Some state regulators are starving for more information about small-group health insurance plans.
Many small employers are too broke and too busy to want to think about filling out a new benefits-related form.
The conflict between the regulators’ hunger for data and the small employers’ hunger for more hours in the day is showing up in the public comments on the U.S. Department of Labor’s effort to update the Form 5500 for employee benefits.
The Form 5500 is like a tax return for benefit plans. In some cases, a plan sponsor may use the same Form 5500 to report on the performance of plan to the DOL, the Internal Revenue Service and the Pension Benefit Guaranty Corp.
Regulators now exempt small health plans from 5500 filing requirements. The DOL has started to update the entire 5500, and it’s thinking about adding a Schedule J health insurance section. The Employee Benefits Security Administration, the DOL division in charge of the update, wants to get information about matters such as enrollment, claims, use of self-insurance, and use of stop-loss insurance, or protection for self-insured plans against catastrophic losses.
The comment period for the Schedule J proposal and the rest of the proposed 5500 update is set to end Oct. 4.
At press time, EBSA had not posted any comment letters from health insurers or benefits groups on its section of the DOL website.
But EBSA has posted 23 comments from other types of commenters.
For a look at what the early birds are saying, read on.
Two senators wrote to ask DOL officials to cut through new, Gobeille-related data-collection knots. (Photo: Allison Bell/LHP)
1. Help state insurance regulators and others cope with an ERISA road block.
Teams in Connecticut, Vermont and other states have been working for years to set up “all-payer claims databases,” or databases showing what all types of public and private plans are paying for care, to see how the health care services market is really working and what opportunities there are to cut costs.
The federal Employee Retirement Income Security Act of 1974, an early benefits reform law, lets states continue to regulate the insurance inside benefits plans. But it does not let states regulate employee benefits.
Some claim database managers have tried to require self-insured plans to contribute data to the all-payer claim databases.
The U.S. Supreme Court ruled in March, in connection with Gobeille v. Liberty Mutual Insurance Company, that ERISA prevents states from requiring self-insured employer plans to respond to data calls. The court told Vermont and other states that the DOL should be in charge of gathering any self-insured plan data that state agencies need.
Sen. Ron Wyden (D-Ore.), and Sen. Patty Murray (D-Wash.) have written to ask DOL officials to collect the kinds of information states were seeking before the Gobeille ruling came out.
Otherwise, claim database data “is likely to become skewed toward Medicaid enrollees, who tend to be sicker and more likely to have a disability than privately insured individuals, and Medicare enrollees, who are older than the commercially insured population,” the senators write in their comment letter. “States should have the option to provide transparency in health care prices from all plan types, not just some.”
Some owners and managers of small businesses wrote to say gathering the data to fill out Schedule J would be a nightmare. (Photo: Thinkstock)
2. Let small business owners focus on keeping their businesses going.
Some owners of small businesses and administrators at those businesses have already sent in informal comments asking DOL officials for paperwork mercy.
“PLEASE do no add to any more reporting duties for small businesses!” one wrote. “We are under 25 people and every bit of my time is precious.”
Steve Van Scoik, an insurance agent in Elkhart, Indiana, wrote to say requiring small employers to file 5500 forms could “be the death of small group plans, especially under 50 lives.”
“These small employers are being overcome by all the government reporting,” Van Scoik writes. “I feel as a broker dealing with this market every day that most will throw up their hands and say enough is enough.”
Timothy Stoltzfus Jost, a former Washington & Lee University law professor who represents consumers in proceedings at the Kansas City, Missouri-based National Association of Insurance Commissioners, has asked DOL officials to pay attention to the NAIC and the federal Centers for Medicare & Medicaid Services, to keep any new DOL reporting requirements from displacing or conflicting with any new NAIC or CMS standards.
Otherwise, Jost writes, an insurer might have to feed data for each claim into two or three separate sets of data.
Federal agencies should coordinate with each other and the NAIC “to develop uniform reporting requirements to simply the burden on issuers and health plans,” Jost writes. “Consumers, issuers, health plans, and state and federal regulators should be involved in the process of developing categories and classifications for reporting to ensure that all interests are served and respected.”
Some early commenters say they are too busy coping with new DOL compliance rules to analyze the Schedule J proposal. (Photo: Allison Bell/LHP)
3. Give everyone more time to think.
Several major commenters, including representatives from the Washington-based American Council of Life Insurers and Boston-Fidelity Investments, have written to say that their organizations are swamped with trying to comply with the new DOL fiduciary standard and other DOL requirements, and that they need more time to analyze and respond to the 5500 revision proposal.
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