Home About NBCH Members Only Programs & Events News Products & Services Publications Health Policy

2011 Weekly Legislative Updates & Resources
Partnership for Patients
Consumer Operated and Oriented Plans (CO-OP)
Health Care Reform Resources
Priority Issues Matrix
Where We Stand
NBCH & Our Advocacy Partners
Communicating with Congress Tips
Archive






Return to Health Policy

Health Care Reform Resources

President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law on March 23. On March 25, the U.S. Senate approved the Health Care and Education Affordability Reconciliation Act (H.R. 4872), a package of modifications to PPACA.  During Senate debate of the measure, Republicans offered a number of substantive amendments to the bill, but all of them were defeated along party lines. Ultimately, the Senate passed a slightly modified version of the reconciliation bill (H.R. 4872) from the House of Representatives-passed version of March 21, so the House had to vote to pass the measure once again. President Obama signed H.R. 4872 into law on Tuesday, March 30.  This action finalized the new health care reform law, bringing to a close more than a year of legislative debate.


HealthReform.gov Becomes HealthCare.gov: The U.S. Department of Health and Human Services (HHS) has changed its health care Web site from HealthReform.gov to HealthCare.gov, effective immediately, in conjunction with the ongoing implementation of the Patient Protection and Affordable Care Act (PPACA). The redesigned Web site is targeted specifically at consumers, with a central database of health coverage options, combining information about public programs (including Medicare) with information from more than 1,000 private insurance plans.


HealthCare.gov provides information for employer plan sponsors as well, including the Implementation Center, where sponsors can find materials related to PPACA regulations, authorities, letters, grants, brochures and requests for comment. This area includes information published by the Office of Consumer Information and Insurance Oversight (OCIIO), the office within HHS responsible for implementing the law.

 

In the months ahead, NBCH will continue to monitor and update the material posted on this site as more information and resources become available.  We are also carefully watching as the regulatory process unfolds to let our membership know of opportunities for public comment and other related actions.  This will ensure some degree of direct impact on the final outcome of the reform legislation. Below are links to various reform-related materials that have been developed both internally as well as by other stakeholder groups with which NBCH is aligned. 

 

NBCH Reform Advocacy Resources

NBCH Regulatory & Advisory Council Resources

Overview of Major Employer-Focused Issues

Resources and information relating to key PPACA employer provisions

  

Employer Responsibility Coverage Mandate: We intend to provide more health care reform compliance updates over the weeks and months to come. The implementation and regulatory process promises to be quite complex, so NBCH is fortunate to be a member of the American Benefits Council (ABC) which provides us with access to many helpful resources. The implications of the employer mandate provisions in PPACA are one of the primary concerns of employers and coalitions relative to this bill. The following is an overview of the “employer responsibility” conference call that ABC hosted on April 1, 2010. In addition to this detailed overview, the actual presentation slides are available upon request from NBCH, kmoler@nbch.org.

 

Relative to the employer responsibility issues, the following is a short overview of the basic issues involving two categories of employers with more than 50 full-time employees (This requirement is regardless of whether the plan/s they provide are grandfathered and non-grandfathered):

  • Employers with more than 50 full-time employees that do not provide employees with a coverage option are penalized.
  • Employers with more than 50 full-time employees that provide an unaffordable coverage option are penalized.
  • Employers are not required to meet the minimum benefit requirements applicable to individual and small group markets.
  • Employers are not required to make minimum contributions to employee premiums, but they have to follow standards to make coverage affordable to employees.
  • The rules and penalties are only applicable to full-time employees, which is 30 or more hours per week determined on a monthly basis. All part-time and certain seasonal employees are exempt from being counted toward the required 50 + threshold.

The goal of the employer mandate it to take keep employers with a low-income employee population (under 400% of the federal poverty level –FLP) from burdening the government with providing for the cost of coverage.

Note: To satisfy the individual coverage responsibility that is effective 1/1/14, employees can acquire coverage through the following means: if available, enroll in an employer plan option; if eligible, enroll in a government-sponsored option (Medicare, Medicaid, TriCare, etc.); or enroll in a Health Insurance Exchange option, which will be available in 2014.

