11/5/2014

1

Health Care Reform Update Riding the Wave2014 for 2015 Plan Year

Insurance Group Reps: 11/6/14 (EHBC 10/16)Presented By: Pamela Boyer

Cheryl AlbrechtInformation is current as of time of presentation

Overview of Presentation

• Define our Plan

• High level review of ACA (PPACA, etc.)

• Employer Shared Responsibility

• Federal & Individual Reporting

• Health Plan Identifiers

• Transitional Reinsurance Fee

• Summary of Legislative Updates

• Action Items2

11/5/2014

2

Wood County Employees Health Benefits Plan• Board of County Commissioners serve as Plan

Administrators and Trustees of the Health & Welfare Plan • Employer sponsored • Self-insured Group Health Plan• Preferred Provider Organization (PPO)• Non-federal governmental plan• Non-ERISA• Grandfathered Health Plan

• Definitions used in application of regulations

3

Review of ACA• Patient Protection and Affordable Care Act (PPACA)

enacted on March 23, 2010• Eight year implementation • Builds on prior annual presentations

• Available on county website• Date used in measuring Grandfathered Status

• Record retention required

• Applies to health & prescription coverage only

• Focus on Employer mandates• Regulations also touch: Individuals, Providers, Carriers, States,

Federal Agencies, etc.

4

11/5/2014

3

Review of ACA• Mandates changes to employer sponsored health

coverage if offered and/or pay various fees/assessments • Alters eligibility rules for employees and dependents (not spouses)• Requires auto enrollment (w/i 90 days)• Removes preexisting condition clauses• Removes annual & lifetime coverage limits on essential health

benefits• Requires certain benefits be covered• Requires distribution of information regarding plan and costs to

employees and federal government (SBC, Exchange, W-2, 1095)• Requires various fees paid to government by plans (PCORI, TRF,

Shared Responsibility, Cadillac Tax, DME, etc.)

5

Individual Mandate Review• Requires every American secure health care coverage

• Coverage provided by an Employer, federal program or Exchange• Creates Exchange or Market Place for individuals to purchase

coverage • Subsidies or tax credits available based on income

• Penalty for non-exempt individuals and family members for each month without coverage at the greater of:

• Flat Dollar Amount: • $95 in 2014, $325 in 2015, $695 in 2016 per person, max 3; ½ under 18

• Percentage of Income:• % of income 1% in ‘14, 2% in “15, 2.5% in “16, COLA beyond

• Individual Mandate: Effective 1/1/14 • Identified on 2014 tax return completed in 2015

6

11/5/2014

4

Employer Shared Responsibility• Employer Mandate: Effective 1/1/14

• Transition Relief in 2015 if “offered” to 70% full time employees• Auditor is same employer for tax purposes (NWWSD separate)

• Requires large employers to:• 1) Offer (or decline) coverage to full-time employees (95% in 2016)

• Full-time employees: 30 hpw/130 hpm• 2) Provide Minimum Essential Coverage (MEC) that is:

• 1) Affordable, and• Lowest cost single plan is 9.5% or less of wages • Using following methods: W-2, Hourly or Federal Poverty

• 2) Provides Minimum Value (MV)• Less than 60% of cost• Grandfathered Plans are considered to offer MV

7

Employer Shared Responsibility• Penalty or IRS assessments are applied to employers if an

employee goes to the Exchange and receives a tax credit if:

• 1) Fail of offer coverage to full time employees/dependents• $2,000 per employee (exempts first 30), and

• Approx. 795 – 30 x $2,000 = $1,530,000• 4980H(a)

• 2) Coverage is not affordable or does not provide minimum value • $3,000 per voucher (or 1/12 value per mo.)

• Oct. to Dec. = $750• 4980H(b)

• Wood County Employer is a Controlled Group• Auditor is the fiscal agent reporting taxes on behalf of employees

8

11/5/2014

5

Types of Employees• Full Time: 30 Hours of Service per week

• Hours of Service: Hours for which an employee is paid or entitled to payment, for the performance of duties for the employee, and each hour for which an employee is paid, or entitled to payment by the employer for a period of time during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence (as defined in 29 CFR 2530.200b-2(a))

• Part Time: not Full Time

• Variable Hour: reasonably expected to be employed on average at less than 30 hours of service per week because hours are variable or otherwise uncertain

• Seasonal Worker: Less than 120 days per year, same time each year

• Definition differs based on regulations, e.g. service accrual, OPERS, FMLA

9

What Are They?• Full time employee

• Variable Hour employee

• Seasonal

• Rehire

• When do I offer coverage?

Full Time

Variable Hour

Part Time

10

11/5/2014

6

Types of Offerings• Initial Offer

• Full time employees scheduled to work 30 hours per week• Must be enrolled within 90 days

• Delayed Offer using a Measurement Period may be used for:

• Variable Hour• Seasonal

• Changes in Status

• Break of Employment is Considered a New Hire• Break must be 13 weeks (26 educational organizations), or• At least 4 weeks and longer than immediately preceding period of

employment

11

Measurement Periods• Two Options Available to Measure Full-Time Status:

• 1. Monthly Measurement Method• 130 hr per month• Based on actual days of the month, e.g. Jan 1 - 31

• “Weekly Rule” is permitted under final regs• 120 hrs per month for months with 4 weeks• 150 hrs per month for months with 5 weeks• Based on pay periods using regulations criteria

• 2. Look-back Measurement Method• Measurement Period, Administrative Period & Stability Period• Initial or Ongoing Measurements

12

11/5/2014

7

Monthly Measurement Method

13

14

Look-Back Measurement Method: Initial (New Hire)

Measurement PeriodLook-back period of 3 to 12

consecutive calendar months.

