HPS in the News
New Wrinkles in DUA AssessmentsGodfathered Regulations on Hold
Ice Cream Stands and Regulations
Payback Time
Health care fails small businesses
Firms cancel health coverage
Barnstable Patriot
New Wrinkles in DUA Assessments
Good Morning All
The DUA is re auditing many companies adding new wrinkles. They are using assessments this means they are stating that employers didn't provide them with enough information to perform an audit and that they put a figure based on employee count a figure that is many times higher than an actual amount due. If you think that is bad wait for it.... the worse part is you can't argue an assessment amount at your hearing.No I'm not kidding. You need to argue the assessment prior to your hearing.
Next the DUA recently sent a notice to a client that had won an appeal and now want a "do over" because their hearing officer made a mistake.
Last they are now counting employees that work out of State.
I have written a formal compliant to the AG'S office. I'm also looking into working with a PR firm to highlight the excesses of the audit department.
Pending Legislation.
We are moving forward at near break neck speed...for the Commonwealth at getting needed changes to the FSC. The one piece that is in all bills will allow employers to count employees that have insurance from another source in their take up rate. Plus we will be trying to get the DUA under control.
For companies that are currently paying the fine and not offering any plans, you need to look at making a change. To be exempt from the fine you must offer a plan. I have a group plan that you can offer that is very inexpensive.
On to regulation updates.
The group co ops are being regulated. The chance that we get a usable plan out of this is doubtful, the major insurance carriers in the State like the current system. Plus they made major gains in not allowing individuals to purchase health plans outside of "open enrollment" periods. Then they also are trying to not allow employers to switch plans.
I have made contact with a large self funding company and we are looking into MEWA's and trying to bring other large insurers into the mix.
I submitted both oral and written testimony in favor of Third Party Administrators needing to register with the State. This will cost my company money but it needs to be done.
Maybe spring will make it here
Bill
Godfathered Regulations on Hold
Good Morning
I hope everyone had a great holiday season!! OK back to work.
The federal regulations concerning grandfathering have been put on hold. They haven't stopped them just put them on hold. The State is hell bent on increasing the number of audits and are re auditing companies. Yes if you have been audited and passed or you were audited and failed ... then won your appeal you may get hit again. The DUA has increased the number of auditors and are sending out letters demanding companies to send in copies of their section 125's. I have been working with a law firm to update the section 125 to meet both the State and Federal requirements, with changes that have taken place on both sides. What this means to you!! When you get your new HIRD forms you must also get a section 125 waiver form. Any employee that has not signed a form needs to sign one!! Any employee that works 64 hours or makes $400.00 in any month puts you at risk of paying for the free rider surcharge.
This has been and extremely busy time period. Meetings have been taking place to repair the FSC so that it gets back to offering insurance to pass or being able to count employees that have other insurance in your take up rate. We will get this done this year. The Commonwealth is looking for cash any thoughts on where they will be looking?? You can expect an increase of at least 40% in your unemployment rates please start pricing that in, plus the HIRE act has ended for part one we will be collecting data for part 2. The State and Feds will be giving away money and I will keep you posted on the best way to collect it.
Now get back to work. Lets all have a great 2011 BillIce Cream Stands and Regulations
To all:
I just found out how the State is going to balance the budget, they going to raise 2 billion dollars from Ice Cream Stands. Yes Ice Cream Stands no inside seating, one full time employee that had insurance. From a business that is only opened a little over 6 months of the year.
Facts that are not in dispute. Owner has an Ice Cream Stand he gives kids their 1st summer job they earn spending money. Yet the hours worked for 1 quarter were over 5500 hours. HOURS nothing to do with the number of employees. At the owners appeal hearing ... yes the State pursued this case. Sharon Minck testified that she agreed there was only one ONE full time employee that had insurance. The hearing officer copied the owners insurance card, then added 500 hours to the fine because the owner forgot to include hours for his wife.
I often get asked why do you work so hard on this, at hearings you have been assured that the Law only effects big companies...that the regulations are fair... that you are getting upset over things that will never happen. Really?? The last 4 years I have been telling anyone that would listen that this is exactly what would happen.
Now I need to get back to preparing for a hearing, this one the State TOOK $60,000.00 out of the owners bank account. Then I need to spend time on looking into the State's case against a gift shop. I hope they don't find out about the greedy little kids with lemonade stands not paying their fair share.
Please share this email. This law needs to get fixed today.
Bill Fields
Health Plan Solutions LLC
healthplansolutions@comcast.net
774-722-3388
Payback Time
To all:
It's payback time. You owe a debt to some people that I expect you to re pay. Plus one new guy that lives about a mile from me. Voting is not just a right it's your obligation.
