Health Care Reform Facts

Health Care Reform:
What Employers Need to Know

Brown & Brown Insurance Healthcare Reform Update

Update on impacts for schools:          This information has been summarized and reported out by our Health Benefits Broker - Brown & Brown
During March 2010, Congress enacted two new laws which overhaul the United States health care system. These two laws are often referred to as Health Care Reform. For employers, the new laws represent the most significant changes to their health benefit plan since the passage of ERISA.
Many provisions of Health Care Reform are already in effect. The purpose of this bulletin is to summarize key changes that become effective in 2013, 2014 and 2015. It is based upon federal regulations and other guidance published as of July 29, 2013.

Additional Plan Changes Employers will be required to make several additional changes to their health plans to comply with Health Care Reform. The changes include the following:

1. Limit on Medical FSA Contributions
For plan years beginning in 2013, a participant is not permitted to contribute more than $2,500 to the participant’s medical flexible spending account (FSA) under an employer’s Section 125 cafeteria plan. An employer is required to amend its Section 125 plan to include this limit no later than December 31, 2014.

2. Waiting Period
For plan years beginning in 2014, health plans may not impose a waiting period of longer than 90 days for newly-eligible full-time employees. Because coverage must be effective no later than the employee’s 91st day of employment, a plan provision which permits a full- time employee to become a participant in the health plan on the first day of the month after
90 days of employment will not comply.

3. Automatic Enrollment
Employers with more than 200 full-time employees will be required to automatically enroll newly-eligible individuals and reenroll existing employees. No regulations have been issued regarding this requirement. The requirement will not take effect until after the regulations are issued.

4. Cap on Maximum Out-of-Pocket Limits
For plan years beginning in 2014, the maximum out-of-pocket limits for all nongrandfathered plans cannot exceed the maximum out-of-pocket limits for high deductible health plans offered in connection with an HSA. These limits during 2014 will be $6,350 for single coverage and $12,700 for two-person or family coverage.

School Security Protocols Evolving

Following a recent in district security meeting with our local Chief of Police and the Special Security Liaison for the schools, I was struck by the ever changing and evolving protocols related to security in our schools.  In particular, a new movement afoot Nationally for "Lock Down" procedures that includes "Fighting Back!"  Being a former military man this resonates with me and is more in line with my beliefs as I feel our duty and responsibility to our children goes beyond simply hiding with them and waiting for the threat will pass.

As an administrator I understand and support the need for planning, drilling and keeping order during any crisis.  In most cases the established protocols are effective and should continue be carried out as noted in the following article that appeared in 2007:

Back to Lockdown Basics

Schools have been using lockdown protocols with success for the past 30 to 40 years. Acts of workplace violence, emergency room shootings, K-12 and higher education shooting rampages demonstrate the need for our campuses to have this lifesaving capability.

by Michael Dorn - Also by this author

July 01, 2007 | Comments (0) | Post a comment

A public high school in the Asheville, N.C., region had just conducted a lockdown drill in the early 1970s when the need arose to implement an actual emergency lockdown. A mentally ill individual began shooting beverage cans he had placed on the trunk of a car and had to be shot and killed by local police in the front school parking lot. Though clearly a bad situation, lockdown procedures protected students and staff from the dangerous intruder.

While this traditional type of Lock down works for certain situations, many believe it leaves our students, faculty and staff in a defenseless position, which I agree. Fighting back may be the difference between surviving or simply becoming another statistic.  This new protocol is labeled the ALICE method:   ALICE is an acronym for Alert, Lock down, Inform, Counter, and Evacuate.

Marietta Police Department Patrolman, Patrick Gragan recently gave the same information to their local high school stating, "The most important part about Alice is the E, evacuate, put distance between you and the problem," explains Gragan.

Typical classroom in lockdown mode

Inform does away with code words but more so is about telling everyone what is happening at all times and where the shooter is.

Counter is about distracting and actively stopping the shooter.

When looking back at tragic events such as Columbine, we see that the lock down procedures actually lead to higher casualty/death rates as the procedures yielded defenseless unmovable targets.

PTO Risk and Insurance

School Business Administrator's fulfill many roles associated with titles that have entered the mainstream in the private sector such as, Chief Financial Officer (CFO), Chief Operations Officer (COO), and Chief Information Officer (CIO).  In addition to these functions a growing area of our responsibility is that of risk avoidance working in partnership with a district Risk Manager to protect against potential liability ranging from use of facilities to storm preparation and disaster recovery.

One particular aspect of this growing concern is related to PTO/PTA activities involving our schools and support groups.  Perhaps the biggest fallacy is that of insurance coverage afforded to PTO/PTA's through the school district.  While Some PTO/PTAs are protected under the school's blanket policy, that is not the case for many activities.  According to the Risk Manager the first line of defense is to have specific events and actions reviewed by the district and in fact approved by the Board of Education in the minutes of a regular meeting.  This recognizes the activity as a "Board Sponsored Event" and minimizes attempts by the carrier to disallow or challenge afforded levels of coverage consistent with the policy.

Very few School Districts in the country provide coverage for PTO activities. In fact, it is a well known and proven method of loss control for the School District to require all groups using School District facilities carry at least $1,000,000 of General Liability and name the School District on the PTO policy as an Additional Insured. Of the few School Districts which do actually insure some PTO events, it is only with prior approval for a specific event. Also, the School District coverage will not extend to any PTO activities off campus.

 

Keep in mind that of the more than 15,000 public school districts, less than 5% provide insurance coverage for PTO activities and then only over and above a very large deductible such as $500,000 or $1,000,000 which the School District, as a municipality, can afford to pay and which the PTO cannot. (source: RV Nuccio & Associates, Inc.)

That said, some events such as those serving or providing alcohol are prohibited by Board policy and place individuals within the PTO/PTA organization at risk of personal assets including their home.  For that reason it is recommended that PTO/PTA secure direct coverage for specific events called, "Event Insurance" that provide coverage to include 'Liquor Liability'.

A recent policy obtained by our High School PTO for such an event, "Dine Around" dinner fund raiser afforded that group General Aggregate Insurance in the amount of $3 million for only $93.75.  As a BA, I call that a serious return on investment (ROI).