SBCMS News/Media

Health Care Reform 2014

Health Care Reform*: 2014 Marks a New Era

Health care reform is in full-swing with the heftiest legislation set for 2014 — when health insurance will become available to millions of Americans who were previously uninsured.  Starting January 1, 2014, most Americans will be required to have health insurance and many businesses will be required to offer coverage to their employees. In addition, health insurance exchanges (Covered California) will be available to facilitate access to coverage.

Starting in 2014, Americans must have minimum essential coverage or pay a tax penalty.  Options for coverage include insurance purchased through the individual market, a public exchange, a government program or an employer-sponsored program.   Minimum essential coverage includes ambulatory services, emergency services, hospitalization, maternity and newborn care, mental health/substance abuse treatments, prescription drugs, rehabilitative services, laboratory services, preventive/wellness services and pediatric services.

Changes Coming in 2014

• Individual Mandate — Everyone (with few exceptions) will be required to have health insurance or pay a penalty.  Penalties start at $95 per individual, $285 per family, or 1% of income (whichever is greater), and increase in subsequent years
• Employer Mandate — Employers with 50 or more full-time equivalent employees must offer minimum essential coverage that is affordable (where employee only contributions do not exceed 9.5% of household income)  for at least 95% of its full-time employees or pay a penalty (i.e. play or pay) if one full-time employee goes to an Exchange and receives a premium tax credit.
  • If coverage is not offered, penalty is $2,000 multiplied by the number of full-time employees (minus the first 30 employees).
  • If coverage is offered but not affordable or does not cover at least 60% of essential benefits, the employer will be assessed $3,000 for each employee receiving a tax credit or $2,000 per full-time employee (the lesser will apply) (excluding the first 30 employees).
• All states must have a health insurance exchange available for individuals and small business owners to view, compare, and purchase health plans offering minimum essential coverage.
• Subsidies — Through the exchange, individuals may qualify for a subsidy in the form of a tax credit if household income is between 100-400% of the federal poverty level.
• Guaranteed issue — Health insurers must sell coverage to everyone, regardless of pre-existing conditions, and can't charge more based on health or gender.
• No annual or lifetime limits — Individual and group health plans may not impose annual or lifetime limits.
• Free preventive care — Plans offering minimum essential coverage must provide several preventive services and screenings at no charge.

Options for Employers with Less Than 50 Employees

• Purchase coverage via the SHOP exchange (Small Business Health Option Program) or traditional market.
• Stop offering coverage and let employees buy an individual plan from the exchange 
• Provide a defined contribution to assist employees with purchasing coverage.
• Apply for tax credits to help cover the cost of premiums if the employer:
  • Employs 25 or fewer employees.
  • Pays annual wages averaging less than $50,000 per full-time equivalent employee.
  • Provides at least 50% of the cost of health care coverage for their employees.

Impact on Individuals and Employers

Individuals, their families, and their employees will have access to health insurance on a broad basis. Employers must assess their options carefully to determine the pros and cons of continuing to provide coverage or allowing employees to access the exchanges.

Although long-term implications are unknown, a number of experts agree reform regulations (i.e., guaranteed issue and mandated level of benefits) may result in increased premiums that will ultimately be passed to employees.

Learn More

Stay tuned for more health care reform communications, including information on Marsh/Seabury & Smith Insurance Program Management's private health care exchange for members. In the meantime, please call Marsh at 800-842-3761 for more information.

*Marsh and the Association/Society do not provide tax or legal advice.  Please consult with your own advisors to determine how the law’s changes and your decisions impact your personal situation. 

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Save on your workers' compensation program

See What You Could be Saving!

 “When I found out how much money I could save ($1,650) on the sponsored workers’ compensation program, I joined CMA. The savings paid for my membership and then some. Now I have access to everything CMA offers”
– Nicholas Thanos, M.D.
   CMA Member

Did you know that CMA/Society members can save 5% on their workers’ compensation insurance? And, they may save up to 15%, depending upon where they place their group medical insurance.

It’s true. CMA/SBCMS members receive a discount on workers’ compensation insurance policies provided through Employers Compensation Insurance Company. This discount is available exclusively through Marsh/Seabury & Smith Insurance Program Management, the CMA/SBCMS sponsored broker and administrator.

EMPLOYERS provides you with loss control tools, such as Loss Control Connection^SM, an easy-to-use, online risk management database. This tool provides policyholders with unlimited access to a comprehensive library of loss prevention tools, OSHA log software, safety posters and other valuable resources—at no charge.

Should you have a claim, experienced professionals at EMPLOYERS work to deliver prompt, efficient, knowledgeable service to resolve claims quickly and fairly while helping employees get back to work.

With workers’ compensation premiums increasing this year, take a moment to contact a Marsh Client Advisor and let us show you how we can deliver a quality insurance program and exceptional savings to you. Call a Marsh Client Advisor at 800-842-3761 or email CMACounty.Insurance@marsh.com today!

d/b/a in CA Seabury & Smith Insurance Program Management • CA Ins. Lic. #0633005 • AR Ins. Lic. #245544
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Medi-Cal Duals Project Delayed

The Department of Health Care Services announced yesterday that the start of the Duals demonstration will be delayed. Instead of their previously announced October 2013 start date, they just announced the project will not begin until January 2014 at the earliest.  Please see below for the full announcement.  We will provide you with up-to-date information as it becomes available. 

Please contact Lishaun Francis for more information or with questions:  Lishaun Francis, Associate Director, Center for Medical & Regulatory Policy, California Medical Association; lfrancis@cmanet.org or 916.551.2554.

Health Reform Heats Up

More than three years have passed since the Affordable Care Act (ACA) was into law, setting into motion some of the most dynamic and volatile years the nation’s health care industry has ever seen.

