Small business options are limited.
By Jerome Connolly, PT, CAE
September 9, 2014
In a final rule1 on health insurance market standards issued May 16, the Centers for Medicare and Medicaid Services (CMS) adopted a wide range of provisions affecting insurance coverage under the Affordable Care Act (ACA), including small business plans, standards for navigators who help consumers find coverage under the ACA, drug coverage determinations, insurer quality rating information, and efforts to stabilize premiums. The rule took effect in July and will be in place when the second round of ACA open enrollment commences November 15.
According to a CMS fact sheet2, the rule standardizes notices health insurers are required to provide to consumers when they make coverage changes when policies are renewed or discontinued. In the area of drug coverage, the rule also requires health plans to make coverage determinations within 24 hours on medications that are not covered for enrollees with conditions that jeopardize their life, health, or ability to regain maximum function, or when enrollees undergo treatment with drugs not covered by the plan.
CMS said the rule aligns the start of annual employer election periods in federally facilitated Small Business Health Options Program (SHOP) Marketplaces for plan years beginning in 2015, with the start of open enrollment in the individual market exchange for the 2015 benefit year. The rule also lists the conditions under which a SHOP would be permitted to not implement “employee choice” in plans, if their state’s insurance commissioner believes it is in the best interest of consumers in that state. Employee choice provides the choice of multiple insurers in a small business marketplace.
Insurance commissioners in 18 states (Alabama, Alaska, Arizona, Delaware, Illinois, Kansas, Louisiana, Maine, Michigan, Montana, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, and West Virginia) have made that determination, claiming that the number of people in the small group market opting for coverage through the ACA is so small that allowing employees to choose from a variety of plans will lead to rate spikes because risk will be too uneven.3
The National Federation of Independent Business (NFIB), which opposed the ACA, criticized the delay of the “employee choice” option in the law. “The SHOPs should offer even more arrangements than employee choice and basic employer choice (the only option currently available), including defined contribution health plans,” says NFIB.4
Even the Small Business Majority which supports the law, expressed disappointment in that provision saying, “The finalization of a rule today that would allow states to potentially delay a critical requirement that the small business health insurance marketplaces allow employees to choose among multiple insurance carriers is incredibly disappointing for small business owners and their workers.”
NFIB also urged CMS to publish actual 2015 rates as early as possible prior to open enrollment so small business owners can plan for the upcoming year.
The final rule also specifies a list of state requirements that would conflict with federal standards for navigators and assisters who help people get enrolled under the ACA. It also requires insurers to submit data to calculate quality ratings, which marketplaces must display starting in 2016.
The regulation includes provisions beneficial to insurance plans, such as changes to the risk corridors program intended to mitigate uncertainty associated with enrollee risk profile, and adjustments to the medical loss ratio (MLR) calculation for policy issuers that provided “transitional” continuation of plans that do not comply with the ACA. Under the MLR requirement in the statute, insurers must spend at least 80 percent of premiums on claims or quality improvements, or refund the difference to consumers. The change will generally result in a reduction in rebate payments for those issuers who would have owed rebates in the absence of the adjustment. (Total consumer benefits from the first two years of the MLR provision amounted to more than $3 billion, according to a Commonwealth Fund report released May 12.5)
A spokesperson for America’s Health Insurance Plans (AHIP) applauded the rule, saying these temporary risk mitigation programs will help ensure market stability and affordability for consumers.6 In its comments on the proposed rule earlier in the year, AHIP had asked for more relief than was included in the final rule.
In addition to the final rule, the CMS also posted answers to Frequently Asked Questions7 May 16 regarding a range of other ACA requirements, including “essential health benefits” that insurers must cover, the actuarial value of plans, mental health parity, guaranteed availability, minimum essential coverage, and transitional policy extensions of plans that do not comply with the ACA for employers with 51–100 employees and for individuals.
This FAQ document emphasizes that health plans must provide coverage of the essential health benefit package, and it is a violation of the law if the plan’s benefit design—or the implementation of its benefit design—discriminates based on an individual’s age, expected length of life, present or predicted disability, degree of medical dependency, quality of life, or other health condition.
