MEDIA RELEASE

The American Recovery and Reinvestment Act of 2009, as amended by the Department of Defense Appropriations Act (2010 DOD Act) on Dec. 19, 2009 and the Temporary Extension Act of 2010 (TEA) on March 2, 2010, provides for premium reductions for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA.

Eligible individuals pay only 35 percent of their COBRA premiums; the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage that began on or after Feb. 17, 2009 and lasts for up to 15 months.

To qualify, individuals must experience a COBRA qualifying event that is the involuntary termination of a covered employee’s employment. The involuntary termination must generally occur during the period that began Sept. 1, 2008 and ends on March 31, 2010.

However, TEA also provides that an involuntary termination of employment is a qualifying event for purposes of ARRA if the involuntary termination:
occurs on or after March 2, 2010 and no later than March 31, 2010; and
follows a qualifying event that was a reduction of hours that occurred at any time from Sept. 1, 2008 through March 31, 2010.

What is COBRA?

COBRA gives workers and their families who lose their health benefits the right to purchase group health coverage provided by the plan under certain circumstances.

If the employer continues to offer a group health plan, the employee and his/her family can retain their group health coverage for up to 18 months by paying group rates. The COBRA premium may be higher than what the individual was paying while employed, but generally the cost is lower than that for private, individual health insurance coverage.

The plan administrator must notify affected employees of their right to elect COBRA. The employee and his/her family each have 60 days to elect the COBRA coverage; otherwise, they lose all rights to COBRA benefits.

COBRA generally does not apply to plans sponsored by employers with fewer than 20 employees. Many states have similar requirements for insurance companies that provide coverage to small employers. The premium reduction is available for insurers covered by these state laws.

Changes Regarding COBRA Continuation Coverage Under ARRA, as amended by the Temporary Extension Act of 2010

TEA extended the COBRA premium reduction eligibility period for one month until March 31, 2010. TEA also expanded eligibility to individuals who experience a qualifying event that is a reduction of hours occurring at any time from Sept. 1, 2008 through March 31, 2010, which is followed by an involuntary termination of employment on or after March 2, 2010 through March 31, 2010.

This expansion also includes a second election opportunity for these individuals who had a reduction of hours qualifying event followed by an involuntary termination, if they did not elect COBRA continuation coverage when it was first offered OR elected but subsequently discontinued COBRA.

Eligibility for the Premium Reduction

The premium reduction for COBRA continuation coverage is available to “assistance eligible individuals”. An “assistance eligible individual” is the employee or a member of his/her family who elects COBRA coverage timely following a qualifying event related to an involuntary termination of employment that occurs at any point from:
Sept. 1, 2008 through March 31, 2010; or
March 2, 2010 through March 31, 2010 if:
the involuntary termination follows a qualifying event that was a reduction of hours; and
the reduction of hours occurred at any time from Sept. 1, 2008 through March 31, 2010.

A reduction of hours is a qualifying event when the employee and his/her family lose coverage because the employee, though still employed, is no longer working enough hours to satisfy the group health plan’s eligibility requirements.

Generally, the maximum period of continuation coverage is measured from the date of the original qualifying event (for Federal COBRA, this is generally 18 months). However, ARRA, as amended by TEA, provides that the 15 month premium reduction period begins on the first day of the first period of coverage for which an individual is “assistance eligible.”

This is of particular importance to individuals who experience an involuntary termination following a reduction of hours. Only individuals who have additional periods of COBRA (or state continuation) coverage remaining after they become assistance eligible are entitled to the premium reduction.

For purposes of ARRA, COBRA continuation coverage includes continuation coverage required under Federal law (COBRA or Temporary Continuation Coverage) or a State law that provides comparable continuation coverage (for example, so-called “mini-COBRA” laws).

Those who are eligible for other group health coverage (such as a spouse’s plan) or Medicare are not eligible for the premium reduction. There is no premium reduction for periods of coverage that began prior to Feb. 17, 2009.

Assistance eligible individuals who pay 35 percent of their COBRA premium must be treated as having paid the full amount. The premium reduction (65 percent of the full premium) is reimbursable to the employer, insurer or health plan as a credit against certain employment taxes.

Period of Coverage

The premium reduction applies to periods of coverage beginning on or after Feb. 17, 2009. A period of coverage is a month or shorter period for which the plan charges a COBRA premium. The premium reduction for an individual ends upon eligibility for other group coverage (or Medicare), after 15 months of the reduction, or when the maximum period of COBRA coverage ends, whichever occurs first. Individuals paying reduced COBRA premiums must inform their plans if they become eligible for coverage under another group health plan or Medicare.

Notice Requirements

ARRA, as amended by TEA, mandates that plans notify certain current and former participants and beneficiaries about the premium reduction. The Department is updating its existing models and creating several additional models to help plans and individuals comply with these requirements.

Each model notice will be designed for a particular group of individuals and will contain information to help satisfy ARRA’s notice provisions, including those added by TEA. As soon as the notices are complete, they will be available on EBSA’s Web site at www.dol.gov/cobra

Expedited Review of Denials of Premium Reduction

Individuals who are denied treatment as assistance eligible individuals and thus are denied eligibility for the premium reduction (whether by their plan, employer or insurer) may request an expedited review of the denial by the U.S. Department of Labor.

The department must make a determination within 15 business days of receipt of a completed request for review. The official application form is available at www.dol.gov/COBRA and can be filed online or submitted by fax or mail.

Switching Benefit Options

If an employer offers additional coverage options to active employees, the employer may (but is not required to) allow assistance eligible individuals to switch the coverage options they had when they became eligible for COBRA. To retain eligibility for the ARRA premium reduction, the different coverage must have the same or lower premiums as the individual’s original coverage.

The different coverage cannot be coverage that provides only dental, vision, a health flexible spending account, or coverage for treatment that is furnished in an on-site facility maintained by the employer.

Income limits

If an individual’s modified adjusted gross income for the tax year in which the premium assistance is received exceeds $145,000 (or $290,000 for joint filers), then the amount of the premium reduction during the tax year must be repaid.

For taxpayers with adjusted gross income between $125,000 and $145,000 (or $250,000 and $290,000 for joint filers), the amount of the premium reduction that must be repaid is reduced proportionately. Individuals may permanently waive the right to premium reduction but may not later obtain the premium reduction if their adjusted gross incomes end up below the limits.

If you think that your income may exceed the amounts above, consult your tax preparer or contact the IRS at www.irs.gov

New Penalty Provision

TEA also provides that the appropriate Secretary may assess a penalty against a plan sponsor or health insurance issuer of up to $110 per day for each failure to comply with such Secretary’s determination 10 days after the date of the plan sponsor’s or issuer’s receipt of the determination.

This fact sheet has been developed by the U.S. Department of Labor, Employee Benefits Security Administration, Washington, DC 20210. It will be made available in alternate formats upon request: Voice phone: 202-693-8664; TTY: 202-501-3911.

In addition, the information in this fact sheet constitutes a small entity compliance guide for purposes of the Small Business Regulatory Enforcement Fairness Act of 1996.

— Find out more:
www.dol.gov/

Gov. Linda Lingle has issued the following statement intended as an opinion/editorial on health care reform:

‘With Congress poised to reconcile the Senate and House versions of national health care reform legislation, this is a critical time for the people of Hawaii to understand why neither bill is good for our state or nation.

To begin with, both versions of health care reform would impose massive unfunded mandates on state governments. Some of the costliest mandates for Hawaii are in Medicaid.

Because we fund Medicaid with both federal and matching state dollars, expanding eligibility and benefits would cost Hawaii taxpayers, conservatively, more than $300 million over five years.

In Hawaii, we have some of America’s most generous Medicaid programs – especially for children. Medicaid enrollment jumped by almost 15 percent in 2009, and last spring the State Department of Human Services had to delay $43.5 million in payments for medical care because of a serious budget shortfall.

Nearly one year later, we are still unable to catch up with our Medicaid funding deficit, and it is about to get worse – a lot worse. On January 1, 2011, the boost to states for Medicaid programs from the national stimulus funding will come to an abrupt end after nine quarters. That means Hawaii will stop receiving more than $350 million in federal funds.

It would take a tremendous sacrifice for Hawaii to maintain the generous eligibility standards and benefits low-income residents currently enjoy in our Medicaid programs. It would take an even greater sacrifice to pay for new federal unfunded mandates required in the Senate and House versions of national health care reform.

If Congress forces Hawaii to further increase Medicaid eligibility and benefits, we could only pay the bill by slashing other government programs or by raising taxes. Neither option is acceptable, in my opinion.

