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Thomas E Murphy 1
Patient Protection Affordable Care Act ndash Thomas E Murphy
91510
Thomas E Murphy 2
Before ObamaCare - Economic Stimulus Legislation
bull Reduce the cost of COBRA to 35 of full premium for persons laid off Government reimburses employer sponsors Layoff must have occurred on or before May 30 2011 and premium subsidy extends for 15 months
bull Partial government funding of Electronic Medical Record mandate
bull Free medical tuition for future MDs who practice in underserved communities 91510
Thomas E Murphy 3
ObamaCare
bull Signed March 23 2010bull Has several effective
dates Major provisions effective Jan 1 2014
bull Plan design by Congressional and Senate Democratic leadership
bull Everyone in the US will be affected by it
91510
Thomas E Murphy 4
What is ldquoObamaCarerdquobull An individual mandate to
acquire health carebull An employer mandate to
offer health carebull Effective January 1 2014bull Ban insurance restrictions on
life time and annual limits and rescissions
bull Controlled premium increases guaranteed coverage no exclusions of pre-existing conditions
bull State insurance exchanges for eligible individuals and employers to buy ldquoaffordablerdquo health insurance
bull Enlarged eligibility for Medicaid (133 of FPL for single adult under age 65))
bull Reduced costs for Medicare ($500 billion)
bull Financed by new taxes fines and expected Medicare savings
91510
Thomas E Murphy 5
ObamaCare ndash a long and winding road
bull Allows for ldquograndfatheringrdquo of plans that need not change their insurance
bull Requires coverage of dependent children up to age 26 by employer offering ldquofamily coveragerdquo
bull Subsidies for employers and individuals who cannot afford mandate
91510
Thomas E Murphy 6
Mandated Benefits Now Include
91510
Thomas E Murphy 7
Employer Discretionary
91510
Thomas E Murphy 8
Government Sponsored
91510
Thomas E Murphy 9
What About
91510
Thomas E Murphy 10
Visualize What will be the design
Based upon the preceding general points
bull How would it workbull What exceptions would
have to be madebull How about definitionsbull Timetablesbull Think deeply ndash come down
the ladder of abstraction
What are the issues here
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 2
Before ObamaCare - Economic Stimulus Legislation
bull Reduce the cost of COBRA to 35 of full premium for persons laid off Government reimburses employer sponsors Layoff must have occurred on or before May 30 2011 and premium subsidy extends for 15 months
bull Partial government funding of Electronic Medical Record mandate
bull Free medical tuition for future MDs who practice in underserved communities 91510
Thomas E Murphy 3
ObamaCare
bull Signed March 23 2010bull Has several effective
dates Major provisions effective Jan 1 2014
bull Plan design by Congressional and Senate Democratic leadership
bull Everyone in the US will be affected by it
91510
Thomas E Murphy 4
What is ldquoObamaCarerdquobull An individual mandate to
acquire health carebull An employer mandate to
offer health carebull Effective January 1 2014bull Ban insurance restrictions on
life time and annual limits and rescissions
bull Controlled premium increases guaranteed coverage no exclusions of pre-existing conditions
bull State insurance exchanges for eligible individuals and employers to buy ldquoaffordablerdquo health insurance
bull Enlarged eligibility for Medicaid (133 of FPL for single adult under age 65))
bull Reduced costs for Medicare ($500 billion)
bull Financed by new taxes fines and expected Medicare savings
91510
Thomas E Murphy 5
ObamaCare ndash a long and winding road
bull Allows for ldquograndfatheringrdquo of plans that need not change their insurance
bull Requires coverage of dependent children up to age 26 by employer offering ldquofamily coveragerdquo
bull Subsidies for employers and individuals who cannot afford mandate
91510
Thomas E Murphy 6
Mandated Benefits Now Include
91510
Thomas E Murphy 7
Employer Discretionary
91510
Thomas E Murphy 8
Government Sponsored
91510
Thomas E Murphy 9
What About
91510
Thomas E Murphy 10
Visualize What will be the design
Based upon the preceding general points
bull How would it workbull What exceptions would
have to be madebull How about definitionsbull Timetablesbull Think deeply ndash come down
the ladder of abstraction
What are the issues here
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 3
ObamaCare
bull Signed March 23 2010bull Has several effective
dates Major provisions effective Jan 1 2014
bull Plan design by Congressional and Senate Democratic leadership
bull Everyone in the US will be affected by it
91510
Thomas E Murphy 4
What is ldquoObamaCarerdquobull An individual mandate to
acquire health carebull An employer mandate to
offer health carebull Effective January 1 2014bull Ban insurance restrictions on
life time and annual limits and rescissions
bull Controlled premium increases guaranteed coverage no exclusions of pre-existing conditions
bull State insurance exchanges for eligible individuals and employers to buy ldquoaffordablerdquo health insurance
bull Enlarged eligibility for Medicaid (133 of FPL for single adult under age 65))
bull Reduced costs for Medicare ($500 billion)
bull Financed by new taxes fines and expected Medicare savings
91510
Thomas E Murphy 5
