Behind the Health Insurance Benefit Card and the Affordable Care Act (ACA) What is the Impact on Fire Fighter Health Care Plans

Transcription

1 Behind the Health Insurance Benefit Card and the Affordable Care Act (ACA) What is the Impact on Fire Fighter Health Care Plans

2 Insurance Card Focused

3 Allowable Charge Usual and Customary, Reasonable, Maximum Allowable Balance Billing Amount you could be responsible for aier co- pays, and coinsurance If you use out of network providers Benefits Level Maximum amount insurance will pay Claim Bill for medical services submined to an insurance company

4 Co Insurance Amount you pay aier you have and copay Co Payment A specific cost required to pay at doctors visit, prescrip@on drug, or medical device Cost Sharing Copays, Coinsurance and Deduc@bles Contribu@ons Premiums in a self insured arrangement

5 Payment required before insurance kicks in, HMO s do not usually include, Indemnity Plans and Point of Service Plans do Open Enrollment Period to make changes to your coverage Qualifying Event Marriage, birth, death or termina@on U@liza@on How frequently a group uses it health insurance

6 The Alphabet Soup of Health Insurance EOB of Benefits COB of Benefits OTC Over the Counter PCP Primary Care Physician POS Point of Service FFS Fee for Service ASA Services Agreement HMO Health Maintenance HSA Health Savings Account HRA Health Reimbursement Account MSA Medical Savings Account EPO Exclusive Provider PPO Preferred Provider IPA Individual

7 Extra Credit ERISA The Alphabet Soup of Health Insurance Employee Income Security Act of 1974 COBRA Consolidated Omnibus Budget Act of 1985 IBNR Incurred But Not Reported

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10 Glossary

11 Healthcare Payers One way to dis<nguish health plans is to iden<fy Who carries the risk: Fully- Insured Plans - insurance companies assume the risk Administered and controlled by insurers which collect premiums and pay out claims For Profit or Not for Profit Self- funded plans Municipal self- insured Employer takes the place of the insurer by paying any medical claims filed by employees Assuming some of the Risk Self- administered plans Union Sponsored self- insured plans, the union receives a finite sum of money from the employer and the union itself bears the risk of paying for its members claims Third- party administrator (TPA) Claims administra@on and processing, but the employer or union assumes the risk of paying on claims

12 Tax Status VEBA Voluntary Employees' Beneficiary Associa<on Internal Revenue Code 501(c)(9) organized to pay life, sick, accident, or similar benefits to members or their dependents. Voluntary of employees Provide for payment of life, sick, accident or other similar benefits to members or their dependents or designated beneficiaries and all of its are for this purpose Earnings may not inure to the benefit of any private individual or shareholder other than through the payment of benefits Consists of individuals with an employment- related common bond such as a common employer, coverage under one or more CBAs, or membership in a labor union.

13 Stop- loss Insurance that takes effect aier a certain amount has been paid out in claims. Self- insured health plans oien buy such policies to protect against catastrophic claims. Intergovernmental risk pools (IRPs) Are made up of public en@@es Form a Risk Pool, which can provide protec@on to the individual agencies against catastrophic risks. Mul<- Employer Plan Maintained for more than one employer

14 Affordable Care Act Pa<ent Protec<on and Affordable Care Act PPACA, or ACA, or Obama Care Passed into law in 2010 intended to reform healthcare and the health insurance system. ACA Requires Employer Mandate 50+ FTEs (Full Time Employees) to offer health insurance to its workers Public and Private Sectors Individual Mandate Individuals not covered by an employer or a government insurance program must provide their own health insurance Most controversial provision of the ACA

15 Affordable Care Act The ACA also requires: Insurers to spend a certain percentage of the revenue they receive from premiums on healthcare services. This figure is oien called the medical loss ra<o, and the minimum is 80% in the individual and small group market and 85% in the large group market. Guaranteed issue this provision restricts the way insurance companies can price the policies they sell, including prohibi@ng the denial of coverage for pre- exis@ng condi@ons, and allowing the underwri@ng of customers based on community ra@ng and age.

16 Affordable Care Act Essen<al Health Benefits (EHB) Ambulatory services Emergency Care Maternity & Newborn Care Drugs Mental Health Substance Abuse Services Services Devices Labs Chronic Disease Management Oral & Vision care for children Non- grandfathered fully insured plans 1/1/14 Required EHB s in all small group market No other plans are required to provide EHBs.