 

Employer Health Care Reform Compliance Resources

Early Retiree Reinsurance Program (ERRP) Application Process Began June 29: The Department of Health and Human Services’ Office of Consumer Information and Insurance Oversight (OCIIO) today, June 29, 2010, announced that it will begin accepting applications for the Early Retiree Reinsurance Program (ERRP), which was created under the Patient Protection and Affordable Care Act (PPACA) to help provide financial relief for businesses, unions, state and local governments who provide health insurance for early retirees during this fragile economic environment. According to HHS, today is the first day applications are being accepted. A draft application was made available June 7, and OCIIO has hosted a stakeholder outreach calls to explain the program. Additional application assistance, including a webinar, supposedly will be available on-line this week but no formal announcement regarding a time has been made. NBCH will closely monitor and let our members know if this opportunity.

 

In the meantime, the following are links to the application and other key information for applicants. In addition, all of the following information is accessible at the website of the HHS Office of Consumer Information and Insurance Oversight.

Interim Final Regulations for “Grandfathered” Health Plans: Long-anticipated regulations implementing the “grandfather” provisions of the Patient Protection and Affordable Care Act (PPACA) were released on June 17, 2010 by the Departments of Labor, Health and Human Services (HHS) and Treasury during an agency press conference. A 60-day public comment period began on the date of publication.

 

PPACA specifies that group health plans or insurance coverage existing on the date of enactment (March 23, 2010) are not required to comply with certain plan requirements under PPACA. These include, for example, the requirement for coverage of preventive care at no cost to the participant or insured. As explained in the preamble to the IFR, however, PPACA does not address at what point changes to such group health plan or health insurance coverage are significant enough to cause the plan or health insurance coverage to cease to be a grandfathered plan, leaving that question to regulatory guidance.

 

The interim final regulations (IFR) set out the specific requirements that a group health plan or insurance carrier must comply with in order to maintain status as a “grandfathered” plans. In general, the rules provide that grandfather plans will lose their status if “they choose to make significant changes that reduce benefits or increase costs to consumers”, according to a helpful fact sheet (http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html) issued by HHS. Specific requirements with respect to these changes are set out in further detail in the IFR. These include rules with respect to changing benefits, employee cost sharing and employer contributions. The regulations also provide a good faith compliance standard and grace period for plans that may have changed their plans subsequent to March 23, 2010, to allow them time to comply.

 

The IFR also addresses whether PPACA’s plan requirements apply to retiree-only coverage and whether a delayed effective date applies to plans subject to collectively-bargained agreements (CBA).According to the IFR preamble, the current law exception for certain retiree-only plans is preserved under PPACA and as a result, its reforms do not apply to such plans.The preamble also states that collectively bargained plans, (both insured and self-insured) that are grandfathered plans are subject to the same requirements as other grandfathered plans and are not provided with a delayed effective date for the provisions with which other grandfathered plans must comply. So, the rules that apply to grandfathered health plans apply to collectively bargained plans before and after termination of the last date of the applicable collective bargaining agreement.

 

Regulation on “Grandfathered” Health Plans provides interim final regulations implementing the rules for group health plans and health insurance coverage in the group and individual markets under provisions of the Affordable Care Act regarding status as a grandfathered health plan. http://edocket.access.gpo.gov/2010/pdf/2010-14488.pdf

 

For more details and Frequently Asked Questions on how your current health plan fits into the new health care law, visit healthreform.gov/about/grandfathering.html.

 

Dependent Coverage of Children Who Have Not Attained Age 26: The Patient Protection and Affordable Care Act (PPACA) requires plans and issuers that offer dependent coverage to make the coverage available until a child reaches the age of 26. Both married and unmarried children qualify for this coverage. This rule applies to all plans in the individual market and to new employer plans. It also applies to existing employer plans unless the adult child has another offer of employer-based coverage (such as through his or her job). Beginning in 2014, children up to age 26 can stay on their parent’s employer plan even if they have another offer of coverage through an employer.

On June 28, the American Benefits Council (The Council), of NBCH is a member, sent a letter to officials at the U.S. Departments of Treasury, Labor and Health and Human Services to request additional guidance in connection with the definition of “child” under the interim final rules for group health plans and health insurance issuers relating to dependent coverage of children to age 26 under the PPACA.