Moreover, insurers may not impose benefit-specific waiting periods, except in covering pediatric orthodontia, in which case any waiting periods must be reasonable. This clarification refers to a waiting period that is applied uniformly to a specific benefit within the plan design and not reasonable medical management.8
The FAQ also states that insurers may file plans that they only market through the Exchange to qualified individuals or the SHOP Marketplace, provided the marketing does not violate applicable discrimination standards, and otherwise complies with applicable federal and state laws and regulations. However, such plans would be considered to be offered in the individual or group market, respectively, in the state. If, despite the fact that the policy issuer has not advertised the plan other than through the Marketplace, an individual or employer (as applicable) seeks to enroll in the plan directly with the insurer, the health plan may instruct the individual or employer to complete enrollment through the Marketplace. But if the individual or employer wishes to enroll directly with the plan, the insurer must accept every individual or employer in the state that applies for such coverage.
While small businesses with fewer than 50 employees are not mandated to buy health insurance in 2015, the SHOP exchange is designed and available for employers with up to 50 employees to offer group health coverage. However, some features of the federal and state SHOPs were delayed late last year as officials shifted focus to the bungled individual marketplace rollout.9
Small employers with generally up to 50 full-time equivalent employees (FTEs) have access to the SHOP Marketplace, which is open for enrollment year-round. It is estimated that small businesses pay on average 18 percent more than larger businesses for health insurance. SHOP is intended to offer small employers increased purchasing power to obtain a better choice of high-quality coverage at a lower cost by pooling their risk. To purchase coverage in SHOP, eligible employers must have at least one common law employee, offer SHOP coverage to all of their full-time employees (FTEs), and meet minimum participation rates.10
A tax credit is available to help small employers afford the cost of providing health care coverage for their employees but it is specifically targeted for those employers with low- and moderate-income workers. Employers with fewer than 25 FTEs, paying average annual wages below $50,000, and that contribute 50 percent or more toward employees’ self-only premiums may qualify for a small-business tax credit of up to 50 percent to help offset the costs of insurance. In 2014, this tax credit became available to qualified small employers that participate in the SHOP Marketplace. The 50 percent tax credit will continue through 2015, after which the program is scheduled to end. On a per-employee basis, the amount must be under $50,000. In fact, if it is under $25,000, the full credit is awarded—but then it phases out until the average reaches $50,000. If the credit exceeds the tax liability for the year, it can be carried back one year or forward for 20 years.11
Beginning this year, the ACA increased the incentives that can be offered to employees, from 20 percent to 30 percent of the total cost of coverage for participation in “health-contingent” wellness programs that require participation in a physical activity, for example, or meeting certain health standards, such as a desired cholesterol or blood sugar level or body mass. To incentivize smoking cessation, smokers can be charged premiums up to 50 percent higher than those for nonsmokers, and federal grants are available to help small businesses start a wellness program.12
A variety of factors, including those described above, has depressed small business enrollment in the first year, and it is likely to remain suppressed for the near term. The Obama administration has allowed small business employers to renew their existing plans through 2016 even if they do not meet ACA coverage standards, and many will do so because of uncertainty with the exchanges. Moreover, as mentioned earlier, the tax credit for businesses with fewer than 25 employees has a limited reach and has been difficult to navigate.
Employee benefits brokers in the 18 states declining to implement the employee choice option will have just one plan to present to employees of small business clients through the ACA’s small business Exchanges, thus leaving in place a distorted, non-uniform system. This will likely extend the time for determining whether the commercial exchanges are making rates more affordable for small businesses.
Once the delays are ended, the renewals run out, and every state is offering employee choice in an online exchange, it is likely enrollment will steadily improve. But without the employee choice feature, there’s little reason at present for a small business to go through the Exchange instead of the brokers whom they have traditionally used.13
Jerome Connolly, PT, CAE, is a registered federal lobbyist whose firm Connolly Strategies & Initiatives has been retained by PPS. A physical therapist by training, he is a former private practitioner who throughout his career has served in leadership roles of PPS and APTA. Connolly also served as APTA’s Senior Vice President for Health Policy from 1995 – 2001.