ObamaCare ndash a long and winding road
bull Allows for ldquograndfatheringrdquo of plans that need not change their insurance
bull Requires coverage of dependent children up to age 26 by employer offering ldquofamily coveragerdquo
bull Subsidies for employers and individuals who cannot afford mandate
91510
Thomas E Murphy 6
Mandated Benefits Now Include
91510
Thomas E Murphy 7
Employer Discretionary
91510
Thomas E Murphy 8
Government Sponsored
91510
Thomas E Murphy 9
What About
91510
Thomas E Murphy 10
Visualize What will be the design
Based upon the preceding general points
bull How would it workbull What exceptions would
have to be madebull How about definitionsbull Timetablesbull Think deeply ndash come down
the ladder of abstraction
What are the issues here
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 4
What is ldquoObamaCarerdquobull An individual mandate to
acquire health carebull An employer mandate to
offer health carebull Effective January 1 2014bull Ban insurance restrictions on
life time and annual limits and rescissions
bull Controlled premium increases guaranteed coverage no exclusions of pre-existing conditions
bull State insurance exchanges for eligible individuals and employers to buy ldquoaffordablerdquo health insurance
bull Enlarged eligibility for Medicaid (133 of FPL for single adult under age 65))
bull Reduced costs for Medicare ($500 billion)
bull Financed by new taxes fines and expected Medicare savings
91510
Thomas E Murphy 5
ObamaCare ndash a long and winding road
bull Allows for ldquograndfatheringrdquo of plans that need not change their insurance
bull Requires coverage of dependent children up to age 26 by employer offering ldquofamily coveragerdquo
bull Subsidies for employers and individuals who cannot afford mandate
91510
Thomas E Murphy 6
Mandated Benefits Now Include
91510
Thomas E Murphy 7
Employer Discretionary
91510
Thomas E Murphy 8
Government Sponsored
91510
Thomas E Murphy 9
What About
91510
Thomas E Murphy 10
Visualize What will be the design
Based upon the preceding general points
bull How would it workbull What exceptions would
have to be madebull How about definitionsbull Timetablesbull Think deeply ndash come down
the ladder of abstraction
What are the issues here
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 5
ObamaCare ndash a long and winding road
bull Allows for ldquograndfatheringrdquo of plans that need not change their insurance
bull Requires coverage of dependent children up to age 26 by employer offering ldquofamily coveragerdquo
bull Subsidies for employers and individuals who cannot afford mandate
91510
Thomas E Murphy 6
Mandated Benefits Now Include
91510
Thomas E Murphy 7
Employer Discretionary
91510
Thomas E Murphy 8
Government Sponsored
91510
Thomas E Murphy 9
What About
91510
Thomas E Murphy 10
Visualize What will be the design
Based upon the preceding general points
bull How would it workbull What exceptions would
have to be madebull How about definitionsbull Timetablesbull Think deeply ndash come down
the ladder of abstraction
What are the issues here
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 6
Mandated Benefits Now Include
91510
Thomas E Murphy 7
Employer Discretionary
91510
Thomas E Murphy 8
Government Sponsored
91510
Thomas E Murphy 9
What About
91510
Thomas E Murphy 10
Visualize What will be the design
Based upon the preceding general points
bull How would it workbull What exceptions would
have to be madebull How about definitionsbull Timetablesbull Think deeply ndash come down
the ladder of abstraction
What are the issues here
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 7
Employer Discretionary
91510
Thomas E Murphy 8
Government Sponsored
91510
Thomas E Murphy 9
What About
91510
Thomas E Murphy 10
Visualize What will be the design
Based upon the preceding general points
bull How would it workbull What exceptions would
have to be madebull How about definitionsbull Timetablesbull Think deeply ndash come down
the ladder of abstraction
What are the issues here
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 8
Government Sponsored
91510
Thomas E Murphy 9
What About
91510
Thomas E Murphy 10
Visualize What will be the design
Based upon the preceding general points
bull How would it workbull What exceptions would
have to be madebull How about definitionsbull Timetablesbull Think deeply ndash come down
the ladder of abstraction
What are the issues here
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 9
What About
91510
Thomas E Murphy 10
Visualize What will be the design
Based upon the preceding general points
bull How would it workbull What exceptions would
have to be madebull How about definitionsbull Timetablesbull Think deeply ndash come down
the ladder of abstraction
What are the issues here
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 10
Visualize What will be the design
Based upon the preceding general points
bull How would it workbull What exceptions would
have to be madebull How about definitionsbull Timetablesbull Think deeply ndash come down
the ladder of abstraction
What are the issues here
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 11
Basic EconomicSocial Theories
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 12
Basic EconomicSocial Theories
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 13
Some issues ndash Individual Mandate
