Applicability of Insurance Reforms to Dental Coverage · PPACA includes two provisions on this...

Applicability of Insurance Reforms to Dental Coverage

April 2009April 29, 2010

Nothing is certain…

Warning: Additional analysis and regulatory feedback may affect interpretations provided on the following slides.

Caution: Regulations issued by HHS and states will ultimately determine interpretation.

4/29/2010 NADP Member's Internal Use Only / Do Not Distribute 2

This presentation should not be construed as legal advice.

Objectives1. Describe reforms contained in PPACA2. Define issues in their application to dental

coverage 3. Outline NADP’s next steps4. Explain paths that result from alternative

regulatory interpretations.5. Answer common questions


HR 3590Patient Protection & Affordable Care Act (PPACA)

modified byHR 4872‐‐Reconciliation

4

Do Insurance Market Reforms Apply to Separate Dental

Coverage?

Skip to 2014 “Essential Health Benefit Package”

Prepare for 2010 & 2011 Reforms to Improve Coverage

4/29/2010 NADP Member's Internal Use Only / Do Not Distribute

PresentersKurt LawsonPartnerHogan & Hartson

Carole JohnsonResearcher/Lecturer

GW Health Policy


Insurance Reforms & Applicability to Dental Coverage

presented by Kurt Lawson


Federal Health ReformAmends the Public Health Service Act by revising and significantly expanding the insurance market reforms added by HIPAA in 1996

NADP Member's Internal Use Only / Do Not Distribute 74/29/2010

Why is This Important?HIPAA (Health Insurance Portability and Accountability Act) established rules related to portability, access, and renewability of group insurance

Included an exception for certain benefits if offered separately, including:

Limited-scope dental Limited-scope visionLong-term care


Key QuestionsIs the HIPAA exception for limited-scope dental benefits applicable to the new insurance market reforms in PPACA?

Or, do the new insurance market reforms apply to limited-scope benefits like dental and vision?

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Intent vs. ImplementationPPACA includes two provisions on this point:

One applies the HIPAA exception in a way that would exclude stand-alone dental plans from most of the insurance market reforms created in the federal bill.

The second provision is less specific or clear. By renumbering provisions in the bill, it creates some ambiguity about the application of the HIPAA exception.


Review Process for“Unreasonable Rate Increases”

Applies to Plan Year 2010Set by HHS Sec & States

(HIPAA Excepted Benefit Definition Not Applied)

IMPROVING COVERAGE REFORMSApplicable to New Coverage

Effective: Sept 23, 2010

Lifetime Dollar Limits Prohibited*

Annual Limits Restricted*

Recission Prohibited*

No Cost Sharing for Preventive Services

Quality Reporting

Dependant Coverage Extended to Age 26*

New Internal/External Appeals Processes

Non‐Discrimination in Eligibility Standards Based on Salary

Eliminate Pre‐ex for Children*

*Applies Also to Grandfathered Plans

SUBPART

II

REFORMS

SUBPART

I

REFORMS

GENERAL REFORMSApplicable to New Coverage

Effective: January 1, 2014

Guaranteed Issue & Renewal Required

All Annual Limits Prohibitedfor

Essential Benefits

Rating Restrictions Imposed (only geography, age, tobacco use and Indi./family coverage allowed)

Waiting Periods Over 90 DaysProhibited*

All Pre‐ex Prohibited*

Coverage for Clinical Trials

*Applies Also to Grandfathered Plans

2010 2011 20132014For All Coverage Issued in 2011

MLR Mandated(85% large group & 80% small group)

By March 23, 2011 (12 months from enactment)

Uniform Coverage Explanation & DefinitionsSet by HHS (consultation with states)

NOTE: Regulations may apply some or all of these reforms to pediatric dental coverage required in 2014 as part of the “Essential Health Benefits Package” if provided in a separate dental policy or rider.

Language Applicable to All Benefits—including Dental

Language Unclear if Applicable to “Excepted Benefits”—including Dental

Not Applicable to “Excepted Benefits”—including Dental

KEY

4/29/2010

Major PPACA Insurance Market Reforms Impacting Coverage(also see Attachment I—listing insurance market reforms as renumbered)

11NADP Member's Internal Use Only / Do Not Distribute

Intent vs. ImplementationSeveral organizations have suggested that congressional intent was to apply the HIPAA exception and exclude benefits like limited-scope dental from the market reforms.

There also is some evidence in early versions of the bill to suggest that this was the congressional intent.


Intent vs. ImplementationThe final arbiter will be regulations developed by the federal Departments of Health and Human Services, Labor, and Treasury.

This is not the only issue in the bill that will require regulatory interpretation.


TimingThis interpretation will happen quickly, as many of the insurance reforms take effect as of plan years beginning on or after 9/23/2010.