17 Find more useful at:

18 THE AFFORDABLE CARE ACT Impact on IAFF Members

19 Types of Plans Fully- insured plans): Aetna, Blue Cross/Blue Shield, etc. Self- funded (local government- run plan) Self- administered (union- run plan) Exchanges

20 Exchanges Also known as Health Insurance Marketplaces Internet shopping for health insurance Different levels of coverage offered to uninsured Ø Bronze- 60/40; Silver- 70/30; Gold- 80/20; 90/10 Ø Catastrophic - under 30, high- deduc@ble Ø All must have EHBs (defined state- by- state) Ø Plans sold on Exchange must be cer@fied

21 Exchanges 3 Types of Exchanges Ø 27 states with federally- facilitated Exchanges Ø 16 states and the District of Columbia with state Exchanges Ø 7 states with federal partnership Exchanges between the state and federal governments

22 Exchanges Premium Assistance Tax Credits Ø Federal subsidies available to individuals with household income % of Federal Poverty Line (phased out as household income increases) Ø Only available for individual market coverage on the Exchange; Obama said in September 2013 that TaI- Hartley funds will not be eligible for subsidies Ø Required personal to premiums can be even with subsidy Ø Individuals will pay a max of between 2% and 9.5% of household income based on cost of silver coverage (70/30)

23 Impact on Benefits 1 Loss of Grandfathered Status Occurs When Plan: Ø Eliminates all (or substan@ally all) benefits to diagnose or treat a par@cular condi@on Ø Increases a percentage cost- sharing requirement above the level at which it was set on March 23, 2010 Ø Increases a fixed- amount cost- sharing requirement* Ø Increases a fixed- amount copayment for any service* Ø Decreases employer contribu@on rate by more than 5% below the contribu@on rate for March 23, 2010 There is no expira'on date for grandfathered status

24 Impact on Benefits 2 Preven@ve care at 100% Emergency room treatment out- of- network same as in- network Coverage for children under age 26 New appeals process No life@me dollar limits (stop- loss coverage) No annual dollar limits on EHBs No preexis@ng condi@on exclusion

25 Impact on Benefits 3 Women s preventa@ve services added to preven@ve care benefits Wai@ng periods not longer than 90 days Cannot discriminate against providers New Summary of Benefits and Coverage (SBC) Document No retroac@ve material plan changes (60- day no@ce required)

26 Impact on plan cost Premiums Centered Outcomes Research (PCORI) Fees o For plan year ending in 2013, PCORI fee is $1 x average number of covered lives o For future plan years, fee is $2 x average number of covered lives o Fee adjusted annually for plan years ending aier September 30, 2014

27 Impact on plan cost: Reinsurance Transi<onal Reinsurance Program requires contribu<ons in years Ø Fee designed to stabilize premiums for high- risk individuals in individual market on Exchanges for 3 years Ø Under final rules, in 2014 Fee is $5.25/month ($63/ year) for each covered life Ø Fees applies to group health plans including MEPs Ø Calculated based on average number of covered lives, including dependents (children under age 26) Ø Excludes re@rees enrolled in Medicare Ø Should calculate cost impact of all ACA- imposed fees

28 Impact on plan cost: HIT Health Insurance Tax (HIT) Ø in 2014, ACA imposes an HIT on the fully- insured market (includes medical, dental and vision) Ø $8 billion in 2014, $11 billion in , $13.9 billion in 2017, and $14.3 billion in 2018 Ø HIT is divided among insures according to a formula based on each insurer s net premiums Ø Businesses and benefit funds that drop coverage or switch from fully- insured to self- insured increase HIT obliga@on to those remaining fully- insured Ø A cascading tax: premiums will increase to pay HIT; new tax assessed on increased premiums

29 Impact on plan cost: clinical trials Clinical Trial Coverage Plan must cover costs when the is in an approved trial for life- threatening costs include costs typically covered under the plan for a par@cipant who is not enrolled in a clinical trail (e.g. lab services) but they do not include the cost of the trial itself Plans should be revised to affirm compliance with this requirement

30 Impact on plan cost: OOP max Annual Limita<ons on Out- Of- Pocket Maximums Plans may NOT impose an annual out- of- pocket on EHBs in excess of a max ($6350 for an individual and $12,700 for a family in 2014) All in- network pa@ent costs sharing deduc@bles, co- pays, and coinsurance on EHBs must be subject to one integrated out- of pocket Dollar amount is subject to change each year based on a medical COLA This applies to medical, dental, and vision; in 2015, Rx drugs will be included

31 Impact plan cost: Cadillac tax Star<ng in 2018, there is a 40% excise tax on value of health insurance benefits exceeding threshold Ø Es@mated threshold is $10,200 for self- only coverage and $27,500 for family coverage; thresholds may be higher based on actual medical infla@on between 2010 and 2018 Ø MEPs considered only at $27,500 level Ø Threshold adjusted upwards for re@rees and plans with a majority of employees in high- risk professions (including construc@on) and may also be increased on age and gender Ø Plan administrator responsible for tax for self- insured plans; insurer responsible in case of fully- insured plans

32 Healthcare: Vested? While pension benefits are generally vested for employees at a certain point, health and welfare benefits for re@rees are generally not An employer may contract with employees or a union to provide vested health benefits Burden of proof is on re@rees to show ves@ng of re@ree health benefits was intended If this burden is not carried, plan sponsors may be able to terminate re@ree health benefits

33 Healthcare: Adverse Older Sicker, injury associated with higher medical costs Higher Rx use Easy target to get rid of costs to plans

34 Healthcare: Tax Penalty Where Does This Leave Re<rees? are individuals subject to the individual mandate to maintain minimum coverage 2014: Greater of $95 per person up to that amount per family or 1% of household income 2015: Greater of $325 per person up to that amount per family or 2% of household income 2016: Greater of $695 per person up to that amount per family or 2.5% of household income

