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Health Care Reform Updates Presented by Barb Gerken, Legislative Co-Chair

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

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Health Care Reform Updates Presented by Barb Gerken, Legislative Co-Chair

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  1. Health Care Reform Updates Presented by Barb Gerken, Legislative Co-Chair

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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.

  8. 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

  9. 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

  10. 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

  11. 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

  12. Essential Benefits Bulletin (cont.) • PPACA requires that Essential Health Benefits include items and services in the following 10 categories

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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

  18. 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

  19. 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

  20. 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

  21. 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 threshold • 78 in Puerto Rico

  22. Coverage Summaries and Material Modification Notice (cont.) • Must use 12 point font • Must customize all identifiable company information throughout document (websites, phone numbers)

  23. 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

  24. 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.

  25. Coverage Summaries and Material Modification Notice (cont.)

  26. Questions

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