Health Care Reform Health Plans Overview GDI Ins 2-15-13
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Transcript of Health Care Reform Health Plans Overview GDI Ins 2-15-13
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7/29/2019 Health Care Reform Health Plans Overview GDI Ins 2-15-13
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GDI Insurance Agencies888-991-2929
Health CareReform: Health
Plans Overview
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Agenda
What is the legal status of the law?
Which plans must comply?
Grandfathered plans
Reforms currently in place
2012-2013 compliance deadlines
Future compliance deadlines
Questions
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Legal Status of Health CareReform Law
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Supreme Court Decision
Supreme Court issued its decision on June 28, 2012 5:4 ruling
Chief Justice Roberts wrote the courts opinion
Upheld individual mandate (purchase healthcoverage or pay a penalty2014)
The individual mandate is constitutional, so the rest
of the law is too
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November 2012 Elections
Key issue in 2012 political campaigns Republicans promised to act to repeal health care reform
law
Democrats supported law as major achievement of PresidentObamas first term
President Obama re-elected for a second term
Congress remains divided Democrats keep control of the Senate
Republicans maintain control of House
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What Will Be Next?
Implementation of health care reform law continuesas scheduled for now
Changes to law may come from Congress Some changes already made Democrats will oppose any major changes, and President
Obama has promised to veto
Courts will address other aspects of the law
For example, courts have ruled on the laws contraceptivecoverage mandate, with mixed results on whether employersmust comply
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Which Plans Must Comply?
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Plans Subject to Health CareReform
Health care reforms health plan rules generallyapply to group health plan coverage
Exceptions Excepted benefits
Retiree-only plans
Group health plans covering fewer than 2 employees
Excepted Benefits Accident or disability income coverage
Separate dental and vision plans
Liability insurance
Some FSAs
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Grandfathered Plans
Grandfathered plan: group health plan or healthinsurance coverage in which an individual wasenrolled on March 23, 2010
Certain health care reform provisions dont apply tograndfathered plans, even if coverage is laterrenewed
A plan can lose grandfathered status by making toomany changes to benefits or costs
Plans will have to analyze status and changes at eachrenewal
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Which Rules Dont Apply to
Grandfathered Plans?
Patient Protections
Nondiscrimination rules for fully-insured plans
New appeals process
Quality of care reporting
Insurance premium restrictions
Guaranteed issue and renewal of coverage
Nondiscrimination based on health status/in health care Comprehensive health insurance coverage
Limits on cost-sharing
Coverage for clinical trials
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Reforms Currently in Place
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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 (non-GFplans)
Appeals process changes (non-GF plans) No reimbursement for OTC medicine or drugs
(without a prescription)
Medical loss ratio rules
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2012-2013 ComplianceDeadlines
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W-2 Reporting
Employers must reportaggregate cost ofgroup health plancoverage on each
employees Form W-2
Does not change thetax rules for healthcoveragecoverageis still not taxable
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Effective Date for W-2 Reporting
Reporting optional for all employers in 2011
Mandatory for 2012 tax year (W-2 Forms provided inJanuary 2013)
Forsmall employers (filed fewer than 250 W-2 Formslast year), reporting requirement is delayed untilfurther guidance issued
Covered employers need to be compiling data
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Reporting
Report coverage under employer-sponsored grouphealth plans Does not include excepted benefits/plans that dont provide
health coverage
Aggregate cost must be reported Include both employer- and employee- paid portions
Determined under rules similar for determining applicablepremium 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
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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
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SBC Compliance Deadlines
Issuers to health plans: Sept. 23, 2012
Health plans to enrollees: Open enrollment: 1st day of the 1st open enrollment period
that begins on or after Sept. 23, 2012 or
Other enrollment: 1st day of the 1st plan year that begins onor after Sept. 23, 2012
Special rules specify when SBC must be provided
No duplication required: if issuer provides toenrollees, plan doesnt have to
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Providing the SBC to Health Plans
Issuers must provide SBC to health plans:
Upon application
Before the first day of coverage (if there have been changes
to the SBC)
When a policy is renewed or reissued
Upon request
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Providing the SBC to Enrollees
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 enrollmentmaterials, when the participant is first eligible to enroll)
Before the first day of coverage (if there have been changes
to the SBC) To special enrollees within SPD timeframe
Upon request
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SBC Standards
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
Language:
Easily understood language Culturally and linguistically appropriate manner
interpretive services and written translations upon request
Translations are available
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SBC Content
Uniform definitions of standard terms
Description of plans coverage
Exceptions and limitations
Cost-sharing provisions
Renewability and continuation
Coverage examples
Required statements and contact information
Internet address for obtaining the uniform glossary ofterms
