Health Care Reform Timeline Last Updated: March 12, 2014

Transcription

1 Health Care Reform Timeline Last Updated: March 12, 2014 On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act ( PPACA or ACA or Health Care Reform ). Health Care Reform will allow employers to continue to sponsor group health plans for their employees, but will make changes to provisions, documentation and other facets of these plans. The law also provides assistance to small employers that sponsor health plans and penalties for large employers that either do not provide coverage or do not provide adequate coverage. In addition, Health Care Reform will place numerous fees and administrative requirements on employers that have not been seen before. The law is broadly written, vague, and details have been, and will continue to be, filled in by regulations issued by the Treasury Department and the Department of Health and Human Services ( DHHS ), along with various other federal agencies. This document is intended to serve as a general overview of the Health Care Reform provisions organized by their effective dates. It will be updated as new information is released. It should not be considered a comprehensive source for the law and its requirements. In addition, this document should not be considered legal advice.

2 Guide to this Timeline: Provisions are divided by their effective year (2010, 2011, 2012, 2013, 2014, 2015, 2016 & 2018). Each section will begin with a list of selected provisions under the applicable year. Click on the below link to view details about that year s provisions. Major 2010 Provisions Major 2011 Provisions Major 2012 Provisions Major 2013 Provisions Major 2014 Provisions Major 2015 Provisions Major 2018 Provisions Not every provision will have a communication included in the section. In addition, this timeline is intended as a brief outline of selected Health Care Reform provisions. It is not intended to be a comprehensive overview. 2

3 Major 2010 Provisions Grandfathered Plans Coverage of Dependents to Age 26 Pre-Existing Conditions Lifetime/Annual Dollar Limits Rescissions Early Retiree Reinsurance Program ( ERRP ) Appeals and External Review Doctor Choice/ Patient Protection Notice Preventive Care Temporary High-Risk Pools Review of Plan Premium Increases Small Business Health Care Tax Credit 3

4 2010 Grandfathered Plans Health Care Reform allows certain plans, that existed on or before March 23, 2010, to remain exempt from some of the law s requirements. Plans are permitted to make some routine changes and still maintain grandfathered status, however plans will lose this status one it makes changes to individual spending or employer contributions. Online Resources: (Model Grandfathered Notice) (FAQs to assist in determining grandfathered status) Benecon Communication: Coverage of Dependents to Age 26 Dependent children must be eligible for coverage if they are under age 26. If the plan is grandfathered, eligibility does not need to include children who have access to other employer sponsored health coverage (other than coverage of another parent). Married dependents are eligible. In 2014, all dependents under age 26 must be eligible even if they have access to other coverage. Treasury Notice provides for an income tax exclusion for the cost of health benefits for dependents through the year in which an individual turns age 26. Benecon Communication: 4

5 Pre-existing Conditions 2010 (cont.) Health plans may not impose pre-existing exclusions on enrollees under age 19. Beginning in 2014, no pre-existing condition exclusions will be permitted for enrollees of any age. Lifetime / Annual Dollar Limits Lifetime and annual dollar limits are not permitted on essential health benefits. Restricted annual limits on essential health benefits are permitted until 2014 on the following schedule: $750,000 (for plan years beginning between 9/23/10 and 9/23/11) $1,250,000 (for plan years beginning between 9/23/11 and 9/23/12) $2,000,000 (for plan years beginning between 9/23/12 and 1/1/14) Essential Health Benefits Include: Ambulatory Patient Services Prescription drugs Emergency Services Hospitalization Maternity / Newborn Metal Health / Substance Use Rehabilitative/Habilitative Laboratory Preventive & Wellness Chronic Disease Management 5

6 Rescissions 2010 (cont.) Health Care Reform prohibits rescissions (termination or cancellation of an individual s or group s coverage if that termination is retroactive, except in two situations: Fraud or an intentional misrepresentation of a material fact Failure to pay premiums Early Retiree Reinsurance Program ( ERRP ) Federal Program that will pay employers for part of the cost of health benefits they pay for surviving spouses and dependents. Program stopped accepting claims after December 31, 2011 due to lack of funds. Benecon Communications: 8/ (Summary of ERRP) 8/ (ERRP Payment Processing Update) 6

7 2010 (cont.) Appeals and External Review Plans are required to have an internal claims appeal process and an external appeals process (conducted by an Independent Review Organization ( IRO ), as well as provide notice to employees of their appeal rights when their claims are denied. Requirements vary based upon plan status (i.e. grandfathered vs. non-grandfathered; insured vs. self-funded). Doctor Choice / Patient Protection Notice Enrollees must be permitted to select a primary care physician ( PCP ), including a pediatrician or an OB/GYN, without a referral from the PCP. This rule does not apply to grandfathered plans. Benecon Communication: 7

