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Health Care Reform Rollout An Educational Seminar 1

Developing Strategy Managing Risk Realizing Your Vision


Health Care Reform Rollout A presentation designed to educate and assist employers regarding the latest information on the new Health Care Reform laws and their implementation. 3


Alicia Gibson Managing Partner IXG Consulting Group


March 23, 2010



Immediate Changes Quality Health Insurance for All Avenues To Obtaining Coverage Qualified Health Plans Hot Topics Critical Dates - Resources 7


Immediate Changes 9

Immediate Changes Grandfathered Plans

Pre-Existing Conditions

Annual Lifetime Limits

Preventative Care Discriminatory Practices

Summary of Benefits

Patient Protections

Immediate Changes 10

Dependent Coverage


Medical Loss Ratio

Grandfathered Plans ( March 23, 2010 )

Grandfathered status will remain intact unless:

• • • •

Eliminating benefits Increasing the cost-sharing requirement Increasing a fixed-amount co-payment Certain reductions in employer or employee organization contribution rates

Changes in annual benefit limits


Grandfathered Plans Effect of Grandfathered Health Plan Status PPACA Provision

Application to Grandfathered Individual Health Plan

Application to Grandfathered Group Health Plan

Patient Protections



Pre-existing Conditions Exclusion


Must Comply

Annual Benefit Limits


Must Comply

Lifetime Benefit Limits

Must Comply

Must Comply

Rescission of Coverage

Must Comply

Must Comply

Immediate Changes


Pre-Existing Conditions Coverage for age 19 years of age and younger

Individual grandfathered plans not required to comply

Rates can be based on pre-existing medical conditions


Dependent Coverage As of September 23, 2010, health insurance coverage was extended to age 26 for dependents Dependent status is not reflective of enrollment in full-time studies

Applicable to All Plans

Immediate Changes


Annual Limits Research shows that annual benefit limits are imposed on: 8.2% of Large Employer Plans 14.4% of Small Employer Plans 19% of Individual Plans


Lifetime Limits Lifetime Limits Are Imposed On: 63% of Large Employer Plans 32% of Small Employer Plans 89% of Individual Plans

Immediate Changes


Annual & Lifetime Limits * 1 in 3 adults suffer from Heart Disease * 11 Million are affected by Cancer


Annual & Lifetime Limits

10% of cancer patients reached their limit in 2006

Exposure to 101+ million Enrollees

Immediate Changes


Annual & Lifetime Limits Three-Year Phase out of annual limits $750,000 for plan years beginning $1.25 Million for plan years beginning $2 Million for plan years beginning


9/23/2010 – 9/23/2011 9/23/11 – 9/23/2012 9/23/2012 – 12/31/2013

Annual Limits Implementation of unlimited coverage is to prevent the financial stress and loss of needed healthcare for serious medical conditions, leading to worsening medical conditions and potentially early death.

Immediate Changes


Preventative Services As of September 23, 2010, grandfathered plans were not required to comply Preventative services are now covered at 100% with no cost sharing, deductible, or co-pays Patient Awareness - Involvement in Health Care Decisions


Rescission of Benefits Average of 10,700 rescissions have occurred each year Retroactive Cancellation A plan can be rescinded anytime for fraud or intentional misrepresentation of material facts 30 day notice of rescission Immediate Changes


Summary of Benefits ( October 1, 2012 and plan year thereafter )

Plans and plan administrators are required to distribute a standardized form that offers a summary of coverage to all enrolled.


Discriminatory Practices This prohibits the discrimination in favor of highly compensated employees receiving “Cadillac Plans.� 40% Tax Penalty

Immediate Changes


Medical Loss Ratio (MLR) Requires: ✴ 85% of premium dollars spent within large group market ✴ 80% of premium dollars spent within small/ individual markets ✴ To be spent on clinical services and activities that improve health care quality.


