Future Bleak for another COBRA Premium Subsidy Extension
Enthusiasm for another COBRA subsidy extension seems to be waning, as evidenced by recent Congressional action. In March, the Senate approved H.R. 4213, a bill which would have extended the subsidy to employees laid off through the end of the year. However, the House stripped that measure from the bill in May before sending it back to the Senate. Senator Robert Casey then proposed an amendment to the bill that would scale back the assistance, proposing a subsidy extension through November 30 that, for employees laid off between June 1 and November 30, would only last for 6 months instead of 15 months. Last Thursday, however, the bill failed to receive enough support to come to a floor vote, as Senate Republicans and some Democrats are opposed to adding to the federal deficit.
At this point, all terminated employees starting on June 1, 2010 would have to pay the full COBRA premium because the subsidy has not been extended. Former employees currently receiving the subsidy would continue to receive it until the end of their subsidy period.
Earlier this month, Walgreens announced that it would stop filling prescriptions for millions of members of CVS Caremark drug plans. It claimed that CVS not only had unsatisfactory reimbursement rates, but that CVS was trying to divert customers to their own pharmacies. In response to Walgreens' announcement, CVS said it would remove Walgreens from its network by July 9. However, the two companies have since come to an undisclosed agreement that will allow Caremark members to continue to fill their prescriptions at Walgreens.
Caremark administers the prescription drug plan for BlueCross BlueShield. Earlier, BlueCross BlueShield notified its employer clients and affected members that they would no longer fill prescriptions at Walgreens. With this dispute resolved, all BlueCross BlueShield of Tennessee members can still fill prescriptions at Walgreens.
Interim Final Rules for Grandfathered Plans
Interim final regulations on the grandfathered plan rule explain certain health care plan changes that would result in a plan losing its grandfathered status under the new health care reform laws. Each plan will need to weigh the advantages of the grandfather status compared to the need of changing plan designs or insurance carriers. Your Cowan account manager can help you make the evaluation. Under the interim rules, the following plan changes will cause a plan to lose its grandfathered status:
- Significantly increasing deductibles and/or co-payments;
- Increasing coinsurance required by the employee;
- Significantly cutting or reducing benefits (i.e., relative to a specific condition);
- Adding/tightening annual benefit limits;
- Decreasing employer contributions by more than 5%;
- Switching insurance carriers; or
- Changing the funding arrangement from self-insured to fully-insured.
Also, a plan's grandfathered status may be revoked as a result of the following changes that will be regarded as abusing the grandfather rule:
- A plan being bought or merged with another plan simply to avoid complying with the law; or
- If a plan forces consumers to switch to another grandfathered plan that compared to the current plan, has less benefits or higher cost sharing as a means of avoiding the new health care reform requirements.
For more details, go to http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html.
Interim Final Regulations on Lifetime and Annual Limits, Preexisting Condition Exclusions, Rescissions, Doctor Choices and Emergency Services
Joint interim final regulations have been issued by the IRS, HHS and DOL regarding certain health care reform rules for group health plans and health insurance coverage in group and individual markets. The regs provide some additional guidance on:
- lifetime and annual limits (including clarification of annual limits to account-based plans, as well as transitional rules for those who have already reached a lifetime limit, and definitions of essential health benefits and restricted annual limits)
For a brief summary of these regulations, go to http://www.healthreform.gov/newsroom/new_patients_bill_of_rights.html.
