Volume 14

Here we grow again!

We are pleased to welcome Jill Armstrong who joins our team

of “A” players as an Employee Benefits Account Executive.

Call us at

(888) 665-1539 or email

Brant Couch

TORCH and HealthSure 

collaborate on private health insurance marketplace

With over 880,000 uninsured people living in the communities served by TORCH member hospitals (Texas Organization of Rural and Community Hospitals), the logic behind creating a private insurance marketplace supported by community hospitals is compelling.

Could embracing ACA increase

your antitrust exposure?

Healthcare providers vulnerable to

FTC/ACA catch-22

By Jennifer Fudge, RPLU

As the Affordable Care Act becomes more mainstreamed, there continue to be obstacles and challenges for leaders of any healthcare organization.

Read Article

IRS reporting simplified

Read Article

ACA could reward

innovative leadership

Embracing change can create 

new opportunities

By Curtis Verstraete

Healthcare leaders know that along with the new risks created by changes in the business, regulatory, economic, social, and political environment surrounding their organizations (the healthcare ecosystem) also comes many new opportunities.

Read Article

With over 880,000 uninsured people living in the communities served by TORCH member hospitals (Texas Organization of Rural and Community Hospitals), the logic behind creating a private insurance marketplace supported by community hospitals is compelling.

The TORCH board of directors, with guidance from HealthSure, reviewed the options and opportunities available to TORCH members and the communities they serve, and are announcing the creation of an insurance marketplace called Texas Community Healthcare Plans. 

Managed by R&D Brokers, the marketplace will be available well before the open enrollment period starting November 15, 2014. TORCH Insurance Services and HealthSure will provide oversight of this initiative.

Could embracing ACA increase your antitrust exposure?

Healthcare providers vulnerable to FTC/ACA catch-22

By Jennifer Fudge, RPLU

While the ACA compels healthcare organizations to look for ways to contain costs and integrate care, Federal Trade Commission regulators have stepped up monitoring and disbanding initiatives such as participation in an accountable care organization (ACO), mergers, and other consolidation or association arrangements.

The FTC averaged one enforcement action against healthcare organizations per year from 1996 to 2010. Compare that to the trend we now see: seven actions were undertaken between 2011 and 2012, nine in 2013, and as of August there have been eight in 2014.

http://www.ftc.gov/enforcement/cases-proceedings/terms/282

With investment bankers anticipating a surge in mergers and acquisitions (M&A) over the next couple of years, it would appear reasonable to see FTC action heat up.

http://www.meridianllc.com/files/meridian_healthcare_snapshot_spring_2014_.pdf

FTC says: “Scrutiny… it’s a good thing!”

In an interview with Modern Healthcare, Markus Meier, the assistant director of FTC healthcare division stated the FTC’s increased scrutiny of the healthcare sector should not discourage hospital leaders from entering mergers and partnerships to create networks that coordinate care.

“The goals of the ACA and the antitrust laws are actually very well aligned in promoting the development of pro-competitive accountable care organizations. ACOs are intended to promote greater efficiency for patients by coordinating care to achieve higher quality at lower cost. Antitrust has the same goal, protecting competition that benefits consumers and promotes efficiencies.

The antitrust laws aim to prevent business practices that unreasonably restrain competition, which can lead to higher prices and lower quality. I sometimes have to remind physicians and hospitals that the antitrust laws are not there to protect their interests as producers of healthcare services, they’re intended to protect consumers, including patients, health plans and self-insured employers. By promoting competition, we hope that leads to lower prices, better quality, more choice and innovation.”

http://www.modernhealthcare.com/article/20140419/MAGAZINE/304199951

Piling on the healthcare sector

While health services make up a very small percentage of all transactions subject to antitrust review, FTC regulators are ramping up the amount of attention they receive. In many cases, these challenges lead to forced divestitures, conduct restrictions, and abandoned transactions.

To cloud the issue more, a recent alert published by Allied World Healthcare reports:

• In June of 2013, while speaking at an American Bar Association Symposium, FTC Chairwoman Edith Ramirez discussed how the FTC had “revamped” their approach to litigating horizontal hospital merger challenges by focusing on how the merger affects price and quality of services. The result from this new approach, according to Chairwoman Ramirez, has been a “winning streak that now includes three successfully-litigated merger challenges and a growing list of hospital deals abandoned after the FTC threatened the challenge.”

