Posted October 31, 2012 by ABlume
By Michael K. Stanley, Lifehealthpro.com
Americans feel that choosing their health care benefits is the second-most difficult major life decision that they face, second only to saving for retirement.
The findings come on the heels of a new survey by Aetna. The Empowered Health Index Survey found that survey participants thought that the proper selection of health care benefits was more difficult than purchasing a car, making decisions about medical tests, parenting and selecting other types of insurance.
Consumers found health care benefit decisions to be exceedingly difficult because of the cluttered and confusing literature that they receive explaining the benefits to them. Eighty-eight percent of survey respondents said that the available information was “confusing and complicated.”
Eight-four percent responded that there was conflicting information in the literature received while 83 percent said that it was hard for them to surmise which plan was best for them.
The survey also found that consumers rarely monitor the cost of their health care. Forty-three percent of respondents said that they rarely or never track how much money they spend on out-of-pocket-costs.
Other survey findings include: Four in ten survey respondents have skipped a dose of medication and 76 percent of consumers in “fair” or “poor” health have admitted to skipping a medication. Over three quarter of respondents said that they believed that the health care law was important to them but 41 percent signaled that they would like more information on the legislation.
A resonating positive aspect of the survey was that consumers are aware of the importance of benefits, they just feel that they are under-resourced rendering them unfit to make educated decisions.
“We need to need to make the process of choosing and using health benefits easier for consumers. The survey results will help us continue to develop and enhance tools, programs and products to drive consumer engagement and empower people to live healthier lives,” said Mark T. Bertolini, Aetna’s chairman, CEO and president.
For details about Crawford Advisors’ customized communications services, click here:
Posted October 25, 2012 by PHaynes
Intro: PPACA requires, for Non-grandfathered Med/Rx plans, that for the 1st plan year on/after 9/22/10 that there be an internal appeals mechanism & once all internal appeals have expired, an external (independent, 3rd party) appeal mechanism must exist. Link (letter L, 1st column).
Update: On June 22, 2011, the U.S. Departments of Health and Human Services (HHS), Labor (DOL), and Treasury issued amendments to the interim final rules on the process for health insurers and group health plans to conduct internal claims and appeals and external review of adverse benefit determinations (enhanced claims and appeals). In relevant part, the amendments limit the scope of external review to cases involving medical judgment. In addition, HHS and DOL released technical guidance and model notice documents regarding the internal claims and appeals and external review process.
Below, you’ll find a link to the Maryland Insurance Administration’s recent decision involving a CareFirst BlueCross BlueShield matter. It is interesting and provides some details about how extensive these cases can quickly become.
Posted October 24, 2012 by ABlume
From the International Foundation of Employee Benefit Plans
Most employers that have analyzed the financial impacts of their wellness programs have found $1 to $3 decreases in their overall health care costs for every dollar spent, according to the report titled A Closer Look: Wellness ROI by the International Foundation of Employee Benefit Plans. The report examines data from the Foundation’s recent Wellness and Value-Based Health Care survey and compares results between organizations that have analyzed the financial impacts of their wellness programs and those that have not.
“Without question, employers are beginning to understand the direct connection that wellness initiatives can have on both employee health and health care plan cost savings,” said Michael Wilson, Foundation CEO. “While the primary goal is reducing health costs, we’re also seeing other advantages from wellness initiatives, such as higher employee morale, increased productivity and reduced disability.”
The report also found that wellness program incentives, such as insurance premium reductions, and communications tools like web links and social networks are used more by organizations that are achieving positive returns on their wellness investment.
“While only 19 percent of our members are analyzing the financial data of their wellness programs, the data gives us insights regarding initiatives in their programs that are successful and may provide a blueprint for other organizations in developing or improving their own wellness campaigns,” said Wilson.
The Foundation divided the respondents of the survey into two groups, the ROI group and the non-ROI group based on whether they measured and achieved positive returns. The data revealed significant differences between the two groups when it came to providing incentives and communicating wellness with the workforce.
Insurance premium reductions for participation in wellness programs accounted for the biggest difference between the two groups, with 49 percent of the ROI group providing this incentive as opposed to just 29 percent of the non-ROI group. Other popular incentives included gift cards and non-cash incentives/prizes/raffles. Those in the ROI group were also more likely than their counterparts to attach incentives to specific types of initiatives such as health screenings (65 percent to 43 percent), health risk assessments (74 to 51) and health care coaches/advocates (43 to 22). Participation among members of organizations in the ROI group increased dramatically when incentives are tied to health screenings and health risk assessments.