35 Healthcare: Dangers Expecta<ons for re<rees in the future Higher costs Reduced Benefits of Coverage

36 Healthcare: Changes ACA effects on re<rees enrolled in Medicare meet the minimum coverage requirement under 65 have previously relied on employer or union coverage for early or had to purchase coverage on the individual market if available ACA changes could provide early with more to purchase individual insurance, but could cause fewer employers and funds to offer early health coverage

37 Healthcare: Savings plan for new hires (HSA, HRA) 403(a) plans, 403(b) and 457(b) deferred plans (HELPS $3000 per year) Exchange in your state might be a viable op@on (but not all re@rees will qualify for subsidies) Medicare Advantage plans Re@ree- only plans

38 More ACA Requirements Summary of Benefits and Coverage (SBC) Ø Under healthcare reform, health insurers and self- funded employers must provide a uniform SBC to people who apply for and enroll in health plans Ø 4- page overview of plan benefits, cost sharing and limita@ons Ø Required set of examples of how the plan works Ø Phone number and internet address for obtaining copies of plan documents A standard glossary of medical and insurance terms must also be available The penalty for "willful" non- compliance is $1000 for each plan enrollee hnp:// Reports- and- Other- Resources/Downloads/sample- completed- sbc- accessible.pdf

39 Other Legal Changes 1 HIPPA Omnibus final rules issued earlier this year made some noteworthy changes to HIPAA requirements An expanded defini@on of Business Associate that may require trust to enter into addi@onal Business Associate Agreements (BAAs) A requirement that a Business Associate enter into wrinen agreement with its subcontractors commivng them to safeguard Protected Health Informa@on (PHI) A revised defini@on of Breach to include a documented, mul@- factored risk assessment on whether there is a low probability that the PHI has been compromised

40 Other Legal Changes 2 COBRA Elec<on No<ces Ø Group health plans are required to provide a par@cipant a COBRA elec@on no@ce no more than 14 days aier receiving no@ce of a qualifying event that will cause a loss of plan coverage Ø Model no@ce is available on the DOL website modelelec@onno@ceredline.doc.

41 Misc. Topics Addi<onal background and effects of ACA IAFF fought to preserve tax exclusion for employer- sponsored health insurance Private exchanges employer offers products from insurance companies EMS more people covered; new for preventable re- admissions; 2.3% medical device tax IAFF affiliates should consider a benefits audit

42 Resources Obama Care Survival Guide (Nick Tate)

43 IAFF Resources hnp://

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45 Health Care Next Steps for the and Towns

46 Government Finance Officers Partnership with Colonial Life Paper found here downloads/ GFOAContainingHealthC arecosts.pdf

47 (page 1) Health insurance premiums Between 1999 and 2010 have grown 138% Salary over the same period only 42% They predict costs to to grow Average Health Care Trend up to 8.5% in 2011, up from 8% in 2010 Reason for trend increases Expensive medical technology and an aging Decreased Cost ShiIing Medicare and Medicaid to Private Insurers

48 Leverage Points Change the level of the benefit provided. Modify how many and what type of benefits the plan provides and who they provide them to. Manage par<cipants choice of providers. Direct or even limit health plan choices to lower cost providers. Share cost with employees. Structure the health plan so that employees bear part of the burden of benefit costs. Reduce use of health care services by employees. Address the economic and actual need for health care services. Right- source health benefit services. Use the right of outsourced service providers and providers within a network to deliver health benefits. Maximize the value received for the health care dollar. Rather than just minimizing costs, consider the benefit received per dollar spent on health benefits.

49 The ROI All- Stars Onsite Clinic Visits Variable Premium High Health Plan and Health Savings Account Wellness Programs Self- Insurance Purchasing Value Based Disease Management

50 High Insurance Plans Are there any savings when you fund the deduc<ble?

51 Consumer Driven Health Care HSA= Health Savings Account FSA = Flexible Savings Account HRA = Health Reimbursement Account CDHP = Consumer Driven Health Plan HDHP = High Deduc@ble Health Plan

52 Consumer Driven Health Care

53 High Health Plan $5,000 per year Employer Supplies Credit Card Credit Card used for the $5,000 End of Year Employer keeps the balance No Networks No Coinsurance Plan pays 100% aier

54 IAFF Local Family Plan $45, $40, $35, $30, $25, $20, $15, $10, $5, $ POS 3T 5K Ded PPO

55 IAFF Local Family Plan with Deductable $45, $40, $35, $30, $25, $20, $15, $10, $5, $ POS 3T HDIP + 5k

56 $35, IAFF LocaI Family Plan w/ded. & % Change 30.00% $30, % $25, % $20, % $15, % $10, % $5, % $ % HDIP + 5k Percentage

57 High Health Plan High meant to lower Removes employee skin in the game Could prove more costly years down the rode Consumer driven product removes the decision for the consumer Removes meant to alter behavior thus lower costs Creates a Fee for Service Indemnity Plan

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