Winter 2007
Act 169 Brings Changes To Advance Health Care Planning
On January 29, 2007, Act 169 went into effect, effectively expanding the legal provisions governing individual health care decision-making in Pennsylvania. The Act uses the term “advance health care directive” to describe living wills, health care powers of attorneys and other documents that combine elements of both. The Act contains new compliance and record-keeping requirements applicable to health care professionals, and provides much-needed clarification with respect to the different types of documents that may be used, while providing key definitions of certain terms. Finally, the Act distinguishes health care agents and health care representatives and describes the duties and responsibilities of each. This article will briefly highlight select provisions of Act 169.
Health Care Agents & Health Care Representatives
Prior to the Act, a person could execute a health care power of attorney to appoint an agent to make health care decisions if and when that person became incapacitated. A health care POA was often done in conjunction with the execution of a Will as part of the individual’s estate plan. However, if a person became incapacitated without a properly executed health care POA, medical providers often lacked guidance regarding medical decisions and were hesitant to rely on family members without the authority of a POA. One of the most important things Act 169 does is provide for a “health care representative” in the event an individual without an appointed guardian does not have a health care power of attorney or other advance health care directive that will provide guidance with respect to health care decisions. Similar to the power of a health care agent, the health care representative may make decisions for an incompetent adult patient. The statutory order of priority for determining the health care representative is: spouse, adult child, parent, adult sibling, adult grandchild and close friend.
While this new provision will be helpful to medical providers seeking to make the right decisions for their patients, a health care representative is not a complete substitute for a health care agent appointed by a power of attorney. A health care representative’s authority is not as broad as a health care agent in that the representative’s authority to withhold or withdraw care needed to preserve life only comes into play if the individual is permanently unconscious or has an end-stage medical condition.
New Terminology: Advance Health Care Directives
Under the Act, a health care power of attorney, a living will, or a document that incorporates elements of both are now classified as “Advance Health Care Directives.” A living will is generally a written statement describing an individual’s wishes with respect to life-sustaining medical treatment and other health care issues. A living will becomes effective only after the individual is determined incompetent, permanently unconscious or has an end-stage medical condition (the previous statute used the term “terminal condition”). In contrast, a health care power of attorney is a document that appoints an agent to act on behalf of the individual to make health care decisions. A health care power of attorney can be effective even if the individual is competent, and the authority of the agent is not restricted to end-of-life decision making. The agent under a health care power of attorney may be granted authority as broad as the granting individual would have. Documents that combine the appointment of an agent with directives regarding life-sustaining medical treatment may also be used. The provisions of the Act governing advance health care directives apply regardless of which type of document is used.
Compliance & Record-Keeping
Under the Act, a health care provider presented with any type of advance health care directive must place a copy of the document in the patient’s medical record. When the health care provider is notified that the advance directive is revoked or amended, this must also be documented in the patient’s record. Provisions are also included to ensure that medical directives are transferred along with the patient from one health care facility to another, and the Act requires that a panel be established to address problems resulting from failure to transfer necessary information.
Health care providers may assume that an advance directive that is presented to them is valid and has not been revoked or amended, and the Act provides liability protection for health care providers. The Act also allows for the sharing of medical information by health care providers to aid the health care agent or representative in their decision-making. The Act prohibits health care providers, physicians and their office staff from signing advance health care directives on behalf of a patient they are treating, and hospitals and other health care facilities will be required to adopt policies and procedures to implement the provisions of the Act.
Although most current forms of health care directives remain valid and don’t necessarily need to be changed, the Act provides new sample forms for living wills and health care powers of attorney. It is advisable to consult with an attorney to determine the form and provisions that best suit a particular individual’s needs.
For more information about Act 169 and the topics addressed in the above article, please contact the author Suzanne S. Becker at ssbecker@nssh.com.
Employers Should Be Aware Of HIPAA Non-Discrimination Rule
Now as employers, particularly small employers, feel the economic pinch in the health insurance industry and struggle to provide the same type of health care they once did, many are undertaking an administrative role to reduce costs. HIPAA (Health Insurance Portability and Accountability Act) has added a layer of complexity for employers offering employee benefits packages “in house” as office managers serve as liaisons to the insurer, or even provide administrative oversight for the group plan, including grievance procedures. In December, the final rule prescribing HIPAA “non-discrimination” in insurance practices was issued. The final rule regarding non-discrimination applies to employee benefit plans as well as to issuers of insurance.
Plans Cannot Mandate Similarly Situated Persons Satisfy Different Cost-Sharing Requirements
“Non-discrimination” in this context essentially means that an employer group health plan cannot refuse to offer the same type of benefits package for the same premium or contribution for the group health plan coverage based upon an employee’s “health factor,” (e.g., health status, medical condition, claims experience). In other words, similarly situated employees must be treated similarly. Employers that serve as sponsors, that must certify under HIPAA that any personal health information (PHI) with which they come into contact will not impact any employment decision, or that otherwise have access to employee health information, need to familiarize themselves with these requirements.
Wellness Program Participation Yields Permissible Cost-Savings
However, an important exception to non-discrimination is the permissibility for employers to offer a discount, rebate or other value in exchange, for participation in a qualifying wellness program. A qualifying wellness program is broadly defined to include any program of health promotion or disease prevention, including such non-traditional remedies like aromatherapy. Participation in a wellness program may be encouraged to institute cost-savings for employees in a way that affords the employees some control over the price they pay for coverage. The reward for wellness program participation is limited to 20% of the total cost of coverage under the plan, more if a dependent is also covered by the plan and likewise participates in a wellness program. The final rule clarifies that only programs under which any of the conditions for a reward is based upon an individual satisfying a standard related to a health factor must meet five additional requirements.
Important dates to remember... Effective date of February 12, 2007.
Although effective, the non-discrimination provisions, including wellness program requirements, will be enforced starting July 1, 2007, to plan years beginning on or after that date whose coverage follows the fiscal year, and shall be applied starting January 1, 2008, for employers whose plan coverage follows the calendar year.
For more information about how the Rule may affect your business, you may contact the author Lucinda C. Glinn at lcglinn@nssh.com.
Disclaimer and IRS Circular 230 Notice:
The material on our website and in this newsletter has been prepared for informational purposes only. It does not constitute legal advice, and transmission of information from this site is not intended to create, nor does its receipt constitute, an attorney-client relationship between Nauman Smith Shissler and Hall, LLP and the visitor to this site. The information contained in this newsletter is not intended as tax advice. As required by IRS Circular 230, we inform you that any information contained in this newsletter is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or for the purpose of promoting, marketing or recommending to another party, any tax-related matter addressed herein.
Nauman Smith Shissler & Hall, LLP
200 North 3rd Street, 18th Floor
Harrisburg, PA 17101
717.236.3010
fax: 717.234.1925
info@nssh.com