1st you can repay S. Bump by not voting for her. This ballot is an anti vote. For anyone that has a problem with the "Fair Share" process this is the poster child for everything that is wrong with it. Plus in case you haven't heard me talk about this very special person I just flat out can't stand her. Even the Boston Globe thinks she is Darth Vader.
Then you need to payback the folks that have gone to bat for you, that have repeatedly shown they are already on your side. That have made calls on your behalf, that have made people explain their actions, and that have worked tirelessly for your interests. And continue to be there for you.
State wide 1st up my friend Karyn Polito.. she went to bat for you early and often. I didn't even get a low number on my Red Sox plate ....lol. She is just a great person.
Then we get to George Peterson... George is special, again someone that really wants what is fair not just for his district but the State. He has been on the front line of making this work. He does however ask me from time to time if I may have forgotten to take my medication .. when I go off about this stuff.
Then Senator Michael Moore not to be confused with the troublesome Senator Richard Moore. Senator M Moore is another person that just gets it. He has an amazing staff, and has not once backed down in his efforts to get this thing fixed.
Senator Harriette Chandler has also expended her time and expertise. We need to mention the retiring Senator Tucker I wish she was coming back. She and her staff have done so much.
Representative Keenan who is also filing a Bill on your behalf. Plus If I would have forgotten to mention him my longest term ally and friend from the Artist Working Group Kathleen B would have kicked my behind. Kathy and I have been walking the streets of Boston for last 3 years (Kathy handing out banana bread) trying to put the Fair back in the FSC. Representative Keenan was one of the 1st on board.
Rep Dorcena Forry is another.
Then the New Guy Randy Hunt a long time friend and neighbor that is running in my District. I know that George will keep him on the ball. Plus when it comes to health care reform he understands it from running his own company, plus my constant nagging.
You may have noticed that I have not made mention of other offices. I have tried to make this list up with people from both parties. This is a very wide email list that goes to both my individual clients as well as my business clients. Folks that have strong opinions on both sides. I wanted you to see that both sides can and often do work on your behalf.
Now Vote!
Bill
Health care fails small businesses
By Jim Stergios and Amy Lischko | May 12, 2010
NOT LONG AFTER President Nixon took the unprecedented step of imposing peacetime wage and price controls, the American people learned a basic economic lesson: Artificial controls don't work unless underlying costs are controlled.
Four decades later, the Patrick administration is imposing controls on small business health insurance rates. The move will prove to be little more than an election-year reprise of Nixon's failed effort.
The Commonwealth's 2006 health care reform was supposed to help address rising health insurance costs for small businesses. It hasn't - and small businesses are paying the price.
The Commonwealth Connector, an independent authority meant to act as an insurance plan clearinghouse, was established to provide real choices and information needed to evaluate options. In theory, an informed and robust marketplace would bend the cost curve and get more of the working poor and lower middle class insured.
The theory is right, but the implementation has failed in two important ways.
First, the Connector focused all its energy on providing nearly free products to the indigent. In contrast, the Connector's board seemed almost uninterested in market-rate products for small business employees.
The Connector revenues come from selling plans, and selling nearly free products was the path of least resistance. Unsurprisingly, 90 percent of the Connector's operating revenue has come from the fee it earns for state-subsidized plans.
The lack of focus on small businesses is evident. The Connector took three years to make information about provider networks and participating primary care providers for small businesses available on its website. It took over two years to launch a small employer pilot program; in more than a year it attracted just 65 businesses and has now been replaced by a new program that offers only seven plans.
Implementation also fell short when the Connector chose to build a top-down bureaucracy rather than leverage the broker and private market community. The quasi-governmental Connector has a $40 million annual budget and 45 employees earning annual salaries that average $100,000. Its board is heavily weighted toward government officials and unions.
Paternalistic fears about "confusing" people have led the Connector to overregulate and minimize consumer choice. Instead of engaging the private market by providing unique products, it has rejected or failed to renew products, resulting in offerings that simply duplicate ones already privately available.
This bureaucratic setup cannot provide choices that contain costs to employees and owners of small businesses - nor help address today's double-digit increases in small business rates.
Utah, the only other state with a health care exchange, demonstrates that there was another path forward.
Utah's Health Insurance Exchange was started with a $600,000 appropriation and has no board and just two employees. The Exchange provides a technology backbone that enables private entities - brokers and businesses - to take advantage of consumer-based options.
Consistent with the Exchange's mission to promote small business growth, it is part of the Governor's Office of Economic Development. Private sector partners provide a significant amount of unpaid policy advice on what businesses and employees need.
Fewer than 1,500 small business employees receive coverage through the Connector. In Utah, with a far smaller population, about 55,000 small business employees have purchased health insurance through the Exchange. It offers 66 plans from a number of carriers, including the largest ones in the state.