1. ACA Exchange and Insurance Market Standards for 2015 and Beyond, Final Rule, Centers for Medicare and Medicaid Services, Department of HHS, http://op.bna.com/hl.nsf/id/bbrk-9k6sfm/$File/finalexchMay2014.pdf. Accessed July 2014.
2. Exchange and Insurance Market Standards for 2015 and Beyond, Center for Consumer Information & Insurance Oversight, www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/marketstandards-5-16-2014.html. Accessed July 1, 2014.
3.4. Kardish C, Small Business Participation in Health Exchanges Likely to Remain Weak, Governing. Posted July 1, 2014. Website www.governing.com/topics/health-human-services/gov-small-business-health-exchanges-enrollment.html. Accessed July 2014.
5. The Federal Medical Loss Ratio Rule: Implications for Consumers in Year 2, The Commonwealth Fund, May 12, 2014.
6. Hansard S, CMS Releases Final 2015 Health Insurance Exchange Rule, BNA’s Health Insurance Report, May 21, 2014.
7. Frequently Asked Questions on Health Insurance Market Reforms and Marketplace Standards, Center for Consumer Information & Insurance Oversight, www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/downloads/Final-Master-FAQs-5-16-14.pdf, posted May 16, 2014. Accessed July 2014.
8. Hansard S, CMS Releases Final 2015 Health Insurance Exchange Rule, BNA’s Health Insurance Report, May 21, 2014.
9. Klein K, Answers to More Small Businesses Questions About Obamacare, Bloomberg Businessweek, June 30, 2014.
10. Key Provisions Under the Affordable Care Act for Employers with Fewer Than 25 Employees, Small Business Administration. Website: www.sba.gov/content/employers-with-fewer-25-employees. Accessed July 18, 2014.
11. Taulli T, Small Business Tax Credits For Obamacare?, Forbes, March 8, 2014.
12. Bluestein A, Your Obamacare To Do List: Launch a Wellness Program, Inc. Magazine. Website: www.inc.com/magazine/201312/adam-bluestein/obamacare-to-do-list-create-a-wellness-plan.html. Accessed July 18, 2014.
13. Bronson C, Obamacare Exchanges to Offer Just One Plan for Many Small Employers, Insurance Business America, June 12, 2014.
Private practice physical therapists from Oregon and Washington gathered in Portland to meet with U.S. Senator Ron Wyden, the new chair of the Senate Finance Committee.
By Clem Eischen, PT, and Diana Godwin, Esq
August 8, 2014
On May 31, more than 35 private practice physical therapists from Oregon and Washington gathered at a café in downtown Portland, Oregon, to meet and have brunch with U.S. Senator Ron Wyden (D. Oregon), the new chair of the Senate Finance Committee.
The agenda included a discussion by the Senator of the issues and challenges ahead as Congress works to revise health care financing, particularly proposed Medicare reforms. The Senate Finance Committee has jurisdiction over changes in the Medicare laws and will decide on the reforms for which we have been advocating in recent years.
The Senator was gracious in soliciting and listening to the concerns of our private practice members, as well as responding to questions. After the more “formal” part of the event, Senator Wyden sat down with us to share a buffet brunch and later stayed for a round of picture taking—lots of arms around shoulders. Jerome Connolly, PPS lobbyist, and Mandy Frohlich, APTA lobbyist, also attended the event.
How did the chair of one of the most powerful committees in the U.S. Senate come to spend almost two hours breaking bread and discussing issues with private practice physical therapists on a Saturday morning?
