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Patient Protection and Affordable Care ActPublic Law No: 111-148 Signed March 23,2010Health Care and Education Reconciliation ActCleared for President March 25, 2010
Bills reduce the number of uninsured (about32 million) in 2019Guarantees accessCertain employers could allow all of theirworkers to choose among the plans availablein the exchanges
• Too Complex – an Unstable Collection of Massive Government, Trillions in Spending, Taxes, and Confusion• over 2,700 pages of complex and confusing provisions. Substantial new authorities are handed to bureaucracies that will launch more complexity and confusion. No one can follow or predict the disruptions, distortions, unintended consequences that flow from the proposals.
• Financial Help is Not Generally Available to Employees of Companies that Provide Qualified Health Insurance• Trillions of dollars of subsidies and entitlements are generally not available to help workers who get qualified insurance from their employers. This means rising health care cost continue to keep wages down.• In response to the incentives of the bill, large employers may reduce certain lower come, in- house positions in favor of outsourcing or contracting out.
• The Bill is Inconsistent with the President’s Promise that Employees can Keep Health Plans They Have Due to Government Micromanagement• The Federal government would take a more substantial role in the design of health insurance through dozens of new requirements.
• The Bill is Inconsistent with the President’s Promise that Employees can Keep Health Plans They Have Due to Punitive Taxes• Starting in 2018, the bill imposes a 40% tax on certain high cost plans which employees would ultimately pay for in either fewer increases in salary changing plans.• The tax will force many employers to change their current plans in favor of cheaper plans – plans that may carry fewer benefits and, possibly, higher cost-sharing.
• The Bill will add to the Instability for Our Economic Future• Over an operating ten year window they are $2. 5 trillion dollars (2014-2023) in new spending. And that is based on estimates that may or may not be reliable over time.• The Congressional Budget Office, the Medicare Actuaries, and many others do not appear skeptical over the political sustainability of hundreds of billions of dollars of cuts to Medicare.
• Mandates, Penalties and Liabilities will Harm Employers Who have Been Doing Their Part to Provide Health Insurance• The bill contains dozens of confusing, conflicting, and burdensome provisions with new bureaucrats and new penalties. These provisions will create conflicting interpretation and pose substantial new threats and liabilities for employers. Employers may get out of the role of providing health insurance.• The employer mandates are punitive, create needless bureaucracy, and may threaten jobs.
Self-FundedDepartment of Employer Labor Plan
Small State GroupRegulators Market
State Insurance Regulators Licensure, AccreditationEXISTING REQUIREMENTS •Prompt pay•Guaranteed renewal •Appeals and grievances•Rating •Privacy/Confidentiality•Preexisting conditions •Licensure/Accreditation•Non‐discrimination •Antitrust•Quality improvement and •Benefit plan reporting material/information•Benefit mandates •Consumer protection•Solvency and financial •Fraud and abuserequirements•Market conduct
Department of Labor Internal Revenue ServiceEXISTING PROGRAMS EXISTING AUTHORITIES •ERISA •Enforcement for HIPAA, Mental Health Parity, •COBRA Genetic nondiscrimination•Health care portability •Tax provisions•Privacy, Mental Health Parity, Genetic Non Discrimination•Benefit Requirements Health and Human Services•Claims Processing EXISTING REQUIREMENTS/PROVISIONSRequirements •HIPAA Benefit Mandates•Enforcement Authorities •HIPAA Privacy/ARRA Privacy •Mental Health Parity •Genetic Information Nondiscrimination Act •Medicaid/CHIP •Medicare
• Large Employers (Above 50)• Auto Enroll (1511)• Inform about coverage option (1512)• Minimum essential coverage (1513)• Eligible employer-sponsored plan• Full time employees (and their dependents)• Penalty if fails to provide opportunity and on full time employee enrolls in a QHP involving premium tax credit or cost-sharing reduction. $2000 per employee cap.
Maintain Essential Coverage after 2013 forindividual and dependentsPenalty of $695 in 2016 with phase in$2,250 for entire family
States to establish Exchanges by 2014Certify Qualified Health Benefit PlansEssential Health Benefit RequirementsRefundable tax credit for coverage under aqualified health planReduced cost-sharing for individualsenrolling in qualified health plans
In 2010 through 2013, eligible employers canreceive a small business tax credit for up to 35percent of their contribution toward theemployee’s health insurance premium. Tax-exempt small businesses meeting the aboverequirements are eligible for tax credits of up to25 percent of their contribution. In 2014 andbeyond, eligible employers who purchasecoverage through the State Exchange can receivea tax credit for two years of up to 50 percent oftheir contribution. Tax-exempt small businessesmeeting the above requirements are eligible fortax credits of up to 35 percent of theircontribution.
