Online Conference Takes “Deep Dive” into Affordable Care Act

AICPA Online Conference on Healthcare Reform: A Deep Dive into the Affordable Care Act

American Institute of CPAs®

Laura Westfall, JD

PanelMark Dietrich, CPA, ABV

Associate, King & SpaldingModerator

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PanelBrian Marks, CEBS Martie Ross, JD

Principal, Pershing Yoakley & AssociatesPrincipal, Digital Benefit Advisors

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Today’s ObjectivesOverview of the U.S. Healthcare System and Reform

Employer Requirements• New Mandates• Reporting requirements, enforcement penalties

The New Rules on Health Insurance• Individual, Small Group, Large Group and Self-Insured Markets• Insights into how to obtain the best coverage at the best price

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Today’s Objectives (Cont.)

How Hospitals and Physicians Charge for Services• The least understood and most important cause of Cost• Reform’s changes to payment mechanisms and how it impacts

what you need to understand to spend wisely

Prognostications: The Future of Healthcare after Reform

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Overview:

The U.S. Healthcare System & Healthcare Reform

Mark O. Dietrich, CPA, ABV

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Mark Dietrich, CPA, ABV

AICPA's National Healthcare Industry Conference Committee and Chaired that Conference in 2012 and 2013

Co-Author; The Financial Professional's Guide to Healthcare Reform published by John Wiley and Son's 2012

Partner-in-charge of audit of 80 physician tax-exempt faculty group practice

Speaker for over 20 years at national conferences on managed care, healthcare reform, valuation and other topics

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Healthcare Spending and Healthcare in the USA

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National Health Spending

Source: California HealthCare Foundation (2012)9








National Health Spending per Person



Healthcare in the USA: A Baker’s Dozen of Key Elements

1. Anti-trust exemption for insurers and Insurer Consolidation

2. Tax deductibility of health insurance and the lack of consumer involvement in the cost of care

1. a/k/a The Cruise Ship Effect

3. Medicare and Cost-Shifting

4. Endorsement of Fee-for-Service models

5. Medicaid and Cost-Shifting

6. Private insurer participation in Medicare

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7. Self-insurance by Large Employers

8. Federal Government Regulation

9. Prospective Payment Systems

10. Managed Care and Capitation

11. Provider Integration

12. Import of Negotiating Leverage

13. Broad Geographic Disparities

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Healthcare in the USA: A Baker’s Dozen of Key Elements

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Antitrust: McCarran–Ferguson Act,1945

Federal antitrust laws do not apply to the "business of insurance" so long as the state regulates insurers.

Federal antitrust laws only apply in event of boycott, coercion, and intimidation.

Bottom Line: Until ACA/Obamacare, health insurance regulation was exclusive to the states, thus it varied widely/wildly across the nation.

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Medicare & Cost-Shifting

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Cost-Shifting: Not-So-Hidden “Secret” Cause of Insurance Inflation

Medicare• $700 billion in Medicare cuts to fund Reform’s cost are supposed

to come primarily from Hospitals?• Don’t count on it! Last time this worked was after 1997’s BBA and

the hospitals got that repealed in 2000’s Budget Improvement & Protection Act.

• Hospitals will attempt to get those savings back from private insurers and the strong hospitals are succeeding.

• Result – Under 65 population and the poor will pay.

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Balanced Budget ActThe Last Time the Proverbial Cost Curve was Bent

Source: The Lewin Group analysis of Medicare cost reports; AHA annual survey data. (1999)18


Cycle of Cost-Shifting

Providers budget based on Payor Mix

Medicare cuts payments

Providers have revenue shortfall

Providers seek increases from non-Medicare insurers

Health insurance premiums go up

Providers’ budget based on Payor Mix

Medicare cuts payments

Providers have revenue shortfall

Providers seek increases from non-Medicare insurers

Health insurance premiums go up

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Provider Integration & Negotiating Leverage

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Players in the Health Insurance World

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Provider IntegrationLong-term trend among hospitals and physicians due to historic contracting practices with insurers accelerated by new provisions of Reform legislation, especially Accountable Care Organizations or ACOs

Simultaneously, small health insurers have been forced out of certain business/markets, strengthening larger insurers ability to set premiums

Both trends exacerbate causes of high healthcare spending and premiums

Note: As a rule, high insurance premiums are generally driven by the high cost of hospitals, physicians & other healthcare services.

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Hospital-Physician Integration

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®American Institute of CPAs®

Consolidated Providers Demand Increases

Large Insurers Demand Premium Increases from Employers

Weaker insurers forced out, more Consolidation

Employers change to higher co-pays, deductibles and benefit reductions for employees

Strong Providers get New

Technologies, Procedures,

Hospital Buildings and Physicians

Weaker providers forced out, more

Consolidation

Reform exacerbates this Cycle

Cycle of Insurance Premium Increases

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Consolidation Drives the Healthcare Cost Spiral

Hospitals acquire physician practices, move ancillary services, some practices, to hospital settings (Site of service or Venue shift)• Think getting two bills for an ER visit, one from the hospital, one from the doctor.• Services like MRI and CT done in a hospital outpatient department are often

dramatically more expensive than when done in a physician office or freestanding setting.

• Medicare Payment Advisory Commission is now recommending site-neutral payments (June 2013).

Hospitals join other hospitals and physicians in Networks that negotiate higher rates• ACA grants regulatory waivers that permit this!

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Bill for the CT scan. Again, 2 "CT Scan" charges but this time Insurer would not tell me the CPT codes for each charge. They said I had to get that from the Hospital. Odd.

Without radiologist charges, CT scan plus contrast drugs charges totaled $7,727.37. They paid $5,215.98 and my portion is $579.55. A lot of money for a very short procedure.26

Case Study


A Personal Story About Shopping for Healthcare

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Markets: Self-Insured vs. Insured Employers vs. Individuals

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Reform and Insurance

Some of the least understood things about the Reform include:• The new insurance market rules and Exchanges apply only to

small group and individual plans.• Large group and self-insured plans are mostly exempted.• A “double whammy” is set up in 2016 for employers with

between 50 and 100 employees, when they will both be subject to the employer mandate and will be forced into the small group market, where premiums are higher and benefits tend to be less and/or more expensive.

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“While the health reform law holds self-insured plans responsible for some of the same taxes and fees as fully insured plans, self-insured plans are exempt from exposure to the excise tax on insurance, community rating on premiums and mandates for essential health benefits. Beginning in 2014, PPACA requires modified community rating in the individual and small-group health insurance markets that will allow insurers to vary rates only based on age, geographic location, family size and smoking status. These rating rules will apply to products offered in the state insurance exchanges and to fully insured products purchased outside of the exchanges by employers with up to 100 employees.”

Who Can Self-Insure?

Small Employers And Self-insured Health Benefits: Too Small To Succeed? Center for Studying Health System Change

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Who Can Self-Insure?“Faced with rising health insurance premiums and the fallout from the economic downturn, many small employers are struggling to maintain health benefits for workers. At the same time, the markets for both third-party-administrative services and stop-loss insurance are becoming increasingly competitive as some carriers offer services to firms with as few as 10 workers. In turn, more small firms are considering self-insurance as an alternative to traditional health insurance products, according to interviews with health plans, stop-loss insurers and third-party administrators.”

Note: This is how you AVOID a lot of Reform’s impact.Small Employers And Self-insured Health Benefits: Too Small To Succeed? Center for Studying Health System Change

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Three (3) Insured Markets Large Group Market historically more than 50 covered

lives but Reform makes it more than 100 (as of 2016) This is for Underwriting purposes and the Exchanges. The increase creates a larger pool in the Small Group Market to

absorb expected actuarial losses!

Small Group Market is historically less than 50 but Reform makes it 100 as of 2016

Individual Market Note: Massachusetts merged its individual and small group markets

into a single risk pool; no other state has done this but if enrollment goals, especially of young and healthy, are not met, this may prove inevitable and will lead to premium increases for small business.

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Simple Overview of Insurance Risk

From an administrative standpoint, it is cheaper to insure 200 people under a single contract than it is to insure 40 groups of 5 people each under 40 contracts or 200 individuals.

The next series of slides are from analysis of Reform in 2010.

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50,000 insured lives average cost per member per month (PMPM) is $780

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64% of the population has an expected cost PMPM between $660 and $900,

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10,000 insured lives average cost per member per month (PMPM) is $780

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46% of the population has an expected cost PMPM between $660 and $900, more variability = higher premiums

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5,000 insured and “adversely selected” average cost per member per month (PMPM) is $886

-200

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This is what happens when the young do not sign-up!

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Healthcare Reform – The Affordable Care Act

Newly available and less expensive coverage for some. Limited benefits, higher co-pays, bigger deductibles, greater out-of-pocket expenses, higher premiums for many. The foreseeable and the unforeseen.


Timeline of Healthcare Reform in the United States

Early Reform Efforts1964: The “Great Society:”

Medicare and MedicaidRegulation: The Anti-

kickback Statute

The 1990s: Rise of Managed Care, The Stark Law, Balanced Budget Act

of 1997Failure of Managed Care,

Provider Integration

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How We Got Where We Are

Massachusetts passes Reform in 2006• Principal author of that legislation, later an aide to Senator

Kennedy, is key author of federal legislation

Patient Protection and Affordable Care Act (now called ACA or Obamacare) modeled on Massachusetts passed in March 2010

Half of states file lawsuit against PPACA in Supreme Court – and lose

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Reform’s Model: Massachusetts

Highest rate of insured residents in the nation, 97.4% [was 93% before Romneycare]

Highest premiums in nation [and still today]• Many mandated benefits, e.g., IVF

One of Highest rates of cost increase in nation

May, 2010 40


Reform’s Model: Massachusetts (cont.)