The focus on business growth and input from the private market has helped promote other reforms. In its first year, the Exchange developed a database that compares the cost of care across all providers; four years after its establishment, the Connector still hasn't developed a similar tool. Unlike Massachusetts, Utah has also passed tort and medical malpractice reform.
We applaud the Connector's success in insuring the indigent. But it has failed to provide small businesses with affordable, diverse choices.
Small business owners cannot afford 25 percent annual hikes to already astronomical health insurance premiums, especially in this economic climate. Price controls will do nothing to control underlying forces that drive health insurance premium increases. And unless Massachusetts does the hard work of getting costs under control, Patrick could be remembered as the guy who tried to prop up the levy as the floodwaters surged in.
Firms cancel health coverage
With cost rising, small companies turning to state
By Kay Lazar, Globe Staff | July 18, 2010
The relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state's already-stressed budget.
Since April 1, the date many insurance contracts are renewed for small businesses, the owners of about 90 small companies terminated their insurance plans with Braintree-based broker Jeff Rich and indicated in a follow-up survey that they were relying on publicly-funded insurance for their employees.
In Sandwich, business consultant Bill Fields said he has been hired by small businesses to enroll about 400 workers in state-subsidized care since April, because the company owners said they could no longer afford to provide coverage. Fields said that is by far the largest number he has handled in such a short time.
"They are giving up out of frustration," Fields said of the employers. "Most of them are very compassionate but they simply can't afford health insurance any more."
Precisely how many small businesses have recently given up offering insurance is hard to pinpoint. The Office of Labor and Workforce Development said the most recent quarterly insurance data collected from small companies has not been compiled.
State officials said they have not seen convincing evidence that there is a trend. There has not been an unusually large spike in enrollment in Commonwealth Care, the subsidized insurance program, according to spokesman Richard Powers. And in any case, Dr. JudyAnn Bigby, secretary of health and human services, said the administration budgeted for higher health care spending because it anticipated that there would be growing numbers of long-term unemployed residents who would be signing up for coverage.
The Massachusetts Division of Health Care Finance and Policy annually surveys employers and found no significant drop in coverage as of the end of 2009, when more than three-quarters of companies offered health insurance.
But insurance brokers say the pace of terminations has picked up considerably since then among small companies, of which there are thousands in Massachusetts. Many of these companies - restaurants, day-care centers, hair salons, and retail shops — typically pay such low wages that their workers qualify for state-subsidized health insurance when their employers drop their plans.
"Those employers are trying to keep their doors open, and to the extent they can cut expenses, they will cut health insurance because they know their people can go to Commonwealth Care," said Mark Gaunya, president of the Massachusetts Association of Health Underwriters, a trade group representing more than 1,000 brokers and other insurance professionals.
The issue is coming to a head as the Patrick administration battles insurers over swiftly escalating rates they have been charging small employers. In February, the governor filed sweeping legislation that proposes to give the Division of Insurance the power to essentially cap health care price increases. That proposal is still pending.
And on April 1, exercising authority the administration had never before used, the division denied 235 of 274 increases proposed by insurers for plans covering individuals and small businesses - base premiums would have increased as much as 32 percent. On July 1, it again held 137 proposed increases to 2009 rates.
The sides have been locked in negotiations for months, with the Patrick administration recently reaching agreement with two insurance carriers on lower rates.
"The Patrick-Murray Administration has taken decisive action to provide small businesses and working families with immediate relief from skyrocketing health insurance premiums," the governor's press secretary, Juan Martinez, said in a statement. He declined to directly address whether small businesses are increasingly dropping health coverage and directing their workers to subsidized care.
But analysts said the burden of double-digit insurance increases shouldered by small businesses over the last several years is likely to become more of a public problem.
"The more the employer insurance system unravels, the higher the cost is going to be for the state in providing subsidies to low income workers," said Larry Levitt, vice president of the Kaiser Family Foundation, a California-based think tank. "From a state finance perspective, stabilizing employer insurance is definitely important."
The state's landmark 2006 health insurance overhaul included regulations designed to discourage low-wage employees from opting for state health insurance over their companies' often more pricey coverage. It denied eligibility to any one whose employer had offered him or her coverage in the past six months and paid at least 33 percent toward the individual's plan.
Most health care advocates and brokers had widely interpreted that to include even workers whose companies had dropped coverage. But recently, some companies that have terminated their group plans have tested those waters and found that their employees were accepted for state-subsidized coverage.
Additionally, company owners say, it has become far cheaper to pay the state penalty for not covering their workers - roughly $295 annually per employee - than to pay thousands more in premiums.
In New Bedford, the Early Learning Child Care center is now paying $1,500 quarterly in fines to the state, instead of the $30,000 it contributed quarterly toward 13 workers' health insurance premiums. When Executive Director Judy Knox terminated the company's health plan late last year, she asked Fields, the consultant, to help 10 of those workers enroll in Commonwealth Care. The other three went on spouses' plans or were eligible for Medicare.
