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Information provided by Kansas City actuary firm Lewis & Ellis www.lewisellis.com
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Health Insurance and Market Reform Overview – H.R. 3590 and H.R. 4872
On March 23, 2010 President Obama signed H.R. 3590 the Patient Protection and Affordable Care Act (PPACA) into law. On March 30, 2010 he signed H.R. 4872 the Health Care and Education Reconciliation Act (HCERA) into law. There are many significant reforms and changes included in these laws. The following easy-to-use format summarizes the insurance, benefits and market reforms that our clients may need to address.
These Reforms Include:
Key Definitions
Coverage and Benefit Reforms
Subsidies for Individuals and Employers
Individual Mandates
Employer Requirements
Insurance Reforms
Benefit Exchanges
Medicaid - CHIP Changes
Medicare Changes
Revenue Generating Provisions - Taxes and Fees
Special Reinsurance and Risk Pool Provisions
Glossary
Lewis & Ellis has spent many hours studying H.R. 3590 and H.R. 4872 and various other publications and has prepared the following as a Summary of the key provisions of these significant pieces of legislation. There will be additional information and clarification in the coming weeks from HHS and state regulators as to how the various elements will be regulated or interpreted. We will keep our website up to date when clarifications are released. These bills impact employers, health insurers, providers of care, Medicare and Medicaid.
We hope you find this useful.
Key Definitions
Grandfathered Health Plans - Any group health plan or health insurance coverage effective on date of enactment (March 23, 2010) and in which an individual enrolled. Can be insured or self-insured While not completely clear, it would appear that the plan can be changed and not lose grandfather status. This will be one of the ongoing issues of the Reform Q&A and regulations. Loss ratio and reporting requirements may not apply. Regulations will hopefully clarify.
Small Group - Any employer with at least one employee but not more than 100 employees.
Large Group - Any employer with more than 100 employees.
Full Time Employee (FTE) - Works at least 30 hours per week. Part time employees (PTE) converted to FTE using # PTE hours per month / 120.
Group Health Plan - An employee welfare benefit plan as defined by ERISA that provides medical care to employees or their dependents directly or through insurance, reimbursement or otherwise.
Health Insurance Issuer - Means an insurance company, insurance service or insurance organization (including an HMO) which is licensed to engage in the business of insurance in a State and which is subject to State law which regulates insurance.
Coverage and Benefit Reforms
Dependent Coverage for Children
- Provide coverage for a dependent child up to age 26 - individual and group if not covered
under other employer plan. Effective for plan years beginning 10-1-2010 and later.
- Provide coverage for a dependent child up to age 26 - individual and group even if eligible
under other employer plan. Effective for plan years beginning 1-1-2014 and later.
Lifetime Limits - Prohibited for individual and group health plans. Effective for plan years beginning 10-1-2010 and later.
Annual Limits - Prohibited for individual and group health plans. Effective for plan years beginning 1-1-2014 and later. Annual limits prior to 2014 must be approved by Health and Human Services (HHS)
Children's Pre-existing Exclusions - Prohibited for children under age 19. Effective for plan years beginning 10-1-2010 and later.
Rescission of Coverage - Prohibited for individual and group health insurers. Except in case of fraud. Effective for plan years beginning 10-1-2010 and later.
Waiting Periods for Coverage - Waiting period greater than 90 days is prohibited. Effective 1-1-2014.
Pre-Existing Exclusions - Plans may not impose any pre-existing conditions exclusions or limitations regardless of age. Effective 1-1-2014.
Preventive Services - Prohibit cost sharing for preventive services. Includes: Immunizations, Screenings and Preventive Services as recommended by US Preventive Services Task Force. Effective for plan years beginning 10-1-2010 and later. Does not apply to Grandfathered Plans.
Coverage Documents - Uniform coverage documents and standardized definitions developed by HHS (with NAIC). There will be a 60 day notice requirement for plan changes. Effective 1-1-2011.
Coverage and Benefit Reforms
Reporting Requirements For Quality of Care- Applies to health insurance issuers and group health plans which will include Third Party Administrators (TPA). Make available to enrollees during open enrollment. Provide reports on benefits or provider reimbursement structures that:
- Improve health outcomes through case management, care coordination, chronic disease
management, etc.
- Implement activities to prevent hospital readmissions
- Implement activities to improve patient safety and reduce medical errors
- Implement wellness and health promotion activities
- Effective 4-1-2012.
New Benefit Standards - Will apply to New Plans. Individual or Group Health Plans in existence on March 23, 2010 are exempt from complying. Effective 1-1-2014.
