Hardee s Q4 Franchise System Call. Health Care Reform Update November 5, 2013

Transcription

1 Hardee s Q4 Franchise System Call Health Care Reform Update November 5, 2013

2 Key Elements of Health Care Reform for Employers Change in tax treatment for over-age 2010 dependent coverage Early retiree medical reinsurance Accounting impact of change in Medicare retiree drug subsidy tax treatment Medicare prescription drug donut hole beneficiary rebate Break time/private room for nursing moms No lifetime dollar limits on essential health benefits Restricted annual dollar limits on essential health benefits, phased amounts until Dependent coverage to 26 (grandfathered plans may limit to children without access to other employer coverage, other than parent s coverage) 1 No pre-existing condition limitations for enrollees up to age 19 1 and no rescissions 1 No health FSA/HRA/HSA reimbursement for nonprescribed drugs Increased penalties for non-qualified HSA distributions Additional standards for non-grandfathered health plans, including preventive care in network with no cost-sharing, appeal and external review, provider choice, and non-discrimination rules for insured plans 3 Income-based Medicare Part D premiums Pharmaceutical importers and manufacturers fees start Medicare, Medicare Advantage benefit and payment reforms Insurers subject to medical loss ratio rules Employers to distribute uniform summary of benefits and coverage (SBC) to participants 2012 (deadlines vary with group of recipients) 60-day advance notice of mid-year material modifications to SBC content Form W-2 reporting for health coverage (track in 2012 for W-2 form provided in early 2013) 4 Coverage for additional women's preventive care services 5 Health insurance exchange coverage Individual coverage mandate 6 Financial assistance for exchange coverage of lower-income individuals State Medicaid expansion (possibly only some states) Dependent coverage to age 26 for any covered employee s child 2 No annual dollar limits on essential health benefits 2 (generally banning standalone HRAs) No pre-existing condition limits 2 No waiting period over 90 days 2 $2,500 per plan year health FSA contribution cap (plan years on or after January 1, 2013) Comparative effectiveness group health plan fees first due Annual dollar limits on essential health benefits cannot be lower than $2 million Employers notify employees about exchanges by Oct. 1, 2013 Medical device manufacturers fees start Higher Medicare payroll tax on wages exceeding $200,000/individual; $250,000/couples Change in Medicare retiree drug subsidy tax treatment takes effect Health Insurance exchanges initial open enrollment period Wellness limit increase allowed 2 Health insurance industry fees Additional standards for non-grandfathered health plans, including limits on out-of-pocket maximums, provider nondiscrimination, and coverage of routine medical costs of clinical trial participants Small market, non-grandfathered insured plans must cover essential health benefits with limited deductibles (initially $2,000/individual, $4,000/family), using a form of community rating Insurers must apply guaranteed issue and renewability to non-grandfathered plans of all sizes Auto enrollment some time after Temporary reinsurance fees first due in late 2014/early 2015 Possible additional reporting and disclosure Employer shared responsibility 40% excise tax on high cost or Cadillac coverage Footnotes 1. Applies to all plans, including grandfathered plans, effective for plan years beginning on or after Sept. 23, 2010 (Jan. 1, 2011, for calendar year plans). 2. Applies to all plans, including grandfathered plans, effective for plan years beginning on or after Jan. 1, Applies to non-grandfathered plans, effective for plan years beginning on or after Sept. 23, 2010, except that insured plan discrimination ban is delayed until regulations issued. 4. A temporary exemption applies to certain categories of employers. 5. Applies to nongrandfathered plans, effective for plan years on or after August 1, A temporary exemption applies to employees of employers with noncalendar-year plans. 1

3 What does the delay mean for employers?

4 Employer Mandate Delayed Until 2015 What does the delay mean for employers? What s delayed? Employer mandate to offer coverage to employees who work on average 30+ hours per week. Minimum value requirement for plan offering. Affordable contribution requirement. Employer reporting to IRS on full-time employees and health coverage status. What s not delayed? Enrollment in employer-sponsored plans could still increase with individual mandate requirement effective January 1, 2014 Public exchanges and expanded Medicaid (in some states) (and individual premium subsidies) still slated for January 1, 2014 effective date Summaries of Benefits and Coverage (SBCs) and exchange notices to employees this fall, including data on whether employer plan provides minimum value ACA fees: PCORI, Temporary Reinsurance, and Health Insurer Fees Plan design requirements for all plans, including maximum 90-day waiting period, no limits on pre-existing conditions or essential health benefits, expansion of wellness incentives, dependent coverage to age 26 Plan design requirements for non-grandfathered plans, including preventive care coverage requirements, limits on out of pocket maximums; limits on deductible (small group only), counting of copayments toward out-of-pocket maximums, coverage for clinical trialrelated services, provider nondiscrimination Waiver for limited medical plans still expected to expire at the end of the 2013 plan year 3