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60-Day Notice Rule
Material modifications not in connection withrenewal must be described in a summary of materialmodifications (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 BEFOREmodification becomes effective
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Preventive Care for Women
New guidelines for preventive care for women onAug. 1, 2011
Must provide coverage for womens preventivehealth services without any cost-sharing Applies to non-GF plans
No deductible, copayment or coinsurance
Effective for plan years beginning on or afterAug. 1, 2012
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Covered Health Services
Well-women visits
Gestational diabetes screening
HPV DNA testing
Sexually transmitted infection counseling
HIV screening and counseling
Breastfeeding support, supplies and counseling
Domestic violence screening and counseling
Contraceptives and contraceptive counseling
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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
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Health FSA Limits
Current limits No limit on salary reductions
Many employers impose limit
Beginning in 2013, 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
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Comparative EffectivenessResearch Fees
Patient-Centered Outcomes Research Institute Created to improve informed health decisions
Research funded by a fee paid by insurers and plan sponsorsof 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 plansapply for 2012-2018 plan years
Amount of fee: $1 per covered life
Increases to $2
Indexed for CPI
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Notice of Exchange
Employers must notify new and current employees ofexchange information Original deadline was March 1, 2013, but this has been
delayed pending more guidance from the DOL
Notice must include information about 2014changes: Existence of health benefit exchange and services provided
Potential eligibility for subsidy under exchange if employers
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
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2014 Compliance Deadlines
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Individual Mandate
Jan. 1, 2014: Individuals must enroll in coverage orpay a penalty
Penalty amount: Greater of $ amount or a % ofincome 2014 = $95 or 1%
2015 = $325 or 2%
2016 = $695 or 2.5%
Family penalty capped at 300% of the adult flatdollar penalty or bronze level premium
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Health Insurance Exchanges
Health insurance exchanges will be established ineach state (by the state or the federal government)
Individuals and small employers can purchasecoverage through an exchange (Qualified HealthPlans) 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
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Employer Responsibility
Large employers subject to Pay or Play rule Offer coverage of a certain quality or possibly pay a penalty
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
Penalties apply if:
Employer does not provide coverage to all FT employees andany FT employee gets subsidized coverage throughexchange OR
Employer does provide coverage and any FT employee stillgets subsidized coverage through exchange
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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 employers plan
Not eligible for government programs (like Medicaid)
Meet income requirements (less than 400% of FPL)
Employers coverage is unaffordable (greater than 9.5% ofincome) or not of minimum value (covers less than 60% ofcost of benefits)
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Employer Penalty Amounts
Employers that do not offer coverage to all full-timeemployees:
$2,000 per full-time employee
Excludes first 30 employees
Employers that offer coverage:
$3,000 for each employee that receives subsidized coveragethrough an exchange
Capped at $2,000 per full-time employee (excluding first 30employees)
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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 affordabilityW-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
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Employer Reporting
Employers will have to report certain informationabout health coverage to the government andindividuals
Applies to: Applicable large employers generally, employers with at
least 50 full-time equivalent employees
Applies to coverage offered after Jan. 1, 2014
First returns to be filed in 2015
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More 2014 Changes
No pre-existing condition exclusions or limitations
Wellness program changes - maximum reward increasesto 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
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Future ComplianceDeadlines
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2018Cadillac Plan Tax
40 percent excise tax on high-cost health plans
Based on value of employer-provided healthcoverage over certain limits $10,200 for single coverage
$27,500 for family coverage
To be paid by coverage providers
Fully insured plans = health insurer HSA/Archer MSA = employer
Self-insured plans/FSAs = plan administrator
More guidance expected
Nondiscrimination R les Coming
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Nondiscrimination Rules Comingfor Fully-Insured Plans
Will apply to non-grandfathered plans
Discriminating in favor of highly-compensatedemployees (HCEs) will be prohibited Eligibility test
Benefits test
HCEs 5 highest paid officers
More than 10% shareholder
Highest paid 25% of all employees
Effective date delayed for regulations
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Automatic Enrollment Rules
Will apply to large employers that offer healthbenefits Applies to GF and non-GF plans
Large employer = more than 200 employees
Must automatically enroll new employees and re-enroll current participants
Adequate notice and opt-out option required
DOL: Regulations will not be ready to take effect by 2014
Employers not required to comply until regulations issued andapplicable
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Questions?Just give your GDI Insurance
Broker a call!888-991-2929
www.gdiinsurance.com
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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
permission. 2012 -2013 GDI Insurance Agency, Inc.