Essential Health Benefits (includes at least):
Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance abuse
Prescription drugs
Rehabilitative servies and devices
Laboratory services
Preventive and wellness services and chronic disease management
Small Employer Maximum Deductible (single):
$2,000 Indexed for years after 2014
Levels of Coverage Effective 1-1-2014
Bronze 60% of full actuarial value
Silver 70% of full actuarial value
Gold 80% of full actuarial value
Platinum 90% of full actuarial value
Limits on Annual Cost-Sharing
- Uses current HSA law - $5,950 single and $11,900 family for 2010. Indexed for years
beyond 2010.
- Does not apply to Grandfathered Plans.
Wellness Programs
Grants to small employers that establish wellness programs. Permit employers to offer discounts / waivers of cost sharing up to 30% of coverage cost, for participating in wellness program(s) and meeting certain health-related standards. Effective for plan years beginning 10-1-2010 and later.
Wellness and Health Smoking cessation
Promotion Activities Weight management
Stress management
Physical fitness
Nutrition
Heart disease prevention
Healthy lifestyle support
Diabetes prevention
Questions / Opportunities
- There are several plan changes to be made on your next plan anniversary or renewal
(10-1-2010 and later).
- There will be a number of additional changes effective in 2014.
- Some of these changes will have a significant financial and administrative impact to plan
sponsors as well as health insurers.
- What impact will the "actuarial value" have?. Not fully defined at this point although we
have tested what we think it is.
- The actuarial value calculation will include a value estimate for the employer share of HRA
and HSA accounts.
- What is a "Grandfathered Plan" and how long will that exemption last?
Subsidies for Individuals and Employers
Premium and Cost Sharing Subsidies to Individuals
- Provide refundable and advanceable premium credits to individuals and families with
incomes between 100%-400% FPL to purchase insurance through the Benefit
Exchanges. Effective 1-1-2014.
- Limited to US citizens and legal immigrants.
- Employees who are offered coverage by an employer are not eligible unless the
employer plan does not have actuarial value of at least 60% or if the employee share
of premium > 9.5% of income.
- Premium credits tied to second-lowest cost silver plan in the Benefit Exchange.
Premium credit such that individual's premium contribution limited as follows:
Income Level Premium Contribution as % of income (sliding scale)
Up to 133% FPL 2.00%
133-150% FPL 3.00 - 4.00% (Means 3% at 133% FPL up to 4% at 150% FPL)
150-200% FPL 4.00 - 6.30%
200-250% FPL 6.30 - 8.05%
250-300% FPL 8.05 - 9.50%
300-400% FPL 9.50%
- Cost-sharing subsidies to eligible individuals and families with incomes between 100%-400% FPL.
- Subsidy reduces cost-sharing amounts so that actuarial value increased to the percentage
below:
Income Level Percentage
100%-150% FPL 94%
150%-200% FPL 85%
200%-250% FPL 73%
250%-400% FPL 70%
Premium Subsidies to Employers
- Tax credit for small employers who purchase coverage and pay at least 50% of total
premium or 50%of benchmark premium. Small Employer = No more than 25 employees
and average annual wages <$50,000.
- Tax Credit: 2010-2013
- Varies by size of employer and average annual wage.
- If < or = 10 employees and average annual wage < $25,000.
- Credit = 35% of employer contribution (25% for tax exempt).
- Reduced by number of employees over 10 but less than 25 and average annual
wage over $25,000. Credit will not be below 0%.
Example 1: 15 employees and an average wage of $25,000
Credit = 23.3% of employer contribution.
Example 2: 8 employees and an average wage of $30,000
Credit = 28.0% of employer contribution.
2014-2015
- Must purchase through Benefit Exchange to get credit.
- Employer contributes at least 50% of total premium cost. Credit = 50% of
employer contribution (35% for tax exempt).
- Reduced by number of employees over 10 but less than 25 and average annual
wage over $25,000 (indexed for inflation after 2013). Credit will not be
below 0%.
Questions / Opportunities
- The premium subsidies are primarily for small employers.
- However, once subsidies are available to individuals and they enroll through an Exchange, the
employer could be affected. (See penalties in section on Requirements).
Individual Mandates
Mandate for Individuals
- Requires US citizens and legal residents to have coverage or there is a tax penalty.
- If an individual has employer-sponsored coverage then mandate is satisfied.
