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Download this presentationon InformedOnReform.comunder Reform NewsWelcome to the Cigna Health Care Reform WebinarPublic Policy, New Fees/Taxes andEssential Health Benefits: What You Need to KnowNovember 14, 2012 2012 Cigna
Download this presentation on InformedOnReform.com under Reform NewsAGENDAPublic Policy, New Fees/Taxes and Essential Health Benefits:What You Need to Know Politics and Public Policy UpdateHow Essential Health Benefits are EvolvingNew Fees and TaxesWhat’s Next and How to PrepareQuestionsYour Moderator and PresentersTomRichards 2012 CignaKatieWadeKathyVaccaro2
Download this presentation on InformedOnReform.com under Reform NewsPOLITICS AND PUBLICPOLICY UPDATE 2012 Cigna3
Download this presentation on InformedOnReform.com under Reform NewsELECTION RESULTS SUMMARYRepublicanDemocrat206332U.S. Senate4555*U.S. House**2331953020PresidentElectoral votes (270 needed)Governors* 2 Independents caucusing with Democrats** 7 races yet to be decided 2012 Cigna4
Download this presentation on InformedOnReform.com under Reform NewsHOW ESSENTIAL HEALTHBENEFITS ARE EVOLVING 2012 Cigna5
Download this presentation on InformedOnReform.com under Reform NewsCLEARING UP THE CONFUSION BETWEEN THREE 1/1/14 PROVISIONSEssential HealthBenefitsMinimum ValueEmployer MandateMinimum EssentialCoverageIndividual MandateSummaryNon-grandfatheredIndividual and Small Groupinsured plans offered onand off the Exchangesmust cover EssentialHealth Benefits.SummaryEmployers with 50 full-time employees mustoffer employees and theirdependents minimum valuecoverage that is affordableor pay a penalty.SummaryAll individuals mustmaintain minimumessential coverage. Failureto do so will result in apenalty.Details 10 general categories States to determinebenefits No annual or lifetimedollar limits for EHBscovered by any plan,including ASODetailsCoverage requirements: Affordable ( 9.5% of W-2wages) Covers 60% of plan costs(deductible, copay and/orcoinsurance)Details Individuals must havecoverage through anemployer, government orindividual plan. No specific requirementsfor this coverage. 2012 Cigna6
Download this presentation on InformedOnReform.com under Reform NewsESSENTIAL HEALTH BENEFITS – WHAT WE KNOW Effective for plans beginning on or after 1/1/14 Each state determines EHBs by selecting a benchmark plan HHS Bulletin in Dec. 2011; awaiting further guidancePlan/Funding TypeIndividual and FullyInsured Small GroupFully Insured LargeGroupASO Small Group andLarge Group 2012 CignaGrandfatherStatusMust CoverEssentialHealth BenefitsDefines EHBAnnual orLifetime Limits onEHB oGFNoStateNoNon-GFNoClientNoGFNoClientNoLarge group 51 in all states currentlyAll states will be 101 as of 1/1/167
Download this presentation on InformedOnReform.com under Reform NewsESSENTIAL HEALTH BENEFITS – 10 BASIC CATEGORIESChallenge of Balancing Comprehensiveness and Affordability 2012 Cigna Ambulatory patient services Emergency services Hospitalization Rehabilitative and habilitativeservices/devices Laboratory services Mental health and substanceabuse disorders/behavioralhealth treatment Maternity and newborn care Prescription drugs Preventive and wellness servicesand chronic diseasemanagement Pediatric services, including oraland vision care8
Download this presentation on InformedOnReform.com under Reform NewsESSENTIAL HEALTH BENEFITS – OPEN QUESTIONSDetermination of EHBs When will states announce their benchmark plan details? Do all benefits included in the benchmark plan become EHBs for the state? Must plans duplicate the benchmark plan benefits, services and cost sharing exactly? How will self-funded plans determine which benefits are EHBs?Cost Sharing Does EHB apply to In-Network benefits only, allowing dollar limits onOut-of-Network benefits? Are separate deductibles and out-of-pocket maximums allowed for pediatric oral andvision coverage?Benefit Categories How will states define habilitative services? How will states define pediatric oral and vision care? What are the age limits for pediatric oral and vision? 2012 Cigna9
