February 2003
COBRA Corner Service Tips One Million Medical Mistakes Voluntary Benefits Check List		CDHC Makes Progress Help For Medical Malpractice NH Legislation Watch Cartoon of the Month

COBRA Corner
COBRA Billing: Is it required?

• Some employers take on an extra administrative task of billing COBRA recipients for premiums by sending monthly statements or providing coupons for the coverage period. COBRA law, however, does not require billing statements of any kind.
• The COBRA election notice must provide written notification of the COBRA premium due date. It also must include the duration of the grace period (30 day minimum) and that failure to pay premiums will result in termination of coverage. The election notice ought to state that, "You should also be aware that it is your responsibility to pay for COBRA coverage even if you do not receive a monthly statement.
• Employers are under no obligation to notify recipients that COBRA will terminate because of lack of premium once the election notice has been properly delivered.
• Premium shortfalls do not automatically result in termination. Employers must accept payment as 'in full' as long as the shortfall is no more than $50 or 10% of the premium, whichever is less. If the shortfall is not made up within 30 days, the plan may then be terminated.

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Service Tips

• Anthem announced that, as of 2/1/2003, it is changing eligibility rules for newly married subscribers. Formerly, the carrier's policy was to make the spousal application effective the first of the month following the date of marriage. The new policy will be to make the spousal application effective on the date of marriage.
• Dental Insurance: As a warning to our subscribers who have orthodontic coverage; be careful to have hygienic visits (cleanings) charged against the dental maximum rather than as an orthodontic visit. The orthodontia benefit is usually $1000 to $1500 lifetime, and it would be better to have cleanings covered by another area of the contract. Be sue that cleanings are provided by your regular dentist.

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One Million Medical Mistakes Yearly

In our research to create these newsletters, we are always interested in good news about the direction of health care and the ultimate cost that results from changes. A recent article published by United Healthcare discussing the emergence of 'evidence-based' medicine really captured our attention.

Because nearly 100,000 people die each year as a result of medical mistakes, a great deal of attention is being paid to the causes. The article articulates many of the efforts of public and private organizations to attack the 'system' problems causing nearly 1,000,000 preventable mistakes by medical providers.

What really caught our attention, however, was the reference to the National Guideline Clearinghouse. We dug deeply into the website and found that thousands of diseases and other maladies are identified. Each item has a virtual plethora of information. The most helpful is the articulation of accepted practices based on medical evidence and research for treatment of the condition.

As insurance plans continue to reduce coverage's, it will be important for all of us as consumers to understand our health issues and be prepared to discuss them intelligently with our doctors. Although we see many websites everyday that are good ones, it is sites like this that will empower us to take a more active role in our own health issues.

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Voluntary Benefits Check List

As employers continue to struggle to contribute to the cost of health plans, many are using voluntary benefits to provide employees access to a full benefits package. This is a big improvement over the days when employers made all of the decisions about life, dental and disability plans. Now, employees can create their own 'life style' package to suit their individual needs.

Here is a schedule for employers considering using voluntary benefits:

• Determine what the program is designed to do
• How are the plans going to be communicated to employees
• Establish a strategy for adding additional products
• Rely on your broker/consultant to identify competitive products and services
• Obtain commitment from senior management to support the program
• Communicate the commitment to all eligible employees
• Check references for chosen carriers
• Document success and plan for next renewal

As with any employee benefit, pay close attention need to ERISA compliance. As with all 'employee welfare plans', employer's responsibility and liability should be well understood before a voluntary package is offered to employees.

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Consumer Driven Health Care Makes Progress

Consumer Driven Health Care (CDHC) is a new model of healthcare that redistributes the financial responsibilities for the cost of care. In short, employers purchase a high deductible healthcare plan (i.e., $3000). The employer then provides each employee with the first $1000 each year. If an employee uses up the employer's portion, the employee is responsible for the next $1000. Once the employer's and employee's money is used up, then the insurance company covers the balance. The concept is designed to reduce utilization and reconnect the consumer with the cost of heath care.

With the figures for the recent renewal period coming in, it appears that membership in CDHC's will be at about 400,000 with 800 employers offering the plan. Most often it is offered as an option with more traditional HMO style plans but some employers have made CDHC the only plan available.

While the concept is still fairly new and has only been offered to large employers by Third Party Administrators (TPA's), Aetna, CIGNA, and Humana have begun programs to offer to their clients. Over the next couple of years, it is expected that CDHC's will be show increasingly large enrollments. At this point, however, and as far as we know, Mass. Blue Cross is the only carrier currently offering a CDHC in New England. However, we understand that Harvard is about to launch CDHC style plans.