8 Preventive Care 2010 (cont.) Plans must provide certain preventive care benefits without being subject to deductibles, copays or other cost-sharing by participants so long as obtained in-network. Does not apply to grandfathered plans. Effective at first renewal after 8/1/12: A specific list of women s preventive services, including but not limited to contraception, is included in this requirement. Benecon Communication: (List of Recommended Preventive Services) Temporary High-Risk Pools Such temporary pools provide insurance to those with preexisting conditions until exchanges begin operating in Review of Plan Premium Increases States were given grants by the Federal Government if they had, or had plans to implement, a mechanism to monitor and curb premium increases. 8

9 2010 (cont.) Small Business Health Care Tax Credit For tax years beginning in 2010, small employers will receive a federal tax credit to offset up to 35 percent of the employer s contribution to health plan costs (as long as the employer contributes at least 50% of the costs). In order to qualify, employers generally must have no more than 25 full-time equivalent employees, with average annual full-time equivalent wages of no more than $50,000. The credit amount will be reduced as the number of full-time employees increases and as average annual compensation of those employees increases. Beginning in taxable years after 2013, the employer must participate in an insurance exchange in order to claim the credit (which may be up to 50%) and may only claim the credit for up to 2 years after The amounts of the credit will be determined based upon the number of employees and average annual salary. Credit amounts have been altered temporarily as a result of the March 2013 Sequester. Online Resource: Small-Employers Benecon Communication: 9

10 Major 2011 Provisions Over-the-Counter Medications Health Savings Account ( HSA ) Distribution Tax Penalty Simple Cafeteria Plans 10

11 2011 Over-the-Counter Medications HRAs, HSAs, and FSAs can no longer reimburse the cost of overthe-counter medications, unless the individual receives a written prescription from a health care provider for the over-thecounter medication. Health Savings Account ( HSA ) Distribution Tax Penalty If a person uses HSA funds for items not listed as medical expenses, then that person will be subject to a twenty percent (20%) tax penalty on the amount. Simple Cafeteria Plans Employers with fewer than 100 employees can establish a simple cafeteria plan that, if all conditions are met, will be considered to meet all applicable nondiscrimination requirements. Such conditions include, but are not limited to, eligibility, participation and contribution requirements. 11

12 Major 2012 Provisions Medical Loss Ratio Women s Preventive Services W2 Reporting Summary of Benefits and Coverage ( SBC ) 12

13 Medical Loss Ratio % of health insurance premiums must be spent on medical expenses or quality care improvements. The remaining 15-20% can go toward profit and administrative expenses. If that 80-85% is not achieved, then the insurer must issue rebates to consumers in amounts proportionate to the amount of premium paid by August 1 of each year. Only applies to fully insured groups. Benecon Communications: (Medical Loss Ratios Summary) (Medical Loss Ratio Rebates FAQ) 13

14 2012 (cont.) Women s Preventive Services Effective at first renewal after 8/1/12: A specific list of women s preventive services, including but not limited to contraception, is included in this requirement. Benecon Communications: (Summary) (Contraception Coverage Alternatives for Religious Organizations) W2 Reporting Starting with the 2012 tax year, employers who distribute 250 or more W2s in the prior calendar year must report the aggregate amount of employer-sponsored coverage on each employee s W2. This is not considered taxable income. Benecon Communication: 14

15 2012 (cont.) Summary of Benefits and Coverage ( SBC ) / 60 Day Advanced Notice of Material Modification Effective at first renewal after 9/23/12 or when any change is made that would affect information on the SBC: A 4-page (front and back) federally mandated form, plus a federally-mandated glossary of standard terms, designed to present an individual s health insurance information in a more easily understood format. Required of all types of health plans. Very specific distribution, timing and formatting requirements. Violation will lead to substantial fines. Groups must provide participants with at least 60 days advanced notice of any changes to the plan (not made in connection with renewal) that would change any content on the last distributed SBC. Benecon Communications: 8/ (SBC / Advanced Notice Summary) 8/ (SBC / Advanced Notice FAQ) 15

16 Major 2013 Provisions Additional Medicare Tax on High-Income Individuals Health Flexible Spending Account ( FSA ) Limits PCOR (Patient Centered Outcomes Research) Institute Fee / Health Coverage Fee / Comparative Effectiveness Fee Exchange/Marketplace Notice 16

