Summary About Health Care Reform

Summary About Health Care Reform

Part II.

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

IN 2011:

• Medical loss ratio (MLR). A Health insurer must publicly report on its MLR and spend at least 80 percent of small Business group 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 Health Savings Account (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 plan market reforms are likely to cause adverse selection in the large employer group health insurance market or to encourage small and midsize employers to self-insure. HHS and the Department of Labor must also collect information on self-funded 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 health insurance benefits and health insurance coverage explanations. Within 24 months of enactment, group health insurance plans must provide enrollees and applicants with coverage documents that meet these standards.

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 per participant through 2019).

IN 2013:

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

IN 2014:

The federal definition of a small group employer is defined as an employer with 1-100 employees. States can modify the definition to 1-50 employees until January 1, 2016.

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

• Annual limits. Annual limits on essential health insurance benefits are prohibited.

• Guaranteed issue. Health insurance companies must accept every employer who applies for health insurance coverage.

• Rating restrictions. Rating restrictions go into effect for new fully insured small group health insurance plans. Insurance companies cannot base premiums on health status, claims experience or gender. Health Insurance Premiums can only vary by:

– Age (no more than 3:1)

– Geography

– Family size

– Tobacco use (no more than 1.5:1)

• Merged markets. States are allowed to merge the individual and small group health insurance markets.

• Clinical trials. Health Insurance 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 group health insurance and private individuals health insurance to buy coverage.

• Essential benefits. Essential health insurance benefit plan is created, which mandates the level of health insurance benefits that must be included in plans offered in the exchange, as well as in the private individual health insurance and small group health insurance markets outside the exchange. Deductibles limited to $2,000 for individuals and $4,000 for families in the small employer group health insurance market (self-funded plans and grandfathered plans are exempt from this requirement).

• 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.5

• Wellness. Expands health insurance plan wellness incentives up to 30 percent of total coverage costs (up to 50 percent with HHS approval).

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

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