Mc Corvie - Healthcare Reform:  How to Get Here from There
Upcoming SlideShare
Loading in...5
×
 

Mc Corvie - Healthcare Reform: How to Get Here from There

on

  • 641 views

 

Statistics

Views

Total Views
641
Views on SlideShare
641
Embed Views
0

Actions

Likes
0
Downloads
20
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Mc Corvie - Healthcare Reform:  How to Get Here from There Mc Corvie - Healthcare Reform: How to Get Here from There Presentation Transcript

  • Health Care Reform How to Get from Here to There
  • Major Plan Design Changes For plans years beginning after  September 23, 2010 (2011 Calendar Year Plans)
  • Advance Notice of Benefit Changes 2011 • 60‐day notice required • Includes changes in covered benefits, co‐ pays, deductibles, coinsurance • Applies to both insured and self‐insured  plans • Penalty for non‐compliance up to $1000 a  day per incidence View slide
  • Pre‐Existing Limitations October 2010 • No pre‐ex limitations on dependents < age 19 2011 • Cannot rescind group coverage except for case  of fraud or misrepresentation – Advance notice required 2014 • No pre‐ex limits for adults either • Applies to grandfathered plans too View slide
  • Annual/Lifetime Maximums 2011 • No group health plan may impose a maximum lifetime  value dollar limit on “essential benefits” • Only “restricted” annual limits – Plan years beginning: 9/23/10 ‐ 9/22/11 $750,000 9/23/11 – 9/22/12 $1.25 million 9/23/13 – 1/1/14 $2 million 2014 • No annual limits
  • Coverage for Adult Dependents 2011 • Must allow dependent coverage till age 26 – Even if married – Even if they do not meet tax definition of dependent • Penalty for non‐compliance $100 a day per incident
  • Other Plan Design Changes 2011 • Emergency Services – Must be covered without pre‐authorization – Must be covered in or out‐of‐network • OB/GYN may be designated as PCP • Preventive Care must be fully covered  – No cost sharing
  • Consumer Driven Plan Changes • January 2011 – OTC meds no longer qualified expenses • FSA, HRA, HSA – Can get doctor’s order – OTC supplies still eligible – Switchover will vary by merchant (IIAS) – Penalty for non-qualified use of HSA funds increased from 10% to 20% • January 2013 – FSA plan year contributions capped at $2500
  • Wellness Incentives 2011 • $200 billion in grants available over 5 years for  employers who • Have fewer than 100 employers who work more than 25 hours a  week and did not have a workplace wellness program as of  3/23/2010 • Employers may create up to 20% incentive for completion of  wellness program – Programs must meet minimum criteria established by  HHS. 2014 • Incentives of 30% (or up to 50% with HHS approval)
  • W–2 Reporting 2011 • Beginning in 2011 tax year, employers must report  value of health benefits on employees W‐2. – Report aggregate cost of employer sponsored coverage  including both employer and employee contributions  (COBRA rate) – Informational only. Not counted as income
  • Small Employer Tax Credits 2010 – 2013 • Up to 35% tax credit for employer contribution – Small businesses with 25 or fewer EEs and avg. wages of  $50,000 or less (full credit for 10 EE s and less) – Who pay at least 50% of health insurance costs 2014 • Increase to 50% for businesses who buy through  Exchange (for up to two years.) • CBO estimates 12% of small business will qualify
  • 2014 When Things Really Get Serious
  • Small Group Redefined Beginning 2014 • Defined as 1 – 100 – States can delay 51‐100 until January 2016 • Below 50 exempt from many provisions
  • Rate Compression • 3:1 ratio  • Rating only on age, geographic location,  coverage tier and tobacco use – 1.5 to 1 • Applies to small group market inside and  outside of the Exchange • 2014 – Risk adjustment inside and outside  Exchange
