Health Care Reform

1. Your Logo Here Health Care Reform All information published herein is gathered from sources which are thought to be reliable, but the reader should not assume that the information is official or final. Reliance on this information or other linked or recommended resources received from us shall be at your sole risk, and we assume no responsibility for any errors, omissions, or damages arising. Users of this information are encouraged to confirm with other sources, and to seek qualified advice if embarking on any actions that could carry personal or organizational liabilities.

2. Introduction • Your presenter • What you’ll learn • Timeline • Key provisions • Resources Name XXXXXXXXX Cell: XXX.XXX.XXXX Email: XXXXXXXXXX

3. Legislative Timeline March 23rd, 2010:Patient Protection and Affordable Care Act HR 3590 March 30th, 2010:Health Care and Education Reconciliation Act of 2010 HR 4872

4. Health Care Reform Bill Approaches to Expanding Coverage

5. Small Employer Tax Credit • Pre-Existing ConditionInsurance Plan • Grandfathered Health Plans • Preventive Care • Health Coverage Options for Children • No Rescission of Coverage for Individuals 2010

6. Small Business Tax Credits • For employers with up to 25 employees • 2010-2013 - up to 35% tax credit • 2014 and 2015 - up to 50% tax credit - only available if purchased through an exchange • After 2015, tax credit expires • Resource: IRS.gov website

7. ‘Grandfathering’ Provision • Changes Allowed after March 23, 2010: • Co-Payment Charges – less than $5 (adjusted annually for medical inflation) or a percentage equal to medical inflation plus 15 percentage points • Deductibles – less than a percentage equal to medical inflation plus 15 percentage points • Employer Contributions - less than 5 percentage points • Changes Not Allowed • Cannot Significantly Cut or Reduce Benefits • Cannot Raise Co-Insurance Charges • Cannot Add or Tighten an Annual Limit • Cannot Change Insurance Companies

8. ‘Grandfathering’ Provision • Applies to all plans, Grandfathered and Non-Grandfathered as of 2010: • No lifetime limits • No rescissions of coverage • Extension of parents’ coverage to young adults under 26 years old • No coverage exclusions for children with pre-existing conditions • No “restricted” annual limits • Notice of Grandfathered Status required

9. Preventive Care • Beginning September 23, 2010 all new health plans: • Must cover preventive services that have strong scientific evidence of health benefits • May no longer charge a copayment, coinsurance or deductible for these services when delivered by a network provider • Examples of covered preventive services: • BMI screenings for obesity • Counseling on smoking cessation, healthy eating, weight loss • Both alcohol use and depression treatments • Blood pressure, diabetes, and cholesterol tests • For a complete list, visit: www.healthcare.gov

10. New options for Children Beginning September 23, 2010 • Dependent Coverage up to Age 26 • Will be allowed to stay on their parents’ insurance plan, whether group or individual • Children can be married. Do not have to be full-time students or financially dependent on parents and can have children of their own • Dependent child cannot be eligible for coverage through their own employer. This stipulation ends in 2014. • Guarantee Issue Coverage up to age 19 • No restrictions due to pre-existing health conditions • Insurers may set-up open enrollment periods

11. Medical Loss Ratio • OTC Prescription Exclusion • HSA Distribution Tax • W2 Reporting 2011

12. Medical Loss Ratio (MLR) • MLR is the percentage of premium spent on actual patient care services. • 85% for large group plans • 80% for individual and small group plans (100 and below) • NAIC is required to establish uniform definitions regarding the MLR and how the rebate is calculated by December 31, 2010 • Standards and any potential rebates to policyholders being applied to the 2011 plan year

13. Individual Tax Consequences

14. Changes in 2011 • W2 Reporting • Employers required to disclose value of benefit provided for health insurance coverage on each employee’s annual Form W-2

15. SBC and Uniform Glossary • SMM 60-Day Notification • PCORI Fees 2012

16. Changes in 2012 • SBC & Uniform Glossary • Employers must provide each employee and beneficiary SBC and Uniform Glossary for any initial enrollment, special enrollment and upon request • 60-Day Prior Notice of Material Modification • Employers and health plans required to provide information of any material modification of the plan or coverage • Patient-Centered Outcomes Research Institute (PCORI) Fees • For the plan year ending after September 30, 2012, there will be a $1 per enrollee tax on fully insured and self-funded group health plans to fund PCORI. For plan years ending after September 30, 2013, the fee increases to $2 per enrollee. This fee expires September 30, 2019

17. FSA Limit • Medicare Payroll Tax • Medical Expense Tax • Notice of Exchange • Exchange Open Enrollment 2013

18. Tax Consequences

19. Changes in 2013 • Notice of Exchange • October 1, 2013 and within 14 days of new hire, employers subject to the Fair Labor Standards Act (FLSA) must inform employees about how the Exchanges operate and the circumstances under which they may receive coverage • Exchange (Marketplace) Open Enrollment • In California, the Individual Exchange (Covered California) as well as the SHOP Exchange for small employers will be accepting enrollments starting on October 1, 2013. May be open to Large Group employers in 2017.

20. Individual Mandate & Penalties • Guarantee Issue Coverage and Subsidies • Employer Mandate • Essential Health Benefits • Exchanges • Changes to Private Insurance 2014

21. Individual Mandates and Penalties

22. Guarantee Issue and Subsidies

23. Employer Mandate & Penalties • Employers with 50 or fewer EEs are exempt from the mandate • Beginning 2015, 50+ if employer does NOT offer coverage and has at least one employee receiving a tax credit • Must pay a $2,000 penalty per FTE, excluding the first 30 employees • Beginning 2015, if employer does offer coverage and has at least one employee receiving a tax credit • Must pay the lesser of $3,000 for each tax credited employee or $2,000 for each employee

24. Essential Health Benefits Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services Prescription drugs Rehabilitative and habilitative services and devices. Laboratory services Preventive and wellness services and chronic disease management Pediatric services, including oral and vision care

25. Insurance Exchanges

26. Changes to Private Insurance 2014 • Deductibles not to exceed 2,000/$4,000 • Limit waiting periods to 60 days • Allow states to merge IFP and small group • SG definition changes to 1-50

27. Changes to Private Insurance 2014 • Require carriers to meet new operating standards and reporting requirements • Expand Medicaid to all individuals under age 65 under 133% FPL • Impose fees on the health insurance sector

28. Timeline for Change – 2015 - 2020 • 2015: Employer Shared Responsibility (Play or Pay) penalties go into effect • 2016: Small Group in California redefined as 1-100 • 2018: Impose a 40% excise tax on insurers of employer-sponsored health plans with high values. • 2020: Medicare Part D “Donut Hole” closes

29. Resources for Updates • Government Sites • www.IRS.gov • www.HealthCare.gov • www.WhiteHouse.gov • www.UStreas.gov • www.insurance.ca.gov • www.labor.ca.gov • Other Valuable Resources • www.CoverageForAll.org • www.NAHU.org • www.NAIC.org • www.SHRM.org • www.KFF.org

30. Q&A