March 9, Update on the Affordable Care Act and Student Insurance

Transcription

1 March 9, 2016 Update on the Affordable Care Act and Student Insurance

2 Agenda 2 Background ACA Impact to Student Health Plan Student Health Options UNC Student Health Insurance Offerings Legislative and Rule Changes Questions

3 Background

4 Health Care Reform Why it Matters 4 Health Care Reform - ACA, PPACA, Obamacare ACA is an acronym for the "Affordable Care Act", a set of laws passed in ACA is the shortened name for the PPACA, the Patient Protection and Affordable Care Act. The ACA is a very extensive set of laws which sets out to reform the U.S. healthcare system. The goal of the ACA is to expand coverage to all Americans and to help control healthcare costs overall.

5 Coverage Requirements & Expansion 5 Individual Mandate: mandates that all Americans, with some very limited exceptions, maintain a minimum level of health insurance or face a tax Insurance Exchanges: creates state-based health insurance exchanges and provides premium tax credits to assist eligible individuals with the purchase of coverage Medicaid Expansion: allows states to expand Medicaid up to 133% of federal poverty level not expanded in NC Employer Mandate: requires all employers, with 50 or more fulltime equivalents, to offer health benefits that meet a defined standard, and pay a set portion of the cost of those benefits on behalf of their employees (Effective January 1, 2015)

6 Exchanges 6 ACA creates state-based exchanges through which individuals and small employers can purchase coverage Presumption under ACA that each State will run the exchange in its State not in NC States can choose NOT to run the exchange and then responsibility falls to the federal government to set up and run the exchange Federal government has also proposed a Federal Partnership model where the federal government runs the exchange, but with the State involvement in certain areas.

7 Uncertainties Largely Gone - Maybe 7 Survived two court challenges: Constitutionality of the Affordable Health Care Act - on June 28, 2012, the Supreme Court announced its verdict, upholding the individual mandate. The Supreme Court ruled that the fine attached to the individual mandate was a tax that the federal government had a right to impose. Therefore, the mandate was not unconstitutional and could survive. King v Burwell - the Supreme Court ruled 6 3 in June 2015 that subsidies should be allowed in states that set up their own exchanges and in those that use the federal marketplace. ACA Survived the 2012 Presidential election, but will it survive the 2016 election?

8 ACA Impact to Student Health Plans

9 Health Insurance Options for Students College and Universities not required to provide Student Health Insurance. 9 Student Plans can be self-insured or fully insured plans. Only about 30 colleges offer self-funded plans. Self-insured student plans are exempt from ACA Fully-insured Student plans resemble employer-sponsored plan requirements Fully-insured plans can be experience rated rather than community rated.

10 ACA Impact to Student Health Plans 10 ACA defines student health insurance as a type of individual health insurance coverage that meet the following conditions: Does not make health insurance coverage available other than in connection with enrollment as a student Does not condition eligibility for the health insurance coverage on any health status Meets any additional requirement that may be imposed under state law. The final regulations do not set any minimum threshold for determining student status, these eligibility decisions are left to each college or university and perhaps even the insurer

11 ACA Impact to Student Health Plans 11 Self-insured student health plans are NOT subject to the ACA, but certain states may have regulations on self-insured plans. The vast majority of student health plans are experienced rated individuals policies; however, some of the Ivy League universities have moved to self insured arrangements, as have large public institutions like the University of California and more recently the University of Kentucky. Big advantage to self-insured plans is the savings on ACA taxes and compliance with some provisions of ACA. Biggest obstacle to implementation of a self-insured arrangement initial funding

12 ACA Impact to Student Health Plans 12 Prior to 2014, student health plans were not required to cover minimum essential health benefits (i.e. emergency services, hospitalization, maternity and newborn care, mental health, prescriptions drugs, pediatric oral and vision care, etc.) ACA restricted the maximum annual limit a policy could impose on minimum essential health benefits. These limits were phased in as follows: $100,000 for policy years on or after July 1, 2013 but before September 23, 2012: and $500,000 for policy years beginning on or after September 23, 2012, but before January 1, 2014 Annual limits for essential benefits were completely prohibited for policy years beginning after January 1, 2014

13 ACA Impact to Student Health Plans 13 ACA required student health plans to provide preventive services and not impose any cost share. ACA requires that copays apply to the Out of Pocket Maximum. ACA prohibits plans from imposing any pre-existing condition exclusion on individuals enrolled in the plan. If you plan covers dependent children, ACA impose a requirement that you make such coverage available for an adult child until the child turns 26 years of age. ACA imposes certain notice and reporting requirements, such as providing a comprehensive summary of benefits and Form 1095-B reporting. Insurers must attempt to collect Social Security Numbers of Students and any covered dependents for reporting on Form 1095-B

14 ACA Impact to Student Health Plans 14

15 Student Health Options

16 Health Insurance Options for Students 16 Thanks to the Affordable Care Act, students have a least a halfdozen health care choices 1. Stay on a parent s plan students under the age of 26 can remain on their parent s plan. Great option, but parents should check the provision for in-network coverage if their child will be attending college in a different state. Most large insurers have affiliated networks in other states. 2. Sign Up for a Student Health Plan many colleges and universities offer their own plan to students most of these are fully-insured arrangements, but some are now moving to selfinsured arrangements. 3. Purchase Coverage on the Exchange purchase coverage on the exchange (i.e Healthcare.gov). Depending on income a student may qualify for a subsidy, but not if their parent has coverage through their employer and that employer offers dependent coverage.

