The document summarizes regulations issued by HHS regarding the transitional reinsurance program established by the Affordable Care Act. The reinsurance program requires health insurers and self-insured group health plans to make contributions in order to help stabilize premiums for individual market policies from 2014-2016. Contribution amounts are based on a national per capita rate, and the total contributions collected will be $12 billion in 2014, $8 billion in 2015, and $5 billion in 2016. Certain limited benefit plans and government-sponsored plans are exempt from making reinsurance contributions.
Alert - Health Care Reform Bill - HHS issues additional guidance on transitio...Annette Wright
The document provides guidance on the transitional reinsurance program established by the Affordable Care Act. It summarizes that the program requires health insurers and self-insured group health plans to make contributions to stabilize premiums. The contributions will fund reinsurance payments to insurers for high-cost individual market claims from 2014 to 2016. The document outlines the amounts to be contributed, how contributions are calculated based on the number of covered lives, and which plans must make contributions.
Health care reform_timeline_chart_1-28-13Eric Stern
The timeline summarizes important dates in the implementation of the Affordable Care Act between 2010 and 2018. Key provisions include:
- 2010-2011: Dependent coverage must be offered until age 26 and pre-existing conditions can be covered through high-risk pools.
- 2011-2013: Medical loss ratio and electronic transactions rules apply, health care exchanges are established.
- 2014: Most individuals must have coverage or pay a penalty and health insurance market reforms take effect.
- 2015-2018: Additional taxes and fees are imposed on health plans, and remaining ACA provisions are implemented.
California Climate Insurance Working Group Sizes Up Parametric SolutionsJasonSchupp1
California’s Commissioner of Insurance convened a Working Group to explore the role innovative insurance solutions may be able to play in helping communities and families manage the risk of climate change. One of the Working Group’s recommendations is to promote parametric insurance. While traditional insurance indemnifies the policyholder for actual loss, parametric insurance pays out a pre-set amount if a disaster such as a flood, wildfire or heat wave exceeds specified parameters.
There is just one hitch: Parametric insurance is not insurance. After the 2008 financial crisis, Congress enacted Dodd-Frank to, among other things, sweep parametric and other event contracts under the jurisdiction of the Commodities Futures Exchange Commission (CFTC). The Working Group is right to highlight the potential for parametric solutions to become an effective risk management tool, but it must invite the CFTC to join in the discussion if it hopes to move its recommendations toward reality.
The document is a chapter from a textbook on health and life insurance. It covers various types of health insurance including group policies, individual policies, and exchanges. It also discusses types of coverage such as basic, major medical, dental and vision. For private plans it addresses unmanaged care, health savings accounts, and managed care options like HMOs, PPOs, and POS. The document also summarizes disability and life insurance, including definitions of term and permanent life policies.
This document provides information about endowment policies offered by various insurance companies. It defines an endowment policy as a type of life insurance that pays a lump sum amount after a specified term or upon death. The document then summarizes key features of endowment policies including maturity benefits, bonuses, tax benefits, and riders. It also describes specific endowment plans offered by companies like LIC, TATA AIG, Aviva, Kotak, and Birla Sun Life.
This document outlines the terms and conditions of the FutureInvest Regular Savings & Whole of Life policy offered by Orient Insurance PJSC. Some key details include:
- The policy provides life insurance coverage and allows policyholders to invest in various investment funds.
- On death of the life assured before maturity, the death benefit will either be the sum assured or fund value, whichever is higher.
- On survival to maturity, the fund value will be paid out as a lump sum. Some optional extended coverage like life insurance may also be provided.
- The policy document defines various terms, covers aspects like premium payments, non-payment provisions, benefits and payout options.
Representative Carolyn Maloney (NY) recently announced the reintroduction of the Pandemic Risk Insurance Act. The first version of this proposal, introduced in May 2020, largely borrowed from the Terrorism Risk Insurance Act.
Alert - Health Care Reform Bill - HHS issues additional guidance on transitio...Annette Wright
The document provides guidance on the transitional reinsurance program established by the Affordable Care Act. It summarizes that the program requires health insurers and self-insured group health plans to make contributions to stabilize premiums. The contributions will fund reinsurance payments to insurers for high-cost individual market claims from 2014 to 2016. The document outlines the amounts to be contributed, how contributions are calculated based on the number of covered lives, and which plans must make contributions.
Health care reform_timeline_chart_1-28-13Eric Stern
The timeline summarizes important dates in the implementation of the Affordable Care Act between 2010 and 2018. Key provisions include:
- 2010-2011: Dependent coverage must be offered until age 26 and pre-existing conditions can be covered through high-risk pools.
- 2011-2013: Medical loss ratio and electronic transactions rules apply, health care exchanges are established.
- 2014: Most individuals must have coverage or pay a penalty and health insurance market reforms take effect.
- 2015-2018: Additional taxes and fees are imposed on health plans, and remaining ACA provisions are implemented.
California Climate Insurance Working Group Sizes Up Parametric SolutionsJasonSchupp1
California’s Commissioner of Insurance convened a Working Group to explore the role innovative insurance solutions may be able to play in helping communities and families manage the risk of climate change. One of the Working Group’s recommendations is to promote parametric insurance. While traditional insurance indemnifies the policyholder for actual loss, parametric insurance pays out a pre-set amount if a disaster such as a flood, wildfire or heat wave exceeds specified parameters.