Communication was one of the most frequently cited reasons for achieving positive ROI given by organizations in the open-ended response section of the survey. Organizations experiencing ROI are more likely than the non-ROI group to provide most types of wellness information and electronic communications, such as web links (43 percent to 32 percent), social networks (18 to nine) and wellness seminars and speakers (65 to 45).
The survey, completed by members of the International Foundation, found that almost 74 percent of organizations experiencing ROI are more likely to have a broader value-based health care strategy that offers initiatives such as health screenings, stress management programs, health risk assessments, and fitness and nutrition programs compared to just 45 percent of the non-ROI group.
“Determining ROI can be of great benefit for employers—leading to increased buy-in from organizational leaders and workers,” explained Julie Stich, the Foundation’s Director of Research. “However it’s not an easy process. ROI can be difficult to measure since health improvement may be influenced by a combination of factors and because it can take anywhere from three to five years to see cost-saving results.”
About Wellness Programs and Value-Based Health Care
Survey responses were received in February 2012 from 646 individuals from the U.S. and Canada, including benefits and human resources professionals, financial managers, and other professionals. Respondents represented a variety of sizes, regions and industries or jurisdictions. Of the 646 members who responded, 539 were from organizations in the U.S. with representation from single-employers/corporations (66 percent), multiemployer trust funds (23 percent) and public/government employers (11 percent).
Posted October 18, 2012 by PHaynes
IRS Announces 2013 Pension Plan Limitations; Taxpayers May Contribute up to $17,500 to their 401(k) plans in 2013
WASHINGTON — The IRS (Internal Revenue Service) today announced Cost of Living Adjustments (COLAs) affecting dollar limitations for pension plans and other retirement-related items for Tax Year 2013. In general, many of the pension plan limitations will change for 2013 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment. Highlights include:
- The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,000 to $17,500.
- The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $5,500.
- The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $59,000 and $69,000, up from $58,000 and $68,000 in 2012. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $95,000 to $115,000, up from $92,000 to $112,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $178,000 and $188,000, up from $173,000 and $183,000.
- The AGI phase-out range for taxpayers making contributions to a Roth IRA is $178,000 to $188,000 for married couples filing jointly, up from $173,000 to $183,000 in 2012. For singles and heads of household, the income phase-out range is $112,000 to $127,000, up from $110,000 to $125,000. For a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range remains $0 to $10,000.
- The AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $59,000 for married couples filing jointly, up from $57,500 in 2012; $44,250 for heads of household, up from $43,125; and $29,500 for married individuals filing separately and for singles, up from $28,750.
Below are details on both the unchanged and adjusted limitations.
A. Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Commissioner annually adjust these limits for cost of living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under Section 415. Under Section 415(d), the adjustments are to be made pursuant to adjustment procedures which are similar to those used to adjust benefit amounts under Section 215(i)(2)(A) of the Social Security Act.
B. The limitations that are adjusted by reference to Section 415(d) generally will change for 2013 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. For example, the limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) is increased from $17,000 to $17,500 for 2013. This limitation affects elective deferrals to Section 401(k) plans, Section 403(b) plans, and the Federal Government’s Thrift Savings Plan.
C. Effective January 1, 2013, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $200,000 to $205,000. For a participant who separated from service before January 1, 2013, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant’s compensation limitation, as adjusted through 2012, by 1.0170.
D. The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2013 from $50,000 to $51,000.
E. The Code provides that various other dollar amounts are to be adjusted at the same time and in the same manner as the dollar limitation of Section 415(b)(1)(A). After taking into account the applicable rounding rules, the amounts for 2013 are as follows:
F. The limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) is increased from $17,000 to $17,500.
G. The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $250,000 to $255,000.
H. The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan remains unchanged at $165,000.
I. The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5 year distribution period is increased from $1,015,000 to $1,035,000, while the dollar amount used to determine the lengthening of the 5 year distribution period is increased from $200,000 to $205,000.
J. The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) remains unchanged at $115,000.
K. The dollar limitation under Section 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $5,500. The dollar limitation under Section 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $2,500.
