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Stefany Martinsen. Health Care Reform Information. TO SIMPLIFY THINGS: This is not legal advice Regulations and guidance is provided by HHS and is incomplete Anything can change without notice Consult your tax advisor for compliance with the IRS code

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Presentation Transcript
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Stefany Martinsen

Health Care Reform Information

slide2

TO SIMPLIFY THINGS:

  • This is not legal advice
  • Regulations and guidance is provided by HHS and is incomplete
  • Anything can change without notice
  • Consult your tax advisor for compliance with the IRS code
  • Wellmark is not responsible for penalties or losses due to employer coverage violations
  • Seek legal advice to determine changes that may impact grandfathered status
  • Any questions, talk to your Wellmark representative

Wellmark is not providing any legal advice with regard to compliance with the requirements of the Affordable Care Act (ACA) or the Mental Health Parity Addiction Equity Act (MHPAEA). Regulations and guidance on specific provisions of the ACA and MHPAEA have been and will continue to be provided by the U.S. Department of Health and Human Services (HHS) and/or other agencies. The information provided reflects Wellmark's understanding of the most current information and is subject to change without further notice. Please note that plan benefits, rates, renewal rate adjustments, and rating impact calculations are subject to change and may be revised during a plan’s rating period based on guidance and regulations issued by HHS or other agencies. Wellmark makes no representation as to the impact of plan changes on a plan's grandfathered status or interpretation or implementation of any other provisions of ACA. Any questions about Wellmark's approach to the ACA of MHPAEA may be referred to your Wellmark account representative. Wellmark will not determine whether coverage is discriminatory or otherwise in violation of Internal Revenue Code Section 105(h). Wellmark also will not provide any testing for compliance with Internal Revenue Code Section 105(h). Wellmark will not be held liable for any penalties or other losses resulting from any employer offering coverage in violation of section 105(h). Wellmark will not determine whether any change in an Employer Administered Funding Arrangement affects a health plan’s grandfathered health plan status under ACA or otherwise complies with ACA.  Wellmark will not be held liable for any penalties or other losses resulting from any Employer Administered Funding Arrangement.  For purposes of this paragraph, an “Employer Administered Funding Arrangement” is an arrangement administered by an employer in which the employer contributes toward the member’s share of benefit costs (such as the member’s deductible, coinsurance, or copayments) in the absence of which the member would be financially responsible.  An Employer Administered Funding Arrangement does not include the employer’s contribution to health insurance premiums or rates.

  • The Lawyers made me say it.

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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Individual Shared Responsibility (Individual Mandate)

Guaranteed Issue

No Pre-existing Condition Exclusions

Three Primary Elements of the Affordable Care Act (ACA)

TERMS TO KNOW

Individual Shared Responsibility: Provision in the law that requires all Americans to have health coverage or pay a tax.

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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Minimum Essential Coverage Requirements
  • EXCEPTIONS TO MANDATE REQUIREMENT
  • Financial Hardships
  • Members of federally recognized Indian tribes
  • Undocumented Immigrants
  • Incarcerated Individuals
  • Religious Objections
  • No Coverage for up to three consecutive months
  • Individual grandfathered & non-grandfathered plans
  • State & federal government plans
  • Employer group plans

EXCEPTED BENEFITS: Plans that are not within scope of most provisions of the Affordable Care Act (ACA), like dental or vision, long-term care and other supplemental coverage offered as a separate insurance policy and do not qualify as minimum essential coverage.

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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You must decide:

Get minimum essential coverage

Pay a tax (the greater of)

  • 2014 – Pay $95 or 1% household income*
  • 2015 – Pay $325 or 2% household income*
  • 2016 – Pay $695 or 2.5% household income*

Individual Mandate Impact on You

Example: Single person household

2016 taxable household income = $65,000

Tax owed = $1,625 (65,000 x .025)

Consult your tax and legal advisor.

* The tax will be based on whichever is greater: the flat fee or the percent of household income.

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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Grandfathered Plans

  • Plans active before ACA (3/23/10)
  • Unaffected by some ACA provisions

Non-Grandfathered Plans

  • Plans sold after 3/23/10
  • GF Benefit changes resulted in NGF status
  • Must move to ACA compliant plan 1st plan year on or after 1/1/14
  • Must comply with ACA provisions

ACA Compliant Plans

  • Plans effective 1/1/14
  • Plans must comply with ACA provisions

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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Standardized Plans: Metallic Tiers

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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BENEFIT CATEGORIES

  • Ambulatory Patient Services
  • Laboratory Services
  • Prescriptions
  • Maternity and Newborn Care
  • Preventive Care and Chronic Disease Management
  • Emergency Services
  • Mental Health and Substance Use Disorder Services and Behavioral Health Treatment
  • Rehabilitative and Habilitative Services/Devices
  • Hospitalization
  • Pediatric Services, Including Oral and Vision Care
  • Essential Health Benefits (EHB)
  • A Bundle of Basic Medical Services
  • Cost-sharing Out-of-Pocket Maximum (OPM) Limits Apply
  • Required for Non-grandfathered Individual and Small Group (1-50) Plans

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

pediatric dental and vision ehb
Pediatric Dental and Vision EHB

* Benefit limitations

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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Cost-Sharing Limits
  • Required for non-grandfathered Individual and Small Group (1-50) plans
  • Limit on out-of-pocket maximum (OPM) for Essential Health Benefits to HSA qualified amounts
    • (2014) $6,350 single/$12,700 family
  • Essential Health Benefit health and drug out-of-pocket payments include:
    • Deductibles, coinsurance, and copayments
  • Small Group deductible limits
    • (2014) $2,000 single/$4,000 family

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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2014

+

=

  • Increase in Cost for Additional Benefits
  • Premiums Will Reflect Increasein Cost
  • Additional Benefits

1.5% Small Group

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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AgeCalculations

  • Premiums Varyby Geographic Region
  • Premiums Calculated at a MemberLevel

Health and Gender No Longer a Factor

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

dependent cap
Dependent Cap

Premiums are member level rated, but capped at three dependents

Based off the three oldest dependents under the age of 21

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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Example: Johnson Bros. Body Shop
  • Depending on the health risk of the group, rate change of +29% to -36%
  • Demographics as well as health risk will determine the change in premium

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

slide15
Medical Loss Ratio (MLR)

How much of a premium dollar must be spent on medical care and quality improvement?

TERMS TO KNOW

Medical loss ratio*: The ratio between how much premium dollar is spent on administrative expense compared to medical care and quality improvements.

Quality improvement: Expenses to reduce hospital re-admissions, improve patient safety, reduce medical errors, and health information technology investments.

Overhead expenses: Expenses like administration, marketing, profits, salaries, and agent commissions are paid from the remaining 20%.

Individual: 80%

Small group: 80%

Large group: 85%

Wellmark already meets this requirement

*The calculation is based on a carriers total book of business and is not measured on an individual plan basis.

.

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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Patient-Centered Outcomes Research Trust Fund
  • $1 per member1 in 2012 – 2013
  • $2 per member1 in 2014

Proposed total annual fees paid by 2019

  • $60 billion = Health insurers
  • $26 billion = Drug manufacturers
  • $20 billion = Medical device manufacturers

Transitional Reinsurance Fee

Additional Impacts to Premiums

1 Fees will be included in the premium rates for all fully-insured plans.

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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2014

+

=

  • ReinsuranceFee
  • Premiums Will Increase to Account for Fees
  • Annual Health Insurer Fee

Fees apply to all GF & NGF Plans Effective 1/1/14

4% Small Group

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

slide18

TERMS TO KNOW

  • The Marketplace:
  • An online Marketplace for individuals and small businesses to shop for and compare health plans
  • Also known as:
  • The Public Marketplace
  • The Amercian Health Benefits Exchange (AHBE)
  • The Small Business Health Options Program (SHOP)
  • The Marketplace
  • Today
  • Tomorrow

Direct

Brokers

Employers

Private Exchange

NEW

Direct

Brokers

Employers

Private Exchange

Public Marketplace

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

slide19
Online marketplace
  • Easy to compare
  • Two types of marketplaces
    • American Health Benefit Exchange
    • Small Business Health Options Program (SHOP)
  • Initial Open Enrollment for individuals isOct. 1, 2013 – March 31, 2014
  • Special Enrollment Period for trigger events

Something New: The Marketplace

Onlineshopping sites

TERMS TO KNOW

Open Enrollment Period: Specified timeframe, established by the federal government, when individuals can sign up for health coverage or switch plans each year.

Special Enrollment Period: The ability for individuals to enroll in or switch plans outside of an open enrollment period. This is only available in limited circumstances when a qualifying life event takes place.

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

slide20
Marketplace Notification
    • Notification by October 1, 2013
    • By first-class mail or electronically (in accordance with the DOL’s electronic disclosure safe harbor requirements)
    • New hires within 14 days of start date
    • “Employers must provide a notice of coverage options to each employee, regardless of plan enrollment (if applicable) or of part-time or full-time status.”
    • DOL model notices available at www.dol.gov/ebsa

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

slide21
Definition of a Small Group (1-50)
  • Open Enrollment
    • Late enrollees can enroll during this period
  • Special enrollment (60 days)

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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2016

Group Size

1-50

Group Size

51-100

Employer Reporting Requirements

Small group definition

1-100

Excise “Cadillac” Tax

Mandatory coverage for clinical trials

Pre-existing conditions limitations

Mandatory coverage for clinical trials

Small Group Definition

Employer Shared Responsibility

Annual Health Insurer Fee

90-Day Max Waiting Period

90-Day Max Waiting Period

Annual Health Insurer Fee

TBD

No Annual Limits on EHB

No Annual Limits on EHB

Pre-existing conditions limitations

Dependent Age 26 - All

Quality of Care Reporting

Transitional reinsurance program

Dependent Age 26 - All

Out –of-pocket cost-sharing limits

New Premium Calculation

Non-discrimination testing for fully-insured groups

Small Business tax credit

Guaranteed Issued

Small Business Health Options Program goes online (SHOP)

Guaranteed Issued

Qualified Health Plan

Essential Health Benefits Package

Applies to Non-grandfathered and Grandfathered plans

Applies to Non-grandfathered plans only

2014

2018

2015

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

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Individual Shared Responsibility - 2014 Coverage Period

2015: Employer reporting requirements

2015: Employer Shared Responsibility

2016: Small Group definition change of 1-100

Continued Fees

Additional Provisions

2015 & Beyond

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

slide24
Our Pledge to You

October 22: Aberdeen

October 23: Pierre

October 24: Rapid City

October 29: Sioux Falls

November 5: Sioux Falls

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield

slide25
More information

WE

KNOW

REFORM

.COM

Confidential and Proprietary – Wellmark Blue Cross and Blue Shield