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Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 1 2013 Public Transportation Symposium Presented by: Melanie Curtice, Partner.

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Presentation on theme: "Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 1 2013 Public Transportation Symposium Presented by: Melanie Curtice, Partner."— Presentation transcript:

1 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA Public Transportation Symposium Presented by: Melanie Curtice, Partner Stoel Rives LLP Health Care Reform: Preparing for 2014 – Are You and Your Employees Ready? MONDAY, AUGUST 26, 2013 SPOKANE, WA

2 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 2 Today’s Topics First four years of health care reform (“HCR”) –Rules already in effect for group health plans (“GHPs”) New GHP fees and 2014 GHP changes Individual mandate Pay-or-play penalties 2014 restrictions on HRAs

3 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 3 First Four Years of HCR No aggregate lifetime dollar limits –Annual dollar limits on essential health benefits (“EHBs”) restricted Children eligible for GHPs until 26 –GHP coverage tax-free through end of year in which child turns 26 No pre-existing condition exclusions (“PCEs”) for children under 19

4 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 4 First Four Years of HCR Summary of benefits and coverage (“SBC”) Health FSA limit: $2,500 (indexed) per employee per plan year W-2 reporting: cost of health coverage reported in Box 12, Code DD Medical loss ratio rules Restrictions on rescissions

5 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 5 First Four Years of HCR Severe restrictions to keep GHPs grandfathered Non-grandfathered GHPs –New internal and external review rules –Rules on designation of primary care physicians –Emergency room payment requirements

6 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 6 First Four Years of HCR Non-grandfathered GHPs –Preventive care covered at 100% –Expanded preventive care rules for women Contraceptive care, including sterilization –Preventive care OTC items must be covered without cost-sharing if prescribed Folic acid Aspirin

7 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 7 First Four Years of HCR Supreme Court ruling on PPACA –Still various court challenges to PPACA provisions Early Retiree Reinsurance Program (“ERRP”) has come and gone 2013: Medicare tax increases for high-income taxpayers and deduction for Medicare retiree drug subsidy eliminated

8 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 8 Later in 2013: Exchange Notice Notice to employees and new hires on exchanges –Explanation of exchange and services provided –Eligibility for premium tax credits –Impact of purchasing through exchange Distributed by Oct. 1, 2013, to all existing employees and new hires as of Oct. 1, 2013 –Beginning of open enrollment period for exchanges

9 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 9 Later in 2013: Exchange Notice Applicable to employers subject to Fair Labor Standards Act Distributed to all employees –Even if not eligible for health plan (e.g., part-time employees) –No distribution to dependents –Distributed by first-class mail or under DOL safe harbor for electronic delivery

10 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 10 Later in 2013: Exchange Notice Two model notices are available –Employers offering health plan –Employers not offering health plan Notices require specific information on employer and employer’s health plan New model COBRA election notice also available –Changes relating to PPACA

11 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 11 Later in 2013: HHS HIPAA Certification HIPAA’s electronic data interchange rules –Part of HIPAA’s administrative simplification rules –Require standardized format, data content, and code set requirements for electronic transactions by covered entities (such as GHPs) –GHPs required to file certification with HHS documenting compliance by Dec. 31, 2013

12 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 12 Later in 2013: PCO Fee Annual fee to fund a Patient-Centered Outcomes Research Institute/Trust Fund Assessed based on number of average lives covered –$1/covered life for 2012 –$2/covered life (indexed) for First PCO fee due for most GHPs in July 2013 –Excise taxes reported on IRS Form 720 (now available)

13 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 13 Later in 2013: PCO Fee Responsible parties –Plan sponsor (self-funded plans) –Insurer (insured plans) Calculating covered lives in self-funded GHPs –Form 5500 method –Actual count method –Snapshot method –Transition relief: any reasonable method allowed for 2012 plan year

14 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 14 Later in 2013: PCO Fee Many GHPs excepted –Ex-pats, stop-loss insurance –HRA integrated with self-funded GHP –HIPAA-excepted benefits Health FSAs, on-site clinics Limited-scope dental and vision, long-term care –EAPs, HSAs, wellness programs

