2014 and Beyond
Reacting to PPACA’s Volatile evolution

Presented By:
Adam V. Russo, Esq.
CEO
Ron E. Peck, Esq.
Sr. Vice P...
Overview
 N ot Even The Crystal Ball Cou ld ’ve Seen This!
 Play or Pay … Eventu ally!
 The Fed s on the Offensive
 Th...
Not even the crystal ball
could’ve seen this!
Massachusetts Foreshadow ing … Realities of “Romney-Care”
 Certainty of Cov...
Not even the crystal ball
could’ve seen this!
Massachusetts Foreshadow ing … Realities of “Romney-Care”
 Certainty of Cov...
Not even the crystal ball
could’ve seen this!
Massachusetts Foreshadow ing … Realities of “Romney-Care”
 Grow th of Self-...
Not even the crystal ball
could’ve seen this!
“ObamaCare” – The Unforeseen
– Play or Pay … Eventually
• Employer Mandate d...
Play or Pay … Eventually!

 Individual Mandate Presses on ... Skinny Plans?
 Coverage for preventive services and a limi...
The Feds on the offensive
 The Fed’s Problem? – Adverse Selection!
 Self-Funding – A Thorn in the Fed’s Side
 Young Hea...
The Feds on the offensive
 The N AIC & States Leading the Charge: Back D oor Regulation
on Self-Funding

 Play or Pay D ...
The Feds on the offensive
 Sw itching Sides: D OL Attack on ERISA Pre-emption?
 Vermont “Health Care D atabase” statute,...
Hottest Issues in REform











Preparing for 2014 Mandates
Spousal Coverage After D OMA
Financial Implicati...
Hottest Issues in REform
 Preparing for 2014 Mandates
 Effective 2014 – Group Health Plans May N OT
 Impose pre-existin...
Hottest Issues in REform
 Spousal Coverage After D OMA
 Federal Law Has Changed – How D o You D efine Spouse?
 For lega...
Hottest Issues in REform
 Financial Implication of Fees
 PCORI
 Should already be collected and paid in 2013
 TRF – Tr...
Hottest Issues in REform
 Essential Health Benefits – D o State Benchmarks Matter?
 State benchmarks do not apply to:
 ...
Hottest Issues in REform
 Impact of N on-discrimination D elay
 Already in effect for Self-funded but delayed for Fully
...
Hottest Issues in REform
 2014 Transitional Relief
 Large media mis-communication
 Transitional Relief is only applicab...
Hottest Issues in REform
 Maternity Benefits for D ependent Children
 Coverage until 26 for dependants – but not necessa...
Hottest Issues in REform
 Grandfathered Plan Requirements for 2014
 Total annual dollar limit phase out on Essential Hea...
Hottest Issues in REform
 Annual Open Enrollment Required of All Plans?
 N ew open enrollment period for health insuranc...
Hottest Issues in REform
 Contraceptive Coverage
 D OL, HHS Issue Final Rules for Contraceptive Coverage
 Religious emp...
Fiduciary Duty – Keep the buck?
 Fiduciary D uty: ASOs, & BUCAs D o It, Should You?
 TPA - Administrative Services Agree...
Fiduciary Duty – Keep the buck?
 Express Oil Change, LLC v. AN B Insurance Services, Inc. 2013
WL 1245748 (N .D . Ala. Ma...
Fiduciary Duty – Keep the buck?
 Hi-Lex Controls v. BCBS of Michigan, 2:11-CV-12557, 2012 WL
5990230 (E.D . Mich. N ov. 3...
Join us November 20, 2013 at 1PM For OUR Next Free Webinar…

What You Don’t Know CAN Hurt You ! – A Detailed
Review of Pro...
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2014 and Beyond