"We had had, in the three previous years, between 17 and 18 percent increases every year," Knox said. "I was so worried about the staff and their coverage, but for most of them, Commonwealth Care seems to be working out very well." The state program covers people with incomes up to 300 percent of the federal poverty level.
Come 2014, when the bulk of the federal health care law goes into effect, the penalties for small companies that do not provide health insurance coverage will be less onerous than those in Massachusetts. That could tempt more small companies to opt out nationally, sending more workers to the public rolls - if health care costs can't be restrained, some analysts said.
"Struggling business don't necessarily feel the need to offer coverage to attract workers," said Kaiser's Levitt.
Massachusetts has not decided whether to adopt the federal rules for small businesses.
The federal law does not impose any penalty on companies with fewer than 50 employees that do not offer coverage, whereas in Massachusetts, employers with more than the equivalent of 11 full-time employees face fines for not offering a health plan and contributing at least 20 percent toward that coverage. But for companies with more than 50 workers, the federal law comes down a lot harder than does the state law.
Barnstable Patriot
Written by Paul Gauvin
Getting through state health insurance maze
Local company helps individuals, small businesses meet new state law
COVERED – Thick in size and as difficult to understand as some of the prose in the annotated
Shakespeare are the expanding laws governing the state’s mandatory health insurance program,
says Jeffrey Pepi of Health Plan Solutions of Osterville and Centerville.
From his experiences, only one in five small businesses are completely compliant with the state's mandatory program requiring employee health insurance, says Jeffrey Pepi of Health Plan Solutions in Osterville, a company that says it is "the only company that works hands on with all aspects of the state’s health care reform act."
Conforming with the law, its expansion and its continually changing rules is particularly vexing for small-business owners who don’t have the time or the inclination to read the fine print or comprehend the legal/bureaucratic jargon, he says.
Consequently, Pepi and his partner, William Fields, who has been in the insurance business for 30 years, offer a service that guides small-business owners into compliance.
"If employees qualify for Commonwealth Care or a Choice Plan, we do all the paperwork and follow it through to completion," Pepi said. "After that, we continue to represent individuals and businesses and keep them informed of new changes as they occur."
"We gather all the pieces of the changing laws. We read, understand and explain all the fine print, monitor changes, attend all the meetings of the Commonwealth Care board governing the program and then help mandated businesses make a proper health insurance offering to fulltime employees. Properly offering a health insurance program under the law avoids penalties, some of them substantial, for either not doing it, or not doing it completely.
Pepi said there are "eight state inspectors calling and walking into businesses, some of them ex-IRS auditors, checking to make sure companies falling into the mandated category comply with the law.7qu
A native Cape Codder who lived for a while in northern Maine with his aircraft-mechanic father and former employee of Cape-based airlines, Pepi had been an independent agent selling health insurance to people who didn’t have it at work and/or were self-employed and had to cover themselves.
Pepi explains that health insurers aside from HMOs required blood and urine tests and a physical before offering coverage to an applicant. But in 1998, state law mandated private insurers extend coverage without physicals. "That created a mass exodus of insurance carriers out of the state, except for HMOS like Blue Cross, Tufts and Pilgrim," he said.
Now, Pepi says, the state requires every taxpayer be insured under pain of penalty, and for some small businesses, the penalty can be substantial. "Under certain conditions, it could ruin a business," he said. "Last year the penalty for individuals not having insurance was $214, but this year it is $916 per year."
Another confusing aspect of the law is the requirement of "11 fulltime equivalents,7qu which does not mean 11 full-time employees. Pepi uses a landscape company as an example.
"The company could have one full-time employee, a foreman, and a group of part-time or seasonal employees whose aggregate hours in a season add up to 40,000 hours,7qu he said. "That would exceed the equivalent to 11 full-time employees who would register 22,000 hours, meaning the company would have to offer health insurance to the one full-time worker. Because of this formula, some employers don’t realize they have to comply.7qu
Some employers aren’t aware, either, that they must fill out and sign a Health Insurance Responsibility Disclosure (HIRD) form within seven days of hiring a new employee.
Other regulations fill a tome 7qu the size of the New York City phone book" can, if not followed or implemented, bring penalties down on the employer who isn’t aware of the rules, says Pepi.
"What employers need to know is that the law stipulates they must offer health insurance" if they fall into the parameters of the mandate, "but they don’t have to provide it if an employee doesn’t want it," he said.
That occurs, he said, when an employee might have another family member providing health insurance through his or her work.
Clients include a host of businesses on the Cape such as the Abbicci, Roadhouse and Kettle Ho restaurants; landscapers, painting companies, building contractors, entertainment, temporary-worker companies, automotive firms and a number of other small general services companies.
More information is available at www.healthcaresoutions.us.