Category: Healthcare

Should My Small Business Provide Health Insurance To Employees?

By: Jack Kerwin

Quality health insurance is, and will remain, one of the most valuable assets an American citizen can possess. Often perceived as a luxury born from large and wealthy companies, health insurance can be offered at the small business level. This blog post will discuss the advantages small business owners create by offering health insurance, explore the current options available, and explain how a new political landscape may shape the health insurance future.

why provide health insurance?

By law, the Affordable Care Act (ACA) does not require small businesses with fewer than fifty full-time employees to provide health insurance packages. However, providing health insurance as a small business owner with few full-time employees has many advantages and should be highly considered by entrepreneurs. Small business owners who provide health insurance may be eligible for lucrative tax benefits. If a  business has fewer than 25 (but no less than ten) full-time employees, pays an average wage of less than $51,600 a year, pays at least half of employee health insurance premiums, and purchases group health insurance coverage through the Small Business Health Options Program (SHOP) Marketplace or through a licensed health insurance agent connected to SHOP, the small business can receive a sizable tax credit. Furthermore, employers can deduct 100% of the monthly premiums they pay on qualifying group health plans from their federal business taxes. Offering health insurance coverage to workers as part of their compensation also allows a business to reduce payroll taxes. Employers may also deduct health savings account contributions from their small business taxes.

Providing quality health insurance as a small business owner has the inadvertent benefit of attracting and retaining quality employees. A 2017 LendingTree survey found 33% of people have turned downed a position due to lack of health insurance. Americans care about quality health insurance and consider it greatly when applying for jobs. A small business owner who provides health insurance will attract a greater pool of candidates. Once hired, the small business owner is able to retain employees and avoid the high costs associated with hiring, onboarding, and training new workers. Finally, a small business owner that provides quality health insurance experiences happier, healthier, and more satisfied employees.

What are my options?

When the legislature passed ACA in 2010, the legislature also created SHOP. SHOP helps business owners with one to fifty employees offer health and dental insurance. SHOP is a point-of-service system small business owners use to look for insurance plans, compare rate and coverage terms, and purchase insurance. Essentially, it acts like an Expedia for health insurance. However, states differ on the implementation of health insurance. Pennsylvania utilizes Pennie, an insurance marketplace like SHOP but does not provide a small business program. Instead, Pennsylvania small businesses are encouraged to utilize group health insurance.

Group health insurance provides employees the option to buy-in to an insurance plan offered by the business owner. A group health insurance plan provides coverage at a lower cost to members since the insurer’s risk is spread across a group of policyholders. Groups must be purchased by individuals and typically require at least 70% participation of group members. The primary advantage of a group health insurance plan is the dispersion of risk, allowing for lower premiums. In 2018, the average per-person premium for small group health insurance was $409 per month, compared to $440 for an individual. Small group health plans had an average deductible of $3,140 per month compared to $4,578 for individual plans. Prices for group health insurance will range depending on factors such as the number of employees and the businesses’ location. Many websites are available to provide free quotes on group health insurance costs.

President Biden, ACA revival, and small business stimulus

Health insurance is one of America’s most debated subjects and has been at the forefront of national politics for years. Former President Trump cut the individual mandate penalty under the ACA with the passing of the 2017 tax bill, disincentivizing Americans to enroll in ACA coverage. President Biden is poised to reinstate the individual mandate, presumptively persuading many Americans to look into health care plans. Now more than ever, small business owners are in a prime position to offer health insurance. Today, as compared to the 1980s, Americans are spending twice as much on health care. U.S. health-care spending grew 4.6% in 2019, reaching $3.8 trillion, or $11,582 per person, according to the Centers for Medicare and Medicaid Services. Out-of-pocket spending grew 4.6% in 2019 to $406.5 billion, a rate of growth that was higher than the 3.8% growth tallied in 2018. The cost of ACA coverage may stay the same, rise, or contract. However, individually purchased insurance such as ACA coverage is likely to remain more than group health insurance. President Biden has also campaigned on the promise to better subsidize health insurance and reinvigorate small business growth through an expansive stimulus package. All of these factors indicate a small business owner would be in a better business and financial position if a form of health care is offered to employees.

conclusion

Whether a business is established, starting out, or a future dream, health insurance coverage deserves consideration when planning for success. A small business that provides health insurance can take advantage of prime tax incentives, draw and retain quality employees, and foster a productive work environment. The need for health insurance will never deteriorate completely and uniform federal care is constantly changing. Small business owners have an incredible ability to provide health insurance, an ability that should always be explored.

This post has been reproduced with the author’s permission. It was originally authored on February 10, 2021, and can be found here.