There is just one hitch: Parametric insurance is not insurance. After the 2008 financial crisis, Congress enacted Dodd-Frank to, among other things, sweep parametric and other event contracts under the jurisdiction of the Commodities Futures Exchange Commission (CFTC). The Working Group is right to highlight the potential for parametric solutions to become an effective risk management tool, but it must invite the CFTC to join in the discussion if it hopes to move its recommendations toward reality.
The document is a chapter from a textbook on health and life insurance. It covers various types of health insurance including group policies, individual policies, and exchanges. It also discusses types of coverage such as basic, major medical, dental and vision. For private plans it addresses unmanaged care, health savings accounts, and managed care options like HMOs, PPOs, and POS. The document also summarizes disability and life insurance, including definitions of term and permanent life policies.
This document provides information about endowment policies offered by various insurance companies. It defines an endowment policy as a type of life insurance that pays a lump sum amount after a specified term or upon death. The document then summarizes key features of endowment policies including maturity benefits, bonuses, tax benefits, and riders. It also describes specific endowment plans offered by companies like LIC, TATA AIG, Aviva, Kotak, and Birla Sun Life.
This document outlines the terms and conditions of the FutureInvest Regular Savings & Whole of Life policy offered by Orient Insurance PJSC. Some key details include:
- The policy provides life insurance coverage and allows policyholders to invest in various investment funds.
- On death of the life assured before maturity, the death benefit will either be the sum assured or fund value, whichever is higher.
- On survival to maturity, the fund value will be paid out as a lump sum. Some optional extended coverage like life insurance may also be provided.
- The policy document defines various terms, covers aspects like premium payments, non-payment provisions, benefits and payout options.
Representative Carolyn Maloney (NY) recently announced the reintroduction of the Pandemic Risk Insurance Act. The first version of this proposal, introduced in May 2020, largely borrowed from the Terrorism Risk Insurance Act.
This document summarizes several endowment policies offered by LIC including Jeevan Anand, Endowment With Profit-14, Limited Payment Endowment with Profits, Jeevan Mitra, Jeevan Saathi, and Marriage Endowment & Educational Annuity. The policies provide a lump sum payment at maturity to cover future expenses like marriage or education, or a death benefit. Key features include moderate premiums, high bonuses, savings orientation, and disability or accident benefits in some plans.
This document outlines 25 reasons to own life insurance through a qualified retirement plan. Some key benefits include using pre-tax dollars to pay premiums, avoiding taxes on death benefits, and using life insurance as an investment within a balanced retirement portfolio. Life insurance can also be used to fund buy-sell agreements for business owners or provide benefits to spouses and heirs in the event of premature death.
This document describes several endowment insurance plans offered by an insurance provider. The plans include Jeevan Anand which provides life insurance coverage until death along with a sum assured and bonuses at the end of the premium term. Limited Payment Endowment with Profit allows limiting premium payments to a single payment or term shorter than the policy term. Jeevan Mitra provides a death benefit of double the basic sum assured along with accrued bonuses.
This document outlines an endowment policy, which is a type of life insurance that pays out a lump sum amount either upon the death of the policyholder or at the end of a specified term. It provides both a living benefit through periodic payouts as well as life insurance coverage. There are several types of endowment policies that vary based on factors like whether the payout is made to one or multiple lives insured, or whether the payout amount is the standard sum assured or a double amount. While endowment policies have benefits like long-term investment and dual protection, they also have drawbacks such as higher premiums and lower surrender values compared to term insurance plans.
CBI Comments on Proposed TRIA Regulatory DefinitionsJasonSchupp1
This comment letter focuses on the proposed rule changes for the Terrorism Risk Insurance Act regulations with respect to the definitions of:
• Act of terrorism; and
• Insured loss
in accordance with Treasury’s Notice appearing at 85 FR 71588 (November 10, 2020).
Louisiana Citizens Property Insurance Company is the state’s residual market providing property insurance to homeowners and businesses that have been unable to procure insurance in the private market. Louisiana Citizens came out of the 2005 hurricane season nearly $1 billion in debt from Hurricane Katrina and Rita losses.
As reflected in the attached graphic, Louisiana Citizens appears to have transformed itself into a leaner, financially disciplined, and well governed organization. While it has yet to publish estimated losses from Hurricane Ida, there appears little chance of a similar financial hole opening in Louisiana Citizens’ balance sheet this year.
A graphic overview of this article is available here.
The document provides information about Birla Sun Life Insurance Company (BSLI), including:
- BSLI is a joint venture between Aditya Birla Group and Sun Life Financial Inc. of Canada.
- It has emerged as a leading player in India's life insurance industry, with over 1.5 million policies sold and a network of over 1000 agents across 100 cities.
- Kapil Dev, a famous Indian cricketer, was appointed as the company's brand ambassador to help increase its national brand recognition.
- BSLI's strengths include its multi-channel distribution network, customer-centric products and services, and strong training programs for agents.
The document defines health insurance as a contract between an insurance provider and an individual or organization that covers medical expenses. Key aspects of health insurance include premium payments, deductibles, copays, coverage limits, and what medical costs are covered. Rates are calculated based on personal health history and risks. Premiums can increase if claims are high or an individual's health status changes. Missed payments can cause a policy to lapse or be cancelled. The document also outlines some common types of health insurance plans and tax benefits.
This paper examines the broad net Congress cast to capture event contracts under the Commodities Futures Trading Commission's (CFTC) jurisdiction and the exclusion the CFTC crafted allowing traditional indemnity-based insurance to remain within the jurisdiction of state insurance regulation.
CBI Comments on Treasury's TRIP Data Call for CaptivesJasonSchupp1
Every year the Federal Insurance Office (FIO), as administrator of the Terrorism Risk Insurance Program, requires participating insurers to respond to a detailed data call.
