effective approaches for responding to student health and accident needs post-ppaca

© 2013 ARTHUR J. GALLAGHER & CO.Q:\2013\BSD\FileName.pptx

Community College Risk Management Consortium

Effective Approaches for Responding to Student Health and Accident Needs Post-PPACA

© 2013 ARTHUR J. GALLAGHER & CO.Q:\2013\BSD\FileName.pptx © 2012 ARTHUR J. GALLAGHER & CO.

Community CollegeRisk Management Consortium

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• Introductions

• Final Legislative Rules/Initiative Updates

• Medicaid Expansion

• Update on State Exchanges

• What Has This Meant for Community Colleges?

• Beyond PPACA: Risk Mitigation / Challenges & Opportunities

» Sports Programs

» Internships / Practicums

• Questions?

Agenda



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Teresa Koster» Division President, Gallagher Koster» Part of the Gallagher Higher Education Practice Leadership Team» Has worked in niche area since 1988

Dan Buckley» Assistant Vice President» Has worked in niche area since 2001

Matt Deeb» Senior Sports & Special Risk Account Executive» Has worked in niche area since 2008

Introductions



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• The U.S. Department of Health & Human Services (HHS) Final Rule, released in March of 2012, outlines the definition of Student Health Insurance Plans (SHIPs) and confirms how SHIPs must conform with PPACA Regulations

• Student Health Insurance Plans have been designated as INDIVIDUAL Plans and therefore must abide by PPACA regulations with few exemptions; guaranteed availability and renewability does not apply

• Accident-Only, Sports Accident, Stand-Alone Short-Term, Study Abroad and International Medical Plans (purchased with the expectation of a minimum of one month) are exempt from PPACA

U.S Dept. of HHS Final Rule for Student Health Insurance Policies



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• Annual Plan Maximum Levels can be no less than: » 2013-2014: $500,000 Per Policy Year

» 2014 and beyond: No Annual or Lifetime Maximum No Pre-Existing Condition Limitations

• No internal annual dollar limits can be applied to ‘Essential Benefits’» Ambulatory Patient Services» Emergency Services» Hospitalization» Maternity & Newborn Care» Mental Health / Substance Abuse Disorder Services» Rehabilitative Services» Durable Medical Equipment / Devices» Prescription Drugs» Diagnostic Tests» Wellness / Preventive Care




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• Student Health Insurance Plans must provide Preventive Services & Women’s Health Services as outlined under PPACA without cost-sharing at In-Network Providers (including contraception)» One-year enforcement ‘safe harbor’ for certain non-exempt, non-profit

organizations with religious objections to covering contraceptives; extended for 2013-2014 policy year

» Accommodation Provision: Requires Insurance Plans to provide contraceptive benefits outside of the sponsored plan for eligible religious institutions and organizations for 2014-2015 policy year

• Targeted Medical Loss Ratio (MLR) must be 80% of Established Premium» Insurer’s MLR calculation methodology is based on their “entire”

Student Health Insurance Block of Business» Plans below 80% MLR must rebate premium to individual students




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• PPACA introduces a variety of new taxes and fees that are intended to raise revenues in order to:» Support the individual health insurance market» Help fund the state and federal exchanges» Assist with conducting research that compares treatment effectiveness

• Total fees/taxes can represent a surcharge of 3-4% of fully insured premium that is included in the rate per insured

• At this time, Self-funded student plans are except from PPACA fees/taxes

New PPACA Fees/Taxes on Individual / Group Plans

Effective Date

Duration

PCORI Fee 10/1/12 Begins 2012; Phases out 2019

Insurer Fee 1/1/14 Permanent

Reinsurance Fee 1/1/14 3 Years (2014-2016)



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• Health Insurance Market Rules (Final)» Student Health Insurance Plans will be "exempt" from the carrier's Single Risk

Pool rate development for all individual plans; however, rates charged by an Insurance Carrier may be based on a school-specific group community if, consistent with Section 2701 of the Market Rules, rates are developed without consideration of age, tobacco use, health status or gender

» The treatment of Student Health Insurance Plans under these final rules will serve as a "transitional period" -- HHS intends to monitor Student Health Insurance Plans during this transitional period to 2014 market reform

Further Clarification on New PPACA Rules



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• Miscellaneous Minimum Essential Coverage Provisions» Final Rule

Determined that because Self-funded SHIPs can vary in the types of benefits provided, these plans should not be permanently designated as minimum essential coverage

Self-funded SHIPs will meet minimum essential coverage for policy years beginning on or before December 31, 2014

For coverage beginning after December 31, 2014, sponsors of Self-funded SHIPs may apply to be recognized as minimum essential coverage

Department of the Treasury intends to publish guidance about whether individuals who are eligible to enroll in Self-funded SHIPs will be treated as eligible for qualified health plan coverage subsidized by the premium tax credit

Further Clarification on New PPACA Rules



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• The Individual Mandate is “Constitutional” and goes into effect in 2014

• Initial Penalty is $95.00 or 1% of individual's income, whichever is greater on the individual’s tax return

• Individuals NOT subject to penalty are:» Undocumented Immigrants» Those with individual income below the IRS tax filing threshold ($10,000 for individuals

and $20,000 for families in 2013)» Those who would be required to spend 8% of their individual income to purchase health

insurance» Incarcerated Individuals» Members of a religion who oppose benefits from a health insurance policy

• Given the above exceptions, many students could be exempt from the tax penalty and may ultimately stay uninsured

• Recent news reports have expressed concern that young adults are more likely to accept the fine than pay for insurance

Individual Mandate or Penalty?



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• The Supreme Court decision allows States to have a choice whether to join in Medicaid Expansion under PPACA

• States can agree to new rules and expand coverage/ eligibility in exchange for New Federal Funds

• States can refuse to participate in expansion without losing ALL of their current Federal Medicaid Funds

State Medicaid Expansion

Sample of State Decisions:

State Status of Medicaid Expansion Decision

California Moving Forward at this Time

Florida Not Moving Forward at this Time

Illinois Moving Forward at this Time

Indiana Debate Ongoing

Michigan Debate Ongoing

Nebraska Not Moving Forward at this Time

Texas Not Moving Forward at this Time

Virginia Not Moving Forward at this Time

Source: The Henry J. Kaiser Family Foundation



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State Medicaid Expansion

# of States Status

24 Moving Forward at this Time

21 Not Moving Forward at this Time

6 Debate Ongoing




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States were given a deadline of December 14, 2012 to decide/confirm whether they would create their own insurance marketplace through a State Exchange. These final decisions are illustrated on the next slide using the following categories:

• Declared State-Based Exchange State has indicated that it will establish a state-based exchange

• Planning for Partnership Exchange State has indicated that it will partner with the federal government to operate an exchange

• Default to Federal Exchange State has indicated that it will default to a federally-facilitated exchange. States in this category had until February 15, 2013 to enter into a state-federal partnership exchange

Exchanges are expected to begin their open enrollment process in October 2013 for coverage effective January 1, 2014

Update on State Exchanges



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# of States Status

17 Declared State-Based Exchange

7 Planning

for Partnership Exchange

27 Default to Federal Exchange



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• Exchanges will offer “Qualified” Health Plans to individuals & small businesses

• Exchanges will also determine who is eligible for federal subsidies (premium credits/subsidized plans) as well as Medicaid

• Exchanges will manage eligibility determinations for Individual Mandate exemptions

• Premium subsidies to purchase health insurance as outlined under PPACA will only be available for qualified plans within the Exchanges

• Eligible residents must enroll in the “State Exchange” of their permanent residency

• At this time, students enrolling in a Fully-insured Student Health Insurance Plan will not be eligible for a premium subsidy to purchase the student plan, even though it might be the most cost-effective option

• After further clarification, international students are not eligible for subsidized premiums or tax credits through Exchanges; therefore, coverage requirements for international students will continue to be the institution's responsibility




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Premium Assistance for Coverage in Exchanges

• Beginning October 2013, middle-income people under age 65, who are not eligible for coverage through their employer, Medicaid, or Medicare, can apply for tax credit subsidies available through state-based exchanges

• Subsidy is available to individuals with income between 100% and 400% of FPL ($11,490 to $45,960 for a single person in 2013) and is based on income reported on 2012 Federal income tax return and family size

• The Exchange will determine the subsidy amount• Premium Tax Credits must be reconciled with the amount of advance payments made on behalf

of the taxpayer




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Update on State ExchangesYoung Adult Plans

• Young adults represent approximately 1/3 of the total uninsured population and have the highest rate of injury-related Emergency Room visits among all age groups

• Though the Affordable Care Act allows young adults to remain on their parents’ health insurance plans until the age of 26, many young adults remain uninsured

• Health Care Exchanges are set to offer Young Adult Plans» Using Massachusetts as an example, given they have an established Exchange based on The

Massachusetts Health Care Insurance Reform Law that was enacted in 2006:

♦ Young Adult Plans with an average deductible of $1,500 are available exclusively to 18-26 year-olds* for a minimum premium of $189 per month**

♦ Plans can be purchased on an month-to-month basis with no minimum enrollment requirement

♦ Deductibles and Cost Sharing are much higher than typical Student Health Insurance Plans

*Age range for YAP Plans may vary among Exchanges**Data obtained on 7/10/13



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What Has This Meant for Community Colleges?

