health care reform presented by barb gerken, regional sales manager
Post on 02-Jan-2016
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Definitions
PPACA – Patient Protection and Affordable Care Act
ACA – Affordable Care Act
Grandfathered – those plans that existed on March 23, 2010, when the Patient Protection and Affordable Care Act (PPACA) was enacted with no “substantial changes”
HHS – Department of Health & Human Services
General Overview
Federal law enacted on March 23, 2010
Expected Benefits Expansion of access to health care coverage Reduce premium costs and make coverage affordable Prevent denials of care and coverage State or federal based mechanism for purchasing insurance Create standards in coverage
Grandfathering
Grandfathered – those plans (group and individual) that existed on March 23, 2010, when the Patient Protection and Affordable Care Act (PPACA) was enacted with no “substantial changes”
Grandfathered plans are permitted to make “routine” changes and still remain exempt from some of the provisions in PPACA.
“Routine” changes include adding new benefits; or making modest adjustments to employer contributions, premiums, co-payments and deductibles.
Grandfathering
A health plan can lose its grandfathered status if it:
Eliminates all or substantially all benefits to diagnose or treat a particular condition.
Increases deductibles or out-of-pocket limits by more than the rate of medical inflation plus 15 percentage points.
Example: Current deductible of $500, 15% change would be $575
Increases fixed copayment by more than the greater of medical inflation plus 15 percentage points or $5.
Grandfathering
A health plan can lose its grandfathered status if it:
Reduces the employer’s contribution rate so that the employer’s share of the total cost of coverage declines by more than 5% points below the contribution rate on March 23, 2010
Increases a percentage cost-sharing requirement above the level at which it was on March 23, 2010
Reduces the overall annual limit on the dollar value of benefits paid for covered services
Grandfathering
Grandfathered Plan MUST comply with the following reforms:
Summary of Benefits and Coverage
Reporting of Medical Loss Ratio and premium rebates if minimum loss ratio has not been met.
Prohibition on lifetime limits on essential benefits
Prohibition on health plan rescissions
Grandfathering
Grandfathered Plan MUST comply with the following reforms:
Dependent coverage offering to child until age 26
Prohibition on waiting periods greater than 90 days
Prohibition on coverage exclusions for pre-existing conditions
Grandfathering
Grandfathered Plan WILL NOT be required to comply with the following reforms:
Preventive care and immunization coverage at 100%
Cover emergency services without pre-authorization or increased cost-sharing out of network
Eliminate discrimination in favor of highly compensated employees
Grandfathering
Grandfathered Plan WILL NOT be required to comply with the following reforms:
Apply federal rating limitations (community rating)
Provide essential benefits in small group market
Cost Sharing and deductible limits
Grandfathering
Special Notes
New employees and members may add on to a plan without loss of grandfathering.
Union contracts in place as of March 23, 2010 will be considered grandfathered until the contract is renewed.
Groups changing insurance carriers between March 23, 2010 and November 15, 2010 lost grandfathered status.
Grandfathering
Special Notes
As of November 15, 2010 a change in carriers would not result in loss of grandfathering as long as all other criteria is met.
A change from self-insured to fully-insured will result in the loss of grandfathering.
