Tag: Chris Bettner

Little Known Impact of Healthcare Reform: PCORI Fees

by Chris Bettner, Sterling Executive Vice President of Business Development

The Internal Revenue Service (IRS) issued a final rule on fees on health insurance policies and self-insured plans for the Patient-Centered Outcomes Research Trust Fund. The Patient Protection and Affordable Care Act (PPACA) established PCORI to promote evidence based medicine by sharing comparative data and effectiveness through research findings.  This is the funding mechanism for the research.

To fund PCORI, PPACA imposes a fee on employers who sponsor self-insured health plans and insurers providing fully insured health coverage as well.  For each policy or plan year ending on or after Oct. 1, 2012, and before Oct. 1, 2019, the first payment is due by July 31, 2013. Each year following, the fee will be due no later than July 31 following the last day of the plan year. The fee must be reported on Form 720, completed by the employer with the fee attached.

The fee is $1.00 per plan participant for the first plan year ending after Sept. 30, 2012, and $2.00 per plan participant in succeeding years.  For policy or plan years ending after Oct. 1, 2014, the fee will be increased based on increases in the projected per capita amount of national health expenditures.

The final rule clarifies that the fee required by the employer is based on the average number of lives covered under the plan during the plan year. There are several ways to calculate this.

If an employer sponsors more than one self-insured arrangement they are treated as a single plan for calculation purposes as long as the plans have the same plan year.  An example of this is a self-insured health plan and a self-insured Health Reimbursement Arrangement (HRA) attached to that health plan.

In the event that the employer has a fully insured health plan with a self-funded HRA, the fee applies to the HRA population.  Remember that the health plan will be paying the fee on the fully insured health plan side.  The employer is still required to calculate and pay for the HRA side.

This same ruling applies to employers who provide health plan coverage to a retiree population.

COBRA and other continuation coverage must also be included in the calculation.

The following plans are subject to the PCORI fee:

  • Medical plans
  • Prescription drug plans
  • Self-insured dental or visions plans (if provided without a separate election or premium charge)
  • HRAs
  • Retiree-only health plans

Excepted or Exempt Plans:

  • Self-insured dental or vision plans (if separate coverage elections and employee contributions)
  • Expatriate coverage for employees working outside the US
  • HSAs
  • Most FSAs
  • EAPs, Wellness programs, and disease management programs (that do not provide a significant benefit)

The employer can aggregate all plans that are self-insured and pay the fee once on all overlapping plan lives.  The employer must pay these fees outside of the plan, not using plan assets.

A consideration for employers who do not wish to pay the fee twice on a fully insured medical plan (the fee is added into the premium by the carrier) and again for a self-funded HRA may want to consider moving to a plan design that is HSA (Health Savings Account) compatible as HSAs are exempt from the fee. Learn more about HSAs.

Learn more about Sterling’s PCORI Fee Calculation Services.

About Chris Bettner
With over 30 years of experience in healthcare sales and management with health insurance carriers, Chris Bettner serves as executive vice president of Business Development for Sterling Health Services and was a co-founder of the company in 2004. Prior to joining Sterling, Chris was Vice President of Sales for Blue Shield of California. She held similar positions at Lifeguard, FHP, Independence Blue Cross and MetLife. Chris is also a national spokesperson on HSAs and consumer directed healthcare programs. Connect with Chris Bettner on LinkedIn.

So What Happens to COBRA Now That the Exchanges Are Up and Running?

by Chris Bettner

Editor Note: This article was written by Sterling’s EVP of Business Development Chris Bettner and published in the May 2014 edition of Health Insurance Underwriter Magazine.

People are always asking us about the longevity of COBRA as it relates to public and private exchange options for terminating employees and employer groups. People are wondering what will become of this product over time? Business Insurance Magazine reports (3/4/14), that private exchanges have hit the 1 million mark as of early January 2014. Over four times that number enrolled through the federal and state exchanges.  Federal subsidies outside of the exchange are now available for policies bought on the open market, according to the New York Times (2/28/14).