Download this presentation on InformedOnReform.com under Reform NewsESSENTIAL HEALTH BENEFITS: STATE BENCHMARK PLAN STATUSBenchmark planselectedStarted theselection processWaiting for guidancefrom HHSNo actiontaken25 States/DC5 States13 States8 StatesSource: AHIP as of 10/18/12 2012 Cigna10
Download this presentation on InformedOnReform.com under Reform NewsESSENTIAL HEALTH BENEFITS IN CALIFORNIA – MAKING HEADWAYBENCHMARK PLAN:Kaiser Small GroupHMO 30 Copay PlanNote: This information is not yet confirmed by HHS.There are still a number of pending questions anddetails to be determined. 2012 CignaProposed benchmark plan includes: Mental health – no limits Physical, occupational and speech therapy –no limits Skilled nursing facility – 100 days Home health care – 100 visits/year Bariatric surgery Lifestyle drugs (Viagra) Autism (state mandate) Children’s Dental/CHIP Plan – 2 cleanings,annual x-rays and other services Children’s Vision/Federal Employee Plan –annual vision exam and 150 allowance forframes/lensesAmong the open questions: Will plans need to mirror these exactbenefits, services and cost sharing? What will be the cost impact?11
Download this presentation on InformedOnReform.com under Reform NewsESSENTIAL HEALTH BENEFITS – POTENTIAL COST IMPACTApplicable to Small and Large Employer GroupsNot Currently CoveredUnder Most Small Group PlansEstimated Cost ImpactAssuming No Dollar LimitsInfertility Treatment3.0% - 9.0%Chiropractic.3% - 2.0%Bariatric Surgery2.0%Habilitative Services (Autism)1.0%Routine Foot Disorders0.4%Acupuncture0.3%Genetic Counseling0.3%Nutritional Evaluation/Counseling0.2%TMJ0.1%Total Estimated Range7.6% - 15.3%Note: Estimates are based on large group experience and may vary basedon availability of data and demographic mix of plan enrollees. Due touncertainty regarding the services covered under each benefit category,cost impacts may vary with additional specificity or market demographics. 2012 Cigna12
Download this presentation on InformedOnReform.com under Reform NewsNEW FEES AND TAXES 2012 Cigna13
Download this presentation on InformedOnReform.com under Reform NewsADDITIONAL MEDICARE TAXES EFFECTIVE 1/1/13 Current Medicare Tax 2.9% of compensation Both employers and employees currently pay 1.45% – no income limitWho is Impacted?.9% AdditionalMedicare Tax onCompensation3.8% AdditionalMedicare Tax onInvestment Income(Interest, Dividends,Capital Gains)Individuals 200k and Couples 250k Employers1.45% .9% 2.35%Medicare tax oncompensationabove theseamountsCompensationincludes wages, tips,commissions, selfemployment incomeEmployers must beginwithholding higheremployee taxes whenearnings reach 200,000.Employer is liable for thetax if they fail to withholdPay Medicare taxon all investmentincome unlessincome above thethreshold is lessExample:Couple with modifiedadjusted gross incomeof 280,000, including 50,000 in investmentearningsNo employer impactPay Medicare Tax on 30,000 (amount above 250,000) 2012 Cigna14
