University of University of Hartford - Emeriti Hartford - Emeriti Health Care Health Care Reform: Reform: Health Plan Health Plan Overview Overview Presented by Presented by Christopher Monroe Christopher Monroe Constitution Advisory Group Constitution Advisory Group
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University of Hartford - Emeriti Health Care Reform: Health Plan Overview Presented by Christopher Monroe Constitution Advisory Group.
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University of University of Hartford - Hartford - EmeritiEmeriti
Health Care Health Care Reform: Reform: Health Plan Health Plan OverviewOverview
Presented by Presented by Christopher MonroeChristopher MonroeConstitution Advisory GroupConstitution Advisory Group
Agenda
• Reforms currently in place
• 2012-2013 compliance deadlines
• Future compliance deadlines
• Retiree Plans – “University of Hartford and Future Impact”
• Questions
Reforms Currently in Place
Provisions Already Effective
• Small employer tax credit• Dependent coverage up to age 26• No lifetime limits/restrictions on annual limits• No rescissions • No pre-existing condition exclusions for children• No cost-sharing for preventive care services• Appeals process changes – “user friendly”• No reimbursement for OTC medicine or drugs (without a prescription)
• Medical loss ratio rules – “fully insured groups only”• Part D Discount Expansion - “Donut Hole”
2012-2013 Compliance Deadlines
W-2 Reporting
• Employers must report aggregate cost of group health plan coverage on each employee’s Form W-2
• Does not change the tax rules for health coverage – coverage is still not taxable
Effective Date for W-2 Reporting
• Reporting optional for all employers in 2011
• Mandatory for 2012 tax year (W-2 Forms provided in January 2013)
• For small employers (filed fewer than 250 W-2 Forms last year), reporting requirement is delayed until further guidance issued
• Covered employers need to be compiling data
Summary of Benefits and Coverage
• Simple and concise explanation of benefits− Applies to GF and non-GF plans
• Final guidance specifies compliance deadlines− Original deadline was March 23, 2012− Revised deadline of September 23, 2012.
• Carrier support in place and functional.
Providing the SBC to Enrollees
• Plans must provide SBC to enrollees:− For each benefit package offered or which they are eligible
− Annually at renewal (or 30 days before new plan year if automatic renewal)
− With enrollment application materials
− If no written enrollment materials, when the participant is first eligible to enroll
− Before the first day of coverage (if there have been changes to the SBC)
− Upon request
SBC Standards
• Appearance− Cannot be longer than 4 double-sided pages− 12-point or larger font− May be color or black and white− Paper or electronic form− Template available
services and written translations upon request− Translations are available
SBC Content
• Uniform definitions of standard terms
• Description of plan’s coverage
• Exceptions and limitations
• Cost-sharing provisions
• Renewability and continuation
• Coverage examples
• Required statements and contact information
• Internet address for obtaining the uniform glossary of terms
60-Day Notice Rule
• Material modifications not in connection with renewal must be described in a summary of material modifications (SMM) or an updated SBC
• Material modification:−Enhancement of covered benefits or services−Material reduction in covered benefits or services−More stringent requirements for receipt of benefits
• Must be provided at least 60 days BEFORE modification becomes effective
Preventive Care for Women
• New guidelines for preventive care for women
• Must provide coverage for women’s preventive health services without any cost-sharing
− Applies to non-GF plans− No deductible, copayment or coinsurance
• Effective for plan years beginning on or after Aug. 1, 2012
Preventive Care for WomenCovered Health Services
• Well-women visits
• Gestational diabetes screening
• HPV DNA testing
• Sexually transmitted infection counseling
• HIV screening and counseling
• Breastfeeding support, supplies and counseling
• Domestic violence screening and counseling
• Contraceptives and contraceptive counseling
Increased Medicare Tax
• Medicare tax rate to increase for high-earners−0.9 percent increase (from 1.45 percent to 2.35 percent)
• Employer responsibilities−Withhold additional amounts from wages in excess of
$200,000−No requirement to match additional tax−No requirement to notify employees
Health FSA Limits
• Current limits−No limit on salary reductions−Many employers impose limit
• Beginning in 2013, limit is $2500/year−Limit is indexed for CPI for later years
• Applies to plan years beginning on or after 1/1/13−This is a change from initial effective date
• Does not apply to dependent care FSAs
Comparative Effectiveness Research Fees – July, 2013 & Beyond
• Patient-Centered Outcomes Research Institute − Created to improve informed health decisions− Research funded by a fee paid by insurers and plan sponsors of
self-funded plans
• Effective date− Plan years ending after Sept. 30, 2012 − Do not apply for plan years ending after Sept. 30, 2019− For calendar year plans – apply for 2012-2018 plan years
• Amount of fee:− $1 per covered life− Increases to $2− Indexed for CPI
Notice of Exchange
• Employers must notify new and current employees of exchange information
− Originally effective March 1, 2013− Delayed until October 1, 2013.− No Penalty if Employers elect not to Distribute Notice
• Notice must include information about 2014 changes:
− Existence of health benefit exchange and services provided− Potential eligibility for subsidy under exchange− Risk of losing employer contribution if employee buys coverage
through an exchange
• More guidance and model notice expected
2014 Compliance Deadlines
Individual Mandate
• Individual mandate is a “tax” and thus constitutional per Supreme Court.
