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Category Archives: Human Resources

Grandfathering Under the New Health Care Legislation

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Introduction

The health care legislation signed into law on March 23, 2010 is officially known as the “Patient Protection and Affordable Care Act.” Gaining widespread usage is the abbreviated “Affordable Care Act,” and when used in context, simply “The Act.” (1)

The Act is immense in scope and complexity, affecting every aspect of the delivery and financing of health care in the United States. Many of its provisions took effect the day the bill was signed, while hundreds more will be implemented in the coming years, most notably in 2014 with the establishment of state-based insurance exchanges, coverage mandates for individuals, and penalties for employers who do not provide their employees with proscribed levels of health care benefits.

In helping our clients understand and comply with the provisions of The Act – and owing to its complexity and multi-year implementation – we’ve found it most effective to address The Act in chapters, as it were, with advance learning and planning periods of three to six months – three to six months, that is, with the major exception of planning for “grandfathering” – in particular, the advantages of grandfathering as it relates to the new non-discrimination rules that will apply to all health plans, including fully-insured plans, on the policy anniversary first following September 23, 2010, unless the plan is grandfathered. For this provision, planning should be accomplished as soon as possible.

About Grandfathering

Under The Act, health plans that have been in continuous effect since March 23, 2010 can avoid several costly requirements of the legislation by adhering to strict guidelines that allow them to continue under current regulations, i.e., to remain “grandfathered.”

Grandfathered status does not exempt a health plan from existing federal and state law, e.g., COBRA, Cal-COBRA, and FMLA, nor does it exempt it from all of The Act’s provisions; however, avoidance of The Act’s requirements as they pertain to the non‑discrimination rules of Internal Revenue Code Section 105(h) may be of paramount importance to the financial well-being of the employer.

Moreover, grandfathered status exempts employers from yet-to-be-defined requirements for the establishment of “internal claims appeal and external review processes,” as well as new “modified community rating” provisions.

New Requirements for Health Plans

Effective with the first policy anniversary after September 23, 2010, all health plans, whether grandfathered or not, must comply with the following new requirements:

– No limit on lifetime benefits

– No limit on annual benefits (except as permitted by The Act)

– Extension of dependent coverage to age 26 (or older if required by state law) (2)

– No exclusions for treatment of pre-existing conditions for persons under age 19

– Designation of Primary Care Providers and direct access to OB-GYN providers and emergency services as needed

Health plans in effect on March 23, 2010 that do not remain grandfathered must also comply with the following new requirements, both at renewal and in perpetuity:

– Provide first-dollar coverage for in-network preventative care

– Establish internal claims appeal and external review processes (3)

– Conform to the non-discrimination rules under IRC Section 105(h) (4)

And it’s this last requirement – conformity to the stringent non-discrimination rules of IRC Section 105(h) – that can present an employer with the greatest cost increase under the entire sweep of The Act. The rules for non-discrimination under Section 105(h) are extraordinarily complex, and the penalties for non-compliance extraordinarily punitive. (5) Indeed, $100 per day for each individual “to whom the failure relates” to the lesser of 10% of the plan’s costs or $500,000.

Changes after March 23, 2010 that Will Not Cause a Loss of Grandfathered Status

– Changing premiums (payable to the carrier).

– Complying with federal and state law.

– Increasing benefits.

– Voluntarily complying with The Act.

– Changing plan structure, e.g., switching from a Health Reimbursement Arrangement to a traditional plan, if benefits are not reduced per the rules on page three herewith.

– Changing provider networks.

– Changing a prescription drug formulary.

– Making changes to accommodate a merger or acquisition, as long as the merger or acquisition is not performed solely to allow a group to move from one grandfathered plan to another with impermissible reductions in benefits or increases in cost sharing.

– Changing administrators for ASO (Administrative Services Only) groups.

Changes after March 23, 2010 that Will Cause a Loss of Grandfathered Status

– Changing from one insurance carrier to another.

– Increasing the co-insurance or percentage of any other cost-sharing feature above the levels at which they were set on March 23, 2010.

