Hobby Lobby & Conestoga Decision Anticipated; History of Litigation

On Monday, June 30, the U.S. Supreme Court is expected to deliver its decision in Sebelius v. Hobby Lobby (No. 13-354). The Affordable Care Act’s provision requiring group health plans (whether offered by an employer or through the health insurance Marketplace) and individual health plans to include specific preventive health services, including contraception coverage at no extra cost to the insured, has generated more litigation than any other part of the law.

Since November 2012, Wolters Kluwer Law & Business has published over a dozen articles on the two cases at the heart of the litigation involving Hobby Lobby and Conestoga Wood Specialties Corp. These articles have appeared in Health Law Daily and Health Reform WK-EDGE. The decisions themselves, as well as related decisions on the contraception coverage controversy involving for-profit and not-for-profit institutions, appear in Wolters Kluwer’s Health Reform KnowlEDGE™ Center.

In this Special Briefing, we have gathered together all of Wolters Kluwer’s reporting on these two cases. When the Supreme Court releases its decision, our analysis of the decision will be available within hours of the release for our Health Law Daily and Health Reform WK-EDGE subscribers. For our blog readers, please expect news of the decision on Monday, with more in-depth analysis later in the week.

See the Special Briefing here.

 

Insurance Companies Moving Forward with Affordable Care Act

Although public reaction the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) has been mixed, four years after its passage, insurance companies are moving forward under its framework. Around the country, insurance companies are looking to expand their offerings to consumers through private, state and federal Exchanges.

  • Georgia. During the 2014 open enrollment period, insurance was offered by five companies on Georgia’s state Exchange. Currently seven insurance companies will be offering coverage on Georgia’s Exchange for the 2015 open enrollment period. Notably missing are United Healthcare and Cigna, two of the nation’s top providers. However, recent reports indicate that United Healthcare is considering joining the state’s Exchange. United currently only offers insurance on five state exchanges. Advocates of the ACA argue that with more companies offering coverage in each state, consumers are given a wider variety of options and more competitive prices.

 

  • Illinois. Ten insurance companies in Illinois have submitted a total of 504 plans for approval to the state Department of Insurance. Approved plans will then be offered on the state’s Exchange during the 2015 open enrollment period. For the 2014 open enrollment period, eight companies offered a total of 165 plans in Illinois. During the 2014 open enrollment period, approximately 92 percent of th 217,000 people who purchased insurance bought a plan through Blue Cross Blue Shield of Illinois.

 

  • Nationally. The national trade organization America’s Health Insurance Plans, or “AHIP”, is pressing the government to “enhance affordability” by allowing lower premium catastrophic plans for families to be sold on the Marketplace. According to AHIP, “We believe a new catastrophic plan would further the public policy goal of affordability and call upon policymakers to expand consumer choices by allowing this lower-premium option to be offered.” Currently catastrophic plans are only available to a select group of individuals.

 

  • Private exchanges. Reports indicate approximately three million Americans purchased health insurance for 2014 on private Health Insurance Exchanges. Private exchanges are run by corporations and can also referred to as “defined contribution” coverage. In Oregon, Regence BlueCross BlueShield of Oregon recently launched “Regence Marketplace” for Oregon businesses to consider, along with this explanatory marketing video:

Some reports estimate that by 2018, enrollment on private exchanges will surpass federal and state Exchange enrollment. Bain & Co. estimates that up to 80 million Americans will get their insurance from private exchanges by 2018.

Highlight on New Hampshire: Marketplace and SHOP Updates

Four insurance companies will be joining New Hampshire’s state Exchange and will offer health insurance plans to state consumers on the Marketplace beginning with the next open enrollment period, November of 2014. Assurant Health, Harvard Pilgrim Health Care of New England, and Minuteman Health (a Massachusetts-bsed co-op) will join Anthem Blue Cross Blue Shield, which was the only company offering plans on the Marketplace for plan years beginning in 2014. Proponents of the additions argue that more competition will lead to more competitive prices for consumers.