Second highest unemployment rate in New England

Self-insured employers increasing to avoid merged Individual/Small Group Market premium increases

Price/Benefit Gap between Small Group Market and Self-Insured & Large Group Market growing

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The Reform of Health Insurance

“If you like your health care plan, you can keep your health care plan”**If you can still afford it!

In Massachusetts, One Man’s “Reform” was another Man’s Ballooning Cost

2011 Slide 42


What to expect

Small Group Premiums go up• Benefit requirements

- No pre-existing condition exclusions- No Lifetime limits- Deductibles limited: $2,000 individuals;$4,000 families- If merged w/ Individual Market, will be worse

• Note: Deductibles in the individual market have, in fact, proven to be higher; some states have higher deductibles on certain drugs, for example

May, 2010 Slide for AICPA

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What to expect

Small Group Premiums go up• Ability to manage your costs is limited by the low deductible and

maximum out of pocket levels ($6,350/$11,700), requires you to pay greater premiums- If healthy, you may have chosen a higher deductible, this would

limit the subsidy you pay to the insurers for those who are not healthy

- Analogous to choosing a high deductible on your auto insurance because of a safe-driving record or financial wherewithal

• Minimum benefits rule requires buying coverage you may not need, e.g., maternity for a 55 year-old

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Financial Professional’s Guide to Healthcare Reform – Young Folks

Pages 74-78 of my book on the legislation have a detailed example of how the law would work in numeric fashion and concludes at the top of page 78

“...For example, a healthy 25 year-old sees a premium increase of 32.5 percent ...”

This is my FAVORITE prediction!

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What to expectLimited Provider Networks• In order to meet ACA standards on benefits,

deductibles and out-of-pocket limits, insurers have been compelled to exclude high cost institutions, typically teaching hospitals and related “high cost” physicians, from their networks

• There are already multiple lawsuits against insurers by providers.

• Impacts ability to continue existing care & relationships with providers

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#AICPA_HEALTH© 2014, Mark O. Dietrich, All Rights Reserved 47

http://aspe.hhs.gov/poverty/13poverty.cfm

35% - See Marriage Penalty next slide

What to expect




ACA Marriage PenaltyAs written in the text, based upon an analysis by the Congressional Research Service, a government agency.• “PPACA phases out premium support subsidies based on individuals’ or families’

income relative to poverty. Because the FPL for the married couple is not twice that of a single person, but only 35% higher (i.e., $14,570/$10,830), premium support under PPACA phases out at a faster rate relative to income for a married couple than it does for a single person, even though the phase-out rate relative to the FPL is the same. The structure of the phase-out results in what some might describe as a “marriage penalty.” One or both individuals in a couple who are unmarried might be eligible for premium support subsidies based on their individual incomes, but if they married they might not, based on their combined income; if found eligible, the premium subsidy they might receive as a married couple could be less than the combined premium subsidies they might receive as an unmarried couple.”

Health Insurance Premium Credits in the Patient Protection and Affordable Care Act, Congressional Research Service, April 28, 2010

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Other Impacts“People who earn 250 percent of the federal poverty level or less will also have their maximum out-of-pocket spending capped at lower levels than will be the case for others who buy plans on the exchange. In 2014, the out-of-pocket limits for most plans will be $6,350 for an individual and $12,700 for a family. But people who qualify for cost-sharing subsidies will see their maximum out-of-pocket spending capped at $2,250 or $4,500 for single or family coverage, respectively, if their incomes are less than 200 percent of the poverty level, and $5,200 or $10,400 if their incomes are between 200 and 250 percent of poverty.”

http://www.kaiserhealthnews.org/features/insuring-your-health/2013/070913-michelle-andrews-on-cost-sharing-subsidies.aspx

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Other Impacts (cont.)

“In California, for example, a standard silver plan will have a $2,000 deductible, a $6,400 maximum out-of-pocket limit and a $45 copayment for a primary care office visit. Someone whose income is between 150 and 200 of the poverty level, on the other hand, will have a silver plan with a $500 deductible, a $2,250 maximum out-of-pocket limit and $15 copays for primary care doctor visits.”

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Financial Professional’s Guide to Healthcare Reform – Exchanges

“As part of the research for this book -— and after receiving notice of a 64% increase from Massachusetts Blue Cross Blue Shield in my insurance premium — I visited the Health Connector [Exchange] web site to see if I could obtain less expensive insurance. There was, in fact, no less expensive coverage and it took many hours to determine that because of the complexity of comparing one policy against the dozens of others. Abandoning the task due to its clear futility, I called my insurance rep, who confirmed the obvious: there ain’t no bargains. In fact, under Massachusetts’ law insurers are required to offer the same non-subsidized products inside the Exchange as they offer outside of it, so there could not be cheaper plans to begin with.”

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Coming Up Next…

Laura Westfall, JD

Associate, King & Spalding

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Employee Benefit Administration and Reporting Requirements for Employers

Laura R. Westfall, Esq.


Overview

Introduction

Timeline of Major Healthcare Reforms Affecting Employers

What Should Employers Be Doing Right Now?

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Overview

Items We’re Still Awaiting Guidance On

Strategies for Cost Containment

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Current State of Employer-Provided Health Plans

Average total cost for active employees: $12,136 in 2013• Up 5.1% from $11,457 in 2012

Employees’ share of total health care expenses, including premiums and out-of-pocket costs, has climbed from 34% in 2011 to 37% in 2013 • More than 80% of large U.S. employers plan to continue to raise the share of premiums that employees pay

66% of large employers offer an account-based health plan (ABHP), such as a health savings account (HSA) or a health reimbursement arrangement (HRA)• Expected to increase to 79% in 2014

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Timeline of Major Healthcare Reforms Affecting Employers

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What Should Employers Be Doing Right Now?


What Should Employers Be Doing Right Now?Confirm That Changes Required to Be Made On or Before January 1, 2014 Have Been Made

Prepare for Changes Required Beginning Mid-2014 and Later

Obtain Necessary Additional Information on Employees

Determine if Your Company is an “Applicable Large Employer” That Will Be Subject to the “Pay or Play” Mandate

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What Should Employers Be Doing Right Now? (Cont.)

Applicable Large Employers: Evaluate the Cost of “Playing” vs. “Paying”

Decide Basic Plan Design (if “Playing”)

Monitor and Assess Implications of Emerging Requirements and Interpretive Guidance Implementing Health Reform

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Confirm That Changes Required to Be Made On or Before January 1,

2014 Have Been Made


Confirm That Plan Changes Required to Be Made On or Before January 1, 2014 Have Been Made

Required Plan Design Changes – Effective for Plan Years Beginning On or After 09/23/2010

• Required Coverage of Dependents to Age 26

• Prohibition on Lifetime Limits

• Restrictions on Annual Limits

• Prohibition on Pre-Existing Condition Exclusions for Children Under Age 19

• Prohibition on Rescissions

• Changes to Internal & External Appeals Process

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Required Plan Design Changes – Effective for Plan Years Beginning On or After 09/23/2010 (con’t.)

• Increased Patient Protections- E.g., requirement not to require pre-authorizations for in-network

emergency care• Coverage of Preventive Services Without Cost-Sharing

• Prohibition on OTC Drug Reimbursements

• Higher Taxes on Improper HSA and Archer MSA Distributions- If plan documentation discusses taxation of HSA/Archer MSA

distributions, make sure to update additional tax to 20%

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Other Required Changes Effective Prior to 2014• Distribution of Summary of Benefits and Coverage (SBC)

- Generally, must be provided beginning on the 1st day of the first open enrollment period that begins on or after 09/23/12

- “Good Faith Compliance” safe harbor for 2013 & 2014 plan years- Plans must provide 60-day advance notice of changes that affect SBC content

• Form W-2 Reporting- Report aggregate cost of employer-sponsored health coverage on Form W-2s (began

with 2012 tax year, with Form W-2s issued to employees by end of Jan. 2013)• $2,500 Limit on Salary Reduction Contributions to Health FSAs

- Applies on a plan year basis- Effective for plan years beginning after 12/31/2012- $2,500 limit is indexed for cost-of-living adjustments in future plan years (still $2,500

for 2014 plan year)

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Other Required Changes Effective Prior to 2014 (con’t.)

• $500,000 Deduction Limit for Executive Compensation Paid to Officers of Health Insurers

- Applies for current and deferred compensation paid to officers, directors, employees and service providers of health insurers

- Effective for plan years beginning after 12/31/2012 (with respect to services performed after 2009)

• Patient-Centered Outcomes Research Institute (PCORI) Fee- Applies to grandfathered and non-grandfathered self-insured health plans

(including retiree plans)- Fee: $2 multiplied by the average number of lives covered under the policy

or plan (e.g., covered employees, spouses and dependents)- Fee for 2012 had to be paid by July 31, 2013 (filed on Form 720)

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Other Required Changes Effective Prior to 2014 (con’t.)• Employer Notice of Exchanges and Premium Credits

- Employers must provide all new hires and current employees with a written notice that:

- Describes the state health insurance exchanges, and- Provides information about premium subsidies that may be available

- Required to be provided to all current employees by 10/01/2013; within 14 days of new hires’ start dates thereafter

- DOL announced that there is no fine or penalty for failing to provide the notice• Employer Notice of Restricted Annual Limits Waiver

- Required only of group health plans that received a waiver or extension of a waiver of annual limit restrictions

- 2013 was the last year the restricted annual limits waiver could apply- Required to be provided by 12/31/2013

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Required Plan Design Changes – Effective 01/01/14• Prohibition on Annual Limits

- Annual dollar limits are prohibited on the value of “essential health benefits” (“EHBs”) for any individual

- Note that the exclusion of all benefits for a particular condition is still permitted

• Prohibition on Pre-Existing Condition Exclusions (for all enrollees)- Note that plans will no longer need to issue “certificates of creditable coverage” after Jan.

