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Health care reform timelineA year-by-year look at what to expect 2010 o Early Retiree Reinsurance Program began o Began closing the Medicare Part D "donut hole" o Dependent coverage for adult children up to age 26 (or higher if state law mandates it) o No lifetime dollar limits on benefits o Restricted annual dollar limits on essential health benefits o No pre-existing condition exclusions for children o 100% coverage for preventive services in network* o No prior authorization for emergency services or higher cost-sharing for out-of-network emergency services* o No referrals required for OB/GYN services o Any available primary care physician (PCP) accepting new patients may be selected o Pediatrician may be selected as a PCP for children o Revised appeals process and changes to adverse benefit determinations (enforcement of some regulations delayed until detailed guidance is issued)* o No discrimination in favor of highly compensated employees (enforcement delayed until detailed guidance is issued)* 2011 o Prescription required for health account reimbursement for over-the-counter medications o 20% tax for nonqualified HSA withdrawals o Medical loss ratio standards go into effect(85% for large group) o Uniform summary of benefits and coverage/60-day notice for material modifications (delayed until final regulations are issued) o Value of employer-sponsored coverage on W-2s for 2012 tax year- meaning W-2s issued in January 2013 (originally required earlier, but the IRS delayed the requirement until the 2012 tax year for large employers and the 2013 tax year for employers who issue fewer than 250 W-2s) o First year medical Ioss ratio rebates may be issued o Employee notification of exchanges and premium subsidies o Medical flexible spending account contributions limited to $2,500 per year o Annual per-member fee for Patient-Centered Outcomes Research Institute (for fiscal year 2013, which technically begins October 1, 2012) o Elimination of tax exclusion for Medicare Part D retiree drug subsidy payments o Penalties for employers who dont provide minimum coverage to full-time employees (50+ employees) o Employer requirement to auto-enroll employees into health benefits (200+ employees) o 90-day limit on waiting periods for coverage o Small group redefined as 1-100 (states may defer until 2016) o No annual dollar limits on essential health benefits o Individual mandate o Guaranteed issue o 30% incentive cap for wellness programs o Coverage of routine patient costs for clinical trials of life-threatening diseases* 2018 o 40% excise tax on high-cost "Cadillac" plans*Not required for grandfathered group health plans
Benefit changes. Coverage requirements. Automaticenrollment. When it comes to health care reform, theresa lot to know- and a lot to do. The more you understandthe law and its provisions, the better you can preparefor change and make strategic decisions that fit yourorganization and your employees.On the other hand, too much information can beoverwhelming. Thats why this guide focuses only on thekey provisions that will affect you and the key decisionsyou need to make. If you want more details, chat with yourbroker or account representative or visit our website atanthem.com/healthcarereform.Moving reform forward for the benefit of you and your employeesTo minimize disruption for you and your employees, we aim to implement health care reform as quickly andeffectively as possible. While unresolved legal and legislative challenges have created uncertainty about thefuture of health care reform, these challenges will not affect our current implementation efforts. We will continueto implement reform in good faith for the benefit of our customers and members.Exempted plansThe federal health care reform law will impact many types of plans, but there are exceptions. In general,these plans are exempted from all or some provisions of health care reform: o Retiree-only plans with no active employees o HIPAA-excepted benefits (benefits that are not an integral part of a health plan, such as stand-alone dental and vision, life and disability plans) o Short-term health insurance plans o Medigap and Medicare Supplement plans o Long-term care insurance o Employee assistance plans
Looking backEmployers weigh the pros and cons of grandfatheringFor many em players, the big decision in 2010 was whether to grandfather their benefit plans. Under the health carereform law, plans that existed on or before March 23, 2010, and havent made certain changes since then may beconsidered grandfathered plans. Grandfathered plans may be exempt from some of the requirements ofthe healthcare reform law.Cost concerns versus benefit implicationsSo far we have seen muted market interest in retaining grandfathered status. Why? Many employers cited the complexitiesof remaining grandfathered, as well as a perception that it would offer limited benefit to them. This reflects the difficulty ofhealth care reform for many employers: balancingtodays cost concerns with tomorrows potential benefit implications: Employers reasons to not grandfather Employers reasons to stay grandfathered Now (2010-2013): Now (2010-2013): o More flexibility to manage immediate cost concerns o Nat required to include some benefits, such as 100% through benefit buy-downs and changes to employer coverage for in-network preventive care services* contribution levels o Able to maintain plan designs that arent allowed for o Fewer administrative responsibilities such