden Gregory in Atlanta, said during the webinar.
Effective Jan. 1, 2011, all commercial health insurance plans must report to the Health and Human Services Department their medical loss ratio, which is the percentage of premium dollars they spent on clinical services and quality improvements, Hanna said.
For individual and small-group insurance products, the minimum medical loss ratio is 80 percent. For large-group products, the minimum ratio is 85 percent. If a fully insured health plan spends less than the required medical loss ratio on clinical and quality improvement services, participants are entitled to a pro rata rebate of the excess premium dollars used for administrative expenses and profits, Hanna said.
The Obama administration has said it will move quickly to implement health insurance industry reforms by establishing standards for medical loss ratios and premium rates (69 HCDR, 4/13/10).