Healthcare Reform Update

Transcription

1 Healthcare Reform Update A N A L Y S I S T O O L S P L A N N I N G S T A T I S T I C S T R E N D S July 9, 2012

2 What Just Happened? The Supreme Court upheld the constitutionality of the Health Reform law s Individual Mandate Vote was 5-4 The Individual Mandate is Intended to Mitigate Massive Cost Shifting Occurs when the uninsured obtain medical care The cost of that care is shifted to those who do pay, through insurance or otherwise Part of a 3-Legged Stool Guaranteed issue (no pre-existing condition restrictions) Community rating Individual mandate 2

3 University Compliance with Healthcare Reform The University of Alaska complied with all mandatory healthcare reform changes on July 1, 2011: Replaced $2M Lifetime Maximum with Unlimited Lifetime Maximum Permit dependent child on plan until age 26 Removed pre-existing condition on children under age 19 The University of Alaska lost grandfather status on July 1, 2011 and has complied with all requirements including the following: No cost share or maximum on preventive care In and out-of-network covered the same for emergency services Appeals process with third party external review 3

4 2013: Summary of Benefits Coverage Plain English summary in standard format of no more than four double-sided pages, 12-pt font; free of charge Counties with >10% individuals fluent only in non- English language Alaska (2) Spanish/Tagalog Obligation: Carriers and Plan Administrators Up to a $1,000 fine, per violation Effective Date: SBC requirements apply: Communications produced & distributed by April 2013 for FY 14 open enrollment 4

5 2013 Issues Health FSA benefits capped at $2,500 per year, beginning with the 2013 taxable year New guidance: Non-calendar year FSAs: Apply rule for PYs beginning in 2013 or later Taxes on high wage earners Applies to: $200,000+ ($250,000 joint filers).9% Medicare tax withholding required (Not Matched by Employer) 3.8% tax on passive investment (capital) gains, but not qualified retirement plan benefits Excise tax on medical device manufacturers W-2 reporting of healthcare coverage values (Reporting 2012 Values in January 2013) Comparative Effectiveness Research Fees $1 per covered life (member) in 2013 and $2 in

6 2014 Issues Individual mandate takes effect & Insurance Exchanges open Employer play or pay mandate Full-Time Employee (FTE) defined as working 30 hours regardless of work status $2,000 per FTE penalty if don t offer Minimum Essential Coverage Pros» Reduced cost and administrative burden for Employer Cons» Employees pay for benefits with post-tax dollars/increased taxable income» Anticipated high cost of coverage in exchanges» FTE penalty is adjustable $3,000 per employee (who obtains subsidies) penalty if don t offer Qualifying & Affordable Coverage Qualifying Coverage 60% actuarial value Affordable Coverage Not more than 9.5% of W-2 pay for Employee Only Employer reporting requirements Who has Minimum Essential Coverage Details of plan offerings, premiums and enrollment Excise taxes on insurers and TPAs Expected to add $10-15 PEPM Incentives/surcharges under a plan, due to health status, under a HIPAAcompliant wellness program increase from 20% to 30% 6

7 2014 Issues Expecting a tremendous increase in demand for primary care The US adult population 20 years and older will increase by 21% between 2005 and 2025 An expected shortage of 35,000 to 40,000 generalists during that time Impact on Hospitals Limited access to primary care may drive more hospital related visits and emergency room use Shortages in rural health care markets that already have well documented shortage of providers Source: Will Generalist Physician Supply meet Demands of an Increasing and Aging Population, Health Affairs, 27 #3,

8 2018 Issues Cadillac Tax 40% Excise Tax on benefit values $10,200 for single & $27,500 for family As of July 1, 2012, the 500 Plan exceeds the 2018 single and family thresholds Impact on HR Departments Increased Administrative Burden Summary of Benefits and Coverage provided for open enrollment and new hires Next Steps Reporting requirements Increased training and skill level for HR personnel Managing employee eligibility and hours Lockton has requested updated census from University to run Healthcare Reform modeler Present analysis from modeler to University of Alaska along with strategies 8

9 A N A L Y S I S T O O L S Our Mission To be the worldwide value and service leader in insurance brokerage, employee P L A benefits, N N and I Nrisk G management services S T A T I S T I C S Our Goal To be the best place to do business and to work T R E N D S Lockton, Inc. All rights reserved. Images in this publication 2010 Jupiterimages Corporation 9