1, 2014 as a result

• Prohibition on Waiting Periods for Coverage Exceeding 90 Days- Guidance in recent IRS proposed regulations

- 90 calendar day limit (includes weekends and holidays)- Employee must be able to elect coverage that is effective on the 91st day

- Coordinating with other eligibility conditions- A plan may impose other eligibility conditions (besides the passage of time)- A waiting period begins only after an employee/dependent has met a plan’s other eligibility

conditions for coverage69


Confirm Plan Changes Required to Be Made On or Before January 1, 2014 Have Been Made

Required Plan Design Changes – Effective 01/01/14 (con’t.)

• Elimination of Stand-Alone Health Reimbursement Accounts (HRAs)

- DOL FAQs state that “stand-alone” HRAs will violate PPACA rule prohibiting group health plans from imposing lifetime or annual limits on essential health benefits

• Annual Limits on Out-of-Pocket Maximums- Limits on out-of-pocket expenditures may not exceed the out-of-

pocket expense limits for high deductible health plans ($6,350 individual / $12,700 family for 2014)

• Annual Deductible Limits for Small Employers- Deductibles under small employer plans may not exceed $2,000

individual / $4,000 family for 2014 70



Required Plan Design Changes – Effective 01/01/14 (con’t.)

• Required Clinical Trial Coverage- Group health plans must cover certain costs in connection with

clinical trials, must not discriminate against an individual who participates in a clinical trial for the treatment of life-threatening diseases

• Maximum Financial Reward for Wellness Program Participation Increases

- Wellness programs that condition rewards on satisfaction of a standard related to a health factor will be able to offer rewards of up to 30% of the cost of coverage (e.g., sum of the employee and employer portions of the cost of coverage) in the aggregate

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Check Documentation and Administrative Procedures for Compliance Generally

• Does each ERISA benefit plan have a plan document and an SPD that comply with ERISA’s written plan/SPD requirements?

- Consider creating a “wrap” plan/“umbrella” plan• Do written terms match administrative practices?

- Example: Employee eligibility waiting periods (30 days)• Do not assume that your company’s third-party administrators and

vendors will create/provide/amend plan documents and SPDs that comply with ERISA, the Code, PPACA, etc.

- Make sure you know whether your company is expected to create/provide/amend plan documents, SPDs, and other documentation (such as the new SBCs)

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Transitional Reinsurance Report and Fee - 11/15/14• Applies to grandfathered and non-grandfathered self-insured health

plans (including retiree plans) and insurers• 2014 Fee: $63 ($5.25 per month) per “covered life” (each individual

covered by the plan)• Plan sponsor must report number of covered lives to HHS by Nov.

15, 2014; must remit the fee to HHS within 30 days after receiving notice of fee liability (which will be sent no later than Dec. 15th)

Employer Mandate - “Pay or Play” - 01/01/15

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Annual Health Insurance Coverage Reporting - 01/01/15• Required information includes whether the employer offers a plan providing

“minimum essential coverage,” and if so, other information, including the length of any applicable waiting period and the employer’s share of total allowed costs of benefits

• Penalties for failure to satisfy reporting requirement for the 2014 plan year will not be enforced

Required Automatic Enrollment (Large Employers) - 2015(?)• Employers with more than 200 employees that offer health insurance coverage

(both fully insured and self-insured) will be required to automatically enroll new full-time employees in coverage, along with an opportunity to opt out of the coverage

• Still awaiting guidance/effective date75




PPACA’s requirements necessitate the collection of additional information by employers regarding their employees

• Total family income (unless a safe harbor is used)• Availability for, and enrollment in, other health insurance

coverage (e.g., by an employee’s spouse)• Cultural and language affiliations (for purposes of distributing

materials in required languages, etc.)

Such additional information needs to be safeguarded against misuse

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Determine if Your Company is an “Applicable Large Employer”

That Will Be Subject tothe “Pay or Play” Mandate


Determine if Your Company is an “Applicable Large Employer” Subject to the “Pay or Play” Mandate

“Pay or Play” Mandate Only Applies to “Applicable Large Employers”

Who is the “Employer?”

Who is a “Full-Time Employee?”

Determining “Applicable Large Employer” Status

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“Pay or Play” Mandate Only Applies to “Applicable Large Employers”• “Applicable Large Employer”

- Employers who employed an average of at least 50 “full-time employees” on business days during the prior calendar year- Determination must be made annually

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Who is the “Employer?”• IRS proposed regulations apply the “common law” meaning of “employer”• All entities treated as a single employer under the controlled group and affiliated service group rules are treated as the same employer for purposes of who is a large employer subject to the employer mandate• An employer also includes:

- Predecessor and successor employers- Governmental entities- Tax-exempt entities under Section 501(c)

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Who is a “Full-Time Employee”?• A “full-time employee” is an individual who is employed on average at least 30 hours of

service per week for a month in the prior calendar year- 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of

service per week, provided the employer applies this equivalency rule on a reasonable and consistent

basis

• “Full-time employees” include “Full-Time Equivalent Employees” (FTEs)• Calculating the Number of FTEs

- (A) Determine the total “hours of service” for a month in the prior year for all employees who were not

full-time employees, including seasonal workers (up to 120 hours of service for each employee);- (B) Divide the number in (A) by 120

- Result = Number of FTEs for the month- Fractions are taken into account in determining the number of FTEs for each month

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Determining “Applicable Large Employer” Status

• Based on the number of full-time employees on “business days” during the preceding calendar year

• IRS Proposed Regulations’ Multi-Step Calculation Method:

- Step 1: Calculate the number of full-time employees (including seasonal employees) for each calendar month in the preceding

calendar year

- Step 2: Calculate the number of FTEs (including seasonal employees) for each calendar month in the preceding calendar year

(using the method described above).

- Step 3: Add the number of full-time employees and FTEs in Steps 1 and 2 for each month of the preceding calendar year

- Step 4: Add up the 12 monthly numbers from Step 3 and divide the sum by 12 = Average number of full-time employees for the

preceding calendar year

- Step 5:

- If Step 4 < 50, then the employer is not an “applicable large employer” for the current calendar year

- If Step 4 => 50, then the employer is an “applicable large employer” for the current calendar year

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Determining “Applicable Large Employer” Status (con’t.)• Seasonal Worker Exception:

- Not a “large employer” if the sum of the employer's full-t ime employees and FTEs is more than 50 for 120 days or less during the prior calendar year (and the employees in excess of 50 who were employed during the not-more-than-120-days period are seasonal workers )• Employer Not In Existence in Prior Calendar Year:

- Such an employer is a large employer if it is reasonably expected to employ, and actually does employ, an average of at least 50 full-t ime employees (taking into account FTEs) on bus iness days during the current calendar year

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If Your Company is an“Applicable Large Employer,”

Evaluate the Cost of “Playing” vs. “Paying”


The Employer Mandate GenerallyBeginning in 2015, “applicable large employers” must

choose to either:• “Play”

- Offer “minimum essential coverage” to substantially all full-time employees (and their dependents) which is both “affordable” and offers “minimum value”

OR

• “Pay”- Pay a penalty tax (an “assessable payment”) for either of the following:

- Failing to offer “minimum essential coverage” to substantially all full-time employees (and their dependents), or

- Offering eligible employer-sponsored coverage that is not “affordable” or does not offer “minimum value”

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The Employer Mandate Generally

Applicable penalty tax is calculated on a monthly basis

• An employer is treated as not offering coverage for the entire month if it fails to offer coverage to a full-time employee for any day of a calendar month

The rules for determining liability for and the amount of assessable payment are applied separately to each member of a controlled group.

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Evaluating the Cost of “Playing” vs. “Paying”How Much Will “Playing” Cost?

• Look at actual costs of providing coverage for 2013, estimated costs of providing coverage for 2014, under current plan options

• Confirm that current plan options comply with applicable PPACA requirements (discussed above)

- Fixing noncompliant plan options will most likely increase costs of providing coverage

• Consider hiring outside consultant to review plans for compliance, estimate costs of offering (compliant) current plan options in 2015

How Much Will “Paying” Cost?• Calculate the Estimated Penalty for Not “Playing”

- Understand How the Penalties Work- Identify Your Full-Time Employees for Purposes of Determining Scope of Liability

for Penalties• Consider Possible Indirect Costs of Not Offering Coverage

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Determine the Cost of “Paying”:Understand How the Penalties Work

Subpart A Penalty: Opting Out Entirely• An applicable large employer will pay a penalty tax for any month that:

- The employer fails to offer substantially all full-time employees (and their dependents) the

opportunity to enroll in “minimum essential coverage” under an “eligible employer-sponsored

plan” for that month; and

- At least one full-time employee has been certified to the employer as having enrolled for that

month in a health exchange for which health coverage assistance is allowed or paid

• Penalty Amount:- $166.67/month, times each full-time employee (minus up to 30 full-time employees)- Before the penalty will apply for a given month, at least one full-time employee must enroll in

a qualified health plan through an exchange for that month and must receive an applicable

premium tax credit for that month’s coverage

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Subpart A Penalty (continued)• Defined Terms

- “Substantially All”- IRS proposed regulations clarify that “substantially all” is generally 95%