Effective with Plan Year on or afterSeptember 23, 2010
No lifetime dollar limits on benefits
Restricted annual dollar limits on essential health benefits
No pre-existing condition exclusions for children under 19
100% coverage for preventive services covered in network (not required for grandfathered group health plans)
Effective with new business and renewals after 8/1/2012
Includes expanded coverage for FDA-approved contraception methods
Initial guidance allowed a narrowly defined group of religious employers to choose not to cover contraceptives/sterilizations
Updates in 2012 allowed religiously affiliated groups allowed a one-year safe harbor for non-profit groups currently excluding contraceptive coverage
Effective August 1, 2012Expanded Coverage for Women’s Services
February, 2013 – HHS released additional guidance broadening definition of “religious” employers to include houses of worship, dioceses and affiliated organizations to be completely exempt using IRS tax code definition
Also allowed other “faith-based” employers to transfer the cost and administrative tasks of the birth control policies to insurance companies
Costs incurred by carriers and third party administrators would be offset by reduction in exchange fees
Effective August 1, 2012Expanded Coverage for Women’s Services
Effective August 1, 2012Expanded Coverage for Women’s Services
Following services covered at no-cost share when in-network:
Well woman visits (including prenatal visits)
Screening for gestational diabetes
Human papillomavirus (HPV) DNA testing
Counseling for sexually transmitted infections
Counseling for sexually transmitted diseases
Counseling for human immunodeficiency virus (HIV)
Screening and counseling for interpersonal and domestic violence
Breastfeeding support, supplies and counseling
Contraceptives
Effective in 2014Essential Benefits
Essential Benefits: A set of health care service categories that must be covered by certain plans beginning in 2014
Will apply to all non-grandfathered plans in the individual and small group market
Effective with plans year starting on or after January 1, 2014
Effective in 2014Essential Benefits
Recommendations based on a report released by the Institute of Medicine in October of 2011
Cited affordability and value as core concerns
Recommended that coverage be limited/excluded if following tests were not met:
Safe Medically effective Shows meaningful improvement Medical service Cost effective
Effective in 2014Essential Benefits
States had the option of choosing one of the following benchmark plans
one of three largest small group plans in the state
one of three largest state employee health plans
one of the three largest federal employee health plan options
largest HMO plan offered in the state’s commercial market
Effective in 2014Essential Benefits
Ohio’s largest three small group products in descending order are as follows:1. Anthem PPO – Blue Access PPO Option D4RXG2. Medical Mutual of Ohio SuperMed 3. Anthem Lumenos
State benchmark plan selection in 2014 would be applicable for 2014 and 2015 benefit years
All state benchmark plans with full set of benefits can be found at www.cciio.cms.gov
Effective in 2014Essential Benefits
PPACA requires that Essential Health Benefits include items and services in the following 10 categories
Ambulatory patient services Prescription Drugs
Emergency Services Rehabilitative and habilitative services and devices
Hospitalization Laboratory services
Maternity and newborn care Preventive and wellness services and chronic disease management
Mental Health and Substance Use Disorder Services, including behavioral health treatment
Pediatric services, including oral and vision care
Effective in 2014Essential Benefits
Pediatric dental/vision
Services for children under the age of 19 yearsCarriers may not add coverage for routine non-pediatric services
Not covered in most benchmark plans
Benchmark plans will be supplemented with Federal Employee Benefit plans for both dental and vision
will not include non-medically necessary orthodontics
Effective in 2014Essential Benefits
Mental Health
Benchmark plans must comply with mental health and substance abuse parity standards outlined in 45 CFR 146.136
States will not be required to defray cost of this parity
Effective in 2014Essential Benefits
Prescription Drug Benefits
Will require at least one drug in every United States Pharmacopeia’s (USP) category and class or
The same number of prescription drugs in each category and class as the benchmark plan
Does not require that drugs be covered in a particular tier
Will require a procedure for enrollees to request clinically appropriate drugs not covered by the health plan