New Hampshire runs a Partnership Marketplace with the federal government, which was approved by Secretary Sebelius in March of 2013. In order to maintain the Partnership Marketplace the state must:

  • Demonstrate the ability to perform all required Exchange activities in line with the attestations it made in its Exchange Blueprint Application Submission; and
  • Comply with regulations and expected progress milestones.

As of April 19, 2014, over 40,000 individuals enrolled with a private plan through the state’s Exchange, and another 7,235 were eligible for Medicaid coverage. The original projection for the state’s 2014 enrollment was 19,000. An overview of the state’s Exchange process can be seen here.

In addition to broadening the choices in the individual Exchange, the state recently closed a comment period that requested opinions on whether or not it is in the best interest of the state’s small group health insurance market to include the employee choice functionality in New Hampshire’s federally operated Small Business Health Options Program (SHOP) during 2015, or if it should delay the functionality until 2016. The comment period was in response to the CMS Final rule on the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) Exchange and Insurance Market Standards for 2015 and Beyond (78 FR 30240).

“Healthy Incentives” Wellness Program Saves County $46 Million Over Five Years

A Seattle area program entitled “Healthy Incentives” that has saved King County $46 million on employee health care since 2006, won the 2013 Innovations in American Government Award, which is bestowed by The Ash Center for Democratic Governance and Innovation at the John F. Kennedy School of Government at Harvard University. The award was established in 1985 by the Ford Foundation to honor government agencies at any level that work to improve the quality of life of citizens.

Healthy Incentives

The Healthy Incentives program has saved King County taxpayers millions of dollars in county employee health care costs. The benefit plan rewards employees with lower out-of-pocket expenses for choosing high quality healthcare plans while participating in wellness activities. The program was created after the realization that employee healthcare costs were rising at a rate three times higher than the Consumer Price Index. The program is credited with:

  • More than 800 individuals quitting smoking
  • Over 2000 individuals classified as overweight or obese have lost at least 5 percent of their weight
  • Fewer health claims for pneumonia, bronchitis and other illness associated with smoking
  • $46 million savings from 2007-2011, with $14.6 million attributed to health improvements of employees

The program has seen a participation rate of 90 percent or higher since its inception. When compared with national averages, participants in Health Incentives lost more weight and smoked less.

Wellness Programs

Although Health Incentives was created before the passage of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), the ACA had multiple provisions to better understand and help employers utilize wellness programs in an effort to reduce cost and increase overall health. Among other things, the ACA provided for a Centers for Disease Control study and evaluation of employer-based wellness programs (sec. 4303), provided for financial grants to small employers with comprehensive workplace wellness programs (sec. 10408), and directed the Secretary to evaluate community-based prevention and wellness programs to develop a plan for Medicare beneficiaries (sec. 4202). In 2013 HHS released a final rule to assist group health plans and health insurance issuers with offering nondiscriminatory incentive programs (Final Rule, 78 FR 33158, June 3, 2013). Discrimination based on health status is prohibited by the ACA. Speaking with Wolters Kluwer, Brooke Bascom, the Healthy Incentives Health Reform Program Manager, noted that the program was designed to reward participation in the program and was not results-based. “It might take seven times to quit smoking and we want to reward someone every time they try,” said Bascom.

The King County Healthy Incentives program has an online Toolkit designed to assist other entities with replicating the program. The Toolkit provides an overview of the program, information on its design, information on partnership with the labor force including a Memorandum of Agreement between management and labor, employee outreach strategies, and measurement and evaluation of the program. Speaking with Wolters Kluwer, Daniel Harsha, Associate Director for Communications at the Ash Center for Democratic Governance and Innovation stated that one of the reasons Healthy Incentives was selected for recognition was the fact that it “served as an important model for other municipal and state governments across the country who are struggling with how to contain rising employee healthcare costs.” Overall the Harvard Ash Center analysis felt the program was well suited for replication.