Few have read the 2,700 page Patient Protection and Affordable Care Act (PPACA). Even if you have, it is difficult to absorb the full implications of the health reform bill. Each week the Department of Labor (DOL), the Department of Health & Human Services (HHS), and Treasury produce new regulations. With so much happening so fast how can employers, insurance agents, consultants, lawyers, or insurance companies keep up with decisions to set strategies, make rational choices, and be legally compliant?
Several regulatory pronouncements have recently been released. In particular, two important Interim Final Regulations (IFRs) have been issued requiring employers to make key financial decisions regarding their health plans:
- On June 14, 2010, the Treasury, DOL, and HHS jointly released an IFR for group health plans to qualify as “grandfathered.” Plans applying for “grandfather” status can avoid some mandated benefits required by the PPACA.
- On June 28, 2010, an IFR was released for preventive care. The new preventive care coverages are effective for plan years beginning on or after September 23, 2010. Plans that are not grandfathered must cover – without cost-sharing – preventive services rated “A” or “B” by the U.S. Preventive Services Task Force (USPSTF). They must also cover certain immunizations and other preventive services for infants, children, adolescents and women in guidelines developed by HHS.
These regulations create major strategic and financial decisions for employers. There is no single answer. Each employer will need to assess its situation and strategic goals to determine what is in its own best interests.
Even if a plan claims “grandfathered” status it will have to comply with several new mandates beginning in 2011. Grandfathered plans must offer dependent coverage to children until age 26. They cannot impose pre-existing conditions on children under age 19. Grandfathered plans cannot have annual and lifetime dollar limits on benefits. To keep grandfathered status plans will be limited in changing insurance companies, benefit designs and employee cost-sharing. The new rule requires plans to provide employees notice of its decision to be a grandfathered plan.
What does a plan save by being grandfathered? The main savings is avoidance of the mandated preventive care services at 100%. A secondary issue is avoidance of the mandated guaranteed access requirements to OB-GYNs and pediatricians.
The mandated preventive care services are complex. There are USPSTF exceptions and limits allowed for many of the coverages. The general understanding is coverage identified by the USPSTF with an A or B rating. But that is only one source of required coverages. PPACA mandates:
(1) USPSTF evidence-based items or services rating of ‘A’ or ‘B,
(2) The Advisory Committee on Immunization Practices (ACIP) recommendations for immunizations,
(3) Health Resources and Services Administration (HRSA) recommendations on infants, children, and adolescents screenings, and
(4) Health Resources and Services Administration recommendations on screenings for women.
What are the costs/savings of the new preventive care services in the short/long term? What new services not now covered voluntarily are mandated? What limitations are allowed? How do the plan demographics (e.g. male/female, single/family) affect the costs?
Plans have serious cost/benefit calculations to make. To make those determinations many plans will rely on their insurer, their third party administrator (TPA), broker, or consultant. To know the right questions to ask advisors, many benefit managers will want to independently study these and other PPACA mandates.
It is important to research original source documents. Read the actual legislation, regulations, government produced guidelines, hear respected legal opinions, and study independent consultant observations. Volumes of information are being produced. It can be time consuming and confusing to get direct answers for plan’s specific situation. But, help is available.
The Healthcare Visions Health Reform Navigator is an inexpensive source that provides easy “Point & Click” researching for insurance and tax/penalty topics contained in PPACA. The Navigator provides direct links to health reform regulation at DOL, HHS, and Treasury. Also included are web-links to knowledgeable independent legal briefs and national consultant analyses and surveys. The Navigator’s dashboard highlights HOT TOPICS and has hyperlinks directly to relevant PPACA sections of the law.
After initial purchase updates as released are provided FREE of charge for a limited period. Also a FREE BONUS download of the “Preventive Care Navigator” is now available at the Health Reform Navigator site.
With these creative tools and other resources in hand, benefit managers will be better prepared to make the many important choices required by PPACA.
Ronald E. Bachman FSA, MAAA, is a Senior Fellow at the Center for Health Transformation, an organization founded by former U.S. House Speaker Newt Gingrich. Nothing written here is to be construed as necessarily reflecting the views of the Foundation or the Center for Health Transformation or as an attempt to aid or hinder regulations or the passage of any bill before the U.S. Congress.
