Title: Welcome
1Welcome Housekeeping
- Thank you for joining us today!
- Important Notes
- This presentation will be available on
www.momentousins.com by Monday, July 16th. - There will be a QA session following the
presentation. Please feel free to send your
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2Wednesday, July 11, 2012
Presented by Sherrie Zenter, Senior Vice
President Momentous Insurance Brokerage Jill
Jacoby, Vice President Momentous Insurance
Brokerage Mark Morgan, Vice President General
Manager Anthem Blue Cross Small Group
3Agenda
- Supreme Court Upholds Health Care Reform Law
- What It Means for Individuals
- What It Means for Employers
- The Big Year 2014 with Mark Morgan
- Questions Answers
4(No Transcript)
5Health Care Reform What is It?
- Patient Protection and Affordable Care Act
(PPACA) signed on March 23, 2010 - The health care reform law makes sweeping changes
to our nations health care system to provide
health coverage to ALL Americans effective 2014.
6Challenges to the Individual Mandate
- On June 28, 2012, the U.S. Supreme Court upheld
the entire Affordable Care Act (ACA) as
constitutional. - The main issue in the case was whether Congress
had the authority under the U.S. Constitution to
enact ACAs individual mandate that beginning in
2014 individuals will need to obtain health care
coverage or pay a penalty. - Opponents of the law argued that Congress
exceeded its constitutional authority by enacting
the individual mandate. - Since the mandate is intertwined with the rest of
ACAs reforms, the laws opponents also argued
that the entire law should be struck down.
7Challenges to the Individual Mandate Future
Implications
- Because the individual mandate was upheld, all
aspects of the health care reform law will remain
in effect. - Additionally, the remaining provisions of the
health care reform law that are not currently in
effect will continue to be implemented as
planned. - Many of the health care reform laws provisions
require agency guidance to be implemented. The
Departments of Labor (DOL), Health and Human
Services (HHS) and Treasury have been regularly
issuing guidance to implement the health care
reforms. These agencies will continue to
promulgate regulations relating to the health
care reform law.
8Challenges to the Individual Mandate Future
Implications
- Employers and health plans will be required to
comply with these to the same extent that they
are required to comply with the various
provisions of the health care reform law. - Although the Supreme Court held that the
individual mandate is constitutional, opponents
of the health care reform law may challenge other
provisions using various legal arguments. If any
further challenges arise, courts will address
these accordingly. - National Election in November can tilt the scales.
9Viewpoint - 6/28/12
- The Affordable Care Act (ACA) was largely upheld.
- Penalty is now called a tax.
- States can opt out to expand Medicaid Programs.
- What if it had been struck down? Back to square
one with 50 million uninsured and a healthcare
system that continues to increase. - Difficult to obtain insurance in the current
individual marketplace and the reason for so many
uninsured (e.g., underwriting approval, rated or
declined). New York individual rates averaging
1,400 per month for individual and 4,272 per
month for family.
10Viewpoint - 6/28/12
- ACA Affects on Individual Medical Insurance
Market. What will 2014 Look Like? - No Medical Underwriting, Waiting Periods or
Ratings. - Tax Penalties for individuals failing to Buy
Coverage. - People wont get coverage until they need it.
Can an individual apply and get coverage before
going to a doctor or hospital? - Need to work on Modifying the Individual Market.
- As passed, Legislation began at 2700 Pages. By
2018 the final Legislation will expand to 250,000
Pages.
11Viewpoint - 6/28/12
- Many tweaks needed for individual mandate to run
smoothly - Via open enrollment periods when someone can
apply for coverage - Carrier Flexibility in Offerings
- Make it tougher to apply if late or miss open
enrollment window
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13Employers must continue to comply with ACAs
reforms
- ACA changes that have already been implemented
will remain in effect, such as the requirement to
cover adult children until age 26 and the
requirement for non-grandfathered plans to cover
certain preventive care services without
cost-sharing. - ACAs provisions that are not currently in effect
will continue to be implemented as planned. For
example, effective for 2013 plan years,
participants pre-tax contributions to health
flexible spending accounts (FSAs) will be limited
to 2,500 per year.
14Employers must continue to comply with ACAs
reforms
- While it is possible that changes will be made to
ACA through future legislation or court rulings,
ACA is the health care reform law currently in
effect. - Thus, employers should continue to prepare for
ACA changes that become effective in 2012 and
2013. - Employers should also keep in mind the ACA
reforms that will take place in 2014.
15ACA Reforms - 2012 and 2013
- Form W-2 Reporting Requirements
- Beginning with the 2012 tax year, large employers
that are required to issue 250 or more W-2 Forms
must report the aggregate cost of
employer-sponsored group health coverage on
employees W-2 Forms. The cost must be reported
beginning with the 2012 W-2 Forms, which are due
in January 2013. - This requirement is optional for smaller
employers for the 2012 tax year and until further
guidance is issued. This reporting is for
informational purposes only it does not affect
the taxability of benefits.
