Health Care Reform Health Plans Overview GDI Ins 2-15-13

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.

Documents

Health Care Reform Health Plans Overview GDI Ins 2-15-13