 

Under the statute, health plans and issuers that offer dependent coverage must make the coverage available to enrollees' adult children until the age of 26. The Council's letter urges the agencies to issue guidance providing an express definition of “child” for purposes of compliance with the adult child coverage requirements of PPACA. Specifically, the Council request clarification that the terms “child” and “children” under PPACA and Section 2714 of the Public Health Service Act have the same meaning as the term “child” in Section 152(f)(1) of the Internal Revenue Code. (Internal Revenue Service Notice 2010-38 already uses this tax code definition for the purposes of the tax treatment of employer-provided health coverage attributable to such adult children.) As explained in the letter, without clarifying guidance, there is a significant possibility that employers and issuers that are currently offering coverage to certain classes of children, including custodial children (grandchildren, nieces and nephews) living in the home of the employee, will cease offering such coverage.

 

“Patients’ Bill of Rights” Regulations Issues: On June 28 the U.S. Treasury Department, Department of Labor (DOL) and Department of Health and Human Services (HHS) released interim final regulations (IFR) setting forth the requirements for group health plans and health insurance coverage in the individual and group market under provisions of PPACA regarding preexisting condition exclusions, lifetime and annual limits, coverage rescissions and patient protections. The official version of the IFR was published in the Federal Register on June 28th, which refers to these new rules as “Patient's Bill of Rights” regulations. The new regulations apply to coverage starting on or after September 23, 2010. For calendar year group health plans, these requirements apply January 1, 2011. The following are some of the major provisions in the recent IFR:

  

Preexisting Condition Exclusions: Group health plans and individual health insurance coverage are prohibited from imposing preexisting condition exclusions, effective for plan years beginning on or after January 1, 2014. But for individuals under age 19 they become effective for plan years on or after September 23, 2010.The prohibition includes denial of coverage under a plan or insurance coverage and denial of specific benefits based on the preexisting exclusion.

  

Lifetime & Annual Limits: Under PPACA and the IFR, group health plans and health insurance issuers are generally prohibited from imposing lifetime and annual limits on the dollar value of health benefits. The regulations’ preamble explains that the annual limit does not apply to flexible spending arrangements (FSAs, which are subject to a $2,500 limit beginning in 2013 under another PPACA provision), medical savings accounts (MSAs) or health savings accounts (HSAs). Health reimbursement arrangements (HRAs) are not subject to the annual limit when they are integrated with other coverage as part of a group health plan that otherwise complies with lifetime and annual dollar limits. Retiree-only HRAs are also not subject to the annual limits. The agencies have specifically requested comments regarding application of the annual limits to stand-alone HRAs.

  

“Essential health benefits”: PPACA prohibits annual limits on the dollar value of benefits generally, but allows “restricted annual limits” with respect to “essential health benefits” as defined by the statute up to 2014. The statute also provides that a plan or insurance issuer may impose annual or lifetime per-individual dollar limits on covered benefits that are not essential health benefits. The IFR defines “essential health benefits” by referencing the statutory definition and “any applicable regulations.” The IFR preamble explains, however, that such regulations have not been issued yet, and for purposes of enforcement, the agencies will take into account “good faith efforts to comply with a reasonable interpretation” of the term. The IFR adopts a three-year phased approach for restricted annual limits for “essential health benefits”:

  • $750,000 for plan or policy years beginning on or after September 23, 2010, but before September 23, 2011
  • $1.25 million for plan or policy years beginning on or after September 23, 2011, but before September 23, 2012
  • $2 million for plan or policy years beginning on or after September 23, 2012, but before September 23, 2014

Since these are minimums for plan years, plans or issuers may use higher annual limits or impose no limits. The IFR clarifies that the minimum annual limits for plan years beginning before 2014 apply on an individual-by-individual basis, meaning that any overall annual dollar limit for families may not operate to deny a covered individual the minimum annual benefits for the plan year. The IFR also requires that a special enrollment opportunity be offered for individuals who are not eligible for benefits because of the prior application of an annual and lifetime limits rule.

Additional Reform Legislation Resources

Disclaimer

• Although the PPACA and the companion reconciliation bill have been enacted, few organizations will find a copy of the statutory text particularly helpful since the statute, amendments, and the reconciliation process have generated well over 2,500 pages of material.

• Not many of the law’s implementing “regulations” have been issued. Moreover, regulations will not be issued for some time, and employers/plan sponsors are well advised to wait for the guidance included in regulations prior to making final plan design changes.

 

     


Login
space