GUIDELINES RELEASED ON WOMEN’S PREVENTIVE SERVICES
The Affordable Care Act – the health insurance reform legislation passed by Congress and signed into law by President Obama on March 23, 2010 – requires health plans to cover preventive services. Preventive services that have strong scientific evidence of their health benefits must be covered and plans can no longer charge a patient a copayment, coinsurance or deductible for these services when they are delivered by a network provider.
Under the Affordable Care Act, women’s preventive health care – such as mammograms, screenings for cervical cancer, prenatal care, and other services – is covered with no cost sharing for new health plans and plans that are not grandfathered.
The Department of Health and Human Services (HHS) has released health plan coverage guidelines, developed by the Institute of Medicine (IOM), that specify the services that women must receive without having to pay a co-payment, co-insurance or a deductible. HHS commissioned an IOM study to review what preventive services are necessary for women’s health and well-being and should be considered in the development of comprehensive guidelines for preventive services for women.
Non-grandfathered plans are required to provide coverage without cost sharing consistent with these guidelines in the first plan year that begins on or after August 1, 2012 (2013 for calendar year plans).
| Type of Preventative Service | HHS Guideline for Health Insurance Coverage | Frequency |
| Well-woman visits. | Well-woman preventive care visit annually for adult women to obtain the recommended preventive services that are age and developmentally appropriate, including preconception and prenatal care. This well-woman visit should, where appropriate, include other preventive services listed in this set of guidelines. | Annual, although HHS recognizes that several visits may be needed to obtain all necessary recommended preventive services, depending on a woman’s health status, health needs, and other risk factors. |
| Screening for gestational diabetes. | Screening for gestational diabetes. | In pregnant women between 24 and 28 weeks of gestation and at the first prenatal visit for pregnant women identified to be at high risk for diabetes. |
| Human papillomavirus testing. | High-risk human papillomavirus DNA testing in women with normal cytology results. | Screening should begin at 30 years of age and should occur no more frequently than every 3 years. |
| Counseling for sexually transmitted infections. | Counseling on sexually transmitted infections for all sexually active women. | Annual. |
| Counseling and screening for human immune-deficiency virus. | Counseling and screening for human immune-deficiency virus infection for all sexually active women. | Annual. |
| Contraceptive methods and counseling. | All Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity. | As prescribed. |
| Breastfeeding support, supplies, and counseling. | Comprehensive lactation support and counseling, by a trained provider during pregnancy and/or in the postpartum period, and costs for renting breastfeeding equipment. | In conjunction with each birth. |
| Screening and counseling for interpersonal and domestic violence. | Screening and counseling for interpersonal and domestic violence. | Annual. |
Group health plans sponsored by certain religious employers, and group health insurance coverage in connection with such plans, are exempt from the requirement to cover contraceptive services. A religious employer is one that: (1) has the inculcation of religious values as its purpose; (2) primarily employs persons who share its religious tenets; (3) primarily serves persons who share its religious tenets; and (4) is a non-profit organization.
HHS PROPOSES REGULATIONS ON ESTABLISHING INSURANCE EXCHANGES
On July 11, 2011, the U.S. Department of Health and Human Services (HHS) proposed a framework to assist states in building Affordable Insurance Exchanges, state-based competitive marketplaces where individuals and small businesses will be able to purchase private health insurance. Starting in 2014, Exchanges are intended to make it easy for individuals and small businesses to compare health plans, get answers to questions and find out if they are eligible for tax credits for private insurance or health programs like the Children’s Health Insurance Program (CHIP).
The proposed regulations are designed to help support and guide states in their efforts to implement Exchanges. HHS proposed new rules offering states guidance and options on how to structure their Exchanges in two key areas:
- Setting standards for establishing Exchanges, setting up a Small Business Health Options Program (SHOP), performing the basic functions of an Exchange, and certifying health plans for participation in the Exchange, and;
- Ensuring premium stability for plans and enrollees in the Exchange, especially in the early years as new people come in to Exchanges to shop for health insurance.