- “Offer”- Offer must be made no less than once during the plan year

- “Dependent”- Does not include employee's spouse or domestic partner, only employee’s children

- “Minimum Essential Coverage”- Defined by what it does not include, which is “excepted benefits” (e.g., stand-alone dental, vision, etc.; AD&D; workers’ comp; liability insurance, etc.)- Should include any major medical-like coverage provided by employer

90



Subpart B Penalty: Coverage Offered Fails Minimum Value and/or Affordability Requirements

• An applicable large employer will pay a penalty tax for any month that such employer offers coverage to substantially all of its full-time employees and their dependents, but the coverage:

- Does not have “minimum value”; and/or- Is not “affordable”

• Penalty Amount:- $250/month, times the number of full-time employees for any month

who receive premium tax credits- Capped at the amount of the Subpart A Penalty- Subpart B will never cost an employer more in penalties than

Subpart A91



Subpart B Penalty (continued)• Defined Terms

- “Minimum Value”- The plan's share of the total allowed costs of benefits provided under the plan is at least

60%- Several methods available to determine minimum value

- Minimum Value Calculator- Design-Based Safe Harbors in the form of checklists- Actuarial Certification

- Amounts contributed by an employer to an HSA are taken into account in determining

the plan’s share of costs for purposes of “minimum value”- Amounts made available under an HRA that is integrated with an eligible employer-

sponsored plan for the current plan year count if the amounts may be used only for cost-

sharing and not to pay insurance premiums

92



Subpart B Penalty (continued)• Defined Terms (continued)

- “Affordable”- The employer-only premium cost is no more than 9.5% of the employee’s household income

- Safe Harbor Relief for Determination of Affordability Available- Form W-2 Pay- Rate of Pay- Federal Poverty Line

- Special Rules:- Integrated HRAs- Wellness Incentives

93



Generally:• An applicable large employer’s potential penalty tax liability is determined by reference to the number of full-time employees employed in a given month • Calculation must be done on a monthly basis

- Unlike the annual determination for purposes of determining “applicable large employer” status• All part-time employees are excluded

- No “full-time equivalency” conversion necessary

94


Determine the Cost of “Paying”:Identify Full-Time Employees

Identifying “Full-Time Employees”• “Full-time employee ”: An employee who has an average of at least 30 hours of serv ice/week during a calendar month

- 30-hour threshold is the same as for purposes of determining whether an employer is an “applicable large employer”• Determining “Hours of Service ”

- Inc ludes hours during which no duties are performed because of vacation, holiday, illness, incapacity, disability, layoff, jury duty, military duty or leave of absence- Hourly Employees :

- Employers must calculate actual hours of serv ice for employees who are paid on an hourly bas is from:- Records of hours worked; and- Hours for which payment is made or due

95



Determining “Hours of Service” (continued)• Non-Hourly Employees:

- Employers must calculate hours of service for employees paid on a

non-hourly basis using one of three methods:- Actual hours of service, from records of hours worked and hours for which

payment is made or due;- A days-worked equivalency, under which an employee is credited with 8

hours of service for each day for which the employee must be credited with

at least one hour of service under the hourly employee calculation rules; or- A weeks-worked equivalency, under which an employee is credited with 40

hours of service for each workweek for which the employee must be credited

with at least one hour of service under the hourly employee calculation rules96


Determine the Cost of “Paying”:Identify Full-Time Employees (Cont.)

• Employers do not need to use the same method for all non-

hourly employees, and may apply different methods for different

classifications of non-hourly employees if the classifications are

reasonable and consistently applied• Note: the definition of “hours of service” is not identical to the

definition of “hour of service” for purposes of qualified retirement

plans

97



• IRS Safe Harbors for Determining “Full-Time Employee” Status- Allows employers to identify full-time employees by calculating employees’ hours during a specified period of months (a “measurement period”) and then locking in that status (full-time or not) for a separate specified period (a “stability period”)- Terminology

- A “Measurement Period”- The look-back period over which hours are calculated to determine whether an employee has averaged at least 30 hours per week. There are two types of measurement periods:

- The “Standard Measurement Period”- Used for ongoing employees

- The “Initial Measurement Period”- Used for new employees

98



Terminology (continued)• The “Stability Period”

- The look-forward period for which an employee’s status (as full-time or not) is locked in,

regardless of the employee’s actual hours during this period- The stability period begins at the end of the measurement period (and any administrative

period)• An “Ongoing Employee”

- An employee who has been employed for at least one complete standard measurement period• A “New Employee”

- An employee who has not been employed for at least one complete standard measurement

period• An employee is a “Variable-Hour Employee” if it cannot be determined on the employee’s start

date that the employee is reasonably expected to work an average of at least 30 hours per week

during the initial measurement period (based on the facts and circumstances on the employee’s

start date)

99



“Look-Back” Measurement Period - Generally: • Measure each employee’s average hours of service over a look-back measurement period that is 3-12 months long• Assign each employee full-time or part-t ime status based on that measurement• Continue that status throughout a stability period that follows the measurement period and is usually the same length• Between the measurement period and the stability period, an employer may have an administration period of up to 90 days

Documentation is Key• Make sure to properly document the methodology used for determining “full-t ime” status—including the measurement and stability periods used under the IRS safe harbors—as well as accounting for breaks in service and leaves of absence

100


Determine the Cost of “Paying”:Consider Possible Indirect Costs of Not Offering Coverage

Necessity of Additional Compensation?Company’s Attractiveness to Potential Talent?Affect on Employee Morale/Productivity?Affect on Employee Turnover Rate?Affect on Public Opinion of Company?

101

Decide Basic Plan Design(if “Playing”)


Decide Basic Plan Design (if “Playing”):Two Basic Design Choices

Option One:• Offer a plan that provides “minimum essential coverage” with “minimum essential value” to all full-time employees, and either:

- Pay a penalty for those full-time employees for whom the employee-only coverage is “unaffordable” and who elect coverage under an exchange; or- Subsidize the cost of coverage for any full-time employees for whom coverage would be “unaffordable”

Option Two:• Offer a plan providing “minimum essential coverage” with “minimum essential value” to some (but not all) full-time employees, and pay a penalty for full-time employees electing coverage under an exchange, for whom the plan is “unaffordable” or to whom the plan doesn’t offer “minimum essential coverage”

- NOTE: Although FTEs (i.e., part-time employees) are included for purposes of determining whether an employer is a “large employer,” FTEs are not required to be offered “minimum essential coverage”

103


Decide Basic Plan Design (if “Playing”):Factors to Consider

Features of Current Plan(s) Offered• Eligibility• Cost of coverage (and in particular, employee-only coverage)

Analyze Characteristics of Company’s Workforce• Average Employee Age• Relative Health• Turnover Rate• Number/Percentage of Part-Time Employees• Any Special Characteristics Affecting Calculation of Penalties

Importance of Offering Health Coverage to Company’s Overall Benefits & Compensation Strategy

104

Monitor and Assess Implications of Emerging Requirements

and Interpretive Guidance Implementing Health Reform


Monitor and Assess Implications of Emerging Requirements and Interpretive Guidance Implementing Health Reform

The DOL, IRS and HHS continue to issue regulations and guidance with respect to many of PPACA’s healthcare reforms; future guidance may require additional changes to plan design, documentation, administrative process, etc.

106

Issues We’re Still Awaiting Guidance On


Items We’re Still Awaiting Guidance OnAutomatic Enrollment

Outstanding Worker Classification Issues

Offering Dependent Coverage

Nondiscrimination Rules for Insured Health Coverage

108

Strategies for Cost Containment


Strategies for Cost ContainmentEvaluate Coverage of Dependents and SpousesCompare Fully Insured to Self-Insured Plan Design

Assess and Adjust Communication of Benefits to

EmployeesReview Contracts with VendorsCompare Actuarial Value of Current Plan to Available Options

110


Strategies for Cost Containment (Cont.)

Consider Raising Plan Deductible LimitsConsider Wellness and Health Risk Improvement StrategiesAssess, and if Necessary Amend, Hiring Practices and Use of Full & Part-Time WorkforceImpose Annual Limits on Non-“Essential Health Benefits”Evaluate (and Possibly Adjust) Costs of Other Benefits

111


Strategies for Cost ContainmentEvaluate Coverage of Dependents and Spouses

• Raise cost of coverage for dependents (and spouses, if offered)- Recall that “affordability” requirement is measured using “employee-only” coverage

• Offer coverage only for dependents, but not spouses• Charge a premium for spouses who are eligible for “minimum essential coverage” through their own employer• Charge for each family member that participates in the plan (instead of employee + family)

112


Strategies for Cost ContainmentCompare Fully Insured vs. Self-Insured Plan Design

• Self-Insured Plans:- Generally not subject to state health insurance regulations and benefit mandates

- Allows uniformity across state lines for large employers- Plan sponsors may have greater control in designing plan benefits, provider networks, and

employee cost sharing- Costs based on company’s own claims experience- Excluded from some of PPACA’s requirements

- Health insurance industry fee (begins 01/01/2014)- Plan sponsor bears some or all of the risk for paying incurred claims- Subject to more direct reporting and fee requirements under PPACA

• Fully-Insured Plans:- Eligible for coverage under state guarantee programs in the event of carrier’s financial

insolvency- Transfer risk from plan sponsor to insurance company for all claims for benefits made under

the plan- Excluded from some of PPACA’s fee and reporting requirements 113


Strategies for Cost ContainmentAssess and Adjust Communication of Benefits to Employees

• Evaluate Current Communication of Benefits- How are communications to employees made?- Who communicates with employees?- How often are / what kind of communications are made?- How transparent are communications?