as notices nongrandfathered plans and mandatory language on plan documents Later (2014 and beyond): o Access to all of the additional benefits the health o Nat limited to four benefit tiers, all of which must care reform law requires, such as 100% coverage for include essential health benefits (small groups only) in-network preventive care services* o Nat required to implement community rating Later (2014 and beyond): requirements and restricted age-based rating factors o To be determined (small groups only)Can you grandfather? Should you?We continue to administer grandfathered plans upon the request of our customers who qualify. To help you decide whetheryoure eligible to grandfather- and if grandfathering is the right decision for you -weve developed a simpie, interactiveonline tool that offers customized feedback based on your input. Try out the tool ata nthem.com/hea lthca rereform or talk to your account representative.*While not all health care reform changes are recuiraJ in grandfatherm plans,in some cases our company has decidm to adopt healthcare reform provisions in bothgrandfatherm and nongrandfatherm plans. According to the U.S. Department of Health and Human Servtces (HHSl, adoptton of these additional provisions has no impacton the grandfathenng status of those plans. For specific beneftt plan impacts of health care reform,please refer to plan materials provided to you
Looking back womens services (including FDA-approved contraception methods) wiII take effect at the first renewal on or afterHow we implemented the first round of provisions August 1, 2012.Heres an overview of how we implemented some key Patient protections*provisions for group health plans in 2010. Theseprovisions went into effect for plan years beginning on We decided to include these provisions in all plans, evenor after September 23, 2010: though they arent required for grandfathered plans.Dependent coverage to age 2 6 Revised appeals process and adverse benefitFor many plans, we implemented this provision early determinations*to avoid a coverage gap for spring 2010 graduates. We created a standard appeal process that complies withGroup plan members were given the opportunity to health care reform for fully insured and self-insuredenroll dependents younger than 26 at their first open groups. We have updated adverse benefit determinationsenrollment after September 23, 2010. We decided to (including explanation of benefit forms) to comply withcover dependents to age 26 for most vision and dental this provisions notice requirements.pia ns as well, even though the health care reform lawdoesnt apply to these HIPAA-excepted benefits. No discrimination in favor of highly compensated employees*No lifetime dollar limits/restricted annual dollarlimits on essential health benefits In December 2010, the government issued a notice delaying enforcement of this provision until moreWe removed lifetime dollar limits from plans where guidance is available. It is the employers or groupsrequired and gave individuals who may have previously responsibility to ensure compliance with thisreached their lifetime maximum an opportunity to provision.re-enroll at the groups regular open enrollment. Weimplemented the annual limits provision, removing Early Retiree Reinsurance Programannual benefit and plan dollar limits. In general, we arenot administering restricted annual limits on essential Five billion dollars was set aside to help employershealth benefits (also known as transitional annual limits). continue to provide coverage to certain retirees. We have helped customers apply for these funds by supplyingNo member cost share for in-network required reportingand information. Fundsforthis temporary program had nearly run out by late 2011- justpreventive care* 18 months after the program began.We expanded our standard preventive care list andupdated nongrandfathered plans to cover these serviceswith no member cost share. We also chose to includethis coverage in some grandfathered plans. An updatedpreventive care list that includes expanded coverage for*Not reqJIred for grandfatffired group ffialth plans
Where we are today Medical loss ratiosMaking gradual shifts from 2011 to 2013 Health insurance issuers will report medical loss ratios (the percentage of premiums spent on medical care and qualityFrom 2011to 2013, reform focuses less on benefit improvement, as opposed to administrative expenses) tochanges and more on industry regulation and funding HHS on a calendar-year schedule. This reporting starts withreform-related programs. Some key provisions you should calendar year 2011. Issuers that dont meet the minimumbe aware of: medical loss ratio (85% for large group) during the calendar year will need to pay rebates by August 1of the followingSpending account changes year. The first rebate payments, if any, must be made byStarting January 1, 2011(regardless of plan year August 1, 2012. For group plans, these rebates will be sentdates), prescriptions are required for spending account to the group. The group can then distribute the rebate toreimbursement of over-the-counter drugs other than insulin. current subscribers or use it to reduce premiums.Also on January 1, 2011, the penalty for nonqualified healthsavings account distributions went up to 20%. Starting in Comparative effectiveness research plan fees2013, health care flexible spending account contributions For plan/policy years ending after September 30, 2012, andwill be limited to $2,500 per year. The limit will be adjusted before October 