GBS HIPAA Training by wuyunqing


									 Prepared by Gallagher Benefit Services.

CEBS Meeting
  Discussion Outline

 February 17, 2011

The Elephant in the Room

Topics - 2011

   Health Care Reform
        Coverage of Adult Children
        Preventive Care Services
        Coverage of OTC Drugs under “Prescription Programs”
        Disclosure Rules for Mini-Meds
        W-2 Reporting
   HIPAA Regulations for Wellness
   Early Retiree Reinsurance Program
   Mental Health Parity and Addiction Equity Act
   Round Table Discussion

Overview of Guidance Issued Since May 2010

Agency guidance
   Guidance issued in 21 areas of Title I of PPACA
      36 discrete agency (DOL, HHS, IRS) publications
      Proposed or interim final regulations; notices; facts sheets,
        FAQs, etc
   Guidance anticipated in 8 areas of Title I of PPACA
   And yet, the answer to so many questions remains: we are waiting
    for guidance

   HCR: Timeline of Key Employer Changes
                                 • OTC drug
• Early retire                     reimbursements
  reinsurance                    • HSA penalties                                • FSA limits
• High-risk pools                • W-2 Reporting (voluntary)                    • Medicare tax
                                 • Employee notification                        • Part D drug subsidy
                                   requirements                                   eliminated

  6/23/10              9/23/10              1/1/11             1/1/12              1/1/13            1/1/14+

                                                                        • Employer and individual mandates
                    • Coverage expansion                                • Insurance exchanges
                                                                        • Patient protections
                    • Patient protections
                                                                        • “Cadillac” excise tax (2018)
Health Care Reform and Renewals after 9/23/10

   For non-grandfathered plans, the following required changes are
    effective on the first date of the plan following September 23, 2010:
        Provide coverage to all children up to age 26
        Eliminate lifetime maximums on essential benefits
        Eliminate pre-existing conditions limitations for children under the age of 19
        Offer preventive coverage in-network without cost sharing
        Provide emergency room services without pre-authorization and with the same
         benefit in and out of network
        No pre-authorization or referral for OB-GYN
        Allow designation of any available provider as PCP
        Include new appeal procedures
        For fully-insured plans: compliance with the nondiscrimination tests detailed in
         IRC Section 105 (h) (delayed until further guidance comes out)

Changes that Negate Grandfather Status

   The following adjustments will cause the plan to lose its
    grandfathered status:
      Reduce or eliminate coverage for a specific health condition or disease
      Increase the participant coinsurance level (e.g., increase from 20% to 30%)
      Increase copays by more than the greater of:
             $5, or
             Medical inflation plus 15 percentage points
      Increase deductibles by more than the cost of medical inflation plus 15
       percentage points
      Reduce the amount of employer subsidy of the health plan by more than 5%
      Add or reduce an annual limit on any service in the plan
      For fully-insured plans, change insurance carriers but only during the period after
       March 23, 2010 but prior to November 15, 2010

HCR: Adult Children
   Effective date: for plan years that begin/began on or after
    September 23, 2010
   Who may be eligible (depending on plan definitions):
        Biological children
        Stepchildren
        Adopted children
        Foster children
        Grandchildren or other related children only have to be covered if there is a
         dependent relationship
        Spouses and dependent children of adult children do not have to be covered
   Open Enrollment Notification:
      HCR reform requires a 30 day special enrollment period for “aged out”
      Employees must be notified in writing no later than the first day of the plan year
       for which the change is effective

HCR: Adult Children

   Cost:
       The plan cannot charge more for an older child than a younger child, but it is
        permissible to increase the costs for all children
   Taxation:
     The federal government has amended the tax code to allow favorable tax status
      to non-dependent adult children covered by the medical plan
     However, each state is permitted to do otherwise
     New York, New Jersey and Connecticut all follow federal guidelines

HCR: Adult Children: Differences in Plan
   Grandfathered Plans:
        Adult children must be offered coverage up to age 26, but only if they are not
         eligible for an employer provided plan through their own employment, or through
         a spouse’s employment
   Non-Grandfathered Plans:
        All adult children must be offered coverage up to age 26, even if they are eligible
         for an employer provided plan through their own employment, or through a
         spouse’s employment
   Just an aside – many carriers are opting to cover all adult children
    up to age 26 regardless of plan status

HCR: Preventive Care

   Grandfathered Plans: there are no mandates on how, or if,
    preventive care is covered
   Non-grandfathered Plans:
     The list of mandates includes all the expected services, such as physicals,
      immunizations, blood pressure and cholesterol screenings in accordance with
      the standard age guidelines
     But, it includes services that may not immediately come to mind:
     For adults:
            Screening and counseling for alcohol abuse and tobacco use
            Aspirin therapy for men age 45 and older and women age 55 and older
            Obesity screening and diet counseling
            STD screenings, prevention counseling
       For women only:
            Breast feeding inventions and support
            Folic acid for pregnant women
            Breast cancer chemoprevention

