What Does Health Care Reform Mean To You?

Well, the ink is dry on our nations most sweeping piece of Health Care legislation to come out of Washington since Social Security and now it's time for the experts to figure out what it all means.  There's only one problem, the folks in Congress who voted for it aren't quite sure what's in the over 2,500 page mammoth bill but there are some significant changes as a result of passage that we can outline here.  With that in mind, we won't know the true extent to which this law with alter the way we do business for months to come.  The things that no one is in disagreement about in this Bill is that it's riddled with new mandates, taxes, penalties, compliance requirements,  price fixes, Medicare cuts, Medicaid expansion and administrative burdens that will forever change the face of business.

There are various time-lines and important benchmarks set forth in this legislation that can lend to a great deal of confusion.  So, with that said, let's look at some FAQ's:

• Will employers and individuals see premiums increase as a result of health care reform?

 In compliance with the guidelines and requirements of the new health care law required by September 23, 2010, insurance carriers will modify policyholder benefits accordingly. With these adjustments to policy benefits, it is probable that an increase in premium costs will occur. Beginning in 2014, premium prices cannot be based on a customer’s gender or health status. Until then, current premium pricing will apply.

• Are there annual or lifetime maximums on coverage under the new law?

Effective September 23, 2010, there are no lifetime maximum limits on coverage. In addition, there will be no annual limits on group plans. For individual plans, annual limits may be allowed based on what Health and Human Services deems reasonable. This information is not yet available.

• When are employees able to have their dependents covered until they are 26?

Effective September 23, 2010, the law states that customers will be able to have dependent coverage for their married AND unmarried children up to the age of 26. The requirement is applicable even if the child is not a tax dependent. The law does not specifically include spouses of married children. There is no requirement to cover children of covered dependent children (i.e., grandchildren).

• Under the new law, do pre‐existing conditions no longer matter?

Effective September 23, 2010, insurance companies cannot limit coverage for children on individual or group policies with pre‐existing medical conditions. For adults with individual policies, this provision goes into effect in 2014.

• Under health care reform, what happens to rescission?

Effective September 23, 2010, rescissions will occur only in cases of customer fraud or intentional misrepresentation.

• Is it true that anyone who applies for coverage will be issued coverage?

Under the Guarantee Issue provision, effective in 2014, anyone who applies for coverage must be issued coverage.

• How will this new law affect MSAs/HSAs?

At this point, the only change we are aware of is the tax penalty increase from 10 percent to 20 percent for “non‐qualified” expense withdrawals.

If you would like to find out more about how Health Care Reform effects you and your business email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com Thanks

Medicare Changes For 2010

Section 102: Currently, Medicare outpatient mental health services require beneficiaries to pay a 50% co-payment under Part B. Other physician services under Part B require only a 20% co-payment. A phased reduction in this co-payment for outpatient mental health services begins in 2010. In the actual statute, the current co-payment amount is not described as “50%”. Rather, it defines what counts as incurred costs in such a way that the result is a 50% co-payment. So, the current statute counts incurred costs at 62.5% and this results in a 50% copayment for beneficiaries. In 2010, instead of incurred costs counting at 62.5% as they do now, they are counted at 68.75%. Once the definition of incurred costs reaches 100%, there is parity.

Section 112: Currently, the Medicare Savings Programs (QMB, SLIB, QI-1) have countable resource limits of $4000 for an individual and $6000 for a couple. This provision increases the amount of allowable resources for applicants to these programs so that it is the same as the resource limit for the full low-income subsidy individuals in 2010. The full low-income subsidy program has higher resource limits that increase based on a formula every year. Therefore, this change should result in an enrollment increase into these Programs, which can provide much needed assistance in Medicare cost sharing.

Section 113: Beginning January 1, 2010, SSA shall have in place a system for electronically transmitting information from an LIS application to the appropriate state agency that accepts Medicare Savings Program applications. Transmittal will only 4 occur with consent of the beneficiary. The information will be used to complete an application for the Medicare Savings Programs.

Section 115: Under the current Social Security statute, states are allowed to collect from the estates of deceased individuals any items or services under a state Medicaid plan that were provided to the individual when he or she was 55 or older. This Section amends the statute to eliminate that authority to collect from Medicare cost-sharing (the Medicare Savings Programs) beginning in 2010.

Section 116: With respect to applications filed on or after January 1, 2010, the value of a life insurance policy and in-kind support and maintenance will not be considered as income or resources for LIS determinations.

Section 118: This provision requires the Secretary provide the application for the Medicare Savings Program in the 10 languages (other than English) most commonly used by applicants for Medicare hospital insurance to states and the Social Security Administration. Such applications must be provided by January 1, 2010.

Section 176: Beginning with the 2010 plan year, the Secretary is required to identify categories of drugs and require that all drugs in those categories that are Part D covered drugs be included on all plan formularies. Such classes must meet specific criteria. It is generally expected that the current 6 protected classes would meet this criteria. The Secretary is also allowed to establish exceptions to this requirement for particular drugs within the class, including allowance for benefits management tools. However, any of these exceptions must meet particular criteria and can only be allowed after notice and comment.

Section 187: A report is due no later than two years of the date of enactment (July 15, 2010) that will describe the extent to which providers and plans are complying with Title VI prohibition against national origin discrimination affecting limited English proficient persons and the Office of Minority Health’s Culturally and Linguistically Appropriate Services (CLAS) Standards. This report shall also make recommendation on improving compliance and enforcement of CLAS Standards.

For more information on Medicare and Medicare Advantage Plans email me at bknauss@employeemployersolutions.com visit us on the web at www.employeemployersolutions.com or Twitter me at http://twitter.com/mployebenefits