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NAVIGATING THE NEXT PHASE OF HEALTH CARE REFORM PRESENTED BY SHIRAZI BENEFITS
NAVIGATING THE NEXT PHASE OF HEALTH CARE
REFORM
PRESENTED BY
SHIRAZI BENEFITS
2
LOOKING BACK
HEALTH CARE REFORM TIMELINE: A YEAR-BY-YEAR LOOK
3
Looking Back2010• Dependent coverage to age 26• Changes to dollar limits• Patient protections• No pre-existing condition exclusions for children• Emergency room services• 100% coverage for in-network preventative services
o For non-Grandfathered plans• Non discrimination in favor of highly compensated
employees (suspended until further guidance)
4
Looking Back• Dependent coverage through age 26
o Allows for dependents to remain on their parent’s or guardian’s health plan until age 26 (dependent age may be higher in some states) and expands the definition of a dependent
o Also applies to specialty products such as vision, dental and pharmacyo 100+ groups with a grandfathered plan can choose to include an
eligibility exclusion for dependents who are eligible for their own employer sponsored plan
o 100+ groups can choose to customize their vision or dental dependent age
5
Looking Back• Changes to dollar limits
o Eliminates annual dollar limits on covered services that may be considered “essential health benefits” by the Department of Health and Human Services (HHS)
o Eliminates lifetime dollar limits on covered services that may be considered “essential health benefits” by HHS
6
Looking Back• Patient protections
o For plans that require a primary care provider (PCP), members must be able to designate any in-network provider as their PCP (including an OB-GYN for a woman or a pediatrician for a child)
o Eliminates referral and preauthorization requirements for in-network OB-GYNs and pediatrician
o Only required for non-grandfathered plans; custom groups with a grandfathered plan may exclude some of the patient protections
7
Looking Back• No pre-existing condition limitations for
childreno Prohibits pre-existing condition exclusions (including coverage denials
and waiting periods) for children younger than 19
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Looking Back• No member cost share for preventive care
o Requires health plans to provide coverage without cost-sharing for preventive services
o Expands preventive services list
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Looking Back• Emergency room services
o Requires plans to cover in-network and out-of-network emergency room services
o Forbids preauthorization requirements for emergency room services, including out-of-network (post treatment notification requirements are permitted)
o Out-of-network copayments and coinsurance cannot exceed in-network copayments and coinsurance
o Only required for non-grandfathered plans.
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Looking Back• Non discrimination in favor of highly
compensated employees (suspended until further guidance)o Prohibits employers from having different health benefits tied to
employee salary levelso Disallows eligibility rules (that is, total hourly or annual salary rules)
that have the effect of discriminating in favor of highly compensated employees
o Self-funded plans are not subject to this requirement, but are subject to a separate similar law. IRS Section 105(h)
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Looking Back2011• Changes to Tax-Free Savings Accounts• Medical loss ratio standards go into effect
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Looking Back• Changes to Tax-Free Savings Accounts
• Excludes the costs for over-the-counter drugs not prescribed by a doctor from being reimbursed through a Health Reimbursement Account or health Flexible Spending Account and from being reimbursed on a tax-free basis through a Health Savings Account or Archer Medical Savings Account.
• Increases the tax on distributions from a health savings account or an Archer MSA that are not used for qualified medical expenses to 20% of the amount used.
• Implementation update: On September 3, 2010, the IRS issued guidance regarding changes on health flexible spending accounts including Health Reimbursement Accounts and health Flexible Spending Accounts noting that over-the-counter medicines prescribed by a doctor could be reimbursed by these tax-savings accounts.
