New Year Health Care Round-Up

January 5, 2011

The 111th Congress can easily be defined as one dominated by a contentious, prolonged health care reform debate. Even so, despite the passage of the Patient Protection and Affordable Care Act (PPACA) in March 2010, health care policy will remain a top priority in the 112th Congress.

Members of Congress on both sides of the isle are currently preparing for early attempts to repeal, defund, and investigate PPACA. House Republicans have scheduled a vote on full repeal of the health care law on Jan. 12, followed by a resolution requiring health committees to report alternative legislation to the existing law.

While full repeal is widely known not to see a vote in the Senate, much less survive a presidential veto, the pending Republican offensive on PPACA next week is just the beginning of health care policy plans set for the 112th Congress.

Nonetheless, while the 112th Congress prepares to debate health policy, regulatory agencies are currently promulgating regulations and guidance set forth in PPACA, many of which started Jan 1, including the following:

  • Changes to Tax-Free Savings AccountsPPACA excludes the costs for over-the-counter (OTC) drugs not prescribed by a doctor from being reimbursed through a Health Reimbursement Account or health Flexible Spending Account and from being reimbursed on a tax-free basis through a Health Savings Account or Archer Medical Savings Account. Increases the tax on distributions from a health savings account or an Archer MSA that are not used for qualified medical expenses to 20 percent of the amount used. Click here for more information on OTC drugs.
  • Grants for Small-Business Wellness ProgramsPPACA provides grants for up to five years to eligible small employers that establish wellness programs. An eligible employer is one that employs fewer than 100 employees who work at least 25 hours per week and did not have a workplace wellness program as of March 23, 2010.
  • CLASS Act ProgramEstablish a national, voluntary insurance program for purchasing community living assistance services and supports (CLASS program). Following a five-year vesting period, the program will provide individuals with functional limitations a cash benefit of not less than an average of $50 per day to purchase nonmedical services and supports necessary to maintain community residence. The program is financed through voluntary payroll deductions: all working adults will be automatically enrolled in the program, unless they choose to opt-out.
  •  Medicare and Medicaid ChangesSeveral changes to the Medicare and Medicaid programs commenced Jan. 1, including, but not limited to, free prevention benefits; a new Center for Medicare and Medicaid Innovation; cuts to Medicare Advantage plan payments; and, new payment models to address chronic care management.
  • Medical Loss Ratio (MLR) for InsurersPPACA requires health insurance plans to report the proportion of premium dollars spent on clinical services, quality, and other costs and provide rebates to consumers for the amount of the premium spent on clinical services and quality that is less than 85% for plans in the large group market and 80% for plans in the individual and small group markets. Click here to learn more about MLRs.

Other health care efforts are underway in 2011 off Capitol Hill. The National Association of Insurance Commissioners (NAIC) and the Institute of Medicine (IOM), both tasked with providing advice and guidance to the Department of Health and Human Resources on several PPACA provisions, will continue their deliberations on health insurance exchanges and the essential health benefits package.

NSBA also will continue to engage the legislative and regulatory process in 2011 to ensure that Congress, regulatory agencies, and other entities work to produce health care policies that do not harm small businesses. Furthermore, NSBA will continue to highlight policies that contribute to small businesses number one concern with the health care system: costs.

Stay tuned to NSBA’s Health Reform Today and Tomorrow Web site for more news and information as it is made available.