L. The annual compensation limitation under Section 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed cost of living adjustments to the compensation limitation under the plan under Section 401(a)(17) to be taken into account, is increased from $375,000 to $380,000.
M. The compensation amount under Section 408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $550.
O. The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $11,500 to $12,000.
P. The limitation on deferrals under Section 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $17,000 to $17,500.
Q. The compensation amount under Section 1.61 21(f)(5)(i) of the Income Tax Regulations concerning the definition of “control employee” for fringe benefit valuation purposes remains unchanged at $100,000. The compensation amount under Section 1.61 21(f)(5)(iii) remains unchanged at $205,000.
R. The Code also provides that several pension-related amounts are to be adjusted using the cost-of-living adjustment under Section 1(f)(3). After taking the applicable rounding rules into account, the amounts for 2013 are as follows:
S. The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for married taxpayers filing a joint return is increased from $34,500 to $35,500; the limitation under Section 25B(b)(1)(B) is increased from $37,500 to $38,500; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D), is increased from $57,500 to $59,000.
T. The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for taxpayers filing as head of household is increased from $25,875 to $26,625; the limitation under Section 25B(b)(1)(B) is increased from $28,125 to $28,875; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D), is increased from $43,125 to $44,250.
U. The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for all other taxpayers is increased from $17,250 to $17,750; the limitation under Section 25B(b)(1)(B) is increased from $18,750 to $19,250; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D), is increased from $28,750 to $29,500.
V. The deductible amount under Section 219(b)(5)(A) for an individual making qualified retirement contributions is increased from $5,000 to $5,500.
W. The applicable dollar amount under Section 219(g)(3)(B)(i) for determining the deductible amount of an IRA contribution for taxpayers who are active participants filing a joint return or as a qualifying widow(er) is increased from $92,000 to $95,000. The applicable dollar amount under Section 219(g)(3)(B)(ii) for all other taxpayers (other than married taxpayers filing separate returns) is increased from $58,000 to $59,000. The applicable dollar amount under Section 219(g)(7)(A) for a taxpayer who is not an active participant but whose spouse is an active participant is increased from $173,000 to $178,000.
X. The adjusted gross income limitation under Section 408A(c)(3)(B)(ii)(I) for determining the maximum Roth IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is increased from $173,000 to $178,000. The adjusted gross income limitation under Section 408A(c)(3)(B)(ii)(II) for all other taxpayers (other than married taxpayers filing separate returns) is increased from $110,000 to $112,000.
Y. The dollar amount under Section 430(c)(7)(D)(i)(II) used to determine excess employee compensation with respect to a single-employer defined benefit pension plan for which the special election under Section 430(c)(2)(D) has been made is increased from $1,039,000 to $1,066,000.
Posted October 17, 2012 by ABlume
Erin McCann, Healthcarefinancenews.com
Medical practices nationwide have expressed their concern regarding the impact of an ICD-10 switchover, according to a recent survey finding 96 percent of respondents concerned about the transition to the updated coding system.
The Nuesoft Technologies sanctioned survey, “Attitudes Toward the Transition to ICD-10 and ANSI-5010,” also showed that 73 percent of respondents anticipate ICD-10 significantly affecting their practice, whether it be financially or operationally.
With HHS issuing a final rule that establishes Oct. 1, 2014 as the ICD-10 compliance deadline, physicians and medical personnel are girding themselves for what many officials perceive to be a complex labyrinth of documentation.
This diagnosis code is slated to replace ICD-9 and expand the number of diagnosis and procedural codes from 17,000 to some 155,000.
“It’s not the number,” said Barry Blumenfeld, MD, CIO of Maine Medical Center in Portland, Maine. The complex addition of coding, he added, “makes things very complicated for physicians choosing codes and will require a lot of training and a lot of insight into how these codes are different.”
Some officials say the transition to ICD-10 will be one of the most significant changes the physician practice community has ever undertaken. The more detailed level of specificity required by ICD-10 will impact areas of practice management processes, including documentation, billing, workflow and quality reporting.
In addition, many practice software systems will need to be upgraded, and physicians and responsible staff will need extensive training to successfully make the transition.