• Adjust Communication of Benefits- Offer social media tools (online discussion groups, classes, quizzes, etc.)- Offer in-person classes- Make information about the cost of health services to employees readily available to

employees- Take advantage of technology

- Smartphone apps for pharmacy management- Insurer/vendor websites

114


Strategies for Cost ContainmentReview Contracts with Vendors

• Review what services each vendor is providing• Consider consolidating services with one vendor (cost efficiency)• Consider implementing performance-based contracts (and setting specific

performance targets)

Compare Actuarial Value of Current Plan to Available Options

• Run an actuary-supported financial impact study of the available options

Consider Raising Plan Deductible Limits• Employers can provide plans with higher deductibles, and then offset those

higher amounts with contributions to employees’ HSAs or integrated HRAs• Encourages employees to make more cost-conscious decisions when

purchasing health care services

115


Strategies for Cost ContainmentConsider Wellness and Health Risk Improvement Strategies

• Implement/Broaden outcome-based wellness programs- Suggestions

- A discount of 20% of the cost of employee-only coverage for individuals who

have an annual cholesterol test and achieve cholesterol levels below 200. - Physical fitness/smoking-cessation program coupled with a financial reward

(such as an employer HSA contribution) - Offering disease management programs for employees/dependents with

chronic medical conditions (e.g., asthma or diabetes), coupled with a financial reward for completing the program’s requirements

- Note: “reasonable alternatives” must be offered to those for whom it would be unreasonably difficult or medically inadvisable to satisfy the requirements of the incentive due to a medical condition

116


Strategies for Cost ContainmentConsider Wellness and Health Risk Improvement Strategies (continued)

• Provide education, tools and other resources for wellness- Suggestions

- Hosting a monthly health informational lunch for employees- Encouraging a weight-loss club by providing a meeting space and a fringe benefit

(such as a company mug) to participants- Sponsoring a health fair- Adding a “phone-a-nurse” benefit to the plan- Offering disease management programs for employees/dependents with chronic

medical conditions (e.g., asthma or diabetes)

• On-site clinics• Remember: Premium discounts offered for participation in wellness programs

do not generally count toward determination of plan’s “affordability”

117


Strategies for Cost ContainmentAssess, and if necessary amend, hiring practices and use of

full & part-time workforce• Be careful of potential retaliation claims

Impose Annual Limits on Non-“Essential Health Benefits”• But note: it’s still not clear what those are

Evaluate (and Possibly Adjust) Costs of Other Benefits• Dental, Vision, LTD, STD, Group Life, etc.

- What % of premiums are paid by employees?

- How rich are the benefits offered by these programs?

• Does it make sense to focus benefits-related expenses on health coverage

instead?

118


Coming Up Next…

Brian Marks, CEBSPrincipal, Digital Benefit Advisors

119

Brian Marks, CEBSExecutive Director/Principal

VSCPA Benefit Advisors

Health Insurance Market Update


Today’s overview (of a moving target)

1. Quick review of ACA requirements for 2014/15 • Not a detailed review of the law (I promise)

2. Highlights of major issues and impact to employers

3. The unintended consequences of reform…how we see the market responding heading into 2014

4. How can employers answer? • Six benefit strategies to consider to address the changes

121


Warning!Pay close attention if you:

Have more than 50 FTEs and are not offering coverage

Have employees working > 30 hours/week not currently covered by your health plan

Have a large percentage of employees opting out

Have a significant number of low income employees relative to Federal Poverty Level (FPL)

Offer different contributions or waiting periods to sub-groups of employees

Provide minimal employer contribution to premium, threatening affordable coverage

If warning signals are flashing, a customized

assessment is recommended…

122

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=BLLz9kuRuPYFIM&tbnid=34d3fC67rBUrVM:&ved=0CAgQjRwwAA&url=http://www.clker.com/clipart-11931.html&ei=hQ5LUdPkJYjb0QGg44C4Bw&psig=AFQjCNE32AXZt921kvNwBvIObCoyW-Nf_w&ust=1363959813674396


ACA overview

123


Key issues and provisions

124

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Individual mandate• Must have minimum essential coverage

- Minimum essential coverage is defined as- Coverage under certain government-sponsored plans- Employer-sponsored plans, with respect to any employee- Plans in the individual market- Grandfathered health plans- Any other health benefits coverage, such as a state health benefits risk

pool, as recognized by the HHS Secretary.- Doesn’t include health insurance coverage consisting of excepted benefits

Individual mandate

125


Could drive more employees back into group plan to avoid penalty – increases employer premium contribution liability

126

Individual mandate

Penalties for Individuals


Individual mandate exemptions• Religious exemption• Those not lawfully present in the United States• Incarcerated individuals• Cannot afford coverage based on formulas contained in the law• Income below federal income tax filing threshold• Members of Indian tribes• Uninsured for short gaps of less than three months• Received a hardship waiver from the Secretary• Residing outside of the United States, or are bona fide residents of any possession of

the United States

Individual mandate

127

Individual mandate: Penalty Transition Relief(IRS Notice 2013-42)

Applies to:• Employees and related individuals enrolled in, or eligible to enroll in, an employer’s non-calendar year

plan• Where the plan year begins 2013 and ends 2014

Transition Relief:• No individual mandate penalty for months in 2014 prior to the first day of the plan year beginning in

2014Example:• Employee and minor daughter eligible to enroll in a

non-calendar year plan that begins August 1, 2013 and ends July 31, 2014

• Neither employee nor daughter enroll in plan for the 2013-2014 plan year

• Employee and daughter eligible for transition relief for January 2014 through July 2014128


Eligibility:For exchange plans – individuals with income between 133% (100% in some states) and 400% of Federal Poverty Level (FPL) without access to minimum essential coverage through their (or spouse’s) employer or are offered coverage that is not “affordable” with 9.5% of income threshold

129

Individual subsidies

Income ranges for 133% to 400% of FPL

Individual:

$15,282 to $45,960

Target max EE cost/mo.:

$121 to $364

Note: Subsidies vary by income level and may be delivered as benefit credits

Family of 4:

$31,322 to $94,200

Target max EE cost/mo.:

$248 to $746

An individual making $15,282 will qualify for a subsidy if the monthly EE premium contribution is $121 or more


Exchanges were “operational” in October

The “SHOP” group exchange and a “Marketplace” for individuals

Carrier signals suggest the following:• Targeting the uninsured• Some carriers are not participating• May offer the minimal number of plans allowed (6), one catastrophic• Will be a bias to narrow network options

This means carriers do not want to cannibalize current group business in

exchanges

Exchanges will be a vehicle to manage subsidies but may be unattractive

to those with other options – navigating the exchange can be challenging

and cumbersome

130

Public exchanges/marketplaces


TX

AZNM

UTNV

MT

WY

ID

ND

SD

MN

NE

KS

OK

LAMS AL

SC

NC

IN

KY

PAIA

WV

ME

AK

CA

OR

WA

COMO

ARTN

WI

ILOH

MINY

GA

FL

VA

HI

MD

DE

NJCT RI

MA

VTNH

DC

Operational State Exchanges (1)

State Partnership Exchange (7)

State Exchange Established (15+DC)

Federally -Facilitated Exchange (27)

Individual marketplace/exchangeInformation from: CIAB -June 28, 2013

131


Health plan requirements

Minimum Value Benefits for 50+ employers; generally not a problemNo annual maximum benefit limit on any plan < 50 – limits on deductibles and out-of-pocket maxima

• $2,000/$4,000 deductible limit but there are exceptions

Wellness program incentives – up from 20% to 30% and 50% for tobacco freeWaiting periods can not exceed 90 calendar days

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Applies to > 50 FTEs, 30 hours, at least 95% FTEs must be offered effective in 2015

1. If no coverage offered….$2,000 penalty/full-time employee, less the first 30 2. If essential coverage is offered but unaffordable (generally >9.5%of Box 1 W-2

wages for employee only on low plan) - $3,000 / FTE enrolled in exchange with subsidy

Key Issues:Is current coverage minimally essential? Likely yes. Is it affordable? Harder to tell.Must offer coverage to employees and children (not spouse)Multiple PT jobs with one employer adding to > 30 hours?

133

Employer mandate


What does it mean?• Not repealed• Continue preparing

- Await final reporting rules- Comply voluntarily- Ensure systems and procedures in place

• No effect on other PPACA provisions

Employer mandate penalty delayIRS Notice 2013-45

134


Key clarification

Measuring FTEs is complex…1. Need full analysis of part-time, variable hour and

seasonal employees, and an understanding of measurement periods

2. Up to 15 month period prior to 2015 (formerly 2014) plan year is critical to 30 hour eligibility for each employee

3. Opportunity now to re-align work force with an understanding of the 30 hour threshold

135


Large employer determinationIRS/HHS Notices 2011-73, 2012-17, 2012-58, DOL 2012-2,IRS §4980H

Employers who employed at least 50 full-time employees, including full-time equivalent employees, on business days during the preceding calendar year

Definition Calculating Employees

Full-time employees Employees who, on average, work 30 hours or more per week

A. Add number of employees employed on business days in the year of evaluation

Seasonal employees A worker who performs labor or services on a seasonal basis

B. (Add total number of hours worked during year of evaluation, but no more than 120 hours for any one employee in a given month) ÷ 120

All other non-full-time employees All other employees who are not full-time or seasonal

C. (Add total number of hours worked during year of evaluation, but no more than 120 hours for any one employee in a given month) ÷ 120

TOTAL Full-time and full-time equivalent employees Add A + B + C for each monthAdd all months together ÷ 12

Employee Type

136


Employer mandate toolIRS/HHS Notices 2011-73, 2012-17, 2012-58, DOL 2012-2, IRS §4980H

• 1 - Full-time employees = total number of employees who work, on average, 30 hours per week

• 2 – Add all actual hours worked, in each month, by seasonal employees

• 3 - Add all actual hours worked in the month for those employees who are not accounted for as full-time or seasonal employees

Employer mandated to offer coverage per PPACA → NO

ACA - Employer Sharing ResponsibilityAre you mandated to offer coverage under ACA?