15 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 15 Later in 2013: PCO Fee PCO fee is applicable to: –Retirees and retiree-only GHPs –COBRA participants –Stand-alone HRA or HRA/insured GHPs Not payable from plan assets PCO fee is tax deductible as ordinary and necessary business expense

16 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : TRP Fee Transitional Reinsurance Program (“TRP”) fee –To assist insurers who provide individual insurance to high-cost enrollees –To repay federal government for ERRP HHS will collect $25B from 2014 to 2016 from health insurers and self-funded GHPs –TRP fee is per capita (per covered life)

17 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : TRP Fee TRP fee for 2014 –$5.25 per month (or $63 per year) per covered life in major medical coverage –TRP fee will be lower in 2015 and 2016 Most GHPs exempt from PCO fee also exempt from TRP fee –Difference: TRP fee not payable for persons whose coverage is secondary to Medicare Retirees and COBRA participants

18 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : TRP Fee Insurance company pays for insured GHPs, plan administrator for self-funded Covered life count due to HHS by Nov. 15, 2014 –Use same counting methods as PCO fee (but just for first nine months of the year) May use different methods for TRP fee and PCO fee –HHS calculates fee and sends bill by Dec. 15, 2014 –Payment due within 30 days –Payable from plan assets

19 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Clinical Trials Non-grandfathered plans may not deny right to participate in clinical trials –Must cover routine patient costs provided to participants not in a clinical trial –May not discriminate against the individual based on participation in the trial –Good-faith compliance, no regulations before 2014

20 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Provider Discrimination Cannot discriminate against any health care provider acting within the scope of the provider’s license –Does not require plans or insurers to accept all types of providers into a network –Does not apply to provider reimbursement rates –Good-faith compliance, no regulations before 2014

21 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : SBC New SBC template for 2014 –Adds data elements requiring plan to disclose whether it Constitutes minimum essential coverage; and Provides minimum value –No new coverage examples

22 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : 90-Day Waiting Period Maximum 90-day waiting periods –Waiting period is a period of time that must pass before an otherwise eligible person is allowed to enroll –Proposed regulations state that eligibility conditions (full-time status) will not count toward 90 days –No requirement to provide coverage to part-time employees

23 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : 90-Day Waiting Period Maximum 90-day waiting periods –No violation if employee is slow to enroll –Enrollment must be available by the 90 th day, even if the middle of the month Many GHPs are changing to the first day of the month following 60 days –Cumulative service hours of not more than 1,200 acceptable as eligibility requirement Enrollment must be offered within 90 days

24 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Cost-Sharing Limits Cost-sharing limits (non-grandfathered) –Out-of-pocket maximums may not exceed the maximums of HSA-eligible high-deductible GHPs (2014: $6,350/single, $12,700/family) –HCR’s limits on deductibles ($2,000/single, $4,000/family) only apply to the small group market (and not to self-funded or insured GHPs in the large group market)

25 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : PCEs, Adult Children No PCEs for anyone (not just children) –HIPAA certificates of creditable coverage no longer required after Dec. 31, 2014 Grandfathered plans must cover all adult children to age 26, even if the child has access to health coverage through the child’s own employer or the employer of the child’s spouse

26 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Individual Mandate Individuals must pay tax if they, their spouses, or their tax dependents do not have “minimum essential coverage” –Greater of percentage of income OR dollar amount multiplied by number of uncovered family members 2014: 1% or $95 (not to exceed 300% of $95) 2015: 2% or $ : 2.5% or $695 Capped at national average bronze-level plan premium Flat dollar amount for individuals under 18 is half of these amounts

27 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Individual Mandate Minimum essential coverage includes –Any employer-sponsored GHP –Any government-sponsored plan, including Medicare Part A, Medicaid, CHIP, TRICARE –Policies in the individual market –State risk pool –Medicare Advantage –Self-funded student plans

28 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Individual Mandate Exemptions for: –Religious conscience –Health care sharing ministry participants –Taxpayers with income below filing threshold –Individuals who cannot afford coverage (contribution exceeds 8% of household income) Compare to other affordability tests (9.5% of household income; 9.5% of wages) –Members of Indian tribes

