Healthcare Financial News

The Federal Trade Commission will suspend enforcement of the new “Red Flags Rule” until May 1, 2009, to give creditors and financial institutions additional time in which to develop and implement written identity theft prevention programs.

Federal law defines a creditor to be: any entity that regularly extends, renews, or continues credit; any entity that regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit.  Healthcare providers that accept deferred payment are construed as creditors under the law.

The Red Flags Rule was developed pursuant to the Fair and Accurate Credit Transactions (FACT) Act of 2003. Under the rule, financial institutions and creditors with covered accounts must have identity theft prevention programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft. For more information on the rule and the six-month suspension, read the FTC’s press release.

Most working Americans obtain health coverage through their employers. Neither presidential candidate is proposing to change that, although each of their plans, if enacted, would affect employers substantially. But over a third of U.S. employers (almost exclusively small employers, with fewer than 500 workers) do not sponsor an employee health plan and one of the central questions of the reform debate is how they might be induced to do so. According to a major new employer survey on health care reform released by Mercer, the majority of these employers believe that employee medical coverage is far beyond their means.
 
When asked their primary reason for not offering health coverage, 43 percent of all employers without employee plans answered “I can’t afford it.” Other reasons included employees being covered under other plans (20 percent), high workforce turnover (9 percent), and the perception that employees would rather have more pay than health coverage (9 percent). When asked how much they would be willing to contribute per employee per month if they were to offer a health plan, 59 percent of these employers said that amount ranges from zero to no more than $50. Only 10 percent said they would pay at least $200.
 
“This finding highlights how tough it’s going to be to ask very small employers to voluntarily take on the expense of providing health coverage,” said Linda Havlin, a Mercer worldwide partner. “It also helps explain why even relatively low-cost catastrophic plans like HSAs have not made great inroads with small employers that find it financially challenging to offer coverage.”