Patient Protection and Affordable Care Act Overview

Transcription

1 Patient Protection and Affordable Care Act Overview Region V 22 nd Annual Spring Conference March 29 th & 30 th, 2012 Aaron A. Casper, AIF Director of Market Development Minnesota Office: Scenic Heights Rd, Suite 210, Eden Prairie, MN PH: / FX: aacasper@nisbenefits.com 1

2 Health Care Reform 2

3 Disclaimer The Patient Protection and Affordable Care Act (PPACA), a.k.a. Affordable Care Act is vast in scope and complex in nature The amount of time given for this presentation is limited I do not imply or suggest that I am an expert on the PPACA legislation I am not an attorney and I do not play one on TV This presentation is merely a highlight of the timelines and key provisions of the Affordable Care Act We are in a very fluid environment with many questions still being answered and clarified 3

4 Remember when Before the Affordable Care Act became law... Then House Speaker Nancy Pelosi told an audience - pass the bill so you can find out what s in it, away from the fog of controversy. * *As reported Kevin Hassett, August 1, 2010; Bloomberg Opinion 4

5 Discussion Outline Timelines and Key Provisions What has already occurred (Part I) What is to come (Part II) Supreme Court Implications Questions 5

6 The Affordable Care Act may appear to be complex to some 6

7 Timelines and Key Provisions Enactment of the historic Patient Protection and Affordable Care Act occurred on March 23, 2010 PPACA passed the Senate on December 24, 2009, by a vote of with all Democrats and two Independents voting for, and all Republicans voting against PPACA passed the House of Representatives on March 21, 2010, by a vote of , with 34 Democrats and all 178 Republicans voting against the bill PPACA was amended by the Health Care and Education Reconciliation Act of 2010 on March 30,

8 2010 Key Provisions The Actual Bill Rate Review Consumer Information Temporary High Risk Pool Internet Portal 8

9 2010 Key Provisions Continued Temporary Reinsurance for Early Retirees (ERRP) Until 2014 or $5 billion spent Effective May 6, 2011 ERRP no longer accepted new applications due to the availability of funds The $5 billion has already been spent Grandfathering Provisions Small Business Tax Credit Tax Credit for Adoption Expenses 9

10 2011 Key Provisions Reforms for Grandfathered and Non-grandfathered Plans (effective for plan years beginning on or after September 23, 2010) Cannot impose exclusions for preexisting conditions for enrollees under age 19 Extend coverage for adult children to age 26 Not rescind coverage unless there is fraud or misrepresentation by the enrollee Lifetime and Annual Limits Many carriers have already removed limits prior to the 2014 mandate 10

11 2011 Key Provisions Continued Reforms for Non-grandfathered Plans (effective for plan years beginning on or after September 23, 2010) Comply with additional standards for internal claims and appeals and external review Not discriminate in favor of highly compensated individuals for insured health plans Cover emergency services without pre-authorization and treat them as in-network Allow designation of gynecologist, obstetrician or pediatrician as primary care provider Cover immunizations and preventive care without cost-sharing 11

12 2011 Key Provisions Continued Medical Loss Ratio (Insured Plans Only) What is a medical loss ratio? Health care reform requires commercial insurers spend at least 85 cents out of every premium dollar on medical claims for its large-group policyholders. For small-group and individual policies, the figure is 80 cents The remaining cents of each premium dollar can be used to pay expenses that do not directly benefit customers such as payroll, advertising, overhead and profits Beginning in 2011, insurers were required to spend at least 80 percent of total premium dollars they collect on medical care and quality improvement. Insurance companies that do not meet the 80/20 standard (also known as the Medical Loss Ratio) are required to pay rebates to their customers According to the news release dated February 16, 2012 consumers will receive up to $323 million in rebates this year. 12

13 2011 Key Provisions Continued Health Savings Account (HSA), Flexible Spending Account (FSA) and Health Reimbursement Arrangement (HRA) Changes The definition of qualified medical expenses for HSAs, FSAs and HRAs was amended to exclude over-the-counter medicine except for insulin, unless issued by prescription Phasing Out the Medicare Part D Coverage Gap $250 rebate will be provided for all Medicare Part D enrollees who enter the lapse in coverage that occurs once an individual reaches the coverage limit under Medicare Part D Prescription Drug Coverage ( donut hole ) 13

14 2012 Key Provisions Summary of Benefits and Coverage Insurers and plan sponsors of self-insured health plans must provide all participants and applicants a Summary of Benefits and Coverage (SBC) Advance Notice of Mid-year Changes 60 Day Advanced Notice of Material Modifications Quality Care Reporting Plans and insurers will need to submit annual reports to HHS in order to allow quality of care measurements Comparative Effectiveness Research Fees 14