Effective in 2014Essential Benefits
Carriers will be require to submit drug lists to:
Exchange – plans sold in the public exchange
State – plans sold in the private market
Office of Personnel Management – multi-state plans
Effective in 2014Essential Benefits
No annual dollar limits applies to all plans except grandfathered individual plans
Stand-alone dental plans would have separate annual limitations on cost sharing from qualified health plans covering the remaining Essential Health Benefits
plan must demonstrate that separate limit is reasonable for coverage of the pediatric dental plan
Effective in 2014Essential Benefits
Maximum deductible of $2,000/$4,000 - small group only does not apply to individual, large group or self-insured markets cannot use FSA, HRA or HSA dollars to offset this maximum carriers may exceed the annual deductible limit if they cannot reasonably reach a given level of coverage without doing so
Effective in 2014Essential Benefits
Maximum out-of-pocket (cost-sharing) tied to the annual limitation on cost sharing for high deductible plans ($6,250/$12,500 – 2013)
does not apply to grandfathered health plans will apply to large groups and self-insured plans
Carriers would be prohibited for any plan design that would discriminate based on age, life expectancy, disability, medical dependency, quality of life or other health condition
Effective in 2014Essential Benefits
States may require a qualified health plan to cover additional benefits
States will be required to defray the cost of these additional benefits if enacted after December 31, 2011
Will allow states to base payment on either statewide average or each issuer’s actual cost
Payments will be made to either the enrollee or to the carrier
Effective in 2014Essential Benefits
Network adequacy requirements are not in the scope of this regulation
Carriers may use prior authorization and other medical management techniques as long as they are not used to discriminate
Effective in 2014
Actuarial Value (AV)
Refers to value of coverage in the SMALL group market
Measure of % of expected health care costs a health plan will cover
Will use national calculator with a single standardized dataset for 2014. Will revert to state data in 2015
Effective in 2014
Actuarial Value (AV)
Will use value of in-network services only
Deductible, co-insurance, out-of-pockets to have large impact on actuarial value
Cost-sharing for emergency rooms, inpatient admissions and diagnostic imaging to have smaller impact on actuarial value
Benefits not compatible with the calculator will provide documentation of actuarial certification
Effective in 2014
Actuarial Value (AV)
Annual employer contributions to HSA account will be included in the AV calculation
Amounts newly made available under an HRA for the current year will be included in the AV calculation
Value will be based on in-network utilization only
Effective in 2014
Actuarial Value (AV)
Plans sold in individual and group markets after 1/1/2014 be sold and marketed by tiers
Tiers to be based on actuarial value scores Bronze – 60% Silver – 70% Gold – 80% Platinum – 90%
Effective in 2014Actuarial Value (AV)
Will allow for variations of +/- 2 percentage points i.e. Silver plan may have actuarial value of 68-72%
Effective January 1, 2014
Guarantee Issue
Considering “Mandate Plus” language to encourage enrollment at time of first eligibility
No Pre-Existing Conditions Clause for Adults
Removal of annual and lifetime dollar limits on ALL plans (including grandfathered)
Effective with Plan Year on or afterSeptember 23, 2010
Dependent Age
Adult children coverage to age 26, end of birth month.
Dependent:
May be eligible for their own employer sponsored plan
May be eligible for Medicare/Medicaid
May be married
Many carriers allowed early adoption of provisions
Effective with Plan Year on or afterSeptember 23, 2010
Dependent Age
Not required for grandfathered groups before 2014 if the dependent is eligible for employer-sponsored coverage
Employer may not charge more or have different benefit structure for dependents based on age
Effective with Plan Year on or afterSeptember 23, 2010
Dependent Age – Ohio Law
Adult children coverage to age 28, end of birth month.
Dependent: Unmarried Resident of Ohio or full-time student Not eligible for employer-sponsored coverage Not eligible for government-sponsored coverage
Additional costs may be charged to the employee
Effective with Plan Year on or afterSeptember 23, 2010
Dependent Age – Ohio Law
State law does NOT apply to self-insured plans governed by ERISA
Will apply to non-ERISA self-funded groups (public employers, government entities, etc.)
