2014 and beyond
TRANSCRIPT
2014 and Beyond
Reacting to PPACA’s Volatile evolution
Presented By:
Adam V. Russo, Esq.
CEO
Ron E. Peck, Esq.
Sr. Vice President & General Counsel
Chris Aguiar
Legal Administrator
September 25, 2013
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Not Even The Crystal Ball Could’ve Seen This!
Play or Pay … Eventually!
The Feds on the Offensive
The Hottest Issues in Reform
Fiduciary Duty – Time to Keep the Buck?
Overview
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Massachusetts Foreshadowing … Realities of “Romney-Care”
Certainty of Coverage Leads to Quandary of Care & Cost
Focus on Universal Coverage - Access Over Cost
Access to Coverage, Not Care
Heavy Coverage Mandates
Increased Risk – Increased Premiums – MA led the nation in 2010
premiums spent – over $400 per person per month (DOUBLE the
national average!)
Carriers file application with state to raise premiums and are denied
Not even the crystal ball
could’ve seen this!
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Massachusetts Foreshadowing … Realities of “Romney-Care”
Certainty of Coverage Leads to Quandary of Care & Cost
Carriers file lawsuit
Government investigates and discovers
Excessive charges
Wasteful tactics
Price fluctuations at facilities and between facilities
August 2012: Massachusetts passes new cost containment bill
Not even the crystal ball
could’ve seen this!
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Massachusetts Foreshadowing … Realities of “Romney-Care”
Growth of Self-funding in MA
Increase in the percentage of workers in self-insured plans
among all firm-size cohorts, except among workers in firms
with fewer than 50 employees.
Since passage of MA health care reform % of workers in firms
with 50 or more employees in self-insured plan increased from
54.4 % in 2005/ 2006 to 67.2 % in 2010/ 2011
Not even the crystal ball
could’ve seen this!
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“ObamaCare” – The Unforeseen
– Play or Pay … Eventually
• Employer Mandate delayed until 2015 ... maybe later?
• Extra year to simplify burdensome reporting requirements
– Effects
• Delay will cost $11 Billion Dollars
(http://www.rand.org/pubs/research_reports/RR411.html)
• Attractive option to let employees go to the exchange?
• Roughly 1 million fewer people than projected will be
enrolling in employer-based coverage.
(http://www.huffingtonpost.com/2013/07/30/employer-
mandate-delay_n_3678049.html)
Not even the crystal ball
could’ve seen this!
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Individual Mandate Presses on ... Skinny Plans?
Coverage for preventive services and a limited number of
doctor’s office visits, but no hospital stays or surgeries.
Loophole in PPACA – Government concedes legality, but
for how long?
Play or Pay … Eventually!
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The Fed’s Problem? – Adverse Selection!
Self-Funding – A Thorn in the Fed’s Side
Young Healthy Lives Being Kept On the Plan –
WELLNESS INCENTIVES!
Old, Sick Lives to the Exchanges
Less Premiums – Higher Risk – Lack of Funding
Their Solution?
The Feds on the offensive
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The NAIC & States Leading the Charge: Back Door Regulation
on Self-Funding
Play or Pay Delay – “Altruism or Conspiracy?”
ERISA - The Next Shoe to Fall?
61% of covered workers are in a self insured plan, up from 49%
in 2000*
2012 Urban Institute Study: 60% of small firms will convert
without regulation*
Original ObamaCare bill had ERISA oversight provisions*
White House & Liberals again trying to close the “self-
insurance” loophole*
* Steve Moore, The Attack on Self-Insurance – Liberals Want to Re-Write ERISA to Save ObamaCare,
Wall Street Journal, 9/12/2013
The Feds on the offensive
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Switching Sides: DOL Attack on ERISA Pre-emption?
Vermont “Health Care Database” statute, 18 VSA § 1941(a)(1)
Requires self-insured plans and their TPAs to provide state with
participant eligibility and claims data
DOL filed Amicus brief supporting VT’s position in Liberty
Mutual Insurance Co. v. Donegan
DOL joining political movement against self-funding and
ERISA preemption?
The Feds on the offensive
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Preparing for 2014 Mandates
Spousal Coverage After DOMA
Financial Implication of Fees
Essential Health Benefits – Do State Benchmarks Matter?
Impact of Non-discrimination Delay
2014 Transitional Relief
Maternity Benefits for Dependant Children
Grandfathered Plan Requirements for 2014
Annual Open Enrollment Required of All Plans
Contraceptive Coverage
Hottest Issues in REform
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Preparing for 2014 Mandates
Effective 2014 – Group Health Plans May NOT
Impose pre-existing condition exclusions on any
covered individual, regardless of age
Coverage waiting periods exceeding 90 days
Annual limits on essential health benefits
Hottest Issues in REform
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Spousal Coverage After DOMA
Federal Law Has Changed – How Do You Define Spouse?