Among other changes, FIO recently announced its intention to improve the data it collects from captive insurers. A captive is an insurance company that is owned by its policyholder. In many cases, a large corporation sets up a captive to manage retained risks, directly access reinsurance, and capture substantial tax advantages.
Many of these corporations also use captives to directly extract billions of dollars in benefits from government programs such as the Terrorism Risk Insurance Program and Federal Home Loan Bank system. In fact, prior data calls revealed that large corporations are expected to receive up to 95% of Terrorism Risk Insurance Program payouts through their captive insurers.
CBI has offered a number of practical suggestions to FIO to improve its data call templates and instructions. These suggestions, if adopted, would make it more likely captives will provide data that leads to useful insights for Congress and other stakeholders.
1. Permanent life insurance can be a good investment if commissions are reduced by 85% and the policy is obtained from a company with low mortality charges. This can improve rates of return by over 200 basis points compared to a standard policy.
2. Reducing commissions, which typically exceed 100% of the first year premium, allows more of the premium to build cash value immediately rather than pay commissions. Low commissions improve long term returns significantly.
3. Obtaining a policy from a company with the best mortality results based on industry studies can further improve returns by 90-140 basis points depending on age. Combining low commissions and low mortality charges offers the best returns.
This proposal starts from the premise that the States must be fundamentally accountable for any pandemic business income coverage program because:
• The orders triggering pandemic business income loss originate and terminate as decisions made by the individual States; and
• The responsibility to manage the economic consequences of those individual State decisions should likewise reside with the respective States.
- Employers who receive the Retiree Drug Subsidy (RDS) will lose the tax deduction for retiree drug expenses starting in 2013 due to healthcare reform regulations. This will significantly increase costs for companies with retiree prescription drug coverage.
- Self-funded Employer Group Waiver Plans (EGWPs) are emerging as an alternative to the RDS. EGWPs allow employers to contract with a prescription drug plan sponsor to provide retiree drug benefits while passing on government subsidies to reduce costs.
- EGWPs offer employers benefits like reducing costs, satisfying existing retiree benefit commitments, increasing efficiency, reducing administrative burden, and improving cash flow compared to the RDS. Employers should
Annuity Basics is part of our continuing series of presentations for Financial Services Industry Training. We develop custom training specific to the financial services industry. Contact us for a quote or discussion of your needs.
Whole life insurance provides long-term value to policy owners in three ways:
1) It guarantees a level death benefit, level annual premium payments, and increases in cash value.
2) It provides permanent life insurance protection as long as premiums are paid.
3) The cash value builds over time and is not affected by market conditions, providing lifetime coverage with guaranteed level premiums.
The document provides tips for employers to avoid an unannounced Department of Labor wage and hour investigation. It discusses ensuring fair compensation practices, understanding regulations, training managers, analyzing state vs federal laws, paying past overtime due, following child labor laws, properly classifying interns, responding to internal complaints, seeking DOL compliance assistance, and conducting a self-audit. It also summarizes several articles on using HR metrics to communicate value to an organization, the Early Retiree Reinsurance Program funds being exhausted, how HHS will define essential health benefits, Maryland allowing same-sex marriage, and San Francisco's healthcare reporting requirements.
News Flash February 21 2014 - Final Regulations on PPACA 90-Day Waiting Peri...Annette Wright, GBA, GBDS
The Departments of Treasury, Labor and Health and Human Services issued final regulations implementing the 90-day waiting period provisions under the PPACA. The final regulations adopt rules from the proposed regulations in 2013 and introduce new guidance. Under the rules, a group health plan cannot apply a waiting period that exceeds 90 days. The regulations also allow employers to use an orientation period of up to one month to evaluate new employees before the waiting period begins. The final regulations are effective for plan years beginning on or after January 1, 2015.
The document provides guidance on final wellness regulations, including definitions of different types of wellness programs (participatory, activity-only, outcome-based) and answers to frequently asked questions. Key points include:
- Participatory programs do not require individuals to meet a standard related to a health factor to obtain a reward. Activity-only and outcome-based programs are considered health-contingent.
- For health-contingent programs, the full reward must be provided to individuals who meet an alternative standard within the same plan year. Rewards generally should not be provided in the year after they are earned.
- Wellness programs can include components that are participatory as well as activity-only
The US Supreme Court ruled that closely-held for-profit corporations cannot be compelled to provide contraceptive coverage that violates the religious beliefs of company owners under the Religious Freedom Restoration Act. The ruling applies to the four contraceptive methods that Hobby Lobby objected to providing in their health plans. While the ruling does not exempt companies from all insurance mandates that conflict with religious beliefs, it does allow closely-held companies to avoid paying for contraceptive services they have religious objections to. The federal government is expected to expand existing exemptions for non-profits to comply with the ruling, but more litigation around the Affordable Care Act is still anticipated.
The IRS has released draft guidance on electronic filing of Affordable Care Act reporting forms for 2014 and beyond. The guidance outlines the two-step process that issuers and transmitters must follow to register with the IRS e-Services system and obtain a Transmitter Control Code to file ACA Information Returns electronically using the Affordable Care Act Information Returns system. Only XML file formats are accepted, with a 100MB limit per transmission. Employers with 250 or more employees should begin preparing now to file electronically by the first quarter 2016 deadline.
The document summarizes final regulations issued by the Department of Treasury on employer shared responsibility provisions under the Affordable Care Act. Key points include:
1) Employers with 50-99 employees have an additional year, until 2016, before they must comply with the employer mandate.
2) Transition rules for 2015 include requiring coverage for at least 70% of full-time employees rather than 95%, and not requiring dependent coverage.
3) Prior transition rules are retained, including the use of measurement periods to determine variable hour employee status and non-calendar year plan effective dates.
4) Guidance is provided on determining full-time status for certain occupations like volunteers, educators, seasonal workers and student employees
This document summarizes several endowment policies offered by LIC including Jeevan Anand, Endowment With Profit-14, Limited Payment Endowment with Profits, Jeevan Mitra, Jeevan Saathi, and Marriage Endowment & Educational Annuity. The policies provide a lump sum payment at maturity to cover future expenses like marriage or education, or a death benefit. Key features include moderate premiums, high bonuses, savings orientation, and disability or accident benefits in some plans.
This document outlines 25 reasons to own life insurance through a qualified retirement plan. Some key benefits include using pre-tax dollars to pay premiums, avoiding taxes on death benefits, and using life insurance as an investment within a balanced retirement portfolio. Life insurance can also be used to fund buy-sell agreements for business owners or provide benefits to spouses and heirs in the event of premature death.
This document describes several endowment insurance plans offered by an insurance provider. The plans include Jeevan Anand which provides life insurance coverage until death along with a sum assured and bonuses at the end of the premium term. Limited Payment Endowment with Profit allows limiting premium payments to a single payment or term shorter than the policy term. Jeevan Mitra provides a death benefit of double the basic sum assured along with accrued bonuses.
This document outlines an endowment policy, which is a type of life insurance that pays out a lump sum amount either upon the death of the policyholder or at the end of a specified term. It provides both a living benefit through periodic payouts as well as life insurance coverage. There are several types of endowment policies that vary based on factors like whether the payout is made to one or multiple lives insured, or whether the payout amount is the standard sum assured or a double amount. While endowment policies have benefits like long-term investment and dual protection, they also have drawbacks such as higher premiums and lower surrender values compared to term insurance plans.
CBI Comments on Proposed TRIA Regulatory DefinitionsJasonSchupp1
This comment letter focuses on the proposed rule changes for the Terrorism Risk Insurance Act regulations with respect to the definitions of:
• Act of terrorism; and
• Insured loss
in accordance with Treasury’s Notice appearing at 85 FR 71588 (November 10, 2020).
Louisiana Citizens Property Insurance Company is the state’s residual market providing property insurance to homeowners and businesses that have been unable to procure insurance in the private market. Louisiana Citizens came out of the 2005 hurricane season nearly $1 billion in debt from Hurricane Katrina and Rita losses.
As reflected in the attached graphic, Louisiana Citizens appears to have transformed itself into a leaner, financially disciplined, and well governed organization. While it has yet to publish estimated losses from Hurricane Ida, there appears little chance of a similar financial hole opening in Louisiana Citizens’ balance sheet this year.
A graphic overview of this article is available here.
The document provides information about Birla Sun Life Insurance Company (BSLI), including:
- BSLI is a joint venture between Aditya Birla Group and Sun Life Financial Inc. of Canada.
- It has emerged as a leading player in India's life insurance industry, with over 1.5 million policies sold and a network of over 1000 agents across 100 cities.
- Kapil Dev, a famous Indian cricketer, was appointed as the company's brand ambassador to help increase its national brand recognition.
- BSLI's strengths include its multi-channel distribution network, customer-centric products and services, and strong training programs for agents.
The document defines health insurance as a contract between an insurance provider and an individual or organization that covers medical expenses. Key aspects of health insurance include premium payments, deductibles, copays, coverage limits, and what medical costs are covered. Rates are calculated based on personal health history and risks. Premiums can increase if claims are high or an individual's health status changes. Missed payments can cause a policy to lapse or be cancelled. The document also outlines some common types of health insurance plans and tax benefits.
This paper examines the broad net Congress cast to capture event contracts under the Commodities Futures Trading Commission's (CFTC) jurisdiction and the exclusion the CFTC crafted allowing traditional indemnity-based insurance to remain within the jurisdiction of state insurance regulation.
CBI Comments on Treasury's TRIP Data Call for CaptivesJasonSchupp1
Every year the Federal Insurance Office (FIO), as administrator of the Terrorism Risk Insurance Program, requires participating insurers to respond to a detailed data call.
Among other changes, FIO recently announced its intention to improve the data it collects from captive insurers. A captive is an insurance company that is owned by its policyholder. In many cases, a large corporation sets up a captive to manage retained risks, directly access reinsurance, and capture substantial tax advantages.
Many of these corporations also use captives to directly extract billions of dollars in benefits from government programs such as the Terrorism Risk Insurance Program and Federal Home Loan Bank system. In fact, prior data calls revealed that large corporations are expected to receive up to 95% of Terrorism Risk Insurance Program payouts through their captive insurers.
CBI has offered a number of practical suggestions to FIO to improve its data call templates and instructions. These suggestions, if adopted, would make it more likely captives will provide data that leads to useful insights for Congress and other stakeholders.
1. Permanent life insurance can be a good investment if commissions are reduced by 85% and the policy is obtained from a company with low mortality charges. This can improve rates of return by over 200 basis points compared to a standard policy.
2. Reducing commissions, which typically exceed 100% of the first year premium, allows more of the premium to build cash value immediately rather than pay commissions. Low commissions improve long term returns significantly.
3. Obtaining a policy from a company with the best mortality results based on industry studies can further improve returns by 90-140 basis points depending on age. Combining low commissions and low mortality charges offers the best returns.