1, 2019, the plan issuer or sponsor wi II payfor the cost of living every year. a fee to partially support the Patient-Centered Outcomes Research Institute. In the first year, the annual fee will be $1Uniform summary of benefits and coverage/ multiplied bytheaverage numberofcovered lives. lnthenotice of material modification second year, it will increase to $2 multiplied by the averageThese rules were scheduled to take effect in March 2012, number of covered lives.but theyve been delayed until final regulations are issued.Plan summaries must have consistent contents and Notification requirementsformatting. For fully insured plans,the plan issuer must Starting in 2013, employers will need to start tellingprovide a compliant paper or electronic summary at certain employees about health insu ranee exchanges andtimes in the enrollment process. Also, the plan issuer must premium subsidies.provide 60-day notice for material modifications to planbenefits.The notice requirement doesnt apply to renewals.W-2 reporting What do you need to do? o If you offer spending accounts, update your employeeEmployers must start reporting the value of employer- benefit materials to reflect the new rules.sponsored coverage on W-2 forms for the 2012 tax o Make sure your payroll department or vendor isyear- meaning W-2s issued in January 2013. This will be prepared for W-2 reporting.a new, separate entry on the W-2 form. This is a reportingobligation only and does not change the current tax-freenature of the benefit.
Where we are today workers. Starting in 2017, states may permit large groups to purchase coverage through an exchange.Moving to a new health insurance market in 2014 Employers will also be able to purchase coverage outsideThe most significant health care reform requirements of the exchanges. Many states have already startedstart in 2014. These are some of the key requirements setting up their exchanges. During this process, werethat will affect employers: encouraging policymakers to design exchange policies that maximize product choice inside the exchange andEmployer responsibility to provide coverage minimize disruptions to the existing marketplace.Employers with 50 or more full-time employees must offer Employer reporting requirementsminimum coverage to active employees (see sidebar).Employers will be subject to penalties if they dont Employers will be required to report certain informationprovide minimum coverage to full-time employees or if to the IRS annually. This information includes:they provide coverage that is not "affordable." These o Whether minimum coverage is offered to full-timepenalties will range from $2,000 to $3,000 per employee. employees o Any waiting periods for health coverageAutomatic enrollment o The monthly premium for the lowestcostoption in each enrollment category under the planEmployers with more than 200 employees must o The employers share of the total allowed cost ofautomatically enroll new and existing full-time employees benefits provided under the planin health insurance plans. Employees may opt out. o Number of full-time employees during each monthHealth insurance exchanges o Name, address and taxpayer identification number (or Social Security number) of each full-time employee,Starting in 2014, people who dont get health insu ranee at and the months each employee was covered under the employers planwork may be able to shop for it through an exchange run o Other information that HHS may require (which willby the state or the federal government. Small businesses likely be refined in later regulations)also can use exchanges to find insurance for theirRequirements for minimum coverageTo be considered minimum coverage, a plan must:o Provide 60o/o actuarial value minimum- basically, this means the plan covers at least 60o/o of covered health care costs.o Be "affordable" based on regulations.Note: Benefit package requirements are not defined;current guidance does not indicate that large group and self-insuredplans will need to include the essential health benefits package.Requirements for exchange plans GoldTo be offered in an exchange, a plan must:o Include the essential health benefits package.o Provide 60o/o actuarial value minimum. Silvero Comply with one of the four benefittiers with specified 70% actuarial values (shown on the right). actuari al value Plus catastrophic plan offerings for 1nd1vt dual s who are younger than 30 or qualify oocause of financial hardship
What services are considered essential health benefits?FAQsAnswering common questions about health care reform Late in 2011, HHS released a bulletin on its approach for essential health benefits. Instead of defining a specific package or rules, HHS will let states choose based on a benchmark plan. If a state chooses not to select aCan we increase our deductible a little bit each year and benchmark, HHS suggests that the defauIt benchmark willstay grandfathered? be the small group plan with the largest enrollment in theA small increase every year could cause a loss of state.grandfathered status. Thats because grandfathered status We do know that essential health benefits include at leastis determined by comparing benefits and contributions to these general categories:the baseline plan in place on March 23, 2010, not the plan in o Ambulatory patient servicesplace during the previous plan year. For more details about o Emergency serviceschanges that would cause a loss of grandfathered status,visit ourwebsite at a nthem.co m/healthcarereform. You o Hospitalizationcan also discuss your unique situation with your account o Maternity and newborn carerepresentative. o Mental health and substance use disorder services, including behavioral health treatmentIf we make a benefit change that causes us to lose o Prescription drugsgrandfathered status, when do we need to move to a o Rehabilitative and habilitative services and devicesnongrandfathered plan? o Laboratory services o Preventive and wellness servicesIf you make a benefit change that causes a loss ofgrandfathered status,you would need to move to a o Chronic disease managementnongrandfathered plan immediately. o Pediatric services, including oral and vision careWhat preventive care services were added for Does the health care reform law require health plans tonongrandfathered plans? cover members costs for clinical trials?Most of the services required by HHS were already included Starting in 2014, nongrandfathered plans must includein our preventive care guidelines; however, we did make coverage of routine patient costs for clinical trials ofsome modifications: life-threatening diseases. o We added certain services, including several additional screening tests and certain services associated with previously covered screenings and vaccines. o We added counseling related to aspirin use, tobacco cessation, obesity and alcohol. o Some services currently covered as medical/maternity are now considered preventive and covered with no cost share applied. An updated preventive care list that includes expanded coverage for womens services (including FDA-approved contraception methods) will take effect at the first renewal on orafterAugust1 2012. ,
How does a fully insured plan determine whether it iscomplying with nondiscrimination tests?We recommend that the group work with its legal andbenefits counselors as we cannot provide legal or taxadvice. The health care reform law states that the rulesfor determining compliance for fully insured pla ns aresimilar to the rules that apply for self-insured plans.These rules are outlined in Internal Revenue CodeSection 105. In December 2010, the government issued anotice delaying enforcement ofthis provision until moreguidance is issued.Can an employer impose an eligibility waiting periodbefore enrolling new employees?Yes,to the extent that the federal health care reform lawand state law permits. Starting in 2014, under the federalhealth care reform law eligibility waiting periods cannotexceed 90 days. Find more questions and answers onDoes the employer mandate provision require our websiteemployers to offer dependent coverage? Were constantly adding new health care reform resources to our website, includingNo, dependents do not have to be offered coverage based answers to common questions. If you have aon the employer mandate. question about health care reform that isnt answered here, be sure to visit anthem.com/What is considered a "Cadillac plan"? healthcarereform.The health care reform law defines high-cost coverage(also known as a "Cadillac plan") as a plan that costsmore than $10,200 (multiplied by the health costadjustment percentage) for single coverage or $2 7,500(multiplied by the health cost adjustment percentage)for family coverage. The health care reform law imposesa 40% excise tax on these plans starting in 2018. Theinsurer or employer will be responsible for the tax. Theamounts will increase in future years based on factorsthat will be provided to the insurer or employer.
SummaryPulling it all together Prov1s1on Requ1red for grandfathered plans Requ1red for nongrandfathered plans No Iifetime benefit dollar limits Dependent coverage for adult children up to age 26 (or higher if state law mandates it) No annual dollar Iim its on certain types of benefits for group plans 100% coverage for preventive care in-network * No prior authorization for emergency services or higher cost sharing for out-of-network emergency * services No pre-existing limitations for children under the age of 19 for group plans No discrimination in favor of highly compensated employees Revised appeals process and changes to adverse benefit determinations * Reporting the value of employer-sponsored coverage on W-2s (2012 tax year) Uniform explanation of coverage (2012) Pre-enrollment document sent explaining benefits and exclusions (2012) 60-day notice for material modifications to plan benefits (2012) 90-day I im it on waiting periods for coverage (2014) Penalties for 50+ employers who dont provide minimum coverage to full-time employees (2014) Automatic enrollment in health plan for employers with 200+ employees (2014) Coverage of routine patient costs for clinical trials of life-threatening diseases (2014)*In some cases OJ r company has decided to adopt trese realth care reform prov1 s1ons1n both grandfatherec and nongrandfatrerec plans
What do you need to do? o Visit our health care reform website for details about maintaining grandfathered status. o Update spending account materials to reflect new rules. o Prepare for W-2 reporting for the 2012 tax year. Need help making decisions in the complex post-health care reform environment? Weve developed tools to make health care reform information more understandable and customized. Check out our comprehensive online resource for up-to-th inute information and tools: o Articles and fact sheets summarize the regulations and answer common questions. o User-friendly layout makes it easy to find the information you need. Its all at anthem.com/healthcarereform.
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