1 Health Care Refrm Patient Prtectin Affrdable Care Act (PPACA) Overview Key Principles DESCRIPTION: Healthcare Refrm/Patient Prtectin & Affrdable Care Act (PPACA) were passed int law March Hwever, the prvisins were spread ut ver the years fllwing the passing f the law. The fllwing timeline prvide a brief verview f the highlights f the bill. What fllws is a brief summary f several PPACA / Recnciliatin Act prvisins t shw the timeline impact Healthcare Refrm will have n emplyers/insured. Fr mre specifics, see (this link gives yu access t details and access t the full text f the law. It is recmmended that legal cunsel be sught fr any implementatin purpses. DETERMINING GRANDFATHERED VS NON-GRANDFATHERED: Grandfathered Health Plans Under the Patient Prtectin and Affrdable Care Act (PPACA), prvisin was made t allw peple already cvered by health insurance t keep that cverage. The term grandfathered plan was created t describe thse plans that were in existence n March 23, Grandfathered plans are exempt frm much f the new insurance refrms f the PPACA, as lng as they retain their grandfathered status. What PPACA Requirements Apply t a Grandfathered Plan? Fr ur grandfathered grup plans, effective January 1, 2011, the fllwing changes apply:! A child f the can be cvered under their parent s cverage t age 26,! Can be married and still be eligible! Lifetime benefit limits n essential health benefits are prhibited.! Rescissin f cverage is prhibited except in the case f fraud r intentinal misrepresentatin f material fact.! Preexisting cnditin exclusins cannt be applied.! Annual limits n the dllar value f essential health benefits are restricted.! An internal and external appeals prcedure must be prvided. What Changes Cause a Plan t lse Grandfathered Plan Status? Examples f changes that will cause a plan t lse grandfathered status are:! Increasing an emplyee s premium cntributin rate by mre than 5%.! Eliminating benefits fr a particular cnditin.! Increasing an insured s cinsurance percentage by any amunt.! Increasing a fixed deductible amunt r an ut f pcket limit by mre than the rate f medical inflatin plus 15%.! Increasing a fixed amunt cpayment by mre than the lesser f $5 plus medical inflatin r medical inflatin plus 15%.! Eliminating a plan ptin. What Benefit Changes Will Nt Cause a Plan t Lse Grandfathered Plan Status? (Disclaimer): This infrmatin is an verview nly; it is nt all encmpassing and it is nt intended t cver all the law s details and is nt be used a legal recmmendatin fr any implementatin prcesses. It is advised that legal advice be sught regarding any specifics f this law.
2 Health Care Refrm Patient Prtectin Affrdable Care Act (PPACA) Overview Key Principles! Adjusting plan eligibility rules.! Cnducting dependent eligibility audits t ensure nly eligible dependents are cvered by the plan.! Adding emplyees and dependents t the plan.! Making changes t cmply with state and federal law.! Vluntarily changing benefits t cmply with health refrm.! Adding benefits.! Making changes t dental & visin prgrams.! Making changes t the PPO netwrks.! Changing insurance carriers, s lng as the structure f the cverage desn t vilate ne f the ther rules fr maintaining grandfathered plan status (amended 11/17/2010). Nn-Grandfathered Health Plans Under the Patient Prtectin and Affrdable Care Act (PPACA), a nn-grandfathered plan is a plan that came int existence n r after March 23, 2010, r a previusly grandfathered plan that made changes that were significant enugh t cause it t lse its grandfathered status. Nn-grandfathered plans are subject t all f the new insurance refrms f the PPACA. What PPACA Requirements Apply t a Nn-Grandfathered Plan? As f September 23, 2010, new nn-grandfathered plans must:! Allw a child f the insured t be cvered under the parent s cverage t age 26, even if married.! Prvide unlimited lifetime benefits fr essential health benefits withut dllar limits! Only allw rescissin f cverage in the case f fraud r intentinal misrepresentatin f material fact.! Remve preexisting cnditin exclusins fr persns under the age f 19.! Remve pre-existing fr all applicants is an ACA metal cmpliant plan.! Allws grups t keep their current benefits, as allwed by their state department f insurance; these plans are referenced as transitinal plans r grandmther plans. The current states are allwing grups t keep their current benefits up t the date stated belw: 1. IL renewals up t Octber IN, WI, & OH renewals up t Octber 1, PPACA TIMELINE: 2015 Cverage mandate: Requires mst individuals t btain acceptable health insurance cverage r pay a penalty f $95 fr 2014 (r 1% taxable incme), $325 fr 2015(r 2% taxable incme), $695 fr 2016 (r, up t 2.5 percent f incme in 2016); after 2016 amunts based n adjustments fr inflatin. Emplyer Respnsibility Requirement impsed n large emplyers nt ffering affrdable health insurance cverage will require paying a mnthly penalty f $ per full-time emplyee beynd the first 30, as lng as the emplyer has at least ne emplyee wh receives subsidized cverage in the lcal health insurance exchange. The penalty amunt will be adjusted annually after 2014 t reflect the natinal increase in insurance premium csts. N penalty applies t part-time wrkers (thse wrking less than 30 hurs a week) wh are nt ffered cverage. Small emplyers (thse with fewer than 50 FTEs) are exempt frm the emplyer respnsibility requirement. (Disclaimer): This infrmatin is an verview nly; it is nt all encmpassing and it is nt intended t cver all the law s details and is nt be used a legal recmmendatin fr any implementatin prcesses. It is advised that legal advice be sught regarding any specifics f this law.
