Patient-Centered Outcomes Research Institute Fee (PCORI)

New fee will fund research and consumer-based health decisions

Established by The Patient Protection and Affordable Care Act (PPACA), the Patient-Centered Outcomes Research Institute (PCORI) is charged with examining the “relative health outcomes, clinical effectiveness, and appropriateness” of different medical treatments. The Institute will evaluate existing studies and conduct its own, with funding in part by employer-paid fees.

Initial mandates include a new fee imposed on employers and insurance carriers for seven years, with fee amounts expected to change during that time. Due each July 31st, this fee is now set to affect Clients with Plan years ending 2012 through 2019.  If a plan sponsor only maintains a flexible spending account (FSA) or a health reimbursement arrangement (HRA), then the plan sponsor may treat each participant's account as covering a single life. (The plan sponsor is not required to count spouses or other dependents.)

 

Calculating the Fee

The fee is equal to the average number of covered lives for the policy year times the applicable dollar amount.

• For policy years ending on or after Oct. 1, 2012, and before Oct. 1, 2013 - the applicable dollar amount is $1.
• For policy years ending on or after Oct. 1, 2013, and before Oct. 1, 2014 - the applicable dollar amount is $2.

Self-funded plans may determine the average number of covered lives by using any of the following methods. Like fully insured plans, plan sponsors must use the same method consistently for the duration of any year and the same method for all policies subject to the fee.

• Actual Count – Count the total covered lives for each day of the plan year and divide by the number of days in the plan year.
• Snapshot dates – Count the total number of covered lives on a single day in a quarter (or more than one day) and divide the total by the number of dates on which a count was made. (The date or dates must be consistent for each quarter.)
• Snapshot Factor – In the case of self-only coverage, determine the sum of: (1) the number of participants with self-only coverage, and (2) the number of participants with other than self-only coverage multiplied by 2.35.
• Form 5500 Method – For self-only coverage, determine the average number of participants by combining the total number of participants at the beginning of the plan year with the total number of participants at the end of the plan year as reported on the Form 5500 and divide by 2. In the case of plans with self-only and other coverage, the average number of total lives is the sum of total participants covered at the beginning and the end of the plan year, as reported on the Form 5500.

Are health insurance policies or self-insured health plans for tax-exempt organizations or governmental entities subject to the PCORI fee?

Yes. Unless the health insurance policy or self-insured health plan is an exempt governmental program described above, the policy or plan is a specified health insurance policy or applicable self-insured health plan subject to the PCORI fee and, accordingly, the health insurance issuer or plan sponsor is responsible for the PCORI fee.

 

The employer is responsible for paying the PCORI fee and filing the Form 720 with the Internal Revenue Service (IRS).  This is because the HRA is funded by the employer.

 

You can access additional information on IRS Questions & Answers.

2014 ACA Implementation: Important Dates to Remember

January 1:
Exchange Coverage Begins

Individual coverage purchased through the federal and state-based Exchanges by December 24, 2013 went into effect January 1. Further, small employers generally may start offering health insurance coverage to their employees through the SHOP Marketplace (where enacted) at any time during the year.

As ACA-compliant policies are being issued, more reforms covering pricing transparency, guaranteed issue, elimination of annual and lifetime coverage limits, incorporation of Essential Health Benefits for many plans and new wellness program incentives will continue to take hold.

Individual Mandate Takes Effect

In addition to the new plans, the Individual Mandate took effect January 1. While there are limited exceptions, almost all Americans are required to maintain a minimum level of health coverage or face a tax penalty.

January 10: 

Insurance Payments Due for January 1 Coverage

While Americans had until December 24 to enroll in a plan to receive coverage starting January 1, many health plans are accepting first payments for these policies until January 10. America’s Health Insurance Plans announced late last year that “Health plans across the country are voluntarily giving individual market enrollees who select a plan by December 23 more time to pay their first month’s premium.”

If enrollees pay their first premiums by January 10, they will be able to claim benefits retroactive to January 1. The goal of this extension is to allow as many people to keep coverage following the tumultuous year-end rush to enroll.

March 31:

Open Enrollment Period Ends

The initial Exchange “open enrollment” period that began October 1, 2013 closes at the end of March. Federal regulators wanted to allow as many people to enroll in health plans under the new system as possible. In light of the early difficulties with federal and state Exchange systems, the lengthy enrollment period affords consumers more time to learn about the new system and shop for a plan that suits their needs.