These proposed rules set minimum standards for Exchanges, give states the flexibility they need to design Exchanges that best fit their unique insurance markets, and are consistent with steps states have already taken to move forward with Exchanges.
Forty-nine states, the District of Columbia and four territories accepted grants to help plan and operate Exchanges. In addition, over half of all states are taking additional action beyond receiving a planning grant such as passing legislation or taking Administrative action to begin building exchanges. States will continue to implement exchanges on different schedules through 2014.
In drafting these proposals, the administration examined models of Exchanges, held numerous meetings with stakeholders and consulted with state leaders, consumer advocates, employers and insurers. To continue that conversation, HHS is accepting public comment on the proposed rules to learn from states, consumers, and other stakeholders how the rules can be improved and HHS will modify these proposals based on the feedback. To facilitate that public comment process, HHS will convene a series of regional listening sessions and meetings.
To reduce duplication of effort and the administrative burden on the states, HHS also announced that the federal government will partner with states to make Exchange development and operations more efficient. States can choose to develop an Exchange in partnership with the federal government or develop these systems themselves.
The preamble to the proposed regulations gives some clues as to the thinking of HHS. Specifically it appears that HHS prefers that states establish non-profit organizations to run exchanges, rather than having the exchanges be run by the state governments. It is also clear from the preamble that HHS believes states should establish a single Exchange, rather than having separate exchanges for individuals and small businesses. If a state chooses to participate in a regional exchange, the proposed regulations say it would have to do so for both individuals and small businesses, even if the exchanges were separate.
HHS requested comments on whether Taft-Hartley plans and church plans should be allowed to participate in Exchanges.
The proposed regulations call for an initial open enrollment period from October 1, 2013 through February 28, 2014. If an Exchange receives an election form by December 22, 2013, coverage will be effective January 1, 2014. If an Exchange receives the election form by the 22nd of a later month, coverage will be effective the first of the following month. This approach will also apply to annual open enrollment periods and special enrollment periods. The proposed regulations call for annual open enrollment periods, beginning in 2014, to run from October 15 through December 7 of each year. The proposed regulations also call for all special enrollment periods to be 60 days.
The proposed regulations call for HHS to determine by January 1, 2013 whether a state’s Exchange will be capable of beginning operation by October 1, 2013 to support the initial open enrollment period. If HHS determines a state will not be ready, HHS will operate an Exchange in that state or contract with a non-profit organization to do so.
The entire geographic area of a state must be covered by one or more Exchanges. A state could meet this requirement by having a combination of a regional Exchange and one or more subsidiary Exchanges. To minimize consumer confusion, only one Exchange may operate in each geographically distinct area.
The proposed regulations use the term “regional Exchange” to mean an Exchange that operates in two or more states. Under the proposed regulations, the states need not be contiguous and regional Exchanges do not need to cover an entire state.
States can also choose to establish one or more subsidiary Exchanges to serve a geographically distinct area within a state.
For more information on Exchanges, including fact sheets, visit http://www.healthcare.gov/exchanges.
MORE PROPOSED REGULATIONS ISSUED ON EXCHANGES
The U.S. Department of Health and Human Services (HHS) along with the Department of the Treasury released three proposed rules on August 12, 2011, related to developing Affordable Insurance Exchanges (Exchanges). Starting in 2014, individuals, families, and small businesses will have access to private health insurance through Exchanges. Forty-nine states, the District of Columbia and four territories applied for grants to help plan and operate Exchanges. Over half of all states have taken additional action beyond receiving a planning grant such as passing legislation or taking Administrative action to begin building exchanges.
One rule proposes standards and systems for applying for and enrolling in qualified health plans and insurance affordability programs through the Exchange that are intended to be:
- Easy and Fast: The eligibility process will rely on electronic data sources to verify applicant information wherever possible. In most cases, this will allow for a near real-time eligibility process so that individuals can receive an eligibility determination and enroll in a plan in a single session.