Most carriers will require an affidavit
Effective with Plan Year on or afterSeptember 23, 2010
No discrimination in favor of highly compensated employees Delayed until further notice
Effective in 2014
Small group redefined as 1-100
State have option of leaving as 2-50 for 2014 & 2015
Mandated as 1-100 as of 2016
Effective October 1, 2012
Fees for Comparative Effectiveness Research
ACA established non-profit organization
Patient-Centered Outcomes Research Institute (PCORI)
Study of effectiveness, risk and benefits of medical treatments
Known as comparative effectiveness research
Effective October 1, 2012
Fees for Comparative Effectiveness Research
Supported by a trust fund
Financed in part from fees from health issuers and plan
sponsors
Fees to be collected for plan and policy years that end after
September 30, 2012 and before October 1, 2019
Calculation of fees based on average # of lives covered by
accident and illness insurance during year
Effective October 1, 2012
Fees for Comparative Effectiveness Research
Does not apply to dental and vision plans
Applies to individual and group plans regardless of funding
Carriers will pay fee for fully insured customers included as part of medical premium
Effective October 1, 2012
Fees for Comparative Effectiveness Research
The fee is considered an excise tax and will be filed on IRS Form 720
Carriers will pay fee for fully insured customersincluded as part of medical premium
Self-insured (ASO) groups will file the Form 720 and pay the appropriate fee
Fee is due by July 31 of calendar year immediately following last day of plan year
Effective October 1, 2012
Fees for Comparative Effectiveness Research
Plan/Policy years ending
October 1, 2012 -9/30/2013
Plan/Policy years ending
10/1/2013 -9/30/2014
Plan/Policy years ending
10/1/2014 -9/30/2019
$1 multiplied by average # of covered lives ($1 per year)
$2 multiplied by average # of covered lives ($2 per year)
$2 (adjusted for medical inflation) multiplied by average # of covered lives ($2 adjusted per year)
Effective in 2014
Insurer Fee
Annual fee on health insurance providers based on their market share of net premiums written, or the sum of premiums earned for all policies during previous years
To offset a portion of the expenses related to premium subsidies and tax credits for individuals purchasing coverage through the exchanges
Fee is due by September 30 of following calendar year
Impact to be approximately 2.46% of premium
Effective in 2014
Insurer Fee
Total fee amount to be collected from all carriers is set at $8 billion in 2014, $11.3 billion in 2015 and 2016, $13.9 billion in 2017 and $14.38 billion in 2018.
After 2018, fee will increase based on premium growth
Fee applies to medical, dental and vision plans
Applies to fully insured customers – not self-insured
Fee is not tax deductible
Effective in 2014
Transitional Reinsurance Fee
To help stabilize premiums for coverage in the individual market during the years 2014 through 2016
All health insurers and TPAs, on behalf of their self-insured group health plans, will submit contributions to support reinsurance payments to issuers covering high-cost individuals in non-grandfathered individual market plans
Aggregate fee of $25 billion over the next three-year period
Effective in 2014
Transitional Reinsurance Fee
Applies to both fully insured and self-insured plans
Current fee is estimated at $6.35 per participant per month
Rating Changes
Effective with new business and renewals after January 1, 2014
Applies to individual and small group market segments
Based on community rating Age (highest age band no more than 3x lowest) Tobacco use (rate for users no more than 1.5x non-
users) Geography Family tier
Effective in 2018
40% excise tax on high cost Cadillac plans
• Insurers to pay tax on any amount over $10,200 – Single and $27,500 – Family annual premium
• 50% of business are anticipated to be affected
• Will not index with inflation
• Current premiums will be affected by several factors (community rating, minimum deductible, 4 years of increases, etc.)