“Most physicians are dreading the change to ICD-10 because the number of codes and level of specificity will increase exponentially,” said Barbara Dunn, president of MedRecovery Solutions, Inc., a large billing firm that works with practices throughout the country to optimize operations through appropriate coding and billing.
Julie Nobles, president of Premiere Medical Billing, echoed Dunn’s concern. “Most physicians I have spoken with are worried about the rollout of ICD-10 because they are not certain the increased costs and staff hours justify the change to a new and larger set of diagnostic codes.”
Yet, for some physicians, the impending transition is being taken in stride. According to Robert Goldman, MD, the founding physician of Georgia Hormones, with the proper training, the transition to ICD-10 will be doable.
“We wanted to stay ahead of the curve so the transition to ICD-10 would be as streamlined as possible,” said Goldman. “Our practice coding specialist, as well as all of our physicians, finished a course this year all about ICD-10 and the new diagnosis codes. Even though the list of codes will be the size of 10 Manhattan phone books, we are prepared. In fact, Europe has been using ICD-10 codes successfully since 2002.”
The Centers for Medicaid and Medicare Services (CMS) has stressed that ICD-10 will provide more specific data than the 30-year-old ICD-9 and better reflect current medical practices. CMS indicated that the added detail embedded within ICD-10 codes will inform health care providers and health plans of patient incidence and history, which improves the effectiveness of case management and care coordination functions
Posted October 11, 2012 by PHaynes
The Employee Benefits Security Administration (EBSA) is a division within the US Department of Labor. Their “Affordable Care Act landing page” has some contains detailed information regarding implementation of the Affordable Care Act (PPACA) that includes:
ACA Implementation Frequently Asked Questions
- Part I This set of FAQs addresses implementation topics including compliance, grandfathered health plans, claims, internal appeals and external review, dependent coverage of children, out-of-network emergency services, and highly compensated employees.
- Part II This set of FAQs addresses grandfathered health plans, dental and vision benefits, rescissions, preventive health services, and ACA effective date for individual health insurance policies.
- Part III This set of FAQs addresses the exemption for group health plans with less than two current employees.
- Part IV This set of FAQs addresses grandfathered health plans.
- Part V This set of FAQs addresses a variety of ACA implementation topics, the HIPAA nondiscrimination and wellness program rules, and the Mental Health Parity and Addiction Equity Act of 2008.
- Part VI This set of FAQs addresses grandfathered health plans.
- Part VII This set of FAQs addresses the Summary of Benefits and Coverage and Uniform Glossary requirements of PHS Act §2715 and the Mental Health Parity and Addiction Equity Act of 2008.
- Part VIII This set of FAQs addresses the Summary of Benefits and Coverage requirements of PHS Act §2715.
- Part IX This set of FAQs addresses the Summary of Benefits and Coverage requirements of PHS Act §2715.
- Part X This FAQ addresses the Summary of Benefits and Coverage requirements of PHS Act §2715.
Coverage of Preventive Services
- Updated Guidance Regarding Temporary Enforcement Safe Harbor
- Advance Notice of Proposed Rulemaking:
- Final Regulations Regarding Exemption
- Guidance Regarding Temporary Enforcement Safe Harbor
- Amendment to Interim Final Rules
- Interim Final Regulations
- Fact Sheet
- Recommended Preventive Services
- Public Comments on Interim Final Rule
- Public Comments on Amendment to Interim Final Rule
- CALLC, 10/3/12: IRS Official States: SBC Rules Do Not Limit Employers to 8-Page Summaries
- CALLC, 9/4/12: PPACA update: The IRS/DOL/HHS Issued Notices on Full-Time, the 90-Day Waiting Period and Affordability
- CALLC, 7/10/12: 2012 Revised Healthcare Reform Timelines, Version 7.0
- CALLC, 7/6/12: Additional Clarity? Certainty? Or, just more guidance to help Employers/Plan Sponsors avoid fines?
Posted October 10, 2012 by PHaynes
Original Post: October 7, 2011; Re-posted: October 10, 2012
Each year, Medicare beneficiaries are allowed to voluntarily enroll in a Medicare outpatient prescription drug program (“Medicare Part D”). The law that authorizes this Medicare benefit also imposes an obligation on employers and plan sponsors that provide prescription drug coverage to Medicare beneficiaries. Employers must disclose to all group members (members, retirees, spouses and dependents) who are eligible to enroll in Medicare Part D, whether the employer group coverage is “creditable prescription drug coverage” or “non-creditable prescription drug coverage.”