Administrative PeriodMaximum of 90 days to

measure and communicate with employees.

Stability PeriodMay not be more than one

month longer than the Initial Measurement Period and must not exceed the

remainder of the Standard Measurement Period (plus any administrative period)

in which the initial MP ends.

Example: New Hire May 10, 2013

2013 - 2014May 10 (Year 1) to May 8 (Year 2)

Avg of 30 service hr/wk for 52 wkor 130 hr/mo for 12 m

2014May 9 (Year 2) to June 8 (Year 2)Review hours to determine eligibility

& notify employees 2014 - 2015July 1 (Year 3) to June 30 (Year 3)

Coverage eligible1st of mo following

Administrative Period

Measurement & Administrative Periodsmay not restrict enrollment beyond

13 months and a fraction of a month.

11/5/2014

8

15

Look-Back Measurement Method: Standard (Ongoing)

Measurement Period

Look-back period of 3 to 12 consecutive calendar

months to check if ongoing or newly hired variable hour or seasonal employees are

full-time.Service Hours include all hours actually worked in addition to any vacation, sick leave, holidays, etc.

Administrative Period

Maximum of a 90 day period between the

Measurement and Stability periods to perform administration and communicate with

employees

Stability Period

At least 6 consecutive calendar months that

follows and not shorter in duration than the

Measurement period. May not exceed Measurement

period if employee does not qualify during the

Measurement Period.

Employed for at least one Standard Measurement Period

2012 - 2013Oct 21 (Year 1) to Oct 19 (Year 2)

Using 26 Payroll Periods Avg of 30 service hr/wk for 52 wk

or 130 hr/mo for 12 m

2013Oct 20 (Year 2) to Dec 31 (Year 2)

Review service hours to determine eligibility & notify employees

Open Enrollment -Nov. 15 to Dec 15

2014Jan 1 (Year 3) to Dec 31 (Year 3)Coverage eligible even if reduced to

part-timeProvided employee payment received

(employee notification & 30 day grace)

16

Standard (Ongoing)

1) If eligible (avg svc 30 hrs) in Measurement Period 1 = Coverage during Stability Period, even if less than 30 svc hours in Stability Period 1.

2) If not eligible in Standard Measurement Period 2 = Coverage terminatesthe end of Standard Stability Period 1.

3) If change to PT = Coverage terminates at the end of the Stability Period.4) If change to FT at any time = Coverage begins per Plan rules.

11/5/2014

9

17

Initial (New Hire Variable Hour)

Variable Hour New Hire = Coverage is not offered during SMP1. Coverage is measured during Initial Measurement Period AND in first complete SMP.1) If not eligible in IMP = No Coverage in ISP. If eligible in SMP2 = Coverage 1/1/15.2) If eligible in IMP = Coverage begins in ISP without loss of eligibility in ISP

even if hours drop to below 30. If not eligible in SMP2 = Coverage terms 6/30/15.

Employer Shared Responsibility• Wood County Plan meets Safe Harbor for 2015

• 70% offer to full time employees• No change in eligibility rules for 2015

• Continue to report ALL new hires on insurance• Working with the Auditor to determine hours• May require alterations to reporting of payroll

• Employer Shared Responsibility Reporting • Required for 2015 enrollment reported in 2016

18

11/5/2014

10

Federal & Individual Reporting• Requires Employers or Plan Sponsors of a self-funded group

health plan to report eligibility and enrollment information• Responsible Individuals• IRS

• Reporting Requirement: Annually effective 2016• Prior year data, e.g. 2015 enrollment reported in 2016

• Information Used to Determine• Individuals/spouses have properly claimed exchange subsidies• Employer Shared Responsibility (ERS) assessments, aka penalties

19

Federal & Individual Reporting• Wood County is the Controlled Group Health Plan

• NWWSD & Airport Authority are participating employers• Wood Lane is a Subhealth Plan

• Governmental Employers may report MEC for other govtentities in one self-insured group health plan if there is an agreement

• Each employer remains responsible for any SR assessments owed

20

11/5/2014

11

Federal & Individual Reporting• Responsible Individuals: by Jan. 31

• Provide to:• Employee, former employee, retiree, or surviving or divorced spouse

who is the primary plan participant who had coverage for at least one day in a month

• TBD: dependents aging out who elect COBRA• Report to full time status individuals; regardless of enrollment

• Name, address and EIN of employer sponsoring the plan; telephone # of reporting entity’s contact person; policy number; coverage information (MEC) as reported to IRS

• May be distributed separately with W-2• Complies with section 6056 using IRS form 1095-C

