MCC Issues

1. MCC Issues June 11, 2009 Jamie Katz

2. Overview • MCC certification process has raised a wide variety of issues • Connector staff has resolved many through analysis of the regulations and determination of Board’s intent • Connector has identified three difficult issues where the staff seeks guidance from Board consensus • We do not want to undermine Board regulations and policies—we expect to return to Board with additional issues in the future • We keep in mind that when a plan is not certified, enrollees will be subject to tax penalty in 2009 of as much as $1,000 per adult

3. Overview • Reviewing principles for MCC determinations: • Plans should self-certify where possible • Does plan present a deviation from MCC? If not, Connector will not review • Does plan provide coverage for core services and a broad range of medical benefits • Does plan present an insurmountable deficit—e.g., plan does not provide for an identified core service or any particular broad range of medical benefits, or does not provide any coverage for prescription drugs • Does plan present a deviation that is “clearly inconsistent with standard employer-sponsored coverage” • Where deviations exist, does plan nonetheless meet or exceed Bronze level of benefits? • For cases in which benefits clearly exceed Bronze, we will not request an actuarial certification • For cases where benefits are very close to Bronze and there’s a deviation, we request an actuarial certification

4. Overview • Three issues, with some overlap • Is there an acceptable amount for a cap on prescription benefits? • Should collectively-bargained plans that fall short of MCC standards be deemed MCC compliant? • Should the Board require, for self-insured plans, that dependents have maternity coverage?

5. Drug caps • A small number of self-insured plans have presented with $5k-$25k caps on their prescription drug benefit • Plans are otherwise MCC compliant and may be more generous than other MCC compliant plans • Connector staff has, to date, rejected any plan with a drug cap • Limited data available—Connector seeking additional data

6. Prescription Drug Spending • 99% of Rx claims spending within 0 - $10,000 *Data were produced by an actuarial student and have not yet been fully reviewed.

7. Drug caps • Existing regulations do not prohibit a cap on drugs • What is an acceptable level of cap? • If Board wants further information, what data would be helpful? • In absence of Board guidance, staff will continue to reject any plan with a cap on prescription drugs

8. Collectively-bargained plans • Employers and unions have asked Connector staff to approve plans for part-time workers that do not meet MCC: • 1: Annual limit $20,000 Rx cap $15,000 Lifetime cap $100,000 • 2: Annual limit $30,000 Rx cap $7,500 Lifetime cap $150,000 Workers do not pay premiums and have low or no deductibles

9. Collectively-bargained plans • Plans expire in December, 2010, with exemption ending December, 2011 • Workers may go to public plans if collectively-bargained plans disallowed • Relatively few workers hit caps on an annual basis in these plans • Based on unique circumstances of these particular plans, staff recommends allowing these plans only until one year following contract expiration

10. Exclusion for maternity benefits • Self-insured plans have presented with a limitation that excludes maternity benefits for dependents (e.g., pregnant daughter of subscriber) • Some plans have already been approved • Maternity benefits are within “broad range of medical services” • There are other, permissible limits on broad range services (e.g., physical therapy) but this limitation targets a segment of the population, unlike other limitations

11. Exclusion for maternity benefits • Exclusion of this benefit is not permissible by employer purchasing a plan from a licensed carrier, but is permissible for a self-insured operating under federal law