17 2013 Additional Medicare Tax on High Income Individuals Effective January 1, 2013, all employees earning in excess of the following threshold amounts will be subject to a 0.9% excise tax for all amounts over and above the threshold amounts: $250,000 if married and filing jointly $125,000 if married filing separately $200,000 if other status Employer s obligation to withhold begins once employee reaches the $200,000 mark regardless of the employee s filing status. Benecon Communication: Health Flexible Spending Account ( FSA ) Limits Salary deferrals made to a Health FSA will be capped at $2500 per year beginning on or after tax year beginning January 1, This requirement applies to the plan year and not calendar year. Interim guidance allows non-calendar year plans exceeding $2500 to remain in effect for a calendar year beginning any time in However, a calendar year plan cannot change to a non-calendar year plan primarily to delay application of the $2500 limit. Benecon Communication: 17

18 2013 (cont.) PCOR (Patient Centered Outcomes Research) Fee Health Coverage Fee / Comparative Effectiveness Fee New federal tax on group health plans to fund comparative effectiveness research. Tax will be $1 per participant (not employee) in the first year, $2 per participant in the second year, and then will be indexed thereafter. Accurate participant count will be determined by using one of three acceptable safe harbor counting methods. For plan years ending between October 1, 2012 and December 31, 2012, the tax will first be due July 31, All other plans, the tax will first be due July 31, Fee to be phased out in Carriers will pay the tax on behalf of fully-insured groups. The plan sponsor will pay the tax on behalf of self-funded groups and file a completed Form 720 with the payment. The Form 720 cannot be filed by a third party. Online Resources: (Form 720) (Form 720 Instructions) Benecon Communications: (summary) (PCOR as a deductible expense) (Information on Form 720) 18

19 2013 (cont.) Exchange/Marketplace Notice All groups subject to the Fair Labor Standards Act ( FSLA ) must distribute a notice to all its employees describing the availability of coverage on the Exchange/Marketplace. Such notices were to be given to all employees by October 1, 2013, and to all new hires thereafter. The Department of Labor has stated that it will not issue penalties for failure to distribute the notice, however, it also has advised groups that they should distribute the notice in accordance with the guidance. Online Resources: (Model Language for Notice) Benecon Communications: 4/138/ 7/138/ 19

20 Major 2014 Provisions The Individual Mandate The Exchanges State vs. Federal Exchanges Essential Health Benefits Pre-Existing Conditions Clinical Trials Waiting Periods Wellness Programs Transitional Reinsurance Program Fee Delay 20

21 2014 The Individual Mandate Individuals must obtain Minimum Essential Coverage or pay a tax. Coverage can be obtained through: Employer An individual Qualified Health Plan ( QHP ) Government Plan (e.g. Medicare, Tricare, etc.) If an individual does not obtain the Minimum Essential Coverage, then he or she has to pay the greater of the following: Year Flat Tax % Income Penalty (Tax) 2014 $95 1.0% 2015 $ % $695 (indexed) 2.5% Benecon Communication: 60/138/ 21

22 2014 (cont.) The Exchanges An Exchange is a governmental or non-profit entity established to facilitate the purchase of Qualified Health Plans by eligible individuals and small employers (100 or fewer employees). The intended purpose of the Exchange is to be a one-stop shop for health insurance issuers to enable individuals and small employers (through the SHOP Exchange) to choose a quality, affordable health plan. Coverage levels will be based upon their actuarial value or richness. Each level will be represented by a particular metal, which will correspond with their actuarial level. The theory is that individuals (or small groups) can compare similar plans, from different carriers based on the plan s metal level. In other words, individuals should be able to make an apples-to-apples comparison. Bronze = 60% Actuarial Value (AV) Silver = 70% AV Gold = 80% AV Platinum = 90% AV The Exchange will also serve to evaluate an individual s eligibility for a government subsidy for their insurance. This will be done through evaluating citizenship status, income, availability of other income, etc. Benecon Communications: (SHOP Exchange) (Employer Coverage Tool) (Role of Brokers and Agents in the Exchange) (Online SHOP enrollment delayed by one year) 22