This proposal starts from the premise that the States must be fundamentally accountable for any pandemic business income coverage program because:
• The orders triggering pandemic business income loss originate and terminate as decisions made by the individual States; and
• The responsibility to manage the economic consequences of those individual State decisions should likewise reside with the respective States.
- Employers who receive the Retiree Drug Subsidy (RDS) will lose the tax deduction for retiree drug expenses starting in 2013 due to healthcare reform regulations. This will significantly increase costs for companies with retiree prescription drug coverage.
- Self-funded Employer Group Waiver Plans (EGWPs) are emerging as an alternative to the RDS. EGWPs allow employers to contract with a prescription drug plan sponsor to provide retiree drug benefits while passing on government subsidies to reduce costs.
- EGWPs offer employers benefits like reducing costs, satisfying existing retiree benefit commitments, increasing efficiency, reducing administrative burden, and improving cash flow compared to the RDS. Employers should
Annuity Basics is part of our continuing series of presentations for Financial Services Industry Training. We develop custom training specific to the financial services industry. Contact us for a quote or discussion of your needs.
Whole life insurance provides long-term value to policy owners in three ways:
1) It guarantees a level death benefit, level annual premium payments, and increases in cash value.
2) It provides permanent life insurance protection as long as premiums are paid.
3) The cash value builds over time and is not affected by market conditions, providing lifetime coverage with guaranteed level premiums.
The document provides tips for employers to avoid an unannounced Department of Labor wage and hour investigation. It discusses ensuring fair compensation practices, understanding regulations, training managers, analyzing state vs federal laws, paying past overtime due, following child labor laws, properly classifying interns, responding to internal complaints, seeking DOL compliance assistance, and conducting a self-audit. It also summarizes several articles on using HR metrics to communicate value to an organization, the Early Retiree Reinsurance Program funds being exhausted, how HHS will define essential health benefits, Maryland allowing same-sex marriage, and San Francisco's healthcare reporting requirements.
News Flash February 21 2014 - Final Regulations on PPACA 90-Day Waiting Peri...Annette Wright, GBA, GBDS
The Departments of Treasury, Labor and Health and Human Services issued final regulations implementing the 90-day waiting period provisions under the PPACA. The final regulations adopt rules from the proposed regulations in 2013 and introduce new guidance. Under the rules, a group health plan cannot apply a waiting period that exceeds 90 days. The regulations also allow employers to use an orientation period of up to one month to evaluate new employees before the waiting period begins. The final regulations are effective for plan years beginning on or after January 1, 2015.
The document provides guidance on final wellness regulations, including definitions of different types of wellness programs (participatory, activity-only, outcome-based) and answers to frequently asked questions. Key points include:
- Participatory programs do not require individuals to meet a standard related to a health factor to obtain a reward. Activity-only and outcome-based programs are considered health-contingent.
- For health-contingent programs, the full reward must be provided to individuals who meet an alternative standard within the same plan year. Rewards generally should not be provided in the year after they are earned.
- Wellness programs can include components that are participatory as well as activity-only
The US Supreme Court ruled that closely-held for-profit corporations cannot be compelled to provide contraceptive coverage that violates the religious beliefs of company owners under the Religious Freedom Restoration Act. The ruling applies to the four contraceptive methods that Hobby Lobby objected to providing in their health plans. While the ruling does not exempt companies from all insurance mandates that conflict with religious beliefs, it does allow closely-held companies to avoid paying for contraceptive services they have religious objections to. The federal government is expected to expand existing exemptions for non-profits to comply with the ruling, but more litigation around the Affordable Care Act is still anticipated.
The IRS has released draft guidance on electronic filing of Affordable Care Act reporting forms for 2014 and beyond. The guidance outlines the two-step process that issuers and transmitters must follow to register with the IRS e-Services system and obtain a Transmitter Control Code to file ACA Information Returns electronically using the Affordable Care Act Information Returns system. Only XML file formats are accepted, with a 100MB limit per transmission. Employers with 250 or more employees should begin preparing now to file electronically by the first quarter 2016 deadline.
The document summarizes final regulations issued by the Department of Treasury on employer shared responsibility provisions under the Affordable Care Act. Key points include:
1) Employers with 50-99 employees have an additional year, until 2016, before they must comply with the employer mandate.
2) Transition rules for 2015 include requiring coverage for at least 70% of full-time employees rather than 95%, and not requiring dependent coverage.
3) Prior transition rules are retained, including the use of measurement periods to determine variable hour employee status and non-calendar year plan effective dates.
4) Guidance is provided on determining full-time status for certain occupations like volunteers, educators, seasonal workers and student employees
This document summarizes questions and answers about HIPAA privacy requirements for employee benefit plans. It addresses whether insured plans need to send a Notice of Privacy Practices, how to determine the date a plan became subject to HIPAA, which benefits are subject to HIPAA privacy rules, how to fill in template forms correctly, and how covered entities must distribute the Notice of Privacy Practices. Key details include that insured plans may qualify for a compliance shortcut and not need to send notices, and that covered entities must post notices on their website and deliver notices to individuals by mail or email.
The document summarizes information about the transitional reinsurance fee that employers with self-insured health plans must pay, including:
1) The fee is $44 per covered individual for 2015 and must be paid in full by January 15, 2016 or in two installments of $33 by January 15, 2016 and $11 by November 15, 2016.
2) Employers must submit enrollment counts using the pay.gov website by November 16, 2015.
3) The Centers for Medicare and Medicaid Services will hold information sessions by phone and email through November 16th to assist employers with submitting enrollment counts and fees.