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Looking Back• Medical loss ratio (MLR)
o MLR is the percentage of premiums spent on medical care relative to the amount spent on administrative costs
o Requires issuers to spend a minimum of 85% for large group and 80% for small group and individuals (generally) on medical care
o If the MLR minimum is not met a rebate check is issued to enrollees in the individual market and employers in the group market
o MLR applies to large group, small group and fully insured plans, regardless of grandfathered status. It is also being implemented for individual plans, but not self-funded groups
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WHERE WE ARE TODAY
MAKING SHIFTS FROM 2012 TO 2013
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WHERE WE ARE TODAY
2012-2013• Uniform Summary of Benefits and Coverage• W-2 tax reporting• Notice for Material Modification• Flexible Spending Account Limits ($2,500 per year)• Comparative effectiveness research (CER) fee• Women’s Preventive Services• Medicare Tax Increase• Health insurance exchanges: Employee notification
deadline extended• Reinsurance Assessment
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WHERE WE ARE TODAY
• Summary of benefits and coverage (SBC)o Requires plans and issuers to provide an easy-to-
understand document that includes a summary of coverage, common glossary of terms and coverage fact labels
o This provision is being implemented for all group sizes and individual plans. It also applies to both fully insured and self-funded plans
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WHERE WE ARE TODAY
• W-2 tax reportingo Requires employers to report the cost of employer-sponsored health
benefits on a separate entry of the W-2 formo Various types of coverage may be included such as medical plans,
dental and vision coverage, prescription drug plans and employee physicals
o This provision applies to fully insured and self-funded plans. However, employers that file less than 250 W-2s are not required to report the value of benefits
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WHERE WE ARE TODAY
• Notice of Material Modificationo Requires plan sponsors or issuers to provide 60 days
advance notice to enrollees when making material modifications to the plan
o Modifications include any change to the coverage such as enhanced or reduced benefits, increased premiums or cost sharing, and new referral requirements
o Can be satisfied by sending an updated summary of benefits and coverage or separate written notice
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WHERE WE ARE TODAY
• Comparative effectiveness research (CER) feeo Revenues will fund research to determine the effectiveness
of various forms of medical treatment. The initial annual fee of $1 per covered life is for plan years that began on or after Oct. 2, 2011. The fee increases to $2 in 2012, then increases to an amount indexed annually to national health expenditures until 2019, when it no longer applies. Reporting and payment using IRS Form 720 is required by July 31of the calendar year immediately following the last day of the policy or plan year (e.g., liability for a plan year ending Jan. 31, 2013 must be filed by July 31, 2014).
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WHERE WE ARE TODAY
• Women’s Preventive Serviceso Requires health plans to cover evidence-informed
preventive care and screenings without cost sharingo Some services include:
• – Well-woman visits• – Testing for human papillomavirus (HPV)• – Breastfeeding support, supplies and counseling• – FDA-approved contraception methods and
contraceptive counselingo This provision applies to all non-grandfathered health plans
(whether insured or ASO) starting with the first plan year on or after August 1, 2012. It also applies to grandfathered health plans that have chosen to implement the ACA’s preventive care coverage
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WHERE WE ARE TODAY
• Medicare Tax Increaseo Increases the Medicare Part A (hospital insurance) tax rate
on wages by 0.9% (from 1.45% to 2.35%) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly and imposes a 3.8% assessment on unearned income for higher-income taxpayers.
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WHERE WE ARE TODAY
• Health insurance exchanges: Employee notification deadline extended o The Affordable Care Act (ACA or health care reform law) added a section to the Fair Labor
Standards Act (FLSA),that says an applicable employer must provide each employee at the time of hiring (or with respect to current employees, no later than March 1, 2013), a written notice:
o Informing the employee of the existence of exchanges including a description of the services provided by the Exchanges, and the manner in which the employee may contact exchanges to request assistance;
o If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through an exchange; and
o If the employee purchases a qualified health plan through an exchange, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.
o The FAQ issued by the Department of Labor (DOL) on January 24, 2013 recognized that the initial March 1, 2013 notification deadline is unrealistic and will not take effect on March 1, 2013. The new FAQ indicates that the agency will issue additional guidance in the future, moving the implementation date to late summer or fall of 2013.
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WHERE WE ARE TODAY
• Reinsurance Assessmento Collected over the three-year period from 2014 through 2016, this assessment
will fund a reinsurance program to help lessen the impact of high-risk individuals entering the Individual market.
o Fully insured plans: The Carrier is required to pay this assessment. The carrier will build additional loads into our premium rates to offset the cost of these fees for any applicable insurance plan effective 2/1/2013 and later.
o Self-funded plans: Third party administrators may make the payment on behalf of self-insured plans.
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WHERE WE ARE GOING
SUMMARY OF NEW HEALTH REFORM LAW EFFECTIVE 2014
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WHERE WE ARE GOING
2014• Health Insurance Industry Fee• Employer requirements to provide coverage• Health Insurance Exchanges
o Health insurance premium and cost sharing subsidies• Guaranteed availability of insurance• Essential health benefits• Wellness programs in insurance• Individual requirement to have insurance
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EMPLOYER RESPONSIBILITY
TO PROVIDE COVERAGE• Health Insurance Industry Fee• The Health Insurance Industry Fee affects health insurers (including HMOs)
and is estimated to start at $8 billion in 2014. It increases year over year before reaching an estimated $14.3 billion in 2018. After 2018, it will continue to increase with premium growth.
• The fee applies only to insured business, and will be based on each insurer’s share of the taxable health insurance premium base (among all health insurers of U.S. health risks). Plans include all insured individual and group medical plans (HMO, Network, PPO and OAP) regardless of funding type (i.e., Guaranteed Cost or Shared Returns including Minimum Premium), behavioral health, pharmacy, vision and dental benefit plans (including stand-alone), among others.
• Impacted plans will be assessed 2-2.5% of premium in 2014. This will increase to 3-4% of premium in future years.
• The Carrier is required to pay this assessment. The Carrier will build additional loads into our premium rates to offset the cost of these fees for any applicable insurance plan..
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Larger employers face penalties
starting in 2014 if they don't make
affordable coverage available.
This simple
flowchart illustrates how those employer
responsibilities work.
EMPLOYER RESPONSIBILITY
TO PROVIDE COVERAGE
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EMPLOYER RESPONSIBILITY
TO PROVIDE COVERAGE• Prepare for 2014, when the employer mandate kicks in. Employers with 50+ full-time employees (or full-time equivalents) must offer medical coverage that is “affordable” and provides “minimum value” to their full-time employees (and their dependent children to age 26) or be subject to penalties. This mandate is effective January 1, 2014, regardless of grandfathered status. There is transitional relief for employer-sponsored plans that begin on a date other than January 1, if they comply upon the first day of their 2014 plan year.o – Employees who work 30 hours per week are deemed full-time.o – Coverage is affordable if employee contributions are less than 9.5% of:
• - an employee’s W-2 wages,• - an employee’s monthly wages (hourly rate x 130 hours per month), OR• - the Federal Poverty Level for a single individual.
o – A plan must pay 60% of the costs of covered health services to be considered as providing “minimum value.”
o – Employers cannot have more than a 90-day waiting period after an employee becomes eligible for coverage.
o – Dependents are considered children up to age 26. Spouses are not included in the definition.
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EMPLOYER RESPONSIBILITY
TO PROVIDE COVERAGE• Determining your full-time employees – Safe harbor methods may be used to determine the full-time status of current and new employees who work variable hours. These methods are complex and differ for ongoing and new employees. Employers should consider the methods carefully with their own legal counsel.
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EMPLOYER RESPONSIBILITY
TO PROVIDE COVERAGE• Who is a Full-Time Employee?o Hours of service include paid leave.o Employers must count all of the hours of service for which an employee
is paid or is entitled to payment, including paid leaves of absence such as:• Vacations• Holidays• Leave for illness, disability or other incapacity• Layoffs• Jury or military duty leave
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EMPLOYER RESPONSIBILITY
TO PROVIDE COVERAGE• Safe Harborso Defined time periods. The safe harbors allow employers to use these
time periods to predict whether an employee will qualify as full-time for shared responsibility purposes:
o Measurement period. Employers select a fixed three- to 12-month measurement period for determining whether an employee has averaged at least 30 hours of service per week.
o Stability period. After meeting the minimum-hours threshold during the measurement , employees must be treated as full-time – regardless of actual hours worked during a subsequent “stability period,” provided they remain employed.• Employees who fail to meet the minimum-hours threshold during
the measurement period do not have full-time status during the stability period and will not trigger shared-responsibility penalties.
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EMPLOYER RESPONSIBILITY
TO PROVIDE COVERAGE• Safe Harborso Stability period.
• The stability period can’t be shorter in duration (number of months) than its associated prior measurement period.
• If an employee meets the minimum-hours threshold during the measurement period, then the ensuing stability period for coverage availability must last at least six full, consecutive calendar months.
• If the employee did not meet the minimum-hours threshold, the stability period cannot be longer than the measurement period.
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EMPLOYER RESPONSIBILITY
TO PROVIDE COVERAGE• Safe Harborso Optional administrative period. Employers may need time after the
measurement period ends to decide which employees must be offered coverage during the ensuing stability period.
o The safe harbor allows an optional “administrative period” between the measurement and stability periods so employers can notify employees qualifying for coverage and handle enrollment tasks.
o The administrative period can’t exceed 90 days or be applied in a way that imposes a gap in employees’ coverage.
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EMPLOYER RESPONSIBILITY
TO PROVIDE COVERAGE• Safe Harborso Uniform periods, except between certain employee groups. An
employer generally must apply its selected measurement and stability periods on a consistent basis to employees.
o But an employer’s measurement and stability periods can vary in length and/or in starting and ending dates for different specified categories of employees:• Collectively bargained versus non-collectively bargained
employees,• Salaried versus hourly employees, and• Employees located in different US states.
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EMPLOYER RESPONSIBILITY
TO PROVIDE COVERAGE• Employer mandate penalties – The penalty for employers not offering any coverage to at least 95% of their employees is $2,000 per FTE (minus the first 30).
• The penalty for employers offering a plan that is not “affordable” or does not provide “minimum value” is the lesser of:o (a) $3,000 per FTE receiving the tax credit for exchange coverage, oro (b) $2,000 per FTE (minus the first 30).
• There are no tax penalties for employers with fewer than 50 full-time employees, or full-time equivalents.
• Employers with non-1/1 plan effective dates will not incur any penalties if they comply upon the first day of their 2014 plan year. Employers cannot change their effective date now to take advantage of this relief.
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REQUIREMENTS FOR MINIMUM COVERAGE
To be considered minimum coverage, a plan must:• Provide 60% actuarial value minimum (covers
at least 60% of covered health care costs)• Be “affordable” based on regulations –
Employee share of the premium must be less than 9.5% of household income
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Essential Health Benefits
1. Ambulatory patient services2. Emergency services3. Hospitalization4. Maternity and newborn care5. Mental health and substance use disorder services,
including behavioral health treatment6. Prescription drugs7. Rehabilitative and habilitative services and devices8. Laboratory services9. Preventive and wellness services and chronic disease
management10.Pediatric services, including oral and vision care
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Determination of employer penalty for categories of
employeesEmployee Category
How is this category of employee used to determine
“large employer?”
Once an employer is determined to be a “large
employer,” could the employer be subject to a penalty if this type of employee received a
premium credit?
Full-time Counted as one employee, based on a 30-hour or more work week Yes
Part-timeProrated (calculated by taking the hours worked by part-time employees in a month / by 120)
No
Seasonal Not counted, for those working less than 120 days in a year
Yes, for the month in which a seasonal worker is full-time
Temporary AgencyGenerally, counted as working for the temporary agency (except for
those workers who are independent contractors)
Yes, for those counted as working for the temporary agency
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POTENTIAL ANNUAL PENALTIES IN 2014 FOR LARGE EMPLOYERS
Not a large employer: Less
than 50 full-time equivalent employees
Large employer: 50 or more full-time equivalent employees
Does not offer coverage Offers coverage
ANo full-time employees
receive credits for exchange
coverage
B1 or more full-time employees receive credits for exchange
coverage
CNo full-time employees
receive credits for exchange
coverage
D1 or more full-time employees receive credits for exchange
coverageNo penalty No penalty Number of full-time
employees minus 30 multiplied by $2,000
No penalty Lesser of:• Number of full-
time employees minus 30,
multiplied by $2,000
• Number of full-time employees
who receive credits for exchange coverage,
multiplied by $3,000.
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IMPACT ON SMALL BUSINESS
• Individual and small group plans must provide Essential Health Benefits Packageo Four components of package:
• Essential Health Benefitso 10 required coverage categories
• Out-of-Pocket Maximumo New accumulation rules and ceiling
• Small group deductible ceilingo 2,000 single/$4,000 family
• Limited to "Metallic" coverage levelso Bronze, Silver, Gold, Platinum
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IMPACT ON SMALL BUSINESS
Essential Health Benefits1. Ambulatory patient services2. Emergency services3. Hospitalization4. Maternity and newborn care5. Mental health and substance use disorder services,
including behavioral health treatment6. Prescription drugs7. Rehabilitative and habilitative services and devices8. Laboratory services9. Preventive and wellness services and chronic disease
management10.Pediatric services, including oral and vision care
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IMPACT ON SMALL BUSINESS
Out-of-Pocket Maximum – New accumulation rules and ceiling
• OOPM ceiling at HSA level: likely $6,400/$12,800 in 2014 (indexed to inflation)
• All cost-sharing (for essential health benefits) must accumulate to OOPM
• Applies to small and large fully insured plans and self-funded plans
• Transition rules give flexibility for "separate service providers" for one year
• Does not apply to out-of-network benefits
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IMPACT ON SMALL BUSINESSSmall group deductible ceiling - $2,000 single/$4,000
family
• Indexed to inflation• Exception for Bronze plans if you cannot
"reasonably" design one with a $2,000 deductible
• Applies to small group fully insured only; NOT to individual, large group, or self-funded
• Does not apply to out-of-network benefits
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IMPACT ON SMALL BUSINESS
Limited to "Metallic" coverage levels (Bronze, Silver, Gold, Platinum)
• Apply on and off Exchange• Defined by actuarial value (plus/minus 2%):
Bronze/60%, Silver/70%, Gold/80%, Platinum/90%
• Federal requirement to offer one Silver, one Gold plan on Exchanges
• All as calculated by the new "actuarial value calculator" (released on 2/20)
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INDIVIDUAL MANDATE
All U.S. citizens and legal residents will be required to have qualifying health
coverage in 2014 or pay a penalty.
This simple flowchart illustrates how that requirement works.
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Health Insurance Exchanges
• Exchanges, administered by a governmental agency or non-profit organization, are where individuals and small businesses with up to 50 employees can purchase qualified coverage.
• Exchanges are effective January 1, 2014.• Businesses with more than 100 employees will be
able to purchase coverage in the SHOP Exchange beginning in 2017.
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Plans within the Exchange
Bronze Plan
Silver Plan
Gold Plan
Platinum Plan
Catastrophic Plan
(only available in the individual
market, for those up to age 30 or
exempt from the mandate)
% of coverage of
benefit costs of the
plan
60% 70% 80% 90%
Out-of-pocket Limit
Equal to the Health Savings Account (HSA) current law limit($6,250 for individuals and $12,500 for families in 2013)
*Catastrophic plan prevention benefits and coverage for three primary care visits are exempt from the out-of-pocket limit.
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Federal Subsidy through the Exchange
• The federal subsidy (or tax credit) is not available to an employee if the following conditions are met:o An employer offers employees the opportunity to enroll in a group
health plan providing minimum actuarial coverage, and o Health plan premium costs for single coverage are less than 9.5% of an
employee’s household income
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Federal Subsidy through the Exchange
• 2013 Poverty Guidelines for the 48 Contiguous States and the District of Columbia Persons in family/household Poverty guideline
• Persons in Family / Household Poverty Guideline For families/households with more than 8 persons, add $4,020 or each additional person.
Persons in
family/household
Poverty guideline 400%
1 $11,490 $45,9602 15,510 $62,0403 19,530 $78,1204 23,550 $94,2005 27,570 $110,2806 31,590 $126,3607 35,610 $142,4408 39,630 $158,520
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Federal Subsidy through the Exchange
• Provide refundable and advanceable premium credits to eligible individuals and families with incomes between 100-400% FPL to purchase insurance through the Exchanges. The premium credits will be tied to the second lowest cost silver plan in the area and will be set on a sliding scale such that the premium contributions are limited to the following percentages of income for specified income levels: o 100-133% FPL: 2% of income o 133-150% FPL: 3 – 4% of income o 150-200% FPL: 4 – 6.3% of income o 200-250% FPL: 6.3 – 8.05% of income o 250-300% FPL: 8.05 – 9.5% of income o 300-400% FPL: 9.5% of income
• Increase the premium contributions for those receiving subsidies annually to reflect the excess of the premium growth over the rate of income growth for 2014-2018. Beginning in 2019, further adjust the premium contributions to reflect the excess of premium growth over CPI if aggregate premiums and cost sharing subsidies exceed .54% of GDP.
• Provisions related to the premium and cost-sharing subsidies are effective January 1, 2014.
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Wellness programs in insurance
• Permits employers to offer employees rewards of up to 30%, potentially increasing to 50%, of the cost of coverage for participating in a wellness program and meeting certain health-related standards.o Effective January 1, 2014
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“Pay or Play?”
CHOICES EMPLOYERS FACE
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6 Reasons why ‘Pay’ is not an easy answer
1. There are lost tax advantages2. Reporting burdens remain3. Employee recruitment and retention challenges4. Counting employees can be complex5. The cost of coverage can be adjusted6. Other financial implications
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6 Reasons why ‘Pay’ is not an easy answer
There are lost tax advantagesCurrently, employee benefits are tax deductible to the employer and a tax free benefit to the employee. The employee’s portion of the premium can be paid via a Section 125 plan, which reduces both the employer’s and employee’s FICA tax.