Here are some other significant problems with the Congressional health care bills:

The Senate version financially penalizes Hawaii and other states that expanded Medicaid coverage prior to the current fiscal crisis, while rewarding states that only provide minimal assistance for their needy residents.

Both bills would federalize most aspects of Medicaid, meaning states would lose the flexibility to control costs and health outcomes.

In exchange for their “yes” votes on health care reform, certain politicians received grossly unfair and possibly unconstitutional “sweetheart deals” that would shift Medicaid costs to other states, including Hawaii.

Neither bill contains meaningful provisions to lower health care costs through medical tort reform.

Neither bill attempts to fix the inefficient practices and abuses that drive costs out of control in the hugely expensive Medicare and Medicaid entitlement programs.

The Senate bill does nothing to address the unfair burden on Hawaii’s taxpayers – currently topping $120 million annually – created by the federal government’s Compacts of Free Association (COFA), which allow migrants from Micronesia, the Marshall Islands and Palau to live in Hawaii.

The House bill makes COFA migrants eligible for Medicaid, which is funded by federal and state dollars, but that is only a half-measure. The U.S. government harmed the home countries of COFA migrants with nuclear weapons testing in the 1940s and 1950s, so it is undeniably a 100 percent federal responsibility to pay for health insurance and all other benefits COFA migrants receive in our state.

In addition, our Congressional delegation would have you believe they scored a legislative coup by bringing additional federal dollars into Hawaii through the Disproportionate Share Hospital (DSH) program. This money is intended to help hospitals defray the cost of treating uninsured or under-insured patients.

What our delegation does not mention, however, is that Hawaii can only receive those federal DSH funds if we put up additional matching state dollars, which are in very short supply as we attempt to overcome a budget deficit of well over $1 billion.

These delegates do not like to mention that our Department of Human Services has already creatively obtained more than $100 million in federal funding to help hospitals provide charity care. And this federal funding does not require a single dollar of additional matching state money.

We all know that America’s health care system has serious problems and that we must act swiftly to achieve fair, affordable and sensible solutions. Unfortunately, the Senate and House bills would take major steps in the wrong direction.

Time is short, but there is still an opportunity to do the right thing. We must “reform the reform bills” during the reconciliation process. Better yet, there is still time to include many alternative proposals offered by minority members of Congress, who have been shunned by the majority and unfairly stereotyped as obstructionists.

Focusing on targeted strategies to fix what is truly broken in the health care system is certainly preferable to forcing our nation’s people to surrender their common sense and independence to a hurried, fiscally unsustainable and seriously flawed political boondoggle.

I urge our residents to make their voices heard in Washington before it is too late.”

MEDIA RELEASE

“Medical care for all” is the focus of a public rally set for Wednesday, Aug. 26 at Hilo’s Mooheau Park Bandstand.

An ad hoc committee of concerned citizens is asking those who want single-payer, universal healthcare to turn out 5-7 p.m. to sign petitions to be presented to Hawaii’s Congressional delegation before Congress reconvenes in September. 

Printed information on various healthcare bills and options – including Medicare for all — will also be freely available to the public at the rally.

“The Congressional recess in August is the voting public’s time to connect with their representatives outside the pressure-cooker of the Washington D.C. beltway and its lobbyist culture, to let them know how they feel about legislation that is being worked on,” said Frankie Stapleton, chairwoman of the ad hoc committee.

Since watching Congress authorize $1.75 trillion in bailouts of Wall Street, financial institutions, insurance companies and automakers in the past year, many are wondering why Congress only starts worrying about deficit spending when it comes to providing universal healthcare for the American people, Stapleton said.

The ad hoc committee, which includes members of the League of Women Voters and members of Progressive Democrats of Hawaii, is inviting all elected officials, including Mayor Billy Kenoi and the state’s entire Congressional delegation, to the rally.

“We found the public is frustrated at trying to communicate with their legislators on this vital issue, even though several of them face election next year,” Stapleton said, adding that is the rationale behind the public rally and petition drive.

For more information or to get involved in the rally, call 935-0622, 982-9100, 935-7981 or 965-8945.

MEDIA RELEASE

The Hawaii Medical Service Association (HMSA) Medical School Travel Support Program has provided nearly $90,000 to subsidize travel and living expenses for medical students assisting physicians on Kauai, Lanai, Maui, Molokai, and Hawaii (Hilo and Kona). 