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Help is on the way for Medical Malpractice Premiums

(One of the things we look for are 'cost drivers' to the system. See the following article as an example of the dynamics affecting the healthcare industry.)

Doctors in many states are ceasing the practice of their specialties as a result of high malpractice insurance premiums. In addition, because of the risk of high jury awards, many insurance companies are ceasing to even provide malpractice insurance.

While President Bush recently proposed federal legislation aimed at curbing awards, the passage of effective legislation seems to still be in the future. A proposed bill passed by the House of Representatives capping non-economic damages at $250,000 was defeated by the US Senate. This leaves the door open for a new effort by the Bush Administration.

Meanwhile, many physicians are leaving their practices where mal-practice insurance reform has not been passed. Some physicians are retiring and some are changing specialties to reduce their risk and insurance premiums. Dr. Miguel A Faria Jr., M.D. said in a recently published article: . . "the medical malpractice crisis isn't merely a matter of insurance. . . It's a symptom of a profound cultural transformation: the entitlement mentality, the erosion of contract rights, collective guilt and scapegoats supplanting individual responsibility, the expectation of government-defined and guaranteed 'equity' and 'social justice', and the idea that all (outcomes) are under human control." Dr. Faria might have also added the efforts by Trial Lawyers Associations to drive up the size of awards.

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NHLegislative Review

Below is the BIA's listing of pending legislation. With their permission, it is being provided to you along with the other items in our newsletter. While the list is not complete it is as comprehensive a list as is available and we thank the BIA for this valuable service.

There is one bill that we are particularly interested in. SB110 re-writes legislation for small group health insurance reform. In 1995, New Hampshire established small group as any employer with from 1 to 100 employees. This changed the health insurance environment and ushered in the HMO era.

While SB110 maintains community rating, it changes small group to 2 to 50, reestablishes geographical and industry rating, and, in addition to age, allows insurers to use health as a rating factor. Understanding that some employers will see increases as well as decreases, the bill includes caps on increases.

The bill is scheduled for its first hearing on March 18, 2003, with the Senate Insurance Committee. We will be keeping a close eye on this one as we are proud to be part of the effort to pass meaningful legislation. Last year we participated in the effort to reform the non-group market upon which many of the small group market changes are proposed.

For complete text of all bills: www.state.nh.us

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BIA Legislative Review
Business & Industry Association of New Hampshire
603/224-5388M
www.nhbia.org

Sponsored by:

February 21, 2003

Health Care - staff contact - DAVID JUVET

• HB 149 - Patients rights - This bill requires that any discovery of a likely cause or contributing cause of patient injury or death during a quality assurance program shall be disclosed to the patient or the patient's legal guardian. Hearing held; report pending before House Judiciary Committee
• HB 172 - Community Benefit Law - This bill extends the committee studying the exemption from property taxes for not-for-profit hospitals and requires the committee to include a study of the community benefits law. Passed the House with Amendment.
• HB 287 - Malpractice Commission - This bill establishes the professional malpractice claims commission. Hearing held; report pending before House Judiciary Committee.
• HB 296 - Settlement Agreements - This bill prohibits the enforcement of any portion of a settlement agreement in a medical injury action that prevents the disclosure of relevant information to the appropriate state medical licensing board. Hearing held; report pending before House Judiciary Committee.
• HB 382 - Healthy Kids Prohibitions - This bill prohibits the state from providing health insurance to persons who do not qualify for such health insurance under the eligibility standards in effect as of the effective date of this bill and prohibits the healthy kids corporation from providing health insurance to low-income adults unless specifically authorized by the general court. Hearing held; report pending before House Commerce Committee.
• HB 398 - Healthy Adults Corporation - This bill establishes a committee to study the establishment of a healthy adults corporation. Hearing held; report pending before House Commerce Committee.
• HB 412 - Alternative Medical Treatments - This bill establishes a committee to study the issue of insurance coverage for alternative medical treatment. Hearing held; report pending before House Commerce Committee.
• * HB 425 - Prescription Drug Costs - This bill establishes the prescription drug cost task force to study issues regarding cost of prescription drugs for New Hampshire citizens. House Health and Human Services Committee recommends ITL for March 6.
• * HB 430 - Extension of Family Insurance to Students - This bill extends insurance coverage to unmarried children under the age of 28 who are part-time students. House voted ITL.
• HB 507 - Employee Benefit Plans - This bill removes disability benefits from certain statutes that set minimum requirements for employee benefit plan procedures pertaining to the filing of benefit claims, notification of benefit determinations, and appeal of adverse benefit determinations. Hearing held; report pending before House Commerce Committee.
• HB 596 - Group Health Insurance - This bill allows all private and public employers with at least 50 employees enrolled in their group health plan to receive health plan loss information upon request and without charge. Hearing held; report pending before House Commerce Committee.
• HB 652 - This bill permits health insurers in the small group and individual markets to use a rating factor to discount the premium rate for health benefit plans that include significant incentives for covered persons to participate in wellness or disease management programs. Hearing: March 3, 11 a.m., Room 302, LOB before House Commerce Committee.
• HB 663 - Medicaid Funding - This bill establishes a statutory county-state finance commission; extends and amends the payment provisions for counties relative to the nonfederal share of nursing home facility services; adds a county official to the health services planning and review board; and increases the tobacco tax. Hearing held; report pending before House Ways & Means Committee.
• HB 679 - Medical Savings Accounts - This bill requires Dept. of Administrative Services to contract with a suitable company (ies) to provide medical savings accounts to state employees as an option to traditional insurance. Work Session: March 4, 9:15 a.m., Room 100, State House before House Exec. Dept. Committee.
• HB 686 - Health Insurance - This bill requires HHS to establish a program to allow NH citizens to purchase the state employee health insurance plan at the group rate. Hearing: March 5, 1 p.m., Room 100, State House before House Exec. Dept. Committee.
• HB 735 - Prescription Drugs - Relative to prescription drugs and Medicaid best practices. Hearing held; report pending before House Health & Human Services Committee.
• * HB 739 - BET/Medicaid Provider Reimbursement - This bill establishes an acuity-based reimbursement system for medicaid providers; establishes a long-term care information and referral network; creates a BET deduction for employer contributions to long term care coverage; and directs the postsecondary education commission to study ways to improve and expand the nursing scholarship programs and establish those programs in Keene and Berlin. Work Session: March 3, 8:45 a.m., Room 302, LOB before House Commerce Committee.
• * HB 758 - Medicaid Eligibility - This bill prohibits the use of certain monetary devices as a method of sheltering wealth for the purposes of Medicaid eligibility. Rescheduled Hearing: March 3, 11:15 a.m., Room 205, LOB before House Health & Human Services.
• HB 784 - Long Term Care - This bill authorizes individuals eligible to receive medicaid-funded nursing home services to choose appropriate, community-based services as an alternative, if such community services would cost the state no more than services in a nursing facility would cost the state. Hearing held; report pending before House Health & Human Services.
• * HB 788 - Repeal of Certificate of Need - repealing the certificate of need law. Rescheduled Hearing: March 3, 9a .m., Room 205, LOB before House Health & Human Services.
• * HCR 13 - Citizens' Health Rights - This resolution declares the health rights of the citizens of New Hampshire. House Health & Human Services recommends ITL for March 6.
• SB 21 - Health Insurance Riders - This bill authorizes insurers to place health insurance riders on individual policies if certain conditions are met. Hearing: March 18, 8:30 a.m., Room 101, LOB before Senate Insurance Committee. Sponsor: Senator Robert Flanders
• SB 78 - Health Care Information Council - This bill establishes the NH health care information council, which shall implement and maintain a statewide healthcare database. Hearing held; report pending before Senate Public Institutions Committee.
• SB 110 - Small Group Employer Definition - This bill revises the laws relative to small group health insurance including changing the definition of small group employer to employers with 2-50 employees. Current law defines small group employers to have 1-100 employees. Hearing: March 18, 9:15 a.m., Room 101, LOB before Senate Insurance Committee.
• * SB 119 - Medical Liability Insurance - This bill clarifies the law relative to recovery for medical injuries under RSA 507-E. Hearing: April 1, 9 a.m., Room 101, LOB before Senate Insurance Committee.

Reporting Key

* = New development or hearing this week
OTP = Ought to Pass (no changes made)
OTP/A = Ought to Pass with Amendment
ITL = Inexpedient to Legislate (bill is dead)
Study = Referred to committee for study
Italics = Italicized bill has been killed

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Cartoon of the Month

Parade Magazine Feb. 2003

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Newsletter Note: The above information is offered to our clients and prospective clients as a service. It is a compilation of pertinent articles we have read, information we have collected from seminars attended and general trend information. It is not to be taken as legal or tax advice. If you have any questions about the information contained in this newsletter, please feel free to call us. Before acting on any legislative or law changes, you should consult your legal and/or tax advisor.

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