Jack Kerwin, at the time of this post, is a 3L at Penn State Dickinson School of Law. Jack was born and raised in Central Pennsylvania. Following graduation, he will be working at the law firm of Kerwin and Kerwin. While at Kerwin and Kerwin, he will help establish, expand, and protect small businesses.  Jack’s hobbies include fly fishing, running, going out to eat, and spending time with his fiancé, Katie, and his dog, Beau.

 

Sources

Caitlin Bronson, The Tope 5 Small Business Health Insurance Options in 2020, PeopleKeep, (January 6, 2020), https://www.peoplekeep.com/blog/top-5-small-business-health-insurance-options-in-2020.

eHealth, 9 Reasons to Offer Small Business Health Insurance, eHealth (January 11, 2021), https://www.ehealthinsurance.com/resources/small-business/9-reasons-to-offer-small-business-health-insurance.

Julia Kagan, Group Health Insurance, Investopedia, (July 11, 2020), https://www.investopedia.com/terms/g/group-health-insurance-plan.asp.

Megan Leonhardt, Americans now Spend Twice as much on Health Care as they did in the 1980s, CNBC (October 9, 2019), https://www.cnbc.com/2019/10/09/americans-spend-twice-as-much-on-health-care-today-as-in-the-1980s.html.

Priyanka Prakash, Small Business Health Insurance Options for 2021, Fundera, (December 16, 2020), https://www.fundera.com/blog/small-business-health-insurance.

Sarah O’Brien, Biden is Pushing for Broader Access to Health Insurance. How you Might Benefit, CNBC (January 27, 2021), https://www.cnbc.com/2021/01/27/biden-healthcare-plan-insurance-benefits.html.

Stephen Miller, What’s Ahead for Health Care Under Biden?, SHRM (November 11, 2020), https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/whats-ahead-for-health-care-under-biden.aspx.

The Health Care Entrepreneur’s Quick Guide to Important Laws: Part 2

By: Anahita Anvari

Health Care Entrepreneurs need to know about the False Claims Act, Qui Tam Provisions and HIPAA. At a recent event, “Health Law 101: Key Legal Issues for Health Care Companies,” speakers identified the top five legal and regulatory issues for health care entrepreneurs to be aware of: The Anti-Kickback Statute, Stark Law, False Claims Act, Qui Tam Provisions, and HIPAA.

This post aims to provide a general overview of the latter three laws: False Claims Act, Qui Tam Provisions, and HIPAA. The Anti-Kickback Statute and Stark Law were addressed in Part 1 of this two-part post.

WHAT ARE THE FALSE CLAIMS ACT (FCA) AND QUI TAM PROVISIONS, AND WHAT DO THEY MEAN FOR ME?

The FCA protects the federal government from paying false or fraudulent claims. You should take steps to comply with the FCA if your business serves patients of government health care programs such as Medicare or Medicaid.

A claim, defined generally, is a request or demand for money or property from the government. Under the FCA, it is illegal to submit claims for payment to the government that you know or should know are false or fraudulent. The FCA also imposes liability when one acts to inappropriately avoid paying money to the government or conspires to violate the FCA. Therefore, you should not submit a claim for payment if, for example, the claim reflects a service that was not truly performed, the bill price is higher than the true price, or the claim incorrectly lists the provider who performed the services. There are no exceptions to this rule.

a. How Are FCA Violations Filed and What Are the Consequences?

Lawsuits for FCA violations may be filed by private citizens (also known as “Relators”) on behalf of the federal government. These lawsuits are permitted under the Qui Tam provisions of the FCA. Relators may receive statutory rewards for filing these lawsuits.

FCA liability may result in a civil monetary penalty for each false claim. Because each false claim is its own penalty, these fines can be detrimental. For example, the Office of Inspector General recently settled a case with a Connecticut provider for violating the FCA. The provider had billed Medicare for procedures that were already included in another billed item, essentially double-billing the government. The settlement was for $792,076.76.

B. How Can I Comply with the FCA?

You should take appropriate steps to comply with FCA by maintaining and implementing an effective compliance program. The seven essential elements to create an effective compliance program are detailed in Part 1 of this post.

Be aware that some states have their own false claims acts. These state laws may differ from the federal law. You should consult with an attorney regarding the laws in your state.

WHAT IS HIPAA AND WHAT DOES IT MEAN FOR ME?

The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) is a federal regulation that governs the privacy and security of protected health information. Protected health information (PHI) is individually identifiable health information in any form (electronic, paper, or verbal) that relates to an individual’s physical or mental health condition, or to the provision and payment of health care to the individual. HIPAA protects PHI when it is transmitted by a covered entity or its business associate. Therefore, your business must comply with HIPAA if it qualifies as a covered entity or business associate. Click here to determine if your business qualifies as a covered entity or a business associate.

