2013-04-23 Healthcare Reform


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This presentation discusses the main provisions of the Health Care Reform law that apply to employers and health plans.

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2013-04-23 Healthcare Reform

  1. 1. Health Care Reform: Health Plans Overview Matthew Roberts, Account Executive April 23, 2013Thrive. Grow. Achieve.
  3. 3. WHICH PLANS MUST COMPLY?Health Care Reform 3
  4. 4. WHICH PLANS MUST COMPLY Rules generally apply to group health plan coverage Exceptions  Excepted Benefits  Retiree-only plans Excepted Benefits  Accident or disability income coverage  Separate dental and vision plans  Liability insurance  Some FSA’sHealth Care Reform 4
  5. 5. GRANDFATHERED PLANS Grandfathered plan: Group health plan or health insurance coverage in which an individual was enrolled on March 23, 2010 Certain health care reform provisions don’t apply to grandfathered plans, even if coverage is later renewed A plan can lose grandfathered status by making too many changes to benefits or costs – Plans will have to analyze status and changes at each renewalHealth Care Reform 5
  6. 6. WHICH RULES DON’T APPLY TOGRANDFATHERED PLANS? Patient Protections No cost-sharing for preventive services Non-discrimination rules for fully-insured plans New appeals process Quality of care reporting Insurance premium restrictions Guaranteed issue and renewal of coverage Non-discrimination based on health status Comprehensive health insurance coverage Limits on cost-sharing Coverage for clinical trialsHealth Care Reform 6
  7. 7. WHICH RULES DO APPLY TOGRANDFATHERED PLANS? Extension of dependent coverage Elimination of lifetime and annual limits Elimination of pre-existing condition exclusions Limits on rescissions Limits on waiting periods Summary of benefits and coverage Reporting medical loss ratioHealth Care Reform 7
  8. 8. REFORMS CURRENTLY IN PLACEHealth Care Reform 8
  9. 9. REFORMS CURRENTLY IN PLACE Small employer tax credit Dependent coverage up to age 26 No lifetime limits/restrictions on annual limits No rescissions No pre-existing condition exclusions for children No cost-sharing for preventive care services (non-GF plans) Appeals process changes (non-GF plans) No reimbursement for OTC medicine or drugs (without a prescription) Medical loss ratio rulesHealth Care Reform 9
  10. 10. 2012-2013 COMPLIANCE DEADLINESHealth Care Reform 10
  11. 11. W-2 REPORTING  Employer must report aggregate cost of group health plan coverage on each employee’s Form W-2.  Does not change the tax rules for health coverage – still not taxable.  Reporting optional for all employers in 2011.  Mandatory for 2012 tax year (W-2 Forms provided in January 2013).  For small employers (filed fewer than 250 W-2 Forms last year), reporting requirement is delayed until further guidance issued.  Covered employers need to be compiling data.Health Care Reform 11
  12. 12. W-2 REPORTING Report coverage under employer-sponsored group health plans  Does not include excepted benefits/plans that don’t provide health coverage Aggregate cost must be reported  Include both employer- and employee- paid portions  Determined under rules similar for determining “applicable premium” under COBRA Not required for:  Employees who terminate during the year and request a W-2 before the end of the year  Employees who would not otherwise receive a W-2 Health Care Reform 12
  13. 13. SUMMARY OF BENEFITS AND COVERAGE Simple and concise explanation of benefits  Applies to GF and non-GF plans Model template and guidance available  Instructions  Sample language  Uniform glossary of terms Final guidance specifies compliance deadlines  Original deadline was March 23, 2012 Issuers to health plans: Sept. 23, 2012 Must be provided 30 days prior to new plan year or within 7 days of renewal acceptance No duplication required: if issuer provides to enrollees, plan doesn’t have toHealth Care Reform 13
  14. 14. 60-DAY NOTICE RULE Material modifications not in connection with renewal must be described in a summary of material modifications (SMM) or an updated SBC Material modification:  Enhancement of covered benefits or services  Material reduction in covered benefits or services  More stringent requirements for receipt of benefits Must be provided at least 60 days BEFORE modification becomes effective.Health Care Reform 14
  15. 15. PREVENTIVE CARE FOR WOMEN Must provide coverage for women’s preventive health services without any cost-sharing  Applies to non-GF plans  No deductible, copayment or coinsurance Effective for plan years beginning on or after August 1, 2012 Covered Health Services  Well-women visits  Gestational diabetes screening  HPV DNA testing  Sexually transmitted infection counseling  HIV screenings and counseling  Breastfeeding support, supplies and counseling  Domestic violence screening and counseling  Contraceptives and contraceptive counselingHealth Care Reform 15
  16. 16. INCREASED MEDICARE TAX Medicare tax rate to increase for high-earners  0.9 percent increase (from 1.45 percent to 2.35 percent) High-earner threshold  Single: $200,000  Married : $250,000 Employer responsibilities  Withhold additional amounts from wages in excess of $200,000  No requirement to match additional tax  No requirement to notify employeesHealth Care Reform 16
  17. 17. HEALTH FSA LIMITS Current limits  No limit on salary reductions  Many employers impose limit Beginning in 2013, the limit is $2500/year  Limit is indexed for CPI for later years Applies to plan years beginning on or after 1/1/13  This is a change from initial effective date Does not apply to dependent care FSAsHealth Care Reform 17
  18. 18. COMPARATIVE EFFECTIVENESSRESEARCH FEES Patient-Centered Outcomes Research Institute  Created to improve informed health decisions  Research funded by a fee paid by insurers and plan sponsors of self-funded plans Effective date  Plan years ending after Sept. 30, 2012  Do not apply for plan years ending after Sept. 30, 2019  For calendar year plans – apply for 2012-2018 plan years Amount of fee:  $1 per covered life per month  Increases to $2  Indexed for CPIHealth Care Reform 18
  19. 19. NOTICE OF EXCHANGE Employers must notify new and current employees of exchange information  Original deadline was March 1, 2013, but this has been delayed pending more guidance from the DOL Notice must include information about 2014 changes:  Existence of health benefit exchange and services provided  Potential eligibility for subsidy under exchange if employer’s share of benefit cost is less than 60 percent  Risk of losing employer contribution if employee buys coverage through an exchange More guidance and model notice expectedHealth Care Reform 19
  20. 20. 2014 COMPLIANCE DEADLINESHealth Care Reform 20
  21. 21. INDIVIDUAL MANDATE Jan. 1, 2014: Individuals must enroll in coverage or pay a penalty Penalty amount: Greater of $ amount or a % of income  2014 = $95 or 1%  2015 = $325 or 2%  2016 = $695 or 2.5% Family penalty capped at 300% of the adult flat dollar penalty or “bronze” level premiumHealth Care Reform 21
  22. 22. HEALTH INSURANCE EXCHANGES Health insurance exchanges will be established in each state (by the state or federal government) Enrollment starts October 1, 2013; coverage begins January 1, 2014 Individuals and small employers can purchase coverage through and exchange (Qualified Health Plans)  In 2017, states can allow employers of any size to purchase coverage through exchange Individuals can be eligible for tax credits  Limits on income and government program eligibility  Employer plan is unaffordable or not of minimum valueHealth Care Reform 22
  23. 23. LOCAL HEALTH INSURANCEEXCHANGES – SMALL GROUP Maryland – state-based exchange Virginia – federal exchange District of Columbia – state-based exchange  Exchange Board’s focus is mandating individuals and employers to purchase insurance through the exchange  This will initially be for employers with less than 50 employees but will inevitably encompass employers with up to 100 employees  Will be done on a transitional basis, with employers with existing plans required to buy from the exchange at the 2015 renewal  City Council will be voting on a bill, including the “consolidation” of the current market, next monthHealth Care Reform 23
  24. 24. HEALTH INSURANCE EXCHANGES Migration to “metal” plans  Platinum – 90%  Gold – 80%  Silver – 70%  Bronze – 60% Rates are the same whether offered in or outside the exchange Carrier selection Changes to underwriting  Age-band compression  Health statusHealth Care Reform 24
  25. 25. CALCULATING EMPLOYERRESPONSIBILITY Dual calculation  First – calculate if an employer is “large”  Second – if an employer is “large”, then determine possible penalties for full-time employees Employer size calculation  Full-time – counted as one employee  Full-time equivalent – total hours worked by part-time employees in a month divided by 130  Seasonal – counted if working more than 120 days Penalty calculation  FT employee: employed for an average of at least 30 hours of service per week over employer designated measurement period (not less than 3 or greater than 12 months)  Seasonal employee: subject to same calculationHealth Care Reform 25
  26. 26. EMPLOYER PENALTY AMOUNTS Employers that do not offer coverage to all full-time employees:  $2,000 per full-time employee  Excludes first 30 employees Employers that offer coverage:  $3,000 for each employee that receives subsidized coverage through an exchange  Capped at $2,000 per full-time employee (excluding first 30 employees)Health Care Reform 26
  27. 27. EXCHANGE PREMIUM ASSISTANCE Employee eligibility will trigger employer penalties Employees who are not offered coverage  Not eligible for government programs (like Medicaid)  Meet income requirements (less than 400% of FPL) Employees who are offered coverage  Not enrolled in employer’s plan  Not eligible for government programs (like Medicaid)  Meet income requirements (less than 400% of FPL)  Employer’s coverage is unaffordable (greater than 9.5% of income) or not of minimum value (covers less than 60% of cost of benefits)Health Care Reform 27
  28. 28. SAFE HARBORS Employer penalties: who is a full-time employee?  Ongoing employees  New full-time employees  New seasonal and variable hour employees Affordability safe harbors  Three different safe harbors for determining affordability – W-2 income, rate of pay and federal poverty line Waiting periods  Cannot exceed 90 days  No penalty for employees in waiting period Employers can rely on safe harbors through 2014Health Care Reform 28
  29. 29. EMPLOYER REPORTING Large employers will have to report certain information about health coverage to the government and individuals  Applies to coverage offered after January 1, 2014  First returns to be filed in 2015 Information required  Employer identifying information  Whether employer offers health coverage to FT employees and dependents  Number of FT employees for each month  Length of any waiting period  Monthly premium for lowest-cost option in each enrollment category  Employer’s share of cost of benefits  Names and contact info of employees and months covered by employer’s health planHealth Care Reform 29
  30. 30. MORE 2014 CHANGES No pre-existing condition exclusions or limitations Wellness program changes - maximum reward increases to 30% Limits on out-of-pocket expenses and cost-sharing No waiting periods over 90 days Coverage of clinical trial participation Guaranteed issue and renewal No annual limits on essential health benefits Insurance premium rating restrictionsHealth Care Reform 30
  31. 31. WE HAVE YOU COVERED!Health Care Reform 31
  32. 32. WE HAVE YOU COVERED With the changes brought on by health care reform, you may be feeling overwhelmed by additional questions from your clients. Take a deep breath – we can help. We have all the resources you need to successfully navigate health care reform including:  Compliance checklists and timelines  Health care reform legislative updates and guides  Employee education materials  Health care reform video content  Community forum  BenchmarkingHealth Care Reform 32
  33. 33. COMPLIANCE CHECKLIST ANDTIMELINES It’s hard to keep track of when each change will be taking place, so let us help. Our up-to date timelines and checklist will keep you ahead of the curve.  Health Care Reform Timeline  Health Care Reform Timeline Chart  Health Care Reform: 2013 Compliance Checklist  2013 Open Enrollment Compliance ChecklistHealth Care Reform 33
  34. 34. HEALTH CARE REFORM LEGISLATIVEUPDATESBe the first to knowwhen regulationschange – our timelylegislative documentsare written andreviewed by lawyers toensure accuracy.  Health Care Reform: Potential Penalties for Employers Under the “Pay or Play” Rules  Health Care Reform: Lifetime and Annual Limits  Health Care Reform and the Future of CDHP’sHealth Care Reform 34
  35. 35. EMPLOYEE EDUCATION MATERIALSOur educationaldocuments foremployees are easy tounderstand, and includeeverything from flyers topayroll stuffers to helpkeep your employees upto date.  Health Care Reform: General Questions & Answers for Employees  Health Care Reform: The Who, What and When  Health Care Reform: The Supreme Court’s DecisionHealth Care Reform 35
  36. 36. HEALTH CARE REFORM VIDEO CONTENT Our short, to-the-point videos detail health care reform and the changes it brings. With videos for you, and videos for your clients, we’ll talk you through it all.  Health Care Reform: W- 2 Reporting Requirements  Health Care Reform: Summary of Benefits and Coverage  Health Care Reform: Patient’s Bill of Rights  Health Care Reform: Age 26 RuleHealth Care Reform 36
  37. 37. HEALTH CARE REFORM PENALTY TOOLSThe employer shared responsibility penalties are just aroundthe corner. Are your clients prepared? We can estimate thepotential cost of the shared responsibility penalties and helpyour clients avoid them.Health Care Reform 37
  38. 38. BENCHMARKINGFind out how other employers are responding to healthcare reform by reviewing our 2012 health care reformbenchmarking information.Health Care Reform 38
  39. 39. QUESTIONS?Health Care Reform 39