HCR: Preventive Care

   Non-grandfathered Plans: (cont’d)
       For children:
            Alcohol and drug abuse assessments
            Autism screening for children at 18 and 24 months
            Behavior assessments
            Iron supplements for at risk infants
            Fluoride supplements for areas without fluoridated water
            STI and HIV screenings and prevention counseling

   Complete guidelines are available from:
     The US Preventive Services Task Force recommendations with a rating of A or B
     Advisory Committee on Immunization Practices of the Centers for Disease
     Recommendations from the Health Resources and Services Administration

HCR: Preventive Care (cont’d)

   Other provisions:
      Whether cost sharing provisions are imposed on an office visit depends on how
       the bill is submitted – any visit that is billed as primarily prevention may not have
       a cost share
      If new services are added to the recommendations list those services must be
       covered with the next effective date
      But if a recommendation is dropped, the plan no longer has to cover that service
       from the date of the change

HCR: Over-the-Counter Drugs

   In the recent past, over-the-counter drugs could be covered by a
    flexible spending account
   Effective January 1, 2011, OTC drugs will only be reimbursed under
    a FSA (and HRA) if the medical provider has written a prescription
      However other OTC items will be covered without a script including diagnostic
       kits, equipment, or supplies
      Insulin may also be covered without a prescription

   When submitting an after the fact claim to the FSA or HRA, a copy
    of the store receipt and prescription is needed to substantiate the
   However, many FSA and HRA plans had moved to debit cards

HCR: Over-the-Counter Drugs
   In order for a purchase to be made with a debit card, certain
    requirements have to be met:
      A script has be presented prior to purchase and the drug dispensed by the
       pharmacist in accordance to the applicable regulations and a rx number is
      The vendor must comply with IRS recordkeeping rules which requires the rx
       number, name of patient/purchaser, date, and amount paid
      The records are available upon request by the employer
      The card system will only accept an OTC drug charge if there is an assigned rx
   The IRS has also limited where debit cards can be used
   Cards must be used at “90 percent pharmacies” where 90% of gross
    receipts qualify for reimbursement under IRS Code 213(d), grocery
    stores with pharmacies, mail order houses that follow this procedure
    and organizations with a merchant code (e.g., hospital)

HCR: Lifetime Maximums & Mini-Med Plans

   HCR eliminated lifetime maximums for all “essential benefits”:
        Ambulatory patient services
        Emergency services
        Hospitalizations
        Maternity and newborn care
        Mental health and substance treatment
        Prescription drugs
        Rehabilitative services and devices
        Laboratory services
        Preventive and wellness services
        Pediatric services including oral and vision care
   Lifetime maximums may still be maintained for non-essential

HCR: Lifetime Maximums & Mini-Med Plans

   Mini-med plans are generally low premium plans that provide a
    limited benefit – often more focused on wellness/prevention than
    major illness coverage
        The lifetime maximum is generally far lower than the average plan
   Plan sponsors may apply for a waiver of the lifetime maximum if the
    cost of the coverage would increase significantly or if the elimination
    of the plan would result in decreased access
   The application must be filed at least 30 days in advance of the plan
   If a waiver is granted, it only applies to the annual maximum – all
    other provisions of HCR apply

HCR: Lifetime Maximums & Mini-Med Plans

   Further, if the waiver is granted a detailed notification must be
    provided to all current and eligible plan participants that includes:
      A statement that the plan does not meet HCR lifetime minimum annual amounts
       limits for essential benefits
      The actual annual dollar limit and a description of the benefits to which the limit
      A statement that the waiver is only for one year

   The notice must be in 14 point bold type
   The notice must be included in any educational materials, including
    SPDs or certificates of insurance and prominently displayed

W-2 Disclosure

   Initially, this was a requirement for calendar year 2011, but now has been
    made optional; it will be required for calendar year 2012
   The amount is not included in the employee’s gross income
   In light of limited guidance available, the cost is based on the same
    methodology as the current COBRA premium

HIPAA Regulations for Wellness

   Under the final HIPAA regulations, there was clarification around “wellness”
   Wellness programs are meant to promote overall good health or to prevent
    the onset of disease
   Under HIPAA, plan sponsors are permitted to provide a reward for the
    desired behavior up to 20% of the premium the individual is enrolled in
        If any of the dependents are enrolled in the program, the 20% is of the total premium the
         family is enrolled
   However, the government has rules for a “bona fide” wellness program:
        The reward must be reasonable for all participants to take advantage of
        An alternative must be provided if the initial standard presents difficulties for some of the
         participants to meet
        Any program requirements (including the alternate means of meeting the rewards’ standard)
         must be described

