Mid-week update

The ACA includes a provision which amends the Fair Labor Standards Act, a federal minimum wage and overtime law administered by the Labor Department, to require large employers (in this case more than 200 employees) to automatically enroll full time employees into one of their health plans subject to the employee’s right to change that decision. The federal government, which is subject to the FLSA, obviously meets the large employer standard. Because the provision did not include an effective date, the Labor Department decided that the provision would not take effect until the Department issued regulations and no earlier than 2014 when the employer shared responsibility mandate was scheduled to take effect. The IRS delayed that mandate until 2015, and the Labor Department still has not issued implementing regulations. Kaiser Health News explains in this article that the ACA’s automatic enrollment provision is controversial and might be repealed in the lame duck session of Congress.

In the OPM call letter for 2015 benefit and rate proposals, OPM recommended that FEHBP carriers begin to use managed formularies to control prescription drug costs. In that regard, the WSJ’s Pharmalot blog reports on recently announced 2015 changes to the formularies of the two largest prescription drug managers, Express Scripts and CVS Caremark.

Speaking of drug costs, it’s worth noting the Politico report that the American Hospital Association is joining the campaign against Gilead Science’s pricing policy for its Hepatitis C drug, Sovaldi.

Finally Modern Healthcare reports that the Blue Cross organizations in California are chipping in $80 million to finance the backbone for the electronic health record systems in that state.  The insurers also will seed the backbone with claims history, hoping to encourage providers to add the real records. The backbone allows the systems that the federal government has funded to the tune of billions and billions of dollars to communicate with each other thereby allowing for example an emergency room to quickly learn about a patient’s medical history, Good move.

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