In March, shortly after Wyden was appointed as chair of Senate Finance, Diana and I flew to Washington, D.C., to meet with him and other key staff in his Senate offices. Tom DiAngelis, PPS president, Jerome Connolly, and Mandy Frohlich accompanied us. Although meetings with the new chairman were in high demand, we were able to meet with him because we both had long-standing relationships with him. Clem—now retired—had a private practice in Portland for many years and hosted meetings at his clinic with Wyden and other physical therapists, and he had supported Wyden in his early campaigns for the House and then the Senate. Clem worked on a committee on national health insurance for Wyden and arranged for Wyden to be a guest speaker at a Sports Medicine Seminar, which Clem co-sponsored when the U.S. Olympic Dream Team played its first exhibition game in Portland in 1992. Diana went to law school with Wyden in the 1970s and had hosted a fundraiser for him in her home during his last Senate race.
A couple of weeks before our scheduled March meeting with the Senator, we started kicking around the idea of hosting a fundraiser for the Senator when he was back here in Oregon during a Congressional break. In late February, Diana contacted Senator Wyden’s campaign staff to discuss potential dates, logistics, a fundraising target to which we would commit, and Federal Election rules. We quickly formed a small task force to coordinate our efforts: Connolly, Mike Matlack, and Frohlich, DiAngelis. We would be the local team on the ground.
The Wyden campaign had a date available in early April when the Senator would be home. We realized this was too soon to get everything organized—particularly since we committed to raise a minimum of $20,000 at the event—so we went back to the campaign staff and settled on the date of May 31.
The next step was to design the invitation that the APTA PAC would “snail mail” to all members of the PAC and email to all PPS members. Diana would also send the invitation to the clinics that she represents in Oregon and Washington. Before we could complete the invitation, we had to locate a venue. We needed a good location, one that had a private meeting space and could serve a nice brunch at a reasonable price. (Practical tip: While you will want to do something nice, you also want to minimize costs so that more of the money raised can go to the legislator or candidate.)
The Wyden campaign had a line on a space they had used for previous fundraisers, but unfortunately, after booking, the venue backed out and we had to start over. Diana phoned and emailed 10 or so other possible venues before locating the magic combination of location, menu, and price. Once we booked the new venue, we could finalize the invitation. (Practical tip: Start working on the invite as soon as possible. The campaign staff has to approve the wording of the invitation to ensure it includes caveats regarding federal rules on contributions (no corporate donations—personal donations only; the correct information on how to make donations online; where to mail checks and to whom the checks should be paid. Plus, we wanted to include a photo of the Senator, so we had to get that from the campaign staff, all of which takes time.)
Once the invitation was ready, we crafted an accompanying letter to inform our PPS members across the country about how important this event was to our national objectives and urge them to contribute toward our fundraising goal. That done, the task force kept track of donations from around the country, answered questions, and thanked the PPS members who sent emails telling us they had donated. Diana stayed in touch with the campaign staff to discuss details and monitor the contributions that were coming in by check or online to the campaign website.
(Practical Tip: Always maintain good communication with the local campaign staff and respond promptly to whatever they need. They will be delivering the legislator to your event and will be keeping him or her apprised of your efforts and progress. Also, do the organizing work yourself rather than rely on the campaign staff. On the morning of our event, one of the campaign staffers who accompanied the Senator told Diana that they had never before participated in a fundraiser where they did not have to do any work—and they specifically made sure the Senator knew that we had handled everything.)
Less than two weeks away from the date of the event, we found ourselves short of our fundraising goal, so the team got back to work. Tom DiAngelis sent out another plea for support to PPS members, Clem made personal phone calls to his key contacts around the country, and Diana urged her Oregon and Washington physical therapists to come through. We also enlisted the help of a private practice business group headquartered in California and they sent out the word to all their contacts. (Practical Tip: Having a small, hard-working team dedicated to hosting a successful event is key.)
Diana kept track of the physical therapists who had responded that they would be attending in person and had her staff prepare name tags the day before and up to the last minute for late responders. Three days before the event, we checked in with the café to let them know the final head count and finalize the menu. Diana arranged for a no-host bar to be available for those who wanted libations stronger than coffee or juice. (Practical Tip: Alcohol is typically welcomed by attendees at these events.) The day before the event, the campaign staff requested short bios of the hosts and the issues that the physical therapists would like to discuss so the Senator would be fully prepared. Diana scrambled to complete and email these to the staff.