Year Penalty
Tax Penalty –Annual 2010 None
(For individuals with No Coverage) 2011 None
2012 None
2013 None
2014 Greater of $95 per person in household to a
max of 3 OR 1.0% of taxable income
2015 Greater of $325 per person in household to a
max of 3 OR 2.0% of taxable income
2016 Greater of $695 per person in household to a
max of 3 OR 2.5% of taxable income
There are some exceptions for the tax penalty.
Questions for Individuals
- Where should they get coverage? Through employer? Through Exchange?
- How do they get tax subsidies?
- Do they pass on coverage and just pay tax penalty?
- What about the high risk pools for coverage prior to 2014?
Employer Requirements
Employer Requirements
- Required to offer coverage.
- Employers with more than 200 employees are required to automatically enroll employees
into health plan. Employee may opt out.
Health Cost on W-2 Effective 1-1-2011
- Employer will be required to include the cost of employer-sponsored coverage on W-2.
Penalty Fee - No Offer 50 or fewer employees
- None
Penalty Fee - No Offer More than 50 employees Effective 1-1-2014
- Also has at least one employee who receives premium tax credit
- Fee = $2,000 per full-time employee (FTE) per year (excludes first 30 employees)
Penalty Fee - With Offer More than 50 employees Effective 1-1-2014
- Has at least one employee who receives premium tax credit
- Fee = lesser of $3,000 for each employee receiving credit OR $2,000 per full-time
employee per year
Free Choice Voucher Effective 1-1-2014
- Employers offering coverage are required to provide a free choice voucher to employees
with incomes less than 400% FPL whose share of premium > 8% but < 9.8% of their
income and choose to enroll in a Benefit Exchange.
- Voucher = Amount employer would have paid toward employee's coverage under the
employer plan.
Voucher Incentive
- Employer will not be subject to penalty for employees receiving premium credits.
Questions for Employers
- How does employer plan actuarial value compare to the Four standard classes -Bronze,
Silver, Gold, Platinum?
- How does employer calculate the cost for the W-2?
- Should employer offer coverage through the Exchanges when they are operational?
- What is the impact of some of the coverage expansions? Children to age 26? No
pre-existing condition limitations?
- What will be the cost of eliminating the lifetime limit?
- What impact will the fees on insurers, pharmacy manufacturers and medical device
manufacturers have?
- What will be the impact of the guaranteed insurability? How much will it change my cost?
Insurance Reforms
Medical Loss Ratios
- Minimum loss ratio requirement.
- Effective for plan years beginning 10-1-2010 and later.
- Rebate required if loss ratio < minimum requirement.
Large Groups 85%
Small Groups – Individual 80%
Loss Ratio = Reimbursement for clinical services plus activities that improve health care quality
Premium less federal and state taxes and fees
- Rebates would be paid beginning 2011 for plan years beginning 2010.
- Insurers need to begin tracking loss ratios now since rebates start in 2011.
Rating Limitations
- Applies to health insurance issuers in the individual or small employer markets.
- Effective for plan years beginning 1-1-2014 and later.
- Allowed variables for rating:
Coverage Type Single versus Family
Area One or more in each state as established by state
Age Will not vary by more than 3 to 1 for adults
Permissible age bands defined by Secretary HHS and NAIC
Tobacco Use Will not vary by more than 1.5 to 1
- Gender is not allowed as a rating variable.
- Agree to charge the same rate for a qualified health benefit plan offered in an Exchange as
well as outside the Exchange.
Single Risk Pool
- Single risk pools will be used by health insurance issuers for all enrollees in all health plans
(individual and small group markets).
Individual Market Enrollees in Exchange and enrollees not in Exchange
Small Group Market Enrollees in Exchange and enrollees not in Exchange
- Grandfathered health plans are excluded
Prohibiting Discrimination Based on Health Status
- Group Health Plan or Health Insurance Issuer of group or individual coverage may not limit
eligibility of an individual to enroll based on:
Health status Medical history
Medical condition Genetic information
Claims experience Evidence of insurability
Receipt of health care Disability
- Effective 1-1-2014
Guarantee Issue
- Effective 1-1-2014
- Each health Insurance Issuer must accept every employer or individual who applies.
- Can restrict enrollment to open enrollment or special enrollment periods.
Guaranteed Renewable
- Health insurance issuer required to renew coverage as long as they continue to offer in
the market.
- Effective 1-1-2014
Premium Review Process
- Establish an annual review of unreasonable increases in premiums.
- Insurers will be required to submit to HHS and the relevant state a justification for increase
prior to implementation.
- Justification will be posted on Insurer website.