- Coordinated: By using the same simplified eligibility rules for premium tax credits, Medicaid and the Children’s Health Insurance Program (CHIP), individuals can enroll in the program that best fits their needs without unnecessary steps or redundant paperwork.
- Seamless: The proposed rule simplifies the redetermination process to help enrollees maintain coverage year after year without unnecessary disruptions.
- Flexible for Employers: The Small Business Health Option Programs (SHOP) Exchange provides small employers a way to provide employees with a choice among health insurance options while keeping costs predictable.
The proposed Exchange Eligibility and Employer Standards rule establishes a system through which an individual may apply for and receive a determination of eligibility for enrollment in a qualified health plan through the Exchange and for Medicaid and the Children’s Health Insurance Program (CHIP). This means that no matter how an application is submitted or which program receives the application, an individual will use the same application and receive a consistent eligibility determination, without the need to submit information to multiple programs.
In order to qualify for coverage through the Exchange or insurance affordability programs, the Exchange must verify application information to determine eligibility based on household income and other factors. Exchanges will be able to access a single place to review and electronically verify existing application data while protecting consumer privacy. For some individuals, paper documentation may still be needed in order to determine eligibility, but for the majority of applicants, an automated electronic data matching process should eliminate the need for paper documentation.
The verification and eligibility determination processes described in the Exchange Eligibility and Employer Standards proposed rule are designed to parallel and integrate with those in Medicaid and CHIP. The Exchange will coordinate with Medicaid and CHIP in an effort to ensure that an applicant experiences a seamless eligibility and enrollment process regardless of where he or she submits an application.
The Department of the Treasury issued a proposed rule regarding premium tax credits for the purchase of coverage through Exchanges and HHS awarded $185 million to 13 states and the District of Columbia to help them build Exchanges.
The premium tax credit is generally available to individuals and families with incomes between 100% and 400% of the federal poverty level ($22,350 – $89,400 for a family of four in 2011. The credit amount is generally equal to the difference between the premium for the “benchmark plan” and the taxpayer’s “expected contribution.” The expected contribution is a specified percentage of the taxpayer’s household income. The percentage increases as income increases, from 2% of income for families at 100% of the federal poverty level (FPL) to 9.5% of income for families at 400% of FPL. (The actual amount a family pays for coverage will be less than the expected contribution if the family chooses a plan that is less expensive than the benchmark plan.) The benchmark plan is the second-lowest-cost plan that would cover the family at the “silver” level of coverage. The credit is capped at the premium for the plan the family chooses (so no one receives a credit that is larger than the amount they actually pay for their plan).
Since many moderate-income families may not have sufficient cash on hand to pay the full premium upfront, an advance payment of the premium tax credit will be made by the Department of the Treasury directly to the insurance company. This advance payment will assist families to purchase the health insurance they need. Later, the advance payment will be reconciled against the amount of the family’s actual premium tax credit, as calculated on the family’s federal income tax return.
In welcome news, the Treasury Department stated: “Solely for purposes of applying the employer responsibility provisions, we anticipate that future guidance will provide a safe harbor permitting employers to base the affordability calculation on the wages they pay their employees instead of employees’ household income.”
WILL THE DEBT-CEILING DEAL IMPACT MEDICARE, HEALTH CARE REFORM?
The enactment of the Budget Control Act (BCA) did not just raise the debt ceiling and reduce federal spending–it also calls for the creation of a bipartisan, 12-member joint congressional committee (known as the “super committee”) that is charged with coming up with over $1 trillion dollars in cuts to federal spending by November 23. Observers are wondering whether the committee will be able to come to an agreement and, if so, what their recommendations will be, not to mention how their work will impact progress on other federal legislation this fall. Public health care financing changes are almost certainly on their way.
