1. ESB-1442-1211

2. From Health Care Reform This is only a brief summary that reflects our current understanding of select provisions of the law, often in the absence of regulations. All of the interpretations contained herein are subject to change as the appropriate agencies publish additional guidance.

3. ESB-1442-1211 Provide a road map for Health Care Reform Gain an understanding of the key administrative obligations affecting employers Develop an immediate action plan

4. ESB-1442-1211 1,000 pages of legislation drafted and enacted very quickly Rules are still being developed – Federal agency guidance – Role of states

5. ESB-1442-1211 Plan design mandates Health FSA/HRA/HSA provisions Plan sponsorship provisions Administrative requirements

6. ESB-1442-1211 Notice and disclosure requirements Enrollment provisions Reporting obligations Nondiscrimination testing Fee payment

7. ESB-1442-1211 Grandfathered plans must maintain records documenting the terms of coverage in effect on March 23, 2010 Must be available to agencies and participants upon request Must be sent to any new insurance carrier

8. ESB-1442-1211 Grandfathered plans must include notice of grandfathered status in all benefit summaries Model language available Effective for plan years on/after March 23, 2010

9. ESB-1442-1211 1 st plan year on/after Sept. 23, 2010: – Lifetime limits – Adult child eligibility All plan years on/after Sept. 23, 2010: – Right to select PCP – Direct access to OB/GYN – Model language available

10. ESB-1442-1211 1 st plan year on/after Sept. 23, 2010 Required to offer a minimum of 30 days for open enrollment – Special enrollment applied for individuals excluded from coverage due to the imposition of lifetime limits or age Individuals and family members could enroll

11. ESB-1442-1211 Fully-insured non-grandfathered plans may not discriminate in favor of highly compensated individuals Self-funded plans are currently subject to similar rules, regardless of grandfathered status

12. ESB-1442-1211 Effective for plan years on/after Sept. 23, 2010 – IRS has delayed enforcement pending publication of regulations Nondiscrimination testing may be required

13. ESB-1442-1211 Non-grandfathered plans must make disclosures to HHS and public – E.g., claims payment policies, enrollment data, financial disclosures, cost-sharing Effective for plan years on/after Sept. 23, 2010 – Regulations are expected to clarify required content and effective date

14. ESB-1442-1211 Plan sponsors and insurers must pay a fee to help fund comparative effectiveness research – $1 per individual for 1 st plan year after Sept. 30, 2011 – $2 per individual for the next year – Increases based on percentage increase in per capital National Health Expenditures in subsequent years Watch for details on how/when to pay

15. ESB-1442-1211 Effective for the 2012 tax year – Employers that filed fewer than 250 W-2s in 2011 are not required to report until future notice Must report health care costs, including: – Employer and employee contributions – Pre-tax and after-tax contributions in most cases

16. ESB-1442-1211 4 methods to calculate cost of coverage: – Premium Charged Method – COBRA Applicable Premium Method – Modified COBRA Premium Method – Composite Rate

17. ESB-1442-1211 Coverage subject to W-2 reportingCoverage exempt from W-2 reporting Employer- sponsored group health coverageHRA Allocations Employer contributions to Health FSAEmployee contributions to a Health FSA* Gap CoverageHealth Savings Account contributions Hospital Indemnity Coverage if pre-taxArcher MSA contributions Fixed Indemnity Coverage if pre-taxStand Alone Dental Coverage Specified Disease Coverage (e.g., cancer, critical illness) if pre-tax Stand Alone Vision Coverage On-site clinicLong Term Care Coverage Employer-sponsored wellnessDisability Coverage Accident, including AD&D * Requires an additional calculation

18. ESB-1442-1211 Action Steps – Contact payroll – Determine which coverages are reportable – Determine reportable cost – Calculate amount to report per employee Worksheet is available at www.HCReducation.com/W2reporting

19. ESB-1442-1211 Plan sponsor must provide a Summary of Benefits and Coverage (SBC) and Uniform Glossary to plan participants Fill in template Distribute with enrollment materials, following special enrollment events, and upon request Required after final regulations are published

20. ESB-1442-1211

22. If make certain modifications to health plan coverage not reflected in distributed SBC Must send notice of changes 60 days in advance of effective date May simply distribute updated SBC Required after final regulations are published

23. ESB-1442-1211 Employers must provide information about the state Exchanges – To all employees by March 1, 2013 – To all subsequent new hires Model language will likely be provided If plan’s actuarial value is less than 60%, must describe availability of premium assistance

24. ESB-1442-1211 Plan sponsors of non-grandfathered plans must report on certain quality-related programs – E.g., disease management Must be issued annually to HHS and to employees during open enrollment Effective date to be established by regulations

25. ESB-1442-1211 Plan sponsors with 200+ full-time employees must automatically enroll newly eligible full- time employees Must provide notice Employees may opt out Effective date to be established by regulations, expected to be published by 2014

26. ESB-1442-1211 Effective January 1, 2014 Employers with 50+ full-time employees must report extensive details about the employer’s health coverage and workforce to the IRS Certain reporting is also required for smaller employers that provide minimum essential coverage

27. ESB-1442-1211 Frequency is to be determined Must provide a written statement to each employee named in the return each year

28. ESB-1442-1211 Effective 2018: 40% non-deductible excise tax Imposed on aggregate value of health coverage that exceeds threshold amounts Plan sponsors must: – Calculate value of coverage on a per month basis – Notify entity required to pay and IRS

29. ESB-1442-1211 General thresholds: – $10,200 individual coverage – $27,500 family coverage Indexed for inflation Applies for specified health coverage

30. ESB-1442-1211 Ensure benefit summaries include required notices – Grandfathered status – Selection PCP – Direct access to OB/GYNs Maintain documentation supporting grandfathered status

31. ESB-1442-1211 Create a plan for complying with the W-2 reporting requirements Watch for guidance on: – Paying comparative effectiveness research fee – Nondiscrimination rules – Transparency disclosures – Summary of Benefits and Coverage distribution

32. ESB-1442-1211 Thank you! This is only a brief summary that reflects our current understanding of select provisions of the law, often in the absence of regulations. All of the interpretations contained herein are subject to change as the appropriate agencies publish additional guidance.