The Impact of the Patient Protection and Affordable Care Act (PPACA) on EAPs

1. The Impact of the Patient Protection and Affordable Care Act(PPACA) on EAPs South Carolina EAPA Conference March 6, 2014 STEVEN M. HAUGHT, LCPC, CEAP, CAADC President, EAPA

2. LEARNING OBJECTIVES Healthcare (HC) Reform = PPACA = ACA= Obamacare Attendees will: 1. Better understand backdrop of PPACA, referred to as the Affordable Care Act (ACA) 2. Know implementation timelines for key components of ADA Discuss ACA challenges and opportunities for EAPs

3. ACA History • Passed by Congress, signed by President Obama 3/23/10 • Declared constitutional by US Supreme Court 6/28/12 • Key provisions: • 1. Increase access to affordable health coverage (HC) to 62 million Americans • 32 million uninsured • 20 million will have increased coverage via parity for mental health & substance abuse treatment services

4. Key Provisions (cont.) • Key provisions: 2. Reduce HC costs & improve quality of care 3. Increase consumer choice & protections 4. Provider consumers with tools to make “informed choice” re.: HC 5. Hold insurance companies accountable

5. Rationale for ACA • Money: control HC costs and increase access • 2011 Federal Gov’t spending: • 25% defense • 23% health • 21% pensions • 13% welfare • 18% all other programs • Estimate: between 2030-2040 mandatory spending will exceed revenue • US behind other 1st world countries in mortality rates amenable to HC • France, Japan, Australia… US = #19 of 19

6. ACA Payment Reform • Shift from pay for service to pay for performance • Payers’ create capitated contracts with entities tasked to integrate and coordinate care for a defined group of Pts. • Integrated Care Models, Accountable Care Organizations (ACOs), Medical Homes • ACOs will receive money back from Medicare if they meet pre-determined “best practice” quality & outcome standards, cost benchmarks • Failure to meet goals/outcomes = penalties & reduced revenues

7. Involved Governmental Departments • Issuing rules and regulations: • 1. Department of Health & Human Services • 2. Department of Treasury: Internal Revenue Service • 3. Department of Labor: Employee (Ee) Benefits Security Administration • Referred to as “The Agencies”; will also have enforcement powers

8. ACA Timeline 2013 • Many provisions already enacted • Children may remain on parents’ HC plan until 26 • Maximum contribution to Flexible Spending Accounts capped @ $2,500 • Ers must notify Ees re.: state hlth insurance exchanges, whether Er plans to meet minimum coverage requirements, how to access info regarding premium subsidies available for hlth insurance exchanges

9. Timelines 2013 & 2014 Large Ers must report cost of Er-provided HC on Ees W-2s HC plans must cover women’s preventive services, including contraception, without co-pays, co-insurance or deductibles 2014 HC waiting periods > 90 days prohibited States must create exchanges to help small Ers provide HC to Ees

10. 2014 Timeline (cont.) • Individual mandate to purchase health insurance • Ers >200 Ees must auto-enroll FTEs (>30 hrs/wk) into default hlth plan with “affordable” coverage • Will impact industries with hourly workers like retail, restaurants, even academic institutions • Cut Ee hours to <30 or provide HC? • 2015 finalized provisions for EAPs as “excepted benefits” may be put into effect

11. Timelines (cont.) 2016 Ers > 50 Ees must offer HC or pay penalties 2017- State exchanges may allow large Ers to provide coverage through exchange plans 2018- Ers will pay 40% excise tax on “Cadillac” plans which exceed $10,200 for single coverage, $27,500 for family coverage

12. Health Insurance Market Reforms (1) Final rules issued 2/20/13 Insurance plans may not base rates on pre-existing conditions, health status, claims history, duration of conditions, gender, occupation, Er size, Er industry May base rates on age, tobacco use, family size & geography 10 categories “Essential Health Benefits” must be covered by all exchange offered insurance plans (for individual and small (50-110 Ees) business purchasers

13. Health Insurance Market Reforms (2) • 1 of 10 “Essential Health Benefits” especially relevant to EAPs : Mental health & substance use disorder services • Another EHB of potential relevance to EAPs: Preventive & Wellness Services & Chronic Disease Management • Limits set on cost-sharing, i.e., out-of-pocket expenses like deductibles, co-pays, co-insurance • Same as annual High Deductible Health Plan max out-of-pocket; 2013: $6250 individual, $12,500 family

14. Health Insurance Market Reforms (3) • ACA will increase coverage of Mental Health & Substance Use Disorder Services by • 1. Including them in Essential Health Benefits • 2. Increases federal parity protections to include individual & small group markets • 3. Increases the number of Americans covered with HC including these benefits

15. Impact on EAPs: ERISA ERISA (Employee Retirement Income Security Act) Are EAPs covered? Answer complex due to variation in EAP designs Any plan defined as “Ee welfare benefit plan” (EWBP) is subject to ERISA ERISA Opinion letter 88 0004A, “…if a program provides assistance in dealing with a wide range of personal problems affecting mental or physical health through a contractual arrangement with an independent organization staffed by trained counselors, the program is covered by ERISA.”

16. EAPs & COBRA Consolidated Omnibus Budget Reconciliation Act amends ERISA Requires offering ongoing coverage to Ees after loss of eligibility for certain benefits under “ group health plans” (GHPs) GHPs are EWBPs providing “services” including “diagnosis, mitigation, treatment or prevention of disease, and any undertaking for the purpose of affecting the structure or function of the body” GHPs must provide “Summary Plan Descriptions” to users

17. EAPs & COBRA (2) EAPs choosing non-medical descriptions such as “assessment” vs. “diagnosis” or “short-term problem resolution” may not successfully avoid falling under COBRA The issue is the function performed, not the description of the function

18. EAPs & HIPAA Health Insurance Portability & Accountability Act- national standards for protection of electronically communicated personal health information (PHI) by health plan, health care clearinghouses and health care providers HIPAA definition of GHP is same as COBRA and that’s essentially the same as for ERISA So, what about your program?

19. EAPs & ACA • ACA regulations issued 2/9/13 require GHPs & health insurers to provide uniform Summary of Benefits & Coverage (SBC) to plan participants • Goal: help consumers compare health plans & HC options = informed choice • 4 pages, includes glossary of HC options • Ancillary to SPD • If an EAP provides counseling, even a few sessions: yes, have to provide SBC • EAPA website: blank SBC template (editable word document); instructions for completing SBC for

20. EAPS, ACA & SBCs EAPs; sample completed SBC for with suggested language for EAPs FAQ sheet When to comply? 1st day of 1st plan year beginning 9/23/12 How often must EAP furnish SBC? On/before (1) day coverage begins, (2) within 7 days of receipt of request, (3) 30 days before start of each new plan year, (4) within 1st 90 days of “special enrollees” If plan is modified, must issue a new SBC

21. EAPs, ACA & SBCs (2) • EAP is responsible for distribution, not the Er customer • Unless Er chooses to include EAP SBC in their overall health plan SBC • SBC must be distributed to participants, beneficiaries & special enrollees • May be distributed by mail or electronically (with specific requirements)

22. EAPS as “Excepted Benefits” (EB) - 1 • 12/24/13 The Agencies published “Amendments to EB”, Federal Register/Vol 78, # 247/Proposed Rules, pp. 77636-7 • Addresses EAPs in Section C • EB = benefits not considered HC plans under ACA & HIPAA • An EAP will be excepted IF: • I. It doesn’t provide “significant” benefits in the nature of medical care

23. EAP as EB - 2 • II. EAP benefits can’t be coordinated with group hlth plan benefits • A. EAP can’t be required (“gatekeeper” ) pre access to other hlth plan benefits • B. EAP eligibility must not be dependent on participation in another grp hlth plan • C. EAP benefits must not be financed by another group hlth plan • III. No Ee premiums or contributions can be required to participate in EAP

24. EAP as EB - 3 • IV. No cost sharing under the EAP • Comments were due by 2/24/14 • >100 comments received • EAPA (4pp), EARF (5 pp), EAR (2 pp), EASNA (3 pp) • These exceptions are effective until “finalized”, at least through 2014

25. I. Doesn’t Provide Significant Medical Benefits EAPA – Agree & endorse. Multi-modality service provision; many services offered, including legal, financial, etc. “Medical Necessity” not required for service EARF – Agree. Workplace productivity mechanism; # sessions irrelevant EASNA – “…doesn’t support this criterion because… no standard, accepted definition… regarding ‘significant’ benefits”; # sessions irrelevant

26. II. EAP benefits can’t be coordinated with group HP benefits - 1 • A. EAPA agrees with A & B; C is “ambiguous”- EAPA doesn’t endorse; needs clarity • If goal is to prevent EA “benefits” from being subsidized by HP…EAPA supports…subsidization could distort referrals • If goal is to prevent EA cost from being subsidized by or embedded in hlth plan – EAPA agrees: other EA core activities like promo, Org. & Supv. Consults, etc., are minimized and decrease EA effectiveness • If goal is to prevent owners of grphlth plan from providing EA under separate contractual agreement, EAPA opposed. This currently occurs: ownership is not the issue, service is

27. II. EAP can’t be coordinated with Grp Hlth benefits - 2 • EARF • A. Agree • B. Agree • C. Disagrees – issue is not financing • EASNA “…does not support this proposal…” • A. EAP not HC benefit but a productivity tool, offered to all Ees • B & C – unlike HC plan, offered free to Ee

28. III. No Ee premiums or contributions for EAP • EAPA – agree; EAPs are paid for by Er • EARF – supports • EASNA – supports • IV. No Cost Sharing Under EAP • EAPA – agrees; cost sharing inconsistent with EA practice • EARF – agrees • EASNA - supports

29. Additional Implications of ACA for EAPs • Interface with new ACOs • Increased numbers with access to HC may strain current provider capacities • EAPs need to consider technology-based treatment models • Video, telephone and internet technologies • Increase access by web, intranet and internet • Changes in promotional materials • Increase focus on outcomes using standardized definitions and tools, not just utilization

30. Additional Implications (2) • Measure impact on productivity (pre/post service functioning- self report considered valid) • HC costs, disability claims, absenteeism, presenteeism • Continued expansion into child & eldercare, legal & financial, critical incident response, webinars, seminars and resources via robust web-site info, assessment tools, links • Continued research into best practices like Strategic Brief Intervention, Referral & Treatment (SBIRT)

31. Additional Implications (3) Some express concern that since many EAPs are being sold under cost, if not as a “give away”, there is not enough money to provide services to the organization If small employers go to health exchanges, may cut EAPs, wellness, work-life and other ancillary services

32. Resources Addiction Professional, www.addictionpro.com Department of Health & Human Services, http://aspe.hhs.gov Employee Assistance Professionals Association, www.eapassn.org Employee Benefit Adviser, http://eba.benefitnews.com Employee Benefit News, http://ebnbenefitnews.com Federal Register The Open Minds Circle,www.openminds.com Workforce, www.workforce.com

33. Contact Steven M. Haught, LCPC, CEAP, CAADC Director, Social Services, Central Region The Actors Fund 8 S. Michigan Ave., #601 Chicago, Il 60603 312-372-0989 shaught@actorsfund.org