The bipartisan independent deficit reduction committee that completed its work last year recommended many potential health-related spending cuts, as have other working groups. Suggested changes to Medicare include:
- Raising the eligibility age
- Raising premiums
- Changing payments to health care providers
- Converting to a voucher system
- Eliminating the long-term care benefits in the new CLASS Act.
According to the terms of the BCA, if legislation is not enacted by the end of the year, automatic across-the-board cuts will be required. Medicare provider reimbursement and many of the discretionary programs within the Department of Health and Human Services and other departments would be cut. That means that health care reform grants to states and other health reform programs and offices would see automatic and immediate budgetary reductions that could have a substantial negative impact on the implementation of health care reform.
11th CIRCUIT COURT: INDIVIDUAL MANDATE UNCONSTITUTIONAL
On August 12, 2011, the 11th U.S. Circuit Court of Appeals in Atlanta upheld a federal judge’s ruling in Florida that the individual mandate in the national healthcare law is unconstitutional. In the 2-1 ruling, a panel of judges said the requirement that everyone have minimum insurance goes beyond the power given to Congress in the commerce clause of the constitution.
The court said: “the individual mandate exceeds Congress’s enumerated commerce power and is unconstitutional. This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives. We have not found any generally applicable, judicially enforceable limiting principle that would permit us to uphold the mandate without obliterating the boundaries inherent in the system of enumerated congressional powers.”
The court struck down part of the lower court’s decision in that the judge in Florida ruled that because the individual mandate was unconstitutional, the entire law should be struck down; however, the 11th Circuit panel disagreed and found that the rest of the law could stand. Many observers believe that much of the rest of the law is unworkable without the individual mandate.
The 6th Circuit previously ruled that the individual mandate is constitutional. This conflict between the circuits sets the stage for the U.S. Supreme Court to decide the issue in their term that begins in October. First, the Obama Administration is likely to appeal the three-judge panel’s ruling to the entire 11th Circuit.
AGENCIES RELEASE PROPOSED FORM FOR SUMMARY OF BENEFITS
Beginning in March 2012, the Patient Protection and Affordable Care Act requires all health insurers and group health plans to provide enrollees an accurate summary of benefits and coverage. On August 17, 2011, the U.S. Departments of Labor, Health and Human Services, and the Treasury proposed new rules under the Affordable Care Act that are intended to enable consumers to understand their health coverage more easily and determine the best health insurance options for themselves and their families. Likewise, these proposed rules are intended to assist employers in finding the best coverage for their business and their employees. Under the proposed rules, health insurers and group health plans will provide consumers with clear, consistent and comparable information about their health plan benefits and coverage.
The rules should enable consumers to understand the coverage they already have and, when purchasing new coverage, to make apples-to-apples comparisons of available options. Specifically, the proposed regulations would ensure consumers have access to two forms to help them understand and evaluate their health insurance choices, including:
- A summary of benefits and coverage.
- A uniform glossary of terms commonly used in health insurance coverage, such as “deductible” and “co-pay.”
The proposed regulations also include instructions, sample language and a guide for coverage examples and calculations to be used in completing the template.
All health plans and issuers will have to provide a summary of benefits and coverage, along with a uniform glossary of terms, to shoppers and enrollees upon request and before they buy coverage. Often, health plans and issuers only provide selective details on the plan or policy before it is purchased, giving consumers a limited understanding of what they are buying. The proposed rules are intended to give consumers straightforward, standardized information on their choices upfront and help them understand the key features of a policy or plan, which should allow them to make a more informed decision.
This summary of benefits and coverage includes a new, standardized health plan or policy comparison tool for consumers known as “coverage examples,” which is intended to be like the nutrition facts label required for packaged foods. The coverage examples illustrate what proportion of expenses a health insurance policy or plan would cover for three common benefits scenarios — having a baby, treating breast cancer and managing diabetes. Additional scenarios may be added in the future. The examples are intended to help consumers understand and compare their share of the costs of care under a particular policy or plan, and see how valuable the health plan would be at times when they need the coverage.
