Health Care Reform
The Patient Protection and Affordable Care Act (PPACA), H.R. 3590, and the Health Care and Education Affordability Reconciliation Act of 2010 were signed into law on March 23, 2010. Many portions of the law won’t be implemented until 2014, but some parts of the law will be effective starting in the fall of 2010.
Read the National Center for Policy Analysis publication, “What Does Health Reform Mean for You? A Consumers Guide“.
You can read a Summary of the provisions or view a Reform Timeline for implementation of key provisions. Our National Association of Health Underwriters has also prepared a Paper (warning, political content) with views about the legislation and what might be improved. There’s a possible 35% tax CREDIT for qualifying small employers. To read more about this, refer to the IRS webpage. For a quick estimate of your credit, try the Tax Credit Calculator.
One of the first, and best publicized, portions of the law to be implemented is the continuation of coverage for dependent children up to age 26, without the requirement of “full time student status”. For most small group plans, this will be effective on the group’s first renewal date following 6 months after the passage of the bill, or October 1, 2010 renewals and later.
Another key provision is coverage of preventive services without deductibles or copayments. Under the regulations, plans must cover without copay, coinsurance or deductible — certain preventive services that have “strong scientific evidence of their health benefits.” On July 14, the Departments of Treasury, Labor and Health and Human Services jointly released Interim Final Rules (IFRs) for group health plans and health insurance issues related to coverage of preventive services. Since these are “Interim” Final Rules, the final rules may eventually differ, but these are the best we have at this point.
General highlights of new regulations:
- Grandfathered plans are exempt for as long as they remain grandfathered. (See below for details on Grandfathered Plans.)
- Non-grandfathered plans (i.e., plans either not in effect on 3/23/10 or that made changes since then resulting in loss of grandfathered status) must comply with the no-cost-sharing requirement beginning with the first plan year on or after September 23, 2010.
- Preventive services are to be covered without any cost-sharing requirement when delivered by a network provider.
- Employers and insurers are not required to provide coverage for recommended preventive services delivered by an out-of-network provider or may impose cost-sharing for recommended preventive services delivered by an out-of-network health care provider.
- If a guideline for a recommended preventive service does not specify the frequency, method, treatment, or setting for the service, the plan or issuer may use “reasonable medical management techniques” to determine any coverage limitations on the service.
General list of services to be offered without copay, coinsurance or deductible:
Evidence-based preventive services: This list of items is taken from the current recommendations of the United States Preventive Services. They are included only if they have a rating of A or B. This broad list generally includes:
- Breast cancer and cervical cancer screenings
- Colon cancer screenings
- Screening for vitamin deficiencies during pregnancy
- Screenings for diabetes, high cholesterol and high blood pressure
Routine vaccinations: A list of immunizations – recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention – are included in the rule. They are considered routine for use with children, adolescents, and adults and range from childhood immunizations to periodic tetanus shots for adults.
Prevention for children: The rule includes preventive care guidelines for children – from birth to age 21 – developed by the Health Resources and Services Administration with the American Academy of Pediatrics. Services include regular pediatrician visits, vision and hearing screening, developmental assessments, immunizations, and screening and counseling to address obesity.
Prevention for women: The regulation mandates certain preventive care measures for women. These recommendations will be in place until new requirements for prevention for women are issued by the United States Preventive Services Task Force or appear in comprehensive guidelines supported by the Health Resources and Services Administration.
Full list of covered preventive services issued as part of the Interim Final Regulations: http://www.healthcare.gov/center/regulations/prevention/taskforce.html
Billing and Office Visits
If a recommended preventive item or service is billed separately from an office visit, then cost-sharing may be applied to the office visit
If a recommended preventive item or service is not billed separately from an office visit and the primary purpose of the office visit is the delivery of such item or service, then cost-sharing requirements may not be imposed with respect to the office visit.
If a recommended preventive item or service is not billed separately from an office visit and the primary purpose of the office visit is not the delivery of the preventive item or service, them cost-sharing made be applied to the office visit.
Grandfathered Plans
This information regarding Grandfathered Plans as it relates to Health Care Reform is intended to be a brief announcement only. Please refer to the links at the bottom of this page for more details.
Health Care Reform – What Are and Are Not “Grandfathered Plans”?
General Rule
- Plans in force since March 23, 2010 or earlier will be grandfathered
- Policies issued after March 23, 2010 will not be grandfathered
- Each benefit package will be considered separately
- Starts the first plan year on or after September 23, 2010
-e.g. January 1, 2011 for calendar year plans
Permissible Changes (No Loss of Grandfather Status)
- Change of a policy’s premium
- Change of employee contributions of 5% or less
- Change plan to comply with federal or state law
- Voluntary plan changes to comply with PPACA (Patient Protection and Affordable Care Act)
- Change of third party administrators
Not Permissible Changes (Will Cause Loss of Grandfather Status)
- Elimination of specific benefit, e.g. mental health parity
- Increase in employee coinsurance
- Increase in deductible or Out of Pocket maximum
- Increase in employee copayment
- Decrease in employer contribution in excess of 5%
- Changes to annual policy limits
- Obtain new policy or new carrier
Eligibility and Enrollment Rules
- Newly hired and newly enrolled employees may be added after March 23, 2010 without loss of grandfather status
- Plans may transfer employees from one grandfathered plan to another without losing status
*Grandfathered plans are still required to conform to the new rules regarding annual and lifetime limits, dependent coverage to age 26, rescission, pre-existing condition exclusions, waiting periods, employer mandates and tax provisions.
Grandfather Regs Brief Analysis