The document is a survey report from Willis that summarizes the results of their 2015 Benefits Benchmarking Survey. Some key findings include:
- PPO/POS plans are offered by 87% of employers and are the most prevalent plan type. HSA-eligible CDHPs are the second most offered at 47%.
- On average, employers offer 3 or fewer medical plan options. The majority (85%) of employers offer 3 plans or fewer.
- Regionally, HMO/EPO plans are significantly more prevalent in the West, offered by 51% of employers in that region compared to 13-42% elsewhere.
Alert health care reform bill - hhs issues additional guidance on transitio...Annette Wright, GBA, GBDS
The document discusses new guidance from the Department of Health and Human Services (HHS) on the transitional reinsurance program established under the Affordable Care Act. The guidance provides details on the amounts that will be contributed to and reimbursed from the program for 2014-2016. Contribution amounts will fund $12 billion in 2014, $8 billion in 2015, and $5 billion in 2016. The contribution per enrollee is estimated to be $63 per year. Insurers will receive reimbursements of 80% of individual claims between $60,000-$250,000. Health plans and insurers will generally have to make contributions, with some exceptions like health flexible spending accounts and employee assistance programs.
Alert - Health Care Reform Bill - IRS Issues Final Regulations for Comparativ...Annette Wright, GBA, GBDS
This document summarizes IRS regulations regarding fees to fund the Patient-Centered Outcomes Research Institute (PCORI). Key points include:
- The fee applies to self-insured health plans from 2012-2019 to fund PCORI research on treatment effectiveness.
- The fee amount is based on average number of covered lives, starting at $1 then $2 per life. Insurers pay for fully-insured plans, sponsors for self-insured plans.
- Exceptions include expatriate plans, certain FSAs/HRAs, EAPs, and plans covering mainly excepted benefits. Government and military plans are also exempt.
The document provides a timeline summary of key provisions from the 2010 Affordable Care Act (ACA) health reform law to be implemented between 2010-2018. Some key points include: expanded dependent coverage until age 26 starting in 2010; prohibiting pre-existing condition exclusions for children under 19 in 2010; establishing state health insurance exchanges by 2014; requiring individuals to have health insurance or pay a penalty starting in 2014; and increasing the Medicare Part D subsidy starting in 2011 to completely close the coverage gap by 2020.
The document discusses how certain proposed legislation and regulations will impact different types of health plans. It notes that while small group and individual plans will be subject to new deductible and out-of-pocket limit caps in 2014, self-insured group plans and large group plans are proposed to be exempt from these requirements. Grandfathered group health plans would also be exempt. Additionally, it states that under proposed regulations, self-insured group health plans would be responsible for paying proposed reinsurance fees of $63 per covered life each year, though third parties could administer the payments.
The Departments of Labor, Health and Human Services, and the Treasury issued a FAQ clarifying when supplemental coverage qualifies as an excepted benefit. According to the FAQ, only supplemental group health coverage that does not include essential health benefits may qualify. The Departments intend to propose regulations stating that supplemental coverage filling gaps in primary coverage categories will only qualify if the benefits are not essential health benefits in that state. Pending rulemaking, the Departments will not enforce against supplemental coverage of non-essential health benefits that complies with existing guidance.
The document discusses new guidance from the Department of Labor regarding medical loss ratio rebates paid by insurers to employers sponsoring ERISA group health plans. The guidance states that rebates may be considered plan assets, requiring employers to comply with ERISA fiduciary rules in handling the funds. It provides details on how rebates should be allocated based on plan terms and between employers and participants. The guidance also covers requirements for non-ERISA plans and terminated plans.
On May 26, Representative Carolyn Maloney of New York introduced the Pandemic Risk Insurance Act of 2020 (HR 7011).
This proposal draws on the basic framework developed for the Terrorism Risk Insurance Act of 2002. Although nearly two decades old, that program has never actually paid a claim. Accordingly, many of its design features remain (thankfully) untested.
This document provides a glossary of terms related to individual health insurance. It defines terms like agent, annual deductible, coinsurance, network providers, pre-existing conditions, and premiums. It also provides contact information for Celtic Insurance Company, an individual health insurance provider. Celtic aims to offer consumers affordable and easy-to-understand insurance plans. The glossary helps explain insurance concepts and Celtic's services.
This document defines various key terms related to health insurance:
1. It describes an actuary as an insurance professional responsible for determining premiums based on claims paid versus premiums collected to ensure profits.
2. It provides brief definitions for terms like admitting privilege, affordable care act, agent, beneficiary, benefit, brand name drug, broker, carrier, case management, certificate of insurance, claim, and COBRA.
3. It explains concepts such as coinsurance, copayment, credit for prior coverage, deductible, denial of claim, dependent, effective date, exclusion, explanation of benefits, fee for service, generic drug, group health insurance, and guaranteed issue.
Actuarial Review on Post-Retirement Medical Plans-2014.Antony Okungu
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The document summarizes key provisions of the 2010 health care reform legislation that affect employers, including requirements regarding lifetime and annual limits on coverage, dependent coverage for children up to age 26, uniform explanations of coverage, reporting on quality of care, and appeals processes. The reforms impose new regulations on employer-provided health plans with respect to benefits and administration.
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The document discusses health insurance and the Malaysian government's plans to privatize healthcare facilities and treatment. This will likely lead to increasing medical fees. Currently, only those who can afford it or have company sponsorship access private healthcare. The government is considering a compulsory national health insurance plan like the UK to address issues of collecting premiums from different groups and ensuring access. However, questions remain about whether health insurance would encourage equitable access to healthcare services or lead to a more polarized system favoring the affluent. The government aims for a restructured national health insurance scheme to attract healthcare workers to rural and underserved areas.