17 Health Insurance Options for Students Purchase Catastrophic coverage in the exchanges, individuals under the age of 30 have the option of purchasing catastrophic health plans with lower premium and higher deductibles of more than $6, Apply for Health Insurance through Medicaid students from low income families may be able to apply for coverage through Medicaid 6. Skip insurance all together - the vast majority of Americans were required by law to carry health insurance beginning in However, there are exceptions to the rule, including members of Indian tribes and members of some religious groups. Health reform rules state that the insurance mandate does not apply to people who do not earn enough money to file income taxes. Right now, that means making under $10,000 for a single person under age 65.

18 Student or Employee 18 Full-time Employee is a common law employee who is employed on average: at least 30 hours of service per week; or 130 hours of service in a month Variable Hour Employee an employee, who at the start of employment, the employer cannot in good faith determine whether the individual is expected to work on average 30 hours of service per week Seasonal Employee an employee hired into a position for which the customary annual employment is six months or less. Employment should begin each year in approximately the same part of the year, such as summer or winter Student Workers does NOT include any hour of service performed by a student as part of the Federal (or equivalent State) Work-Study Program

19 Graduate Student or Employee 19 Graduate students in a teaching assistant (TA) role may typically receive financial support for Student Health Insurance during the period of employment Eligibility for financial support for a student employee may be based on an institution s policy, department policy other terms and conditions of employment for TAs Payment for Student Health Insurance for student employees will vary greatly from institution to institution Some standard practices for paying for coverage include: Grad Students receives a direct payment for SHIP coverage from their institution in the form of a scholarship or other payment SHIP coverage is paid directly to insurer by the institution (very common practice) Grad student receives funds for SHIP coverage in addition to the stipend the Grad student receives

20 20 Impact on Subsidies to Graduate Students Employers cannot provide a cash reimbursement to employees to reimburse those employees for the cost of an individual health insurance policy (IRS Notice ) Any type of direct payment by an institution for SHIP coverage fails to satisfy the ACA market reforms and may be subject to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee) SHIPs are considered individual health insurance policies Offering student insurance on different terms to graduate student employees (TAs) vs. students not employed may result in these plans being deemed as employer payment plans resulting in some additional Employer responsibilities under the ACA

21 UNC Student Health Insurance Offerings

22 UNC Student Coverage UNC Students (undergraduate and graduate) may be required to have coverage based on their student status UNC sponsors the Student Health Insurance Plan underwritten by Blue Cross/Blue Shield of NC (also known as Student Blue ) The Student Blue Plan meets all requirements of an individual insured plan under the ACA. The plan is an experienced rated plan with individual policies. It satisfies a student s requirement to meet the ACA Individual Mandate. On average, the Student Blue Plan covers 35,000 to 40,000 students each semester. Students that do not have the Student Blue Plan generally have another form of coverage. The plan is NOT an Employer sponsored group insurance plan and does NOT meet the ACA requirement for the Employer Mandate 22

23 Legislation and Rule Changes

24 24 Legislation and Rule Clarification Student Worker Exemption Act of 2016 (H.R. 210) - addresses a significant issue concerning the treatment of student employees under the employer mandate of the Affordable Care Act (ACA). Bill was never voted on in the House or Senate Student Health Plan Premium Reduction Arrangements- Notice provides transition relief from compliance with certain market reforms of the ACA for educational institutions that provide premium reduction payments for student health insurance

25 25 Legislation and Rule Clarification CMS and HHS issue final rule on February 26, 2016 on Individual Institution Risk Pools Provides clarification that issuers could establish separate risk pools from their individual health insurance market single risk pool (or merged market risk pool, where applicable) for student health insurance coverage, including by establishing separate risk pools for different institutions of higher education, or multiple risk pools within a single institution, provided the risk pools were based on a bona fide school-related classification (for example, graduate students and undergraduate students) and not a health status-related factor.

26 26 Legislation and Rule Clarification CMS and HHS final rule issued on February 26, provides an exemption to the requirements for student health insurance coverage for plan years beginning on or after January 1, The rule change states that student health insurance coverage would be exempt from the actuarial value requirements under section 1302(d) of the Affordable Care Act but would be required to provide an actuarial value of at least 60 percent. Advocacy American Council on Education (ACE) American College Health Association (ACHA) College & University Professional Association for Human Resources (CUPA-HR)

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