The federal Departments of Health and Human Services, Labor, and Treasury are actively working on these rules now.


Principles for Interpreting ApplicabilityIndicators of Congressional IntentSpecific vs. General ProvisionsCase LawImperfect Process

Lack of formal conference Rushed process

Practical Impact


Next Steps


Next StepsNADP & Partners* review applicability with federal agencies

Respond to proposed regulations

Timeframe – Indications that regulatory proposals to be released imminently (within weeks)

* VSP has joined in the legal memo, NAVCP is considering; DDPA declined (developed separate internal memo)


Framing Issue Until ClarificationWe believe that Congressional intent was to limit the application of market reforms to comprehensive, major medical insurance*.

Dental (and vision) coverage offered separately from medical insurance are classified as “excepted benefits” under the provisions of the Public Health Service Act where market reforms are added.

NOTE: Some or all of these reforms may be applied to pediatric dental coverage required in 2014 as part of the

“Essential Health Benefits Package” when provided in a separate dental policy or rider.


Questions


Implications

presented by Carole Johnson


Application of Specific Market ReformSec. 2794* was written in a way that appears outside the scope of the HIPAA exception

Sec. 2794. Ensuring that consumers get value fortheir dollars. Starting in 2010, the Secretary, inconjunction with the states, will annually reviewunreasonable premium increases.

.

Requires health insurance issuers to justify unreasonable increases and publicly post this information on the Internet.

*Effective on date of enactment (3/23/2010)


What Has HappenedIRS Addressed Tax Implications for Extending Coverage to Dependants

IRS Notice 2038--Tax Treatment of Health Care Benefits Provided With Respect to Children Under Age 27

Announcements of Compliance Prior to Effective Dates

Extension of Dependant Coverage to 26Elimination of Recissions


POLL

What is Your Company Doing on Dependant Coverage

to Age 26?


If Regulations Do Apply

HIPAA Exception


Next Big IssueRules that apply to the “Essential Health Benefit Package (EHBP)” beginning in 2014.

Essential benefits include pediatric oral health services and are required in the individual and small group markets beginning in 2014.

PPACA allows the required pediatric dental services that are part of the “essential benefits” package in the new Exchanges to be sold as stand-alone dental plans


“Essential Benefit” RequirementsOut-of-pocket limits: Beginning in 2014, essential health benefits package coverage must limit cost-sharing.

Actuarial values: Coverage must be offered at one of the specific actuarial values. Bronze = 60% A.V.; silver = 70% A.V.; gold = 80% A.V. and platinum = 90% A.V.

Deductibles: By 2014, small group health plans providing the essential benefits package cannot impose a deductible greater than $2,000 for individuals or $4,000 for other coverage.

Prohibition on most annual limits for essential benefits4/29/2010 26NADP Member's Internal Use Only / Do Not Distribute

If Regulations Don’t Apply

HIPAA Exception to Improving Coverage Reforms


What Applies & WhenExisting Business, i.e. Grandfathered Health PlansNew Business


Definition of Grandfathered PlansGroup health plan or health insurance coverage in which an individual was enrolled on date of enactment (3/23/2010).

Exempt from certain market reform requirements

Family members can continue to enroll

New employees and their families can continue to enroll.

Regulation will define the full scope of GF plans.


In 2010 All Business Impacted byRestrictions on annual limits*Ban on all lifetime limitsBan on pre-existing conditions for children under 19Extension of Dependent Coverage to 26Reporting of MLRsUniform coverage explanations/standardized definitions (12 month time frame for HHS to develop)

* Some discretion provided to the Secretary of HHS prior to 2014.


In 2010 “New Business”* Also Impacted byQuality reporting Internal & External Appeals processBan on recissionsCoverage of recommended preventive benefits without cost-sharing

Mandatory Loss Ratios of 85% for Large Group & 80% for Small Group with Rebates

In 2011 New Business Impacted by


*New business, i.e. health plans that are not grandfathered

If Regulations Don’t Apply

HIPAA Exception to General Reforms


In 2014, All Business Impacted byNo pre-ex for all ages90-day limit on waiting periods

Ban on Annual LimitsLimits on rate variationGuaranteed availability and renewabilityNo health status discriminationCoverage of clinical trials

In 2014, New Business* Also Impacted by


*New business, i.e. health plans that are not grandfathered

Questions


Upcoming HCR Webinars. . .Thursday, May 13th – 2 pm CDT

Pediatric Oral Health Coverage Requirements (Exchanges, Private Market, Large & Small Group)

Tuesday, May 25th – 2 pm CDTHCR Financing Impacts on Dental Plans


Applicability of Insurance Reforms to Dental Coverage · PPACA includes two provisions on this...

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