After March 31, consumers will only be able to enroll in new plans following qualifying events such as the birth of a child or loss of employer-sponsored coverage. Americans who do not purchase coverage by this date may be subject to a tax penalty under the ACA.

May 31: 

Health Plan Rate Filings Due

Rate filings for 2015 plans must be submitted by the end of May. The filing deadline was initially April 30, but the deadline has been extended by a month to allow insurers more time to calculate their expected costs. Because 2014 open enrollment does not end until March 31, insurers have been given more time to analyze the enrollment data. While last year’s premium rates were highly anticipated, 2015 rates will be equally important to watch as insurers begin to factor real information about Exchange enrollment trends into their premium calculations.

October 1: 

All Renewal Coverage Must Be ACA Compliant

After receiving critical feedback last fall about Americans losing coverage, President Obama made an administrative policy change to uphold his promise that people could keep their insurance. According to Centers for Medicare & Medicaid Services (CMS), plans renewed after October 1, 2014 must be one of the plans originally "grandfathered in" back in 2010, or they must meet ACA coverage requirements. It’s possible a new wave of complaints about cancelled coverage will emerge next fall, which was avoided for one year due to the President’s administrative action.

November 4:

Mid-Term Elections

The mid-term elections will play a role in the future of the ACA and the 2016 presidential election. In particular, Republicans may have a chance to regain control of the U.S. Senate, which they lost in 2006. This could have a significant impact on key elements of the ACA in 2015. 

November 15: 

2015 Open Enrollment Begins

Because of the extension of the rate filing deadline, open enrollment will begin a month later than expected. Running from November 15, 2014-January 15, 2015, next year’s open enrollment period will be significantly shorter than the inaugural year, but will be lengthier than traditional enrollment periods. Once again, we will be analyzing trends in Exchange and non-Exchange-based enrollments.

January 1, 2015: 

Employer Mandate Begins

At the end of 2014, the Employer Mandate will re-emerge as a hot potato as it will take effect for large employers on January 1, 2015. As we have discussed in previous blogs, the Employer Mandate was delayed a year. Starting next year, it requires employers with more than 50 full-time equivalent employees to provide full-time workers with affordable coverage, or face penalties/taxes of either $2,000 or $3,000 per employee. The goal is to ensure as many American workers are covered by health plans through their employers as possible.

It’s important to note that the federal health care reform initiative discussed in this blog is referred to by several different acronyms including ACA, PPACA and ObamaCare.

 

How to Keep your Pipes from Freezing

by: Texas Plumbing Diagnostics

Most people are aware that when water freezes, it expands. That’s why your forgotten can of soda in the freezer exploded. When water freezes in a pipe, it will expand in the same way.

If it expands enough, it will burst, water will escape, and serious damage may occur. A 1/8-inch crack in a pipe can spew up to 250 gallons of water in a day. But this is one disaster you can prevent by taking a few simple precautions.

Both plastic and copper pipes are susceptible to freezing. Pipes freeze for a combination of three reasons: a quick drop in temperatures, poor insulation and a thermostat that is set too low.

Water pipes in warmer climates may be more vulnerable to winter cold spells, since the pipes are more likely to be located in unprotected areas outside of the building insulation. Homeowners can be proactive by determining whether they have any plumbing items that need protection, and then ensuring that they provide that protection.

Pipes in attics, crawl spaces and outside walls are all vulnerable to freezing, especially if there are cracks or openings that allow cold outside air to flow across the pipes.

Research at the University of Illinois has shown that wind chill, the same cooling effect of air and wind that causes the human body to lose heat, can play a major role in accelerating ice blockage, and thus, bursting water pipes.

When is it cold enough for pipes to freeze?

Homeowners should be alert to the danger of freezing pipes. Any time temperatures dip to 32 degrees, pipes may freeze, especially when wind chill is a factor.

 Tips to avoid frozen pipes:

• Know where the water cut-off valve is located in your home. Make sure that every responsible person in the home is aware of its location.

• Remove, drain and carefully store hoses used outdoors.

• Keep garage doors shut if any water lines are located inside.

• Seal all openings where cold air can get at unprotected water pipes. As stated above, it’s especially important to keep cold wind away from pipes.