• In addition, Chairwoman Ramirez indicated that the FTC will not only look to current and contemplated M&A, but also look to investigate past acquisitions or consolidations as well. She told attorneys and academics in the audience to “stay tuned” for additional FTC action and added “I view retrospectives as an important complement to commission enforcement efforts, and I will be on the watch for more opportunities to conduct new retrospective studies…”

• Former FTC Chair Jon Leibowitz told the Wall Street Journal, “If you want to do something about controlling costs in healthcare, you have to challenge anticompetitive hospital mergers.”

Due diligence keeps it simple

Due diligence and a good understanding of antitrust laws are key solutions in avoiding unnecessary litigation. At HealthSure, our main message to clients is to be cautious and be prepared to do a lot more investigating when comparing the options of consolidation and association.

Additionally, the fluid and highly dynamic nature of antitrust exposures means the coverage solutions available are constantly evolving. Contact your HealthSure representative to learn more about how you can best protect your organization.

 Go to the top

IRS reporting simplified

A ray of sunshine appears among ACA storm clouds

By Brant Couch, CIC, CPA

As our mission is to help you succeed in the increasingly complex world of risk and insurance, it is gratifying when someone else puts the brakes on the accelerating pace of complexity.

There has been a lot of commotion about the supposed increasing complexity of Internal Revenue Service (IRS) reporting in 2015. In fact, there are only a few things you need to be aware of to ensure reporting compliance.

What the ACA asks from employers

In 2015, employers with 50 or more workers have a responsibility to offer employees health coverage. If employers with 50 or more employees fail to do so, they may face fines if their workers go to health insurance exchanges and have earnings low enough to qualify for federal subsidies.

Employers with fewer than 50 workers do not have this responsibility. But, if these employers voluntarily decide to cover their employees, insurance exchanges represent a new option for them in terms of where to shop.

Certain employers with less than 25 workers are eligible for federal tax credits. To qualify, the company must cover at least half of the premium for all of its employees, and must also have average wages of less than $50,000.

What the IRS is looking for

On March 5, 2014, the U.S. Treasury Department (USDT) and the IRS released final rules for information reporting for insurers and certain employers under the employer mandate provisions of the ACA. These provisions become effective in 2015.

For details, visit these links, Information Reporting by Applicable Large Employers: Health Insurance Coverage Offered Under Employer-Sponsored Plans and Information Reporting of Minimum Essential Coverage.

Employers who offer highly affordable coverage to full-time employees will find the information-reporting requirements of Section 6055 and revisions to increase consistency of Section 6056 of Internal Revenue Code relatively straight forward.

Simplified reporting highlights

• Employers with less than 50 full-time employees are exempt from the ACA employer shared responsibility provisions and therefore from the employer reporting requirements.

• Employers large enough to be subject to the employer responsibility provisions and that “self-insure” will complete a single, consolidated form to report to the IRS and employees. The form has two sections: the top includes information for section 6056 reporting while the bottom includes information for section 6055.

• Employers subject to employer responsibility, but do not “self-insure” only have to complete the top section of the form (reporting for section 6056). Insurers and other providers of health coverage will use a separate form to report only under section 6055. Insurers do not have to report on enrollees in the Health Insurance Marketplace as the Marketplace will be providing information on individual coverage.

Employer reporting made simple

Employers providing a “qualifying offer” to any full time employees, have a simplified alternative to reporting monthly, employee-specific information.

(A qualifying offer provides employee-only coverage that costs employees no more than approximately $1,100 in 2015 (9.5 percent of the Federal Poverty Level), combined with an offer of coverage for the employee’s family.)

• For employees receiving qualifying offers for all 12 months of the year, employers must report only the names, addresses, and taxpayer identification numbers (TINs) of those employees and a declaration that the employees received a full-year qualifying offer. Employers will also give the employees a copy of the simplified report or a standard statement indicating the employee received a full-year qualifying offer.
• For employees receiving a qualifying offer for less than all 12 months of the year, employers will be able to simplify reporting to the IRS and to employees for each of those months by entering a code indicating that the qualifying offer was made.
• Employers certifying they made a qualifying offer to at least 95 percent of full-time employees (and employees’ families) will be able to use an even simpler alternative reporting method for 2015. They can use a streamlined reporting method for their entire workforce, including any employees not receiving a qualifying offer for the full year. These employers must provide employees with statements about the employees’ possible eligibility for premium tax credits.
• Employers have also been given the option of not identifying which of its employees are full-time. Instead, employers may simply include those employees who may be full-time. To take advantage of this option, the employer must certify that it offered affordable, minimum value coverage to at least 98 percent of the employees about whom it is reporting.

