Two Individual Fiduciaries Liable for Payment of $4.7 Million for Bilking Welfare Benefit Plan

December 12, 2014 at 10:59 am | Posted in Employment Law, ERISA, Essential Health Benefits | Leave a comment
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 Two Individual Fiduciaries Liable for Payment of $4.7 Million for Bilking Welfare Benefit Plan;

 Lawsuit was filed 9 years ago.

 

The DOL issued the following announcement yesterday:

CHERRY HILL, N.J. – A federal judge has found the fiduciaries of a defunct national multi-employer benefit plan based in Cherry Hill, are liable for approximately $4.7 million in assets that were improperly diverted. James Doyle and Cynthia Holloway, fiduciaries to the Professional Industrial Trade Workers Union Health and Welfare Fund, must make restitution to the plan, with interest, for violating the Employee Retirement Income Security Act.

The decision resolves a lawsuit filed by the U.S. Department of Labor in 2005 and subsequent legal proceedings stemming from an investigation conducted by the department’s Employee Benefits Security Administration.

“Doyle used this benefit plan as the guise for an illegal moneymaking scheme that jeopardized the well-being of countless workers and their families.  Holloway was in a position to put an end to the fraud, but failed to act,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “The department’s persistence in pursuing this case through an appeal should send a message to those who think they can get away with conducting such an outlandish scheme.”

The court determined that Doyle and others used the fake Professional Industrial Trade Workers Union as a front for a scheme to operate a purported, union-sponsored employee benefit plan.  To obtain medical benefits from the plan, employers and workers across the United States were required to join the phony union and make payments.  Rather than use the funds to pay out health care benefits and pay reasonable costs of administration, most of the payments were used to cover bogus expenses including “union dues.” While Doyle diverted money that should have been used to pay benefits, Holloway failed to act as a prudent and loyal fiduciary by failing to put a stop to the scheme.

The court also found that the defendants marketed and ran the health plan in violation of federal law when they failed to administer the fund’s assets for the exclusive purpose of providing benefits to the fund’s participants and beneficiaries.

Filed in the U.S. District Court for the District of New Jersey, the decision permanently bars Doyle and Holloway from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan, and appoints an independent fiduciary to administer and ultimately terminate the plan.  At its height, the plan had approximately 2,500 participants.

The investigation was conducted by the EBSA Philadelphia Regional Office. The case was litigated by the New York Regional Office of the Solicitor and the department’s Division of Plan Benefits Security.

Workers participating in employer-sponsored health and retirement benefit plans, who feel that they have been denied a benefit appropriately or have questions about benefits laws, can contact an EBSA benefits advisor by http://www.askebsa.dol.gov or calling 866-444-EBSA (3272).

HHS Announces Increase in Healthcare.Gov November Enrollment Figures: Significant Number Going to Medicaid Expansion

December 11, 2013 at 1:02 pm | Posted in Affordable Care Act, Compliance, Essential Health Benefits, Health and Human Services, Health Care, Health Insurance Exchanges, Health Insurance Marketplace, Medical, PPACA | Leave a comment
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This morning HHS reported that nearly 365,000 individuals have selected plans from the state and federal Marketplaces by the end of November. HHS reported, among other things, that:

  • November’s federal enrollment number outpaced the October number by more than four times.
  • Nearly 1.2 million Americans, based only on the first two months of open enrollment, have selected a plan or had a Medicaid or CHIP eligibility determination.
    • Of those, 364,682 Americans selected plans from the state and federal Marketplaces; and
    • 803,077 Americans were determined or assessed eligible for Medicaid or CHIP by the Health Insurance Marketplace.
  • 39.1 million visitors have visited the state and federal sites to date.
  • There were an estimated 5.2 million calls to the state and federal call centers.

What “may” be a troubling sign is that, to date, the majority of enrollees have been directed into Medicaid or CHIP coverage and are not paying premiums for their coverage. HHS is hopeful that the premium-paying, working “young invincibles” (ages 19-35), who are a key actuarial pillar to the Affordable Care Act, will enroll closer to the end of the enrollment period in March 2014.