3 Health Care Refrm Patient Prtectin Affrdable Care Act (PPACA) Overview Key Principles (affrdable cverage defined = cvering at least 60% f medical csts and nt extracting an emplyee cntributin twards the price f that cverage in excess f 9.5% f that emplyees husehld incme) Emplyers with 50 r mre FTEs will pay a penalty f $250/mnth ($3,000 a year) fr each fulltime wrker wh is ffered emplyer cverage but instead receives a premium credit t buy cverage in the exchange. The ttal amunt that an emplyer will have t pay with respect t such emplyees will be capped at an amunt equal t $2,000 times the ttal number f fulltime wrkers in excess f 30 that the firm emplys. These dllar amunts will be adjusted annually after 2014 by the grwth in health insurance premiums. Will need t cunt emplyees wh d nt wrk full time (i.e.-part time emplyees) by dividing the aggregate # wrk hurs wrked fr 1 mnth by 120; Will need t cnsider cntrlled grup rules, as members f a cntrlled grup will be treated as a single emplyer, and all emplyees will be treated as emplyed by a single emplyer; and Will nt be cnsidered t have emplyed mre than 50 full time emplyees if the emplyer s wrkfrce exceeds 50 full time emplyees fr 120 days r fewer during the calendar year and the emplyees in excess f the 50 during the 120 day perid were seasnal wrkers! Sample: In preceding year; ABC Manufacturing emplys 35 emplyees wrking year rund. They emply 40 seasnal emplyees fr 90 days. This is nt a large emplyer, as they exceeded 50 emplyees fr less than 120 days (if grup exceeded 50+ fr 120 days including seasnal emplyees, they wuld be cnsidered a large emplyer) N Pre-x: Health plans can n lnger exclude cverage fr treatments based n pre-existing health cnditins (applies t all ages) fr ACA metal cmpliant plans, grandfathered Plans, and large grup plans. Other plans have n pre-x fr dependents under the age 19 nly. Guaranteed issue: Insurance carriers must accept every persn and emplyer wh applies fr cverage (als see rating restrictins belw)- applies t Small Grup Only, and late applicants are subject t plicy language. Rating restrictins: Insurance cmpanies restricted frm charging higher rates due t heath status, gender, r ther factrs. Premiums can vary nly n age (n mre than 3:1), gegraphy, family size, and tbacc use (Small Grup nly) N annual limits -prhibits all emplyer plans frm impsing annual limits n amunt f cverage individual may receive (des nt apply t grandfathered plans) Cst Share limits-implement $6,350 Cst-sharing limits fr individual cverage and $12,700 fr family cverage Essential benefit levels-implement new levels f essential benefit cverage, e.g., prescriptin drugs, disease management. ambulatry, emergency, mental nervus, substance use disrder, rehabilitative, labratry, preventive, wellness, and pediatric services, hspitalizatin, maternity and newbrn care, etc. fr ACA metal cmpliant plans. SF reprting: Begin reprting self-insurance cverage t IRS Waiting perid maximum: maximum waiting =90 days Opens Health Insurance Exchanges (HIE). This new ptin allws peple t shp fr standard health packages. It enables enrllment and administers tax credits, purpse is fr peple f all incme ranges can btain affrdable cverage. Multistate Natinal Plans will be ffered t individuals and small emplyers thrugh state exchanges Health insurance exchanges will be established at the state level fr individuals and small emplyers (generally <100 emplyees).! The exchanges may include large emplyers January 1, (Disclaimer): This infrmatin is an verview nly; it is nt all encmpassing and it is nt intended t cver all the law s details and is nt be used a legal recmmendatin fr any implementatin prcesses. It is advised that legal advice be sught regarding any specifics f this law.