23 2014 (cont.) State vs. Federal Exchanges States were to give HHS a detailed blueprint of their proposed exchange by the end of December HHS then had until February 2013 to certify if the state is ready to operate its own Exchange by 2014 (Open Enrollment begins October 1, 2013). Pennsylvania has decided that it will not create an Exchange. As such, Pennsylvania will automatically revert to the Federal Exchange (once created). At least 30 states will not create their own Exchange. Essential Health Benefits Non-grandfathered insured plans must include a number of Essential Health Benefits to qualify as Minimum Essential Coverage. There are 10 general categories of Essential Health Benefits. Each state has been charged with choosing a benchmark plan that is to serve as a blueprint for the required Essential Health Benefits. PA has chosen: Aetna PA POS Cost Sharing 34/1500 Ded., which can be found at: Benecon Communications: (Prohibition on Stand-Alone HRAs) 23

24 2014 (cont.) Pre-Existing Conditions Beginning January 1, 2014, all individual and group health plans are not allowed to deny coverage for a pre-existing condition for anyone of any age. This ban includes benefit limitations and coverage denials. Grandfathered plans are exempt from this rule. Clinical Trials Non-grandfathered health plans may not deny the individual participation in an approved clinical trial, deny (or limit or impose additional conditions on) coverage of routine patient costs for items and services furnished in connection with the trial, or discriminate against the individual based on participation in the trial. This does not apply to grandfathered plans. 24

25 Waiting Periods 2014 (cont.) Waiting periods may not exceed 90 days. May require a change in plan documents. Benecon Communication: Wellness Programs Program incentives can be raised to 30% of overall cost of coverage or 50% for smoking cessation programs (prior limit = 20%). Also, new types of wellness programs to be introduced with new requirements for each type. Benecon Communication: 25

26 2014 (cont.) Transitional Reinsurance Program Fee Summary $25 billion in assessments to be paid annually over a 3-year period to partially reimburse commercial insurers writing policies for individuals with high health care costs. First year assessment = $63 per participant Second year assessment = $42 in 2015 per participant Third year (estimate) = $26 in 2016 per participant Fee will apply to those enrolled in major medical plans. Insurers will pay on behalf of insured plans. Plan sponsors or third party administrators will remit fee on behalf of self-funded plans. Plan administrators will be required to send plan enrollment counts to HHS by November 15, 2014, HHS will then send out bills by December 15, 2014, with first payments due 30 days later. The second payment will due in the fourth quarter of the year. Benecon Communication: 138/ 26

27 Delay Summary 2014 (cont.) On March 5, 2014, The Department of Health and Human Services ( HHS ) released guidance extending a prior transitional policy for some ACA non-compliant health plans in the individual and small group health market until October 1, It will be left to the states and, in some instances, the insurance carriers to determine which (if any) non-compliant plans will continue. Benecon Communication view/2336/138/ 27

28 Major 2015 Provisions The Employer Mandate ( Pay or Play ) Employer Reporting 28

29 2015 The Employer Mandate ( Pay or Play ) Large Employers (greater than 50 full-time + full-time equivalent employees) must offer health coverage to full-time employees or pay a penalty. Full-time Employees, for purposes of the Employer Mandate, are employees who work 30+ hours per week. Full-time equivalent employees = total monthly hours of all part-timers / 120. Part-time Employees are only counted to determine employer size. They do not need to be offered coverage, nor are they counted in the assessment of penalties. 29

30 2015 The Employer Mandate (cont.) There are 2 types of penalties under the Employer Mandate: 1. Failure to provide coverage to at least 95% of fulltime employees and their dependents. Penalty amount is $2000 per employee per year (paid monthly); assessed if only one employee obtains coverage through the Exchange and qualifies for a subsidy. First 30 full-time employees are free 2. Failure to provide affordable and adequate coverage Affordable Coverage = employee s share is less than 9.5% of employee s household income Adequate Coverage = must cover 60% of expenses $3000 penalty per full-time employee per year (only for each employee that obtains a federal subsidy and coverage in the Exchange) Transitional Relief was offered in the final Employer Mandate Regulations that extended the effective date for mid-sized employers, granted some non-calendar year plan relief and created some additional employer requirements. Benecon Communication: 315/138/ 30

31 Summary 2015 Employer Reporting Employers and insurers will have to report on various aspects of the their health plans and any offers of coverage. The reporting requirements will begin for the 2015 plan year, but will not be filed until Benecon Communication /view/2315/138/ 31

32 Major 2018 Provision The Cadillac Tax 32

33 The Cadillac Tax 2018 Summary If the aggregate value of the health plan coverage to an employee exceeds $10,200 (single) or $27,500 (family), the excess is subject to a 40% non-deductible excise tax. Tax will be paid by the insurer for insured coverage and by plan administrator or employer for a self-funded plan. No adjustment for geographic area, age, state mandates, cost shifts, etc. Needs additional guidance. With so much push-back, there is a strong possibility for repeal. 33