Applicability - §4980H Enter Year (YYYY) of Evaluation

Employers who employed at least 50 full-time employees, including full-time equivalent employees, on business days during the preceding calendar year

Full-Time Equivalent Employees

MonthFull Time

employees1Hours for all

seasonal employees2

Seasonal employees converted to full-time

equivalents Hours for all other non-

full-time employees3

January 0 0 0.0 0

February 0 0 0.0 0

137


Variable hour and seasonal employeesIRS/HHS Notices 2011-73, 2012-17, 2012-58, DOL 2012-2, IRS §4980H

Type Definition

Variable hour employee An employee is a variable hour employee if, based on the facts and circumstances at the start date, it cannot be determined that the employee is reasonably expected to work on average at least 30 hours per week or who initially starts at 30 hours per week but is anticipated to do so for a limited duration

Seasonal employees The statute does not address how the term “seasonal employee” might be defined for purposes of whether a new employee of an applicable large employer is reasonably expected to work full time for purposes of determining the amount of any assessable payment under § 4980H. Through at least 2014, employers are permitted to use a reasonable, good faith interpretation of the term “seasonal employee” for purposes of this notice.

138


Variable hour/seasonal rulesIRS Notice 2012-58

Initial Measurement Period (IMP) Administrative Period

Applicable Stability Period (IMP = Full-time)

Applicable Stability Period (IMP ≠ Full-time)

A “look back” period of 3-12 consecutive calendar months

• Cannot exceed 90 calendar days

• Administrative period can be limited further when applying combined duration rule*

• Must be the same length as the stability period for on-going employees

• At least 6 consecutive calendar months

• Cannot be shorter duration than IMP

• Begins after IMP and any applicable administrative period

• Cannot be more than 1 month longer than the IMP

• Must not exceed the remainder of the SMP plus any associated administrative period in which the IMP period ends.

Full-time status of newly hired variable hour and seasonal employees

*IMP and administrative period cannot extend beyond, at most, 13 months and a fraction of a month from the employee’s start date

139


Variable hour determination toolIRS Notice 2012-58

Adding Employees Waiting period New Hire On-Going Employees

Will you always add employees on the first of a

month? Y/N

# of Days Initial Measurement Period (IMP)(in months)

Proposed Stability Period

(in months)

Administrative Period

(in days)

Standard Measurement Period (SMP)(in months)

Proposed Stability Period

(in months)

Administrative Period

(in days)

Evaluation: Acceptable Unacceptable Unacceptable Unacceptable Unacceptable Unacceptable Unacceptable

Overall validation of proposed eligibility plan

All rules are not satisfied - please try changing some of your optionsValidation messaging provided for each eligibility rule

Plan appears to satisfy all rules - proceed to Step 3OR

140


Key Issues:

Is current coverage minimally essential? • Likely yes

Is it affordable?• Harder to tell

141

Employer mandate/play or pay


“Affordability” and metal plans

142

Deductible OOP Max Office Copays

Co-insurance Actuarial Value / Expected OOP

Metal Level

No Deductible $0/$0

$3,000/$6,000

$25/$50 20% 88%$1,250

Platinum

TraditionalDeductible

$2,000/$4,000 facility

$4,500/$9,000

$30/$50 20% 78%$1,750

Gold

HDHP $3,000/$6,000comprehensive

$3,000/$6,000

None 0% 71%$2,000

Silver

HDHP $5,000/$10,000comprehensive

$5,000/$10,000

None 0% 62%$2,350

Bronze

Actuarial value (plan cost/total cost)


Administration

Requirements on the rise for employersStatus against 30-hour threshold and various measurement periods

W-2 reporting

Annual reporting on whether/not essential health benefits offered

Automatic enrollment for employers with 200+ FTEs (delayed?)

< 50 covered lives will be individually rated with one year bands (employees

and dependents)

Supporting employees who consider the exchange:• Exchange interaction• Support individual exchange application

- Supply EIN numbers, etc. • Tracking and reporting penalty status

143

Individual exchange applicationsEmployer support required!

REVISED APPLICATION:

1. 21-page application is now 3-7 pages

2. 2 family members v. 6 family members

3. Questions:

a. Demographic

b. Tax-filing status

c. Employer information and access to employer-sponsored coverage

d. Household income

e. Who is requesting coverage

144


New rating impact

Current Underwriting Techniques:

1. Experience Rating – 100+ for most carriers• Base rates adjusted for industry, gender, location, claim history• Weighted between group and pool experience

2. Community Rating / Adjusted Community Rating - 26 to 99• Requires group risk questionnaire• Community (pooled) base rate• Adjustments - demographics (age/sex factor), industry, geographic, loss

ratio (claims vs. premium)

145


New rating impact

Current Underwriting Techniques:

3. Medical Underwriting - 2 to 25 • Requires individual health questionnaires• Assign points based on medical conditions within group• Total points translate to a factor which is applied to the base rates

- Factors range from 0.7 (favorable risk) to 2.1 (unfavorable risk) for most carriers

• Base rates vary by Age, Gender, and Tier- Age bands differ by carrier and range from 4:1 to 7:1 or more

146


New community rating impact

ACA Impact to Current Underwriting Methodologies (< 50):

No medical underwriting

Standard age bands with a maximum 3:1 cost ratio

Able to adjust for Tobacco Users up to 50%

One major carrier stated that 40% of groups in the 2 to 99 insured segment will see a rate impact of 50% or more heading into 2014…….

HOW? Pinching underwriting bands

Upward cost pressure from new benefits and increased demand

Impact of currently uninsured

New fees and taxes (approaching 4-6% for full year!)

147

Low Risk High Risk


New rating impact

148

Scenario 1 Scenario 2 Scenario 3

Average Age 35 40 49

% Male 59% 56% 41%

Medical Conditions Better than Average Average Average

% Change due to Demographics (Age/Gender)

56% 29% -5%

% Change due to Medical Conditions

10% 0% 0%

% Change due to Pricing Trend

11% 11% 11%

% Change due to New Taxes & Fees

4% 4% 4%

Total % Change 98% 49% 10%

Cost Illustration:

American Institute of CPAs® 149

New rating impact

Employee Age

Tier RateER Contrib -

80% of EE RateRate

ER Contrib. - 80% of EE Rate

25 EE only $339 $271 $225 $18030 EE only $339 $271 $250 $20035 EE only $339 $271 $275 $22040 EE only $339 $271 $325 $26045 EE only $339 $271 $380 $30450 EE only $339 $271 $425 $34055 EE only $339 $271 $500 $40060 EE only $339 $271 $550 $44065 EE only $339 $271 $625 $500

NOW 2014

<50 individual rating – all rates will be individually rated at the dependent level

Rate diff. problematic in budgeting,

discrimination issue?

< 50 EEs Now Future

1 rate Ind. rates

Male – 55 yrs. - $500

Spouse - 50 - $425

Child - 25 - $225

Child - 17 - $180

Family $1,200 $1,330


Employer premium contribution

Premium contribution discrimination testing likely to apply (was delayed in 2010)

Different contributions for different classes creates substantial risk of wage and eligibility test failureSafe harbor – eliminate any class differences in premium contribution; or offset with salary and employee may deduct via the 125 planAwaiting final regulations; may allow testing within a class…e.g. PT workers

150


New rating impactSummary:

2 to 50 employees:• No requirement to offer coverage• New age bands / no medical underwriting• Individual rates• Some individuals drift to individual coverage? Or, • Does coverage become unaffordable for many employers?

50 to 100 employees: • Required to offer coverage to avoid penalty (2015) in certain states• Need to really review FTE equivalents and PT staff impact• What’s affordable?

100+ employees:• Required to offer coverage to avoid penalty (2015)• Still experience rated but higher taxes and trends• Treading water may mean average 20-25% rate increases

151

Financing ACA

152


New taxes/fees

153

ACA Fee Fee Fully Insured Self-InsuredCost

Impact

Patient-Centered Outcomes Research Institue (Comparative Effectiveness)

$1 per covered life Year 1, $2 per covered life Year 2, indexed thereafter until it

sunsets in 2018

Yes Yes < 0.01%

Annual Health Insurance Industry Fee

Estimated to be 2% to 2.5% of premium in 2014

and 3% to 4% in later years

Yes No 2% to 2.5%

Transitional Reinsurance Program Assessment Fee

$63 per covered life in 2014 and will be indexed

thereafter until it sunsets in 2016

Yes Yes 2%

Risk Adjustment Program and FeeEstimated to be $1 per

covered life

Yes for employers that participate in the

individual and small-group markets

No < 0.01%

Marketplace (i.e., Exchange) User Fees

3.5% of the monthly premium for each policy in

federally facilitated marketplaces

Yes for small groups offering coverage through federal

marketplaces

No 3.5%

Cadillac Excise Tax (tax for high-cost plans)

Effective in 2018: 40% of the amount premium over

established threshholds for single coverage and family

coverage

Yes if premiums exceed threshholds

Yes if budget rates exceed threshholds

Varies


General thoughts

Continuation of employer-based plan seems most common approach in the market• Recruitment and retention requirements • Market uncertainty• Desire for employee support

Method of offering likely to change• Private exchange

Much still undefined

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So what are the strategies?

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Beginning the evaluation processGather documentation:

1. Identify all full-timers according to the new rules.

2. Define current eligibility requirements and waiting period.

3. Itemize current benefit offerings and plans by class of employees .

4. Document all coverage elections and contributions by person and compare to salary.

5. Understand who elects and who does not and why.

6. Determine methodology for additional information gathering from employees.

7. Begin plan for employee education and communication.

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Potential solutions

1. Operational changes to workforce

New hires scheduled < 30 hours

Legitimate outsourcing opportunities (e.g. groundskeepers, maintenance, food service)

Job sharing

Joint ventures or partnerships?

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2. Early renewal took place in 12/2013

Most aspects of PPACA were effective with plan years beginning 1.1.14 or after (such as…underwriting changes, no pre-ex)

Many carriers allowed an early renewal. E.g.…renewed as usual 4.1.13. Re-renewed 12.1.13 until 11.30.14. Resulted in avoidance of PPACA requirements for 8 month extension.• Would re-set deductibles and OOP max or maintain as calendar year

Delay of rate hike?

Administrative burden

Lots of strings attached…

What will happen in late 2014?

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Potential solutions


3. Plan designCarriers mapping to new plan designs

• Plans must have AV of +/- 2% of metal target (e.g. 61% AV = bronze)• Most plans are in the silver/gold range now – can estimate with help• HRA – many questions around how/where they fit?

Contribution• Generally 9.5% contribution of Box 1 W-2 wages applies to lowest qualifying plan -

move to lowest bronze level plan as basis for contribution? • Wellness and tobacco incentives

Eligibility• “Carve out” lower compensated employees to exchange to take advantage of subsidy• Carve-out spouses from plan

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Potential solutions


4. Self-funding and captives

If employer pool has healthy risk compared to average, consider self-funding• Will be available down to 10-50 employees, with capped liability, gain-sharing

and consistent funding

Captives can be attractive for employers with similar risk or management characteristics, and especially for groups with a common interest (e.g. schools, retirement communities, religious organizations, industry peer groups)• Needs to be seriously vetted – not for all, devil is in the details

Could offset impact of large ACA renewal – the more favorable demographics/medical risk the more advantageous it is

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Potential solutions


5. Defined contribution and private exchanges or marketplaces

“Defined contribution” means employer budgets and contributes a fixed dollar amount per employee, typically separate dollar buckets for medical and ancillary coverage

Private exchanges create a marketplace buying experience for employees – online, multi-choice, service-backed buying experience

DBA solution in place

Strategies to maintain employee and employer tax preferences

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Potential solutions


6. Pay or play? How strategically important is it to offer a health plan?• What do your employees really want/need?• Is the current cost trend sustainable?• Historically, it’s been important to offer health coverage. Is it

still?• For 2015, is paying the penalty/tax the best approach? Will

penalties increase and when? • Many pay or play models are inferior teasers…

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Potential solutions


What must employers do before 2015?• Determine applicable large employer status• If large employer, decide to pay or play• If play, ensure offered coverage is affordable and of minimum value• If pay, calculate penalty

• Strategic considerations if you “play”– Variable hour employees (how to best manage)– Determine where you will be relating to affordability and minimum value

– Maximize positioning

Health Care Reform – 50+

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What must employers do in 2014?• Determine if you will be aided or harmed by ACA underwriting

changes– Age band changes– No risk adjustments

• Set strategy based upon determination above– Early renew (delay)– Self-fund– Immediately implement ACA rates

Health Care Reform - <50

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Strategic Considerations• Almost all small groups will have to make plan design changes in 2014 due to market

reforms.

• Most groups should consider a multi-plan option and defined contribution strategy. Private exchanges could offer a potential solution.

• Employees will have to take on more responsibility for healthcare purchasing and behaviors.

• Employers will need to support this with decision-support resources, education, and consideration of wellness incentives.

• Insurance carriers will be introducing new products to achieve the 60% minimum value featuring performance based/restrictive networks, reduced services, and increased consumer responsibility.

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ACA will impact each employer uniquely. There is no common solution.

You will need the tools (e.g. pay or play calculator, metal plan estimator, 30 hour “look back”) and expertise and know how to help you design the right path

Advanced planning will help to get your house in order

Anticipating major rate actions is a must…don’t wait until the renewal execution period to consider your options

Contact your consultant sooner rather than later with any questions or concerns

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Customized solutions required!


When do I act?

Probably not a decision that is best made hastily

If you have immediate concerns, please reach out to your consultant

Otherwise seek advice as market and rules evolve

Might not want to be an early adopter of new world• Exchange not fully vetted, underwriting uncertain, product mix likely thin• Consider the value proposition any decision will portray to your employees

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Thank You!Brian Marks

Executive Director / VSCPA Benefit Advisors 877-998-7272


Coming Up Next…

Martie RossPrincipal, Pershing Yoakley &

Associates

169

Impact of Healthcare Provider Community RestructuringAICPA Online Conference on Healthcare Reform: A Deep Dive Into the Affordable Care Act

Martie RossPrincipal, Pershing Yoakley & Associates


The Back Half of the ACA

171


“We can’t afford to have a flu clinic this year.”

- Hospital Chief Executive Officer

“We can’t afford to have a flu clinic this year.”

- Hospital Chief Executive Officer

172


“The one thing that could happen for which we have no contingency

plan is a massive outbreak of health.”

- Physician Practice Administrator

173


Today’s Environment

Fee-for-service as primary cost driver• Massive regulatory oversight

Defensive medicine as secondary cost driver• Practice by exception

Incentives result in provider-centered care

174

Every system is perfectly designed to achieve exactly the results it gets.

-Donald Berwick

175


Flipping Healthcare

ACO

SpecialistsFacilitiesMedicalHome Person

IPFacilities

OPFacilities

PCPs

Specialists

Multi- SpecialtyGroups

AncillaryServices

Patient

Today Tomorrow

CIN

MedicalHome

Person

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Bundled Payments

PCP Capitation

Global Payment

Fee for Service

Shared Savings

Reactive Focused Predictive

Visitor

Symptomatic

Acute Needs

Services & Supplies

Unit Based

No Financial Risk

Patient

Episode

Most Common Conditions

Packaged Treatments

Efficiency Based

Partial Financial Risk

Person

Overall Health

Community Health Characteristics

Manage Well Being

Outcome Based

Full Financial Risk

Evolution of Reimbursement

P4P

177


Affordable Care Act – Two Strategies

PaymentBased on

Quality

Incentives for ClinicalIntegration

178


Hospitals• Readmission Reduction

Program• DRG Modifier• HAC/Never Event Penalty

Physicians• PQRS• VBP Modifier• Physician Feedback

Reports• SGR Fix Legislation

Payments Based on Quality

179


Hospital Readmission Reduction Program

Penalty based on 3-year historical 30-day hospital readmission rates for AMI, heart failure, and pneumonia

• Same or any other subsection (d) hospital• Reason for readmission irrelevant• List expands in 2015 to include hip/knee arthroplasty and COPD

180

181#AICPA_HEALTH© 2014, Mark O. Dietrich, All Rights Reserved

PenaltiesPenalty attaches to all DRG payments:

Even more costly

• Negative perception in community

• Commercial insurance/employers

FY 20131%

Reduction

2,200 hospitals penalized $280

million

FY 2014

2% Reduction

FY 2015 and

going forward

3% Reduction


DRG Modifier

Adjustment to DRG payment based on clinical quality measures and patient satisfaction scores

• Achievement and improvement• Budget neutral (winners and losers)• Percentage of DRG payments at risk (withhold and re-distribute)

• 1.25 percent for FY 2014

182


HAC/Never Event Penalty

Begins in FY 2015

Top quartile (lowest scores) = 1 percent payment reduction

183


Measures

Proposed “never events”

• Pressure ulcer rate• Volume of foreign object left in the body• Iatrogenic pneumothorax rate• Post-operative physiologic and metabolic derangement rate• Post-operative pulmonary embolism or DVT rate• Accidental puncture and laceration rate

Proposed HACs

• Central line-associated blood stream infection• Catheter-associated UTI

184


Physician Quality Reporting System

Submission of reports, not achievement of scores • Range of reporting options

Carrots followed by sticks• 0.5% bonus in 2013 and 2014 • 1.5% penalty in 2015 if ≠ report in 2013 • 2.0% penalty in 2016 ≠ report in 2014 (and thereafter)

Meaningful use penalties• 1% penalty in 2015 if not MU in 2014; 2% in 2016; 3% in 2017;

4% in 2018 or 2019

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Physician Value-Based Payment Modifier

Phased in between 2015 and 2017

2013 performance determines 2015 modifier for providers in groups of 100+

Budget neutral

wRVU x conversion factor x VBPM• Positive number = paid more• Negative number = paid less

Far broader impact than Medicare payment

186


Physician Feedback Reports

Individual reports on resource use and quality of care as compared to peer group based on Medicare data

Used to calculate Medicare physician value-based payment modifier

Schedule• In Spring 2013, reports sent to physicians in groups of 25+ in nine

states based on 2011 data (CA, IL, WI, MN, MI, MO, IA, KS, NE) • By February 2014, reports to physicians in groups of 25+

nationwide based on 2012 data• All physicians by 2016

187


SGR Fix

Three-month fix now in place

Three reported bills• Senate Finance• House Ways and Means• House Energy and Commerce

188


SGR Repeal and Medicare Beneficiary Access Improvement Act

Freeze MPFS rates at 2013 levels thru 2023

Sunset PQRS, VBM, and ERH MU penalties on 12/31/16

Single VBP adjustment effective 01/01/17 (4 to 12 percent between 2017 and 2021)• Quality (PQRS measures)• Resource use (current VBP program + enhancements)• Meaningful use• Clinical practice improvement activities (TBA)

Providers in APMs receive 5 percent bonus, exempt from VBP adjustment

189


ACA and Commercial Payers Impact on Providers

HEDIS measures• Plan accreditation for exchange participation• Medicare Advantage Five Star ratings

Risk-adjusted payments

Medical loss ratio

190


Incentives for Clinical Integration

FFS Payment for Care Management

Accountable Care Organizations

Other APMs

Private Payer Initiatives

191


FFS Payment for Care Management

New Medicare payment for post-discharge transitional care management (30 days post-discharge from institutional care)

Medicare payment for Chronic Care Management in CY2015

Medicaid health home model

Commercial payer PMPM payments for specific populations

192


Accountable Care Organization

Providers who voluntarily work together to improve quality/reduce costs

Patient attribution based on PCP

Opportunity for shared savings • Total FFS payments – benchmark• Meet and report on specified performance standards

193


Accountable Care Economics

Actual total FFS payments• Payer’s actual total payments for specified services provided to

identified patient population during defined time period• All providers, not just ACO participants

Benchmark• Predetermined target spend typically based on historical data

Performance Standards

194


Medicare Shared Savings ProgramACO Functions

Establish and maintain quality assurance and improvement program

Promote evidence-based medicine, patient engagement, care coordination, patient-centeredness

Compile and report participants’ quality measure scores

Distribute shared savings and assess shared losses

195


Calculating Shared Savings/Losses

Each ACO participant continues to bill fee-for-service independently

Eligibility for and level of shared savings based on performance score

Calculate actual total cost of care for assigned patients against pre-determined benchmark

Apply formula to determine share of savings (losses)

196


MSSP ACO Waivers

Stark Law, Anti-Kickback Statute, CMPs on gainsharing, beneficiary inducement

Governing body determines financial arrangement promotes MSSP purposes

Pre-participation waiver up to one year prior to application submission

Participation waiver remains in place so long as part of MSSP

197


Choosing Wisely

Initiative of the American Board of Internal Medicine Foundation started in 2011

46 specialty societies have published “Five Things Physicians and Patients Should Question”

24 Consumer Reports patient education guides

198

199

200


Aggregate Medicare Spending

201


Per Capita Medicare Spending

202


Other APMs

Medicare Bundled Payments

Center for Innovation Demonstration Projects

Private Payer Initiatives• Bundled payments• Shared savings• Primary care capitated payment

203

®American Institute of CPAs® 204

The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.

- Malcolm Gladwell


Healthcare 2.0

1. The industry is learning to purchase value, not volume

2. Providers and payers are struggling to find common solutions to universal challenges because healthcare continues to be a local and regional commodity

3. Stakeholders are searching for their purpose and relevancy in a patient-centered healthcare continuum

4. Consumerism is emerging as a driving force in healthcare

5. Change is accelerating due to knowledge derived from disparate and dynamic data

205


Provider ResponseEconomic and Clinical Integration

206

207

Economic IntegrationThrough

Consolidation

Clinical Integration Through Networks of

Independent Providers

Provider Responses

Hybrid Models 208


Economic Integration

Health system mergers and acquisitions

Media reports of dramatic and unprecedented hospital employment of physicians

AMA’s 2012 Physician Practice Benchmark Study• Nationally representative random sample of post-residency

physicians providing care 20+ hours/week and not employed by federal government

209


Practice Arrangements

Practice Owned by Practice Physicians - Owner (48.9)Practice Owned by Practice Physicians - Non-Owner (11.1)Practice Wholly Owned by Hospital (14.7)Practice Partially Owned by Hos-pital (8.3) Practice Owned by Not-for-Profit Foundation (6)Direct employees of hospital or health system (5.6)

210

Best Non-Hospital

Rest of Non-Hospital

Best Hospital/IDN

Rest of Hospital/IDN

Overhead % 58.3 60.0 56.8 83.4

Gross Charges per FTE MD

$1,372,247 $1,069,530 $995,303 $755,855

Physician wRVU per FTE MD

13,096 12,809 9,714 9,117

Total MD Net Revenue per FTE MD

$351,082 $280,439 $261,865 $69,881

Multi-Specialty Group Practice Performance (MGMA 2011)

211


Alignment Models

MSO Services Hospital offers menu of administrative services to support independent practices

Medical Director or Administrative Services Hospital retains physician as independent contractor to provide medical director or other administrative services

Equipment or Building Joint Venture Hospital and physicians co-own building or equipment leased to hospital or leased to medical practices

212


Alignment Models

Service Line Management or Co-Management Agreement

Hospital contracts with physician group to manage or co-manage hospital service line (e.g., cardiology, oncology)

FMV considerations

Gainsharing Hospital pays physician percentage of any reduction in hospital’s costs for patient care attributable in part to physicians’ efforts

Quality and performance measuresCMP considerations

213


Alignment Models

Medical Foundation/ Professional Services Agreement Relationship

Hospital creates non-profit foundation to own and operate medical practice business; physician participation on governing board

Foundation enters into professional services agreement with medical group to provide physician services; Foundation bills and collects

Medical group employs physicians

Hospital-Owned Medical Practice Hospital (or separate foundation per above) owns medical practice and employs physicians

214


Alignment Models

Physician Hospital Organization Hospital and physicians co-own entity that facilitates payer contracts

Vary in degree of integration from non-risk messenger models to risk-assuming entities that negotiate with payersEconomic Credentialing Require certain number of admissions/procedures as condition of medical staff membership

Prohibit competition with hospital

215


Alignment Models

Service Line Joint Venture Hospital and physicians co-own a particular medical service lineExamples: ambulatory surgery center, sleep laboratory, diagnostic imaging center

Participating Bonds Physician ownership of hospital-issued bonds bear a higher interest rate of interest contingent on hospital achieving desired financial goals

Shared Medical Practice Ownership Hospital and physicians co-own the medical practice entity which employs physicians

Physicians have role in governance

216


Clinical Integration

Providers accountable to each other and to community to deliver high-quality care in efficient manner• Collectively define and enforce standards of care• Implement efficiencies• Coordinate patient care

217


Antitrust Origins

Per se illegal for independent market participants to negotiate jointly on price-related terms

Three options• Messenger model• Economic integration• Clinical integration

Pursue clinical integration to achieve higher fee-for-service reimbursement

218


Clinically Integrated NetworksVerb vs. Noun

219


Clinically Integrated Network

Lean infrastructure to support provider accountability

Vehicle for independent providers to jointly negotiate with payers• Access to patients• Access to payment• Access to actionable information

220


CIN Functions

Core functions• Promote evidence-based medicine• Implement efficiencies• Facilitate care coordination• Negotiate and manage payer contracts

Additional support services

221


Promote Evidence-Based Medicine

EBM = integrating individual clinical expertise with the best available external clinical evidence from systematic research

Clinical protocols• Identify (prioritize)• Implement (education, technology solutions)• Monitor (reporting on quality measures)• Remediation (including punitive measures)

222


Implement Efficiencies

Ongoing assessment and improvement of clinical environment and work flow processes

Eliminate unnecessary costs to participants

Examples• Procedure scheduling and staffing• Standardization of equipment and supplies

- Appropriate use criteria• Advise on medical technology planning and capital purchases

223


Facilitate Care Coordination

Identify high-risk, high-cost patients• Disease registries• Data analytics

Aggressive interventions• Patient navigator/health coaches• Remote monitoring• Transitional care management/chronic care management • Patient engagement strategies and tools (e.g., shared decision-

making)

224


Manage Payer Contracting

Standard fee schedule

Narrow networks and tiered benefits plans

Pay for performance

Shared savings programs

Bundled payments

Centers of Excellence

Global budgets

225


Narrow Networks

Importance of network participation• New payment models reward covered lives, not covered

services

Lower-cost insurance products

Direct involvement of self-insured employers

Patient transparency

226


Other CIN FunctionsPhysician Practice Support Services

Back-office functions

Group purchasing

HR/staffing

Physician value-based purchasing

ICD-10 transition and compliance

HIPAA Privacy and Security Rule compliance

Patient-centered medical home accreditation

227


CIN Formation

Two or more entities develop formal relationship to share unique resources and capabilities to create competitive advantage

Motivations• Achieve economies of scale• Design continuum of care• Develop narrow networks• Defend against competition from large systems• Test the waters for more “involved” relationship• Unwilling/unable to commit to traditional M&A

Common interests well understood; authority limited; activities specifically defined

228


CIN Phases

Strategy development• Engage in level-setting education• Define rationale and objectives• Determine scope• Examine feasibility

Partner assessment• Develop selection criteria• Perform SWOT analysis• Enter into letters of intent

229


CIN Phases

Establish terms of relationship• Prioritize objectives• Document rights and responsibilities

Commence and maintain relationship• Engage in strategic and operational planning• Secure IT infrastructure• Develop timelines and link resources• Identify performance measures

Exit strategy• Specify triggers• Determine procedures to wind down alliance

230


Population Health Management

231

232

233


Martie RossPershing Yoakley & Associates, PC9900 W. 109th Street, Suite 130Overland Park, KS [email protected]

234

mailto:[email protected]


Coming Up Next…

Panel Discussion

&

Question Answer Session

235

Copyright © 2013 American Institute of CPAs. All rights reserved.

Thank You

236

Online Conference Takes “Deep Dive” into Affordable Care Act

Health & Medicine

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aicpa online

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