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Health Care Reform Updates
Presented by Barb Gerken, Legislative Co-Chair
Medical Loss Ratio – Recent Activity
HR 1206: “Broker Bill”
Introduced by Representatives Rogers and Barrow
Legislation to “pass” producer commissions “through” the
MLR calculation
Ensures agents/brokers are not adversely impacted by the
regulations
Over 170 co-sponsors
Medical Loss Ratio – Recent Activity (cont.)
S 2068: Senate version of Broker Bill
“The Access to Independent Health Insurance Advisors Act of
2012”
Introduced in the Senate by Mary Landrieu, Johnny Iakson,
Ben Nelson and Lisa Murkowski
Excludes the independent health insurance producer
compensation from the MLR calculations
Medical Loss Ratio – Recent Activity (cont.)
S 2068: Senate version of Broker Bill
Will not be identical to HR 1206 but will include improvements
Congressman Rogers and Barrow have given their support of
the revised version
W2 Reporting
Additional interim guidance released by IRS on January 3,
2012
Confirms that employers filing less than 250 W-2s are not
subject to requirement
Indicates that specialty coverage, if included in medical
benefits, must be reported
does not impact employees’ taxable wages
W2 Reporting (cont.)
Section 6051(a) was added to the US Tax Code through
PPACA
Required for 2012 W-2 Forms
Employer must report the aggregate cost of applicable
employer-sponsored coverage
W2 Reporting (cont.)
Applicable coverage = coverage under any group health
plan made available to the employee by an employer
which is excludable from the employee’s gross income.
W2 Reporting (cont.)
Doesn’t include coverage for: On-site medical clinics Long-term care Dental and vision plans independent of the medical plan Accident only coverage or disability coverage General liability insurance and automobile liability insurance Worker’s compensation Automobile medical payment insurance Credit-only insurance Coverage only for a specified disease or illness Hospital indemnity or other fixed indemnity insurance
W2 Reporting (cont.)
Not required of employers filing less than 250 W-2
Forms
Does not apply to Archer MSA or health savings account
contributions
Does not apply to the amount of any salary reduction
contributions to a health flexible spending arrangement
W2 Reporting (cont.)
Cost is reported on Form W-2 in Box 12, using code DD
Employer may apply any reasonable method of reporting
cost of coverage for terminated employee
Should include costs for employee and any dependent
covered under group plan
COBRA costs are included
Essential Benefits Bulletin
States would choose one of the following benchmark plans
one of three largest small group plans in the state
one of three largest state employee health plans
one of the three largest federal employee health plan options
largest HMO plan offered in the state’s commercial market
Essential Benefits Bulletin (cont.)
PPACA requires that Essential Health Benefits include items and services in the following 10 categories
Ambulatory patient services Prescription Drugs
Emergency Services Rehabilitative and habilitative services and devices
Hospitalization Laboratory services
Maternity and newborn care Preventive and wellness services and chronic disease management
Mental Health and Substance Use Disorder Services, including behavioral health treatment
Pediatric services, including oral and vision care
Supreme Court Hearings
Arguments are scheduled for 3 days beginning March 26
Court has scheduled 6 hours of arguments (norm is 1 hour)
Decision is expected in June, 2012
Supreme Court Hearings (cont.)
Monday - is court action premature
Tuesday - is minimum coverage requirement provisions legal
Wednesday – can rest of law can take effect without individual insurance mandate
Coverage Summaries and Material Modification Notice
General Requirements:
Group Market – health insurer is required to create and deliver summary of coverage and benefits to consumers shopping for coverage.
Must be delivered ASAP but no later than 7 days after request.
For individual, insurer’s compliance with web portal requirements satisfies the obligation
Coverage Summaries and Material Modification Notice (cont.)
General Requirements (cont.):
Summary can be up to four pages front and back
Electronic delivery is permitted. Different rules apply for individual, fully insured or ASO group
Trumps state laws that require insurers to provide less information
Coverage Summaries and Material Modification Notice (cont.)
Notice of Proposed Rulemaking released on August 17, 2011
Originally to be effective on March 23, 2012
Updated Regulations released February 10, 2012
New effective date of September 23, 2012
Coverage Summaries and Material Modification Notice (cont.)
Applies to both grandfathered and nongrandfathered plans
Applies to both fully insured and self insured plans
No-carve out available for large group market
For ASO plans, duty to issue a summary will be both the plan sponsor and its plan administrator
Coverage Summaries and Material Modification Notice (cont.)
No longer require premium information
Reduces number of coverage examples
Diabetes – well controlled
Maternity – normal delivery
Requires a statement of meeting minimum essential coverage
Requires statement of meeting actuarial value
Coverage Summaries and Material Modification Notice (cont.)
No longer need to be delivered as stand alone document for group coverage
can be included in SPD – must be intact and prominent
Must be stand alone for individual
No longer required to be printed in color
Standard template is required for first year use best efforts to display not standard benefits
Coverage Summaries and Material Modification Notice (cont.)
Must be provided in culturally and linguistically appropriate manner
If 10% or more of population in claimants county are literate in only the same non-English language
Determined by the American Community Survey data
Currently 255 U.S. Counties meet threshold78 in Puerto Rico
Coverage Summaries and Material Modification Notice (cont.)
Must use 12 point font
Must customize all identifiable company information throughout document (websites, phone numbers)
Coverage Summaries and Material Modification Notice (cont.)
Requires plan sponsors or issuers to provide 60 days advance notice to enrollees when making material modifications to the plan.
Plan issuers or sponsors who willfully fail to provide timely notice will be subject to a fine of $1,000 per enrollee
Coverage Summaries and Material Modification Notice (cont.)
The 60-day Notice of Material Modification does not apply to renewal of coverage.
Duty can be satisfied by providing either a separate notice describing material modification or an updated coverage summary.
Coverage Summaries and Material Modification Notice (cont.)
Questions