A copy of the HHS Release and accompanying report is here: http://www.hhs.gov/news/press/2013pres/12/20131211a.html

U.S. Supreme Court to Address Constitutionality of Affordable Care Act’s Contraception Mandate On Private Employers

November 26, 2013 at 1:04 pm | Posted in Affordable Care Act, Compliance, Creditable Coverage, Essential Health Benefits, Federal Laws, Health Care, Medical, PPACA, Regulations, Wellness | Leave a comment
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The Supreme Court announced today that it will accept for hearing and decision the constitutional challenge to the Affordable Care Act’s (ACA) contraception mandate as it applies to private employers who have a religious objection to the mandate. The contraception mandate is part of one of the ten required health essential benefits (women’s preventive health services) required of health plans under ACA.

There is currently a disagreement among the federal Circuit Courts of Appeals as to its constitutionality. It is reported that the hearing will be this spring.

Regulatory Green Light, Red Light! President Obama “Allows” Health Insurers Discretion to Reinstate, Upon Request, Individual Coverage Not Compliant with ACA Essential Benefits Requirements

November 18, 2013 at 9:15 am | Posted in Affordable Care Act, Compliance, Essential Health Benefits, Health and Human Services, Health Care, Health Insurance Exchanges, Health Insurance Marketplace, Medical, PPACA, Regulations | Leave a comment
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President Obama held a brief news conference Thursday, November 14, where he announced that his administration would “allow” health insurance companies, without any legislative amendment to the Affordable Care Act (ACA) to reinstate, at a consumer’s request, individual health insurance earlier cancelled this year. However, insurers will be required to educate individual policyholders that they should first explore whether they could get a better plan from healthcare.gov before asking for their cancelled coverage to be reinstated. As of November 14, there were no regulations or legislative amendments that allow for the remedy. However, HHS and CMS sent out a letter to health insurers telling they “may” do so. Apparently what the President is doing is putting the onus on the health insurance industry to make the change voluntarily so the legislative process can be avoided.

The Hill publication reports that Karen Ignagni, president of America’s Health Insurance Plans (AHIP), said the administration’s move could damage the insurance market.

“The only reason consumers are getting notices about their current coverage changing is because [ObamaCare] requires all policies to cover a broad range of benefits that go beyond what many people choose to purchase today,” Ignagni said in a statement.

“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers.”

Only time will tell what actually happens.

A link to the letter from HHS/CMS is at
http://www.cms.gov/CCIIO/Resources/Letters/Downloads/commissioner-letter-11-14-2013.PDF

HHS Commits $12,000,000 Toward Funding Residency Programs for PCPs

July 22, 2013 at 10:23 am | Posted in Affordable Care Act, Essential Health Benefits, Health and Human Services, Health Care, Medical, PPACA | Leave a comment
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In anticipation of the backlog of soon-to-be millions of newly insured Americans under the Affordable Care Act looking for a primary care physician to accept them as patients, the Department of Health and Human Services announced $12 million in grants to 32 teaching hospitals across the country. New England recipients are the Greater Lawrence Family Health Center in Lawrence, Massachusetts and the Penobscot Health center in Bangor, Maine.

A copy of HHS Press Release is here: http://www.hhs.gov/news/press/2013pres/07/20130719a.html

White House Announces that President Obama Will Veto Any Legislation that Attempts to Delay the Individual Mandate Requirement Beyond 1-1-14

July 17, 2013 at 10:19 am | Posted in Affordable Care Act, Essential Health Benefits, Federal Laws, Health Care, Health Insurance Exchanges, Health Insurance Marketplace, Medical, Regulations | Leave a comment
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Subsequent to the Obama Administration’s announcement earlier this month that the large employer “pay or play” mandate would be delayed until 2015, Congress has been exploring legislation that would delay the January 1, 2014 requirement that individual U.S. citizens have health insurance, the “individual mandate,” to 2015 as well. Yesterday the White House announced that the President would veto any legislation that sought to delay the individual mandate. The Congressional Budget Office also announced that any House Republican’s bill to delay the individual mandate would cut the deficit, but would cause insurance premiums to rise upwards to 10-15%.

