Although there are few changes in retirement plan regulations for 2012, a few trends are emerging that may result in legal changes in the next few years. The trends are related to disclosure of fund past performance, participant fees, and lifetime income scenarios in the hope that participants will make informed choices in investments.
ACO’s (Accountable Care Organizations): Paying for health care based on outcomes rather than fee-for-service is one way that health care reform is attempting to cut health care costs.
Supreme Court Oral Arguments: Debate on the constitutionality of the individual mandate to buy health insurance begin in March, and a decision is expected by summer.
Medicare Payment Reform: Like ACO’s, this is an attempt to cut costs by tying patient outcomes to provider payments.
2012 Election: If Republicans win the presidency and a majority in Congress, it could affect attempts to repeal health care reform.
Health Insurance Exchanges: States have until the end of 2012 to certify that they are ready for the 2014 implementation of exchanges.
The final rules have been published determining the percentage of your insurance premium that insurance companies must spend on health costs. This percentage, called a Medical Loss Ratio (MLR), is 80% for medical plans sold to employers with fewer than 50 employees and 85% for companies with 50 or more employees.
If insurance companies do not meet this minimum, they must rebate a portion of insurance premiums to employers and employees.
The Supreme Court has set aside five and a half hours for oral arguments challenging the constitutionality of PPACA (Patient Protection and Affordable Care Act). Arguments are scheduled for March and will focus on the constitutionality of the individual mandate that most Americans purchase health insurance beginning in 2014. The justices must also decide whether the rest of the law can stand or whether the entire law must be struck down. Their decision will likely be made in June.
The CLASS (Community Living Assistance Services and Supports) Act, a part of the last years health care reform bill, may not be implemented after questions were raised about its sustainability. Designed to keep people with impairments out of nursing homes, the program would pay for services received at home. One estimate says that the program would cost the Federal government more than the premiums collected would cover by 2025.
The number of HHS staff working on the CLASS Act has been reduced, but there has been no official word on its future. At the Senate Finance Committee hearing in February, Kathleen Sebelius said “The program will not start unless we can be certain it will be solvent and self-sustaining into the future.”
The Department of Health and Human Services announced additional mandated preventive services for women for health plans with plan years beginning on or after 8-1-2012.
Democrats and Republicans are working together to repeal the provision of the Accountable Care Act (health care reform) that prevents consumers from using FSA and HSA funds to purchase over-the-counter drugs without a prescription. Legislation was introduced in both the Senate and the House on July 14th.
Several reports released this week show different views of how health care reform will affect the number of Americans covered by employer-based insurance.
The number has been decreasing for the last 10 years, from 69% of Americans in 2000 to 61% in 2009.
Senator Orrin Hatch and Congressman Erik Paulsen have introduced legislation to provide additional benefits for Health Savings Accounts. Some of the proposed provisions include removing the restriction on using HSA funds for over-the-counter drugs, allowing spouses to contribute catch-up funds to the same HSA, allow rollovers from FSA’s to HSA’s, and adding wellness expenses to the list of eligible HSA expenses.
On Tuesday, the Senate voted 87 to 12 to repeal a provision of the Accountable Care Act requiring businesses to issue 1099 forms to all vendors from whom they purchased more than $600 of goods and services during the year.
The House passed a similar bill last month, and the White House has indicated that President Obama supports the repeal.
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