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2014 and Beyond

  1. 1. 2014 and Beyond Reacting to PPACA’s Volatile evolution Presented By: Adam V. Russo, Esq. CEO Ron E. Peck, Esq. Sr. Vice Presid ent & General Cou nsel Chris Aguiar Legal Ad m inistrator Septem ber 25, 2013 ©The Phia Group, LLC – Copyright 1999-2013
  2. 2. Overview  N ot Even The Crystal Ball Cou ld ’ve Seen This!  Play or Pay … Eventu ally!  The Fed s on the Offensive  The H ottest Issu es in Reform  Fid u ciary Du ty – Tim e to Keep the Bu ck? ©The Phia Group, LLC – Copyright 1999-2013
  3. 3. Not even the crystal ball could’ve seen this! Massachusetts Foreshadow ing … Realities of “Romney-Care”  Certainty of Coverage Leads to Quandary of Care & Cost  Focus on Universal Coverage - Access Over Cost  Access to Coverage, N ot Care  Heavy Coverage Mandates  Increased Risk – Increased Premiums – MA led the nation in 2010 premiums spent – over $400 per person per month (D OUBLE the national average!)  Carriers file application w ith state to raise premiums and are denied ©The Phia Group, LLC – Copyright 1999-2013
  4. 4. Not even the crystal ball could’ve seen this! Massachusetts Foreshadow ing … Realities of “Romney-Care”  Certainty of Coverage Leads to Quandary of Care & Cost  Carriers file law suit  Government investigates and discovers  Excessive charges  Wasteful tactics  Price fluctuations at facilities and betw een facilities  August 2012: Massachusetts passes new cost containment bill ©The Phia Group, LLC – Copyright 1999-2013
  5. 5. Not even the crystal ball could’ve seen this! Massachusetts Foreshadow ing … Realities of “Romney-Care”  Grow th of Self-fund ing in MA  Increase in the percentage of w orkers in self-insured plans am ong all firm -size cohorts, except am ong w orkers in firm s w ith few er than 50 em ployees.  Since passage of MA health care reform % of w orkers in firm s w ith 50 or m ore em ployees in self-insured plan increased from 54.4 % in 2005/ 2006 to 67.2 % in 2010/ 2011 ©The Phia Group, LLC – Copyright 1999-2013
  6. 6. Not even the crystal ball could’ve seen this! “ObamaCare” – The Unforeseen – Play or Pay … Eventually • Employer Mandate delayed until 2015 ... maybe later? • Extra year to simplify burdensome reporting requirements – Effects • D elay w ill cost $11 Billion D ollars (http://w w w.rand.org/pubs/research_reports/RR411.html) • Attractive option to let employees go to the exchange? • Roughly 1 million few er people than projected w ill be enrolling in employer-based coverage. (http://w w w.huffingtonpost.com/2013/07/30/employermandate-delay_n_3678049.html) ©The Phia Group, LLC – Copyright 1999-2013
  7. 7. Play or Pay … Eventually!  Individual Mandate Presses on ... Skinny Plans?  Coverage for preventive services and a limited number of doctor’s office visits, but no hospital stays or surgeries.  Loophole in PPACA – Government concedes legality, but for how long? ©The Phia Group, LLC – Copyright 1999-2013
  8. 8. The Feds on the offensive  The Fed’s Problem? – Adverse Selection!  Self-Funding – A Thorn in the Fed’s Side  Young Healthy Lives Being Kept On the Plan – WELLN ESS IN CEN TIVES!  Old, Sick Lives to the Exchanges  Less Premiums – Higher Risk – Lack of Funding  Their Solution? ©The Phia Group, LLC – Copyright 1999-2013
  9. 9. The Feds on the offensive  The N AIC & States Leading the Charge: Back D oor Regulation on Self-Funding  Play or Pay D elay – “Altruism or Conspiracy?”  ERISA - The N ext Shoe to Fall?  61% of covered w orkers are in a self insured plan, up from 49% in 2000*  2012 Urban Institute Study: 60% of small firms w ill convert w ithout regulation*  Original ObamaCare bill had ERISA oversight provisions*  White House & Liberals again trying to close the “selfinsurance” loophole* * Steve M oore, The A ttack on Self-Insurance – Liberals W ant to Re-W rite ERISA to Save ObamaCare, W all Street Journal, 9/12/2013 ©The Phia Group, LLC – Copyright 1999-2013