  • Minimum Benefit Package • 90 day max waiting period • Covers comprehensive set of services • 60% of the actuarial value of covered  benefits • OOP limited to HSA levels $5,950 and  $11,900 • Applies to individual and small group market – Except grandfathered plans
  • Health Insurance Exchange Choice Portal
  • Subsidy Payment & Reconciliation Carrier A Carrier B Carrier C Carrier D S P E Individual Exchange The Exchange Reporting Preferred Model (Carriers could bill and collect.) S E (S) Determine Subsidy I Eligibility/Amount P (E) Plan Selection, Enrollment ( I) Premium Invoice (P) Non-Subsidy Premium Payment
  • Carrier A Carrier B Carrier C Carrier D Carrier E E E E E P E P P P P ti on The on cilia Exchange r Rec Carrie (P) Group Premium Payment (E) Plan Selection, Enrollment E I P ( I) Premium Invoice Tax Credit Mechanism Employer
  • Precious Metal Plans • All plans must meet HSA OOP limits • Bronze – covers 60% of benefit costs • Silver – 70% • Gold – 80% • Platinum – 90% • Catastrophic Plan for Young Invincibles – Up to age 30  – Or exempted from mandates • Carriers only have to offer silver and gold
  • Two Levels of Subsidy Subsidize Premium through Tax Credits • Contributions for silver plan limited to: 133 – 150% of FPL: 3 to 4% of income 150 – 200% of FPL:  4 to 6.3% of income 200 – 250% of FPL:  6.3 to 8.05% of income 250 – 400% of FPL:  8.05 to 9.5% of income 300 – 400% of FPL:  9.5% of income • Adjusted annually
  • Two Levels of Subsidy Reduce Out‐of‐Pocket Maximums  • Out of pocket cost reductions – 100‐200% – one‐third of the HSA limits – 200‐300% ‐ one‐half of the HSA limits – 300‐400% ‐ two‐thirds of the HSA limits • 2010 HSA OOP Limits – $5,950 individuals, $11,900 families
  • Employer Penalty – No Plan • Effective January 2014 • 50 or more EEs • If you do not offer “minimum essential  coverage” AND • At least one full‐time employee receives  subsidy through the Exchange – $2000 penalty per employee – Excluding first 30 EEs
  • Real Cost of Dropping Coverage Number of Employees 10,000 Less 30 exempted 9,970 Premium $ 8,863 EE Contribution (25%) $ 2,216 Employer Contribution (75%) $ 6,647 Penalty (non-deductible) ($2000 per EE less 30 Ees) $ 1,994 Loss of Deduction $ 798 Net Cost $ 2,792 Employee Compensation Increase (90% of employer contribution) $ 3,324 Tax Gross Up (30%) $ 997 Total Comp Expense $ 4,321 Total Employer Cost $ 7,112
  • Free Rider Penalty Effective 2014 • 50 or more EEs • Even if you offer coverage, subject to penalty if: • Coverage is unaffordable because EE must contribute  more than 9.5% of household income • Or if plan covers less than 60% of covered health expenses • And one or more full‐time EEs receives a subsidy. • Lesser of: • Penalty of $250 per month ($3,000) annually per subsidized EE – $2.000 multiplied by all full‐time employees, less 30 EEs
  • Free Choice Voucher • Applies to employees within 400% of the  FPL – If their contribution cost is between 8% and 9.8  of their income – And they want to buy coverage through the  Exchange • Employer must provide EE with a voucher  equal to employer contribution to buy  insurance through Exchange • No penalty to employer who offers voucher
  • Bridge to Reform Checklist • Develop wellness program. Apply for grant. • Employee education – Online tools • Couple high‐deductible with tax‐advantaged  plans • Consider automation tools, outsourcing • Pay attention. Things will change.
  • Creative Design Mix Wellness Education Leave Incentives Management $3050 deductible Fixed POP Plan HSA-qualified insurance plan Cost $1850 HRA for Employees Variable $3050 (Buy down deductible to $1200) Cost 1040 Deduction HSA FSA for Employees for Owners (Covers 1st $1200) Voluntary Dependent Care - $5000
  • Timeline & Checklist
  • Questions?