A copy of the White House veto threat statement can be found here: http://www.whitehouse.gov/sites/default/files/omb/legislative/sap/113/saphr2667r_20130716.pdf

Massachusetts Health Connector Announces It Will Become The Health Insurance Marketplace On 10-1-13 Under the Affordable Care Act

July 16, 2013 at 11:59 am | Posted in Affordable Care Act, Essential Health Benefits, Health Care, Health Insurance Exchanges, Health Insurance Marketplace | Leave a comment
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The Massachusetts Health Insurance Connector Authority released the following announcement:

The Health Connector: The Health Insurance Marketplace that Serves You

As you may know, the Health Insurance Marketplace, a new way to find affordable, quality health coverage, opens for business October 1. The Marketplace simplifies your search for health coverage by gathering the options available in your area in one place. With one application you can compare plans side-by-side based on price, benefits, quality, and other features important to you before you make a choice. Every state will have a Marketplace. Since you live in Massachusetts, the Health Connector is the Health Insurance Marketplace to serve you. Instead of HealthCare.gov, you’ll use the Health Connector website to apply for coverage, compare plans, and enroll.

Visit the Health Connector now to learn more and to stay connected with the latest news from your state Marketplace. Signing up for updates directly or joining available social channels from the Health Connector is the best way for you to get and share information.

Open enrollment starts October 1, 2013. Coverage starts as soon as January 1, 2014.

Congress and Administration Battle Over Funds Necessary for Creation and Operation of “Federally Run” Affordable Care Act Exchanges

April 12, 2013 at 9:35 am | Posted in Affordable Care Act, Essential Health Benefits, Federal Laws, Health and Human Services, Health Care, Health Insurance Exchanges, Health Insurance Marketplace, Medical | Leave a comment
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Reported in Today’s HealthWatch

The Health and Human Services Department (HHS) said in budget documents Wednesday that it expects to spend $4.4 billion by the end of this year on grants to help states set up new insurance exchanges. HHS had estimated last year that the grants would cost $2 billion. HHS also is asking Congress for another $1.5 billion to help set up federally run exchanges in states that do not establish their own.

HHS Assistant Secretary for Financial Resources Ellen Murray punted Wednesday when asked about the consequences if Congress also denies the new request.

HHS is “determined to make them work,” she said of the exchanges.

Exchanges are intended to function as one-stop shops where consumers can compare and buy private insurance plans if they don’t get coverage through their employers. Each state’s exchange will determine whether customers are eligible for Medicaid or a subsidy to help pay for private coverage, and policies sold through an exchange must meet certain criteria.

The healthcare law did not provide any funds specifically for HHS to set up a federal fallback exchange because lawmakers envisioned most states setting up their own marketplaces

Read more: http://thehill.com/blogs/healthwatch/health-reform-implementation/293071-costs-mount-for-health-laws-exchanges#ixzz2QAO3KKjR

Are the Wheels Starting to Come Off the Car? HHS Reduces the Number of Health Plans Available to Small Businesses on State Insurance Exchanges Starting in 2014 Because of “Operational Challenges.”

April 3, 2013 at 11:33 am | Posted in Affordable Care Act, Essential Health Benefits, Federal Laws, Health and Human Services, Health Care, Health Insurance Exchanges, Health Insurance Marketplace, Medical, PPACA, Regulations | Leave a comment
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There has been genuine bipartisan skepticism as to whether the federal government will be able to meet the ambitious deadlines set for itself and employers in 2014 under the Affordable Care Act. Yesterday, HHS pulled back on one promise: giving small businesses the option to pick from more than one health plan on a state insurance exchange. The following article from today’s New York Times reports on the issue.

Unable to meet tight deadlines in the new health care law, the Obama administration is delaying parts of a program intended to provide affordable health insurance to small businesses and their employees – a major selling point for the health care legislation.