Effective January 1, 2011Medical Loss Ratio - MLR
Applies to individual and fully insured group coverages
(including grandfathered groups)
Does not apply to self-insurance plans
Requires health plans to report the proportion of premium dollars spent on clinical services, quality service and other costs
Effective January 1, 2011Medical Loss Ratio - MLR
Medical Loss ratio standards 80% for small group and individual 85% for large group
Must provide rebates if the share of premium spent is less than set percentages
Effective January 1, 2011Medical Loss Ratio - MLR
Began with coverages purchased in 2011 with rebates issued to enrollees by August of the following year
1st round of payments began in August, 2012
Average rebate of $157 for 2011 reporting year
Rebates to Enrollees in Group Markets
Rebates to be provided to group policyholder for
distribution
Carriers must provide rebates to policyholder covered
during the MLR reporting year on which the rebate is based
Effective January 1, 2011Medical Loss Ratio - MLR
Rebates to Enrollees in Group Markets
Carrier must provide notice of rebate to both policyholder and
subscribers
Notice must contain explanation that the policyholder must
agree to use portion of rebate attributable to subscriber
contribution to premium for the benefit of current subscribers
Effective January 1, 2011Medical Loss Ratio - MLR
Rebates to Enrollees in Group Markets
Initial rule only required notification from issuers who did owe rebates
Guidance released in August 2012 required notice from carriers whether or not MLR has been met
Notice from carriers who meet or exceed standards only required to provide notice for 2011 reporting period
Effective January 1, 2011Medical Loss Ratio - MLR
Rebates to Enrollees in Group Markets
Carriers who meet or exceed standards not required to include current or prior year MLR
Notices must direct enrolled to HHS website for specific information on carrier MLRs
Effective January 1, 2011Medical Loss Ratio - MLR
Rebates to Enrollees in Group Markets
Groups subject to ERISA - rebates to policyholder may have
plan asset, fiduciary responsibility and prohibited transaction
implications under Title 1 of ERISA
Decisions regarding the handling and allocation of the rebates
should be made by plan fiduciary consistent with ERISA
Effective January 1, 2011Medical Loss Ratio - MLR
Rebates to Enrollees in Group Markets
Rebates must be sent to policyholder and must provide appropriate % of subscriber premium contribution
i.e. rebate of $20,000 due to group and employee pays 40% of premium…$8,000 must be used for benefit of subscriber
Effective January 1, 2011Medical Loss Ratio - MLR
Rebates to Enrollees in Group Markets
Rebate can be used in several ways:
refund to subscriber covered by group health policy in form of cash, reimbursement to enrollee credit card or direct payment to enrollee bank account
this option should be used if the rebate is larger than 90 days worth of premium this rebate option will result in a taxable income amount to the employee
Effective January 1, 2011Medical Loss Ratio - MLR
Rebates to Enrollees in Group Markets
Rebate can be used in several ways:
reduce subscriber portion of annual premium for subsequent policy year (“premium holiday”)
enhancement of benefits
programs to improve member health
Effective January 1, 2011Medical Loss Ratio - MLR
Rebates to Enrollees in Group Markets
Private plans also need to understand that the DOL has interpreted ERISA to require that participant monies in private employer plans be put into a trust within 90 days after they arereceived. Very few insured plans operate through a trust, so it would be a burden to create a trust due to delays in dispensing the rebates. To avoid the 90-day rule, private plans should take steps to use or pay out the rebate within 90 days after it is received.
Effective January 1, 2011Medical Loss Ratio - MLR
2011 MLR Reporting Period Results
HHS indicates $1.1 billion in rebates distributed in July to 12.8 million consumers
Less than 10% of the private health insurance consumers
Average rebate to be $151.
Aetna – Met in all division, UHC – Ohio – met all but River Valley products in individual and large group, Anthem – met in small and large group markets, but not individual
Effective January 1, 2011Medical Loss Ratio - MLR
Effective January 1, 2011
Prescription required for over-the-counter medications under health care reimbursements
20% tax for non-qualified HSA withdrawals
Effective in 2013Employer Notification Guidelines
Medicare Tax Increase New 3.8% Medicare contribution on certain unearned
income from high-income individuals
Itemized deductions for Medical Expenses –
Increases from 7.5% - 10% of adjust gross income
Waives increase for individuals 65 and older for tax years 2013 through 2016
Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage
Proposed Regulations released February 2013
90 day comment period
Comments need to be received by May 2, 2013
Public hearing scheduled for May 29, 2013
Individual Mandate
Requires individuals requires a non-exempt individual to maintain minimum essential coverage or make a shared responsibility payment
Payment would be included with Federal income tax return
Effective January 1, 2014
Payments will be assessed on a monthly basis
Taxpayer is responsible for the payment for any claimed dependents
Individual Mandate
Member of a recognized religious sect or a division thereof and is adherent to the tenets or teachings of the sect
1. Has established tenets or teachings for which members/adherents are conscientiously opposed to acceptance of benefits of any private or public insurance
2. Maintains, and has maintained for a substantial period of time, practice whereby its members make provision for its dependent members that is reasonable in view of their general level of living
3. Has been in existence since December 31, 1950
Individual Mandate - Exemptions
Member of a health care sharing ministry
1. Described in Section 501(c)(3) and exempt from tax under Section 501(a)
2. Members of which share a common set of ethical or religious beliefs and share medical expenses amongst themselves regardless of the State in which member resides or is employed
3. Members retain membership even after the develop a condition
Individual Mandate - Exemptions
Member of a health care sharing ministry (cont.)