*American Association of Community Colleges

• In the U.S., there are 1,132 Community Colleges educating approximately 13 million students annually*

• A large percentage of this population are at risk of remaining uninsured under PPACA due to:» Aging off parent’s health insurance plan at age 26» Residing in a State that has not expanded their Medicaid Eligibility» Not being subject to individual mandate penalty due to financial position» Opting to pay the individual mandate penalty which is much lower than the cost of insurance

• Risk to campuses with uninsured Students include:» Students incorrectly assuming their institution will cover medical expenses associated with an accident

that occurs on-campus or during school-sponsored activities» Sports Programs, Internships and Practicums present a higher risk of injury both on-campus and during

school-sponsored activities» Costs associated with injuries and/or high cost sharing coverage through Young Adult Exchange Plans

may lead to students’ financial hardship



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Scope of the Community CollegeSports Programs

• 75,000+ Community or Junior College Students participate in athletics nationwide

» NJCAA: 570+ member institutions and 50,000+ student athletes

» CCCAA: 100+ member institutions and 25,000+ student athletes

Beyond PPACA/ Risk Mitigation Challenges and Opportunities



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Sports Accident Coverage Basic Layer Coverage• 100% of Usual & Customary Charges above the policy deductible• 104 week benefit period (two years from the date of injury to seek relevant medical treatment)• Pre-existing conditions if cleared to play after a pre-participating physical• Overuse/Repetitive motion injuries i.e. tendonitis• Injuries brought on by Exertion i.e. dehydration, heat exhaustion, fainting• Accidental Death & Dismemberment coverage

Sports Accident Coverage Catastrophic Layer Coverage• Lifetime Benefit Period• Catastrophic Cash/Disability Coverage• Housing/Home Modification• Ancillary Illnesses• Home/Custodial Healthcare• Accidental Death & Dismemberment coverage




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Sports Programs

• Excess Athletic Accident Policies are the best means of covering exposures for these student athletes

» Basic Market update – Basic layer currently covers the first $25,000 on an injury, this will need to increase to $50k in 2014-2015• More than a half dozen “A” rated carriers will continue to offer this coverage.

» Catastrophic Market update – coverage is available up to $5,000,000 per injury• 198 NJCAA member schools currently have the NJCAA Catastrophic coverage from

$25k-$5M underwritten by Mutual of Omaha.• Other schools can purchase their own coverage from a small group of other carriers.• Because of PPACA this plan no longer offers “ancillary illness benefit” which used to be limited to

$100,000• For the 2013-2014 academic year, the catastrophic rates for all sports risk categories will be increased by

25%• On August 1, 2014 the deductible on the NJCAA Catastrophic policy will increase from $25k to $50k




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Internships and Practicums

• Campus Exposures» Internship/Clinical/Practicum Partners requirement of

Accident/Blood Borne Pathogen coverage» Protects students and families from the costs associated with

accidental injuries» Supplemental Accident Insurance could impact the type of claims

submitted to the institution’s General Liability Policy» Reduced litigation for on-campus accidents or accidents

occurring during school activities» The insurance pays actual expenses incurred and pays regardless

of fault, which guarantees equal access to medical care for all students

» The school can offer a comprehensive program without the costs to implement the plan (premiums can be transferred to parents simply as part of tuition, or as a line item in school registration fees)




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Internships and Practicums

• Student Accident Insurance Coverage Solutions» Coverage can be tailored for various situations: while enrolled in classes, while participating in

student groups, for club/intramural sports and Internship/Practicum programs » Custom-Designed Programs: 100% of eligible expenses, low deductible levels and coverage for

travel to and from recognized events» Coordinates with parent’s (primary) plan, if applicable, to pay for copayments, deductibles and

outstanding balances for an Injury» Rosters or enrollment files not necessarily required under Mandatory Coverage» Blanket Premium or Per Student Rate structure




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Questions?Contact Information:

Teresa Koster800-457-5599, x.6422

[email protected]

Dan Buckley800-457-5599, x.6421

[email protected]

Matt Deeb800-457-5599, x,[email protected]

mailto:[email protected]



effective approaches for responding to student health and accident needs post-ppaca

Documents

gallagher kosterpart

ppaca u

community colleges

individual plans

international medical

niche area

sports accident

annual plan maximum