1. HEB Business Solutions 375 South 300 West Salt Lake City, UT 84101 Ph:801-328-5000/Fax: 801-328-5009 www.hebsolutions.com

2. Health Care Reform By JJ Jones, R.H.U. and Dave Lewis, C.P.A.

8. Health Care Reform No Pre-Existing Conditions Where hospitals used to write these claims off and increased costs to those that pay their bill, they will now go to insurance companies and the cost will be passed along to consumers in the form of premium increases. The question is, will hospitals reduce rates? Can no longer deny coverage to children with pre-existing conditions under the age of 19. (All Plans) Effective on First Plan Year After September 23, 2010 Eliminating Pre-Existing Conditions Clauses What it means to you What is it? Effective WHAT

9. Health Care Reform No Lifetime Maximums Will probably add approximately $.25 per member per month to your premiums. The greatest effect will be on self-insured stop loss premiums. Eliminates lifetime maximums in health plans. (All Plans) First Plan Year after September 23 rd , 2010 No Lifetime Maximums What it means to you What is it? Effective WHAT

10. Health Care Reform No Annual Maximums Plans have been allowed to cap benefits such as dialysis to keep the plan viable. This will increase costs, but the severity of the impact is not known at this time as each group is specific to its own limits. Limits annual maximums to “Essential Health Benefits” only. In 2014 – Eliminates all annual limits. (All plans) First plan year after September 23, 2010 & 2014 No Annual Maximums What it means to you What is it? Effective WHAT

11. Health Care Reform No More Co-Pays? What it means to you What is it? Effective WHAT Will add about 1% to the total premium for these “new” plans. “ New” plans must cover preventive services without a co-pay or deductible applying. First plan year after September 23 rd , 2010 First Dollar Preventive Services

12. Health Care Reform Being Forced to Purchase? Currently being challenged by 41 states as unconstitutional. If it is deemed unconstitutional it will really mess things up. All citizens must have coverage or face a tax penalty consequences January 2014 Individual Mandated Coverage What it means to you What is it? Effective WHAT

13. Health Care Reform Employer Penalty What it means to you What is it? Effective WHAT Do you pay the penalty and cancel coverage or keep plans in place with all of the administrative concerns. Keep in mind it could be much cheaper for an employer to pay a $2,000 penalty if they cover a lot of families. Employers must provide employee coverage or pay penalty of $2,000 per employee (not counting the first 30). January 2014 Employer Coverage Mandate

14. Health Care Reform Waiting Periods What it means to you What is it? Effective WHAT This will bring employees onto plans sooner and may affect seasonal employment, but I do not expect this to be a big issue. Waiting periods are limited to no more than 90-days. 2014 Waiting Period Rules

15. Health Care Reform Maximum Out-Of-Pockets What it means to you What is it? Effective WHAT This could be the biggest cost hit impact to new plans, as many employers have high deductible plans with high out-of-pocket maximums. Depending on the plan this could increase cost by 20% over a competitors plan. Out-of-pocket limits can not exceed HDHP limits of $5,000 individual and $10,000 family. 2014 Out-of-Pocket Limits Established

16. Health Care Reform Emergency Room – Utah (BIG DEAL) What it means to you What is it? Effective WHAT New plans can go to all emergency room facilities at P.P.O. levels. Emergency care must be paid at PPO levels. Immediately effective for new plans Emergency Non-PPO Care

17. Health Care Reform Better Shot at Appeals? What it means to you What is it? Effective WHAT Most plans in Utah and surrounding states have strong appeals processes in place so this should not impact plans significantly. An Internal/ External appeal process for claimants to appeal denied claims. Immediately effective for new plans Requires Established Appeals Process

18. Health Care Reform P.C.P.’s What it means to you What is it? Effective WHAT Most plans in the West no longer require a PCP designation so this is not an issue. Applicants can designate an OB/GYN or Pediatrician as a Primary Care Physician. Immediately effective for new plans Primary Care Doctor Selection

19. Health Care Reform Enrollment What it means to you What is it? Effective WHAT Little effect for most plans. Will put pressure on employees to “opt out” versus “opt in”. Large employers (over 200 employees) must auto-enroll employees in the least expensive plan option and provide adequate notice on how to opt out. Immediately, OR 2014 – the law is not specific Auto Enrollment Required

20. Health Care Reform Dependent Definitions What it means to you What is it? Effective WHAT This is currently the Utah Law. No change for Utah Plans except married dependent children can continue through age 25. Child age limit is moved to age 26 (through age 25) for the purpose of health plan eligibility ( All Plans). First plan year after September 23 rd , 2010 Changes the Definition of a Child

21. Health Care Reform Administration Cost/Insurers What it means to you What is it? Effective WHAT This one is interesting. Some states currently impose fees to insurers for risk pools, premium taxes and other surcharges which will make it more difficult for insurers to meet the administrative percentage rules. This could cause lay-offs and quality reductions at the insurers. Will require insurers for individual and small groups to spend 80% of premium dollars on medical services. Large groups is 85% and allows for rebates to premium payers if not done. January 2011 Making Premium Pay Provision

22. Health Care Reform No Rescissions What it means to you What is it? Effective WHAT Generally will not affect insured plans as most in the West do not rescind coverage No rescissions of coverage First plan year after September 23 rd , 2010 Eliminates Rescission of Coverage

23. Health Care Reform 125 Plan Changes What it means to you What is it? Effective WHAT This eliminates these reimbursements for those extra funds you have in your FSA at the end of the year. Employees will reduce FSA elections, employers lose small tax benefit. Removes over-the-counter medications that do not have a doctors prescription from being reimbursed under FSA, HRA, HSA’s. January 2011, but could be earlier if your plan runs mid- year 2010 into 2011 Flex Plan Changes

58. Health Care Reform Excise tax on high-cost employer plans 2018 Increase in medical deduction threshold for taxpayers age 65 and over 2017 Premium assistance credit Excise tax on uninsured individuals Excise tax on applicable large employers Insurer reporting requirements Eligible premiums included in cafeteria plans 2014 Increase in medical deduction threshold for taxpayers under age 65 Additional hospital insurance tax on high-income taxpayers Medicare tax on investment income Fees on health plans (after Oct. 1, 2012) Medical device excise tax Flexible spending arrangement maximum imposed 2013 1099’s required for payments to corporations Adoption credit sunset Adoption-assistance programs sunset 2012 Small business tax credit Prescription drug coverage deduction eliminated W-2 reporting SIMPLE cafeteria plans Restrictions on use of HSA and FSA funds for over-the counter drugs Tax on HSA distributions increase 2011 Adoption credit increase Adoption-assistance program increase Tanning excise tax 2010