HOW THE NEW HEALTHCARE BILL WILL EFFECT YOU AND YOUR BUSINESS The bill will come out in installments Some start 90 days from the bill (June 23rd, 2010) Many start in six months (September 23rd, 2010) Some start in 2011 Some start in 2012 Some start in 2013 Most start in 2014 A few start in 2016 And the rest start in 2018 Many of these initiatives are still works in progress In many cases the insurance companies are still working out the details Some facets are questionable We’re not sure what they mean or how they can be enacted Updates are coming out constantly Today we are going to go over what we know Essential Benefits Prescription drugs Rehabilitative services Habilitative services and Ambulatory patient services devices Laboratory services Emergency services Preventive and wellness Hospitalization services Maternity and new born Chronic disease care management Mental health and Pediatric services substance abuse care including vision and oral Behavioral health care treatment List by Blue Cross Blue Shield of Georgia Prior authorization and increased cost sharing for emergencies is no longer allowed Old plans can be grandfathered 2010 June 1- $5 billion has been set aside for a reinsurance plan to be set up for employer’s coverage for early retirees over 55. This is to cover 80% of the claims between $15,000 and $90,000. This is to go away in 2013 By July 1, each state is to have an Internet portal for individuals and small businesses to shop for insurance June 21- $5 billion has been set aside for the states to create a high risk pool for adults with pre existing conditions who can not get health insurance now and have been uninsured for 6 months In Georgia, the Department of HHS will set this up. In most other states the Insurance Commissioners Office is setting these up. This will go away in 2013 September 23- New policies must cover the full cost of preventive care as recommended by the US Preventive Task Force This includes immunizations, preventive care for children through adolescents and preventive care for women Old plans can be grandfathered Colonoscopies unknown at this time September 23- New appeals process Plans will be required to have external review process Must provide participants with notice of the internal and external appeals process Must allow participant to review files and present evidence and testimony as part of appeals Must be able to maintain insurance through appeals process Old plans can be grandfathered September 23- Nondiscrimination rules that apply to self funded plans will now extend to fully insured plans These rules prohibit employee’s eligibility to be based on hourly pay or salary pay Can be grandfathered September 23- Plans may no longer contain lifetime limits on coverage of essential benefits Annual limits will be restricted by the Department of Health and Human Services September 23- No rescissions are allowed unless proof of fraud or misrepresentation Insurer must provide prior notice of cancellation Cannot be grandfathered Primary care doctors can be chosen as long as they are in network and taking new patients Plans may no longer require pre authorization or referrals to OB/GYNs Old plans can be grandfathered Probably does not affect Georgia Plans can no longer favor highly compensated employees This is under scrutiny as many plans today are set up as manager’s carve outs. It is unknown if this will make a difference depending on the compensation of the managers September 23- Plans may no longer carry pre existing condition exclusions for children under 19 years of age This cannot be grandfathered Children who do not have access to group health insurance through their employer, can stay on their parent’s plan to age 26, even if married Any employer contributions to the premiums are a tax deductible business expense and not taxable income for the member Insurance companies are jumping on this now Beginning in 2010, small businesses with fewer than 25 employees and average wages of less than $50,000 will receive a tax credit for their contributions to buying health insurance for employees The credit starts at 35% and increases to 50% in 2014, when the exchange becomes operational A tax credit may be available to small businesses with fewer than 10 employees whose annual wages average less than $25,000 2011 January 1- Employers will be required to disclose the value of health insurance benefits on the employee’s annual W-2 form This can exclude employer’s contribution to HSAs This will probably not be taxed just disclosed Not specified if this is to disclose the year 2010 or 2011 January 1- Insurers must publicly report the medical loss ratio and it must be 80% for small groups and individuals and 85% for large groups Small groups are those with under 100 employees, but states can make it 50 starting in 2014 Any excess money over the 80% or 85% must be paid back to those insured as rebates Health Spending Accounts, Flexible Spending Accounts and Health Reimbursement Accounts can no longer pay for over the counter drugs, unless they are prescribed by a doctor Penalties for early withdrawal of funds increases