Boca Benefits Consulting Group Inc.

We are not the only systems being hacked. New U.S. Cyber Command gears up for probes. It is not all paranoia.

See this link regarding information provided at Senate Armed Services Committee confirmation hearing.

BBCG’s blog is back up at 12:00 noon 4/15/2010. We are trying a different look on this blog concurrent with the conversion to the most recent version of WordPress. It is cleaner and easier for a new user to navigate. We also feel it is just a lot easier to read due to its font and layout. Let us know how you like it!

BBCG downloaded all files related to this blog today and scanned them for malicious scripts utililzing McAfeee definitions. No WordPress files associated with this blog were found to be infected.  See http://1msc.com/blog/?p=235 for related information.

Our WordPerfect version conversion was delayed today as we scanned the present blog files and related database. Planned conversion completion is 4/15/2010.

Please see http://1msc.com/blog/?p=189 and http://1msc.com/blog/?p=192 for information on recent hacker activity realive to older WordPress versions. BBCG has noted substantial illigitimate user activity in the last 90 days and today discovered a trojan script embedded in one of the 1msc.com blog files.

This blog will be down for a few hours on 4/14/2010 as BBCG converts it to the most recent version of WordPress. Please note that no malicious script activity has been noted on the bocabenefits.com blog site. We are taking this measure as a precaution only.

Whether your company is a small firm or a very large one, there is probably at least one similarity. Workman’s compensation insurance has historically been purchased based on estimates of payroll size and risk categories that are trued-up at year-end via some form of insurance carrier audit. During the course of the year some carriers require that the estimating employer provide a deposit which functions as a reserve against loss of cashflow and ultimate payment if the estimated premium payment is determined to be short. Neither employers nor carriers have been happy with this arrangement.  As a small employer, these year-end true-ups can be very traumatic if additional funds are due over and above the deposit. From the carriers perspective, in addition to cashflow and bad debt implications, they just never like chasing funds after the risk event has occured.

The concept of “pay-as-you-go” has emerged which means that the workman’s compensation liability is tracked per employee per pay period and premium is paid on the actual as opposed to an estimated liability. It eliminates the need for up-front deposits for smaller employers and year-end audits. For carriers, it improves cash flow and more accurately matches the premium flow with the underlying risk. In a shrinking economy this is somewhat less important than in an expanding economy where estimated payrolls may be based on dampened historical data that does not currently reflect renewed economic vitality.

Smaller employers have had “pay-as-you-go” offered to them by big name payroll companies which have forged deals with insurance companies to provide the required reporting. Many of those smaller employers feel that they are locked-in and have no other alternative due to the potential financial implications. They feel that moving to another payroll solution means a return to the deposit and audit methodology. They might be unhappy but they bite their tounge and endure the present relationship. However, that is not the required reality.

For the smaller employer, BBCG can work with virtually any property and casuality licensed agent who handles your workman’s compensation insurance. If there is no agent an employer wants to protect, BBCG will facilitate a new relationship. The one absolute: it is necessary to utilize a payroll service company which utilizes one of the major payroll software systems. This does not mean one of the “big name” payroll companies. A small CPA with whom you have developed a comfort level as your payroll service company over time can provide the required reporting if he/she uses one of the major software vendors. The requirement lies in the software vendor and the insurance carrier interface company having established the appropriate data sharing protocol. Most of the major payroll systems are represented but there are in fact a few for which this solution is not viable. We would encourage you to call us at 727-510-7138 to discuss how you are presently structured.

Larger employers may not be using a payroll company at all. If payroll is an in-house function, the software and data reporting issues might become more problematic. However, that does not preclude larger employers from having similar access to “pay-as-you-go”. If the degree of sophistication is present, we can likely structure a data reporting protocol directly between the employer and the carrier interface company. The key is structuring a data reporting methodology which regularly transmits all the data elements required by the insurance carriers. These specfications are in place for each of the major payroll software systems. A major large employer could be treated as a new software system if it is using a proprietary in-house system. If using one of the major commercially available systems, the interface may already be there.

A question often arises as to which workman’s compensation insurance carriers the “pay-as-you-go” concept might apply. Due to the way the carrier interface company has been built, virtually all the major carriers subscribe. If your company presently uses a “captive” agent who can only show you his/her company’s product there might be a disconnect. However, if your company uses an independent agent or broker it is more than likely that he/she can be protected either by using one of the carriers with which an agent appointment already exists or by newly appointing the agent/broker with a carrier that has the best terms for the employer. Again, if no agent protection is required, BBCG will assist the employer with having an agent/broker from the company with the best terms named as a new “broker of record.”

Please call BBCG at 727-510-7138 if you have any questions.