bull Consequences of non-compliance
bull What if you cannot afford it
bull What plan of benefits must you acquire
bull What if your employer offers a plan but you cannot afford the required cost sharing
bull How do I meet the new eligibility standards for Medicaid
bull Where do I go to buy insurance
bull With ldquoinsurance reformrdquo will the PPACA encourage adverse selection
bull How will Exchange plan be more ldquoaffordablerdquo
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 14
Issues - Employer Mandate
bull What consequences for non-compliance
bull What if Irsquom a small employer and cannot afford insurance
bull What is a ldquosmall employerrdquo
bull What if I cover them but the government says itrsquos too costly for my employees
bull What plan of benefits must I offer
bull Who decides thisbull Can my plan be
ldquograndfatheredrdquo Whatrsquos the significance of this status
bull How will my sponsored health insurance be less costly
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 15
The Basic ldquoWork Flowrdquo
91510
Actuarial value = of claim costs paid by insurance
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 16
Questions Any questions
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 17
Time Tables Medicaid amp MLRs
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 18
Concerning Issues
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 19
Are we on the right trajectory
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 20
Solution bigger than the problem
bull This could have immediately reduced health care costs and made health care more affordable
bull Immediately dealt with the problem of the legitimately uninsured
bull With much less complexity and cost
91510
bull When the problem was the uninsured
bull And the underlying cause is our very high costs
bull Should we have simply enlarged Medicaid created a quality-based health care market and executed a surge on cost reduction
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 21
Was the PPACA the right buy
91510
Paying for a Lamborghini
Could a Cinqua Cento solution worked better
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 22
The Timetable
On enactmentbull No deductions for excessive
insurance company executive compensation temporary retiree reinsurance plan are effective on or 90 days after enactment
September 23 2010bull No lifetime limits and restricted
annual limitsbull Adult children coverage bull First dollar coverage for
preventive carebull No pre-existing exclusion for
under 19 years and non-discrimination premium rules
bull Internal and external appeal process
bull New financial reporting and disclosure
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 23
The Timetable
January 1 2011bull No HSA FSA
reimbursement for OTC drugs
bull W-2 reporting for financial value of benefits
bull Payroll deductions for voluntary Long Term Care program
January 1 and March 23 2012bull Uniform explanation of
coverage requiredbull 60 day advance notice of
plan modificationsbull Reporting and disclosure on
corporate service provider
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 24
The Timetable
January 1 2013 March 1 2013
bull New Medicare payroll tax on high earnings
bull Cap on FSA contributionsbull No deduction for retiree
drug subsidybull Comparative effectiveness
capitated fee for employersbull March 1 ndash Required
employer notification regarding Exchanges
And then
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 25
Timetable - January 1 2014
bull Exchanges operationalbull Employer and individual
mandates opt-outs free choice vouchers cost sharing and premium credits fines and penalties are effective
bull No pre-existing condition exclusions for anyone
bull No annual limitsbull 90 day time limit for
enrollment waiting periods
bull New wellness incentivesbull Essential benefit must
include clinical trials for life-threatening diseases
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 26
Hogwarts - Ready for the flyover
bull What are some of the definitions
bull How will it all workbull How do certain
provisions inter-relatebull What is the ldquofine printrdquo
of the Affordable Care Act
bull See All the Government Interpretative Rules
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 27
What is Essential Coverage
A Plan Must Provide1 out-patient services 2 emergency services3 hospitalization 4 maternity and pediatrics5 mental health and
substance use disorder 6 prescription drugs
And alsobull 7 rehabilitative and
services and devices bull 8 laboratory services bull 9 preventive and wellness
services and chronic disease management
bull 10 pediatric services including oral and vision care
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 28
Fines for non-complying employers
bull Employer who does not offer health insurance and who has gt 50 employees and one FTE receives a premium tax credit to buy in an Exchange employer must pay fine of $2000 for each such employee (excluding the first 30)
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 29
Premium Credits
bull For those whose annual income is between 133 and 400 of the FPL the amount of the expected premium contribution made by the individual shall range from 2 of annual income to 95 respectively of annual income and will be based upon the second level ldquosilver planrdquo premium available in the Exchanges