The permitted methods of delivery are: by hand; United States mail; an electronic copy delivered to an e-mail address provided by the employee; an electronic copy delivered via a link on the Internet; a copy delivered by any other means acceptable to both the plan and the employee. An oral description of the form is not sufficient. The form may not be incorporated into any other document.
The proposed rules are a result of a public process led by the National Association of Insurance Commissioners (NAIC) and a working group composed of stakeholders. These stakeholders included representatives of health insurance-related consumer advocacy organizations; health insurers; health care professionals; patient advocates, including those representing individuals with limited English proficiency; and other qualified individuals. During its process, the working group met monthly, invited public input, and conducted consumer testing of the language and forms. The proposed regulations adopt the recommendations submitted by the NAIC after that process and request comments on how the forms can be improved.
Under the rules in the proposed regulations, beginning on March 23, 2012, all health insurance issuers and group health plans must provide the Summary of Benefits and Coverage and the uniform glossary to consumers.
An insurer or group health plan must automatically provide a Summary of Benefits and Coverage to a consumer prior to enrolling in coverage and 30 days prior to reissuance or renewal of their health coverage so they are informed about the coverage they have. People enrolled in a health plan must be notified of any significant changes to the terms of coverage reflected in the Summary of Benefits and Coverage at least 60 days prior to the effective date of the change.
The Summary of Benefits and Coverage may be disclosed to consumers in either paper or electronic form if certain consumer safeguards are met. Therefore, it may be possible for a plan or issuer to post the Summary of Benefits and Coverage on its website or on HealthCare.gov, or provide it by email.
This proposed rule is open to public comments for 60 days from the date of publication in the Federal Register. The proposed rules request comment on how the Summary of Benefits and Coverage and the uniform glossary can be provided to individuals while minimizing undue cost and burden on employers and health insurance issuers. Comments are also requested on different methods of providing the uniform glossary and the Coverage Examples, in the interest of streamlining compliance and making the implementation of these requirements as workable, efficient and user-friendly as possible.
The health care reform law requires that the summary of benefits and coverage include a statement about whether a plan provides minimum essential coverage. Since minimum essential coverage is not required until 2014 and since the regulations on minimum essential coverage have not yet been released, this statement will not be required until 2014.
The health care reform law requires that the summary of benefits and coverage be no more than four pages. The agencies have interpreted this to mean no more than four double-sided pages.
More information about the proposed regulations is available at www.healthcare.gov/news/factsheets/labels08172011a.html.
To view the proposed template for the summary of benefits and coverage, visit www.healthcare.gov/news/factsheets/labels08172011b.pdf.
IS IT REALLY THE END OF AN ARRA?
Not necessarily, some individuals will still be eligible to receive the subsidy beyond August 31, 2011. The American Recovery and Reinvestment Act (ARRA) provided a COBRA premium reduction for eligible individuals who were involuntarily terminated from employment through the end of May 2010. Due to the statutory sunset, the COBRA premium reduction under ARRA is not available for individuals who experience involuntary terminations after May 31, 2010. However, individuals who qualified on or before May 31, 2010 may continue to pay reduced premiums for up to 15 months, as long as they are not eligible for another group health plan or Medicare even if their COBRA coverage did not start until a later date due to the terms of a severance arrangement, or the use of banked hours or other similar provision that delayed the start of their COBRA coverage. For example if an individual was involuntarily terminated on May 31, 2010 and due to the terms of a severance agreement their COBRA coverage did not start until December 1, 2010, they would still be eligible for the full 15 months of subsidy through February 29, 2012 as long as they are not eligible for another group health plan or Medicare.
Please contact Garner Consulting for assistance with any of these issues.
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Garner Consulting does not practice law. Please seek qualified counsel if you need legal advice. For employee benefits consulting, please call John Garner, Gerti Reagan Garner or Zaven Kazazian at (626) 351-2300. Please visit our web site at www.garnerconsulting.com, where you can find back issues of our Bulletins.