4. Been in existence since December 31, 1999
5. Members have continuously, and without interruption, shared medical expenses since December 31, 1999
6. Conducts an annual audit performed by an independent certified public accounting firm with reports made available to members
Individual Mandate - Exemptions
An individual who is not a citizen or who is an illegal alien
Incarcerated individuals (except those pending disposition of charges)
Individual Mandate - Exemptions
Individual lacking access to affordable minimum essential coverage
Required contribution exceeds a percentage (8% for 2014) of the individual’s household income
Household income = sum of taxpayer’s and claimed dependents’ modified adjusted gross incomes
Modified AGI = calculated by adding back certain items to your Adjusted Gross Income.
Individual - Exemptions
An individual who’s household income is less than required to file taxes
Member of an Indian tribe Includes Federally recognized Indian tribes as listed
in the Indian Entities Recognized and Eligible to Receive Services from the United States Bureau of Indian Affairs
An individual suffering a hardship (rules to be developed)
Individual Mandate - Exemptions
All exemptions based on affordability are based on the household income for the year for which an exemption is being claimed
A certificate of exemption issued by an Exchange is required in order for the exemption to be recognized
Individual MandatesNotes on Exemptions
Assessed on a monthly basis. Penalty of 1/12 of the greater of the following amounts:
1. Flat dollar amount
2. Percentage of income
Individual MandatePenalty Amounts
Flat dollar amount
equal to the lesser of:
1. Sum of the applicable dollar amounts for all nonexempt individuals without minimum essential coverage for which the taxpayer is liable
2. 300% of the applicable dollar amount
Individuals under the age of 18 = ½ of the applicable dollar amount
Individual Mandate Penalty Amounts
Flat dollar amount
$95 for 2014
$325 for 2015
$695 for 2016
Will increase by cost-of-living adjustments after 2016
Individual Mandate Penalty Amounts
Exchanges – Marketplaces
An exchange is a marketplace for consumers to compare apples to apples plan designs and elect coverages
Exchanges can be public or private
Private exchanges have been in existence for many years
The exchanges proposed under the Affordable Care Act have many eligibility requirements and regulations
Exchanges – Marketplaces
Exchanges will be available to certain individuals and also to groups (under the SHOP) program
All U.S. citizens are eligible to purchase coverage in the public exchanges
Subsidies will be available for both premiums and for out-of-pocket costs based on income levels
Exchanges – Marketplaces
States had option to elect to run their own exchange, partner with the federal government or turn it over to the federal government (Federal Fallback Exchange (FFE))
Ohio has elected the FFE Ohio will retain the oversight function with regards to carriers and brokers – certifications, licensing, rate reviews
Exchanges – Marketplaces
Plan designs sold within the exchange will be required to meet specific actuarial values
Platinum – 90% Gold – 80% Silver – 70% Bronze – 60% Catastrophic – 50% **
** only available to individuals under the age of 30 who are able to show financial hardship
Exchanges – Marketplaces
Plans sold in the exchange will also be required to:
include the essential health benefits
provide minimum of 60% actuarial value
be certified by the exchange
allow for subsidies based on income levels
Exchanges – Marketplaces
Plans sold in the exchange will also be required to:
include the essential health benefits
provide minimum of 60% actuarial value
be certified by the exchange
allow for subsidies based on income levels available only on the Silver level plans
Exchanges – MarketplacesFederal Poverty Levels
48 Contiguous States and DCNote: The 100% column shows the federal poverty level for each family size, and the percentage columns
that follow represent income levels that are commonly used as guidelines for health programs.