29 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Premium Tax Credit Federal subsidy to help individuals purchase insurance at the exchanges –Individuals eligible for credit may also qualify for cost-sharing reductions (lower deductibles and co-pays) –HHS plans to pay premium tax credit amount directly to insurer to partially pay premiums when due –Lawsuit challenging whether subsidy is available in exchanges operated by federal government PPACA says subsidies only available in state exchanges

30 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Premium Tax Credit Eligibility for premium tax credit –U.S. citizens and legal residents whose income is between 100% (133%) and 400% of federal poverty level $46,000/individual, $94,000/family of four But not eligible if: –Offered enrollment in an “affordable” employer-sponsored GHP providing minimum value (“MV”); Offer also disqualifies all eligible dependents, even if dependent coverage not affordable –Actually enrolled in an employer-sponsored GHP (regardless of MV or affordability); or –Eligible for other coverage (such as Medicare Part A, Medicaid)

31 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Premium Tax Credit Minimum value: GHP pays at least 60% of the total allowed costs of GHP benefit –To determine MV HHS has issued an MV calculator for use for 2014 HHS checklists Actuary opinion of MV Affordable coverage: cost for employee-only coverage of lowest GHP option does not exceed 9.5% of household income –No affordability test for family coverage –Compare pay-or-play rule: 9.5% of wages

32 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Pay-or-Play Penalties Employer pay-or-play penalties apply to “applicable large employers” –Averaged 50 or more full-time equivalents on business days during previous calendar year Full-time: 30 hours/week or 130 hours/month –Aggregation rule applies: count employees of all employers in same controlled group Equivalents count for determining employer size but not for pay-or-play penalty amounts

33 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Pay-or-Play Penalties Two types of pay-or-play penalties –No coverage penalty: IRC § 4980H(a) –Insufficient coverage penalty: IRC § 4980H(b) Only applicable to full-time employees (“FTEs”)

34 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): No Coverage Penalty Employers who do not offer “minimum essential coverage” to at least 95% of FTEs and their children –Children by birth or adoption –Foster children –Stepchildren First federal mandate to cover children of domestic partners or same-sex spouses? One or more FTEs receive a premium tax credit at exchanges “Offer” means chance to enroll at least once a year

35 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): No Coverage Penalty Minimum essential coverage (“MEC”) –For this penalty, no requirement that MEC be affordable or provide minimum value However, if the coverage is not affordable or does not provide minimum value, the employee must be able to reject coverage at least once a year –Most coverage, other than HIPAA-excepted benefits, qualifies under proposed regs How minimal can this coverage be?

36 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): No Coverage Penalty Calculating the no coverage penalty –Monthly penalty payment of $2,000 per FTE (after subtracting the first 30 FTEs), divided by 12 –Aggregation rules do not apply Exemption for first 30 FTEs is split among the companies in the controlled group based on percentage of FTEs of controlled group each company employs

37 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): No Coverage Penalty No Coverage Penalty Aggregation Example Controlled Group has total of 150 FTEs No. of FTEsPercentage Exemption Company A90 FTEs 60%18 FTE Company B30 FTEs20% 6 FTE Company C30 FTEs20% 6 FTE Monthly No Coverage Penalties Company A$2,000 X 72 FTE divided by 12 = $12,000/month ($144,000/year) Company B$2,000 X 24 FTE divided by 12 = $4,000/month ($48,000/year) Company C$2,000 X 24 FTE divided by 12 = $4,000/month ($48,000/year)

38 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Insufficient Coverage Penalty Imposed when these requirements are met: –Employer offers coverage to 95% or more of FTEs –FTE receives a premium tax credit –Monthly penalty is lesser of following, divided by 12: $2,000 per FTE (after subtracting first 30 FTEs) $3,000 per FTE receiving premium tax credit

39 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Insufficient Coverage Penalty No insufficient coverage penalty if FTE was offered affordable GHP coverage with MV Affordability rule for employers (in lieu of 9.5% of household income rule): the lowest cost option for employee-only coverage does not exceed –9.5% of employee’s W-2 wages –9.5% of employee’s monthly pay –9.5% of federal poverty line for a single individual –Not applicable to dependents’ coverage and no requirement for employer to subsidize if 9.5% test is met