Download this presentation on InformedOnReform.com under Reform NewsNEW TAXES AND FEES WITH EMPLOYER IMPACTComparative EffectivenessResearch FeeWhoWhatWhenHowMuchPricingImpact 2012 CignaHealth InsuranceIndustry FeeReinsurance Assessment Annual fee on insured and Annual fee on all insuredplans beginning in 2014self-insured plans beginningon/after 10/2/11 Includes Dental/Vision HRA/FSA nuances, etc. Excludes ASO Annual fee on insuredand self-insured plans,2014-2016 Annual fee of 1, then 2 indexed, per participantuntil 2019Estimated costs:Estimated costs: 2 - 2.5% of premium in 2014 60 - 90 PMPY in 2014 First payable July 2013 Increasing to 3-4% infuture years 40 - 60 PMPY in 2015 Excise tax form 720 NOT tax-deductible IS tax-deductible FI: Cigna pays, built intorates Full amount built into ratesfor plans 1/1/14 ASO: Client must calculateand pay own fee Partial load for planseffective in 2013 basedon portion of premiumearned in 2014 FI: Full amount built intorates for 1/1/14 ; partialload in 2013 Excludes Dental/Vision 25 - 35 PMPY in 2016 ASO: Client is liable butCigna submits payment ontheir behalf15
Download this presentation on InformedOnReform.com under Reform NewsWHAT’S NEXT AND HOWTO PREPARE 2012 Cigna16
Download this presentation on InformedOnReform.com under Reform NewsWHAT’S NEXTGuidance/Regulations – Still Pending for Several Key ProvisionsNovember 16:December 16:January 1:March 1:States mustnotify HHSon intent toestablish anExchangeStateExchangeblueprintsdue Flexible SpendingAccount (FSA) capped at 2,500/employed adultEmployers must sendemployees noticesabout ExchangesNOV. ‘12DEC. ‘12 Exchange certificationincluding “ConditionalApproval” dueJAN. ‘13FEB. ‘13MAR. ‘13January:February 15: 2012 W-2s mustinclude the valueof healthcoverage forinformation onlyStates’ plansdue to HHS forpartnershipExchanges AdditionalMedicare taxesbegin 2012 Cigna17
Download this presentation on InformedOnReform.com under Reform NewsHOW TO PREPARE: CHECKLIST FOR EMPLOYERSEssential Health Benefits9 Assess or confirm your situs state/Essential Health Benefits state9 Understand your requirements or options with Essential Health BenefitsFees and Taxes9 Medicare: Withhold the new .9% tax for those earning 200k 9 Medicare: Communicate the new tax, as appropriate for your population9 CERF: Self-insured plans should prepare to calculate and pay in July 20139 Industry Tax: Be cognizant this applies to insured dental and vision, too9 Reinsurance Assessment: Insured plans should be aware and self-insuredplans are liable but Cigna is required to make the payment on your behalfOverall9 Evaluate your company culture/’DNA’ and align incentives accordingly9 Don’t just focus on 2014 – think 2020 and beyond9 Ramp up your communications plan – there’s a lot more to come! 2012 Cigna18
Download this presentation on InformedOnReform.com under Reform NewsNEXT STEPS AND QUESTIONSVisit ouraward-winning website,InformedOnReform.comTry our new tool,Health Care Reform for YOUOur next webinar will takeplace in early 2013 2012 Cigna19
"Cigna" is a registered service mark and the "Tree of Life" logo is a service mark of Cigna Intellectual Property, Inc., licensed for use byCigna Corporation and its operating subsidiaries. All products and services are provided by such operating subsidiaries and not by CignaCorporation. Such operating subsidiaries include Connecticut General Life Insurance Company, Cigna Health and Life InsuranceCompany, and HMO or service company subsidiaries of Cigna Health Corporation and Cigna Dental Health, Inc. All models are used forillustrative purposes only.11/12 2012 Cigna 2012 Cigna. Some content provided under license.20
All products and services are provided by such operating subsidiaries and not by Cigna Corporation. Such operating subsidiaries include Connecticut General Life Insurance Company, Cigna Health and Life Insurance Company, and HMO or service company subsidiaries of Cigna Health Corporation and Cigna Dental Health, Inc. All models are used for