  10. 10. The Feds on the offensive  Sw itching Sides: D OL Attack on ERISA Pre-emption?  Vermont “Health Care D atabase” statute, 18 VSA § 1941(a)(1)  Requires self-insured plans and their TPAs to provide state w ith participant eligibility and claims data  D OL filed Amicus brief supporting VT’s position in Libert y Mut ual Insurance Co. v. Donegan  D OL joining political movement against self-funding and ERISA preemption? ©The Phia Group, LLC – Copyright 1999-2013
  11. 11. Hottest Issues in REform           Preparing for 2014 Mandates Spousal Coverage After D OMA Financial Implication of Fees Essential Health Benefits – D o State Benchmarks Matter? Impact of N on-discrimination D elay 2014 Transitional Relief Maternity Benefits for D ependant Children Grandfathered Plan Requirements for 2014 Annual Open Enrollment Required of All Plans Contraceptive Coverage ©The Phia Group, LLC – Copyright 1999-2013
  12. 12. Hottest Issues in REform  Preparing for 2014 Mandates  Effective 2014 – Group Health Plans May N OT  Impose pre-existing condition exclusions on any covered individual, regardless of age  Coverage w aiting periods exceeding 90 days  Annual limits on essential health benefits ©The Phia Group, LLC – Copyright 1999-2013
  13. 13. Hottest Issues in REform  Spousal Coverage After D OMA  Federal Law Has Changed – How D o You D efine Spouse?  For legally married in a state that recognizes marriage  Employers must apply equal protection to same-sex & opposites sex marriages  Private, Self-funded plans? - D o N ot Have to Offer Coverage to Same Sex Spouses  Federal law does not require coverage  State law is exempt  COBRA & FMLA Implications ©The Phia Group, LLC – Copyright 1999-2013
  14. 14. Hottest Issues in REform  Financial Implication of Fees  PCORI  Should already be collected and paid in 2013  TRF – Transitional Reinsurance Fund  Applies to both insurance & self funded  Reinsurance Contributions in effect through D ecember 31, 2016  D ue in 1 annual payment ©The Phia Group, LLC – Copyright 1999-2013
  15. 15. Hottest Issues in REform  Essential Health Benefits – D o State Benchmarks Matter?  State benchmarks do not apply to:  Self-insured health plans  Grandfathered health plans  BUT – if Essential Health Benefits provided, cannot be subject to limits  Benchmarks must be used to determine “minimum value” ©The Phia Group, LLC – Copyright 1999-2013
  16. 16. Hottest Issues in REform  Impact of N on-discrimination D elay  Already in effect for Self-funded but delayed for Fully insured  Many groups seeking to keep their Fully insured plans.  Ploy to keep Plans from Self-funding? ©The Phia Group, LLC – Copyright 1999-2013
  17. 17. Hottest Issues in REform  2014 Transitional Relief  Large media mis-communication  Transitional Relief is only applicable for certain aspects  Out of Pocket Max D elay  To Ensure compliance, must ensure relief applies to the specific component ©The Phia Group, LLC – Copyright 1999-2013
  18. 18. Hottest Issues in REform  Maternity Benefits for D ependent Children  Coverage until 26 for dependants – but not necessarily costs of pregnancy  Roughly 70% of Plans choose not to provide maternity benefits to dependents  Justified under the Pregnancy D iscrimination Act of 1978  True even after Essential Health Benefits come into play (maternity coverage is an Essential Health Benefit)  Stay tuned … N ational Women’s Law Center has filed federal discrimination complaints against five large employers claiming exclusion of pregnancy coverage for dependant children violates PPACA nondiscrimination provisions ©The Phia Group, LLC – Copyright 1999-2013