- Insurers with patterns of excessive increases may be excluded from participating in Benefit
Exchanges.
- Effective for plan years beginning after 9-23-2010.
- Beginning in 2014 HHS and States will monitor premium increases both within a Benefit
Exchange and outside a Benefit Exchange.
What is an unreasonable or excessive increase?
Reporting Requirements For Quality of Care
- Applies to health insurance issuers and group health plans which will include Third Party
Administrators (TPA).
- Make report available to enrollees during open enrollment.
- Provide reports on benefits or provider reimbursement structures that:
- Improve health outcomes through case management, care coordination, chronic
disease management, etc.
- Implement activities to prevent hospital readmissions.
- Implement activities to improve patient safety and reduce medical errors.
- Implement wellness and health promotion activities.
Questions / Opportunities
- Health insurance issuers will need to revise their underwriting and rating structures and
methodologies.
- Provider contracting just became more important as way to distinguish your products.
- Guaranteed Issue - what does this mean? Open enrollment rules will be critical? What
rating options will HHS, states allow?
- Will there be a minimum period for enrollee (especially open enrollment) to maintain
coverage? 6 months? 12 months?
Benefit Exchanges
American Health Benefit Exchange
- Each State, not later than 1-1-2014, shall establish a Benefit Exchange that:
- Facilitates the purchase of qualified health plans;
- Provides for the establishment of a Small Business Health Options Plan (SHOP)
- Administered by a governmental agency or non-profit organization.
- Individuals and small employers with up to 100 employees can purchase qualified coverage
through Exchange.
- Can have more than one Benefit Exchange in State as long as each Benefit Exchange serves
a specific geographic area.
State-licensed health insurers will be required to participate.
Enrollment periods
- An initial open enrollment period for 2014 to be determined by HHS. Annual open
enrollment period for each calendar year 2015 and later. Special enrollment periods.
Requirements for Exchange
- Make available qualified health plans.
- Implement procedures for certification, recertification and decertification of qualified
health plans provide a toll-free hotline for assistance.
- Maintain an internet website that has comparative information on qualified health plans.
- Assign a rating to each Qualified Health Plan (uses relative quality and price measures to
be developed).
- Utilize a standardized format for presenting health benefit plan options.
- Inform individuals of eligibility requirements for Medicaid Programs.
- Make available (electronically) a calculator to determine cost of coverage after any premium
tax credits.
- Establish a Navigator program.
- Be self sustaining beginning 2015 by charging assessments or user fees to health insurers.
- Publish sources of revenue and how funds are used -cannot be wasteful.
Premium Considerations
- Qualified Health Plans (QHP) will need to submit justification for any premium increase.
- Qualified Health Plans will display this information on their website.
- Benefit Exchange will consider excess of premium increases outside Exchange versus
inside Exchange.
- Excessive or unjustified premium increases could lead to decertification of QHP.
- Rating limitations in Insurance Reforms section will apply.
Benefit Plans
- See New Benefit Standards Effective 1-1-2014
Navigators
- Can be chosen by Benefit Exchange to perform duties listed below. Funded by grants
from the Benefit Exchange.
Duties Include:
- Conduct public education on availability of Qualified Health Plans.
- Distribute fair and impartial information on QHP and premium tax credits.
- Facilitate enrollment in QHP.
- Provide referrals to an office of consumer assistance for consumer complaints or
grievance
Eligible Entities:
- Cannot be a health insurance issuer.
- Cannot receive any consideration from health insurance issuer for an Exchange
enrollee.
- Trade, industry or professional association.
- Consumer focused nonprofit group.
- Chamber of Commerce or Union.
- Licensed insurance agents or broker.
- Qualified or licensed, if applicable, entity to engage in the Navigator duties.
Qualified Health Plans
- Minimum requirements to be certified as a Qualified Health Plan:
- Meet marketing requirements. Do not employ practices that discourage enrollment
of individuals of significant health needs.
- Ensure a sufficient choice of providers. Provide information on availability of network
and non-network providers.
- Include essential community providers within network where available.
- Be accredited with respect to quality and performance measures such as HEDIS and
CAHPS.
- Implement a quality improvement strategy.
- Utilize a uniform enrollment form that qualified individuals and qualified employers may
use.
- Utilize the standard format for presenting plan options.
- Charge the same premium rate for each benefit plan whether in Benefit Exchange or
offered (direct) outside Exchange.
Options-Consumer and Qualified Health Plan
- Qualified Health Plan can still offer health plans to individuals or groups outside the Benefit
Exchange.