Household Size 100% 133% 150% 200% 300% 400%
1 $11,490 $15,282 $17,235 $22,980 $34,470 $45,960
2 15,510 20,628 23,265 31,020 46,530 62,040
3 19,530 25,975 29,295 39,060 58,590 78,120
4 23,550 31,322 35,325 47,100 70,650 94,200
5 27,570 36,668 41,355 55,140 82,710 110,280
6 31,590 42,015 47,385 63,180 94,770 126,360
7 35,610 47,361 53,415 71,220 106,830 142,440
8 39,630 52,708 59,445 79,260 118,890 158,520
For each additional person, add
$4,020 $5,347 $6,030 $8,040 $12,060 $16,080
Exchanges – Marketplaces
Individual Premium Contribution Based on Income
Income (individual) Minimum Premium Contribution
FPL (2013 guidelines)
Annual dollar amount Annual percent of income
Annual dollar amount
100-150% $11,490-$17,235 2-4% $229.80-$689.40
150-200% $17,235-$22,980 4-6.3% $689.40-$1,447.74
200-250% $22,980-$28,725 6.3-8.05% $1,447.74-$2,312.36
250-300% $28,725-$34,470 8.05-9.5% $2,312.36-$3,274.65
300-400% $34,470-$45,960 9.5% $3,274.65-$4,366.20
Actuarial Value (Generosity of Plan) Based on Income
Income (individual) Actuarial Value of Coverage
FPL Annual dollar amount Percent
100-150% $11,490-$17,235 94%
150-200% $17,235-$22,980 87%
200-250% $22,980-$28,725 73%
250-300% $28,725-$34,470 70%
300-400% $34,470-$45,960 70%
Exchanges – Marketplaces
Exchanges – Marketplaces
Exchange responsibilities include: Consumer assistance Enrollment Eligibility Financial Management Plan Management QHP selections
Exchanges – Marketplaces
Consumer assistance will be provided by: Navigators In-Person Assisters Enrollers Brokers/Agents
Exchanges – Marketplaces
Navigators
Conduct public education activities to raise awareness of availability of coverage through the exchange
Distribute information concerning enrollment in QHPs and the availability of tax credits and cost-sharing reductions
Facilitate enrollment
CANNOT recommend plan designs or discuss details of the benefits
Exchanges – Marketplaces
Navigators
Will be required to complete training programs related to the duties outlined
Cannot accept payment in any form from an insurance company or stop loss carrier
Will not be required to carry E&O coverage
Effective January 1, 2010Small Group Tax Credit
Available to employers with no more than 25 full-time equivalent employees
Average annual wages less than $50,000
Employer sponsored coverage offered with minimum of 50% employer contribution
Effective January 1, 2010Small Group Tax Credit
For-profit groups: tax credit up to 35% of employer cost in years 2010-2013
Increases to 50% in 2014
Non-profit groups: tax credit up to 25% of employer cost in years 2010-2013
Increases to 35% in 2014
Effective January 1, 2010Small Group Tax Credit
Designed to encourage small businesses to offer heath care coverage for the first time or to help them maintain coverage
Available to for-profit and non-profit organizations
Will only be available 2014-2016 if group coverage is purchased through the public exchange (SHOP)
Effective January 1, 2010Small Group Tax Credit
Example 1: Auto Repair Shop with 10 Employees
Employees: 10
Wages: $250,000 total, or $25,000 per worker
Employer Health Care Costs: $70,000
2010 Tax Credit: $24,500 (35% credit)2014 Tax Credit: $35,000 (50% credit)
Effective January 1, 2010Small Group Tax Credit
Example 2: Foster Care Non-Profit with 9 EmployeesFirst Street Family Services.org:
Employees: 9
Wages: $198,000 total, or $22,000 per worker
Employer Health Care Costs: $72,000
2010 Tax Credit: $18,000 (25% credit)2014 Tax Credit: $25,200 (35% credit)
Effective Date – plan year on or after September 23, 2012
General Requirements:
Health insurer is required to create and deliver summary of coverage and benefits to consumers shopping for coverage.