Who truly knows how all of these changes in healthcare insurance will impact COBRA as we know it today, but unless there are also changes to the federal COBRA law, it’s likely to be here to stay. Employers must offer COBRA continuation to their terminating employees regardless of other forms of coverage now available to them, such as the exchanges. The administrative burden and steep penalties to employers for errors still apply to COBRA for any employer of 20 or more employees.

One thing we know people are experiencing with the exchange option is narrow networks.”  If an employee has been under care or using a particular provider or hospital, that provider or hospital may not participate in the carriers’ products in the exchange. This may affect the choices a terminating employee makes. Qualified beneficiaries may find subsidized options on the open market for the same cost or less than the exchange and have access to a network that includes their preferred providers.

People who need coverage elect COBRA for multiple reasons based on their healthcare needs and financial considerations. Others may choose not to elect COBRA and choose another form of coverage. With the option of coverage under the exchanges today and the removal of pre-existing conditions as a reason to deny coverage, affordable plans can be found through the exchange. Sometimes the cost differential is significant but sometimes it is not, depending on type of coverage and other demographic information.

The real change in COBRA is not whether employers need to continue buying the administration of COBRA through a qualified administrator, but whether terminated employees will elect it or opt for a plan through an exchange. Employers need the peace of mind that they are in compliance with COBRA federal guidelines, timelines, etc. as it applies to any qualified beneficiary. The administrator may see a reduction of the 2% of premium that they can withhold due to participation, but I would not suggest reduction in the administration of COBRA for employer groups to which it applies. COBRA is a service as well as an option and an employer law.

About Chris Bettner
With over 20 years of experience in healthcare sales and management with health insurance carriers, Chris Bettner serves as Executive Vice President of Business Development for Sterling Health Services. She joined the company in 2004. Prior to Sterling, Chris was Vice President of Sales for Blue Shield of California. She held similar positions at Lifeguard, FHP, Independence Blue Cross and MetLife. Chris is also a national spokesperson on HSAs and consumer directed healthcare programs.

Consumer Driven Health Plans Fit with Reform

by Chris Bettner

Consumer Driven Health Plans Fit with ReformWhen health savings accounts (HSAs) were created in 2004, no one envisioned the sweeping changes to the U.S. healthcare system that would pass into law in March 2010.

Throughout the healthcare debate, people speculated whether Congress would eliminate health savings accounts (HSAs), flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs).

Not so. Despite some changes in contribution limits and restrictions in how funds can be used, most industry insiders believe that the popularity of these products will continue. It is a good thing for employers and employees when healthcare reform allows consumers to play a role in how they pay for their healthcare and encourages them to make good healthcare choices.

The new healthcare reform law does change how FSA, HRA, and HSA funds can be used. To read more on how these changes affect you, continue reading this article here.

About the Author
With a long and successful record of achieving stellar results and taking care of clients, Chris Bettner is a leading member of the executive team for Sterling Health Services Administration. As Executive Vice President for Business Development since 2004, she shared a vision with company founders that consumer directed health plans would have an enormous impact on the affordability and accessibility of healthcare for individuals and businesses. She has made that vision a reality for thousands of Sterling clients who have adopted health savings accounts, health reimbursement arrangements and premium only plans through Sterling.

A health insurance industry veteran, Chris has over 25 years of experience in healthcare sales and management. Prior to joining Sterling, she was Vice President of Sales for Blue Shield of California where shChris Bettner, EVP Business Development | Sterling HSAe was responsible for a sales organization comprised of 153 people and over 60% of total revenue.

During her exemplary career, Chris has also served in executive level positions with other notable health insurance companies, including FHP/Take Care, LifeGuard, Independence Blue Cross, and MetLife.

Chris received her B.S. degree in business management from Cardinal Stritch University in Milwaukee.