from 10% to 20% and Archer MSAs go from 15% to 20% January 1- The Department of Health and Human Services is to conduct a study on self funded plans and market characteristics of employers to determine how to make sure there is no adverse selection This may lead to additional reporting requirements January 1- Grants will be available for small employers that establish wellness programs. There will be technical assistance and other resources to evaluate the program. Program must be new to qualify Grants available for five years starting in 2011 CLASS PROGRAM All employees will automatically be enrolled by employers into a Long Term Care program and begin to make payroll contributions This will provide a national insurance pool for Long Term Care for people who need in home care or care in a care center when they are disabled Employees can choose not to purchase this 2012 March 23, 2011- HHS will create a Uniform Standards and Definitions Summary for each plan in accordance with the National Association of Insurance Commissioners. These will explain coverage and benefits Highlights of plans No more than 4 pages Font no smaller than 12 pt. Includes coverage points Must include standardized definitions of terms Companies must begin to use these by March 23, 2012 March 23- A 60 day notice must be provided for any summary material modification Penalties for not providing summary or timely changes will be not more than $1000 for each willful failure, but each participant is counted Applies to grandfathered plans A research fee of $1.00 per participant through 2013 and $2.00 through 2019 will be collected to pay for a comparative effectiveness study 2013 Employee contributions to FSAs will be limited to $2500 a year The cap will be adjusted annually in accordance with the Consumers Price Index Employers will be required to notify employees About the exchange for new employees at the time of hire and for current employees by March 21, 2013 They may be eligible for a subsidy under the exchange if employer’s contribution is less than 60% of the total allowed costs of benefits If employee purchases through the exchange he or she will lose employer’s coverage 2014 Large employers will have expanded form 5500 reporting requirements which will include information on the health insurance coverage of their employees All individuals will have to carry health insurance or pay a penalty enforced by the IRS The penalty will be $95.00 or 1% of income which ever is greater in 2014. This amount will be phased up in later years Families will pay half the penalty for children with a cap of $2,085.00 per family Religious Reasons Members of Native Individual no longer American Indian lives here Tribes Incarceration Hardship waivers Tax payers who are Can’t afford it under 100% of No Income Tax Liability poverty level (Some say religion based insurance) There can no longer be exclusions for pre existing conditions on group or individual plans All people who apply must be accepted for coverage This does not apply to grandfathered plans There can no longer be any rate ups for new individual and fully insured small group plans There can no longer be increased premiums based on health status, claims history or gender Allowable rate increase: Age (3:1 ratio) Geography Family size Tobacco use (1:1.5 ratio) States can merge their small group and individual markets Routine patient care costs must be covered for a patient who engages in approved clinical trials for life-threatening illnesses such as cancer Does not apply to grandfathered plans State health insurance Exchanges will be set up and running for small businesses and individuals to buy insurance. States can determine if they will allow large groups to buy here as well in 2017 There are restrictions on plan designs They must all cover essential health benefits States can require additional benefits if they pay for them Large employers do not have to offer employee health insurance But most with over 50 employees will pay an assessment if they do not offer coverage, or the coverage isn’t affordable Both full time and part time employees are included when determining the number of employees (full time equivalency rules) Employers with 50+ employees who do not offer the minimum essential coverage will pay $2000 for each employee over the first 30 if one of their employees gets a tax subsidy to buy insurance on the exchange (full time equals 30 hours, determined monthly). Certain seasonal workers are not included. Penalties are assessed monthly. Employers who do not offer plans with minimum essential coverage but have at least one employee who receives a subsidy on the exchange will pay the lesser of $3000 for each employee receiving credit, or $2000 for each full time employee Employers must provide “free choice” vouchers to employees with incomes below 400% of poverty level if employees contribution to coverage is over 9.5% of the employees income and the employee chooses to purchase coverage in the exchange. No penalties will be imposed with respect to those who use these vouchers. This is called the “free ride” penalty Employers