– Increasing any fixed-amount cost-sharing, e.g., deductibles and out-of-pocket limits, above the level in effect on March 23, 2010 by a percentage that exceeds the sum of medical inflation plus 15%. (6)

– Increasing co-payments above the levels in effect on March 23, 2010 by an amount that exceeds the greater of: a). the sum of medical inflation plus 15%; or, b). $5, increased by medical inflation.

– Reducing employer contributions toward any tier of group health insurance coverage or group health plan by more than 5% below the contribution rate on March 23, 2010.

– Eliminating all (or substantially all) benefits to diagnose or treat a specific condition.

– Imposing an annual or lifetime limit on benefits if an annual or lifetime limit had not been previously imposed on all benefits; or, for plans that previously imposed a lifetime limit on all benefits, imposing an annual limit that is lower than the lifetime limit; or, for plans that previously imposed an annual limit on all benefits, decreasing the dollar value of that annual limit.

Conclusion

Employers should preserve their rights under The Act by planning now – well in advance of their renewal – to determine if it’s in their best interest to retain grandfathered status for their health plans, and if so, then to manage them with extreme care.

(1) The health care legislation is actually comprised of two new laws: The Patient Protection and Affordable Care Act (H.R. 3590) as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872).

(2) Grandfathered plans may exclude <26 dependents if coverage is available through their employer.

(3) Per the requirements of IRC Section 503.

(4) The Act does not actually extend IRC Section105(h) to fully-insured health plans; rather, it adds Section 2716 to the Public Health Services Act which, for the most part, mirrors IRC Section 105(h).

(5) Penalties are imposed in the form of an excise tax under the provisions of IRC Section 4980D.

(6) The Department of Health and Human Services currently assumes an annual medical inflation rate of 4% for 2011‑2013 (simple interest), so that to retain grandfathered status, copayments, deductibles, and out-of-pocket limits may not be increased by more than 19% above 3/23/10 levels at the first post 9/23/10 renewal, nor by more than 23% above 3/23/10 levels at the second renewal, nor by more than 27% above 3/23/10 levels at the third renewal, etc.

[ad_2] Source by Dave M. Peters

Benefits of Human Resource Management

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In the highly competitive world of business, companies that can provide high quality products and services are likely to expand and grow despite the current economic crisis. An integral part of the success of any company its system of human resource management and the communication and development of relationships with its employees

From the smallest business to the largest company it is essential for the company’s human resource department to be able to monitor personnel files on daily basis so that individual performance levels can be measured, holiday dates scheduled, pensions kept up to date, the amount of sick leave balanced and salaries checked.

An additional, very important aspect of resource management is concerned with staff morale. An employee who is unhappy or unmotivated is unlikely to perform tasks well. If the employee feels that the company cares about him he will in turn care about the company and strive for its success. Employees should always feel able to talk to HR manager about any problems they may have and feel secure that the conversation will remain confidential. A good HR manager should also be able to find solutions where possible or offer constructive advice to an employee with difficulties whilst remaining unbiased.

As technology has progressed more companies are using software packages specifically developed for use in Management. Such packages allow creation and editing of individual employee records, database functions and report analysis so that the manager has access to all relevant information, collectively and individually, at the touch of a button. By relieving the administration workload, there is more time for one on one conversation with employees and personal contact with all departments and managers, facilitating a full understanding by all concerned of the working environment, moral and conditions within the company.

HR Management is the key to a happy workforce, identifying the individual ambitions and strengths of employees and encouraging them to make a worthwhile contribution to the success of the company.

Sitting behind a desk buried in administrative paperwork is not time well spent in a Human Resource department. The more time a HR Manager can devote to face to face communication, identifying training needs, problems with employee morale and co-coordinating communication between the relevant departments, the better the company will run. Resource Management improves performance, productivity and communication across the board and its role in the success of business cannot be underestimated.

This management has almost replaced the older personnel departments incorporating recruitment, selection, disciplinary action, bonus and reward incentives, training and liaison services among its many other roles. The Human Resource Manager is versatile, professional and unbiased with excellent communication skills making him or her one of the most valuable assets on the company payroll.