Prior deadline of Nov 15th is now Oct 15th
In prior plan years, the deadline for employers/plan sponsors to notify employees had been November 15th. However, the deadline is now October 15, 2011.
Clients of Crawford Advisors, LLC have been compliant with this standard in several ways, and, generally always during the first 60 days of each plan year—which means our clients need not worry whether the deadline to comply was 11/15 and is now 10/15. For example, our clients that have calendar year plans generally distribute their Medicare D certificates of creditable coverage by the end of February (and that is well in advance of the 10/15 deadline).
Note: If you were to only send Medicare D certificates of creditable or non-creditable coverage by October 15th—you would be telling plan participants that the plan they’ve been on for the past ten (10) months is or isn’t creditable. If it isn’t creditable – you’ve done your employee a great disservice (they’ll likely be charged higher Medicare D premiums as a “late entrant”). While that information is required to be distributed and disclosed, it is interesting that CMS/HHS has never actually reconciled that these employees will likely be going through an open enrollment for their employer’s plan and will be selecting a new plan for 2012, and it is that plan’s Medicare-credibility that participants should be comparing to the one they are selecting by October 15th not the plan that they’ve had for the past ten (10) months.
For more information, including CMS model notices and guidance, visit the CMS website.
For historical background on this topic, please read our Compliance Chronicle from August of 2005:
Posted October 10, 2012 by ABlume
By Warren S. Hersch, Benefitspro.com
More than one-third of all employees are prepared to bolt their current employer absent an improvement in their benefits package.
So notes new research from Aflac, which published this finding in its 2012 Aflac Workforces Report. The company conducted the survey in partnership with the national polling firm Research Now.
When asked how influential a benefits package is in the decision to leave a current employer, 34 percent of the report’s respondents say “very influential” or “extremely influential.” And when asked what their current employer could do to keep them at their job, 49 percent say “improve my benefits package.”
The report reveals that nearly half (49 percent) of workers are at least somewhat likely to look for a new job in the next 12 months. And more than a quarter (27 percent) are very or extremely likely.
The report also reveals a correlation between satisfaction with benefits and job satisfaction generally.
Nearly three-quarters of workers (73 percent) who indicate they are extremely or very satisfied with their benefits package also say they are extremely or very satisfied with the job. This compares with 33 percent of workers who are dissatisfied with their benefits and are extremely or very satisfied with their job.
The report notes that workers who are offered wellness programs and take part in the programs are significantly more likely to be satisfied with the job, feel positively towards their employer and consider their well-being better protected, compared to workers who aren’t offered wellness programs.
Among employees whose employers offer voluntary benefits options, 55 percent say they are satisfied with benefits offerings; 60 percent say the benefits package meets their family needs, 67 percent say their employer takes care of its employees, 61 percent says they are taking full advantage of their benefits offerings and 70 percent say that a comprehensive benefits package safeguards their health and wellness.
By comparison, among employees whose employer does not offer voluntary benefits options, the people who answered as above represented 41 percent, 45 percent, 59 percent, 46 percent and 59 percent of respondents, respectively.
Posted October 5, 2012 by ABlume
By Allison Bell
The Patient Protection and Affordable Care Act of 2010 (PPACA) seems to be having a growing effect on group health coverage, researchers say.
The researchers, at the Henry J. Kaiser Family Foundation, Menlo Park, Calif., and the Health Research & Educational Trust, Washington, have reported that finding in a report based on a survey of 2,121 U.S. employers.
The researchers found that the overall percentage of participating employers offering health benefits increased slightly, to 61%, from 60% in 2011, but is still down sharply from 69% in 2010.
The offered rate dropped to 98%, from 99%, for firms with 200 or more workers, but it increased to 61%, from 59%, for firms with 3 to 199 workers, and it increased by 2 percentage points for firms with 3 to 50 workers.
The average annual single premium increased 3% to $5,615, and the average annual family premium increased 4%, to $15,745.
But the rate of increase for individual coverage was down from 8%, and the rate of increase for family coverage was down from 9%.
The researchers also found that plans are much less likely to be grandfathered.
