News in brief - April 11, 2011

Cigna to pay $600,000 fine after underwriting problems are found in N.C.

Philadelphia-based Cigna has agreed to pay a $600,000 fine and refund employers almost $638,000 in premiums after regulators in North Carolina discovered that the company had overcharged some companies for coverage from 2002 to 2004.

Cigna accepted the North Carolina Dept. of Insurance's findings that it had violated state laws, agreed to fix the problems and issue refunds to customers, according to an agreement with the department. It also agreed to hire a third-party vendor to conduct an audit and determine if the company overcharged for coverage from 2005 to 2010.

The company said in a statement that it "made some documentation mistakes and was unable to consistently prove how it determined premiums for some of its clients. We apologize for the problems, and we are working closely with the Dept. of Insurance to rectify this situation."

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CMS to develop meaningful use proxy function

The Centers for Medicare & Medicaid Services announced in March that it will create a function on its website that would allow physicians to assign a proxy to register and attest to meeting the Medicare meaningful use incentive criteria on their behalf.

The feature, requested by physicians in large practices who are required to register individually, will be launched in May. Doctors will need to attest individually, even in large, multiphysician practices, but they can assign a proxy to attest on behalf of all the physicians in their practice.

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Small businesses not required to report cost of health insurance coverage on W-2s

The Patient Protection and Affordable Care Act mandates that companies report the cost of employer-provided health care on W-2 forms. But the requirement is optional for smaller entities for the immediate future, according to guidance issued March 29 by the Internal Revenue Service.

In response to calls to allow more time to get ready for this aspect of health system reform, the reporting requirement is being waived for companies, including medical practices, that issue fewer than 250 W-2 forms for 2011 and 2012 (www.irs.gov/pub/irs-drop/n-11-28.pdf). Including this information on the W-2 will continue to be optional for small employers beyond those years unless subsequent guidance stating otherwise is issued.

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