And… even simpler yet

Fundamentally speaking, the IRS wants you to tell them:

Section 6055

• Information about the entity providing coverage, including contact information
• Which individuals are enrolled in coverage, with identifying information and the months for which they were covered

Section 6056

• Information about the employer offering coverage (including contact information and the number of full-time employees)

• For each full-time employee, information about the coverage (if any) offered to the employee, by month, including the lowest employee cost of self-only coverage offered

As each healthcare organization has unique circumstances and needs, we recommend consulting your risk and insurance advisor for further guidance and details.

Go to the top

Healthcare leaders faced with the imminent decision to pay or play can simplify the discussion by reconfirming their organizations fundamental philosophy around employee benefits.

If offering employee benefits is a strategic asset (necessary for attracting, retaining, and successfully retiring highly productive employees), sending your employees to a healthcare exchange may not be the best option. Instead, you might continue to offer group health insurance that meets the minimum requirement. If this is the choice you make, you will find the reporting is simple and the fees are clear.

Exchanges and the IRS

On the other hand, if you decide not to offer benefits- for whatever reason – or have not yet offered benefits and have over 50 full-time employees, things can get little more complicated.

There are two scenarios to be aware of:

• The first scenario occurs when an employer does not offer health coverage to “substantially all” of its full-time employees and any one of its full-time employees both enrolls in health coverage offered through a State Insurance Exchange and receives a premium tax credit or a cost-sharing subsidy. In this scenario, the employer will owe a “no coverage penalty” of $2,000 per year (adjusted for inflation) for each full-time employee (excluding the first 30).

• The second scenario occurs when an employer does provide health coverage, but it is deemed inadequate for Employer Mandate purposes because it:
  • Is not “affordable”
  • Does not provide at least “minimum value”, or
  •  The employer offers coverage to substantially all (but not all) of its full-time employees and one or more of its full-time employees both enrolls in Exchange coverage and receives an Exchange subsidy.

In this second scenario, the employer will owe an “inadequate coverage penalty” of $3,000 per person. This penalty is calculated based not on the employer’s total number of full-time employees, but only on each full-time employee who receives an Exchange subsidy. (The penalty is also capped each month by the maximum potential “no coverage penalty” discussed in the first scenario).

Healthcare leaders know that along with the new risks created by changes in the business, regulatory, economic, social, and political environment surrounding their organizations (the healthcare system) also comes many new opportunities.

When it comes to historical waves of change, the ACA is unprecedented. Not only will it affect every American seeking healthcare; it will affect every healthcare provider in the country. The full impact of the ACA on the healthcare system will take many years to be realized. In the meantime, healthcare leaders can take advantage of the opportunities this tsunami of change is creating.

For instance, the individual mandate is creating a whole new group of clients for primary care providers. Healthcare leaders have a choice: They could see people who never before had access as an unsupportable burden on an already over-taxed system. Or, they could see them as an opportunity to expand capacity by streamlining existing, and creating new delivery models.

Similarly, the employer mandate essentially increases the financial pressure for employers to provide employee healthcare coverage. This pressure will likely drive employers to seek alternative, more affordable healthcare for their employees. Organizations willing to innovate and provide alternatives could enjoy significant growth.

And then there’s those Accountable Care Organizations (ACOs)

While there are risks inherent in ACO participation (see story on anti-trust exposures), they can help hospitals and other providers protect and expand their volume. To realize the opportunities created by the individual and employer mandates, participation and leadership in an ACO could be essential for creating new and streamlined methods for delivering quality, low-cost care. Participation could also provide new ways for streamlining claims processing and eliminating reimbursement obstacles. And, in some instances, an ACO could provide the means to work directly with self-insured employers and cut the middlemen out of the reimbursement process.

Has wellness’s time finally arrived?

For care providers, the ACA’s support of wellness programs creates an exciting opportunity. As well-meaning as most traditional wellness plans have been, most employers would agree their effectiveness has been hard to measure. Perhaps the greatest challenge traditional programs face is employees who could benefit the most from wellness strategies are typically those who ignore or under utilize employer-sponsored programs.

Reducing chronic diseases and acute illnesses is unarguably a path to reducing healthcare costs. Innovative providers who can figure out how to provide effective screening to employers and preventative clinical coaching to patients could create new growth and revenue.

Check your attitude

While not so simplistic as the old glass half-full/half-empty approach, a leader’s ability to take advantage of the opportunities created by the massive changes in our healthcare system comes down to attitude. Cautious optimism compels you to look for opportunity in change. Fear, resentment, and resistance could turn your organization into a victim of change.

Go to the top

Go to the top

Q: How will the ACA impact the premiums we pay for the employee health plan we sponsor?

Go to the top