15 2012 Key Provisions Continued Administrative Simplification Beginning in 2012 and extending through 2016 HHS will adopt uniform standards and operating rules for the electronic transactions that occur between providers and health plans that are governed under the Health Insurance Portability and Accountability Act of 1996 W-2 Reporting Plan sponsors will be required to report the aggregate cost of their employer-sponsored group health plan coverage on the annual Form W-2, in box 12 using code DD. Plan sponsors who voluntarily choose to report the cost of coverage on 2011 Forms W-2 may do so 15

16 2013 Key Provisions Employer Notice Requirements Plan sponsors must provide written notice informing employees about the health insurance exchanges and employees potential eligibility for premium credits if the plan sponsor s share of costs is less than 60% of the allowed total cost of benefits Flexible Spending Account Changes FSA contributions will be limited to $2,500 and indexed in future years Retiree Drug Subsidy Deduction Deductions will be disallowed if plan sponsors provide prescription drug coverage to their Medicare Part D eligible retirees and they receive federal retiree drug subsidies Deduction for Unreimbursed Medical Expenses Itemized deduction threshold for unreimbursed medical expenses will be increased from 7.5% of adjusted gross income 16

17 2013 Key Provisions Continued Medicare Tax Individuals (Business Managers and Payroll Personnel) earning more than $200,000 ($250,000 for married couples filing jointly) will be required to pay an additional 0.9% of Medicare tax on wages 17

18 2014 Key Provisions Summary of Benefits and Coverage SBCs will be required to indicate whether the plan provides minimum essential coverage and whether the plan s share of costs is at least 60% of actuarial value Automatic Enrollment expected in 2014 Employers with more than 200 employees that offer health insurance coverage will be required to automatically enroll new full-time employees in coverage, with the opportunity to opt out Plan Design Changes and Benefit Mandates Coverage of essential benefits for insured individuals and small group plans will be required 18

19 2014 Key Provisions Continued Individual Mandates Individuals will be required to obtain minimum essential coverage, with the penalty for noncompliance being the greater of $95 per individual or 1% of household income over the filing threshold Individual Subsidies Financial subsidies will be made available to individuals through: premium assistance tax credits for individuals with income between 100% and 400% of the federal poverty level Cost-sharing subsidies for individuals with income up to 250% of the federal poverty level to reduce out-of-pocket costs of eligible individuals in certain plan coverage obtained through an exchange Employer Provisions Must report on whether minimum essential coverage was offered to employees 19

20 2014 Key Provisions Continued HEALTH INSURANCE EXCHANGES Each State will establish one or more health benefit exchanges where individuals and small employers can purchase health insurance through the state in which they live An exchange will make qualified health plans (QHPs) available. To offer a QHP through an exchange, a provider must agree to: Offer certain types of health coverage; and Charge the same premium for each QHP of the provider regardless to whether the plan is offered inside or outside the exchange 20

21 2014 Key Provisions Continued Qualified Health Benefit Plans through Cafeteria Plans State Basic Health Plan Option HHS will establish a basic health program Eligible individuals and families will have access to coverage options through these plans rather than through an exchange Premium Variation for Participation in Employer sponsored Wellness Programs Employers will be able to vary premiums up to 30% for employee participation in certain health promotion and disease prevention programs 21

22 2014 Key Provisions Continued Insurance Market Reforms Insurer Fee Mental Health and Substance Abuse Benefits Parity 22

23 2015 Key Provisions Employer Reporting of Health Insurance Coverage State Health Insurance Exchanges Must be Selfsustaining Individual Mandate Penalty Increases Penalty for noncompliance will increase by $325 or 2% of household income over the filing threshold 23

24 2016 Key Provisions Individual Mandate Penalty Increased The penalty for noncompliance with the minimum essential coverage requirements will increase to $695 or 2.5% of household income over the filing threshold 24

25 2017 Key Provisions Large Employers in Health Insurance Exchanges States will be able to allow large employers to purchase coverage through health insurance exchanges 25

26 2018 Key Provisions Tax on High Cost Plans ( Cadillac Tax) An excise tax of 40% will be imposed on employersponsored health benefits above the aggregate value of employer-sponsored health plan coverage in excess of $10,200 for single coverage and $27,500 for family coverage 26

27 US Supreme Court Justices 27

28 Supreme Court Implications The Supreme Court heard six hours of oral arguments this week both in support and against the provisions of the Affordable Care Act Key arguments Individual mandate Whether or not the expansion of the Medicaid program violates the Constitution A decision is expected by the end of June

29 Questions? Minnesota Office: Scenic Heights Rd, Suite Eden 210, Prairie, Eden MN Prairie, MN / PH: / / PH: / FX: FX: