bcbs the affordable care act 2010 and beyond

8/8/2019 BCBS the Affordable Care Act 2010 and Beyond

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A Blue Cross and Blue Shield Association Presentation

The Affordable Care Act:The Affordable Care Act:

2010 and Beyond2010 and Beyond

National Labor Office SymposiumNational Labor Office Symposium

October 5, 2010October 5, 2010


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Plans can lose grandfathered status if:

Deductibles/cost-sharing increase above certain levels

Employer contributions decrease by >5%

Change insurance policies

Make certain other changes

Grandfathered coverage doesnt have to comply with:

Preventive services rules, new appeals requirements (2010)

Essential benefit categories, cost-sharing rules (2014)

Certain other requirements

Grandfathered plans have to keep track of their status and disclose tomembers

General Rules on Grandfathering

Special rule for insured plans under a CBA (next slide)

Grandfathering


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Special Grandfather Rule forSpecial Grandfather Rule forInsuredInsuredCollectively Bargained PlansCollectively Bargained Plans

InsuredInsured collectively bargained plans retain grandfathered statuscollectively bargained plans retain grandfathered statusuntil last CBA in effect on 3/23/10 terminatesuntil last CBA in effect on 3/23/10 terminates ---- even if changeseven if changes

are made that usually would end grandfathered statusare made that usually would end grandfathered status E.g., an insured collectively bargained plan changes its insurerE.g., an insured collectively bargained plan changes its insurer

After the last CBA ends, the general grandfathering rules applyAfter the last CBA ends, the general grandfathering rules apply

Insured collectively bargained plan still are subject to the samInsured collectively bargained plan still are subject to the sameerequirements as other grandfathered plans (e.g., dependent agerequirements as other grandfathered plans (e.g., dependent agechange)change)

No special rule for selfNo special rule for self--funded plansfunded plans

Grandfathering


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How ACA Effective Dates Work

ACA effective dates generally are tied to plan years:

1. Plan year in ERISA document2. If none, then deductible or limit year

3. If none, then policy year

4. If none, then employer taxable year

5. If none, then calendar year

Example:

Dependent age extension to age 26 applies to plan yearsbeginning on or after September 23, 2010

If ERISA document says plan year is calendar year, thenchanges for that particular ERISA plan must be effective by

January 1, 2011

Grandfathering


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Preventive Services Benefits (2010)

Plans must cover certain preventive servicesPlans must cover certain preventive services

with no costwith no cost--sharingsharingCovered Benefits

HighHigh--priority recommendations (priority recommendations (AA oror BB) by U.S. Preventive Services Task) by U.S. Preventive Services TaskForceForce

Immunizations for routine use recommended by CDCImmunizations for routine use recommended by CDC

Preventive care and screenings for children supported by HealthPreventive care and screenings for children supported by Health ResourcesResourcesand Services Administrationand Services Administration

Guidelines for women supported by HRSAGuidelines for women supported by HRSA

Other Important Information

Grandfathered plans are exemptGrandfathered plans are exempt

Coverage for inCoverage for in--network benefit only is permissiblenetwork benefit only is permissible

New recommendations must be covered for the first plan year thatNew recommendations must be covered for the first plan year thats ones oneyear after adoption by the governmentyear after adoption by the government

Prevention/Wellness


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HIPAA Wellness Rule Changes (2014)

Plans may provide rewards up to 30% (previously 20%) for

participation in certain health promotion and prevention programs

Reasonable chance of improving health or preventing disease

Cannot be overly burdensome or used to discriminate based on ahealth factor

Reward cannot exceed 30% of cost of member-only coverage

HHS and the Labor Dept have an option to increase ceiling to 50%

Following rewards are permissible: Premium discount or rebate

Absence of surcharge

Waiver of cost-sharing

Value of benefit not covered

PremiumVariation

ProgramDesign

Prevention/Wellness


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Annual and Lifetime Limits

No annual and lifetime limits on essential benefits

Essential benefits include: Hospitalization, physician services, emergencyservices, Rx drugs, maternity, mental health, etc.

Limits OK for nonessential benefits

HOWEVER There are two options for annual limit exceptions before 2014

1. Follow HHS Schedule: 2011: $750,000

2012: $1.25 million

2013: $2 million

2. Request HHS Waiver: Send annual application indicating compliance with annual limit rules

would cause significant decrease in access to benefits or asignificant increase in premiums

HHS will process waiver application within 30 days

Applies to new and grandfathered group plans

2010 Changes


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Dependent Coverage to Age 26Dependent Coverage to Age 26

Must cover adult child to age 26Must cover adult child to age 26

Regardless of student status, marital status, tax dependency,Regardless of student status, marital status, tax dependency,

residencyresidency Not required to cover spouse or child of adult child dependentNot required to cover spouse or child of adult child dependent

Must provide oneMust provide one--time retime re--enrollment right to those who previouslyenrollment right to those who previouslyaged out or were denied coverageaged out or were denied coverage

Prior to 2014, grandfathered group plans not required to cover iPrior to 2014, grandfathered group plans not required to cover iffdependent is eligible to enroll in other group coveragedependent is eligible to enroll in other group coverage

2010 Changes


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Must cover emergency services without priorMust cover emergency services without prior

authorization (including nonauthorization (including non--network)network) Member non-network cost-sharing cannot exceed in-network

However, non-network providers can balance bill patients

Plans must pay non-network providers a reasonablerate, defined as the greater of: Negotiated payments for in-network providers

Amount using the method the plan generally uses to determinenon-network payments, but substituting in-network cost-sharing Medicare payments for emergency services

Emergency Services2010 Changes


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Primary Care Provider

Must allow member to choose own primary care physician fromMust allow member to choose own primary care physician fromthose in networkthose in network

Pediatrician

Must allow child to have a pediatrician as primary care providerMust allow child to have a pediatrician as primary care provider

OB-GYN

May not require authorization or referral for inMay not require authorization or referral for in--network OBnetwork OB--GYNsGYNs

Provider Choice2010 Changes


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New rule clarifies which health plan decisions can be appealed

Decisions regarding eligibility, claims or coverage denials inclDecisions regarding eligibility, claims or coverage denials includinguding

medical necessity, health care setting, level of care, andmedical necessity, health care setting, level of care, andeffectiveness of a covered benefiteffectiveness of a covered benefit

New rule included some key changes from the ERISA rules that

plans have been following for almost a decadeDenial notice content expandedUrgent care claim decision timeframe reduced from 72 to 24 hoursClaimants may present testimony during appeal

New conflict of interest criteriaPlans must strictly adhere to new rule or members can go straight

to court (e.g., small procedural mistakes might not pass, even ifmember not harmed)

Internal Claim Appeals2010 Changes


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Determining Whether State or Federal Rules Apply Federal:Federal: ERISA selfERISA self--funded plans and insured group plans in states wherefunded plans and insured group plans in states where

external review does not certain NAIC standards or where there iexternal review does not certain NAIC standards or where there is no processs no process

State: Insured group plans and non-ERISA self-funded plans (stateemployee plans, church plans)

State External Review

Must be based on NAIC Model, but scope is wider Includes adverse benefit determinations based on effectiveness of a covered

benefit vs. effectiveness of the health care service

Must meet other minimum standards, e.g., no minimum $$ threshold toappeal

Existing state external review process considered to be compliant for planyears beginning before 7/1/11

New Federal Process

Rule released 7/23/10; additional guidance expected next year

External Review of Claim Decisions2010 Changes


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2011-2013 Changes

Medical Loss Ratios

(2011+)

Insured plans only does not apply to self-funded

Annual rebates to participants, starting 2011, if:

Less than 85% of premium spent on clinical services andhealth improvement activities (80% for small group market)

Uniform CoverageSummaries

(2012+)

New and grandfathered plans will need to provide 4-pagebenefit summaries using HHS standardized format anddefinitions

Flexible SpendingAccount Limits

(2013+)Contributions limited to $2,500/year

Auto-Enrollment(eff. date not clear)

Large employers (>200 employees) must automatically enrollworkers in health plans

While there arent as many benefit plan changes occurring 2011-2013, planning for 2014 will take a lot of time and attention

Later Changes


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Additional Group Benefit PlanChanges Will Go into Effect in 2014

Pre-Existing Condition Exclusion Period: Not allowed (e.g., no 6-month wait for Member X to receive asthma benefits due to medical

history and break in prior coverage) Waiting Periods: Limited to 90 days (e.g., new members have to wait

90 days before eligible for health benefits)

Out-of-Pocket Limits: Approx. $5,950 (self), $11,900 (family) (highdeductible plan limits for 2010 shown as example, but will be adjusted forinflation)

Small Group Rules: Essential benefits must be covered; deductiblessubject to limits; and metallic product requirements related to actuarialvalue of 60%-90% (member cost-sharing as percent of plans coveredbenefits)

Note: Coverage will have to provide at least 60% actuarial value to satisfy mandateto have insurance but most group plans today are far above that level

Later Changes


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There Will Be Major Changes in HowHealth Insurance Works Starting in 2014

Many individuals will be required to have coverage under federallaw

Federal Subsidies: Sliding scale of subsidies for people withincomes 100% to 400% poverty level (about $43,000/individual and$88,000 today. People with employment-based coverage canqualify under certain circumstances

Exemptions: Affordability, financial hardship, other

Noncompliance Penalties: Greater of: (1) flat $ amount (from $95in 2014 to $695 in 2016) or (2) % of household income (from 1% in2014 to 2.5% in 2016)

New rules for health insurance policies sold to small employers andoutside the employment context (AKA individual market)

Insurers will sell regardless of health status during open enrollmentperiods

Premiums not based on health status of applicants Certain essential benefit categories must be covered

Later Changes


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Employer Pay or Play (2014)

Play

Employers with more than 50 FTEs must offer minimumcoverage

Part-time workers included in count, but seasonal workers are not

No minimum employer contribution requirement

On average, plan must pay 60% of covered benefits (i.e., copays and deductibles

equal no more than 40%)

Pay

If not, the employers must pay a penalty

1. Employer doesnt offer coverage and at least one full-time employeereceives a tax credit: $2,000 x total # of FTEs (minus first 30)

2. Employer does offer coverage, but at least one FTE receives tax creditdue to 60% covered benefit requirement or employee cost exceeds9.5% of household income: Lesser of $2,000 x total # of FTEs (minusfirst 30) or $3,000 x # of FTEs receiving tax credit

Later Changes


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Exchanges in 2014 Will Make FindingInsurance Easier

Later Changes


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Exchanges Will Perform Many Functions RegardingSmall Group and Individual Health Insurance

Help consumerschoose & enroll incoverage

Collect health plandata

Run websites that

allow consumers toshop for health plans

Help eligible

individuals get federalsubsidies

Help eligibleindividuals enroll in

Medicaid/ CHIP

Exclude health planswith excessive rate

increases

Offer health plansoptions

The

Exchange

States have a lot of flexibility in designing ExchangesStates have a lot of flexibility in designing Exchangeswhich insurers and policies to include, whowhich insurers and policies to include, who

runs the Exchange, what areas they cover, etc.runs the Exchange, what areas they cover, etc. Starting in 2017, large groups may be allowed to use ExchangesStarting in 2017, large groups may be allowed to use Exchanges

Later Changes


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Federal Agencies and States Share Oversightfor Many Reforms

The Affordable Care Act and HIPAA (1996) allocate responsibilities betweenfederal and state officials and define scope of federal preemption

HHS DOL Treasury/IRS Enforcement for insurers, stateemployee group plans

Individual/group plan standards (withDOL/Treasury)

Penalties of $100 per day perindividual if noncompliance with planstandards

Exchange standards

Enforcement for self-funded andinsured ERISA group plans

Group plan standards (withHHS/Treasury)

DOL can sue if noncompliance withplan standards

Other employer focused rules (e.g.,autoenrollment)

Enforcement for group plans, churchplans

Group plan standards (with HHS/DOL)

Excise tax of $100 per day perindividual if noncompliance with planstandards

Enforcement of individual/ employermandates

Individual/small employer subsidies

States State options (federal fallback if states dont act):

Implement health plan standards

Run Exchanges

States not needed to enforce the employer and individual mandates/subsidies NAIC has statutory role advising HHS on some issues, informal role on many other issues


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The Affordable Care Act:The Affordable Care Act:

2010 and Beyond2010 and Beyond

National Labor Office SymposiumNational Labor Office Symposium

October 5, 2010October 5, 2010


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Agenda

Grandfathering and Effective Dates

Prevention and Wellness Changes 2010 Changes

Later Changes (2011 and Beyond)

