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Health Care Reform:
Counseling The Corporate Client
Eleanor D. Thompson
October 19, 2010
HEALTH CARE REFORMHEALTH CARE REFORMFROM THE EMPLOYER’S FROM THE EMPLOYER’S
PERSPECTIVEPERSPECTIVE:
Counseling The Corporate ClientCounseling The Corporate Client
PBI Presentation
October 19, 2010
Eleanor D. Thompson
INTRODUCTIONINTRODUCTIONNew RulesNew Rules
Why the health care system needs new rules… Unsustainable health costs Poor quality of care Unaffordable health insurance
INTRODUCTIONINTRODUCTION
How Employers see it… Lack of capital available to invest in business Reduced profits Reduction in workforce Increased expenses dominated by health care costs
Employers’ Goals: Stabilize expenses Save jobs Salvage solvency in recessionary economy
Three Key OptionsThree Key OptionsFor Employers to Meet GoalsFor Employers to Meet Goals:
1. Whether to provide health care coverage to employees?
2. Whether to maintain grandfather status?
3. Whether to initiate or enhance cost controls in the form of Plan design, cost-sharing and/or implementing Wellness Programs?
Analysis of Employer Options Requires:Analysis of Employer Options Requires:
Legal Analysis:Legal Analysis:• The Patient Protection and
Affordable Care Act• The Health Care and
Reconciliation Act of 2010• Accompanying Regulations• Technical Releases from HHS,
DOL and Treasury• FAQs posted by HHS-DOL-
Treasury on Healthcare.gov• Other federal statutes• Other state statutes
Non-Legal Analysis:Non-Legal Analysis:• Financial analysis of impact
of choice on corporate assets• Corporate analysis of the
impact of choice on business management, operations, employee relations and corporate reputation
1. Whether to Provide Health Care 1. Whether to Provide Health Care CoverageCoverage
Costs
For Providing
Coverage
Penalties for
NOT Providing
Coverage
vs.
A. In short term
B. In long term
C. Rules, methodologies, calculations
vs.
2. Whether to Retain Grandfather Status2. Whether to Retain Grandfather Status
Keep the Plan
you have
Change the Plan
you have
Control costs
by eliminating some,
but not all, PPACA
requirements
Control costs
by changing plan
design or
cost-sharing
vs.
3. Whether, and how, to Control Costs3. Whether, and how, to Control Costs
Using Plan Design• Provide less comprehensive health benefits• Cover only employee, not spouse or dependents• Offer and encourage Consumer Direct Health Plans
Using Cost-Sharing Methods• Increase employee portion of premium• Increase deductible• Increase co-payment• Increase coinsurance
3. Whether, and how, to Control Costs3. Whether, and how, to Control Costs
Prevention and Wellness• Redirection From Illness to Health• Goal: to encourage healthier lifestyles for employees and lower
healthcare costs for employers
Prevention• Insurers required to cover preventive care with no cost-sharing by
consumer §2713• Incentive to consumer to choose healthy lifestyle• Cost increasing to Employer currently• Screening, laboratory tests and other types of preventive care• To be supplemented by the U.S. Preventive Services Task Force
3. Whether, and how, to Control Costs3. Whether, and how, to Control CostsWellness Programs
4 Wellness Program Provisions
PPACA §1001 PPACA §1201*
PPACA §4303 amended by §10404
§ 10408
Reporting requirements to be developed by Secretary of HHS regarding wellness and health promotion activities
Non-discrimination rules that affect employer wellness programs
CDC will provide employers with technical assistance, consultation, tools and other resources in evaluating employer-based wellness programs
Awarding Grants to eligible employers to provide their employees with access to comprehensive wellness programs
3. Whether, and how, to Control Costs3. Whether, and how, to Control CostsWellness Programs to Save Lives and Save Money
PPACA §1201 • The wellness provisions of the PPACA essentially
codify the wellness regulations that were established by HHS, DOL and Treasury under HIPAA in 1996
• PPACA broadens wellness provision applicable to group health plans to include health insurance issuers; and increases incentive limit from 20% to 30%, with option to go to 50%
3. Whether, and how, to Control Costs3. Whether, and how, to Control CostsWellness Programs
• Employers may use incentives in Wellness Programs, such as, discounts, rebates, or other rewards for participation without running afoul of non-discrimination rules based on health-status related factors
• Provided, The reward does not require the participant to satisfy a
certain health standard; The reward is available to all similarly situated
individuals
3. Whether, and how, to Control Costs3. Whether, and how, to Control Costs
Wellness Programs
If the reward is based on a certain health standard, it will be permitted, but only if… The reward is not greater than 30% of total coverage The program is designed to promote health or prevent
disease Individuals given an opportunity to qualify at least once
each year The reward is available to all similarly situated
individuals The availability of reasonable alternatives is disclosed in
plan materials
3. Whether, and how, to Control Costs3. Whether, and how, to Control Costs
Wellness Programs
Legal Analysis Required for Wellness PlansLegal Analysis Required for Wellness Plans
PPACA – Patient Protection and Affordable Care Act
HIPAA – Health Insurance Portability and Accountability Act
ADA – Americans with Disabilities Act
GINA – Genetic Information Non-discrimination Act
ADEA – Age Discrimination in Employment Act
Title VII of the Civil Rights Act of 1964
State Laws
Federal Tax Laws