Since its inception, the law has been a subject of controversy, inspiring hotly contested debates in Washington, D.C., Sacramento and across the entire nation.  For some, this dramatic overhaul of the nation’s health care system represents our national leaders finally making good on the long-overdue promise of “health care for all.” Others claim that the law is a clear overreach of federal authority that threatens to overburden an already fragile economy.

Although the law remains controversial, the United States Supreme Court has ruled that the law is constitutional and active steps are being taken to move forward at the federal and state level. With many of the provisions set to take effect on January 1, 2014, state officials across the nation are scrambling to make sure they’re ready to implement the law’s sweeping changes.

The road has already been a somewhat rocky one.

Throughout the implementation process, the U.S. Department of Health and Human Services has been narrowly meeting its own deadlines, often times leaving states waiting for federal guidance that could dramatically alter their own implementation plans. With several major deadlines coming in the next few months, many observers expect this problem to only get worse.

Adding to the headache for the federal government is the fact that the ACA has received mixed support from the states, which has complicated implementation efforts nationwide. As of early February, only 19 states had elected to develop their own state-run “exchange,” an online marketplace where consumers can purchase subsidized coverage. An additional five states will form state-federal partnerships to operate their marketplaces, while the remaining states have declined to participate, meaning the federal government will be responsible for operating exchanges in those areas.

Despite these problems, the march toward reform continues on.

The Next Major Milestone
The next major milestone toward full implementation is set to take place on October 1, 2013, when state exchanges are set to begin their pre-enrollment. In the first years following these marketplaces going live, more than 32 million currently uninsured Americans are expected to gain coverage, either through an exchange plan or the ACA’s massive expansion of the Medicaid program. Some analysts expect as many as 5 million of these newly insured to come from California.

Three months after the pre-enrollment begins, January 1, 2014, exchanges are set to go live, meaning that millions of Americans will, for the first time, be able to purchase coverage using the federal subsidies promised in the ACA.

In order to navigate this massive undertaking, states will need to decide which plans will be offered through their exchanges, construct the actual online marketplaces through which consumers will purchase coverage and implement major public outreach campaigns to ensure that these citizens – many of whom have never had the benefit of “open enrollment” or a similar purchasing period – understand how and where they can sign up for coverage under the reform law.

California Leads the Way
Despite the uncertainty swirling around the ACA’s implementation, California looks to be on track to meet the coming deadlines.

In the days following the ACA’s passage, California was the first state to establish a health benefit exchange and has been working toward implementation ever since. That exchange, recently named Covered California, has already launched its online consumer marketplace, www.coveredca.com, and is one of 25 states that have gained conditional approval from the federal government to operate its own insurance marketplace.

There is, however, still much work to be done at the state level.

Unlike most other states, California opted to adopt an “active purchaser” model when building its new exchange, meaning Covered California’s Board of Directors will be responsible for selecting which insurance providers will be allowed to offer products on the exchanges. The selected products, known as qualified health plans (QHPs), will be required to meet a set of benefit standards finalized by the Covered California board late last year. The QHPs will be selected through a competitive bidding process set to begin in the coming months, and it’s anticipated that somewhere between three to five QHPs will be selected for each one of California’s 18 19 geographical rating regions.

Protecting Physician Interests
Unfortunately several recent decisions by the exchange board have placed California’s physician community on its heels. The California Medical Association (CMA) has been an active participant in stakeholder hearings and is working to ensure that the interests of physicians and their patients are taken into consideration as the exchange prepares to open for business.

Several of issues of concern arose when the board was working to finalize the benefit standards that interested payors will be required to meet in order to have their products considered for the QHP designation.  One major concern for physicians is how the exchange plans to deal with monitoring and ensuring network adequacy among of QHPs.

Throughout the benefit design conversation, exchange staff continued to favor the existing method of network monitoring, which calls for the Department of Managed Health Care (DMHC) and Department of Insurance (DOI) to be responsible for ensuring that plans offered to consumers have enough participating providers. In other words, the status quo. Several stakeholders, including CMA, have noted that those two entities are currently unable to ensure adequate networks among existing plans and would likely be overwhelmed by the added task of monitoring additional exchange products. While CMA asked that the exchange take an active role in monitoring networks beginning in 2014, the DMHC/DOI method remained in the final benefit standards adopted by Covered California’s Board of Directors in August, meaning it could become the norm once the state’s marketplace goes live.

CMA also voiced concern over the exchange’s handling of the “grace period” provision included in the ACA. Under current California law, patients who are delinquent on their premiums are allowed a full 90 days to settle up before their policy is terminated for nonpayment. However, under the ACA’s grace period provisions, exchange plans will be allowed to suspend payment for services rendered if an enrollee is more than one month delinquent. If the patient fails to settle up within the three-month grace period, the plan can then terminate coverage for nonpayment and deny all pending claims for services. In this scenario, physicians could potentially be on the hook for 60 days worth of services with no avenue for recourse.

CMA has repeatedly asked Covered California’s board to reconcile the state and federal policy, but to date an adequate fix has not been presented.

Given the exchange’s accelerated timeline, as well as the exchange board’s tendency to revisit issues that were previously thought to be decided, it remains possible that both of these matters, along with others that have caused concern to physicians, could see some sort of resolution before 2014.

To be sure, the next few months will be some of the most important and tumultuous times the medical community has faced in recent memory, but as a CMA member you have the comfort of knowing that your interests are being advocated for in front of all the key players driving the nation’s reform efforts.

For more information on the implementation of health reform in California, subscribe to CMA Reform Essentials. This newsletter, available to both members and nonmembers, covers the activities of the state’s health benefit exchange board and legislation significant to California’s ongoing reform efforts. Subscribe today at www.cmanet.org/newsletters.