Beginning Stages of Health Care Reform

Grandfathering Health Plans Extension of Non-Discrimination Rules 100% Preventive Care Services Prohibition of Pre-Existing Condition Exclusion Lifetime and Annual Limits Rescissions Dependent Age to 26 Appeals Patient Protection (PCP and ER) Rate Justification Cost Ratio Requirement Early Retiree Reinsurance Subsidy Program

Am I eligible? Plans in effect on March 23, 2010 will be eligible Risking Grandfathered Status What can I do for my Plan, while also maintaining the Plan’s grandfathered status?

Types of changes will cause a plan to lose grandfathered status Key point: while new plans are subject to all of the health reform rule and mandates, grandfathered plans have a reduced level of compliance... At least for now To maintain grandfathered status, the plan must provide a statement in plan materials (model notice is available) to notify participants that the plan is a grandfathered plan, and who the participant can contact for questions and complaints

Cannot “significantly” cut or reduce certain conditions or diagnoses (diabetes, HIV, etc.) Cannot decrease coinsurance levels (90% to 80%) Cannot “significantly” increase deductibles and out-of- pocket maximums (rate of inflation + 15%) Cannot “significantly” increase plan copayments Greater of $5.00 or Medical Inflation + 15% Cannot change insurance companies (carriers)

Decrease in employer contribution rate: Based on cost of coverage (decrease in employer contribution by more than 5%) Based on a formula (such as hours worked, by more than 5%) Changes in annual limits

Benefits cannot be based on wages: One of the five highest paid officers A shareholder that owns more than 10% in value of the employer’s stock Among the highest paid 25% of all employees No discrimination on eligibility

ProvisionGrandfatheredNon-Grandfathered Dependent Age 26Required Lifetime/Annual LimitsRequired No Pre-Ex for Kids under 19Required 100% Preventive CareNot RequiredRequired Patient Protection (PCP/ER)Not RequiredRequired RescissionsRequired AppealsRequired

Cost sharing cannot be applied to preventive services recommended by the U.S. Preventive Services Task Force Applies to: All plans and all funding arrangement for: New groups Non-grandfathered groups renewing 9/23/2010 or later

Cost-sharing Requirements when the Recommended Preventive Service is provided during an Office Visit Preventive Care Services Coverage: In-Network versus Out-of-Network Reason for Office VisitCost-Share Allowed on Office Visit? Primary ReasonNo Not Primary ReasonYes Type of Network UtilizationPreventive Care Services Coverage In-Network100% Covered Out-of-NetworkNo coverage required: cost-sharing allowed

Patient has the following benefits: $1,000 Deductible 80/20 In-Network Coinsurance $25 copay for In-Network Office Visits Visit #1 In-Network Provider – Dr. Greenlee Purpose: Back pain Patient ask Dr. Greenlee if he can get his flu shot while he’s there Visit #2 In-Network Provider – Dr. Greenlee Purpose: Annual Physical What does the patient owe for Visit #1 and Visit #2?

Visit #1 Dr. Greenlee’s office codes the visit with the primary reason of back pain Patient owes $25 copay for the office visit and owes nothing for the flu shot Visit #2 Dr. Greenlee’s office codes the visit as a routine preventive care Patient owes nothing

Visit #3 Preventive Service: Colonoscopy In-Network Outpatient Surgical Center Polyps found and removed Provider bills one procedure: “Colonoscopy with Polyp Removal” How is the patient’s Colonoscopy and Polyp Removal covered?

Visit #3 Provided the procedure is coded with the primary reason being a screening, it will be paid as preventive and no cost-share will apply

No waiting period for members under age 19 with pre- existing conditions No impact to Benefit Waiting Periods Pre-existing conditions may continue to apply for adults (19+) until 2014 Applies to both, grandfathered and non- grandfathered plans

1. Will the Pre-Existing Clause apply to Amy? 2. If so, for how long? 3. If and when will her Dermatologist treatment be covered? Visit #1 Amy (age 17, dependent child of employee) Regularly sees a Dermatologist Family had a four-month lapse in coverage Family is eligible for coverage 9/1/2010 Relevant Information: PPO (renewal date: 1/1/2011) 6-month Pre-Existing Waiting Period 80/20 In-Network Coverage $25 copay for In-Network Office Visits $45 copay for Specialists Eligible for benefits: 9/1/2010

Visit #1: The pre-existing clause will apply to Amy for four months At renewal, the pre-existing waiting period for members under 19 will be lifted Amy’s dermatology treatment will be a covered benefit beginning 1/1/2011 (upon group renewal)

Prohibits imposing lifetime and annual limits on the dollar value of Essential Health Benefits Allows lifetime and annual per individual dollar limits on specific covered benefits that are not EHB Applies to both, grandfathered and non- grandfathered plans

Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services Prescription drugs Laboratory services Rehabilitative services and devices Preventive and wellness services and chronic disease management Pediatric services, including oral and vision care Any other benefit that the Secretary later deems “essential”

National Medical Inflation = 4 – 5% Local Medical Trend = 10 – 12% Changes in Health Care = 1 – 2%

Ollis & Company suggests you proceed with the following steps: Meet with your Trusted Advisor and discuss with him/her what your goals are when it comes to employee benefits Create a long-term business plan centered around your employee benefits plan Look at several plan designs and funding arrangements Be proactive PRAY!

Grants for small employer wellness programs ($200M has been set aside) Over the Counter drugs no longer reimbursable through FSA, HRA or HSA unless prescribed by a physician HSA penalties for non-medical expenses increase from 10% to 20%

Credible Websites: Surveys – Place for your Contact Information The Whitlock Company 3271 E. Battlefield, Suite 300 Springfield, MO Corporate Wellness Conference October 1 st – O’Reilly Family Events Center (Drury) 7:30 – Noon Register Online at $35.00 Ollis & Company 2274 E. Sunshine Springfield, MO