Health Care Reform and Concordia Plan Services 2012

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• Complex set of regulations and requirements• Law signed March 23, 2010; upheld by Supreme Court

June 28, 2012 – Some plan changes implemented January 1, 2011– Ongoing communication about various features of law

• Legislative requirements continue to evolve as effective dates for components draw near

The Patient Protection and Affordable Care Act

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More Change is Coming…

• Majority of requirements to be implemented by 1/1/2014• Some elements of the law have been modified and

others delayed• Timeline could be further extended or the requirements

could be modified due to:– 2012 elections– Lobbying efforts– Legislative and Administrative adjustments

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• Many regulations, guidelines, and rulings have been published to help organizations and insurance companies with implementation of requirements

Health Care Reform Legislation

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CPS is Not Standing

Along the Sidelines

We have been—and will continue to be—actively researching, interpreting, and preparing to implement the applicable segments of the

law as the effective dates require.

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It’s a joint effort

CPS is working with others to ensure we:• Understand requirements and implement

as appropriate• Remain flexible to account for revisions to

the law• Make appropriate decisions to meet the

needs of our customers

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We have Strategic Partners

We’re keeping a pulse on what is happening in Washington, D.C., and in other church bodies that have denominational plans• Church Alliance• Church Benefits Association

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We have Strategic Vendor Relationships

We’re working with others in the healthcare industry• Blue Cross Blue Shield of Minnesota• Cigna• Express Scripts

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We Have Access to Experts in Healthcare and Employee Benefits

• OptumInsight • Towers Watson• Buck Consultants• Gallagher Benefit Services

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• Ensure the Concordia Health Plan complies with the law

• Share information and provide education to help improve awareness

• Help LCMS employers understand their responsibilities

• Help our members understand their options, benefits, and protections

Our Pledge to Our Customers

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• Decision to “Grandfather” health plan:− Exempts the CHP from potentially onerous

regulatory requirements− Allows CHP to exclude coverage of

contraceptive abortifacients

Concordia Health Plan Claimed as Grandfathered Status

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• Compliant with all applicable provisions− Eliminated Pre-existing Condition

Limitation for any person under age 19− Eliminated applicable Annual and Lifetime

Maximums− Updated enrollment provisions to allow for

coverage of adult children up to age 26

Health Care Reform – CPS Actions to Date

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• Small Business Health Care Tax Credit− Small employers in church plans may be eligible− Estimated 2,000 eligible LCMS ministries− Estimated $11,000,000 potential credit

annually synodwide− Reports of ministries receiving over $23,000 for one

year alone!− Available for tax years 2010 – 2013− Resources to help understand and calculate the credit

are available on our website (www.ConcordiaPlans.org)

Health Care Reform – CPS Actions to Date (cont.)

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• Early Retiree Reinsurance Program− $1,600,000 applied for and received!− Funds have helped control increases to the

CHP contribution rates

Health Care Reform – CPS Actions to Date (cont.)

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Health Care Reform – CPS Actions to Date (cont.)

• Transitioned to Medicare Part D Prescription Drug Plan for Medicare members− Contract with Express Scripts − Administrative change invisible to member− Allows access to additional discounts

provided by large pharmaceutical companies − Result: 8% reduction in Medicare

supplemental coverage rates for 2012

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4th Quarter of 2012

• New Summary of Benefits and Coverage (SBC)– Easy-to-understand wording for consistent display

of plan benefits and member out-of-pocket costs – Helpful tool to evaluate choice of plans– Guidelines and restrictions apply to ensure

consistency across carriers

• New Uniform Glossary of Terms• Applies for first open enrollment period beginning

on or after 9/23/12

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What’s New for 2013

• New contribution limit of $2,500 on Medical Flexible Spending Accounts

• New graduated Medicare tax rates (introducing higher rate for highly compensated)

• Information about health care exchanges and subsidies for coverage scheduled to start January 1, 2014 (notice to workers by 3/1/13)

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Glimpse of the Future. . .

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Issues for 2014 and Beyond

• 2014:– States incented to operate health care “Exchange”

or federal government will operate exchange applies for individuals and small employers (<100); states can limit to employers <50

– Coverage mandate on individuals:• Have health care or pay tax• Individual exchange subsidies – Premium Tax Credit (“PTC”)• Individual market reform – no medical underwriting; no pre-

existing conditions exclusions; community rating

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Issues for 2014 and Beyond (cont.)

• 2014 cont.:

– “Play or pay” penalty on large employers with 50 or more employees

– No annual dollar limit on essential benefits (applies to grandfathered plans)

– No pre-existing condition limitations allowed (applies to grandfathered plans)

– Report value of health coverage on W-2 beginning with 2013 tax year

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Issues for 2014 and Beyond (cont.)

• 2015 – Auto-enrollment mandate for large employers with more than 200 employees

• 2017 – Exchanges for large employers (100+)

• 2018 – Cadillac Plan tax

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New Healthcare Environment

• There’s a lot of change on the horizon

• We are here to help you through the changes that involve your health coverage

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We Are Here to Help

CPS is your resource, assisting both the employers and workers of the LCMS to

make appropriate decisions in the changing healthcare environment –

decisions that support the worker, the employer, and the related ministry

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How to Learn More

• Call us toll free, 888-927-7526• Visit our website, www.ConcordiaPlans.org

– News section– Health Care Reform section

• Watch your mail for our communications– Benefits Bulletin newsletters– Concordia Plans UPDATE newsletters– Other special mailings

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Questions?

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Thank you for participating!