Legislative Update Patient Protections And Affordable Care Act Timeline 4 1...ForestFinancialGroup
Forest Financial Group provides a legislative update on the timeline for implementation of the Patient Protection and Affordable Care Act. Key provisions beginning in 2010 include a temporary reinsurance program for early retirees, establishing high-risk pools, and requiring dependent coverage until age 26. Starting in 2014, major reforms take effect such as prohibiting pre-existing condition exclusions, establishing health insurance exchanges, and expanding Medicaid eligibility. An excise tax on high-cost health plans begins in 2018.
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The document outlines key provisions and implementation timeline of the 2010 Patient Protection and Affordable Care Act. Some major provisions beginning in 2010 include dependent coverage for adults up to age 26, prohibiting pre-existing condition exclusions for children, free preventive services, and improved appeals processes. In 2011, provisions expand to include a 50% brand name drug discount in the Medicare Part D donut hole, medical loss ratio reporting for insurers, and preventive services with no cost sharing for Medicare beneficiaries.
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Similar to Alert:HHS ISSUES FINAL REGULATIONS (20)
This document summarizes key Social Security, Medicare, and retirement plan limits for 2017 and 2018. For Social Security, the wage base and maximum annual benefit increased slightly, as did annual retirement earnings limits. For Medicare, premiums and deductibles increased modestly. For retirement plans, the compensation limit and contribution limits increased, with the defined benefit plan limit rising to $220,000. Health savings account contribution and deductible/out-of-pocket expense limits also increased for individual and family coverage.
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Health Care Reform Developments Week of January 12, 2015
Alert:HHS ISSUES FINAL REGULATIONS
1. HUMAN CAPITAL PRACTICE
ALERT:
HEALTH CARE REFORM BILL
October 2012 www.willis.com
HHS ISSUES FINAL REGULATIONS
ON REINSURANCE PROGRAM
Section 1341 of the Patient Protection Affordable Care Act (PPACA) requires that standards be
implemented enabling states to establish and maintain a transitional reinsurance program. The
purpose of the program is to help stabilize premiums for coverage in the individual health
insurance market.
PPACA provides for three risk-spreading mechanisms to mitigate the potential impact of adverse
selection and stabilize premiums: a risk corridor, a risk adjustment program and the transitional
reinsurance program. Only the reinsurance program is discussed in this Alert as it is the program
of particular interest to plan sponsors of group health plans.
BACKGROUND
Starting in 2014, due to insurance reform under PPACA, health coverage will be available to
anyone, regardless of health status, either in the individual market or through the small group
market. This unfettered availability will result in adverse selection, that is, the tendency for high-
risk individuals to buy health insurance and low-risk individuals to defer purchase of health
insurance resulting in an inability to attract healthy enrollees. Such adverse selection ultimately
causes premiums to increase in any market, but especially in the individual and small group
markets.
In order to stabilize these increasing premiums, especially in the first three years of operation of
state insurance exchanges, 2014-2016, PPACA provides for the implementation of a transitional
reinsurance program. Reinsurance is basically buying protection against the possibility that
some rare set of circumstances (such as high claims cost) might produce losses that an insurer is
unable to fund on its own. Thus, the reinsurance program under PPACA is designed to reduce the
uncertainty of insurance risks in the individual market by making payments for high-cost claims.
The reinsurance program will be funded with payments to an “applicable reinsurance entity”
from health insurance issuers and certain plan administrators on behalf of group health plans.
Although the regulations provide for states to establish a reinsurance program, even if not
establishing a health insurance exchange, states are not required to establish such a program. If a
state chooses not to establish a reinsurance program, then the Department of Health and Human
Services (HHS) will establish it for the state. The program is scheduled to run for a three-year
period beginning January 1 2014. However, a state is permitted to continue a reinsurance
program after the end of the three- year period. The final regulations can be found at
www.gpo.gov/fdsys/pkg/FR-2012-03-23/pdf/2012-6594.pdf.
2. n
AFFECTED PLANS AND EXCEPTIONS n
Workers’ Compensation
Credit-only insurance
n Long-term care
Health insurance issuers and third-party administrators (TPAs) on
n Health flexible spending accounts (FSA)
behalf of group health plans are generally required to make
that meet the definition of an excepted
contributions to the transitional reinsurance program. Currently, it
benefit. The fee will apply to a health FSA
is unclear whether the TPA or the actual plan is liable for the
if (i) no other conventional group health
reinsurance contribution. It is presumed the plan is ultimately
plan coverage is offered in addition to the
responsible for the fee, but that the TPA bears the responsibility for
health FSA, and (ii) the health FSA is
remitting the fee on behalf of the plan. Presumably, insurance issuers
designed so that the maximum benefit
will have a way to pass this fee onto employers, and administrators of
potentially payable to any participant for
self-insured plans will more than likely seek reimbursement over the
a year could not exceed the greater of two
course of the plan year. Thus, the plan sponsor, i.e., generally the
times the participant’s salary reduction
employer, should be prepared to fund this contribution, regardless of
election or $500 plus the participant’s
being fully insured or self-insured. It also appears that a self-insured
salary reduction election.
plan that is self-administered will also be expected to cover this fee.
n Employee Assistance Programs, disease
Neither the statute nor the regulations provide exceptions for
management or wellness program as long
governmental or church plans that are self-insured.
as the program does not provide for
significant medical care or treatment.