• Pipes in attics and crawl spaces should be protected with insulation or heat. Pipe insulation is available in fiberglass or foam sleeves. Remember, the more insulation you use, the better protected your pipes will be.

• During freezing weather, leave cabinet doors open under kitchen or bathroom sinks (especially if they are located against an outside wall) to allow warmer room air to circulate around pipes. You can also place a small lamp with an incandescent bulb near the pipes. Be sure to remove anything flammable from the area to prevent fires.

• Let faucets drip slowly to keep water flowing through pipes that are vulnerable to freezing. If the dripping stops, it may mean that ice is blocking the pipe. Keep the faucet open to assist in pressure relief.

• Heating cables and tapes are effective for freeze protection. Follow manufacturer’s directions closely when using these products.

• Exterior pipes and hose bibbs (outdoor faucets) should be drained or enclosed in 2-inch insulation sleeves.

• When weather is very cold, keep thermostats at the same temperature day and night. Lowered temperatures at night may contribute to colder attic temperatures and thus, more vulnerable pipes.

What to do if your pipes freeze:

If you turn on your faucets and nothing comes out, the water in your pipes is probably frozen. You may be able to thaw a frozen pipe with the warm air from a hair dryer. Make sure the faucet is open, and never stand in water while operating an electric appliance. Do not use a blowtorch or any open flame to thaw a pipe, to prevent fires.

If your water pipes have already burst, turn off the water at the main shut-off valve in the house. Leave the water faucets turned on. Again, make sure your family members know where the water shut-off valve is and how to operate it. Then call a plumber to help.

Why would my organization need Cyber Liability Coverage?

A large majority of non-profit and social service executive directors, boards of directors and risk managers are not aware that their standard insurance coverages (Commercial GL, Property, D&O, crime) typically don’t provide proper coverage for cyber liability. Most employees and IT professionals don’t know that they (along with their organization) have an exposure to cyber risks and how that exposure can pose a significant financial threat to their institutions.

 A Non-Profit or Social Service organization that...

• Obtains social security numbers, drivers license numbers, bank account numbers of clients or employees
• Has access to patient medical records
• Is in the process of going ‘paperless’ or keeps paper files onsite
• Provides online access to sensitive data
• Allows laptops or access to their network from a remote location
• Relies on their computer network on a daily basis 

Financial Threats to Your Institution:

• Costs to comply with federal and/or state required notification. Per individual, the average cost per record is estimated at $203
• Regulatory proceedings(including fines and penalties) as a result of a privacy breach. This includes HIPAA violations
• Employees (teachers, volunteers) and/or groups of affected individuals(alumni, current students, parents) suing for damages as a result of a privacy breach
• Liability for the transmission of malicious code to an outside party
• Denial of service attack on your network, causing computer system to go down and business interruption expenses
• Intellectual property/privacy lawsuits. These include libel/slander arising out of content that is on your internet or intranet sites 

Given our expertise in underwriting Commercial Package, D&O & EPLI for the social service industry
and other non-profit institutions. We recently developed a cyber product that...

• Is modular. You and your agent are able to pick and choose the appropriate coverage lines
• Is on PHLY’s admitted A++ paper in most states
• Provides industry leading coverage for both 1st party and 3rd party exposures
• Helps you understand. At any point, a cyber underwriter can help explain the coverage to an agent or insured

Information Needed for a Non-Binding Indication for current or prospective PHLY Customers:

• Annual revenues and number of employees

Claim Scenarios for Non-Profit Organizations

• Client information was on a case manager’s laptop that was stolen from her office. Files on the laptop contained patient names, social security numbers, dates of birth, addresses, phone numbers, medical condition information and case information
• Third-party vendor that hosted a foundation’s website experienced a security incident. Customers who donated to the organization may have had their names, dates of birth and credit card information accessed
• Adult day care’s computer network is down for 4 days as a result of a Trojan horse attack and are unable to provide any services as a result. There is a need to hire experts to correct their system and get it back to where it was functioning
• In an effort to go paperless,cleaningcrewataHIVawareness organization discards all employee files in an unsecured dumpster. Personal information of all employees is compromised and those affected join a class action suit against the non-profit
• Animal shelter holding a golf tournament posts information regarding the event on their website. As a result of the shelter not getting permission to use a golf company’s logo, they are sued for copyright infringement