A. Are There Exceptions to HIPAA?

There are some limited exceptions to HIPAA. Covered entities may use or disclose PHI without authorization for treatment, payment, and healthcare operations, such as utilization review and credentialing. Other examples include judicial and administrative proceedings, research, or public health emergencies. You should consult with an attorney or compliance professional to be sure the use or disclosure falls within an exception.

B. I Am a Covered Entity or a Business Associate…Now What?

A covered entity or business associate must comply with HIPAA. You should be familiar with the major HIPAA rules and take measures to comply with them:

  • The Privacy Rule establishes criteria for protecting PHI, gives patients certain rights to their health information, and permits use and disclosure of PHI under specific circumstances.
  • The Security Rule requires covered entities and business associates to develop and implement safeguards to protect the confidentiality, integrity, and availability of electronic PHI.
  • The Breach Notification Rule sets forth notification requirements should a breach of unsecured PHI occur.
  • The Enforcement Rule outlines the procedures for investigating potential HIPAA violations and imposing liability.

C. What Are Examples and Consequences of HIPAA Violations?

Generally, HIPAA requires you to protect PHI from unauthorized access, use, or disclosure. Examples of violations include lost or stolen devices that contain PHI, posting PHI on social media, or an employee disclosing PHI to friends or coworkers.

HIPAA violations may result in civil monetary penalties (CMPs), criminal penalties, or mandatory exclusions from participating in Medicare. CMPs range from $100 per violation to $50,000 per violation, depending on the severity. Criminal penalties can result in jail time from one to ten years. For example, a hospital in Texas agreed to a $2.4 million settlement for violating HIPAA after it released the name of a patient to multiple media outlets in a press release.

D. How Do I Comply with HIPAA?

You should comply with HIPAA by implementing safeguards to protect PHI from unauthorized use and disclosure. Examples of safeguards include proper training of employees, use of encryption and decryption of electronic messages, conducting audits, keeping inventory of hardware and electronic devices, conducting periodic risk assessments, reviewing Business Associate Agreements, reporting any security incidents, and consulting with an attorney.

This post was authored February 4, 2019 and reproduced with the author’s consent from here.

Anahita Anvari, at the time of this post, is a second-year law student at Penn State’s Dickinson Law. She is from Southern California and is interested in health care law. Anahita founded the Health Law and Policy Society and is currently serving as an Associate Editor of the Dickinson Law Review.

Sources:
  • For a complete list of sources, see original post here.
  • https://www.justice.gov/sites/default/files/civil/legacy/2011/04/22/C-FRAUDS_FCA_Primer.pdf
  • https://www.hhs.gov/hipaa/for-professionals/faq/covered-entities/index.html
  • https://www.hhs.gov/hipaa/for-professionals/privacy/guidance/business-associates/index.html
  • https://hipaaqsportal.hhs.gov/a/index
  • https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/HIPAAPrivacyandSecurity.pdf
  • https://sites.psu.edu/entrepreneurshiplaw/2018/11/05/health-care-entrepreneurs-guide-to-important-laws/
  • https://www.govinfo.gov/app/details/USCODE-2010-title31/USCODE-2010-title31-subtitleIII-chap37-subchapIII-sec3729
  • https://www.law.cornell.edu/uscode/text/31/3730
  • https://www.hipaajournal.com/what-are-the-penalties-for-hipaa-violations-7096/
  • https://www.hipaajournal.com/hipaa-compliance-checklist/
Photo Sources:
  • http://fcpablog.squarespace.com/blog/2014/11/6/the-false-claims-act-a-primer-for-whistleblowers.html
  • http://www.vhha.com/programs/event/webinar-hipaa-and-new-technologies-using-texting-and-social-media-within-the-rules/
  • https://blog.v-comply.com/compliance-healthcare-industry/

 

The Health Care Entrepreneur’s Guide to Important Laws: Part 1

By: Anahita Anvari

Health Care Entrepreneurs need to know about The Anti-Kickback Statute and Stark Law.  At a recent event, “Health Law 101: Key Legal Issues for Health Care Companies,” speakers identified the top five legal and regulatory issues for health care entrepreneurs to be aware of: The Anti-Kickback Statute, Stark Law, False Claims Act, Qui Tam Provisions, and HIPAA.

This post aims to provide a general overview of the first two laws: The Anti-Kickback Statute and Stark Law, although it is appropriate to flag that violations of either of these laws can form the basis of a False Claims Act violation as well.