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6 Reasons why ‘Pay’ is not an easy answer
Reporting burden remainsEmployers will still face federal reporting requirements to help determine the penalty amount. The individual exchanges will require employee reporting to determine if the employee is eligible for a premium tax credit.
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6 Reasons why ‘Pay’ is not an easy answer
Employee recruitment and retention challengesThe primary reason for offering employee benefits is to attract and retain employees. PPACA does not change this. Employers that offer a good comprehensive employee benefit package will still be looked up on more favorably than those employers that decide not to offer employee benefits.
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6 Reasons why ‘Pay’ is not an easy answer
Counting employees can be complexCounting employees is a complex calculation! How many full time? How many part time? How do I count seasonal? How do I count temporary?
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6 Reasons why ‘Pay’ is not an easy answer
The cost of coverage can be adjustedCurrent plans may be too expensive for the employer or the employee. Employers can begin offering the 60% minimum value plan or reduce employees hours to part time to mitigate the overall cost effect of PPACA.
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6 Reasons why ‘Pay’ is not an easy answer
• Other financial implicationso Employers may have to increase employee compensation to off set the
loss of employer provided coverage. An employer paying $500 per month for medical insurance would have to give their employee a raise between $633 and $926 per month to give the employee the same after tax money, so the employee can purchase medical insurance through the exchange.
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Impact of Affordable Care Act (ACA)
2010 ProvisionsUnless otherwise noted, the provisions went into effect for plan years on or after 9/23/2010
Individual Small Group Large Group Self-funded (ASO
Dependent coverage for adult children to age 26 Y Y Y Y
No lifetime or annual dollar limits on essential health benefits Y Y Y Y
No lifetime dollar limits on coverage Y Y Y Y
100% coverage for in-network preventive care1 Y Y Y Y
No annual dollar limits on certain types of benefits (restricted annual limits allowed until 2014) Y1 Y Y Y
No pre-authorization for emergency services1 (patient protection) Y Y Y Y
No higher cost share for out-of-network emergency services1 (patient protection) Y Y Y Y
No pre-existing condition exclusions for children Y Y Y Y
Revised appeals process1 Y Y Y Y
Early retiree reinsurance program (fund exhausted 2011) NA Y Y Y
MLR requirements Y (80%) Y (80%) Y (85%) NA
No pre-tax reimbursements from health spending or flexible spending accounts (HSA/FSA) for non- prescribed over-the-counter medications
NA Y Y Y
1The law does not require grandfathered plans to comply with this provision. However, in some cases we have decided to extend these provisions regardless of
grandfathered status.
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Impact of Affordable Care Act (ACA)
2011 ProvisionsUnless otherwise noted, the provisions went into effect on 1/1/2011
Individual Small Group Large Group Self-funded (ASO20% tax for nonqualified HSA withdrawals Y Y Y Y
2012 ProvisionsUnless otherwise noted, the provisions went into effect for plan years on or after 9/23/2012
Individual Small Group Large Group Self-funded (ASOReporting value of employer- sponsored coverage on W-2 NA Optional Optional Optional
Summary of Benefits & Coverage (SBC) Y Y Y Y(provided for benefits we administer)
60-day notice of material modification Y Y Y Y
Women’s Preventive CareY
(effective for new or renewing plans on or after 8/1/2012)
Y*(effective for new or renewing plans on
or after 8/1/2012)
Y*(effective for new or renewing plans on
or after 8/1/2012)
Y*(effective for new or renewing plans on
or after 8/1/2012)* Religious exemption or one year enforcement safe harbor available for groups that meet certain, specific criteria outlined in the regulation.
2Payable beginning Federal fiscal year 2013 which began October 1, 2012. Applies to plan years ending 10/1/2012 and later.