PPACA drafters tried to make good on one of President Obama’s campaign promises — that people who liked their health coverage could keep it — by letting individual policies or group plans that stay substantially the same avoid complying with some new PPACA requirements, such as requirements that individual and small group plans use at least 80% of their revenue to pay for health care and quality improvement efforts.
The percentage of all employer plans that report that they are still “grandfathered” has fallen to 31%, from 56% a year ago.
The researchers also found that employers are now more likely to say they have been affected by a PPACA young adult coverage provision.
The provision requires group plans that offer family coverage to let enrollees pay to add dependents up to age 26 to their coverage.
The percentage of surveyed employers that have added young adult dependents to their plans as a result of the PPACA provision has increased to 31%, from 20%, the researchers say.
At employers affected by the provision, the average number of young adults added has increased to 7 this year, up from 6 a year ago.
Posted October 4, 2012 by ABlume
Kaiser Health News
By Michelle Andrews
Elizabeth Nash was 21 and just finishing her junior year at the College of William & Mary when she had a miscarriage. She planned to tell her parents about it in person, but her insurer beat her to it when, as a matter of routine, it mailed them a form that described the medical treatment she’d received.
Nash says the experience “caused a rift that took a while to repair.”
Nash, now 38, recently co-authored an analysis of state laws on health-care confidentiality for insured dependents for the Guttmacher Institute, a reproductive health organization, and was surprised to find that state laws in this area are “so lacking and vague and mushy.”
Under the Affordable Care Act, which allows adult children to stay on their parents’ plans until they reach age 26, breaches of privacy such as the one Nash experienced may become a growing problem. Since the law passed, more than 3 million young adults have gained coverage, according to the Department of Health and Human Services.
Although parents must give consent for most care provided to children younger than 18, many states allow minors to consent on their own to such potentially sensitive services as testing and treatment for sexually transmitted infections, prenatal care and delivery, contraception and outpatient treatment for mental health and substance abuse.
The privacy rule of the federal Health Insurance Portability and Accountability Act (HIPAA), which took effect a decade ago, generally prohibits the unauthorized disclosure of individuals’ medical records and other health information. But there’s a catch. Health-care providers and insurers can generally use such information when trying to secure payment for treatment or other services.
And that can be problematic. Providers submit bills to insurers, which process them and generate a document, often an Explanation of Benefits (EOB) form, that tells the insured or the policyholder how much the insurer paid and what, if anything, is owed on the bill.
These communiques are important to combat fraud and identity theft, and many states require that they be sent, according to Nash.
But the documents do not always go to the person who was treated. “The notice could go to your parents or to you, depending on state law, insurance contracts and insurance policy,” says Abigail English, director of the Center for Adolescent Health and the Law, and lead author of the analysis published by the Guttmacher Institute.
English says it’s “extremely common” for insurers to send EOBs to the policyholder rather than the patient.
Under federal privacy regulations, patients can request that insurers not disclose confidential information or ask that they send it to an address of their choosing. Insurers are required to comply if not doing so would endanger the patient, says English, for example, if it posed a threat of domestic violence.
“Plans typically do have procedures in place to deal with the disclosure of sensitive information,” says Susan Pisano, a spokeswoman for America’s Health Insurance Plans, a trade group.
Some insurers have made strides in addressing confidentiality issues related to billing and other communications. Cigna, for example, redesigned its EOB forms to strip out specifics about the treatment or services provided, says Joe Mondy, a spokesman for the company. The form, which typically goes to the policyholder, does name the facility and the provider, however.
In addition, unless the law requires it, the insurer sends an EOB only if there’s a balance due.
Policy experts say strategies such as Cigna’s make sense. That’s especially true given the expansion in free preventive services under the Affordable Care Act. Starting in January, for example, many women in new health plans or in those that have changed their benefits enough to lose grandfathered status will be eligible for such services, including contraceptives, counseling and screening for sexually transmitted infections, and screening and counseling for domestic violence.
“With more insurance coverage of contraception, there will be more issues of whether insurers are protecting confidentiality,” says Tina Raine-Bennett, an obstetrician-gynecologist at Kaiser Permanente Medical Center in Oakland, Calif., who is chair of the Committee on Adolescent Health for the American College of Obstetricians and Gynecologists.
Although protecting young women’s privacy poses a challenge for insurers, “I do believe there will be a net gain in having those services,” she says.