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In the Beginning…

In the Beginning…. Beginning Stages of Health Care Reform. Update on 9/23 Provisions. Grandfathering Health Plans Extension of Non-Discrimination Rules 100% Preventive Care Services Prohibition of Pre-Existing Condition Exclusion Lifetime and Annual Limits Rescissions Dependent Age to 26

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In the Beginning…

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  1. In the Beginning… Beginning Stages of Health Care Reform

  2. Update on 9/23 Provisions • Grandfathering Health Plans • Extension of Non-Discrimination Rules • 100% Preventive Care Services • Prohibition of Pre-Existing Condition Exclusion • Lifetime and Annual Limits • Rescissions • Dependent Age to 26 • Appeals • Patient Protection (PCP and ER) • Rate Justification • Cost Ratio Requirement • Early Retiree Reinsurance Subsidy Program

  3. Grandfathering Health Plans

  4. Grandfathering Health Plans • Am I eligible? • Plans in effect on March 23, 2010 will be eligible • Risking Grandfathered Status • What can I do for my Plan, while also maintaining the Plan’s grandfathered status?

  5. Grandfathering • Types of changes will cause a plan to lose grandfathered status • Key point: while new plans are subject to all of the health reform rule and mandates, grandfathered plans have a reduced level of compliance... At least for now • To maintain grandfathered status, the plan must provide a statement in plan materials (model notice is available) to notify participants that the plan is a grandfathered plan, and who the participant can contact for questions and complaints

  6. Prohibited Plan Changes to Keep Grandfathered Plan • Cannot “significantly” cut or reduce certain conditions or diagnoses (diabetes, HIV, etc.) • Cannot decrease coinsurance levels (90% to 80%) • Cannot “significantly” increase deductibles and out-of-pocket maximums (rate of inflation + 15%) • Cannot “significantly” increase plan copayments • Greater of $5.00 or • Medical Inflation + 15% • Cannot change insurance companies (carriers)

  7. Prohibited Plan Changes to Keep Grandfathered Plan • Decrease in employer contribution rate: • Based on cost of coverage (decrease in employer contribution by more than 5%) • Based on a formula (such as hours worked, by more than 5%) • Changes in annual limits

  8. Extension of Nondiscrimination Rules

  9. Prohibitions of Discrimination • Benefits cannot be based on wages: • One of the five highest paid officers • A shareholder that owns more than 10% in value of the employer’s stock • Among the highest paid 25% of all employees • No discrimination on eligibility

  10. Grandfathering: A Quick Overview

  11. Preventive Health Care Legislation

  12. Preventive Health Care Legislation • Cost sharing cannot be applied to preventive services recommended by the U.S. Preventive Services Task Force • Applies to: • All plans and all funding arrangement for: • New groups • Non-grandfathered groups renewing 9/23/2010 or later

  13. Preventive Care Legislation • Cost-sharing Requirements when the Recommended Preventive Service is provided during an Office Visit • Preventive Care Services Coverage: In-Network versus Out-of-Network

  14. Scenario Patient has the following benefits: • $1,000 Deductible • 80/20 In-Network Coinsurance • $25 copay for In-Network Office Visits Visit #1 • In-Network Provider – Dr. Greenlee • Purpose: Back pain • Patient ask Dr. Greenlee if he can get his flu shot while he’s there Visit #2 • In-Network Provider – Dr. Greenlee • Purpose: Annual Physical What does the patient owe for Visit #1 and Visit #2?

  15. Scenario – The Answers Visit #1 • Dr. Greenlee’s office codes the visit with the primary reason of back pain • Patient owes $25 copay for the office visit and owes nothing for the flu shot Visit #2 • Dr. Greenlee’s office codes the visit as a routine preventive care • Patient owes nothing

  16. Scenario Visit #3 • Preventive Service: Colonoscopy • In-Network Outpatient Surgical Center • Polyps found and removed • Provider bills one procedure: “Colonoscopy with Polyp Removal” How is the patient’s Colonoscopy and Polyp Removal covered?

  17. Scenario – The Answer Visit #3 • Provided the procedure is coded with the primary reason being a screening, it will be paid as preventive and no cost-share will apply

  18. Prohibition of Pre-Existing Condition Exclusions

  19. Pre-Existing Conditions • No waiting period for members under age 19 with pre-existing conditions • No impact to Benefit Waiting Periods • Pre-existing conditions may continue to apply for adults (19+) until 2014 • Applies to both, grandfathered and non-grandfathered plans

  20. Scenario • Will the Pre-Existing Clause apply to Amy? • If so, for how long? • If and when will her Dermatologist treatment be covered? Visit #1 • Amy (age 17, dependent child of employee) • Regularly sees a Dermatologist • Family had a four-month lapse in coverage • Family is eligible for coverage 9/1/2010 Relevant Information: • PPO (renewal date: 1/1/2011) • 6-month Pre-Existing Waiting Period • 80/20 In-Network Coverage • $25 copay for In-Network Office Visits • $45 copay for Specialists • Eligible for benefits: 9/1/2010

  21. Scenario – The Answer Visit #1: • The pre-existing clause will apply to Amy for four months • At renewal, the pre-existing waiting period for members under 19 will be lifted • Amy’s dermatology treatment will be a covered benefit beginning 1/1/2011 (upon group renewal)

  22. Lifetime & Annual Limits

  23. Lifetime and Annual Limits • Prohibits imposing lifetime and annual limits on the dollar value of Essential Health Benefits • Allows lifetime and annual per individual dollar limits on specific covered benefits that are not EHB • Applies to both, grandfathered and non-grandfathered plans

  24. What are Essential Health Benefits? • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health and substance use disorder services • Prescription drugs • Laboratory services • Rehabilitative services and devices • Preventive and wellness services and chronic disease management • Pediatric services, including oral and vision care • Any other benefit that the Secretary later deems “essential”

  25. Moving Forward…

  26. Cost • National Medical Inflation = 4 – 5% • Local Medical Trend = 10 – 12% • Changes in Health Care = 1 – 2%

  27. Now What??? • Ollis & Company suggests you proceed with the following steps: • Meet with your Trusted Advisor and discuss with him/her what your goals are when it comes to employee benefits • Create a long-term business plan centered around your employee benefits plan • Look at several plan designs and funding arrangements • Be proactive • PRAY!

  28. REMINDERS: • Grants for small employer wellness programs ($200M has been set aside) • Over the Counter drugs no longer reimbursable through FSA, HRA or HSA unless prescribed by a physician • HSA penalties for non-medical expenses increase from 10% to 20%

  29. Wrap Up • Credible Websites: • www.insurance.mo.gov • www.statehealthfacts.org • www.healthcare.gov • Surveys – Place for your email • Contact Information The Whitlock Company 3271 E. Battlefield, Suite 300 Springfield, MO 65804 417-881-0145 • Corporate Wellness Conference October 1st – O’Reilly Family Events Center (Drury) 7:30 – Noon Register Online at www.ollisco.com $35.00 Ollis & Company 2274 E. Sunshine Springfield, MO 65804 417-881-8333

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