Patient Protections •

Primary Care Providers are able to be chosen by the insured: Pediatricians and OB/GYNs are now able to be considered a PCP under plans - no referrals required

New Laws allow insureds to obtain emergency care without prior authorization and without regard to in- or out- of network providers

Payment from insurance will be based on in-network percentages at a reasonable rate (*not applicable to grandfathered plans)

Immediate Changes


Quality Health Insurance for All 27

Quality Health Insurance Notification of Changes

Guaranteed Coverage

Rating Structure

Waiting Periods

Tax-Favored Plans

Quality Health Insurance 28


Subsidy Eligibility

Notification of Exchanges Employers are required to inform the employee of: 1. The existence of exchanges 2. Eligibility for tax credits or subsidies 3. Loss of employer contribution


Guaranteed Coverage ✴ Every employer and every individual that applies for coverage must be accepted by the insurer

✴ Open and special enrollment periods may be implemented. IMPORTANT

Open enrollment is October, 2013 through February, 2014. “Qualifying Events”

Quality Health Insurance 30

Pre-Existing Conditions As of‌ January 1, 2014 plans may no longer impose pre-existing condition exclusions


Rating Structure Fair Health Insurance Premiums

✴ Applicable to Small Group and Individual Plans ✴ Large Group where eligible to purchase through the Exchange Monthly Premium Based On: •








*The maximum increase in premium based on age is 3 times the cost of the lowest plan cost.

Quality Health Insurance 32

Waiting Periods Small & Large Groups

…cannot impose a waiting period over 90 days for new employees or newly eligible employees

Large Groups

Auto enrollment for all employees

Can still impose a wait period (Not to exceed 90 days)

Employee has the option to waive coverage


Subsidy Eligibility Premium Credit

Any level plan for those that fall within the 138% - 400% FPL

Cost Sharing

Available for those that fall within 138% 250% of FPL (Silver Plan Only)

Quality Health Insurance 34

Subsidy Eligibility Federal Poverty Level Chart Federal Poverty Level = $11,490 (single) Federal Poverty Level = $19,530 (for average family size of 3.13)

Below 133% Free

133%–400% Reduction


Above 400% No Reduction

Premium Assistance Employees Offered Premium Assistance Credit


If an employee has access to insurance through work


and the cost exceeds 9.5% of the employee income


and the employee is within 400% FPL


The employee is eligible to a subsidy through the exchange.

Total Allowed benefit costs is less than 60% Actuarial Value.

Quality Health Insurance 36

Out of Pocket Expenses For individuals at or below 400% of the FPL, out of pocket expenses will be capped by: 2/3 if income is 100%–200% 1/2 if income is 200-300% 1/3 if income is 300-400%


Tax-Favored Plans FSA, HSA, HRA Limits and Rules

• •

Flexible Spending Account - $2500

Health Reimbursement Arrangements - No Limit - Self-Employed Individuals not eligible

Health Savings Accounts - $3100 max contribution for an individual - $6250 max contribution for a family - $1,000 for each person over the age of 55

Quality Health Insurance 38


Mr. Marty Halloran, CPA


TAX TALK Patient Protection & Affordable Care Act: 2013 1. Additional 0.9% Medicare tax imposed on wages, compensation or self-employed income. Threshold: Married filing joint $250,000, Married filing separate $125,000, all others $200,000.

Employers must withhold this tax when wages exceed $200,000 in the current year. There is no employer match.

2. Health flexible spending accounts will be capped at $2,500 a year

Quality Health Insurance 40

Mr. Marty Halloran, CPA


Patient Protection & Affordable Care Act: 2013 3. The 7.5% floor for deducting medical expenses increases to 10% for filers under age 65. 4. Unearned income will be subject to a 3.8% Medicare surtax when modified adjusted gross income exceeds the same thresholds as in #1 above. Unearned income is defined as interest, dividends, capital gains, annuities, royalties and passive rental income. Tax-free interest or retirement plan income is not included.