16ACA Reforms - 2012 and 2013
- Womens Preventive Care Services
- Effective for plan years starting on or after
Aug. 1, 2012, non-grandfathered plans must cover
specific preventive health services for women
without cost-sharing, such as deductibles,
co-payments and coinsurance. These services
include well-woman visits, breastfeeding support,
domestic violence screening, STD screening and
contraceptives. Exceptions to the contraceptive
coverage requirement apply to certain exempt
religious employers.
17ACA Reforms - 2012 and 2013
- Medical Loss Ratio Rebates
- Fully insured plans may receive rebates in August
2012 if they qualify for a rebate from their
health insurance issuers due to the medical loss
ratio (MLR) rules. The MLR rules require
insurance companies to spend a certain percentage
of premium dollars on medical care and health
care quality improvement, rather than
administrative costs. - Employers may receive rebates from issuers in the
form of a premium credit, lump-sum payment or
premium holiday, if permissible under state law.
Any portion of a rebate that is a plan asset must
be used for the exclusive benefit of the plans
participants and beneficiaries. This may include,
for example, reducing participants premium
payments.
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18ACA Reforms - 2012 and 2013
- Summary of Benefits and Coverage
- Plans and insurance issuers must provide a
summary of benefits and coverage (SBC) to
participants and beneficiaries. The SBC is
intended to provide simple and consistent
information about health plan benefits and
coverage in plain language. - Plans and issuers must provide the SBC to
participants and beneficiaries who enroll or
re-enroll during an open enrollment period
beginning with the first day of the first open
enrollment period that begins on or after Sept.
23, 2012.
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19ACA Reforms - 2012 and 2013
- FSA 2,500 Contribution Limit
- Effective for plan years beginning on or after
Jan. 1, 2013, an employees salary reduction
contributions to a health FSA offered under a
cafeteria plan are limited to 2,500.
20ACA Reforms - 2012 and 2013
- Elimination of Retiree Drug Subsidy Deduction
- Employers that receive the Medicare Part D
retiree drug subsidy have been able to take a tax
deduction for their prescription drug costs,
including costs attributable to the subsidy.
Also, these employers do not have to pay tax on
the drug subsidy amount. Effective for 2013, the
deduction for the retiree drug subsidy will be
eliminated.
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21ACA Reforms - 2012 and 2013
- Additional Medicare Tax Withholding
- Effective Jan. 1, 2013, an additional 0.9
Medicare tax will apply to high-income
individuals. - Employers are required to withhold the additional
Medicare tax on an employees wages in excess of
200,000 (250,000 for married couples filing
jointly).
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22ACA Reforms - 2012 and 2013
- Health Insurance Exchanges Notice of
Availability - Employers must provide all new hires and current
employees with a written notice about ACAs
health insurance Exchanges and the consequences
if an employee decides to forgo
employer-sponsored coverage and purchase a
qualified health plan through an Exchange. - This notice requirement generally becomes
effective as of March 1, 2013. The Department of
Health and Human Services (HHS) has indicated
that it intends to issue model Exchange notices.
More agency guidance is also expected on this
notice requirement.
23ACA REFORMS - 2012 AND 2013 Nondiscrimination
Rules for Fully Insured Plans
- Effective date delayed for regulations.
Important to review each renewal date. - Fully-insured plans must follow rules regarding
nondiscrimination in favor of highly-compensated
employees - Cannot discriminate with respect to eligibility
or benefits (e.g., Doesnt allow for Class
Carve-Outs. Must be consistent on contributions
toward cost of insurance paid by Employer, etc.) - Highly Compensated Employees (Testing Applies)
- 5 highest paid officers, more than 10
shareholder, or highest paid 25 of all
employees
24ACA Reforms 2014
- Additional ACA coverage mandates and reforms
become effective in 2014. - For example, group health plans may not
- Impose pre-existing condition exclusions on any
covered individual, regardless of the
individuals age - Have a waiting period for coverage that exceeds
90 days or - Apply any annual limits on essential health
benefits.
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25ACA Reforms 2014
- ACAs state-based insurance Exchanges are
scheduled to be operational. - Also in 2014, the individual mandate will become
effective, as will ACAs pay or play penalties
for employers. Under the pay or play rules,
certain employers with at least 50 full-time
equivalent employees will face penalties if one
or more of their full-time employees obtains a
premium credit through an Exchange. An individual
may be eligible for a premium credit either
because the employer does not offer health care
coverage or the employer offers coverage that is
either not affordable or does not provide
minimum value.
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26(No Transcript)
27Health Care Reform What Does it Mean for You?
- How health care reform legislation affects you
varies greatly depending on your age, who you
work for and many other factors. - So what does it mean for you? The following is a
list of how health care reform affects a number
of common categories.
28Health Care Reform What Does it Mean for You?