  19. 19. Hottest Issues in REform  Grandfathered Plan Requirements for 2014  Total annual dollar limit phase out on Essential Health Benefits by 2014  D ependent child coverage until age 26  N o pre-existing condition limitations for dependants under age 19  N o w aiting periods greater than 90 days ©The Phia Group, LLC – Copyright 1999-2013
  20. 20. Hottest Issues in REform  Annual Open Enrollment Required of All Plans?  N ew open enrollment period for health insurance plans  Consumers can begin enrolling in new health plans on October 1, 2013  Enrollment period to extend through March 31, 2014  Applies to both employer provided and individually purchased health coverage ©The Phia Group, LLC – Copyright 1999-2013
  21. 21. Hottest Issues in REform  Contraceptive Coverage  D OL, HHS Issue Final Rules for Contraceptive Coverage  Religious employers exempt  N o Exemption for non-religious emplo0yers w ho’s beliefs w ould be violated  N on-profit religious hospitals do not have to pay for contraceptives  Insurance providers MUST still provide separate coverage  TPAs may be required to provide or arrange separate no -cost contraceptive services for plan participants of exempt plan  Use EBSA Form 700 ©The Phia Group, LLC – Copyright 1999-2013
  22. 22. Fiduciary Duty – Keep the buck?  Fiduciary D uty: ASOs, & BUCAs D o It, Should You?  TPA - Administrative Services Agreement (“ASA”)  “TPA is not and shall not be deemed to be a fiduciary of Client or any other parties. The duties of TPA under this agreement are purely administrative and shall not be deemed to defer or delegate any discretionary authority or control on behalf of Client or w ith respect to any benefit plan of Client.”  But remember – its w hat’s you do, N OT w hat you say!  Those w ho act like a Fiduciary, w ill be deemed one ©The Phia Group, LLC – Copyright 1999-2013
  23. 23. Fiduciary Duty – Keep the buck?  Express Oil Change, LLC v. AN B Insurance Services, Inc. 2013 WL 1245748 (N .D . Ala. Mar. 27, 2013).  Broker helped employer create self-funded plan  Failed to arrange for reinsurance coverage  Court held broker liabl e ©The Phia Group, LLC – Copyright 1999-2013
  24. 24. Fiduciary Duty – Keep the buck?  Hi-Lex Controls v. BCBS of Michigan, 2:11-CV-12557, 2012 WL 5990230 (E.D . Mich. N ov. 30, 2012).  D iscretionary Authority w ith the “BUCAs”  “The Plan Administrator delegates to “BUCA” the discretion to interpret and apply plan terms and to make factual determinations in connection w ith its review of claims under the plan. Such discretionary authority is intended to include, but not limited to, the determination of the eligibility of persons desiring to enroll in or claim benefits under the plan, the determination of w hether a person is entitled to benefits under the plan, and the computation of any and all benefit payments. The plan administrator also delegates to “BUCA” the discretionary authority to perform a full and fair review, as required by ERSA, of each claim denial w hich has been appealed by the claimant or his duly authorized representative.” ©The Phia Group, LLC – Copyright 1999-2013
  25. 25. Join us November 20, 2013 at 1PM For OUR Next Free Webinar… What You Don’t Know CAN Hurt You ! – A Detailed Review of Provisions Contained within provider network agreements … Ad am V. Russo, Esq. arusso@phiagroup .com Ron E. Peck, Esq. rpeck@phiagrou p.com Chris Aguiar caguiar@phiagrou p .com Text “PHIA” to 22828 & Join our Mailing List! www.russominchofflaw.com ©The Phia Group, LLC – Copyright 1999-2013 781-535-5600 (Ph) 781-535-5656 (Fax) 163 Bay State Dr. Braintree, MA 02184 www.passionforsubro.com

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