2013 ProvisionsUnless otherwise noted, exact dates of implementation are to be determined
Individual Small Group Large Group Self-funded (ASO
Reporting value of employer- sponsored coverage on W-2 NA Transitional relief until 2014 Y(employer responsibility)
Y(employer responsibility)
Employee notification of exchanges, including subsidies and tax credits NA Y
(employer responsibility)Y
(employer responsibility)Y
(employer responsibility)
Flexible spending account contributions limited to $2,500/year Effective 1/1/2013 NA Y Y Y
Patient-Centered Outcomes Research Institute (PCORI)- sponsored comparative effectiveness research fee (CER)2
Y(health plan pays)
Y(health plan pays on employers’
behalf)
Y(health plan pays on employers’
behalf)
Y(employer responsible for calculating
amount and paying fee)
Free choice voucher required to be provided to qualifying employees NA Repealed Repealed Repealed
* Religious exemption or one year enforcement safe harbor available for groups that meet certain, specific criteria outlined in the regulation.2Payable beginning Federal fiscal year 2013 which began October 1, 2012. Applies to plan years ending 10/1/2012 and later.
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Impact of Affordable Care Act (ACA)
2014 ProvisionsUnless otherwise noted, exact dates of implementation are to be determinedPlease see chart “2014 Impacts” for specific on / off exchange plan impacts
Individual Small Group Large Group Self-funded (ASO
Insurer Fee (or Health Insurance Tax) Y(health plan pays on employers’ behalf)
Y(health plan pays on employers’ behalf)
Y(health plan pays on employers’ behalf) NA
Transitional Reinsurance Fee NA Y(health plan pays on employers’ behalf)
Y(health plan pays on employers’ behalf)
Y(employer encouraged to calculate amount
and pay fee directly3)
Essential health benefits (EHB) package required Y Y NA NA
Out-of-pocket maximum limits applied (cumulative for all coverage) Y Y Y(transitional relief until 2015)
Y(transitional relief until 2015)
No pre-existing condition exclusions regardless of age Y Y Y YCoverage waiting period not to exceed 90 days Y Y Y Y
Employers with 50+ required to offer coverage with minimum value (MV) NA Y
(dependent on number of employees) Y Y(dependent on number of employees)
Auto-enrollment required by employers with 200+ employees NA NA Y(dependent on number of employees)
Y(dependent on number of employees)
Coverage of routine care costs for patients* participating in clinical trials Y Y Y Y
“Small group” redefined as 1-100 (states may defer until 2016) NA Y Y Y(dependent on number of employees)
Deductible limits $2,000 individual /$4,000 family4 NA Y NA NA
HIPAA nondiscrimination rules on wellness programs NA Y Y YWellness program maximum incentive increase to 30% 5 NA Y Y YIndividual mandate Y NA NA NAGuaranteed issue Y Y Y YRating limitations NA Y NA NA* Patients with life-threatening illnesses
3 Final business decision pending based on interpretation of regulations.
4 Health insurance coverage may exceed the annual deductible limit if it cannot reasonably reach a given level of coverage (metal tier) without exceeding the deductible limit
5 Up to 50 percent for programs designed to prevent or reduce tobacco use
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Impact of Affordable Care Act (ACA)
2014 Impacts
Individual Market Small Group Fully-Insured Market Large Group Fully Insured Market (until 2017)
Self-Insured Market
On Exchange Off Exchange On Exchange Off Exchange Off Exchange Off Exchange
Coverage for essential health benefits (EHBs) Must cover Must cover Must cover Must cover Coverage not required Coverage not required
Lifetime / Annual limits No $$ limits on EHBsOther limits ok
No $$ limits on EHBsOther limits ok No $$ limits on EHBs Other limits ok No $$ limits on EHBs Other limits ok No $$ limits on EHBs Other limits ok
No $$ limits on EHBs Other limits
ok
Deductible limits NA NA Applies Applies NA NA
Out-of-Pocket maximum limitations Applies Applies Applies Applies for NGF Applies for NGF Applies for NGF
Metal levels (actuarial value or AV) Must meet 1 of 4 AV levels Must meet 1 of 4 AV levels for NGF Must meet 1 of 4 AV levels Must meet 1 of 4 AV levels for NGF N/A (risk penalty if plan is not 60% MV)N/A (risk penalty if
plan is not 60% MV)
Rating rules Standardized rating Standardized rating for NGF Standardized rating Standardized rating for NGF N/A N/A
No pre-existing condition exclusions Applies Applies to NGF Applies Applies Applies Applies
90-day waiting period limitation N/A N/A Applies Applies Applies Applies
Coverage for patients in clinical trials Applies Applies to NGF Applies Applies (NGF) Applies (NGF) Applies (NG*)
HIPAAnondiscrimination on wellness programs N/A N/A Applies Applies Applies to NGF Applies to NGF
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