For legally married in a state that recognizes marriage
Employers must apply equal protection to same-sex &
opposites sex marriages
Private, Self-funded plans? - Do Not Have to Offer
Coverage to Same Sex Spouses
Federal law does not require coverage
State law is exempt
COBRA & FMLA Implications
Hottest Issues in REform
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Financial Implication of Fees
PCORI
Should already be collected and paid in 2013
TRF – Transitional Reinsurance Fund
Applies to both insurance & self funded
Reinsurance Contributions in effect through
December 31, 2016
Due in 1 annual payment
Hottest Issues in REform
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Essential Health Benefits – Do State Benchmarks Matter?
State benchmarks do not apply to:
Self-insured health plans
Grandfathered health plans
BUT – if Essential Health Benefits provided, cannot be
subject to limits
Benchmarks must be used to determine “minimum value”
Hottest Issues in REform
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Impact of Non-discrimination Delay
Already in effect for Self-funded but delayed for Fully
insured
Many groups seeking to keep their Fully insured plans.
Ploy to keep Plans from Self-funding?
Hottest Issues in REform
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2014 Transitional Relief
Large media mis-communication
Transitional Relief is only applicable for certain aspects
Out of Pocket Max Delay
To Ensure compliance, must ensure relief applies to the specific
component
Hottest Issues in REform
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Maternity Benefits for Dependent Children
Coverage until 26 for dependants – but not necessarily costs of
pregnancy
Roughly 70% of Plans choose not to provide maternity benefits to
dependents
Justified under the Pregnancy Discrimination Act of 1978
True even after Essential Health Benefits come into play (maternity
coverage is an Essential Health Benefit)
Stay tuned … National Women’s Law Center has filed federal
discrimination complaints against five large employers claiming
exclusion of pregnancy coverage for dependant children violates PPACA
nondiscrimination provisions
Hottest Issues in REform
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Grandfathered Plan Requirements for 2014
Total annual dollar limit phase out on Essential Health
Benefits by 2014
Dependent child coverage until age 26
No pre-existing condition limitations for dependants
under age 19
No waiting periods greater than 90 days
Hottest Issues in REform
©The Phia Group, LLC – Copyright 1999-2013
Annual Open Enrollment Required of All Plans?
New open enrollment period for health insurance plans
Consumers can begin enrolling in new health plans on October 1, 2013
Enrollment period to extend through March 31, 2014
Applies to both employer provided and individually purchased health
coverage
Hottest Issues in REform
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Contraceptive Coverage
DOL, HHS Issue Final Rules for Contraceptive Coverage
Religious employers exempt
No Exemption for non-religious emplo0yers who’s beliefs
would be violated
Non-profit religious hospitals do not have to pay for contraceptives
Insurance providers MUST still provide separate coverage
TPAs may be required to provide or arrange separate no-cost
contraceptive services for plan participants of exempt plan
Use EBSA Form 700
Hottest Issues in REform
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Fiduciary Duty: ASOs, & BUCAs Do It, Should You?
TPA - Administrative Services Agreement (“ASA”)
“TPA is not and shall not be deemed to be a fiduciary of Client
or any other parties. The duties of TPA under this agreement
are purely administrative and shall not be deemed to defer or
delegate any discretionary authority or control on behalf of
Client or with respect to any benefit plan of Client.”
But remember – its what’s you do, NOT what you say!
Those who act like a Fiduciary, will be deemed one
Fiduciary Duty – Keep the buck?
©The Phia Group, LLC – Copyright 1999-2013
Express Oil Change, LLC v. ANB Insurance Services, Inc. 2013
WL 1245748 (N.D. Ala. Mar. 27, 2013).
Broker helped employer create self-funded plan
Failed to arrange for reinsurance coverage
Court held broker liable
Fiduciary Duty – Keep the buck?
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Hi-Lex Controls v. BCBS of Michigan, 2:11-CV-12557, 2012 WL
5990230 (E.D. Mich. Nov. 30, 2012).
Discretionary Authority with the “BUCAs”
“The Plan Administrator delegates to “BUCA” the discretion to
interpret and apply plan terms and to make factual determinations
in connection with its review of claims under the plan. Such
discretionary authority is intended to include, but not limited to, the
determination of the eligibility of persons desiring to enroll in or
claim benefits under the plan, the determination of whether a
person is entitled to benefits under the plan, and the computation of
any and all benefit payments. The plan administrator also delegates
to “BUCA” the discretionary authority to perform a full and fair
review, as required by ERSA, of each claim denial which has been
appealed by the claimant or his duly authorized representative.”
Fiduciary Duty – Keep the buck?
©The Phia Group, LLC – Copyright 1999-2013
Join us November 20, 2013 at 1PM For OUR Next Free Webinar…
What You Don’t Know CAN Hurt You ! – A Detailed
Review of Provisions Contained within provider
network agreements …
Adam V. Russo, Esq. Ron E. Peck, Esq. Chris Aguiar
[email protected] [email protected] [email protected]
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