By the morning of the event, all was in place and everyone had a good time. All the wonderful private practice physical therapists who attended and those who contributed money made the event a tremendous success—we raised over $45,000! According to his staff, Senator Wyden was thoroughly impressed.
Thank you all.
APTA Federal Government Affairs Leadership Award recipient.
Interview by Kelly Sanders, PT, DPT, OCS, ATC
August 8, 2014
This year, the APTA Federal Government Affairs Leadership Award was given to PPS member Mark Anderson. Established in 2013, this annual award was created to recognize the efforts and achievements of an APTA member in advancing the association’s federal government affairs objectives. We caught up with Mark to discuss his contributions in this area of advocacy and find out what piqued his interest in this important area of APTA service.
Q: Would you share a bit about your background and the roles you have played in the government affairs arena over the years?
A: My interest in government affairs issues started as Utah chapter president. Multiple state issues were brewing, and I tried to take a proactive approach in dealing with issues before they heated up. Rodney Miyasaki, an earlier chapter president, set a great example [by] getting direct access without any opposition. I began going to Washington, D.C., in the early 1990s and made my first Capitol Hill visits in 1994.
Q: What was the catalyst that got you involved in government affairs? Was it a particular issue, person, etc?
A: I learned quickly that Hill staff “made the world go round.” Establishing relationships and providing Congressional staff with information and assistance went a long way. One day, I got a call from a Representative’s chief of staff saying the member was bringing Newt Gingrich (then Speaker of the House) to town. She asked if I could rally our troops to get some people to attend. I quickly reached out to a local physical therapy school and our chapter, and at the end of the day, we had a sizable crowd present for the event. Time and time again, providing needed data and being consistent in messaging has paid off. Over the past 15 years, I have had the opportunity to be an APTA key contact for Orrin Hatch. During this time, I have been able to get to know and work with his health policy advisors. We have established friendships and spent time discussing issues in Washington as well as in our state. I have become very comfortable contacting Senator Hatch’s office whenever we are facing time sensitive issues that affect our profession. I am confident that we provide them with accurate information and information that is focused on our patients.
Q: What issues are you particularly passionate about right now? What do you think are the most important issues facing physical therapy right now?
A: Each year our lobbying efforts focus on three primary issues. Trying to work on more issues seems to take away focus. Depending on the year, we have focused on the therapy cap, direct access, referral for profit, and student loan repayment assistance. During the past 10 years, my number one legislative issue has been the therapy cap and associated limitations. Due to the length of time we have spent on this issue at the Hill, it is very unusual for any of our Congressional contacts to not have a solid understanding of the therapy cap. If you were to ask me what issue I am the most passionate about and the one I love to educate and discuss, it would be referral for profit and the in-office ancillary exceptions. In the past two years we have been able to discuss this issue as a potential way to pay for costs associated with fixing the cap. Congress always wants to know how much a particular issue will cost. It is very nice to report a savings with fixing referral for profit and a budget neutral for student loan assistance.
One of the most enjoyable offshoots of my legislative work has been taking students and other therapists to visit Congress. Planning a visit and assigning speaking points is exciting. Having a new attendee’s experience be a positive experience and watching their confidence build as the day unfolds is exhilarating. Over the years, Kim Cohee (Utah’s APTA key contact) and I have been able to share this experience with a significant number of therapists and students.
In the many years I have been walking through the halls of Congress, I have never felt the urgency of our messages more than I do today. Congress is polarized. Blame is plentiful. If we do not maintain a steady effort in reminding policy makers what is at stake, our patients and our profession will lose all that has been gained.
Kelly Sanders, PT, DPT, OCS, ATC, is a member of the Impact editorial board. She can be reached at Kelly@movementforlife.com.