Healthcare Reform and the Role of the States

F d l A i d St t Sh O i ht


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Federal Agencies and States Share Oversightfor Many Reforms

The Affordable Care Act and HIPAA (1996) allocate responsibilities betweenfederal and state officials and define scope of federal preemption

HHS DOL Treasury/IRS Enforcement for insurers, state

employee group plans

Individual/group plan standards (withDOL/Treasury)

Penalties of $100 per day perindividual if noncompliance with planstandards

Exchange standards

Enforcement for self-funded andinsured ERISA group plans

Group plan standards (withHHS/Treasury)

DOL can sue if noncompliance withplan standards

Other employer focused rules (e.g.,autoenrollment)

Enforcement for group plans, churchplans

Group plan standards (with HHS/DOL)

Excise tax of $100 per day perindividual if noncompliance with planstandards

Enforcement of individual/ employermandates

Individual/small employer subsidies

States State options (federal fallback if states dont act):

Implement health plan standards

Run Exchanges

States not needed to enforce the employer and individual mandates/subsidies NAIC has statutory role advising HHS on some issues, informal role on many other issues


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Key State Activities

Statutory role advising HHS on insurance market regulation, keyforms, other issues

Informal advisory role on many other issues

Strategic planning, information-sharing role to facilitate reformimplementation

Within ACA Framework - State Perspective

Retain state oversight of insurance market Ensure flexibility to reflect unique market environment, needs


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Key Players - State Consortium on Health Care ReformImplementation

National Governors Association NGA

National Association of Insurance Commissioners NAIC

National Association of State Medicaid Directors NASMD

National Academy for State Health Policy - NASHP

Key Players State Legislators

National Conference of State Legislators NCSL

National Conference of Insurance Legislators NCOIL

Council of State Governments CSG

States are acting NOW to advise HHS on 2010, later changes


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What / who is NAIC?

Insurance regulators of 50 states, DC, territories Appointed or elected

Leadership changes annually currently WV, IA, FL, OK, KS

Extensive committee structure for debate, taking action

Develops insurance models for state consideration

NAIC Health Care Reform Principles

Protect rights of consumers

Address health care spending Promote state innovation

Stop cost-shifting

Avoid adverse selection


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NAIC Multiple responsibilities in key issue areas

Medical Loss Ratio (by 1/11 for rebates beginning 1/12)

Uniform definitions, standard methodologies for calculating MLR,rebates

At least 80% (85%) on clinical, quality improvement expenses

Rate Review (immediate) Report on state authority to review, approve/deny rates

Disclosure form for unreasonable premium increase request

Rating methodology (by 1/14) Advise HHS on age bands, rating areas

Develop models for states


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NAIC, cont.

Plan standards (by 3/11 for 3/12 Plan years)

Definitions, disclosure notices

Summary of benefits

Exchanges (immediate, state notice by 1/13 for 1/14)

RFI response, consult on regulation development Model to reflect ACA requirements, state options

Uniform enrollment form

Anti-Fraud (immediate) Uniform standards and form for reporting fraud and abuse

Interstate Compact standards (by 1/13 for 1/16 implementation)


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NAIC, cont. Immediate Reforms

NAIC models, model language for states (immediate)External Review

Internal Appeals Grievances, UR

Dependent coverage to Age 26No Pre-ex for children


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State Legislators Implement state reform strategy

NCSL, CSG, ALEC information resources for legislators

NCOIL model legislation

Summer-Fall 2010 educate through webinars, national

conferences Challenges of change elections, litigation

All states in session 2011

Will conform immediate reforms to retain state oversight

Will put wheels in motion toward Exchanges, other 2014 activities

H l h R f d h R l f h S


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HHS looking to state officials, local insurance marketexperts for guidance

Step up to be part of the process!

Consult state officials for information, opportunity to

shape healthcare reform

www.naic.org www.nga.org

www.ncsl.org www.ncoil.org

www.csg.org www.nashp.org
http://www.naic.org/http://www.nga.org/http://www.ncsl.org/http://www.ncoil.org/http://www.csg.org/http://www.nashp.org/http://www.nashp.org/http://www.csg.org/http://www.ncoil.org/http://www.ncsl.org/http://www.nga.org/http://www.naic.org/

bcbs the affordable care act 2010 and beyond

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