TAX TALK Patient Protection & Affordable Care Act: 2014 1. Individuals who remain uninsured will owe a penalty tax equal to the larger of $95 or 1% of income above the filing threshold. For 2015 the minimum penalty is $325 and in 2016 it will be $695 or 2.5% of income above the filing threshold. 2. The family penalty is 3 times the individual amounts without regard to number of family members. 3. Impose a $2,000 per employee penalty on employers with more than 50 employees who do not offer health insurance to their full-time workers.

Quality Health Insurance 42

Mr. Marty Halloran, CPA


A “Cadillac Tax” is imposed on employer-sponsored health plans. 40% excise tax charged on the excess benefit of $10,200 for singleonly coverage and $27,500 for family coverage. This is total cost of insurance, not just employee paid premiums. Other Items: Small Business Health Care Tax Credit – enacted in 2010 with a maximum 35% tax credit through 2013 and expanded to 50% starting 2014. Must have less than 25 full-time equivalent employees with under a $50,000 average salary. File form 8941 with your business tax return.



Avenues to Obtaining Coverage


Avenues to Obtaining Coverage Federal/State Run Exchange

Shop Exchanges

Grandfathered Plans

Employer Coverage

Obtaining Coverage 46

Co-Ops, Non-Profits Member Run Plans

Medicare & Medicaid

Exchanges Exchanges Are Responsible for: Certification of Qualified Health Plans

Presenting Plans in Standard Format

Grant Exemptions from Individual Responsibility

Operation of Toll Free Phone # and Website

Eligibility of Medicare/ Medicaid

Seamless Communication Medicaid & CHIP

Rating of All Plans offered

Electronic Calculator for Plans

Online Enrollment


Exchanges 1. Who will be able to utilize the Exchange and when? Beginning Oct 2013, open enrollment begins for Small Businesses & Individuals 2. Small Business Health Option Program - “SHOP” 3. Consumer operated & Oriented Plans - “CO-OPs” Co-Ops will be non-profit member run plans. 4. What is a Compact Plan? Plans offered across state lines available in 2016. 5. Keeping Your Coverage Initiative - Grandfathered Plans

Obtaining Coverage 48

Employer Coverage Group Employer Coverage Under 50 Employees Are Able To Participate in the Exchange

Small Business Market

50+ Employees

Large Business Market

200+ Employees

Two Sectors

Unable To Participate in the Exchange Until 2016


Medicare Coverage for individuals that are age 65 or older and qualify with 40 quarters OR under age 65 and qualify due to disability or health status Financing and Increases of Coverage Preventative Care Part D $250 reimbursement for those that reach the donut hole

Eliminate the coverage gap in Part D by 2020 Improve coordination of benefits for dual eligible individuals Obtaining Coverage 50

Medicaid Individuals that qualify financially for State and Federally Funded Coverage Pregnant Women Children Elderly Disabled Those that fall within 138% or below the FPL Federally Funded



Qualified Health Plans 53

Qualified Health Plans

What Constitutes “Qualified� Essential Health Benefits

Qualified Health Plans 54

Plan Valuation

Definition Qualified Health Plan Is a plan certified through the Department of Health and Human Services as meeting regulations regarding Essential Health Benefits and Actuarial Value


Definition • 1-100 Small Group Market • Benefits = Typical Employer Plan • Limits >HSA Limits Are Prohibited • Deductibles over 2K (individual) Prohibited • Deductibles over 4K (family) Prohibited • Individual Catastrophic Plans: Under 30 • Essential Health Benefits Covered Qualified Health Plans


Essential Health Benefits Ambulatory Patient Services

Prescription Drugs

Emergency Services

Rehabilitative & Habilitative Services


Laboratory Services

Maternity & Newborn Care

Preventive & Wellness Services Including Chronic Disease

Mental Health, Substance Use, & Behavioral Health Disorders

Pediatric Services Including Oral & Vision Care


Plan Valuation Actuarial value accounts for the percentage of coverage a plan offers vs. the out-ofpocket expense of the insured. Deductibles, Coinsurance, Co-pays and Cost are all factored in to this valuation.