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Health Care Reform Impact on Employer-Sponsored Health Plans

Excerpted from Various Insurance and Benefits Industry Sources

(impact on self-insured plans is annotated in bold text below)

• Prohibition of lifetime limits – Prohibits all plans from establishing lifetime limits. Only applicable to self-insured plans established after 6 months from date of enactment.
• Prohibition of annual limits – Prohibits all plans from establishing annual limits on the dollar value of benefits starting in 2014. Prohibits plans from setting limits that would “impair essential health benefits” in subsequent years. Only applicable to self-insured plans established after 6 months from date of enactment.
• Prohibition on rescissions – Prohibits all plans from rescinding coverage except in instances of fraud or misrepresentation. Only applicable to self-insured plans established after 6 months from date of enactment.
• Coverage of preventive health services – Requires all plans to cover preventive services and immunizations, recommended by various Federal agencies, also specifically includes certain child preventive services and women’s preventive care. Plans are prohibited from imposing any cost-sharing requirements. Only applicable to self-insured plans established after 6 months from date of enactment.
• Dependent coverage – Requires all plans offering dependent coverage to make coverage available to dependents that are under the age of 26 and unmarried. Plans are not required to cover dependents of dependents. Only applicable to self-insured plans established after 6 months from date of enactment.
• Prohibition of preexisting conditions – No group health plan or insurer offering group or individual coverage may impose any pre-existing condition exclusion or discriminate against those who have been sick in the past. Only applicable to self-insured plans established after 6 months from date of enactment.
• Prohibiting discrimination based on health status – No group health plan may set eligibility rules based on health status, medical condition, claims-experience, receipt of healthcare, medical history, genetic information or evidence of insurability – including acts of domestic violence or disability. Permits employers to vary insurance premiums by as much as 30 % for employee participation in certain health promotion and disease prevention programs. Only applicable to self-insured plans established after 6 months from date of enactment.
• Prohibition on waiting periods – Prohibits any waiting periods for group or individual coverage that exceed 60 days. Employers are penalized $600 per full-time employee for each employee required to wait beyond 60 days. Only applicable to self-insured plans established after 6 months from date of enactment. 
• Required Plan Information Disclosure
  • Requires plans to issue a summary of benefits and explanation of coverage to beneficiaries with the following criteria:
    • In uniform format
    • In “easily understood” language
    • Inclusion of uniform definitions of standard insurance and medical terms
    • Explanation of cost-sharing exceptions, reductions and limitations on coverage
    • Provide common benefits scenarios 
• Expanded Beneficiary Appeals Availability
  • Requires plans to implement a process for external appeals of coverage determinations and claims
  • Requires self-insured plans to comply with minimum standards to be established by the Secretary of DOL
  • Only applicable to self-insured plans established after 6 months from date of enactment.
• Health Information Technology Standards and Plan Requirements
  • Adoption of uniform standards and operating rules for the electronic transactions that occur between providers and health plans that are governed under HIPAA (such as benefit eligibility verification, prior authorization and electronic funds transfer payments)
  • Establishes a process to regularly update the standards and operating rules for electronic transactions and requires health plans to certify compliance or face financial penalties collected by the Treasury Secretary
• “Young Invincibles” Plan
  • Allows health insurers to offer a catastrophic, high-deductible plan as an exchange option
  • To be eligible for plan, individuals must be either
    • Under the age of 30
    • Exempt from the individual responsibility requirement because coverage is unaffordable to them
    • Individuals with access to employer-sponsored plans who meet criteria may join
  • Plan must
    • Cover essential health benefits
    • Cover at least 3 primary care visits
    • Require cost-sharing up to the HSA out-of-pocket limits
• Allowable Prevention and Wellness Incentives
  • Allows employers to discount up to 30% of the premium or cost-sharing requirements for participants in a workplace wellness program
  • Provides discretion to HHS to permit discounts up to 50%
• Low-Income Tax Subsidies Effects on Employer-Sponsored Health Plans
  • Employees with access to employer-sponsored coverage are eligible for credit (for use in an Exchange only), if:
    • Plan covers less than 60% of total coverage cost
    • The premium exceeds 9.8 of total income
• Employer Responsibility
  • Requires an employer with more than 50 full-time employees that offers coverage, but has employees receiving the “premium assistance” tax credit, to pay the lesser of $3,000 for each employee receiving the credit, or $750 for each full-time employee – adjusted annually and non-deductible
  • An employer with more than 50 full-time employees that maintains an enrollment waiting period would be required to pay
    • $600 for any full-time employee subjected to longer than a 60 day waiting period – adjusted annually and non-deductible
• Employee “Free Choice” Voucher
  • Allows employees with access to an employer-sponsored plan, under certain income eligibility, to receive a voucher from their employer, equal to their employer’s contribution (“free choice” voucher), to purchase coverage through an Exchange participating plan.
  • To be eligible for a voucher, an employee would have to meet both of the following criteria:
    • The cost of the employee’s coverage needs to be between 8% and 9.8 percent of the employee’s household income
    • Employee has a household income below 400% FPL
  • The contribution amount to the voucher must be equal to the amount the employer contributes to their own health plan
  • If the employee chooses coverage that costs less than the voucher, the employee keeps the remainder amount
  • Vouchers cannot be taxed as income
• Automatic Employee Enrollment
  • Requires employers with more than 200 employees to automatically enroll new full-time employees in coverage
  • Requires employers to provide adequate notice and the opportunity for an employee to opt out of any coverage the individual or employee was automatically enrolled in 
• Reporting Requirements for Employer-Plan Sponsors
  • Requires large employers (over 200 employees) to report the following
    • Whether it offers to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan
    • The length of any applicable waiting period
    • The lowest cost option in each of the enrollment categories under the plan
    • The employer’s share of the total allowed costs of benefits provided under the plan
    • The number and names of full-time employees receiving coverage
    • Disclose the value of the benefit provided by the employer for each employee’s health insurance coverage on the employee’s annual Form W-2 
• Requirement to Disclose Coverage Options
  • Requires that an employer provide notice to their employees informing them of the existence of an exchange
• Excise Tax on Generous Plans
  • Levies an excise tax of 40% on insurance companies and plan administrators for any health coverage plan that is above the threshold of:
    • $8,500 for single coverage
    • $23,000 for family coverage 
• Fees on Self-Insured Plans
  • In 2013, the plan sponsor of a self-insured plan is required to pay $2 multiplied by the average number of covered lives
  • From 2013-2019 the previous year’s fee is multiplied by projected per-capita amount of National Health Expenditures
  • Plans are not required to pay fees beyond 2019 
• Termination of Deductibility of Medicare Prescription Drug Subsidies
  • Elimination of the deductibility of Federal subsidies for Medicare Rx programs 
• Limitation on Health Flexible Spending Arrangements
  • Limits the amount of contributions to health FSAs to $2,500 per year indexed by CPI 
• Annual Report on Self-Insured Plans
  • Requires the Secretary of DOL to prepare an annual report, using information obtained from submitted Form 5500, on various aspects of self-insured, group health plans. Report will include:
    • Plan type
    • Number of participants
    • Benefits offered
    • Funding arrangements
    • Benefit arrangements
    • Data from the financial filings including:
      • Information on assets
      • Liabilities
      • Contributions
      • Investments
      • Expenses 
• Indirect Health Industry Fees Likely to Increase Plan Costs 
  • Fees on Pharmaceuticals
    • Imposes an annual flat fee of $2.3 billion on the pharmaceutical manufacturing sector beginning in 2010
  • Fee on Medical Devices
    • Imposes an annual flat fee of $2 billion on the medical device manufacturing sector in years 2011 – 2017
    • Imposes an annual flat fee of $3 billion on the medical device manufacturing sector in years after 2017

