PPACA - Informed on Reform


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Patient Protection Affordable Care Act (PPACA), also known as Obamacare, is approaching fast. All HR professionals should be fully informed and be prepared early to mitigate any risks and liabilities. View this powerpoint as a resource and contact CIGNA directly if you have any questions.

This presentation was used during a webinar by CIGNA. All rights and content belong to CIGNA. Please contact CIGNA representative for further information.

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PPACA - Informed on Reform

  1. 1. © 2013 CignaDownload this presentation onInformedOnReform.comunder Reform NewsWeb Meeting Call In Numbers:877.702.9054 OR 877.681.3373Passcode: 334435Welcome to the Cigna Health Care ReformWeb MeetingInsights Heading Into 2014March 21, 2013Download this presentation on InformedOnReform.com under Reform News
  2. 2. © 2013 CignaDownload this presentation on InformedOnReform.com under Reform NewsInsights Heading Into 20142© 2012 CignaDownload this presentation on InformedOnReform.com under Reform NewsAGENDA• Employer mandate in 2014• “Affordability” for individuals versus employers• Actuarial Value and Minimum Value calculators• Essential Health Benefits and employer impacts• Other 2014 provisions to consider• Questions Kathy VaccaroCigna VPHealth Care ReformYour Presenter
  3. 3. © 2013 CignaEMPLOYER MANDATE IN 20143Download this presentation on InformedOnReform.com under Reform News
  4. 4. © 2013 CignaEMPLOYER MANDATECOVERAGE MANDATE EFFECTIVE 1/1/14Employers with 50 or more full-timeemployees/equivalents must offer:“Affordable” coverage – employee contributions are less than 9.5% of:• Employee’s W-2 wages• Employee’s monthly wages, OR• Federal Poverty Level for a single individualA plan that provides “minimum value” – pays 60% of the costs of coveredhealth servicesCoverage to full-time employees and their dependent children up to age 26Plans that currently begin on a date other than January 1 will not facepenalties if they comply upon the first day of their 2014 plan year.4Download this presentation on InformedOnReform.com under Reform News
  5. 5. © 2013 CignaEmployer plannot offered to“substantially all”full-time employeesEmployer plan“unaffordable” and/ornot “minimum value”EMPLOYER MANDATE2014 PENALTIESDownload this presentation on InformedOnReform.com under Reform News5Triggers (same for both scenarios):One employee receives a subsidy with Exchange plan$2000 per employeeminus first 30 employeesPenalty amounts are 2014 only. Starting in2015 they are inflation adjusted annually.PENALTY LESSER OF:$2000 per employeeminus first 30 employeesOR$3000 for each employeecertified for premiumassistancePENALTY1 2
  6. 6. © 2013 CignaEmployer plan offered to “substantially all”full-time employeesEMPLOYER MANDATEOffer to “substantially all” full-time employeesDownload this presentation on InformedOnReform.com under Reform News6Offers to 95% of its full-time employees, however one employeewithin the 5% is certified as subsidy eligible$3000 per full-time employee not offeredcoverage in any given monthPENALTY
  7. 7. © 2013 CignaEMPLOYER PENALTIES EXAMPLE 1Penalty$2,000 per employee,minus the first30 employees500 EmployeesNO COVERAGE470500 employeesminus first 30$2,000per employee$940,000Trigger1 employee receives a subsidy7Download this presentation on InformedOnReform.com under Reform News
  8. 8. © 2013 CignaEMPLOYER PENALTIES EXAMPLE 21,200 Employees250 receive subsidyPenaltyWill be the lesser cost of:• $2,000 / employee, minus the first 30; or• $3,000 / employee who receives a subsidy1,1701,200 - 30 employees$2,000per employee$2,340,000250employeesreceiving subsidy$3,000per employee$750,000ORPenalty is the lesser of:Trigger1 employee receives a subsidy8Download this presentation on InformedOnReform.com under Reform News
  9. 9. © 2013 CignaAFFORDABILITY ANDACTUARIAL VALUE VSMINIMUM VALUE9Download this presentation on InformedOnReform.com under Reform News
  10. 10. © 2013 CignaEMPLOYER MANDATEINDIVIDUAL MANDATEEmployee-only plancosts no more than9.5% of employee’sW-2 wagesSelf-only coveragecosts no morethan 8% of annualhousehold incomeAFFORDABILITY?AFFORDABILITY DEFINITIONSDownload this presentation on InformedOnReform.com under Reform News1Americans must maintainminimum essential coverageunless “unaffordable”Employers with 50+ full-timeemployees must offer minimumvalue coverage that is “affordable”
  11. 11. © 2013 CignaAFFORDABILITY EXAMPLEDownload this presentation on InformedOnReform.com under Reform News11Family of four with $43,000 employee wages, ~190% of FPLABC Company benefitsTotal for family:$6,500ABC Company benefitsAccess to affordable,minimum value coverageWhat about the spouse and children?Self-only coverage:$3,400 (7.9% of wages)Subsidized Exchange coverageTotal for family:$6,200Self-only coverage:$3,400Self + children:$2,800Option A Option BSelf + family coverage:$6,500
  12. 12. © 2013 CignaCALCULATORS – ACTUARIAL VALUE & MINIMUM VALUEDownload this presentation on InformedOnReform.com under Reform NewsActuarial Value Calculatordetermine value of individual andinsured small group plansMinimum Value Calculatordetermine if “large group” planscover 60% of costsUsed byMainly insurers in the non-grandfathered individual and smallgroup marketsCalculationThe combination of deductible,coinsurance and out-of-pocket (OOP)maximumsUsed byMainly large employersCalculationThe total allowed costs of benefitexpenses covered by the employersponsor12Calculators and methodology are available on the CCIIO website.
  13. 13. © 2013 CignaESSENTIAL HEALTHBENEFITS ANDEMPLOYER IMPACTS13Download this presentation on InformedOnReform.com under Reform News
  14. 14. © 2013 CignaA BETTER UNDERSTANDING OF ESSENTIAL HEALTH BENEFITSDownload this presentation on InformedOnReform.com under Reform NewsWho must cover EHBs:• All individual and fully insured small group non-grandfathered plansWho doesn’t have to cover EHBs:• Large group plans, self-funded small group plans and grandfathered individualand small group policies are not required to cover EHBsDollar Limits:• All plans of any size, funding, grandfathered/non-grandfathered status thatcover any EHBs cannot impose annual or lifetime dollar limits14More clarity:• All benefits in the benchmark plan become EHBs for the state• Self-funded, large and grandfathered group plans must use an EHB definitionauthorized by HHS• Pediatric is defined as under the age of 19• States can define Habilitative Services if the benchmark plan does not• MHSA Parity is extended to individual and small group markets• EHB applies to In-Network services only
  15. 15. • Effective for plans beginning on or after 1/1/14• Limits apply to all In-Network benefits included in the planBENEFIT PLAN COST SHARING LIMITSDownload this presentation on InformedOnReform.com under Reform News15© 2012 CignaNoYesNon-GFIndividualPlan/Funding TypeGrandfatherStatusOut of PocketMaximums limited to$6,400 / $12,800*Deductible limited to$2,000 / $4,000Fully Insured SmallGroupNon-GF Yes YesGF No NoFully Insured LargeGroupNon-GF Yes NoGF No NoASO Small Group andLarge GroupNon-GF Yes NoGF No NoLarge group = 50 or more; will be 100 or more in 2016*OOP limits are estimates until formal amounts are published
  16. 16. © 2013 CignaOTHER PROVISIONS WITHEMPLOYER RESPONSIBILITIESTO CONSIDER16Download this presentation on InformedOnReform.com under Reform News
  17. 17. © 2013 CignaOTHER EMPLOYER CONSIDERATIONS• Intended to inform employees of:• The public Exchanges and the services provided by them• Employer plan requirements and their potential eligibility for a subsidywith a plan purchased on an Exchange• The March 1, 2013 effective date delayed to late summer or fall• The Department of Labor is considering:• Providing model language• A template for employers• Flexibility and adequate time to comply17Download this presentation on InformedOnReform.com under Reform NewsEmployee Notice of the ExchangeA written notice to all employees from all employers
  18. 18. © 2013 CignaOTHER EMPLOYER CONSIDERATIONS18Download this presentation on InformedOnReform.com under Reform NewsDue July 31, 2013 for effective datesbased on plan or ERISA year:• 11/2/11 – 10/31/12• 12/1/11 – 11/30/12• 01/1/12 – 12/31/12Cigna support resource:www.cigna.com/CERF-ToolkitComparative EffectivenessResearch Fee No Annual LimitsAnnual limits will be completelyphased out by 1/1/14Cigna Voluntary Starbridge LimitedMedical Plans will sunset when thewaivers expire on 12/31/13COBRA will not be availableOptions for those currently inStarbridge plans:ExchangesFamily/Individual plansEmployer-sponsored plansParent plan (under age 26)Spouse planMedicaid
  19. 19. © 2013 CignaOTHER EMPLOYER CONSIDERATIONS, CONTINUED19Download this presentation on InformedOnReform.com under Reform NewsNo Pre-existingConditions Guaranteed Issue90 Day WaitingPeriod Auto EnrollmentNo one, at any age,can be deniedcoverage based on apre-existing healthconditionThe ban includesbenefit limitationsand coverage denialsFully insured coveragemust accept everyindividual and groupapplicantCoverage mustbe renewed orcontinued at the plansponsor or individual’schoiceEnrollment waitingperiods cannotexceed 90 daysImplementation dateis TBD, effective datein the law is January1, 2014Employers with morethan 200 employeesmust automaticallyenroll new and renewcurrent employees
  20. 20. © 2013 CignaNEXT STEPS AND QUESTIONSVisit ouraward-winning website,InformedOnReform.com• News Alerts• Fact Sheets• Timeline• ToolsTry our new tool,Health Care Reform for YOU20Download this presentation on InformedOnReform.com under Reform News
  21. 21. © 2013 Cigna"Cigna" is a registered service mark and the "Tree of Life" logo is a service mark of Cigna Intellectual Property, Inc., licensed for use byCigna Corporation and its operating subsidiaries. All products and services are provided by such operating subsidiaries and not by CignaCorporation. Such operating subsidiaries include Connecticut General Life Insurance Company, Cigna Health and Life InsuranceCompany, and HMO or service company subsidiaries of Cigna Health Corporation and Cigna Dental Health, Inc. All models are used forillustrative purposes only.3/13 © 2013 Cigna. Some content provided under license.21Download this presentation on InformedOnReform.com under Reform News