2014 and Beyond

2014 and Beyond
Reacting to PPACA’s Volatile evolution

Presented By:
Adam V. Russo, Esq.
CEO
Ron E. Peck, Esq.
Sr. Vice Presid ent & General Cou nsel

Chris Aguiar
Legal Ad m inistrator

Septem ber 25, 2013
©The Phia Group, LLC – Copyright 1999-2013

Overview
 N ot Even The Crystal Ball Cou ld ’ve Seen This!
 Play or Pay … Eventu ally!
 The Fed s on the Offensive
 The H ottest Issu es in Reform
 Fid u ciary Du ty – Tim e to Keep the Bu ck?


Not even the crystal ball
could’ve seen this!
Massachusetts Foreshadow ing … Realities of “Romney-Care”
 Certainty of Coverage Leads to Quandary of Care & Cost
 Focus on Universal Coverage - Access Over Cost

 Access to Coverage, N ot Care
 Heavy Coverage Mandates
 Increased Risk – Increased Premiums – MA led the nation in 2010
premiums spent – over $400 per person per month (D OUBLE the
national average!)
 Carriers file application w ith state to raise premiums and are denied


 Certainty of Coverage Leads to Quandary of Care & Cost
 Carriers file law suit

 Government investigates and discovers
 Excessive charges
 Wasteful tactics
 Price fluctuations at facilities and betw een facilities

 August 2012: Massachusetts passes new cost containment bill


 Grow th of Self-fund ing in MA
 Increase in the percentage of w orkers in self-insured plans
am ong all firm -size cohorts, except am ong w orkers in firm s
w ith few er than 50 em ployees.
 Since passage of MA health care reform % of w orkers in firm s
w ith 50 or m ore em ployees in self-insured plan increased from
54.4 % in 2005/ 2006 to 67.2 % in 2010/ 2011


“ObamaCare” – The Unforeseen
– Play or Pay … Eventually
• Employer Mandate delayed until 2015 ... maybe later?
• Extra year to simplify burdensome reporting requirements
– Effects
• D elay w ill cost $11 Billion D ollars
(http://w w w.rand.org/pubs/research_reports/RR411.html)
• Attractive option to let employees go to the exchange?
• Roughly 1 million few er people than projected w ill be
enrolling in employer-based coverage.
(http://w w w.huffingtonpost.com/2013/07/30/employermandate-delay_n_3678049.html)


Play or Pay … Eventually!

 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?


The Feds on the offensive
 The Fed’s Problem? – Adverse Selection!
 Self-Funding – A Thorn in the Fed’s Side
 Young Healthy Lives Being Kept On the Plan –
WELLN ESS IN CEN TIVES!
 Old, Sick Lives to the Exchanges
 Less Premiums – Higher Risk – Lack of Funding
 Their Solution?


 The N AIC & States Leading the Charge: Back D oor Regulation
on Self-Funding

 Play or Pay D elay – “Altruism or Conspiracy?”
 ERISA - The N ext Shoe to Fall?
 61% of covered w orkers are in a self insured plan, up from 49%
in 2000*
 2012 Urban Institute Study: 60% of small firms w ill convert
w ithout regulation*
 Original ObamaCare bill had ERISA oversight provisions*
 White House & Liberals again trying to close the “selfinsurance” loophole*
*

Steve M oore, The A ttack on Self-Insurance – Liberals W ant to Re-W rite ERISA to Save ObamaCare,
W all Street Journal, 9/12/2013


 Sw itching Sides: D OL Attack on ERISA Pre-emption?
 Vermont “Health Care D atabase” statute, 18 VSA § 1941(a)(1)
 Requires self-insured plans and their TPAs to provide state w ith
participant eligibility and claims data
 D OL filed Amicus brief supporting VT’s position in Libert y
Mut ual Insurance Co. v. Donegan
 D OL joining political movement against self-funding and
ERISA preemption?


Hottest Issues in REform











Preparing for 2014 Mandates
Spousal Coverage After D OMA
Financial Implication of Fees
Essential Health Benefits – D o State Benchmarks Matter?
Impact of N on-discrimination D elay
2014 Transitional Relief
Maternity Benefits for D ependant Children
Grandfathered Plan Requirements for 2014
Annual Open Enrollment Required of All Plans
Contraceptive Coverage


 Preparing for 2014 Mandates
 Effective 2014 – Group Health Plans May N OT
 Impose pre-existing condition exclusions on any
covered individual, regardless of age
 Coverage w aiting periods exceeding 90 days
 Annual limits on essential health benefits


 Spousal Coverage After D OMA
 Federal Law Has Changed – How D o You D efine 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? - D o N ot Have to Offer
Coverage to Same Sex Spouses
 Federal law does not require coverage
 State law is exempt

 COBRA & FMLA Implications

 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
D ecember 31, 2016
 D ue in 1 annual payment


 Essential Health Benefits – D o 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”


 Impact of N on-discrimination D elay
 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?


 2014 Transitional Relief
 Large media mis-communication
 Transitional Relief is only applicable for certain aspects
 Out of Pocket Max D elay
 To Ensure compliance, must ensure relief applies to the specific
component


 Maternity Benefits for D ependent 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 D iscrimination Act of 1978
 True even after Essential Health Benefits come into play (maternity
coverage is an Essential Health Benefit)
 Stay tuned … N ational 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

 Grandfathered Plan Requirements for 2014
 Total annual dollar limit phase out on Essential Health
Benefits by 2014
 D ependent child coverage until age 26
 N o pre-existing condition limitations for dependants
under age 19
 N o w aiting periods greater than 90 days


 Annual Open Enrollment Required of All Plans?
 N ew 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


 Contraceptive Coverage
 D OL, HHS Issue Final Rules for Contraceptive Coverage
 Religious employers exempt
 N o Exemption for non-religious emplo0yers w ho’s beliefs
w ould be violated
 N on-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


Fiduciary Duty – Keep the buck?
 Fiduciary D uty: ASOs, & BUCAs D o 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 w ith respect to any benefit plan of Client.”
 But remember – its w hat’s you do, N OT w hat you say!

 Those w ho act like a Fiduciary, w ill be deemed one


 Express Oil Change, LLC v. AN B 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 liabl e


 Hi-Lex Controls v. BCBS of Michigan, 2:11-CV-12557, 2012 WL
5990230 (E.D . Mich. N ov. 30, 2012).

 D iscretionary Authority w ith the “BUCAs”
 “The Plan Administrator delegates to “BUCA” the discretion to
interpret and apply plan terms and to make factual determinations
in connection w ith 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 w hether 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 w hich has been
appealed by the claimant or his duly authorized representative.”

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 …

Ad am V. Russo, Esq.
arusso@phiagroup .com

Ron E. Peck, Esq.
rpeck@phiagrou p.com

Chris Aguiar
caguiar@phiagrou p .com

Text “PHIA” to 22828 & Join our Mailing List!

www.russominchofflaw.com

781-535-5600 (Ph)
781-535-5656 (Fax)
163 Bay State Dr.
Braintree, MA 02184

www.passionforsubro.com

2014 and Beyond

Recommended

Recommended

More Related Content

What's hot

What's hot (18)

Similar to 2014 and Beyond

Similar to 2014 and Beyond (20)

More from brianjohnriggs

More from brianjohnriggs (7)

Recently uploaded

Recently uploaded (20)

2014 and Beyond