Facts About Healthcare Reform Bill

Facts About Healthcare Reform Bill

Part VI

Health insurance plan changes that impact individuals and employers (both fully insured and self-funded plans unless otherwise noted) over the next few years:

High-Level Overview Health Reform Law: Key Provisions for Large Employers IN 2011:

• Medical loss ratio (MLR). An insurer must publicly report on its MLR and spend at least 85 percent of large group health insurance premiums on medical services or provide rebate payments to enrollees.

• Spending accounts. Health savings accounts (HSAs) and flexible spending accounts (FSAs) may no longer be used to purchase over-the-counter drugs unless prescribed by a doctor. increases tax for nonqualified HSA withdrawals from 10 percent to 20 percent, and for Archer MSA withdrawals from 15 percent to 20 percent.

• HHS studies. HHS is required to study the group health insurance plan markets to compare employer characteristics and determine whether the new health insurance market reforms are likely to cause adverse selection in the large group market or to encourage small and midsize employers to self-insure. HHS and the Department of Labor must also collect information on self-funded health insurance plans. These studies could lead to additional employer reporting requirements.

• Uniform explanation of coverage. Within 12 months of the law's enactment, HHS, in consultation with the National Association of Insurance Commissioners, will develop uniform standards and definitions for summaries of benefits and coverage explanations. Within 24 months of enactment, group health insurance plans must provide enrollees and applicants with coverage documents that meet these standards. Additionally, enrollees must be notifi ed 60 days in advance of any material modification to coverage that wasn't included in the most recent summary.

IN 2012:

• Comparative effectiveness fee. A new fee is imposed on group health insurance plans to fund comparative effectiveness research ($1 per participant through 2013; $2 through 2019).

• Release of Medicare claims data. The private sector may purchase standardized data extracts of Medicare Parts A, B and D claims data to combine with their own claims data to evaluate provider performance measures on quality, efficiency, and the effectiveness of care.

IN 2013:

• FSA contributions. Contributions to flexible spending accounts are limited to $2,500 a year.

IN 2014:

• Pre-existing conditions. Group health insurance plans can no longer impose pre-existing conditions exclusions for any person of any age.

• Annual limits. Annual limits on essential health benefits are prohibited.
• Guaranteed issue. Health insurance companies must accept every employer who applies for health insurance coverage.
• Clinical trials. Coverage of routine patient care costs is mandated for participation in approved clinical trials (does not apply to grandfathered plans).

• Exchanges. State health insurance exchanges are up and running for small businesses and individuals. States can allow large employers to participate beginning in 2017. (Note: the federal definition of a large employer is an employer with 101 or more employees. States can modify the definition to 51 or more employees until January 1, 2016).

• Cost-sharing limits. Cost sharing imposed under group health insurance plans is limited to current health savings account amounts (does not apply to grandfathered plans).

• Waiting periods. Waiting periods cannot exceed 90 days.
• Wellness. Expands health insurance plan wellness incentives up to 30 percent of total coverage costs (up to 50 percent with HHS approval).

• Essential benefits. Essential benefit plan is created, which mandates the level of benefits that must be included in health insurance plans offered in the exchange, as well as in the individual and small group health insurance markets outside the exchange. (Self-funded health insurance plans and grandfathered plans are exempt from this requirement).

• Reinsurance. A temporary reinsurance program will be established for the individual market and funded by individual and group health insurance plan assessments ($25 billion in 2014-2016).

IN 2018:

• Taxes. A new excise tax goes into effect for high-value, "Cadillac" health insurance plans: 40 percent for amounts over $10,200 for individuals and $27,500 for family plans, paid by health insurance companies and plan administrators.

Not to be used for implementation purposes IMPORTANT: This document is designed to provide a general overview of the new health reform law. It does NOT attempt to cover all of the law's provisions and should NOT be used as the legal advice for implementation activities. We encourage you to seek any professional advice, including legal counsel, regarding how the new requirements will affect your specific plan.

This summary provided by Humana One Health Insurance and Humana Small Business Health Insurance.