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PPACA, COMPLIANCE & THE USA MARKET
PPACA, COMPLIANCE & THE USA MARKET
The USA healthcare market is the largest in the world followed by Switzerland and Germany
• It consists of broad services offered by various hospitals, physicians, nursing homes,
diagnostic laboratories, pharmacies and supported by drugs, pharmaceuticals, chemicals,
medical equipment, manufacturers and suppliers.
• Critical illness survival rates and access to pharmaceuticals and technology in the USA
exceeds that of any other industrialized country
• However, the system is costly and the increasing cost of healthcare services and
insurance premiums have rapidly increased in the last 30 years
• Many individual and employers have opted out of buying insurance plans
• Many others cannot afford insurance plans - not everyone uninsured is indigent or poor.
• The system is flawed by its emphasis on catastrophic care and not preventative care,
fraud, abuse and waste of resources which adds to the cost of the healthcare system.
• The system is completely private and each individual is responsible for their medical bills
and medical care.
INTRODUCTION
Who pays…
SIZE OF THE US MARKET
Where it goes…
SIZE OF THE US MARKET
SIZE OF THE US MARKET
SIZE OF THE US MARKET
SIZE OF THE US MARKET
Healthcare Reform does not answer or address costs!
HEALTH INSURANCE PREMIUM
HEALTH INSURANCE PREMIUM
2014 – After its rollout, the PPACA has seen the number of uninsured decrease at its greatest rate to 13.4 % or 32 million.
2013 – With the PPACA nearing, the number of uninsured rose to 18% or 43 million.
2012 – Total Number of Uninsured is 42 million or 17.5%.
2011 – Slightly decreased to 38 million or 16.1% of the population.
2010 – When the PPACA was enacted the number of uninsured had increased since the start of President Obama’s administration from 35 million to about 39 million or 16.4% of the population.
*Healthcare inflation was reported at 2.32% in October of 2013.
THE UNINSURED SITUATION
What is PPACA, what does it aim to do & who does it affect?
• The Patient Protection and Affordable Care Act was signed into law by President Barack Obama in March of 2010.
• It mandates that every individual must be covered by a healthcare plan by year 2014. A delay has been imposed on the employer mandate until 2015.
• Individuals must purchase healthcare from a private company or “healthcare exchanges created by the states or the Federal Government in each of the 50 States.
• It does not obligate any employer to provide insurance, however it does place penalties on employers that do not offer health plans to employees. It also places penalties on individuals that choose not to participate in a health plan offered by an employer via a tax penalty administered by the IRS- This has become known as the “play or pay” rule.
WHAT IS THE PPACA
What is PPACA, what does it aim to do & who does it affect?
• The law makes both insurance plans, individual and group employer plans, subject to the mandates.
• It permits self-funded plans with many exceptions more than 62% of all employers large and small have opted to go the self funded route.
• The law is enforced and administered by a collaboration of the Department of Labor, Health and Human Services and the Internal Revenue Service. Further support falls under the responsibilities of state insurance commissioners.
• The law outlines the role of each of these entities in providing individual, small and large group insurance coverage.
• The government will provide subsidies to those unable to afford health insurance via Expanded Medicaid or Healthcare Exchanges depending on income.
WHAT IS THE PPACA
• The health policy must meet the definition of a group plan or a health issuer plan. Short-term plans are not subject to PPACA regulations.
• The health product must meet the definition of group or individual health insurance coverage.
• Student health policies are subject to PPACA regulations & must comply.
• Every plan must include certain provisions that are phased in from 2010 to 2015.
• Every plan must cover a scheme of basic benefits some with no limits or exclusions that are known as “essential benefits”.
• Employers that do not provide group plans may opt to send their employees to the healthcare exchanges and pay a tax for not participating – Employer Shared Responsibility Mandate ( over 100 employees in size)
• Applies to long term health plans, not short term health plans- short term health plans are not to exceed one year.
If the plan is a group health plan or an individual health insurance issuer offering individual or group health insurance coverage, (includes HMO plans, Medicaid plans and Medicare HMO plans):
HOW DOES IT APPLY TO HEALTH PLANS
THE PPACA ROLLOUT
March 2010 Healthcare Reform Passes and will be implemented in phases to 2014.
September 2011 26 US States file a lawsuit against the federal government claiming that the PPACA is unconsDtuDonal.
June 2012 Supreme court rules that the law is consDtuDonal.
October 2013 Open enrollment begins for coverage taking effect in January 2014.
March 2014 Open enrollment closes.
• Minimum loss ratios by market of 80% or
85% (large vs. small employers)
• Rate Review
• Guarantee Issue
• Guarantee renewability
• Policies cannot carry pre-existing
conditions
• No discrimination on health status
• No discrimination of plan for highly
compensated employees vs. non highly
compensated employees (executives vs.
non executive)
ALL POLICIES ARE SUBJECT TO:
• Additional Taxation of certain types of
policies by 2018 for exceptionally rich
benefits if not offered to everyone (some
employers offer more than one plan and
employees may choose)
• No lifetime maximums nor annual limits
• Coverage of preventative care without
cost sharing
• Extension of adult dependent coverage
to age 26
• No pre existing condition
• Must provide “essential health” benefit
package as outlined by the law
1. AMBULATORY SERVICES
• Primary care visit to treat an injury or illness.
• Specialist visit.
• Other practitioner office visit (nurse, physician assistant).
• Outpatient facility fee.
• Outpatient surgery physician/surgical services.
• Home health care services.
• Skilled nursing facility.
• Hospice services.
4. EMERGENCY SERVICES
• Emergency room services.
• Emergency transportation/ambulance.
• Urgent care centers or facilities.
3. HOSPITALIZATION
• Inpatient hospital services (e.g. hospital stay).
• Inpatient physician and surgical services.
5. MATERNITY & NEWBORN CARE
• Prenatal and postnatal care.
• Delivery and all inpatient services for maternity care.
2. MENTAL HEALTH & SUBSTANCE USE
DISORDER SERVICES
• Mental/behavioral health outpatient services.
• Mental/behavioral health inpatient services.
• Substance abuse disorder outpatient services.
• Substance abuse disorder inpatient services.
FEDERALLY MANDATED ESSENTIAL HEALTH BENEFITS
10. PRESCRIPTION DRUGS
• Generic drugs.
• Preferred brand drugs.
• Non-preferred brand drugs.
• Specialty drugs.
6.REHABILITATIVE & HABILITATIVE SERVICES
• Outpatient physical therapy.
• Outpatient speech therapy.
• Outpatient occupational therapy.
• Durable medical equipment.
• Rehabilitative Service Example: Speech therapy for
• an adult who has suffered a stroke.
• Habilitative Service Example: Speech therapy for a
non-verbal child with autism.
8. LABORATORY SERVICES
• Diagnostic tests (x-rays and lab work).
• Imaging (CT/PET scans, MRIs).
9. PREVENTATIVE & WELLNESS SERVICES
AND CHRONIC DISEASE MANAGEMENT
• Preventative care/screening/immunizations.
7. PEDIATRIC SERVICES
(INCLUDING ORAL & VISION CARE)
• Routine eye exam for children.
• Eye glasses for children.
• Dental check-up for children.
FEDERALLY MANDATED ESSENTIAL HEALTH BENEFITS
The law defines a person subject to PPACA as an “applicable individual,” and “applicable individuals” must maintain the minimum essential coverage.
• “Applicable individuals” are defined as “any individual that is a citizen of the USA or an alien lawfully present in the USA”*
• Penalties are imposed on individuals that do not maintain minimum essential coverage via a tax administered and collected by the Internal Revenue Service (IRS), some exceptions may apply to this requirement.
The following examples illustrate the penalty for a single individual and for a family of four. Penalty amounts are shown for 2014, 2015, and 2016:
• 2014: $95 per individual & $285 per family, or 1% of household income.
• 2015: $325 per individual & $975 per family, or 2% of household income.
• 2016: $695 per individual & $2,085 per family or 2.5% of household income.
WHO MUST MAINTAIN “ESSENTIAL COVERAGE”
PPACA does not:
• Regulate insurances or insurance companies though it places some controls and some regulations in order to enforce PPACA.
• Does not oversee the admittance of any insurance company into any state for the business of transacting insurance.
Foreign nationals entering the United States for the purpose of a work related
assignment for a foreign corporation domiciled in the country of origin of the expat or
a third country expat working for the same corporation may be subject to PPACA
depending on several situations having to do with:
ü Legal status of the employee
ü Filing Tax Status of the Employee
ü Social Security Tax being paid in the USA
• As of early this year, new rules allow foreign insurance providers to approve their “group health plans” as ACA-compliant by following certain steps. This will protect the individual from penalties & taxes.
• Individual policies and student health plans may be approved following a separate process of approval.
INPATS & THE PPACA
If the tax status, visa and conditions of employment
make the employee admitted alien or temporary admitted
alien the individual may be subject to PPACA.
PPACA Key Entities:
The PPACA involves three main government entities – the IRS, CMS, & HHS – in regulating, administering & implementing healthcare reform & its provisions.
WHO ADMINISTERS THE PPACA
• The PPACA is a law that applies to all residents, citizens, and admitted persons in the USA – including employers and insurance providers.
• Penalties for failure to follow PPACA compliance guidelines will be issued in the form of a tax on both individuals and employers.
• Admitted insurances face new taxes to fund the assistance of those who cannot afford insurance.
• Foreign insurance providers are not subject to these taxes, however – the “inpat” individual may still be subject to such taxes.
• New regulations permit foreign group health plans to be approved by the PPACA. For individual health plans, approval can be achieved under certain conditions.
• This approval will preclude these taxes being charged or applied.
SUMMARY & RECOMMENDATIONS
ABOUT PAYERFUSION
• PayerFusion is a fully licensed Third Party Administrator and holds Certificates of
Authority from all U.S.A. Insurance Regulators to administer policies, collect premiums
process and execute claim payments on behalf of USA domestic and International
insurance carriers.
• PayerFusion holds Underwriting Authority and is licensed to fully underwrite USA self-
funded plans that are fully reinsured (stop loss).
• We have been developing and assisting our clients in PPACA compliance since 2010 and
act as a benefit consultant.
• To date we have accomplished the approval of over 7 foreign insurance companies
accounting for more than 14 different plans for compliance in the USA so that the
members do not have to leave their plans and do not have to pay a penalty or tax.
• Based in Miami, Florida, U.S.A., PayerFusion has developed an extensive suite of services
to meet the compliant needs of both the domestic and international payers.
Thank You for Attending!
