Employer Health Plans Swimming in Alphabet Soup; Martha Priddy Patterson to Shed Light on New Regulations Under COBRA, HIPAA, HIPDB, and Cafeteria Plans.

Business Editors/Health & Insurance Writers

WASHINGTON--(BUSINESS WIRE)--April 26, 2000

More than 300 pages of new regulations directly affecting most employer health plans have been issued within the last year under COBRA, HIPAA, HIPDB, and rules applying to flexible benefit plans. Employers are suddenly facing this alphabet soup of new regulations regarding health privacy, health care continuation, and data bank reporting on health providers dismissed by employer plans. But the news is not all bad. Martha Priddy Patterson, Director of Employee Benefits Analysis for Deloitte & Touche's Human Capital Advisory Services practice, will speak today at a Certified Employee Benefits Specialist "Focus on Health and Welfare Plans" seminar in Washington, D.C. She will tell participants that some of the new regulations provide the employer with valuable guidance and actually offer more flexibility than employers might have thought they had.

Included in her speech will be information on the Health Insurance Portability and Accountability Act (HIPAA). Under HIPAA, health care data would be subject to stringent federal rules limiting the access and use of individual health care data. The presumption of the rules is that only the individual should have access to his or her medical records; any other access, except as needed for treatment or payment, should be strictly limited. The rules would restrict, if not curtail, employers' efforts to monitor quality of care and control costs. Employers are attempting to develop procedures that would enable them to use the data for these purposes while continuing to preserve the employee's privacy. The proposals would require virtually constant monitoring and recording of all access and uses of health care data.

In addition, the Health Integrity and Protection Databank (HIPDB), a provision of HIPAA, requires employers to report successful actions they take to sue health care providers or drop such providers from their plans for competency reasons.

The Consolidated Omnibus Budget Reconciliation Act, or COBRA, requires that employers offer employees and their dependents who have lost employer health care coverage to continue purchasing their employer coverage at the employee or dependent's own cost. The final regulations resolve many commonly disputed questions. For example, COBRA coverage cannot be denied merely because the individual is eligible for Medicare; the individual must actually be enrolled in Medicare. Employees who had dual coverage with the employer and with a spouse's employer must be offered COBRA coverage if he or she loses employer coverage, even though health care coverage under the spouse's plan is on-going. Employers are not required to permit COBRA-eligible individuals to continue participation in flexible spending accounts, if the individual would have to contribute more than he or she could receive from the account.

Ms. Patterson will also talk about cafeteria plan regulations which increased the employees' rights to change their benefits during the course of the plan year. Employees may change their cafeteria plan benefits if they or their dependents enroll in Medicare, if the employee takes leave under the Family and Medical Leave Act, during special enrollment periods offered under HIPAA, and if there is a change of residence.

Deloitte & Touche's Human Capital Advisory Services practice assists clients in virtually all aspects of retaining, motivating, developing, compensating, and benefiting people. The practice consults to those businesses and industries that provide and insure employee benefits. Human resource, actuarial, insurance, and managed care consultants work with clients to identify, manage, and measure the human capital issue that can impact financial performance.

Deloitte & Touche, one of the nation's leading professional services firm, provides assurance and advisory, tax, and management consulting services through 30,000 people in more than 100 U.S. cities. Deloitte & Touche is part of Deloitte Touche Tohmatsu, a global leader in professional services with more than 90,000 people in over 130 countries. Deloitte & Touche refers to Deloitte & Touche LLP, Deloitte Consulting LLC, and related entities. For additional information, visit Deloitte & Touche's website at www.us.deloitte.com/humancapital.

The seminar will be held Wednesday, April 26, 2000 at the Capital Hilton Hotel, 16th and K Streets, NW. Washington, D.C. from 8am to 3:45pm. Ms. Patterson will be speaking from 1:30 to 2:30 pm. Members of the press are welcome to attend and a copy of her entire remarks is available by calling 510/287-2709.