2013-04-23 healthcare reform

Thrive. Grow. Achieve.

Health Care Reform: Health Plans Overview Matthew Roberts, Account Executive April 23, 2013

AGENDA

WHICH PLANS MUST COMPLY

REFORMS CURRENTLY IN PLACE

2012-2013 COMPLIANCE DEADLINES

2014 COMPLIANCE DEADLINES

WE HAVE YOU COVERED

QUESTIONS

Health Care Reform 2

WHICH PLANS MUST COMPLY?

3 Health Care Reform

WHICH PLANS MUST COMPLY

Rules generally apply to group health plan coverage

Exceptions

Excepted Benefits Retiree-only plans

Excepted Benefits

Accident or disability income coverage Separate dental and vision plans Liability insurance Some FSA’s


GRANDFATHERED PLANS

Grandfathered plan: Group health plan or health insurance coverage in which an individual was enrolled on March 23, 2010

Certain health care reform provisions don’t apply to grandfathered plans, even if coverage is later renewed

A plan can lose grandfathered status by making too many changes to benefits or costs

– Plans will have to analyze status and changes at each renewal


WHICH RULES DON’T APPLY TO GRANDFATHERED PLANS?

Patient Protections

No cost-sharing for preventive services

Non-discrimination rules for fully-insured plans

New appeals process

Quality of care reporting

Insurance premium restrictions

Guaranteed issue and renewal of coverage

Non-discrimination based on health status

Comprehensive health insurance coverage

Limits on cost-sharing

Coverage for clinical trials


WHICH RULES DO APPLY TO GRANDFATHERED PLANS?

Extension of dependent coverage

Elimination of lifetime and annual limits

Elimination of pre-existing condition exclusions

Limits on rescissions

Limits on waiting periods

Summary of benefits and coverage

Reporting medical loss ratio



Small employer tax credit

Dependent coverage up to age 26

No lifetime limits/restrictions on annual limits

No rescissions

No pre-existing condition exclusions for children

No cost-sharing for preventive care services (non-GF plans)

Appeals process changes (non-GF plans)

No reimbursement for OTC medicine or drugs (without a prescription)

Medical loss ratio rules


2012-2013 COMPLIANCE DEADLINES


W-2 REPORTING

Employer must report aggregate cost of group health plan coverage on each employee’s Form W-2.

Does not change the tax rules for health coverage – still not taxable.

Reporting optional for all employers in 2011.

Mandatory for 2012 tax year (W-2 Forms provided in January 2013).

For small employers (filed fewer than 250 W-2 Forms last year), reporting requirement is delayed until further guidance issued.

Covered employers need to be compiling data.


W-2 REPORTING


Report coverage under employer-sponsored group health plans Does not include excepted benefits/plans that don’t provide

health coverage

Aggregate cost must be reported Include both employer- and employee- paid portions Determined under rules similar for determining “applicable

premium” under COBRA

Not required for: Employees who terminate during the year and request a W-2

before the end of the year Employees who would not otherwise receive a W-2

SUMMARY OF BENEFITS AND COVERAGE


Simple and concise explanation of benefits Applies to GF and non-GF plans

Model template and guidance available Instructions Sample language Uniform glossary of terms

Final guidance specifies compliance deadlines Original deadline was March 23, 2012

Issuers to health plans: Sept. 23, 2012

Must be provided 30 days prior to new plan year or within 7 days of renewal acceptance

No duplication required: if issuer provides to enrollees, plan doesn’t have to

60-DAY NOTICE RULE

Material modifications not in connection with renewal must be described in a summary of material modifications (SMM) or an updated SBC

Material modification:

Enhancement of covered benefits or services Material reduction in covered benefits or services More stringent requirements for receipt of benefits

Must be provided at least 60 days BEFORE modification becomes effective.


