Implications of the PPACA on Group Health Plans. Presentation Overview Upcoming Requirements to Consider Important Regulatory Guidance Accountable Care.

Implications of the PPACA on Group Health Plans

Presentation Overview

Upcoming Requirements to ConsiderImportant Regulatory GuidanceAccountable Care OrganizationsPPACA’s Effects on PlansCurrent Legislative Developments

Plan Reforms Effective 2011

Employers to Begin Reporting on Cost of Coverage: Cost of Coverage Entails? Report on Succeeding Year’s W-2 Provided to Employees at Departure Certain Types of Coverage Exempted

CDHPs Penalties: Increased Penalty for Non-Qualified Use Cap on FSAs

Plan Reforms Effective 2012 & 2013

Plans to Report on Health OutcomesProvide Plan Explanations Plans to Pay Per-Life FeePlan SummariesEmployers to Disclose Coverage OptionsMedical Loss Ratio

Plan Reforms Effective for Plan Years Beginning 2014

Implementation of Insurance Exchanges Individual MandateEmployer MandateProhibition of Pre-X Exclusions Rating Rules Guaranteed Availability Renewability Prohibition on Waiting Periods > 90 DaysOut-Of-Pocket MaximumsDeductible Maximums

Guidance - Grandfathered Plan Modifications

Defined as Plans in Existence 3/23/10 Exempted from Certain Plan Requirements Allowable Changes:

Claims Payment Policy Increase in Nominal Premium Amount Changes to Comply with PPACA & State Law Changes to Plan Service Providers Addition of Dependents and New Hires Limited Increase in Fixed Cost-Sharing Amounts (other than co-pays)

Prohibited Changes: Decrease in Benefits Increase in % of Employee Contribution/Premium (> 5%) Increase in % Coinsurance Cost-Share Increases in Deductibles or Out-of-Pocket Limits (> medical inflation + 15%) Increases in Copayments (the > of $5 or medical inflation + 15%) Addition or Increase of Annual Limits

Guidance - Coverage of Young Adult Dependants

Plans May Not Deny Coverage Based On: Financial Dependency Residency Student Status Employment Marital Status

Young Adult Dependents Defined: Biological Children Stepchildren Adopted Children Foster Children

Guidance - Annual and Lifetime Limits

Limits Only Apply to TBD “Essential Health Benefits”Phase -In:

Plan years beginning after 9/23/10 - $750,000 Plan years beginning after 9/23/12 - $1.250,000 Plan years beginning after 9/23/13 - $2,000,000

Guidance - Provider Provisions

Primary Care Provider: Any Available Provider

Pediatrician: Pediatricians as PCP Plan May Require In-Network

Obstetrician and Gynecologist: Required Referral for In-Network Provider Prohibited

Guidance - Coverage of Prevention and Wellness

1st Dollar Coverage for Prevention and Wellness: Required Cost-Sharing For Out-Of-Network Allowed

Services Plans Must Cover: Recommendations of the U.S Preventive Services Task Force Recommended Immunizations Evidence-Based Prevention for Children Recommended by HRSA

Guidance - External Review

Informing of Review ProcessNotification of Rights to ReviewAllow for Emergency ReviewContract With 3 Independent IROsNotification of the Decision

Guidance - MLR

Plans to Report and Disclose: Earned Premiums Reimbursements for Clinical Services Spending on Programs to Improve Quality Spending on all Non-Claims Costs

Separate Reports for Each MarketDeductibility of TaxesRebatesOption to Adjust Ratio in Individual Markets

Accountable Care Organizations

Description of ACOsACO Federal Guidelines and ProvisionsConcerns with ACOs

PPACA’s Impact on Group Plans

Decision to Remain Grandfathered: Cost Benefit Analysis

Changes in Benefits: Costly Plan Reforms May Lead to a Decrease in Benefits

Administrative Burdens: Increased Admin Raising Plan Costs

Employers Continuing Coverage: Too Much Burden for a Less Needed Benefit?

Insurers to Continue Offering Health Products: Costs/Requirements Incentive to Leave Market?

Current Legislative Developments

Attempts to RepealAttempts to DefundIncremental Changes Made:Future Attempts for ChangeNon-PPACA Reform IdeasLegal Challenges

Questions?

Jay FahrerDirector, Government RelationsSelf-Insurance Institute of America (SIIA)[email protected]