What is the Anti-Kickback Statute (AKS) and What Does It Mean for Me?

The AKS is a criminal statute intended to protect against health care fraud and abuse. The law makes it illegal to offer, pay, solicit, or receive a remuneration to induce a referral or generate business of a federal health care program. Therefore, you may not give or receive, or attempt to give or receive, anything of value in return for such referrals or business.

a.  Are There Any Exceptions to the AKS?

The AKS includes several “safe harbor” exceptions. Not meeting a safe harbor does not mean that an arrangement automatically violates the AKS. However, a business arrangement will not be an AKS violation if it meets all the requirements of a safe harbor. Therefore, you should consult with an attorney to determine whether your business arrangement falls squarely within a safe harbor, or how to structure future business arrangements so that they do fall within the safe harbor.

b. What Are Some Examples of AKS Violations?

Examples of kickbacks that may violate the AKS include: cash payments, free meals or gifts provided to physicians, and certain arrangements where payments to a physician exceed the fair market value. This list is not exhaustive and other arrangements may be an AKS violation.

What is the Physician Self-Referral (Stark) Law and What Does It Mean for Me?

 The Stark Law prohibits physicians from referring patients to receive designated health services (DHS), payable by Medicare or Medicaid, from an entity in which the physician or immediate family member has a financial relationship. A list of DHS’ can be found here.

Defined broadly, a “financial relationship” means an ownership or investment interest in an entity, or a compensation arrangement between a physician and an entity. For example, such investment interest could be through ownership of shares in the entity providing the DHS, or an interest in a different entity that holds an ownership or investment interest in the entity providing the DHS. More information about financial arrangements can be found here.

There is no intent requirement to violate the Stark Law.  This means that you may be in violation of the Stark Law even if you did not know of the violation or it was by accident. Therefore, you should consult with an attorney to determine if your business arrangement complies with the Stark Law.

a. Are There Any Exceptions to the Stark Law?

The Stark Law provides over thirty general exceptions, such as referring a patient to another doctor in the same practice group, certain rentals of office space or equipment, and ownership of some publicly traded securities and mutual funds. You should consult with an attorney to determine if your business arrangement meets a Stark Law exception.

b. What Are Some Examples of a Stark Law Violation?

Examples of Stark Law violations include referring patients to a facility in which you have a financial interest, retention of Medicare or Medicaid overpayments, miscoding health care claims to obtain greater reimbursement, billing Medicare of Medicaid for services that did not occur, referring patients for medically unnecessary procedures, and paying physician salaries and bonuses far above the fair market value. This list is not exhaustive and other arrangements may be a Stark Law violation.

What are the consequences of violating the AKS or Stark law?

A violation of the AKS can lead to criminal penalties and administrative sanctions, including imprisonment, civil monetary penalties of potentially $50,000 for each violation, and exclusion from further participation in federal health care programs. A violation of the Stark Law can lead to additional penalties. Depending on the situation, these penalties may be up to $15,000 for each improper claim billed to Medicare or Medicaid, or up to $100,000 for each arrangement.

For example, a Pennsylvania hospital and a regional cardiology group were recently involved in a lawsuit for submitting claims to Medicare and Medicaid that violated the AKS and Stark Law. The claims were based on impermissible referrals from the cardiology group to the hospital. The companies agreed to a settlement totaling $20.75 million.

How Do I Comply with the AKS and Stark Law?

You should take appropriate steps to comply with the AKS and Stark Law by implementing and maintaining an effective compliance program. The Office of the Inspector General (OIG) of the Department of Health and Human Services has identified seven essential elements to create an effective compliance program:

  1. Implementing written policies, procedures, and standards of conduct.
  2. Designating a compliance officer and compliance committee.
  3. Conducting effective training and education.
  4. Developing effective lines of communication.
  5. Conducting internal monitoring and auditing.
  6. Enforcing standards through well-publicized disciplinary guidelines.
  7. Responding promptly to detected offenses and taking corrective action.

While OIG has noted that compliance programs are not “one size fits all,” businesses should put forward a meaningful effort to ensure adequate compliance. Implementing these seven elements into your business’ compliance program can help guarantee your compliance.

As a final note, be aware that some states have their own anti-kickback and self-referral laws. These state laws may be stricter than the federal laws, and may include business arrangements involving private health insurers, rather than just federal health care programs. You should consult with an attorney regarding the laws in your state.

*This post was authored on October 31, 2018.

Anahita Anvari, at the time of this post, is a second-year law student at Penn State’s Dickinson Law. She is from Southern California and is interested in health care law. Anahita founded the Health Law and Policy Society and is currently serving as an Associate Editor of the Dickinson Law Review.

 

Sources: