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

1. Health Care
Reform: Health
Plans Overview
Matthew Roberts, Account Executive
April 23, 2013
Thrive. Grow. Achieve.

2. AGENDA
 WHICH PLANS MUST COMPLY
 REFORMS CURRENTLY IN PLACE
 2012-2013 COMPLIANCE DEADLINES
 2014 COMPLIANCE DEADLINES
 WE HAVE YOU COVERED
 QUESTIONS
Health Care Reform 2

3. WHICH PLANS MUST
COMPLY?
Health Care Reform 3

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’s
Health Care Reform 4

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
renewal
Health Care Reform 5

6. WHICH RULES DON’T APPLY TO
GRANDFATHERED 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 trials
Health Care Reform 6

7. WHICH RULES DO APPLY TO
GRANDFATHERED 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 ratio
Health Care Reform 7

8. REFORMS CURRENTLY
IN PLACE
Health Care Reform 8

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 rules
Health Care Reform 9

10. 2012-2013 COMPLIANCE
DEADLINES
Health Care Reform 10

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. 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. 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 to
Health Care Reform 13

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. 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 counseling
Health Care Reform 15

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 employees
Health Care Reform 16

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 FSAs
Health Care Reform 17

18. COMPARATIVE EFFECTIVENESS
RESEARCH 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 CPI
Health Care Reform 18

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 expected
Health Care Reform 19

20. 2014 COMPLIANCE
DEADLINES
Health Care Reform 20

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 premium
Health Care Reform 21

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 value
Health Care Reform 22

23. LOCAL HEALTH INSURANCE
EXCHANGES – 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 month
Health Care Reform 23

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 status
Health Care Reform 24

25. CALCULATING EMPLOYER
RESPONSIBILITY
 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 calculation
Health Care Reform 25

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. 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. 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 2014
Health Care Reform 28

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 plan
Health Care Reform 29

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 restrictions
Health Care Reform 30

31. WE HAVE YOU COVERED!
Health Care Reform 31

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
 Benchmarking
Health Care Reform 32

33. COMPLIANCE CHECKLIST AND
TIMELINES
 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 Checklist
Health Care Reform 33

34. HEALTH CARE REFORM LEGISLATIVE
UPDATES
Be the first to know
when regulations
change – our timely
legislative documents
are written and
reviewed by lawyers to
ensure 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’s
Health Care Reform 34

35. EMPLOYEE EDUCATION MATERIALS
Our educational
documents for
employees are easy to
understand, and include
everything from flyers to
payroll stuffers to help
keep your employees up
to date.
 Health Care Reform:
General Questions &
Answers for Employees
 Health Care Reform: The
Who, What and When
 Health Care Reform: The
Supreme Court’s Decision
Health Care Reform 35

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 Rule
Health Care Reform 36

37. HEALTH CARE REFORM PENALTY TOOLS
The employer shared responsibility penalties are just around
the corner. Are your clients prepared? We can estimate the
potential cost of the shared responsibility penalties and help
your clients avoid them.
Health Care Reform 37

38. BENCHMARKING
Find out how other employers are responding to health
care reform by reviewing our 2012 health care reform
benchmarking information.
Health Care Reform 38

39. QUESTIONS?
Health Care Reform 39