The program, part of a two-year commitment with the John A. Burns School of Medicine (JABSOM), provides valuable Neighbor Island training opportunities for students and much needed health care resources for rural communities.

The HMSA Medical School Travel Support Program makes it possible for additional medical students to perform rotations on the Neighbor Islands where they work with rural physicians to help improve access to quality health care in those communities. 

The program gives Oahu medical students valuable experience that may help shape their decisions about where to practice.

“In an effort to ‘grow our own healers,’ HMSA and JABSOM joined forces last year to provide more medical school students with the opportunity to train on the Neighbor Islands,” said HMSA Senior Vice President Cliff Cisco. “Ultimately, we hope some students return to the Neighbor Islands to practice. In the meantime, they are helping local physicians and rural communities.”

“By working in rural areas, our medical students find out what wonderful practice opportunities there are all across Hawaii,” said Kelley Withy, M.D., associate professor at JABSOM. “HMSA funding has allowed many more students to have these experiences, and we hope the program will grow in the coming year so we can encourage more to practice on the Neighbor Islands.

Program highlights include:

* Six first-year medical school students worked in Kalaupapa under the direction of Kalani Brady, M.D., and provided assistance to physicians in the remote area of Molokai.

* Eight students in the Imi Hoola program provided medical services to rural communities. (Imi Hoola is a 12-month post-baccalaureate program in the Department of Native Hawaiian Health that gives qualified candidates from disadvantaged backgrounds an opportunity to gain valuable experiences and succeed in medical school.)

The John A. Burns School of Medicine, UH Manoa was established in 1965 and has trained more than 4,500 medical doctors (medical school and residency program) to date. 

Approximately half of the physicians practicing in Hawaii are graduates of the John A. Burns School of Medicine MD or residency program.

The University of Hawaii Foundation, a nonprofit organization, raises private funds to support the University of Hawaii System.  

Its mission is to unite donors’ passions with the University of Hawaii’s aspirations to benefit the people of Hawaii and beyond. This is done by raising private philanthropic support, managing private investments, and nurturing donor and alumni relationships.

HMSA is a nonprofit, mutual benefit association founded in Hawaii in 1938. It is governed by a community board of directors that includes representatives from health care, business, labor, government, education, clergy, and the community at large. HMSA is a member of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans. 

Nationally, HMSA and 38 other Blue Cross and Blue Shield plans provide worldwide coverage to more than 100 million members.

By KARIN STANTON/Hawaii247.org Contributing Editor

 
Incoming Senator Josh Green is making his case for universal health insurance coverage for children ahead of next month’s Legislative session.

In an newsletter issued Thursday, Dec. 4, Green said children with healthcare coverage are healthier, do better in school, and become more productive members of society requiring less state resources. Alternately, he said, uninsured individuals place a financial burden on an already ailing hospital system.

“It is the responsible and compassionate thing to do for our children and it is a good investment,” said Green, who is an emergency room physician and made health care issues his top priority during his tenure in the state House of Representatives.

Green said Hawaii has done a better job providing affordable health insurance to it’s people than virtually any other state, primarily because the Prepaid Health Act of 1974 mandates employers provide health coverage for workers who work more than half-time.  

Today, approximately 10 percent of Hawaii residents are uninsured, most of whom are part-time workers and younger individuals. The uninsured rates for children has hovered between 3 percent and 5 percent for the last several years. 

While a member of the state’s House of Representatives, Green worked with a coalition of stakeholders to initiate a plan to cover every child in the state.

Key players in this attempt at universal coverage for children included Hawaii Covering Kids, the state Legislature, the Department of Human Services/Governor’s Office, the Hawaii Primary Care Association and HMSA.  

In 2006, the Keiki Care law was passed to ensure healthcare coverage for every child in Hawaii – either through Quest, Keiki Care or employer programs – and ultimately covered 2,000 children, Green said.

When the global recession hit, the administration was forced to cut the Keiki Care program temporarily from the budget. This cost was $50,000 per month and was matched by HMSA, he said.

Green said he and the other stakeholders now are reaching out to the philanthropic community for $600,000 annually to restore Keiki Care. 

“And we continue to rely on the extraordinary efforts of Hawaii Covering Kids, DHS and the Primary Care Association which have kept Hawaii in the top group of states where covering kids with health insurance is concerned,” Green said. 

— Find out more:

Josh Green: www.joshgreen.org, sengreen@capitol.hawaii.gov