40 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Minimum Value MV percentage –Use anticipated spending for a standard population (developed by HHS based on typical plans) –Take into account benefits provided by the plan that are included in any one of the EHB-benchmark plans –Employer HSA contributions –New HRA contributions that can be used only for cost-sharing (not to pay premiums) –Wellness incentives not counted unless non-smoking incentive

41 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Affordability Calculation May consider –New HRA contributions that can be used for cost-sharing or to pay premiums –Non-smoking incentives, but not other wellness incentives

42 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Full-Time Employee Common-law employee Excluded from the definition are: –Leased employees (for more than one year) –Sole proprietor –Partner in a partnership –2% S corporation shareholder –Foreign employees with no U.S.-sourced income

43 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Full-Time Employee Employee working 30 hours per week or 130 hours per month is considered FTE –Employer must count all paid time off –Special rules for some unpaid leave (FMLA, USERRA, jury duty) –Special rules for determining working hours for certain employees Non-hourly and commissions-based employees School employees

44 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): FTEs and New Hires FTEs must be offered coverage to avoid pay-or-play penalties –New FTE hires must be offered coverage within 90 days of hire Employees in part-time positions need not be offered coverage

45 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): VHS Employees Proposed regulations for variable hour and seasonal (“VHS”) employees –Variable hour employee: employer does not know on hire date whether employee will be FTE –Seasonal employee Agricultural employees Seasonal employees in department stores Waiting for more guidance on how long “season” may be –4-6 months likely maximum –9-month school employees are not seasonal

46 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): New VHS Employees Proposed regulations for new VHS employees –Initial measurement period (“IMP”) to measure how many hours employee is working –3- to 12-month IMP allowed –At end of IMP, employer determines whether new VHS employee was FTE during IMP

47 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): New VHS Employees If new VHS employee is determined to be FTE during IMP –Employer must offer coverage within 90 days of end of IMP (or 13 months from the date of hire, if sooner) (“Administrative Period”) to avoid pay-or-play penalties –Once it begins, coverage must last for “initial stability period” regardless of the number of hours worked during stability period

48 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): New VHS Employees Length of initial stability period (“SP”) after IMP –If IMP was six months or less, initial stability period must be at least six months –If IMP was longer than six months, initial stability period must be at least as long as IMP If VHS employee is terminated during SP, GHP would offer COBRA

49 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): New VHS Employees If new VHS employee is determined not to be FTE during IMP, coverage need not be offered during the stability period to avoid pay-or-play penalties –However, if VHS employee is hired into a full-time position during administrative or stability periods, employer must offer coverage within 90 days of hire into full-time position

50 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Example: New VHS Three-month IMP, one-month administrative period, six-month initial SP –Employee hired Feb. 1, 2014 –IMP from Feb. 1 to Apr. 30, 2014 –Administrative period from May 1 to May 31, 2014 –Stability period from June 1 to Dec. 31, 2014

51 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Measuring FTEs in SMP Proposed regulations allow employer to select standard measurement period (“SMP”) of 3-12 months –Fixed period of time (such as Oct. 1 to Sept. 30) each year –All on-going employees (not just VHS employees) measured

52 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Measuring FTEs in SMP Within 90 days of end of SMP, employees determined to be FTEs must be eligible for GHP during stability period in order to avoid pay-or-play penalties –If SMP is six months or less, stability period must be at least six months –If SMP is longer than six months, stability period must be at least as long as IMP

53 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): SMP Example Nine-month SMP from Jan. 1 to Sept. 30 of each year 90-day administrative period from Oct. 1 to Dec. 31 of each year 12-month stability period from Jan. 1 to Dec. 31 of the following year

54 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Different Periods Setting different measurement/stability periods allowed for different classifications of employees –For union/non-union –Salaried/hourly –Employees of different entities –Employees in different states

55 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA (2015): Stability Period Issues Eligibility must continue during stability period regardless of hours worked –What if employee’s hours drop so that the employee cannot afford the coverage? Expected that IRS will issue guidance that this is a change event under cafeteria plan rules If employee is eligible, but does not pay premium, no qualifying event under COBRA –Must COBRA still be offered at end of stability period?