91510
bull Premiums above these amounts will be subsidized ndash a premium credit
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 30
Premium credits ndash a little help
bull The credits are refundable
bull They can be advanced to the participant
bull So the idea is if you cannot afford to pay the whole premium you will receive a premium credit to buy from an Exchange
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 31
A Fine or a Free Choice Voucher
Employer sponsor of health insurance
bull If employer with gt 50 employees offers coverage and one FT employee receives premium credit to buy in an Exchange the fine is $3000 for each such employee or $2000 for each and every employee (excluding the first 30)
Free Choice Voucherbull IF employer offers essential
coverage but employeersquos premium exceeds 8 but is less than 98 of income and his income is under 400 of FPL employer must provide a ldquofree choice voucherrdquo and opportunity to ldquoopt outrdquo and buy insurance in an Exchange
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 32
Free Choice Voucher
bull In such case no fine and the amount of the voucher roughly equals the employerrsquos cost
bull So the employee ldquoopting outrdquo gets a subsidy from his employer to buy insurance in the Exchange
91510
Free Choice
Vouchers
No Fine
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 33
Cost Sharing Credits ndash in addition to premium credits
bull If employerrsquos plan provides less than 60 Actuarial Value or the employeersquos share of the premium exceeds 95 of income the employee is eligible to receive a cost sharing credit
bull The Actuarial Value involves the percentage of claims paid by the insurer and is affected by deductibles co-pays co-insurance and annual out-of-pocket maximums
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 34
Cost Sharing Credits
bull The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits and have the effect of increasing the Actuarial Value (AV) of the basic benefit plan to the following percentages
bull When income level is this of FPL then AV must be
bull 100-150 FPL AV - 94bull 150-200 FPL AV - 87
bull 200-250 FPL AV - 73bull 250-400 FPL AV -70
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 35
Cost sharing credits ndash Quantitative Goal
Increase the Actuarial Valuebull To increase the actuarial
value of the plan up to 94 for those whose income is between 100 to 150 of the FPL and it decreases to 70 for those with incomes between 250 and 400 of FPL (Effective January 1 2014)
Whatrsquos the of claims paid
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 36
Remember These subsidies are for buying through the Exchanges
bull Premium Credits
bull Cost-sharing subsidies
bull Free Choice Vouchers
bull Access to Exchanges restricted to US citizens and legal immigrants
ldquoAmerican Health Benefit Exchangesrdquo
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 37
No Fine for Small Employer - Auto-Enrollment for large employers
bull An employer with fewer than 50 employees is not subject to a fine whether it offers health insurance or not
bull Employer with gt 200 employees who offers insurance must auto-enroll all employees in current health plan
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 38
Fines for non-complying individuals
bull The flat fee fines increase from $95 per year in 2014 $325 in 2015 $695 in 2016 or alternatively from 1 of taxable income in 2014 to 25 in 2016 with a cap of $2085 per year
bull There will be later COLA adjustments
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 39
What about small businesses
bull Employers who offer health care with 25 or fewer employees whose average annual wages are less than $50000 can receive a tax credit of up to 35 of the employerrsquos cost of the plan provided this cost represents at least 50 of the total or 50 of the benchmark premium (Effective 2010-14)
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 40
What about small businesses
bull A 100 tax credit will be available for those employers with 10 or fewer employees whose annual average wages are less than $25000
bull After 2014 certain small businesses as defined by the law will be eligible to receive tax credits from 50 to 100 of the premium paid to an Insurance Exchange on behalf of their employees
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 41
Grandfathered Plans (In existence on March 23 2010)
bull Grandfathered Plans must provide for the dependent coverage up to age 26 unless the person has coverage from other source
bull Must eliminate all pre-existing conditions for under age 19 now
bull All pre-existing conditions restrictions must go for group plans by January 1 2014
bull Cannot rescind policies for health reasons
bull Cannot have enrollment waiting periods in excess of 90 days
bull Group plans must eliminate life time and certain annual maximums
bull Must contain existing cost sharing features to certain COLA increases
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 42
Grandfathered Plans
Maintain statusbull Insured Plans that are
grandfathered must comply with Medical Loss Ratio provisions
bull Plans that significantly cut benefits or increase cost sharing will lose their grandfathered status
Loss of Status Then bull No cost sharing for
preventive carebull Guaranteed access to
OBGYN and Pediatriciansbull Guaranteed availability and
renewability of coveragebull Coverage for defined
essential planbull Must provide for appealsbull And more
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 43
The New Taxes ndash Financing of PPACA
bull Employer sponsors must pay a per-capita tax to finance comparative effectiveness
bull 40 excise tax on Cadillac plans that provide benefits valued at $10200$27500 (effective 01012018)
bull New tax of 38 on unearned income for high income persons
bull Fines for non-compliance
bull No deduction for excess executive compensation at insurance companies
bull New taxes on pharmaceutical health insurance companies medical device makers and tanning salons
bull New Medicare payroll tax (from 145 to 35) on high earners $200000 (eff 01012013)
bull New taxes on deductibles
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 44
Taxes ndash fine printbull The law will increase the threshold
for deductible medical expenses from 75 of adjusted gross income to 10 the increase not applicable to individuals over 65 for tax years 2013-2016 (Effective January 1 2013)
bull Flexible spending account (FSAs) contributions cannot exceed $2500 annually and must apply to prescribed medicines and treatments not over-the-counter items
bull The excise tax on non-medical distributions from HSAs will increase from 10 to 20 (Effective January 1 2013)
bull There will be a tax on individuals without qualifying health care coverage of the greater of $695 up to a maximum of three times that amount or 25 of household income This will be phased in beginning 2014 with an individual annual fine of $95 the fine increases over time to the above-described $695 levels
bull An excise tax of 40 on the amount of a health care plan that exceeds $10200 (single) or $27500 (family) in aggregate value will be levied on either the company that insures or the employer who sponsors such a plan This is often called the ldquoCadillac Plan taxrdquo NA to high risk insurance
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 45
Taxes - the fine printbull The ability of employers to take a tax
deduction for the $1300 Medicare Part D subsidies received from the government in exchange for continuing to offer retiree health care will be eliminated effective January 1 2013
bull Special taxes on the pharmaceutical industry sector will be levied in aggregate amounts of $28 billion in 2012 to $4 billion in 2017 and $28 billion in 2019
bull Similarly the insurance sector will pay aggregate additional taxes of $8 billion in 2014 to 143 billion in 2018 Future special taxes will be based on premium growth
bull There are special exceptions for non-profit insurance companies
bull There will be a 23 excise tax on the sale of any taxable medical devices Effective December 31 2012
bull There will be a special excise tax of 10 on tanning studio services
bull Annual compensation for executives of health insurance providers in excess of $500000 per year will have limited deductibility (Effective January 1 2009)
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 46
Other Provisions
bull Non-discrimination in premiums except premium tiers for family coverage ratings actuarial value age and tobacco use
bull Medicare ldquodonut holerdquo deductible will be phased out
bull Reporting requirements to HHS regarding plan design and details (ldquotransparency requirementrdquo)
bull No premium or cost sharing subsidies for abortions except where necessary to save life of mother or is result of rape or incest
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 47
Claims and AppealsNew Obligation to provide internal and external appeals of
bull Any adverse decision over coverage of a certain treatment prescribed diagnostic procedure or illness
bull Any rescission of coveragebull Process allows external
appeal is expedited costs paid by employer and binding final decision
Will this lead to increased litigation and costs
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 48
Free Preventive Services
bull No more cost sharing for evidence based care as defined by the US Preventive Services Task Force
bull The Task Force must give the screening or preventive care a grade of ldquoArdquo or ldquoBrdquo in order to qualify for no cost sharing
bull For women and children see Health Resources and Services Administration
bull Immunizations approved by CDC also must be ldquofirst dollarrdquo
bull Does cost sharing mean the deductible is not applicable there are no co-pays and no co-insurance
bull What if the service is delivered contemporaneously with non-preventive care (Separate billing required)
bull Whatrsquos the policy objective here
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 49
What are the Exchanges
bull States must run effective 2014
bull Provide low cost ldquoaffordablerdquo insurance
bull Available to individuals whose employer plan is too costly or do not have insurance
bull Available to small employers
bull Later in 2017 larger employers can participate in the Exchanges
bull Several levels of plans can be available
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 50
The Insurance Exchanges ndashPlans
Types of Plansbull (1) Bronze - essential health
benefits and cover 60 of the benefit costs with out-of-pocket maximums of $5950 (single) and $11900 (families)
Affordable Plansbull (2) Silver will provide 70
benefit cost coverage with the same out-of-pocket maximums
bull (3) Gold will cover 80 and bull (4) Platinum 90 and bull (5) catastrophic plans will
be available to those up to 30 years of age and only in the individual market
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 51
Breast Feeding
bull The Act requires reasonable time and place for working mothers to breast feed
bull DefinitionDOL Wage and Hour Division Fact Sheet 22
bull What do you think the issues are here Hours worked
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 52
Long Term Care Program
bull Working adults must be given opportunity to enroll in this long term care program Self-pay government sponsored
bull Employer can auto enroll (with opt out) and must offer payroll deductions
bull Whatrsquos the policy here
bull Will initially increase deficit
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 53
Flexible Spending Accounts ndash High Deductibles
bull FSAs limited to $2500 per year Amounts above will be subject to excise tax
bull No pre-tax purchase of over the counter drugs in FSAs HSAs or HRAs
bull Cost sharing deductibles are limited to $5950 (individuals) $11900 (family)
91510
Smile Michelle
What about Cafeteria Plans
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 54
Medical Loss Ratios
bull This means the insurance companyrsquos percentage of expenses paid for health claims The lower the OGampA and marketing expense the higher the medical loss ratio
bull PPACA requires an 80 - 85 MLR for insurance companies
91510
Health Care Reform Magazine 170910
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 55
Legal Challenges
bull States have sued saying PPACA is unconstitutional because Congress cannot require individuals to buy health care and
bull Medicaid expansion is an unfunded mandate
bull ERISA and PPACA conflict
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 56
Lifetime Annual Limits Rescission and Patient Protectionsbull After 2014 no lifetime or
annual limitsbull ldquoReasonablerdquo limits can
be imposed until 2014 bull No pre-existing condition
exclusions for pre 19 year-olds effective September 23 2010
bull None allowed after 2014
bull No cancellation of coverage for health reasons Only for non-payment of premium and fraud Effective September 23 2010
bull Wellness incentive cap is increased to 30
bull Guaranteed issue ndash no turn downs due to health reasons
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 57
Interim Pre-Existing Condition Insurance ProgramTemporary Health Insurancebull Creates a temporary high
risk insurance poolbull Effective 90 days after
enactmentbull Eligible will be those who
have a pre-existing condition and were uninsured for 6 months
bull Eligible to enroll
Except for Green Beer Day
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 58
Temporary Retiree Reinsurance Plan
bull Provides health insurance coverage to retirees over age 55 who are not eligible for Medicare
bull Program will reimburse employers or insurers for 80 of retiree claims between $15000 and $90000
bull Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan (Effective 90 days following enactment through January 1 2014)
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 59
Some Questions without Answers
bull Will the the Exchanges provide affordable and attractive health insurance for small employers and individuals
bull Howbull What will happen to
high deductible plans
bull Will employers opt for no coverage or
bull will employer coverage (180 million) remain the key means for most to obtain health insurance
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 60
Some FAQs
bull Will the cost of health care continue to rise
bull Will annual limit prohibition extend to special ldquonon-essentialrdquo health benefits (eg ldquohome health carerdquo)
bull Who will determine preventive care in the future--politicians or clinicians
bull Will there be a difference in employer response to the law depending on whether they are insured or self-insured
bull How will employers provide W-2 information on the value of the health plan
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 61
Questions
bull Will the PPACA lead to health care rationing
bull What constitutes and who will determine ldquoacceptable coveragerdquo Is there room for choice here
bull Are the minimum Actuarial Values realistic Fair
bull Will PPACA destroy private health insurance altogether
bull On what basis will the insurance companies in the Exchanges compete
bull Will the government set provider fees
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 62
Are you ready to advise
bull See some DOLEBSA FAQs here
bull What would you advise an employer with 50 employees who currently offers health care to do
bull What about an employer with 200 employees who currently offers care
91510
Come with me to Gryffindor
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 63
Ready to Advise
bull What new opportunities products services might be developed as a result of the PPACA
bull What if your client has a grandfathered plan but needs to increase cost sharing or change insurance companies
91510
Shoot 100 free throws per day
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
Thomas E Murphy 64
Big Picture ndash the Genesis of Reform
91510