The law calls for a new insurance marketplace specifically for small businesses, starting next year. But in most states, employers will not be able to get what Congress intended: the option to provide workers with a choice of health plans. They will instead be limited to a single plan.

The choice option, already available to many big businesses, was supposed to become available to small employers in January. But administration officials said they would delay it until 2015 in the 33 states where the federal government will be running insurance markets known as exchanges. And they will delay the requirement for other states as well.

The promise of affordable health insurance for small businesses was portrayed as a major advantage of the new health care law, mentioned often by White House officials and Democratic leaders in Congress as they fought opponents of the legislation.

Supporters of the law said they were disappointed by the turn of events.

The delay will “prolong and exacerbate health care costs that are crippling 29 million small businesses,” said Senator Mary L. Landrieu, Democrat of Louisiana and the chairwoman of the Senate Committee on Small Business and Entrepreneurship.

In the weeks leading up to the passage of the health care legislation in 2010, Ms. Landrieu provided crucial support for the measure, after securing changes to help small businesses.

The administration cited “operational challenges” as a reason for the delay. As a result, it said, most small employers buying insurance through an exchange will offer a single health plan to their workers next year.

Health insurance availability and cost are huge concerns for small businesses. They have less bargaining power than large companies and generally pay higher prices for insurance, if they can afford it at all.

The 2010 law stipulates that each state will have a Small Business Health Options Program, or SHOP exchange, to help employers compare health plans and enroll their employees.

One of the most important tasks of the exchange is to simplify the collection and payment of monthly premiums. An employer can pay a lump sum to the exchange, which will then distribute the money to each insurance company covering its employees.

The Obama administration told employers in 2011 that the small business exchange would “enable you to offer your employees a choice of qualified health plans from several insurers, much as large employers can.” In addition, it said, the exchange would “consolidate billing so you can offer workers a choice without the hassle of contracting with multiple insurers.”

Exchanges are scheduled to start enrolling people on Oct. 1, for coverage that begins in January. However, the administration said that the government and insurers needed “additional time to prepare for an employee choice model” of the type envisioned in the law signed three years ago by President Obama.

D. Michael Roach, who owns a women’s clothing store in Portland, Ore., said the delay was “a real mistake.”

“It will limit the attractiveness of exchanges to small business,” he said. “We would like to see different insurance carriers available to each of our 12 employees, who range in age from 21 to 62. You would have more competition, more downward pressure on rates, and employees would be more likely to get exactly what they wanted.”

John C. Arensmeyer, the chief executive of Small Business Majority, an advocacy group, said that the delay of “employee choice” was “a major letdown for small business owners and their employees.”

“The vast majority of small employers want their employees to be able to choose among multiple insurance carriers,” Mr. Arensmeyer said.

Small Business Majority supported Mr. Obama’s health care law.

That support was invaluable to Democrats who pushed the bill through Congress. Representative Nancy Pelosi of California, who was speaker at the time, cited the group’s research as evidence that “small businesses will benefit from health insurance reform.”

However, in recent weeks, insurance companies urged the administration to delay the employee choice option.

“Experience with Massachusetts has demonstrated that employee choice models are extremely cumbersome to establish and operate,” the health insurer Aetna said in a letter to the administration in December.

Insurers said that the administration was partly responsible for the delay because it did not provide detailed guidance or final rules for the small-business exchange until last month.

Businesses with up to 100 employees will be able to buy insurance in the exchanges. In 2014 and 2015, states can limit participation to businesses with 50 or fewer employees. Companies with fewer than 25 workers may be able to obtain tax credits for up to two years of coverage bought through an exchange. States can open the exchanges to large employers in 2017.

A few states running their own exchanges, including California and Connecticut, said they planned to offer an employee choice option next year, though it was not required by the federal government.

A stated goal of the 2010 law was to increase “consumer choice” and stimulate competition among insurers.

The law makes it easier for consumers to compare health plans by defining four standard levels of coverage, ranging from the least to the most generous. The law says an employer can pick a level of coverage and then allow employees to choose among all the health plans available at that level.

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