beginning stages of health care reform. grandfathering health plans extension of non-discrimination...
TRANSCRIPT
Beginning Stages of Health Care Reform
In the Beginning…
Grandfathering Health PlansExtension of Non-Discrimination Rules100% Preventive Care ServicesProhibition of Pre-Existing Condition ExclusionLifetime and Annual LimitsRescissionsDependent Age to 26AppealsPatient Protection (PCP and ER)Rate JustificationCost Ratio RequirementEarly Retiree Reinsurance Subsidy Program
Update on 9/23 Provisions
Grandfathering Health Plans
Am I eligible?Plans in effect on March 23, 2010 will be
eligibleRisking Grandfathered StatusWhat can I do for my Plan, while also
maintaining the Plan’s grandfathered status?
Grandfathering Health Plans
Types of changes will cause a plan to lose grandfathered status
Key point: while new plans are subject to all of the health reform rule and mandates, grandfathered plans have a reduced level of compliance... At least for now
To maintain grandfathered status, the plan must provide a statement in plan materials (model notice is available) to notify participants that the plan is a grandfathered plan, and who the participant can contact for questions and complaints
Grandfathering
Cannot “significantly” cut or reduce certain conditions or diagnoses (diabetes, HIV, etc.)
Cannot decrease coinsurance levels (90% to 80%)
Cannot “significantly” increase deductibles and out-of-pocket maximums (rate of inflation + 15%)
Cannot “significantly” increase plan copaymentsGreater of $5.00 orMedical Inflation + 15%
Cannot change insurance companies (carriers)
Prohibited Plan Changes to Keep Grandfathered Plan
Decrease in employer contribution rate:Based on cost of coverage (decrease in
employer contribution by more than 5%)Based on a formula (such as hours worked, by
more than 5%)
Changes in annual limits
Prohibited Plan Changes to Keep Grandfathered Plan
Extension of Nondiscrimination Rules
Benefits cannot be based on wages:One of the five highest paid officersA shareholder that owns more than 10% in
value of the employer’s stockAmong the highest paid 25% of all employees
No discrimination on eligibility
Prohibitions of Discrimination
Provision Grandfathered Non-Grandfathered
Dependent Age 26 Required Required
Lifetime/Annual Limits Required Required
No Pre-Ex for Kids under 19
Required Required
100% Preventive Care Not Required Required
Patient Protection (PCP/ER)
Not Required Required
Rescissions Required Required
Appeals Required Required
Grandfathering: A Quick Overview
Preventive Health Care Legislation
Cost sharing cannot be applied to preventive services recommended by the U.S. Preventive Services Task Force
Applies to:All plans and all funding arrangement for:
New groupsNon-grandfathered groups renewing 9/23/2010 or
later
Preventive Health Care Legislation
Preventive Care Legislation Cost-sharing Requirements when the Recommended
Preventive Service is provided during an Office Visit
Preventive Care Services Coverage: In-Network versus Out-of-Network
Reason for Office Visit Cost-Share Allowed on Office Visit?
Primary Reason No
Not Primary Reason Yes
Type of Network Utilization Preventive Care Services Coverage
In-Network 100% Covered
Out-of-Network No coverage required: cost-sharing allowed
Patient has the following benefits: $1,000 Deductible 80/20 In-Network Coinsurance $25 copay for In-Network Office Visits
Visit #1 In-Network Provider – Dr. Greenlee Purpose: Back pain Patient ask Dr. Greenlee if he can get his flu shot while he’s there
Visit #2 In-Network Provider – Dr. Greenlee Purpose: Annual Physical
What does the patient owe for Visit #1 and Visit #2?
Scenario
Visit #1Dr. Greenlee’s office codes the visit with the
primary reason of back painPatient owes $25 copay for the office visit and
owes nothing for the flu shot
Visit #2Dr. Greenlee’s office codes the visit as a
routine preventive carePatient owes nothing
Scenario – The Answers
Visit #3Preventive Service: ColonoscopyIn-Network Outpatient Surgical CenterPolyps found and removedProvider bills one procedure: “Colonoscopy
with Polyp Removal”
How is the patient’s Colonoscopy and Polyp Removal
covered?
Scenario
Visit #3Provided the procedure is coded with the
primary reason being a screening, it will be paid as preventive and no cost-share will apply
Scenario – The Answer
Prohibition of Pre-Existing Condition Exclusions
No waiting period for members under age 19 with pre-existing conditions
No impact to Benefit Waiting Periods
Pre-existing conditions may continue to apply for adults (19+) until 2014
Applies to both, grandfathered and non-grandfathered plans
Pre-Existing Conditions
Scenario
1. Will the Pre-Existing Clause apply to Amy?2. If so, for how long?3. If and when will her Dermatologist treatment be covered?
Visit #1Amy (age 17, dependent
child of employee)Regularly sees a
Dermatologist Family had a four-month
lapse in coverageFamily is eligible for
coverage 9/1/2010
Relevant Information:PPO (renewal date:
1/1/2011)6-month Pre-Existing
Waiting Period80/20 In-Network Coverage$25 copay for In-Network
Office Visits$45 copay for SpecialistsEligible for benefits:
9/1/2010
Visit #1:The pre-existing clause will apply to Amy for
four months
At renewal, the pre-existing waiting period for members under 19 will be lifted
Amy’s dermatology treatment will be a covered benefit beginning 1/1/2011 (upon group renewal)
Scenario – The Answer
Lifetime & Annual Limits
Prohibits imposing lifetime and annual limits on the dollar value of Essential Health Benefits
Allows lifetime and annual per individual dollar limits on specific covered benefits that are not EHB
Applies to both, grandfathered and non-grandfathered plans
Lifetime and Annual Limits
Ambulatory patient servicesEmergency servicesHospitalizationMaternity and newborn careMental health and substance use disorder servicesPrescription drugsLaboratory servicesRehabilitative services and devicesPreventive and wellness services and chronic
disease managementPediatric services, including oral and vision careAny other benefit that the Secretary later
deems “essential”
What are Essential Health Benefits?
Moving Forward…
National Medical Inflation = 4 – 5%
Local Medical Trend = 10 – 12%
Changes in Health Care = 1 – 2%
Cost
Ollis & Company suggests you proceed with the following steps:Meet with your Trusted Advisor and discuss
with him/her what your goals are when it comes to employee benefits
Create a long-term business plan centered around your employee benefits plan
Look at several plan designs and funding arrangements
Be proactivePRAY!
Now What???
Grants for small employer wellness programs ($200M has been set aside)
Over the Counter drugs no longer reimbursable through FSA, HRA or HSA unless prescribed by a physician
HSA penalties for non-medical expenses increase from 10% to 20%
REMINDERS:
Wrap Up Credible Websites:
www.insurance.mo.gov www.statehealthfacts.org www.healthcare.gov
Surveys – Place for your email
Contact InformationThe Whitlock Company3271 E. Battlefield, Suite 300Springfield, MO 65804417-881-0145
Corporate Wellness ConferenceOctober 1st – O’Reilly Family Events Center (Drury)7:30 – NoonRegister Online at www.ollisco.com$35.00
Ollis & Company 2274 E. SunshineSpringfield, MO 65804417-881-8333