Qualified Health Plans


Plan Valuation 90%





Silver Bronze




Hot Topics


Hot Topics Small Businesses Rewards & Rebates

Wellness Programs

Birth Control & Abortions


Exemptions & Safe Harbor Rules

Hot Topics 62

Small Businesses Credits and Incentives to Provide Benefits

Employers could vary premiums

Workplace Wellness Grants Offered - Less than 100 workers - Employees must work at least 25 hrs wk - Must meet “wellness” criteria


Wellness Programs

Mr. Richard Reinholz Lowe’s YMCA, Mooresville

Hot Topics 64

S  at  work Exceptional Programs & Services With over 19 locations and a team of professional health and wellness specialists, the Y can provide countless ways to improve the health of your company. Our programs and services support the athlete to those with medical needs. We customize our approach with a special focus on encouraging teamwork and fun.

Professional Staff The YMCA has long term success in helping individuals make positive behavior change. Our success is due to our staff. The Y is the only provider who can offer a team of certified professionals in the following specialties to help employees reach their goals: – Exercise Physiologists – Personal Trainers – Group Exercise & Fitness Instructors – On-site Registered Dietitians in partnership with Carolinas HealthCare System – On-site Registered Nurses in partnership with Carolinas HealthCare System – Lifestyle & Weight Management Instructors – Member Retention Specialists – Yoga & Pilates Instructors – Cycle Instructors – Sport Conditioning coaches 65

Additional Benefits to Employees of being a Y Member: – – – – – – – –

Free drop-in childcare to ensure your child is in a safe environment while you work out. Bible studies Access to 11 outdoor pools and waterparks as well as the Lake Norman YMCA lakefront. Access to an onsite Registered Nurse or Registered Dietitian through Carolina’s HealthCare System. Hundreds of group exercise classes offered weekly including Zumba®, cycle, yoga, Pilates, BodyPump®, water fitness and more. Volunteer opportunities that allow you to give back to families & communities. Member benefits around town. Nationwide access: more than 2,400 YMCAs across the country will honor your YMCA of Greater Charlotte membership as part of the YMCA's AWAY program (Always Welcome at the Y). Childcare programs that keep kids happy and healthy so parents too can focus on their own health such as: • Swimming programs • Sports • Preschool • Afterschool • Day Camp • Teens


Additional Benefits to Employees of being a Y Member: – – – – – – – –

Free drop-in childcare to ensure your child is in a safe environment while you work out. Bible studies Access to 11 outdoor pools and waterparks as well as the Lake Norman YMCA lakefront. Access to an onsite Registered Nurse or Registered Dietitian through Carolina’s HealthCare System. Hundreds of group exercise classes offered weekly including Zumba®, cycle, yoga, Pilates, BodyPump®, water fitness and more. Volunteer opportunities that allow you to give back to families & communities. Member benefits around town. Nationwide access: more than 2,400 YMCAs across the country will honor your YMCA of Greater Charlotte membership as part of the YMCA's AWAY program (Always Welcome at the Y). Childcare programs that keep kids happy and healthy so parents too can focus on their own health such as: • Swimming programs • Sports • Preschool • Afterschool • Day Camp • Teens


CHS  and  YMCA  of  Greater  Charlo3e   Carolinas  HealthCare  System,  one  of  the  na8on’s  leading  and  most  innova8ve  healthcare  organiza8ons,  provides  a  full   spectrum  of  healthcare  and  wellness  programs  throughout  North  and  South  Carolina. Carolinas  HealthCare  System  works  to  improve  and  enhance  the  overall  health  and  wellbeing  of  its  communi8es  through   high  quality  pa8ent  care,  educa8on  and  research  programs,  and  a  variety  of  collabora8ve  partnerships  and  ini8a8ves.     The  YMCA,  through  the  partnership  with  Carolinas  HealthCare  System,  is  able  to  provide  the  following  wellness  assessments   and  services  to  employers:  

Personal  Health  Survey

Online    or  Paper  Ques=onnaire   (Vendor:  Applied  Health  Analy=cs)