Excise Tax on High Cost Employer Plans in2018 (9001)Annual Fee on Health Insurance Providers9010Elimination of Deduction of Expensesallocable to Medicare Part D Subsidy 9012
• No Lifetime or Annual Limit (PHSA 2711)• Prohibiting rescissions (PHSA 2712)• Coverage of preventive services (PHSA 2713)• Extension of dependent coverage (PHSA 2714)• Development and utilization of uniform explanation of coverage documents and standardized definitions (PHSA 2715)• Prohibition of discrimination based on salary (exception self-insured) (PHSA 2716)
• Ensuring quality of care (PHSA 2717)• Accounting for Costs value (PHSA 2718)• Appeals process (PHSA 2719)• Administrative simplification (1104)• Prohibition of preexisting condition (PHSA 2704)• Guaranteed availability of coverage (2702)• Non-discrimination in health care (2706)• Comprehensive health insurance coverage (2707)
• Guaranteed availability 2702• Guaranteed renewability 2703• Prohibiting discrimination based on health status 2705• Wellness program 2705• Provider participation 2706• Prohibition on excessive waiting periods• Development of coverage documents and standardized definitions (2715)
Between 6 million and 7 million people wouldbe covered by an employment-based planunder the bill who would not be covered byone under current law (largely because themandate for individuals to be insured wouldincrease workers’ demand for coveragethrough their employers).
Between 8 million and 9 million other peoplewho would be covered by an employment-based plan under current law would not havean offer of such coverage under the proposal.Firms that would choose not to offercoverage as a result of the proposal wouldtend to be smaller employers and employersthat predominantly employ lower wageworkers.
Under the legislation, workers with an offer ofemployment-based coverage would generallybe ineligible for exchange subsidies, but that“firewall” would be enforced imperfectly andan explicit exception to it would be made forworkers whose offer was deemedunaffordable.
Current Employer Providing InsuranceSmaller Companies not Bigger CompaniesProviding Insurance but Willing to Pay Penalty Employees Receive But Employees Receive Subsidy Subsidy
Small Business Tax Credit Eliminating Pre-Existing ConditionExclusions for Children Prohibiting Rescissions Eliminating Lifetime Limits Regulating Use of Annual Limits Covering Preventive Health ServicesExtending Coverage for Young Adults
Standardizing the Definition of QualifiedMedical ExpensesIncreased Additional Tax for Withdrawalsfrom Health Savings Accounts and ArcherMedical Savings Account Funds for Non-Qualified Medical ExpensesPharmaceutical Manufacturers Fee
Administrative SimplificationLimiting Health Flexible Savings AccountContributionsEliminating Deduction for Employer Part DSubsidyIncreased Threshold for Claiming ItemizedDeduction for Medical ExpensesAdditional Hospital Insurance Tax for HighWage WorkersMedical Device Excise Tax
Reforming Health Insurance RegulationsEliminating Annual LimitsEnsuring Coverage for IndividualsParticipating in Clinical TrialsEstablishing Health Insurance Exchanges forIndividual and Small Group MarketProviding Health Care Tax CreditsIndividual MandateEmployer MandateHealth Insurance Provider Fee
High Cost Plan Excise Tax
Increasing the subsidies for premiums andcost sharing that would be offered throughthe new insurance exchanges;Increasing the penalties for employers that donot offer health insurance and modifying thepenalties for individuals who do not obtaininsurance;Increasing the federal share of spending forcertain Medicaid beneficiaries;
Changing eligibility for Medicaid in a way thateffectively increases the income thresholdfrom 133 percent of the federal poverty levelto 138 percent for certain individuals;Reducing overall payments to insurance plansunder the Medicare Advantage program;Expanding Medicare’s drug benefit byphasing out the “doughnut hole” in thatbenefit;
Modifying the design and delaying theimplementation of the excise tax oninsurance plans with relatively highpremiums; andIncreasing the rate and expanding the scopeof a tax that would be charged to higher-income households.
• Adding Problems and Instability for Our Economic Future• Relies on Cuts in Medicare that Are Not Politically Sustainable Over Time• Breaking the Promise to Allow Employees to Keep Current Plans• Failing to Address the Rising Cost of Health Care• Government Regulation of the Health Care Quality of Hospitals and Doctors
Extensive Requirements to ProvideInformation to the GovernmentUnfairly treating low and moderate incomeworkersPressure for outsourcing