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2012-06-28 Healthcare Reform Update
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2012-06-28 Healthcare Reform Update

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  • 1. Healthcare Reform Update Jon Zeisler, Director, Group Benefits DateThrive. Grow. Achieve.
  • 2. HEALTHCARE REFORM UPDATE AGENDA • Status & Legislative Update • Healthcare Reform Past (2010 - 2011) • Healthcare Reform Present (2012 – 2020) • Health Insurance Exchanges • Outlook & DiscussionHealth Care Reform Update/ Page 2
  • 3. HEALTHCARE REFORM UPDATE STATUS & LEGISLATIVE UPDATEHealth Care Reform/ Page 3
  • 4. HEALTHCARE REFORM UPDATE OVERVIEW • Patient Protection and Affordable Care Act (PPACA) signed in to law on March 23, 2010 • Health Care and Education Reconciliation Act (HCERA) signed in to law on March 30, 2010 • Legislation gradually (but dramatically) changes health insurance industry over the next ten years • Estimates put the cost between $940 billion and $1.2 trillion • Expected to expand coverage to 32 million Americans that are currently uninsuredHealth Care Reform Update/ Page 4
  • 5. HEALTHCARE REFORM UPDATE STATUS UPDATE • March 26 to 28, 2012 - Supreme Court hears oral arguments for and against PPACA • Supreme Court expected to rule on case by June 28 • Key issues ̵ Individual mandate - constitutionality ̵ Anti-Injunction Act ̵ Severability • If any or all of the law is upheld by the Supreme Court, what happens in November?Health Care Reform Update/ Page 5
  • 6. HEALTHCARE REFORM UPDATE CONGRESSIONAL UPDATE • Presidential race ̵ Current electoral projections - 237 for Obama, 191 for Romney, 110 tossup ̵ Need 270 electoral votes to win ̵ Probable outcome - no change in White House • Senate race ̵ 51 / 47 / 2 - Democrat / Republican / Independent ̵ 79 seats safe or not up, 21 seats in play ̵ Probable outcome - no change in Senate • House of Representatives race ̵ 193 / 242 - Democrat / Republican ̵ 386 seats safe or not up, 49 seats in play ̵ Probable outcome - no change in HouseHealth Care Reform Update/ Page 6
  • 7. HEALTHCARE REFORM UPDATE WHAT DOES ALL THIS MEAN? • Supreme Court decision - no change in the law • Executive Branch - no change in the law • Legislative Branch - no major changes in the law, however, the law is constantly evolving ̵ House Bill 436 • Regulators (HHS, DOL, IRS) - no major changes in the law, however, the law is constantly evolving ̵ Delayed - Reporting Requirements on W-2’s ̵ Delayed - Nondiscrimination rules ̵ Amended - FSA limits (plan year vs. calendar year)Health Care Reform Update/ Page 7
  • 8. HEALTHCARE REFORM UPDATE Subsidizes Requires most Makes it easier to coverage for Americans to have buy/retain low/middle- health insurance coverage income enrollees Mandates reform Adds employer of medical responsibilities - insurance must “pay or play” practicesHealth Care Reform Update/ Page 8
  • 9. HEALTHCARE REFORM UPDATE Healthcare Reform Past (2010 - 2011)Health Care Reform Update/ Page 9
  • 10. HEALTHCARE REFORM UPDATE RECAP - 2010 CHANGES • Member may designate any in-network doctor as a primary care physician • Eliminate pre-ex limitation for children under age 19 • Provide for coverage for children until age 26 • Emergency services are all paid “in-network” • Preventive care must be provided at no cost • Eliminate annual and lifetime coverage limits on “essential” benefitsHealth Care Reform Update/ Page 10
  • 11. HEALTHCARE REFORM UPDATE ESSENTIAL BENEFITS • Emergency and Ambulatory Services • Hospitalization • Laboratory Services • Maternity and Newborn Care • Preventive and Wellness Services • Rehabilitative TherapiesHealth Care Reform Update/ Page 11
  • 12. HEALTHCARE REFORM UPDATE RECAP - 2011 CHANGES • Limits on over-the-counter medications • Employers MAY begin reporting value of health plans on W-2s • HSA penalties increase from 10% to 20% • Plans cannot discriminate in favor of highly-compensated individuals - DELAYED (until final regs are issued) • Medical Loss Ratios (MLRs) are establishedHealth Care Reform Update/ Page 12
  • 13. HEALTHCARE REFORM UPDATE MEDICAL LOSS RATIOS • Shows percentage of premium dollars spent on medical claims and clinical services/activities to improve health care quality • 80% MLR for small groups • 85% MLR for large groups • MLR reporting is done on a calendar year • Premium rebates must be issued if MLR is not metHealth Care Reform Update/ Page 13
  • 14. HEALTHCARE REFORM UPDATE Healthcare Reform Present (2012 – 2020)Health Care Reform Update/ Page 14
  • 15. HEALTHCARE REFORM UPDATE EFFECTIVE 2012 • Federal research fee of $1 per enrolled employee per month • Medicare Payroll Tax will be expanded to include unearned income…high income earners only • Standardized summary of benefits coverage • Employers MUST begin reporting value of health plans on W-2s (UPDATED: only applies to large employers)Health Care Reform Update/ Page 15
  • 16. HEALTHCARE REFORM UPDATE EFFECTIVE 2013 • Contributions to a Medical FSA are capped - UPDATED • Employee Medicare Tax increases…high income earners only • Employers must provide annual reports to HHS and employees on health plan benefits that “improve health” • Federal research fee increases to $2 • Employers MUST begin reporting value of health plans on W-2s (UPDATED: ALL employers)Health Care Reform Update/ Page 16
  • 17. HEALTHCARE REFORM UPDATE EFFECTIVE 2014 • Eliminate annual and lifetime limits on non-essential benefits • Eliminate pre-existing condition limitations for ALL • Health Insurance Exchanges begin to operate for small groups • Individual mandate and applicable penalty for no coverageHealth Care Reform Update/ Page 17
  • 18. INDIVIDUAL MANDATE All Americans 2% For 47% Against 51% Variance CNN/ORC International Poll, March 2012.Health Care Reform Update/ Page 18
  • 19. INDIVIDUAL MANDATE Men Women 42% For For 47% 58% Against 53% Against CNN/ORC International Poll, March 2012.Health Care Reform Update/ Page 19
  • 20. INDIVIDUAL MANDATE Democrats Republican 29% 53% For For Against Against 71% 47% CNN/ORC International Poll, March 2012.Health Care Reform Update/ Page 20
  • 21. HEALTHCARE REFORM UPDATE EFFECTIVE 2014 (CONT.) • Employers with 50 or more employees are required to “pay or play” • Employers that provide coverage must ensure it is affordable, or a penalty could be assessed • Auto-enrollment required for groups with more than 200 FTE’s • Waiting periods cannot exceed 90 daysHealth Care Reform Update/ Page 21
  • 22. HEALTHCARE REFORM UPDATE PAY OR PLAY FACTOR • A survey by Towers Watson1 indicates that majority of employers will continue to offer group health plans to employees. Definitely will offer 3% 9% Likely to offer 46% 42% Likely NOT to offer Undecided 1. From www.towerswatson.com, May 2010.Health Care Reform Update/ Page 22
  • 23. HEALTHCARE REFORM UPDATE EFFECTIVE 2015 • Individual mandate penalty increases to $325 per uninsured adult ($975 per family), or 2% of household income, whichever is greater 1. From www.towerswatson.com, May 2010.Health Care Reform Update/ Page 23
  • 24. HEALTHCARE REFORM UPDATE EFFECTIVE 2016 • Health Insurance Exchanges begin to operate for groups with up to 100 employees • Individual mandate penalty increases to $695 per uninsured adult ($2,085 per family), or 2.5% of household income, whichever is greaterHealth Care Reform Update/ Page 24
  • 25. HEALTHCARE REFORM UPDATE BEYOND 2016 • 2017 - Health Insurance Exchanges begin to operate for ALL • 2018 - 40% excise tax on “Cadillac” health plans • 2020 - Federal research fee of $2 per enrolled employee per month is phased outHealth Care Reform Update/ Page 25
  • 26. HEALTHCARE REFORM UPDATE Health Insurance ExchangesHealth Care Reform Update/ Page 26
  • 27. HEALTHCARE REFORM UPDATE KEY DATES OF THE EXCHANGEHealth Care Reform Update/ Page 27
  • 28. HEALTHCARE REFORM UPDATE HEALTH INSURANCE EXCHANGES - BENEFITS • Insurers will compete on cost, quality and 60% network Bronze Plan Level • Requires 4 basic Silver 70% plan designs • Plans are based Gold 80% on actuarial value of benefits Platinum 90% 0 20 40 60 80 100Health Care Reform Update/ Page 28
  • 29. HEALTHCARE REFORM UPDATE HEALTH INSURANCE EXCHANGES - INTENT • Designed to provide “easy” comparison shopping • Clear communications of plan descriptions/rates • Choice • Better pricing/quality coverage through competition • Expand coverage to uninsured AmericansHealth Care Reform Update/ Page 29
  • 30. HEALTHCARE REFORM UPDATE Outlook & DiscussionHealth Care Reform Update/ Page 30
  • 31. HEALTHCARE REFORM UPDATE OUTLOOK Status Planning Grant Only Level 1 Grant (incl Hawaii) Level 2 Grant Did not apply (only Alaska)Health Care Reform Update/ Page 31
  • 32. HEALTHCARE REFORM UPDATE OUTLOOK • Maryland State Exchange • District of Columbia Exchange • Virginia State ExchangeHealth Care Reform Update/ Page 32
  • 33. HEALTHCARE REFORM UPDATE OUTLOOK • The law is here to stay • As the law matures, regulators may continue to modify various aspects of the law due to unintended consequences, ease of administration, etc. • We will be here to help you meet the obligations under the law and help you navigate the evolution of the lawHealth Care Reform Update/ Page 33
  • 34. HEALTHCARE REFORM UPDATE QUESTIONS?Health Care Reform Update/ Page 34