HIPAA Regulations for Wellness (cont’d)

   Beginning in 2014, HCR increases the potential reward from 20% to 30%
    and it may potentially rise if certain government agencies find value in
    wellness programs
   Employers with less than 100 employees will be eligible to receive grants for
    comprehensive wellness programs
        $200 billion is available under a five year program
   However, there is some concern about how the wellness programs will meet
    the requirements of the Americans with Disabilities Act
        Under the Act, any medical examinations, activities, medical history taking, etc. must be
         voluntary unless the information is intrinsic to performing the position
        As the percentage reward increases, as well as the cost of health care, how does one define

Early Retiree Reinsurance Program (ERRP)
   ERRP is another means of encouraging access to health insurance until
    2014 provides government plans
   The program has been allocated with $5 billion
   The program began in 2010 and will run until the money runs out
   Any plan sponsor that a plan covers early retirees between the ages of 55
    to 64 (e.g., not Medicare eligible) may apply for reimbursement of large
   The reimbursement is equal to 80% of claim dollars between $15,000 and
   In order to be eligible the plan must include a program that generates
    savings for participants with chronic and high cost conditions, AND, the
    monies must be used to reduce plan or participant costs (e.g., deductibles,
    copays, coinsurance

ERRP (cont’d)
   The application requests specific information, including:
        Disease management programs
        Projected reimbursements for the next two plan years
        A statement that the plan has policies and procedures in place to detect fraud and waste
   HHS started accepting applications on June 29, 2010 and will continue to
    accept them until it is apparent that the funding has run out
   The approval notification process began on August 31st, 2010
   Once approved the designated account manager and account
    representative will receive an e-mail providing instructions to register on-line
   The on-line process will allow plan sponsors to submit participant and claim
    data, track submissions and reimbursements

ERRP (cont’d)
   Participants must be notified that the plan is participating in the program, no
    later than after the first reimbursement
   The notice may be provided in any way, including inclusion in the
    educational materials, desk drop, mail, etc., that the plan sponsor is assured
    of delivery
   The notice must include general information about how the funds will be
    utilized to offset future increase
   Additional information is available at

Mental Health Parity and Addiction Equity Act

   The original Mental Health Parity Act of 1996 was signed into law under
    President Bill Clinton and it eliminated dollar amount limits for these benefits
   Most plan sponsors then modified their programs to day/visit limits that
    generally equated to the dollar amounts
   Many advocates felt the law did not fully accomplish the hoped for change
    in attitude and coverage

Mental Health Parity and Addiction Equity Act

   The 2008 law, officially known as the, Mental Health Parity and Addiction
    Equity Act, (MHPAEA) expanded coverage to include substance abuse
    benefits as well as mental health benefits
   The law became effective for plan years effective 1/1/10, however, interim
    regulations were not issued until 2/2/10, thus forcing plan sponsors to re-
    think changes made for 1/1/10
   The regulations state that the employee cost sharing provisions for MH/SA
    must be substantially equal to the predominant limits that apply to
    medical/surgical benefits under the plan

Mental Health Parity and Addiction Equity Act
   Each category of benefits must be looked at separately to determine parity:
        Inpatient, in-network
        Inpatient, out-of-network
        Outpatient, in-network
        Outpatient, out-of-network
        Emergency care
        Prescription drugs
   To determine the minimum level of coverage, a plan sponsor must calculate
    the medical/surgical cost sharing in each category
   The cost sharing for MH/SA services must be equal to the cost sharing
    provisions of 2/3rds of the medical/surgical benefits
   Additionally, the same protocols must be followed; thus certain common
    requirements are likely not to be permitted:
        Requiring care through an EAP or other managed care vendor
        Prior authorization for care
        Step therapy
        Exclusions for non-compliance
Mental Health Parity and Addiction Equity Act

   Plan sponsors must also provide information regarding the standards used
    for the determination of medical necessity, if requested by the participant
   Also, the standard ERISA claim denial information applies:
        The reason for denial, including references to the materials utilized
        A description of the appeals process
        Access to any documents that the decision is based on
        The name of the medical providers who were consulted in the process
   There are a few plans that are exempt:
        Employers with no more than 50 employees in the prior year
        Plans which actuarial attest that the cost of implementing the changes will result in a
         percentage increase of 2% or more
        Self-funded non-federal governmental plans that opt out

Mental Health Parity and Addiction Equity Act

   Many states have mandated mental health and substance abuse benefits;
    any mandated benefit will trigger full parity
   Thus, fully-insured plans will have less flexibility than self-insured plans

Discussion/Horror Stories/Tales of Good
Health Insurance Gone Bad


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