BBCG did not spend a lot of time massaging the below linked file to make it aesthetically pleasing. It summarizes the implications for employer sponsored health plans (i.e., both insured and self-insured). We opted to expedite the posting. Although the House was forced to revisit the reconciliation procedures, the actual gist of the legislation is unlikely to change.

See http://bocabenefits.com/reform_as_passed.pdf for the summary.

BBCG is now listed on the Globaltrade.net “The marketplace for International Trade Services” web site: http://www.globaltrade.net/user/profile.html?user.id=223 . This site is similar to other business oriented social web sites. Please see our posts there.


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As our prior post indicated, BBCG is particpating in the AccessAmerica initiative in China sponsored by the U.S. Department of Commerce. The white paper “Accessing International Healthcare Insurance in the Global Economy” is now posted with a Chinese language synopsis at: http://www.buyusa.gov/china/zh/aa_resources.html .


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Following a sale of group healthcare to a group of diplomats in Beijing, China, BBCG has been posted as an insurance resource in a U.S. Department of Commerce sponsored program called AccessAmerica.  That program provides Chinese language translation of our services and provides a link on the embassy web site in Beijing. As part of that service BBCG was also asked to write a related white paper which is now posted there as well.

This is the direct link to the BBCG piece: http://www.buyusa.gov/china/zh/aa_listing.html?bsp_cat=84130000&bsp_id=32 . [Note: Chinese language browser module may be required for full functionality.]

This is the link to the directory in which it is posted (Insurance Services): http://www.buyusa.gov/china/zh/aa_directory.html

This is a link to a copy of the white paper (best viewed by downloading first via right mouse click and “Save Target As” function): http://bocabenefits.com/papers/intl_health_insurance.pdf .


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