4 Health Care Refrm Patient Prtectin Affrdable Care Act (PPACA) Overview Key Principles 2018 Large emplyer: Federal definitin f a large emplyer is an emplyer with 101 r mre emplyees (small emplyer = emplyees). Hwever, the states can elect t change this large emplyer definitin t 51 r mre emplyees and small 1-50 emplyees (until 1/1/2016) Health Care Premium Tax Credits Available thrugh the HIE t ensure peple can btain affrdable cverage. Credits are available fr peple with incmes abve Medicaid eligibility and belw 400 percent f pverty ($88,000 fr a family f fur) wh are nt eligible fr r ffered ther acceptable cverage. Premium subsidies will be available fr individuals and families with incmes between 133 percent and 400 percent f the pverty level, r $14,404 t $43,320 fr individuals and $29,326 t $88,200 fr a family f fur. Prvides fr health care premium subsidies n sliding scale (fr example, a family f 4 earning 150 percent f the pverty level, r $33,075 a year, will have t pay 4 percent f its incme, r $1,323, n premiums. A family with incme f 400 percent f the pverty level will have t pay 9.5 percent, r $8,379. HIPAA requirements fr Wellness: Wellness Plans must satisfy current HIPAA rules regarding wellness prgrams, with an increase in the limit applicable t wellness incentives frm 20 percent t 30 percent. This means that generally the reward fr satisfying the wellness prgram, tgether with the reward fr ther wellness prgrams available under the plan, may nt exceed 30 percent f the cst f emplyee-nly cverage under the plan Exchange eligibility: Wrkers wh qualify fr an affrdability exemptin t the individual respnsibility plicy but d nt qualify fr tax credits can take their emplyer cntributin and jin an Exchange plan. Free chice vuchers: Emplyers must ffer free-chice vuchers t emplyees whse share f the premium fr emplyer-spnsred cverage wuld be between 8 and 9.5 percent f their incme. The amunt f an emplyee s vucher wuld equal the cntributin the emplyer wuld make t its wn health plan n behalf f the emplyee, and the emplyee culd use the vucher t purchase insurance in the exchange. Reinsurance; A temprary reinsurance prgram will be set up fr individual market and funded by grup and individual health plan assessments New Tax: Excise tax n high cst emplyer-prvided health plans takes effect. EMPLOYER GUIDANCE EMPLOYER REPORTING: Cadillac health plans tax-. 40% fr amunt > $10,200 fr individuals and $27,500 fr family plans paid by insurance cmpanies and administratrs Emplyers mandated t disclse the value f health care benefits n each emplyees annual W-2 Emplyee ntificatin- emplyer must ntify emplyees f: Exchange availability new emplyees at hire time, current emplyees by 3/1/2013 Pssibility f eligibility fr subsidy under an exchange if the emplyers cntributin t the plan is less than 60% f ttal allwed csts! If emplyee pts t take exchange, he/she will lse emplyer premium cntributin (Disclaimer): This infrmatin is an verview nly; it is nt all encmpassing and it is nt intended t cver all the law s details and is nt be used a legal recmmendatin fr any implementatin prcesses. It is advised that legal advice be sught regarding any specifics f this law.
5 Health Care Refrm Patient Prtectin Affrdable Care Act (PPACA) Overview Key Principles 2014-large emplyers will be subject t expand 5500 reprting t include infrmatin n health insurance cverage f their emplyees (Disclaimer): This infrmatin is an verview nly; it is nt all encmpassing and it is nt intended t cver all the law s details and is nt be used a legal recmmendatin fr any implementatin prcesses. It is advised that legal advice be sught regarding any specifics f this law.