21

Federal & Individual Reporting• IRS: by Feb 28

• Taxpayer identification numbers (TINs) or SS# for all covered individuals (responsible individuals and all bellybuttons)

• Birthdates may only be substituted for SS# if “reasonable efforts” made to obtain SS# failed by initial request & two annual attempts by following Dec. 31

• Employer identification number (EIN), name, and address of the plan sponsor

• Coverage dates by month for each covered individuals• Enrolled for at least one day of the month

• Complies with section 6056/6055 using IRS form 1094-C• Required electronically if over 250 employees

22

11/5/2014

12

Federal & Individual Reporting• IRS to provide Assessment Notifications

• IRS to adopt an appeals process to collect additional information pursuant to HHS regulations

• Forms 1094-C & 1095-C• IRS released reporting forms on 7/28/14 & instructions on 9/29/14

• Software changes required to track historical enrollment information by month from insurance program

23

National Health Plan Identifier• New requirement: Effective 11/5/14

• Requires Plans apply for a number at Centers for Medicaid Services (CMS)

• Comply with HIPAA Electronic Data Interchange (EDI) rules• Sending claims and electronic fund transfers• TPA must use in all transactions by 11/7/16

• ICD-9 to ICD-10 Billing

• Self-Insured Plan Sponsors must apply on-line• Multistep process• Requires Authorizing Authority

• Controlling Health Plan (CHP) or Subhealth Plan (SHP) • Wood County Employee Health Benefits Plan – CHP• Wood Lane - SHP

• Issue new enrollment cards?

24

11/5/2014

13

Transitional Reinsurance Fee• Transitional Reinsurance Fee (TRF)

• Provides funding for underinsured

• Plans pay 2014 through 2016• 2014 = $63• 2015 = $44

• $63 annually per member or $5.25 pmpm• Each belly button on plan as Primary (not secondary)

• Total Members on Wood County Plan • 1750 x $63 = $110,250• May be reduced for those on secondary coverage• Calculated per month of coverage or $5.25 pm

25

Patient-Center Outcome Research Institute Fee• Patient Center Outcome Research Institute Fees (PCORI)

• Provides funding for measuring treatment outcomes

• Effective 10/1/12 to 10/1/19• Paid in following year by July

• Based on members• Actual County Method, or• Snapshot Method

• Snapshot Count, Snapshot Factor• Form 5500 Method

• Rates:• 2013 = $1 ($1,320)• 2014 = $2 ($2,628)• 2015 = $2.08

26

11/5/2014

14

Legislative Updates• State of Ohio sponsored bill to eliminate dependent

eligibility rules for ages 26 & 27• ORC 3923.241 & AOAC 3901-8-13

• Elimination of HIPAA Certificates of Creditable Coverage effective: 1/1/15

• Not needed to credit for pre-existing condition provisions as ACA eliminated all pre-existing condition clauses

• Federal Activity at Supreme Court• Defense of Marriage Act: change to our eligibility rules to extend to

same sex spouses based on “state of celebration”• Religious freedom for birth control exception not applicable to

Wood County

27

Action Items• Standardize form for new hires

• Identify status approved by appointing authority• Change current use of PA, letter of offer, contract, etc.

• Report ALL new hires on insurance report

• Follow current New Hire checklists• Report any change in employment status

• No changes in eligibility due to safe harbor in 2015• 2016 Eligibility Rule Changes• Amend Plan Document to remove continuation of coverage in a

self-pay status in 2016

28

11/5/2014

15

Action Items• May need to issue new id cards with CHP#

• HIPAA Confidentiality• Employer fined 4.8M for ePHI Breech • Continue to send eligibility in confidential manner

• Email on county network secure• Use encryption method for all internal & external email• Insert “confidential” in the subject line to encrypt message

• Stay tuned for additional training in 2015

• Other Action Items???• Standardize Employee Enrollment on Health & Prescription

Coverage

29

2015 Funding Rates• Catastrophic Claim Utilization

• Medical Inflation• Health 9%• Prescription 8%, 20% Specialty

• Single to Family Ratio Changed• 2.4 to 2.6

• Stop Loss Changes due to unlimited liability• Incorporated prescription under umbrella

• Trust Not Funding Monthly Premiums• 2010 to 2014 trust used to reduce employer/employee premiums

• ACA: $146,078 in 2014 & 2015

• Separate Rates for Wood Lane

• Projected 2015 Plan Costs: $10,697,649

30

11/5/2014

16

Group Representative Reminders• Group Rep Training: May 22, 2014 Power Point Available

• Document on Monthly Report: All Hires & Leaves

• Wellness Screening: Verify completion prior to submitting on monthly report

• Record Retention: Annual certifications, etc. until IEVR completed

• COB & Secondary Coverage

• Precertification Requirements

• Recommend Identification of Primary Care Physician

• Use “Confidential” in Email Subject Line for HIPAA Encryption

• Request Packets: Rachel Richmond

• Distribute SPD to Employees• Annual Meetings: Nov. 19 & 20

• January Insurance Report: DUE – DEC. 29 @ 9:00 a.m.

31

Questions ???

• Thank You!!!• Door Prize Drawing

32