- The 65 now receive
- Free preventive services under Medicare
- Once those with Medicare prescription drug
coverage enter the doughnut hole coverage gap,
they will be entitled to 50 percent off certain
brand-name medications. - Medicare beneficiaries earning 85,000 or more
will pay higher Part B premiums until 2019. - Those with Medicare Advantage plans may lose some
benefits or experience an increase in
co-payments.
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29Health Care Reform What Does it Mean for You?
- Employees of a large company
- Employers with 50 or more employees will be
required to provide coverage or pay a penalty
starting in 2014. Existing coverage packages will
be grandfathered in, but new plans have to meet
minimum requirements.
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30Health Care Reform What Does it Mean for You?
- Low-income employees
- Even without children or a disability, those
among the lowest-income workers will be eligible
for Medicaid as of 2014. - Those who earn less than 400 percent of the
federal poverty level (about 88,000 for a family
of four) will be eligible for subsidies to help
buy coverage. - The expansion of funding for community health
centers, designed to offer free and reduced-cost
care, will also provide relief.
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31Health Care Reform What Does it Mean for You?
- Children with a pre-existing condition
- Group health plans and health insurance issuers
may not impose exclusions on coverage for
children with a pre-existing condition. Provision
applies to all employer plans and new plans in
the individual market.
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32Health Care Reform What Does it Mean for You?
- Adults with a pre-existing condition
- Starting 2014, adults with pre-existing
conditions will be able to obtain individual
coverage through an insurance exchange. - Insurers cannot place annual or lifetime limits
on coverage, nor can they deny coverage or charge
higher premiums due to a pre-existing condition.
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33Health Care Reform What Does it Mean for You?
- Unemployed and uninsured
- Most individuals who are unemployed and uninsured
likely qualify for Medicaid under the coverage
expansion that began in 2010. - The expansion of funding for community health
centers, designed to offer free and reduced-cost
care, will also provide relief. - Certain uninsured individuals with pre-existing
conditions can obtain coverage through the
temporary high-risk pool as well (e.g., PCIP).
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34Health Care Reform What Does it Mean for You?
- Small-business owners
- Organizations with 25 or fewer workers may be
eligible for a tax credit to help provide
coverage for employees (e.g., average annual
wages of less than 50,000 per FTE). - Those with 50 or more employees must provide
benefits or incur a penalty tax starting in
2014.
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35Health Care Reform What Does it Mean for You?
- Young adults
- Children may stay on their parents policies
until age 26.
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36(No Transcript)
372014 Exchange Responsibilities
- Only Available in Exchanges
- Subsidies for individuals from 133-400 of FPL
- Small employer tax credits
Exchange Functions
Operate a toll-free telephone hotline to help users
Enroll applicants in their chosen plan
Maintain a website to sell plans
Work with federal and state agencies regarding subsidies and tax credits
Enroll eligible individuals into Medicaid
Set annual Open Enrollment Period and special Enrollment Periods
Certify and rate plans
382014 Product Framing
Plus catastrophic plan offering for individuals
younger than 30/financial hardship The benefit
requirements listed above for exchange plans will
also apply to Individual and small group fully
insured plans sold outside of the exchanges
392014 Questions Remain
- What will the Exchange look like?
- Will the Individual Exchange work?
- Will employers drop coverage and move employees
into the Exchange? - Small Group 2 100 Lives - 2016
- Will the SHOP (Small Employer) Exchange work?
- Will Anthem Blue Cross be in the Exchange?
40Individual Responsibility
- Jan. 1, 2014 Individuals must enroll in coverage
or pay a tax penalty - Penalty amount
- Greater of amount or a of income
- 2014 95 or 1
- 2015 325 or 2
- 2016 695 or 2.5
- Family penalty capped at 300 of the adult flat
dollar penalty or bronze level premium
41Family Responsibility
- Penalty amount
- Greater of amount or a of income
- 2014 285 or 1
- 2015 975 or 2
- 2016 2,085 or 2.5
- Family penalty capped at 300 of the adult flat
dollar penalty or bronze level premium
42Health Care Reform Resources
- Momentous Provides Continued Updated Resources
www.momentousins.com - The U.S. Department of Health and Human Services
maintains a website www.HealthCare.gov - The White House Website - http//www.whitehouse.go
v/healthreform - California PCIP is available at
www.pcip.ca.gov/Home/default.aspx - California Health Benefit Exchange is available
at www.healthexchange.ca.gov/Pages/Default.aspx
43Additional Resources Posted on www.momentousins.co
m By Monday, July 16th
- Todays PowerPoint Presentation
- Health Care Reform Timeline 2010 2018
- Medical Loss Ratio Rules
- Health Care Reform General QA for Employers
- State of Employment Laws California Health Care
Reform - Health Care Reform Who, What, When
- IRS Provides Guidance on 2,500 Health FSA Limit
effective January 1, 2013 - Health Care Reform Common Acronyms
www.momentousins.com
44Questions? Please feel free to ask now and/or
contact Momentous directly at Sherrie Zenter
szenter_at_mmibi.com P 818-933-2739 Jill Jacoby
jjacoby_at_mmibi.com P 818-933-2778