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.

Summary Health Care Reform

Summary Health Care Reform

Part IV.

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

Overview

The health reform package is made up of two parts: a bill that passed the Senate on Christmas Eve, passed the House on March 21, and was signed into law by the President on March 23, and a second piece of legislation: the House’s reconciliation bill, which makes changes to the original

law, passed both chambers on March 25, and was signed by the President on March 30. Many of the provisions in the law will not take effect for several years. At the earliest, provisions that affect employer-sponsored health plans will take effect six months from the date of enactment – in late September. Even then, those early provisions will not affect plans until they renew for the next plan year.

The health reform law has thousands of pages and hundreds of provisions. So it’s important to remember that before many of those provisions are put in place, additional laws and regulations will need to be developed. That could be a lengthy process. Here are some highlights of the major provisions.

Individual responsibility

Starting in 2014, everyone must have health insurance coverage or pay a penalty, which will be enforced by the Internal Revenue Service. The penalties will be phased in over time:

• In 2014, an individual without a health insurance plan must pay whichever amount is greater: $95 or 1 percent of income.
• For 2016 and beyond, that penalty rises to $695 or 2.5 percent of income, whichever is greater (the $695 is indexed from 2016 on).
• Families will pay half the penalty for children, with a cap of $2,085 per family.
• There will be exemptions to this requirement, such as in cases of fi nancial hardship and other limited circumstances. Subsidies to buy private health insurance in new state exchanges will be available in the form of tax credits and cost-sharing assistance for people above Medicaid eligibility but below 400 percent of the federal poverty level. Medicaid eligibility will be increased to 133 percent of the federal poverty level.

Changes that affect your business and the employees who depend on you.

Employer responsibility

New employer group health insurance penalties and obligations

Starting in 2014, employers don’t have to offer their employees health insurance coverage, but most of them with more than 50 employees will pay an assessment if they don’t, or if they offer health insurance coverage that isn’t affordable. Full-time and part-time employees are included when determining whether an employer has 50 employees (based on current full-time employee equivalency rules).

• Employers with 50 or more employees that do not offer “minimum essential health insurance coverage” will pay $2,000 for each employee over the fi rst 30 employees if one of their employees gets a tax subsidy to buy health insurance under an exchange.
• Employers with 50 or more employees that do offer minimum essential health insurance coverage but have at least one full-time employee receiving subsidized coverage under an exchange will pay whichever is less: $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee. Employers must provide “free choice” vouchers to employees with incomes below 400 percent of the federal poverty level if the employee’s contribution to health insurance coverage is between 8 percent and 9.8 percent of income and the employee chooses to purchase coverage in the exchange. No penalties will be imposed on employers with respect to employees who receive these vouchers. Employers with more than 200 employees that offer health insurance coverage must automatically enroll new full-time employees in health insurance coverage. Employees may opt out.

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.

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.