[ad_2] Source by Lisa Wagner

Employment Law – Unfair Dismissal – Absence From Work

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The case of Mainwaring v Corus UK Ltd [2007], concerned issues relating to the alleged unfair dismissal of an employee due to long periods of absence caused by the employees back problems. The employee had been employed as a crane driver for over 30 years. In 2002, he began to suffer from back problems which caused him to be absent from work for extended periods of time.

At one point in late January 2006 he again took time off work due to his back condition. He consulted his GP and was prescribed medication as well as a course of physiotherapy. He was advised to keep active, to perform normal activities as pain permitted, and to avoid heavy lifting or sitting in one place for long periods of time.

Throughout the duration of his absence, the employee was seen regularly by B, an occupational therapist engaged by the employer. By the 16th of March the employee’s condition had improved to the extent that B concluded that he would be able to return to light duties within about two weeks, although at that point he was not fit for a full return to work.

However, in early March the employer had received an anonymous ‘tip-off’ from a colleague of the employee who suggested that the employee might have been behaving outside of work in a manner inconsistent with him legitimately being absent from work due to back problems.

The employer did not take a witness statement from the informant, but it decided to undertake surveillance of the employee. Consequently, between the 9th and the 16th of March, the employee was recorded on video on three occasions. On two of those occasions he was seen loading and unloading shopping from the boot of his car.

Upon viewing the video footage, B concluded that had the employee informed him that he was capable of performing those tasks, he would have recommended that he was fit to return to work with no restrictions being placed upon him.

Subsequently, on the 27th of March, an investigatory meeting was held, following which the employee was suspended pending the outcome of a disciplinary investigation. The employee was invited to a disciplinary hearing which was conducted on the 7th of April by R, the employer’s manufacturing manager.

At the conclusion of that hearing, R dismissed the employee on the ground that he had dishonestly reported himself as unable to work through illness when he had in fact been fit to work. A subsequent internal appeal against that dismissal by the employee was unsuccessful. The employee therefore presented a claim before the employment tribunal alleging that he had been unfairly dismissed. His claim was upheld by the tribunal on the basis that:

§ The employer had failed to act within the range of reasonable responses in failing to take a statement from the informant; and

§ The employer, having received a ‘tip-off’, had proceeded to suspend the employee and had thereby demonstrated a pre-judged mindset to dismiss.

The employer appealed to the Employment Appeal Tribunal (EAT) against this decision. The EAT ruled that:

§ The tribunal’s finding in relation to the employer’s failure to take a statement from the informant was an error of law;

§ The tribunal’s findings in relation to the employee’s suspension and the employer’s mindset to dismiss had been reached upon an incorrect factual basis; and

§ The tribunal had failed to consider the effect of the internal appeal procedure on the fairness of the dismissal proceedings.

The appeal was allowed and it was held that:

§ The communication to the employer by the informant had not formed any part of the investigation into the employee’s conduct. The communication had merely triggered the investigation. Furthermore, the reasons for dismissal relied upon by the employer made no mention of the communication from the informant, and there was no evidence capable of supporting the assertion that the employer had had that communication in mind when deciding to dismiss. In such circumstances the absence of any witness statement from the informant could not be said to have been relevant to the reasonableness of the investigation or the decision to dismiss.

§ In relation to the tribunal’s conclusions on the allegation that the employer had approached the investigation with dismissal in mind, that conclusion had been reached upon the basis that following the receipt of the ‘tip-off’ the employer had suspended the employee without further consideration. Having regard to the investigatory meeting of the 27th of March 2006, the tribunal had clearly reached that conclusion upon a misapprehension of the facts.

§ By neglecting to consider the potential effects of the internal appeal procedure, the tribunal had failed to consider the fairness and reasonableness of the proceedings as a whole. Accordingly, the employee’s unfair dismissal claim would be remitted for fresh consideration by a different tribunal.