with more than 200 employees, that offer coverage, must automatically enroll new full time employees in coverage. Employees may opt out Subsidies to buy insurance in the exchange will be available in tax credits and cost sharing assistance, for people above Medicaid eligibility, but below 400% of Federal Poverty Level For small businesses All plans must incorporate essential benefits Deductibles are limited to $2000 for individuals and $4000 for families It does not specify if Qualified High Deductible Health Plans which are a necessary part of HSAs will have the benefits to qualify for essential benefits Does not include self funded plans or grandfathered plans Catastrophic plans will be available for those under 30 years of age Other restrictions will apply Waiting periods cannot exceed 90 days No penalty stated so far Cannot be grandfathered Wellness incentives can include up to 30% of the premiums and up to 50% with Department of Health and Human Services approval A reinsurance plan will be available for the individual market and will be funded by individual and small group plan assessments 2016 The penalty for people who chose not to buy health insurance will rise to $695 or 2.5% of income, which ever is greater States can join healthcare compacts which will allow insurers to sell individual policies in any state participating in the compact 2018 A new excise tax goes into effect for high value (Cadillac) plans. 40% tax for amounts over $10,200 for individuals and $27,500 for families. This will include employee and employer contributions as well as contributions to FSAs, HSAs and HRAs, onsite clinics or wellness plans that are ERISA plans. Not included are dental benefits, vision, accident, disability, long term care and after tax indemnity or specified disease plans. This will be paid by the insurance companies and plan administrators OTHER Employers and employees can keep the plans they had as of March 23rd, 2010, and are exempt from some reforms. Collectively bargained plans that were ratified prior to March 23rd, 2010 can be maintained in place until the next collective bargaining agreement related to healthcare coverage ends. Most new laws go into effect as plans renew after the stated dates The Department of Health and Human Services will adopt a single set of operating rules for electronic transactions to create uniformity. Group health plans will have to comply. Electronic claims will include: Health claims Physician encounter information Eligibility and claims status Enrollment and disenrollment Premium payments Referral authorization and precertification New employer administrator reporting responsibilities: Whether employer offers minimal essential benefits to full time employees Any waiting periods Monthly premium for lowest cost option in each enrollment category (If more than one is offered) Employer’s share of the total cost of benefits provided under the plan New Employer Administrator Reporting Responsibilities, continued: Number of full time employees each month Name, address and Social Security Number for each full time employee and the months they were covered under the employer’s plan Probably others as well THERE IS NO COVERAGE FOR ILLEGAL IMMIGRANTS They will not be able to purchase insurance from the exchange even if they pay full price (reported in the AP, April 5, 2010) Beware! New rights for employees to charge their employers with discrimination having to do with health benefits, based on federal laws such as the Age Discrimination Act, the Rehabilitation Act, the Civil Rights Act, the Fair Labor Standards Act, and others. The acts amendment of the Fair Labor Standards Act prohibits an employer from discrimination in terms of exclusions from participation in or in denial of benefits under any health program or activity BEWARE!! This bill also provides whistleblower protections for employees who provide information to, or cooperate with federal or sate government authorities concerning alleged violations of the act. These new rights apply whether the employer’s health benefits plan is fully funded or self insured Reports from Kathleen Sibelius of the Department of Health and Human Services Beware of scam insurance policies Currently 18 states have filed a lawsuit that this is unconstitutional. We don’t know what will happen How do we pay for this???? July 1, 2010- 10% tax on tanning business equals 2.7 billion over 10 years In 2011- pharmaceutical industry will pay annual industry fees which will increase yearly to 2.8 billion by 2019 In 2013- medical device manufacturers will begin to pay an additional 2.3% tax on sales In 2013- Medicare payroll tax will increase by .9% for individuals who make over $200,000 and couples who make over $250,000 a year 3.8% tax from income from interest, dividends, annuities, royalties and rents from those who make over $200,000 and couples who make more than $250,000 a year In 2014- Insurers will pay a premium tax. It will pay out: 8 billion in 2014 11.3 billion in 2015 13.9 billion in 2017 14.2 billion in 2018 It will then rise proportionate to the overall premium growth QUESTIONS???