Biometric  Screenings  

Body  Mass  Index,  Waist  Circumference  &  Blood  Pressure   Measurements

Lipid  Profile  &  Glucose  Screenings  

Finger  s=ck  (Cholestech  LDX)  or  Venipuncture

One-­‐on-­‐One  Risk  Factor  Counseling

One-­‐=me  individual  counseling  session  to  review  results 68


Investment  Matching  Concept The  YMCA  of  Greater  Charlo3e  will  match  a  companies  investment  in  their   employees  health  and  well-­‐being. • •

The  YMCA  will  match  companies  investment  in  membership  up  to  40%  with  centralized  billing  and  up  to  30  %  without   centralized  billing.  The  investment  matching  will  come  through  the  following  programs  /  services – Health  Coaching – Personal  Health  Survey – Biometric  Screening – Lipid  Profile  and  Glucose  Screening – One  on  One  Risk  Factor  Counseling – Personal  Training – On-­‐Site  Group  Exercise  Classes – Wellness  Challenges – ETC.


Wellness Programs Employers Give Discount or Rebate of Premium 1. Currently cannot exceed 30% cost of employee-only coverage but may increase to 50% 2. Example: • Emily’s Health Coverage Per Month = $300 • Emily is taking steps to become more active by utilizing her gym membership

offered through the company wellness program.

• If Emily reports she worked out at least 3 times per week, employer can

rebate or discount her premiums by an additional 30%.

• Employer pays 50% of premium - in Emily’s case, $150. • If Emily works out, employer pays $90+ • Emily’s Monthly Cost = $60

Hot Topics 71

Play or Pay: Penalties Individuals failing to carry coverage

• •

Reporting Penalty Schedule

Flat Fee Phase In $95 in 2014 $325 in 2015 $695 in 2016 flat fee 1.0% of taxable income in 2014 2.0% of taxable income in 2015 2.5% of taxable income in 2016

Large Employers (50+ employees)

• •

$2,000-$3,000 per employee (with the first 30 excluded) Cadillac Plan = 40% Excise Tax

Hot Topics 72

Birth Control & Abortions 1. This is a State matter 2. The primary complaint is that tax-payer dollars and penalty charges are going to fund abortions and the “morning after� pill The act has attempted to mitigate this issue by creating two payments for 1 plan premium for subsidized plans - 1st bucket = Taxpayer $$ - 2nd bucket = Insured $$ IF services rendered include birth control measures or abortions, the funding comes from bucket #2. Many lawsuits have been filed against the ACA for this one issue!


Exemptions & Safe Harbor ➡

Granted for financial hardship, religious objections, American Indians… for those without coverage for less than three months… including undocumented immigrants, incarcerated individuals, those for whom the lowest cost plan option exceeds 8% of an individual’s income, and those with incomes below the tax filing threshold.

Hot Topics 74



Health Care Reform Critical Dates Date


Action Item


Sep 1


Employer Must notify employees of open enrollment and options regarding exchanges




Open Enrollment Begins; Exchanges Available




All-inclusive Health Policies Terminate at Midnight




Affordable Care Act becomes fully active


Last month to obtain insurance without penalties imposed. Open enrollment = Oct 13–Feb 14





Large group market can access insurance plans through exchanges


Utilize our consultancy services to stay on top of the law and implement standards that allow you to be in compliance with Federal and State level requirements

High level view of the policies and timeline

US Department of Labor

US Congressional Budget Office

IXG Consulting Group

Health and Human Services – Office of Civil Rights

The American Public Health Association offers reports covering many areas of our nation’s health

National Association of Insurance Commissioners – timeline and commentary on the law

Henry J. Kaiser Foundation – Great resource for relatable terms and applicable examples of the law



Special Thanks To:

Marty Halloran CPA - Cornelius

Richard Reinholz YCommunity Health & Wellness Senior Director Lowe’s YMCA - Mooresville

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Health Care Reform Rollout - An Educatinal Seminar