Transcript Document

Health Care
Reform: Health
Plan Overview
Presented by
Christopher Monroe
Constitution Advisory Group
University of
Hartford - Emeriti
Agenda
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Reforms currently in place
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2012-2013 compliance deadlines
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Future compliance deadlines
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Retiree Plans – “University of Hartford and Future
Impact”
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Questions
Reforms Currently in Place
Provisions Already Effective
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
• Appeals process changes – “user friendly”
• No reimbursement for OTC medicine or drugs
(without a prescription)
• Medical loss ratio rules – “fully insured groups only”
• Part D Discount Expansion - “Donut Hole”
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2012-2013 Compliance
Deadlines
W-2 Reporting
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Employers must report
aggregate cost of
group health plan
coverage on each
employee’s Form W-2
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Does not change the
tax rules for health
coverage – coverage
is still not taxable
Effective Date for W-2 Reporting
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Reporting optional for all employers in 2011
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Mandatory for 2012 tax year (W-2 Forms provided in
January 2013)
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For small employers (filed fewer than 250 W-2 Forms
last year), reporting requirement is delayed until
further guidance issued
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Covered employers need to be compiling data
Summary of Benefits and Coverage
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Simple and concise explanation of benefits
− Applies to GF and non-GF plans
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Final guidance specifies compliance deadlines
− Original deadline was March 23, 2012
− Revised deadline of September 23, 2012.
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Carrier support in place and functional.
Providing the SBC to Enrollees
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Plans must provide SBC to enrollees:
− For each benefit package offered or which they are eligible
− Annually at renewal (or 30 days before new plan year if automatic
renewal)
− With enrollment application materials
− If no written enrollment materials, when the participant is first
eligible to enroll
− Before the first day of coverage (if there have been changes to
the SBC)
− Upon request
SBC Standards
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Appearance
− Cannot be longer than 4 double-sided pages
− 12-point or larger font
− May be color or black and white
− Paper or electronic form
− Template available
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Language:
− Easily understood language
− “Culturally and linguistically appropriate manner” – interpretive
services and written translations upon request
− Translations are available
SBC Content
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Uniform definitions of standard terms
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Description of plan’s coverage
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Exceptions and limitations
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Cost-sharing provisions
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Renewability and continuation
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Coverage examples
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Required statements and contact information
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Internet address for obtaining the uniform glossary of
terms
60-Day Notice Rule
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Material modifications not in connection with
renewal must be described in a summary of material
modifications (SMM) or an updated SBC
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Material modification:
− Enhancement of covered benefits or services
− Material reduction in covered benefits or services
− More stringent requirements for receipt of benefits
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Must be provided at least 60 days BEFORE
modification becomes effective
Preventive Care for Women
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New guidelines for preventive care for women
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Must provide coverage for women’s preventive
health services without any cost-sharing
− Applies to non-GF plans
− No deductible, copayment or coinsurance
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Effective for plan years beginning on or after
Aug. 1, 2012
Preventive Care for Women
Covered Health Services
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Well-women visits
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Gestational diabetes screening
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HPV DNA testing
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Sexually transmitted infection counseling
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HIV screening and counseling
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Breastfeeding support, supplies and counseling
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Domestic violence screening and counseling
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Contraceptives and contraceptive counseling
Increased Medicare Tax
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Medicare tax rate to increase for high-earners
− 0.9 percent increase (from 1.45 percent to 2.35 percent)
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High-earner threshold
− Single: $200,000
− Married : $250,000
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Employer responsibilities
− Withhold additional amounts from wages in excess of
$200,000
− No requirement to match additional tax
− No requirement to notify employees
Health FSA Limits
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Current limits
− No limit on salary reductions
− Many employers impose limit
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Beginning in 2013, limit is
$2500/year
− Limit is indexed for CPI for later years
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Applies to plan years beginning on or after 1/1/13
− This is a change from initial effective date
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Does not apply to dependent care FSAs
Comparative Effectiveness Research
Fees – July, 2013 & Beyond
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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
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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
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Amount of fee:
− $1 per covered life
− Increases to $2
− Indexed for CPI
Notice of Exchange
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Employers must notify new and current employees of
exchange information
− Originally effective March 1, 2013
− Delayed until October 1, 2013.
− No Penalty if Employers elect not to Distribute Notice
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Notice must include information about 2014
changes:
− Existence of health benefit exchange and services provided
− Potential eligibility for subsidy under exchange
− Risk of losing employer contribution if employee buys coverage
through an exchange
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More guidance and model notice expected
2014 Compliance Deadlines
Individual Mandate
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Individual mandate is a “tax” and thus constitutional
per Supreme Court.
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Jan. 1, 2014: Individuals must enroll in coverage or
pay a penalty
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Penalty amount: Greater of $ amount or a % of
income
− 2014 = $95 or 1%
− 2015 = $325 or 2%
− 2016 = $695 or 2.5%
Health Insurance Exchanges
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Health insurance exchanges will be established in
each state – October 1st “Working out the Kinks”
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Individuals and small employers can purchase
coverage through an exchange
− In 2017, states can allow employers of any size to purchase
coverage through exchange
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Individuals may be eligible for federal subsidy
− Limits on income and government program eligibility
− Employer plan is unaffordable or not of minimum value
Employer Responsibility
“Pay or Play”
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Large employers subject to “Pay or Play” rule
− Offer coverage of a certain quality or possibly pay a penalty
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Applies to employers with 50 or more full-time
equivalent employees in prior calendar year
− FT employee: employed for an average of at least 30 hours of
service per week
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Penalties apply if:
− Employer does not provide coverage to all FT employees – Access
− Plan Design is not of a Minimum Value – 60% actuarial value
− Cost of single coverage is not deemed Affordable – 9.5% “Safe
Harbor”
Employer Penalty Amounts
“Pay or Play”
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Employers that do not offer coverage to all full-time
employees:
− $2,000 penalty per full-time employee
− Excludes first 30 employees
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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)
− Penalties do not apply if your plan satisfies the minimum value
(60%) or 9.5% Safe Harbor test.
Employer Reporting
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Employers will have to report certain information
about health coverage to the government.
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Information geared towards:
− Access – “must offer to all FT employees working over 30 hrs”.
− Coverage Levels – “must cover 60% of plan expenses”
− Affordability – “can’t exceed 9.5% of gross income”
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Applies to coverage offered after Jan. 1, 2014
Originally. Later postponed until 2015.
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First returns to be filed in 2016
Transitional Reinsurance Fee
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Three (3) year program – “Support high dollar claims
within an exchange structure”
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Aim is to raise $25 billion to fund this initiative.
− 2014 – Fee set at $5.25 per member per month or $63.00
annually.
− Member is defined as employee, spouse, dependent children.
− Fee reduces each year and “sunsets” in 2017.
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Applies to fully insured and self insured employer
groups.
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Estimated impact to the University in 2014 - $110,000
Future Compliance
Deadlines
2018 – Cadillac Plan Tax
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40 percent excise tax on high-cost health plans
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Based on value of employer-provided health
coverage over certain limits
− $10,200 for single coverage
− $27,500 for family coverage
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To be paid by coverage providers
− Fully insured plans = health insurer
− HSA/Archer MSA = employer
− Self-insured plans/FSAs = plan administrator/employer
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More guidance expected
Automatic Enrollment Rules
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Will apply to large employers that offer health
benefits
− Applies to GF and non-GF plans
− Large employer = more than 200 employees
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Must automatically enroll new employees and reenroll current participants
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Adequate notice and opt-out option required
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DOL:
− Regulations will not be ready to take effect by 2014
− Employers not required to comply until regulations issued and
applicable
University of Hartford
PPACA and Retiree Coverage
PPACA & Retiree Coverage
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Uncertainly Still Abounds – “Same for Active Plans”.
Financial Constraints – “Will there be Belt Tightening”
Part D changes have been Positive:
− $250 Part D Refund (2010) for those within “Donut Hole”
− Discounts continue to grow within the “Donut Hole” –
generic/brand
− Shrinking of the “Donut Hole” by 2020.
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University’s Cost Basis has improved.
− Cost reductions since 2010 - $450 to $390.
− Integrity of the current plan has been maintained for the most
part.
PPACA & Retiree Coverage
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2014 Individual Mandate – Questions Linger
− Will the “Exchange” roll out impact my current plan?
− Will I be pushed to secure coverage via the “Exchange”?
− Will the Patient Centered Research Organization address issues
relative to Medicare coverage limits?
− If the University drops its plan how will I secure coverage?
− Will my plan change in 2014 and what will it cost me as a retiree of
the University?
− Will my doctor continue to accept Medicare reimbursement?
− Will it be difficult to schedule appointments with my provider?
− Will funding be shifted from Medicare to support PPACA?
Questions?
Thank you!
This presentation is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Please
contact legal counsel for legal advice on specific situations. This presentation may not be duplicated or redistributed without
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