Category Archives: Health Plans

Extending the COBRA Premium Subsidy Extension (No, it’s not inadvertently redundant.)

The original COBRA premium subsidy extension, passed in December 2009, extended the original eligibility period for involuntarily termed employees. The original cutoff date, December 31, 2009, moved to February 28, 2010.

With February 28th  just four days away, a NEW extension for COBRA premium subsidy eligibility has not yet been passed.  In fact, reference to such an extension was actually stripped from the jobs bill passed by the Senate today.  

However, the AP reports that with the jobs bill now on its way to the House, Harry Reid now wants to extend the COBRA extension  (as well as unemployment benefits) before February 28th. 

Reid is reported to be considering a two step process:

     1) An initial 30 day extension.
     2) A follow on,  longer term extension, possibly to the end of December.

Another scenario, of course, is “no further extension”…an unlikely outcome, in our view.

We will keep you informed …

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Filed under COBRA, Health Care Reform, Health Plans, Legislative Updates

Don’t Dismiss Disease Management

Business Week has a questionable piece which challenges the efficacy of disease management programs.

 Reviewing a program that General Electric ran for its employees over 10 years ago, the authors conclude that the company found “scant return” on the money they spent…but then go on to tell us that GE is starting a new “outreach service” to provide disease management and wellness support to employees.

 Why take this step if disease management is a waste of time?

 The Disease Management Blog picks up on this point as well, calling the Business Week piece a “faux exposé.” They conclude that “…there is ongoing innovation, building on the lessons of what has worked and what doesn’t work…” in the world of disease management.

I certainly do not discount wellness or disease management efforts; in fact, I think that the issue of personal accountability is a missing component in the wider health care debate. By all means, seek to “build on lessons” learned, but do not dismiss out of hand.

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Filed under Health Care Spending, Health Plans, Wellness

Stay Tuned – Further Extension to the COBRA Subsidy Likely

Among the legislation delayed by the snowfall in Washington is another possible extension to the COBRA subsidy.

The initial changes made last year were: 

  • The last the end date of eligibility for the ARRA subsidy was extended from December 31, 2009, to February 28, 2010.
  •  The ARRA premium Subsidy increased from nine months to the current 15 months. 

Now, at least two different sets of extensions are being considered: 

 1)      The Administration’s proposed federal budget for fiscal year 2011 includes a proposal to extend eligibility to employees laid off from March 1, 2010 through Dec. 31, 2010. The subsidy period in this legislation is reduced to 12 months.

2)      The pending jobs bill proposes extending eligibility until May 31, 2010. The duration of the subsidy would remain at the current 15 months.

12 months? 15 months? The good news will be extending the benefit for the those in need, but we feel the pain of those once again trying to be ahead of the compliance curve.

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Filed under COBRA, Health Care Spending, Health Plans, Legislative Updates

HSA – Health Savings Account

The health savings account (HSA) was introduced in 2003. There are really two sides to an HSA plan: the savings account, usually referred to as the HSA, and the health plan.  The HSA is a tax advantaged medical savings account. Savings can be used  to pay the deductible of the corresponding  High Deductible Health Plan (HDHP). The HDHP must meet specific guidelines to qualify for HSA status.

There are some similarities between an HSA and a flexible spending account (FSA). Employers don’t have  to fund either the HSA or the FSA. HSA’s allow deposits up to the maximum contribution limit, set annually by the IRS.  For the year 2010, the amount  is $3,050 for individual coverage,  and $6,150 for family coverage, and includes both employee and employer contributions.

Unlike FSAs, the unspent HSA funds roll over each year. Contributions, as well as interest earned, remain free from taxes. Disbursements are also tax free, provided they are used to pay qualified medical expenses.

By investing in a health savings account, employees get a tax advantaged account that stays with them. They may continue to contribute as long as they remain covered by a qualified HDHP.

Qualified HDHPs are very different to “traditional” health plans. Because of the differences, some employees may be initially reluctant to embrace them. We will look at these in our next HSA post.

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Filed under Health Plans, HSA