5 Employer Mandate Delayed Until 2015 This is only a delay but a welcome one for employers Medical plan cost will still go up an additional 3% to 4% or more (on top of trend) in 2014 due to the ACA plan design requirements and fees Cost control continues to be the primary focus of employers Introducing a CDHP or take steps to increase enrollment in an existing CDHP Strong commitment to health management and wellness programs Private exchanges will continue to emerge as a strategy to enable employers to manage benefit spend and maximize the value of benefits delivered to employees Employee communication is as important if not MORE important now 4

6 State public health insurance

7 State public health insurance exchanges The Affordable Care Act requires every state to have a health insurance exchange starting in 2014 that allows individuals and small employers to shop for and purchase health coverage from qualified health plans States may offer separate individual and Small Business Health Options Program (SHOP) exchanges or merge the exchanges Until 2016, states may define small employers as having either 1-50 employees or full-time employees (FTE). In 2016, all small employers will be defined as having FTE. Beginning in 2017, states can decide whether they want to open their exchange to large employers An HHS fact sheet provides links to each state s exchange website, where available ( The initial open enrollment period for 2014 coverage runs from Oct. 1, 2013 through March 31,

8 State public health insurance exchanges In late September, HHS announced small businesses will not be able to enroll in the Small Business Health Options Program (SHOP) in states with federally facilitated exchanges until November, delaying enrollment by one month Small employers will be able to review coverage options beginning Oct. 1, but won't be able to actually enroll until November If enrollment is completed by Dec. 15, coverage will begin Jan. 1,

9 State public exchange options State-run exchange Partnership exchange Federally Facilitated Exchange State operates all exchange activities (subject to federal guidelines) Sources: National Conference of State Legislatures; HHS.gov State takes responsibility for activities related to plan management, consumer assistance or both. State plan management partnership exchange. State recommends plans for QHP certification, manage QHP issuer accounts and day-to-day administration and oversight of QHPs. State consumer partnership exchange. State manages navigators and the inperson assistance program. HHS operates call center, website; and funds and awards navigator grants. States may also manage outreach and education efforts. HHS operates all exchange activities State maintains role as enforcer of market reforms inside and outside exchange 8

10 State public exchange decisions for 2014 (as of Oct. 18, 2013) Declared state exchange (16) Planning partnership exchange (6) State SHOP/Federally Facilitated Individual (3) Default to federal exchange (26) Source: State Reforum 9

11 Plan types and eligibility for government subsidies 10

12 Spectrum of Choices Excepted medical plans hospital indemnity, critical illness Skinny medical plan only covers 100% Preventive Care Minimum Essential Coverage (< 60%) Minimum Value Plan (60%) The benefits are paid with respect to an event without regard to whether benefits are provided. Insurance pays a fixed dollar amount per day (or per other period) of hospitalization or illness, regardless of the amount of expenses incurred.. Preventive Care paid at 100%; no other medical coverage provided (no physician visits, no hospital inpatient care; no prescription drugs). Based on proposed regulations; would qualify as Minimum Essential Coverage. Defined very broadly: Eligible employer sponsored plan virtually any employer sponsored group health plan, excluding HIPAAexcepted benefits. Plan option must pay at least 60% of total costs for allowed benefits. Three methods for calculating minimum value: minimum value calculator, design-based safe harbors, certification by an actuary. Value of benefit 11

13 From the Employee s Perspective Satisfy individual mandate if enrolled? Excepted medical plans hospital indemnity, critical illness No Skinny Medical only covers 100% Preventive Care Yes, based on proposed regulations Minimum Essential Coverage (< 60%) Yes Minimum Value Plan (60%+) Yes Possible to qualify for subsidized coverage in public exchange? Does not impact individual s ability to qualify for subsidized coverage If enrolled No If not enrolled - Yes If enrolled No If not enrolled - Yes Offer of this benefit negates employee eligibility for subsidized coverage 12

14 Next Steps

15 Health Care Reform Overview What s Next For Employers? Move forward with planning for implementation of all provisions.. In Place Requirements Maintain compliance with existing provisions Grandfathered plans must Annually monitor degree of changes against requirements Fulfill annual notification requirements Plans losing GF status must Implement non-gf status requirements 100% preventive care coverage Appeals processes Provider selection/referral rules OON ER coverage Etc Continue to implement: Summaries of Benefits and Coverage W-2 reporting $2,500 HC FSA limit Coverage of additional women s preventive care Effectiveness research fees Medicare tax increase for high earners Medicare retiree Rx subsidy elimination Medical loss ratio rebate distribution (insured plans) Exchange notifications for employees 2014 and Beyond Develop strategies for: Individual mandate Health insurance exchanges & Medicaid expansion 90-day waiting period limit New health plan fees Required notices & reporting No essential benefit or pre-ex limits Wellness incentives 30%-50% Limits on OOP (Non-GF) & deductible (Non-GF small group) Coverage for clinical trial-related services (Non-GF) Insured non-discrimination rules (date?) Auto-enrollment (date?) Employer mandate (2015) Cadillac tax (2018) 14