Health Care Reform

All information published herein is gathered from sources which are thought to be reliable, but the reader should not assume that the information

is official or final. Reliance on this information or other linked or recommended resources received from us shall be at your sole risk, and we

assume no responsibility for any errors, omissions, or damages arising. Users of this information are encouraged to confirm with other sources,

and to seek qualified advice if embarking on any actions that could carry personal or organizational liabilities.

Your Logo Here

Introduction

Your presenter What you’ll learn

• Timeline• Key provisions• Resources

Name

XXXXXXXXX

Cell: XXX.XXX.XXXX

Email: XXXXXXXXXX

Legislative Timeline

March 23rd, 2010:Patient Protection and Affordable Care Act HR 3590

March 30th, 2010:Health Care and Education Reconciliation Act of 2010 HR 4872

Approaches to Expanding Coverage

Requires most US citizens to have health insurance

Create state-based

exchanges for individuals

Create employer exchanges

for small businesses

New regulations on health plans

Expand Medicaid to

133% of FPL

Health Care Reform Bill

2010

Small Employer Tax Credit Pre-Existing Condition

Insurance Plan Grandfathered Health Plans Preventive Care Health Coverage Options

for Children No Rescission of Coverage

for Individuals

Small Business Tax Credits

For employers with up to 25 employees• 2010-2013 - up to 35% tax credit• 2014 and 2015 - up to 50% tax credit

- only available if purchased through an exchange

• After 2015, tax credit expires

Resource: IRS.gov website

‘Grandfathering’ Provision

Changes Allowed after March 23, 2010:• Co-Payment Charges – less than $5 (adjusted annually for

medical inflation) or a percentage equal to medical inflation plus 15 percentage points

• Deductibles – less than a percentage equal to medical inflation plus 15 percentage points

• Employer Contributions - less than 5 percentage points

Changes Not Allowed• Cannot Significantly Cut or Reduce Benefits• Cannot Raise Co-Insurance Charges• Cannot Add or Tighten an Annual Limit• Cannot Change Insurance Companies

‘Grandfathering’ Provision

Applies to all plans, Grandfathered and Non-Grandfathered as of 2010:• No lifetime limits• No rescissions of coverage• Extension of parents’ coverage to young

adults under 26 years old• No coverage exclusions for children with

pre-existing conditions• No “restricted” annual limits• Notice of Grandfathered Status required

Preventive Care

Beginning September 23, 2010 all new health plans: • Must cover preventive services that have strong scientific

evidence of health benefits• May no longer charge a copayment, coinsurance or deductible

for these services when delivered by a network provider

Examples of covered preventive services:• BMI screenings for obesity• Counseling on smoking cessation, healthy eating, weight loss• Both alcohol use and depression treatments• Blood pressure, diabetes, and cholesterol tests• For a complete list, visit: www.healthcare.gov

New options for Children

Beginning September 23, 2010

Dependent Coverage up to Age 26• Will be allowed to stay on their parents’ insurance plan,

whether group or individual• Children can be married. Do not have to be full-time students

or financially dependent on parents and can have children of their own

• Dependent child cannot be eligible for coverage through their own employer. This stipulation ends in 2014.

Guarantee Issue Coverage up to age 19• No restrictions due to pre-existing health conditions• Insurers may set-up open enrollment periods

2011

Medical Loss Ratio OTC Prescription Exclusion HSA Distribution Tax W2 Reporting

Medical Loss Ratio (MLR)

MLR is the percentage of premium spent on actual patient care services.• 85% for large group plans • 80% for individual and small group plans (100 and below)

NAIC is required to establish uniform definitions regarding the MLR and how the rebate is calculated by December 31, 2010

Standards and any potential rebates to policyholders being applied to the 2011 plan year

Individual Tax Consequences

Increase excise tax on disallowed distributions from HSAs to 20%.

Exclude OTC Rx in HSA, FSA & HRA

Changes in 2011

W2 Reporting • Employers required to disclose

value of benefit provided for health

insurance coverage on each

employee’s annual Form W-2

2012

SBC and Uniform Glossary SMM 60-Day Notification PCORI Fees

Changes in 2012

SBC & Uniform Glossary

• Employers must provide each employee and beneficiary SBC and

Uniform Glossary for any initial enrollment, special enrollment and

upon request

60-Day Prior Notice of Material Modification

• Employers and health plans required to provide information of any

material modification of the plan or coverage

Patient-Centered Outcomes Research Institute (PCORI) Fees

• For the plan year ending after September 30, 2012, there will be a $1

per enrollee tax on fully insured and self-funded group health plans to

fund PCORI. For plan years ending after September 30, 2013, the fee

increases to $2 per enrollee. This fee expires September 30, 2019

2013

FSA Limit Medicare Payroll Tax Medical Expense Tax Notice of Exchange Exchange Open Enrollment

Tax Consequences

Increased Itemized Deduction for Medical

Expenses to 10%

Increased Medicare Payroll Tax by 0.9%

Limit FSA contributions to $2500

per year

Changes in 2013

Notice of Exchange• October 1, 2013 and within 14 days of new hire, employers subject to the

Fair Labor Standards Act (FLSA) must inform employees about how the

Exchanges operate and the circumstances under which they may receive

coverage

Exchange (Marketplace) Open Enrollment• In California, the Individual Exchange (Covered California) as well as the

SHOP Exchange for small employers will be accepting enrollments

starting on October 1, 2013. May be open to Large Group employers in

2017.

2014

Individual Mandate & Penalties Guarantee Issue Coverage

and Subsidies Employer Mandate Essential Health Benefits Exchanges Changes to Private Insurance

Individual Mandates and Penalties

• Requirement of most US citizens and legal residents to purchase health insurance – exemptions for:• Financial hardship• Religious objections• Native Americans• Those without coverage less than 3 months• Undocumented immigrants• Lowest cost plan option exceeds 8% of income

Individual Mandate

• For non-compliance, individual must pay:• $95 in 2014• $325in 2015• $695in 2016

Individual Penalties

Guarantee Issue and Subsidies

• Required for individuals and groups up to 100• Cannot be turned down due to a pre-existing

health condition

Guarantee Issue Coverage

• Income limits for subsidies:• 133% - 400% of FPL

• Premium credits or cost-sharing subsidies.

Individual Subsidies

Employer Mandate & Penalties

Employers with 50 or fewer EEs are exempt from the mandate

Beginning 2015, 50+ if employer does NOT offer coverage and has at least one employee receiving a tax credit• Must pay a $2,000 penalty per FTE, excluding the

first 30 employees

Beginning 2015, if employer does offer coverage and has at least one employee receiving a tax credit• Must pay the lesser of $3,000 for each tax credited

employee or $2,000 for each employee

Essential Health Benefits

Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services Prescription drugs Rehabilitative and habilitative services and devices. Laboratory services Preventive and wellness services and chronic

disease management Pediatric services, including oral and vision care

Insurance Exchanges

GI with rating based on age, area and tobacco use

Five plan types offered

Can allow large groups beginning 2017

Available to individuals and small groups

Effective 2014

Changes to Private Insurance 2014

Deductibles not to exceed 2,000/$4,000

Limit waiting periods to 60 days

Allow states to merge IFP and small group

SG definition changes to 1-50

Changes to Private Insurance 2014

Require carriers to meet new operating standards and reporting requirements

Expand Medicaid to all individuals under age 65 under 133% FPL

Impose fees on the health insurance sector

Timeline for Change – 2015 - 2020

2015: Employer Shared Responsibility (Play or Pay) penalties go into effect

2016: Small Group in California redefined as 1-100

2018: Impose a 40% excise tax on insurers of employer-sponsored health plans with high values.

2020: Medicare Part D “Donut Hole” closes

Resources for Updates

Government Sites• www.IRS.gov• www.HealthCare.gov• www.WhiteHouse.gov• www.UStreas.gov• www.insurance.ca.gov• www.labor.ca.gov

Other Valuable Resources• www.CoverageForAll.org• www.NAHU.org• www.NAIC.org• www.SHRM.org• www.KFF.org

Q&A