Contributions to the reinsurance program are required for group
n Medicare and Medicaid programs are
health plans. Thus, plans that consist solely of excepted benefits as
exempt from the fee.
provided under section 2971(c) of the Public Health Service Act are
expressly excluded from this fee. Specifically, the types of coverage
Whether retiree–only coverage and wellness
that are excluded from application of the transitional reinsurance fee
plans are subject to the reinsurance
are the following:
contributions remains unclear. To the extent
they constitute group health plans and do not
n Limited-scope dental and vision plans, accident-only or
qualify as any of the excepted benefits listed
disability-only plans, and on-site clinics. A dental or vision plan
above, it seems these coverages would be
will be deemed to be excepted if provided under a separate
subject to the contribution. Furthermore, as it
policy, certificate, or contract of insurance or if participants may
relates to insured coverage, the regulations
decline coverage and participants must pay an additional
provide that contribution amounts are based
contribution to elect the coverage.
on the issuer’s “fully insured commercial book
n Coverage only for a specified disease or illness and hospital
of business”. However, guidance has not been
indemnity or other fixed indemnity insurance provided coverage
provided as to exactly when coverage is
is offered as independent noncoordinated benefits
considered a commercial book of business.
n Coverage issued as a supplement to liability insurance
n Liability insurance, including general liability and automobile
2 Willis North America • 10/12
3. AMOUNT OF RESINSURANCE CONTRIBUTION
In order to fund the transitional reinsurance program, PPACA provides for aggregate
contributions in the amount of $12 billion for plan years beginning in 2014, $8 billion for
plan years beginning in 2015 and $5 billion for plan years beginning in 2016. This amount
includes an aggregate amount of $5 billion which is to be collected for deposit into the U.S.
Treasury as general revenue.
Reinsurance contributions will be based on a national per capita contribution rate to be
determined by HHS for a benefit year (defined to be a calendar year). HHS will announce the
contribution rate in an annual notice of benefit and payment parameters. The per capita
contribution will be applied to all “reinsurance contribution enrollees” who are defined as
individuals covered by a plan for which reinsurance contributions must be made pursuant to
the final regulations. Since the regulations reference individuals covered by a plan, this
apparently means that “reinsurance contribution enrollees” are employees, spouses and
dependents and the fee will be applicable to all of these.
As this regulation recently became effective and fees are not due until January 2014, HHS
has yet to communicate the amount of the per capita fee for each reinsurance contribution
enrollee. However, it is estimated that the fee could range between $61-$105. This fee is
much greater than the Comparative Effectiveness Research Fee (CER) recently discussed in
Willis Alert, July 2012, “IRS Issues Proposed Regulations for Comparative Effectiveness
Research Fees” ($1 per average covered life increasing to $2 per average covered life).
Additionally with the CER fee, plan sponsors were provided some relief with a rule that lets
covered lives participating in multiple self-insured plans which have the same plan year as
being only counted once for the purpose of the fee. However, the CER fee is regulated by the
Treasury Department and Treasury provided this relief rule. The transitional reinsurance
program is regulated by HHS and any such relief does not seem apparent at this time. Of
course, further guidance from HHS is expected regarding this program.
HHS is responsible for allocating reinsurance payments to appropriate insurance issuers in
a state, the U.S. Treasury, and to the state reinsurance program or HHS for administrative
expenses of carrying out the transitional reinsurance program. Additionally, the regulations
provide that states are permitted to collect more than the amounts specified by the statute
and for a longer amount of time then the three year period provided in the statute, if these
amounts are insufficient for covering transition reinsurance payments or administrative
cost. (The regulations provide additional guidance for states choosing to collect additional
funds such as notice, timing and recordkeeping requirements.)
TIMING
Regulations for the transitional reinsurance fee were effective as of May 22, 2012.
Assessments for the fee will be in operation from 2014-2016. Contributions are expected to
be collected on a quarterly basis beginning on January 15, 2104. Although states have the
option of collecting the fee for the fully insured market, HHS retains responsibility for
collecting the fee for self-insured plans. States that will be collecting contributions are
permitted to set their own timeframe but are encouraged to adopt similar timeframes to
those adopted by HHS.
3 Willis North America • 10/12
4. RECORDKEEPING
Self-insured plans are required to maintain certain records relating
to the fee. The transitional reinsurance program requires each self-
insured plan to maintain a record of the state of residency of each
participant and beneficiary that the plan covers. Thus, plans will
need to prepare to gather this information during their 2013 open
enrollment period.
PENALTIES
In general, the maximum monetary penalty that may be imposed
appears to be $100 per day per affected individual. However, at this
time, it is unclear how this penalty will apply as to the transitional
reinsurance fee. Issues yet to be resolved include whether the TPA
will be liable if the fee is not paid, as well as, how the number of
“affected individuals” will be counted.
CONCLUSION
Recently published regulations for a transitional reinsurance
program to assist in stabilizing premiums for the individual and
small group market in 2014 caught many employee benefit
professionals off-guard. The program is likely to result in additional
costs for employer plan sponsors, possibly additional recordkeeping
and for those who self-administer their plans, additional reporting
obligations. Plan sponsors of both fully and self- insured plans need
to begin to consider the additional costs the plan may incur (without
knowing exact contribution requirements). Also, both types of plans
will need to work with either their insurance carriers or TPAs to
determine how residency information for all participants will be
recorded and maintained.
As further guidance on the transitional reinsurance fee program is
expected, Willis will continue to keep you apprised of any
information as it develops.
4 Willis North America • 10/12