© RT COOPERS, 2007. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

[ad_2] Source by Rosanna Cooper

4 Benefits of the Affordable Health Care Act You May Not Know

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The Patient Protection and Affordable Care Act (PPACA), informally known as Obamacare, has 4 key features to assist the uninsured. Though the act will not be completely in place until January 1st, 2020, the major features will come to fruition by January 1st, 2014.

1. Pre-Existing Condition Insurance Plan

If you’ve been denied health insurance because of pre-existing conditions, you will no longer be ineligible because of the PPACA. A report made by the Department of Health and Human Services found that there are currently 25 million people in the US that have a pre-existing condition and are also uninsured. Without the PPACA, these Americans may go without health care or have to pay for their conditions completely out of pocket.

2. Young Adult Coverage

Health insurance companies previously only allowed children to stay on their parent’s policies until the age of 19 with the occasional exception for young adult students. Under the PPACA, insurance companies cannot remove children enrolled in their parent’s health insurance plans until they are older than 26. Because of the ease and affordability implemented by this provision, there are now 2.5 million more young adults that are insured according to a study from the National Center for Health Statistics.

3. Affordable Insurance Exchanges

Insurance exchanges are in essence a competitive marketplace where individuals and small businesses will be able to have the same advantages that were once reserved for large companies. Large companies have purchasing power and ability to pool risk when buying health insurance. This usually results in large companies paying lower insurance rates than small businesses and individuals. The law evens the playing field by offering exchanges to every American in order to become informed and shop around for a plan that meets their individual needs. Offering options and access to valuable information about insurance will lead to more affordable care.

4. Consumer Operated and Oriented Insurance Plans

Consumer operated and oriented insurance plans, or CO-OPs for short, is a health insurer that is created and run by the consumers in the CO-OP. These insurers are non-profit so any profits made from the CO-OP must lower the CO-OP customers’ premiums, improve their benefits, or improve the quality of the CO-OP members’ health care. These CO-OP’s will be created by the federal government offering loans to non-profit organizations. The main benefit of a CO-OP is the assurance that your needs as a health insurance consumer will be met as the CO-OP elect the board of directors.

[ad_2] Source by Ashley Burge

Pre-Existing Medical Conditions – Can You Qualify for Insurance?

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A frequent challenge that many Americans come up against when they are shopping for health insurance is the matter of pre-existing medical conditions. As difficult as it may be to accept, insurance companies are for profit entities that want to ensure that their expenses remain low and their revenues remain high. That means they don’t look favorably upon insuring people who have existing medical problems because that means they may end up paying out more money than they collect from the insured. However, unlike what is popularly believed, this does not mean you will automatically be denied health coverage from an insurance company.

When underwriting their policies, health insurance companies look at a number of factors when deciding who to insure and who to decline. For those with pre-existing medical conditions, they will look at the type of disease you have and the costs associated with treating it. Rather than deny coverage right out of the gate, an insurance company may impose a waiting period (generally about 12 months) before they will pay medical bills associated with your condition. Another option insurance companies may do is charge higher premiums and out of pocket expenses for your health coverage.

But whether or not an insurance company will extend those options to you or decline to cover you will depend a lot on the type of disease you have. People with treatable diseases, like asthma and high blood pressure, may have an easier time getting health insurance than a person with a catastrophic disease, like cancer. To prevent insurance providers from cherry picking and taking only the healthiest people, the government recently passed the Patient Protections and Affordable Care Act. As of September 2010, children 19 and younger cannot be excluded from their parent’s insurance plan because of a pre-existing condition. Adults will receive similar protection starting in 2014.

You can be approved for health insurance if you have pre-existing medical conditions. The caveat, though, is that you may be forced to agree to a waiting period or pay higher premiums. Therefore, it is important that you do your research and compare health insurance plans and providers. A website that allows you to grab quotes from several different providers at once can cut down the amount of time you spend looking for insurance. It may take time to find the right insurance that will cover your condition. However, if you are persistence you will find a plan that fits your needs.

If you need assistance in locating particular coverages at a pre-determined price, we can help you find a reduce health insurance premium today.

[ad_2] Source by Sean L Johnson