PREVENTIVE CARE FOR WOMEN

Must provide coverage for women’s preventive health services without any cost-sharing

Applies to non-GF plans No deductible, copayment or coinsurance

Effective for plan years beginning on or after August 1, 2012

Covered Health Services

Well-women visits Gestational diabetes screening HPV DNA testing Sexually transmitted infection counseling HIV screenings and counseling Breastfeeding support, supplies and counseling Domestic violence screening and counseling Contraceptives and contraceptive counseling


INCREASED MEDICARE TAX


Medicare tax rate to increase for high-earners 0.9 percent increase (from 1.45 percent to 2.35 percent)

High-earner threshold Single: $200,000 Married : $250,000

Employer responsibilities Withhold additional amounts from wages in excess

of $200,000 No requirement to match additional tax No requirement to notify employees

HEALTH FSA LIMITS


Current limits No limit on salary reductions Many employers impose limit

Beginning in 2013, the limit is $2500/year Limit is indexed for CPI for later

years

Applies to plan years beginning on or after 1/1/13 This is a change from initial

effective date

Does not apply to dependent care FSAs

COMPARATIVE EFFECTIVENESS RESEARCH FEES


Patient-Centered Outcomes Research Institute Created to improve informed health decisions Research funded by a fee paid by insurers and plan

sponsors of self-funded plans

Effective date Plan years ending after Sept. 30, 2012 Do not apply for plan years ending after Sept. 30, 2019 For calendar year plans – apply for 2012-2018 plan years

Amount of fee: $1 per covered life per month Increases to $2 Indexed for CPI

NOTICE OF EXCHANGE


Employers must notify new and current employees of exchange information Original deadline was March 1, 2013, but this has been

delayed pending more guidance from the DOL

Notice must include information about 2014 changes: Existence of health benefit exchange and services provided Potential eligibility for subsidy under exchange if employer’s

share of benefit cost is less than 60 percent Risk of losing employer contribution if employee buys

coverage through an exchange

More guidance and model notice expected

2014 COMPLIANCE DEADLINES


INDIVIDUAL MANDATE


Jan. 1, 2014: Individuals must enroll in coverage or pay a penalty

Penalty amount: Greater of $ amount or a % of income 2014 = $95 or 1% 2015 = $325 or 2% 2016 = $695 or 2.5%

Family penalty capped at 300% of the adult flat dollar penalty or “bronze” level premium

HEALTH INSURANCE EXCHANGES


Health insurance exchanges will be established in each state (by the state or federal government)

Enrollment starts October 1, 2013; coverage begins January 1, 2014

Individuals and small employers can purchase coverage through and exchange (Qualified Health Plans) In 2017, states can allow employers of any size to

purchase coverage through exchange

Individuals can be eligible for tax credits Limits on income and government program eligibility Employer plan is unaffordable or not of minimum value

LOCAL HEALTH INSURANCE EXCHANGES – SMALL GROUP


Maryland – state-based exchange

Virginia – federal exchange

District of Columbia – state-based exchange

Exchange Board’s focus is mandating individuals and employers to purchase insurance through the exchange

This will initially be for employers with less than 50 employees but will inevitably encompass employers with up to 100 employees

Will be done on a transitional basis, with employers with existing plans required to buy from the exchange at the 2015 renewal

City Council will be voting on a bill, including the “consolidation” of the current market, next month

HEALTH INSURANCE EXCHANGES


Migration to “metal” plans

Platinum – 90% Gold – 80% Silver – 70% Bronze – 60%

Rates are the same whether offered in or outside the exchange

Carrier selection

Changes to underwriting

Age-band compression

Health status

CALCULATING EMPLOYER RESPONSIBILITY


Dual calculation First – calculate if an employer is “large” Second – if an employer is “large”, then determine possible

penalties for full-time employees

Employer size calculation Full-time – counted as one employee Full-time equivalent – total hours worked by part-time

employees in a month divided by 130 Seasonal – counted if working more than 120 days

Penalty calculation FT employee: employed for an average of at least 30 hours

of service per week over employer designated measurement period (not less than 3 or greater than 12 months)

Seasonal employee: subject to same calculation

EMPLOYER PENALTY AMOUNTS


Employers that do not offer coverage to all full-time employees:

$2,000 per full-time employee

Excludes first 30 employees

Employers that offer coverage:

$3,000 for each employee that receives subsidized coverage through an exchange

Capped at $2,000 per full-time employee (excluding first 30 employees)

EXCHANGE PREMIUM ASSISTANCE


Employee eligibility will trigger employer penalties

Employees who are not offered coverage Not eligible for government programs (like Medicaid) Meet income requirements (less than 400% of FPL)

Employees who are offered coverage Not enrolled in employer’s plan Not eligible for government programs (like Medicaid) Meet income requirements (less than 400% of FPL) Employer’s coverage is unaffordable (greater than 9.5% of

income) or not of minimum value (covers less than 60% of cost of benefits)

SAFE HARBORS


Employer penalties: who is a full-time employee? Ongoing employees New full-time employees New seasonal and variable hour employees

Affordability safe harbors Three different safe harbors for determining affordability –

W-2 income, rate of pay and federal poverty line

Waiting periods Cannot exceed 90 days No penalty for employees in waiting period

Employers can rely on safe harbors through 2014

EMPLOYER REPORTING


Large employers will have to report certain information about health coverage to the government and individuals Applies to coverage offered after January 1, 2014 First returns to be filed in 2015

Information required Employer identifying information Whether employer offers health coverage to FT

employees and dependents Number of FT employees for each month Length of any waiting period Monthly premium for lowest-cost option in each

enrollment category Employer’s share of cost of benefits Names and contact info of employees and months

covered by employer’s health plan

MORE 2014 CHANGES


No pre-existing condition exclusions or limitations

Wellness program changes - maximum reward increases to 30%

Limits on out-of-pocket expenses and cost-sharing

No waiting periods over 90 days

Coverage of clinical trial participation

Guaranteed issue and renewal

No annual limits on essential health benefits

Insurance premium rating restrictions

WE HAVE YOU COVERED!


WE HAVE YOU COVERED


With the changes brought on by health care reform, you may be feeling overwhelmed by additional questions from your clients. Take a deep breath – we can help.

We have all the resources you need to successfully navigate health care reform including: Compliance checklists and timelines Health care reform legislative updates and guides Employee education materials Health care reform video content Community forum Benchmarking

COMPLIANCE CHECKLIST AND TIMELINES


It’s hard to keep track of when each change will be taking place, so let us help. Our up-to date timelines and checklist will keep you ahead of the curve.

Health Care Reform Timeline Health Care Reform Timeline Chart Health Care Reform: 2013 Compliance Checklist 2013 Open Enrollment Compliance Checklist

HEALTH CARE REFORM LEGISLATIVE UPDATES


Be the first to know when regulations change – our timely legislative documents are written and reviewed by lawyers to ensure accuracy.

Health Care Reform:

Potential Penalties for Employers Under the “Pay or Play” Rules

Health Care Reform: Lifetime and Annual Limits

Health Care Reform and the Future of CDHP’s

EMPLOYEE EDUCATION MATERIALS


Our educational documents for employees are easy to understand, and include everything from flyers to payroll stuffers to help keep your employees up to date.

Health Care Reform:

General Questions & Answers for Employees

Health Care Reform: The Who, What and When

Health Care Reform: The Supreme Court’s Decision

HEALTH CARE REFORM VIDEO CONTENT


Our short, to-the-point videos detail health care reform and the changes it brings. With videos for you, and videos for your clients, we’ll talk you through it all.

Health Care Reform: W-

2 Reporting Requirements

Health Care Reform: Summary of Benefits and Coverage

Health Care Reform: Patient’s Bill of Rights

Health Care Reform: Age 26 Rule

HEALTH CARE REFORM PENALTY TOOLS


The employer shared responsibility penalties are just around the corner. Are your clients prepared? We can estimate the potential cost of the shared responsibility penalties and help your clients avoid them.

BENCHMARKING


Find out how other employers are responding to health care reform by reviewing our 2012 health care reform benchmarking information.


QUESTIONS?

2013-04-23 healthcare reform

Economy & Finance