56 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Required HRA Integration No aggregate lifetime dollar limits allowed No annual dollar limits on essential health benefits allowed HRAs would violate these rules –Previous waiver program for HRAs and other GHPs (mini-meds) ends in 2014

57 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Required HRA Integration HRAs will violate rules unless “integrated” with a GHP without dollar limits What does “integration” mean? –HRA limited to employees enrolled in a GHP Mere eligibility for GHP is not enough Enrollment in an individual policy is not enough Can HRA be integrated with more than one GHP?

58 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 58 Issues on Delayed List Automatic enrollment for large employers –Delayed until after 2014 –Enforcement moved to EBSA Nondiscrimination rules for insured GHPs –PPACA requires these rules for non-grandfathered GHPs to be “similar” to the rules for self-funded GHPs –Enforcement delayed until regulations issued

59 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 59 Non-HCR Issues for 2013 HIPAA Omnibus Rule action items –Amend business associate agreements –Revise GHP’s notice of privacy practices –Revise GHP’s privacy and security policies –Revise GHP’s breach notification policies –Retrain your workforce

60 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 60 Non-HCR Issues for 2013 Possible demise of DOMA –Changes how GHP will be taxed for same-sex spouses (and possibly registered domestic partners in some states) –May require summary plan description/plan document changes –Retroactivity?

61 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 61 Non-HCR Issues for 2014 New HIPAA wellness program regulations –Applicable to a wellness program that is, or is part of, a group health plan Three types of programs –Participatory program –Health-contingent: activity-only –Health-contingent: outcome-based

62 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 62 Non-HCR Issues for 2014 Major changes from previous wellness program rules –Health-contingent program’s maximum reward increased from 20% to 30% of total premium (50% for non-smoking rewards) –Health-contingent outcome-based programs must offer alternative method to all who do not otherwise qualify for reward and must pay for the cost of the alternative method

63 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 63 Non-HCR Issues for 2014 Example: reward for non-smokers –All smokers must be offered a reasonable alternative (smoking cessation program) –Plan must identify and pay the cost of smoking cessation program –Smoker gets reward upon completion of program, whether or not smoker quit smoking No incentive required if smoker dropped out of program Repeat next year

64 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : State Exchanges Mechanism for organizing the health insurance marketplace to help consumers and small businesses access affordable insurance coverage Mitigate adverse selection –Essential health benefits for all plans –Single risk pool for individual market plans –Same plan, same premium (inside and outside)

65 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : State Exchanges All states required to have one by 2014 –State exchange –Partnership exchange –Federally facilitated exchange First open enrollment period begins Oct. 1, 2013, for Jan. 1, 2014, coverage

66 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Exchange Functions Certify plans as Qualified Health Plans Operate internet portal with standardized comparative information Provide telephone assistance Rate insurance plans Use standardized format for presenting plan options Inform individuals of eligibility for health programs and subsidies Provide electronic calculator to determine actual cost of coverage Certify that individuals are covered Inform employers of employees who cease coverage Establish a Navigator program

67 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Exchange Basics All plans offered must offer EHBs Cost-sharing limitations Four categories of coverage by actuarial value (“AV”) –Bronze = 60%– Silver = 70% –Gold = 80%– Platinum = 90% “Catastrophic” plans for select groups

68 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : Silver/Bronze Illustration TierActuarial Value DeductiblePatient Coinsurance Out-of-Pocket Limit (HSA) Bronze 160%$4,37520%$6,350 Bronze 260%$3,47540%$6,350 Silver 170%$2,05020%$6,350 Silver 270%$65040%$6,350 Produced by Kaiser based on federal guidance Deductible applies to all services except preventive (no cost sharing allowed)

69 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA : SHOP Exchange Small Business Health Options Program (“SHOP”) for employer with 2-50 employees States may choose to merge with individual exchange Employer decides level of coverage –Employees pick any plan offered within level

70 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 70 But Wait, SHOP Somewhat Delayed “Employee choice” provision in the SHOP exchange implementation has been delayed one year Federal SHOP exchanges will have only one coverage option until 2015

71 Health Care Reform: Preparing for 2014 MONDAY, AUGUST 26, 2013 SPOKANE, WA 71 QUESTIONS? Please contact: Melanie Curtice (206)


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