No one is exempt – individual and groups regardless of size and/or funding arrangement
Summary of Benefits and CoverageMaterial Modification Notice
General Requirements (cont.):
Summary can be up to four pages front and back
Electronic delivery is permitted. Different rules apply for individual, fully insured or ASO group
Can be included in SPD – must be intact and prominent
Summary of Benefits and CoverageMaterial Modification Notice
Delivery Requirements:
Group renewal – must be delivered no later than 30 days prior to renewal
Open enrollment period – must receive SBC with other open enrollment materials but no later than the first day of open enrollment
Benefit change – provide ASAP but no later than 7 days after renewal is issued or written confirmation of intent to renew is sent
New applications – with application/enrollment materials but no later than 7 days after application
Special enrollments – within 90 days of enrollment
Summary of Benefits and CoverageMaterial Modification Notice
Requires plan sponsors or issuers to provide 60 days advance notice to enrollees when making material modifications to the plan.
Does not apply to renewal changes
Duty can be satisfied by providing either a separate notice describing material modification or an updated coverage summary.
Plan issuers or sponsors who willfully fail to provide timely notice will be subject to a fine of $1,000 per enrollee
Summary of Benefits and CoverageMaterial Modification Notice
Must be provided in culturally and linguistically appropriate manner
If 10% or more of population in claimants county are literate in only the same non-English language
Determined by the American Community Survey data
Currently 255 U.S. Counties meet threshold78 in Puerto Rico
Summary of Benefits and CoverageMaterial Modification Notice
W2 Reporting
Section 6051(a) was added to the US Tax Code through PPACA
Required for 2012 W-2 Forms
Employer must report the aggregate cost of applicable employer-sponsored coverage
Applicable coverage = coverage under any group health plan made available to the employee by an employer which is excludable from the employee’s gross income
Additional interim guidance released by IRS on
January 3, 2012
Confirms that employers filing less than 250 W-2s are
not subject to requirement until further notice
does not impact employees’ taxable wages
W-2 Reporting
Doesn’t include coverage for:
On-site medical clinics Worker’s Compensation
Credit Only Insurance Long Term Care Insurance
Accident only/disability coverage Auto Medical Payment Insurance
General/Auto liability insurance Hospital Indemnity Insurance
Specified Disease or Illness Policy Fixed Indemnity Insurance
Dental/vision plans independent of the medical plan
W-2 Reporting
Does not apply to Archer MSA or health savings account contributions
Does not apply to the amount of any salary reduction contributions to a health flexible spending arrangement
W-2 Reporting
W-2 Reporting
Cost is reported on Form W-2 in Box 12, using code DD
Employer may apply any reasonable method of reporting cost of coverage for terminated employee
Should include costs for employee and any dependent covered under group plan
COBRA costs are included
Effective in 2013
Effective in 2013
Employer Notification Guidelines Employer to notify employee regarding health
insurance exchanges and availability of premium subsidies
Medicare Payroll Tax Increase Employers to withhold an additional 0.9% in Medicare
tax on employee wages in excess of $200,000
Effective in 2013
Flexible Spending Account Contribution Limits
New limits to health care spending account contributions
$2,500 per year
To be adjusted annually for cost of living
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