• Jan. 1, 2014: Individuals must enroll in coverage or pay a penalty
• Penalty amount: Greater of $ amount or a % of income
− 2014 = $95 or 1%− 2015 = $325 or 2%− 2016 = $695 or 2.5%
Health Insurance Exchanges
• Health insurance exchanges will be established in each state – October 1st “Working out the Kinks”
• Individuals and small employers can purchase coverage through an exchange
− In 2017, states can allow employers of any size to purchase coverage through exchange
• Individuals may be eligible for federal subsidy− Limits on income and government program eligibility− Employer plan is unaffordable or not of minimum value
Employer Responsibility“Pay or Play”
• Large employers subject to “Pay or Play” rule− Offer coverage of a certain quality or possibly pay a penalty
• Applies to employers with 50 or more full-time equivalent employees in prior calendar year
− FT employee: employed for an average of at least 30 hours of service per week
• Penalties apply if:− Employer does not provide coverage to all FT employees –
Access
− Plan Design is not of a Minimum Value – 60% actuarial value
− Cost of single coverage is not deemed Affordable – 9.5% “Safe Harbor”
Employer Penalty Amounts“Pay or Play”
• Employers that do not offer coverage to all full-time employees:
− $2,000 penalty per full-time employee
− Excludes first 30 employees
• Employers that offer coverage:− $3,000 for each employee that receives subsidized coverage
through an exchange
− Capped at $2,000 per full-time employee (excluding first 30 employees)
− Penalties do not apply if your plan satisfies the minimum value (60%) or 9.5% Safe Harbor test.
Employer Reporting
• Employers will have to report certain information about health coverage to the government.
• Information geared towards:−Access – “must offer to all FT employees working over 30
hrs”.−Coverage Levels – “must cover 60% of plan expenses”−Affordability – “can’t exceed 9.5% of gross income”
• Applies to coverage offered after Jan. 1, 2014 Originally. Later postponed until 2015.
• First returns to be filed in 2016
Transitional Reinsurance Fee
• Three (3) year program – “Support high dollar claims within an exchange structure”
• Aim is to raise $25 billion to fund this initiative.− 2014 – Fee set at $5.25 per member per month or $63.00
annually.− Member is defined as employee, spouse, dependent children.− Fee reduces each year and “sunsets” in 2017.
• Applies to fully insured and self insured employer groups.
• Estimated impact to the University in 2014 - $110,000
Future Compliance Deadlines
2018 – Cadillac Plan Tax
• 40 percent excise tax on high-cost health plans
• Based on value of employer-provided health coverage over certain limits
− $10,200 for single coverage− $27,500 for family coverage
• To be paid by coverage providers− Fully insured plans = health insurer− HSA/Archer MSA = employer− Self-insured plans/FSAs = plan administrator/employer
• More guidance expected
Automatic Enrollment Rules
• Will apply to large employers that offer health benefits
− Applies to GF and non-GF plans− Large employer = more than 200 employees
• Must automatically enroll new employees and re-enroll current participants
• Adequate notice and opt-out option required
• DOL: − Regulations will not be ready to take effect by 2014− Employers not required to comply until regulations issued and
applicable
University of HartfordPPACA and Retiree Coverage
PPACA & Retiree Coverage
• Uncertainly Still Abounds – “Same for Active Plans”.
• Financial Constraints – “Will there be Belt Tightening”
• Part D changes have been Positive:− $250 Part D Refund (2010) for those within “Donut Hole”
− Discounts continue to grow within the “Donut Hole” – generic/brand
− Shrinking of the “Donut Hole” by 2020.
• University’s Cost Basis has improved.− Cost reductions since 2010 - $450 to $390.
− Integrity of the current plan has been maintained for the most part.
PPACA & Retiree Coverage
• 2014 Individual Mandate – Questions Linger− Will the “Exchange” roll out impact my current plan?
− Will I be pushed to secure coverage via the “Exchange”?
− Will the Patient Centered Research Organization address issues relative to Medicare coverage limits?
− If the University drops its plan how will I secure coverage?
− Will my plan change in 2014 and what will it cost me as a retiree of the University?
− Will my doctor continue to accept Medicare reimbursement?
− Will it be difficult to schedule appointments with my provider?
− Will funding be shifted from Medicare to support PPACA?