- Qualified individual or employer can select a health plan offered outside the Benefit Exchange.
- Qualified individual may enroll in any Qualified Health Plan.
- Agents or brokers may enroll individuals or employers in any Qualified Health Plan offered
through Exchange.
- Procedures and compensation to be established by HHS.
Eligible Individuals or Employers
- Must be a US resident or legal immigrant.
- Employers of at least one employee but not more than 100 are eligible (States could
change limit to 50).
- States can allow large employers (100 plus) to enroll in Exchange.
- Effective 2017.
Medicaid – CHIP Changes
Expansion of Medicaid
- Expand Medicaid to all individuals under 65 with incomes up to 133% FPL.
- All newly eligible adults guaranteed a benchmark benefit package that at least provides the
essential health benefits.
- Effective 1-1-2014.
Year Funding
Financing of Plan 2014 Funded 100% by federal government
(For newly eligible) 2015 Funded 100% by federal government
2016 Funded 100% by federal government
2017 & later Shared by states and federal govt. with
increases in federal medical assistance
percentage (FMAP)
Treatment of CHIP (Children’s Health Insurance Program)
- Require states to maintain current income eligibility levels for children in Medicaid and CHIP
until 2019.
- Extend funding for CHIP through 2015.
Questions / Opportunities
- For Medicaid plans, what kind of risk is the newly eligible adult member?
- Will the network need modifying to accommodate more adult members?
- What will the states allow from a pricing standpoint?
Medicare Changes
Part D Benefits
- Provide a $250 rebate to Medicare beneficiaries who reach Part D coverage gap in 2010.
- Gradually increase coinsurance paid by Medicare in coverage gap from 0% in 2010 to 75%
by 2020.
- Require 50% discount from Drug Manufacturers on brand name drugs filled in coverage gap
beginning 2011.
Medicare Advantage
- Freezes Medicare Advantage payments in 2011.
- Reductions in Medicare Advantage payments begin in 2012.
Revenue Generating Provisions – Taxes and Fees
Changes to Flexible Spending Accounts (FSA)
- Over-the-counter drugs not prescribed by doctor are excluded from reimbursement.
Effective 1-1-2011.
- Annual contributions for medical expense limited to $2,500. Effective 1-1-2013. Increased
by cost of living adjustment for years after 2013.
Changes to Health Savings Accounts (HSA)
- Over-the-counter drugs not prescribed by doctor are excluded from reimbursement.
Effective 1-1-2011.
- Increase tax on distributions not used for qualified medical expenses to 20% (from 10%)
of disbursed amount. Effective 1-1-2011.
Medicare Part A Tax Rate
- Tax rate from 1.45% to 2.35% on wages > $200,000 (single) or $250,000 (married filing
joint). Effective 1-1-2013.
Excise Tax on Insurers of High Cost Employer Plans
- Applies to the health insurance company or TPA for self insured. Effective 1-1-2018.
- Tax = 40% of value of plan over threshold amounts.
Threshold Amounts: Single $10,200
Family $27,500
Plan Value includes:
- Reimbursement for medical expenses from FSA or HRA
- Employer contributions to HSA
- Coverage for supplementary health insurance (excluding dental and vision)
Medicare Part D Retiree Drug Subsidy
- Eliminate tax deduction for employers who receive Part D subsidy -subsidy will be considered
income. Effective 1-1-2013.
Annual Fee for Drug Manufacturer
- Fee is for sales of brand name drugs.
- The revenue collected goes to the Medicare Part B Trust Fund. Effective 1-1-2012.
Year Revenue to be Generated
2012 $2.8 billion (estimated by L&E to be equivalent to
0.25% - 0.40% of health plan premium)
2013 $2.8 billion
2014 $3.0 billion
2015 $3.0 billion
2016 $3.0 billion
2017 $4.0 billion
2018 $4.1 billion
Annual Fee for Medical Device Manufacturer
- In the form of an excise tax.
- Tax = 2.9% of the sale of any taxable medical device.
- Excludes: Eyeglasses, Contacts, Hearing aids.
- Effective 1-1-2013.
Annual Fee on Health Insurers and TPA's
- Applies to health insurance premiums and third party administrator (TPA) fees.
Year Revenue to be Generated
2014 $8.0 billion (estimated by L&E to be equivalent to
0.65% - 0.90% of health plan premium)
2015 $11.3 billion
2016 $11.3 billion
2017 $13.9 billion
2018 $14.3 billion
There are some exclusions (non profit insurers-only 50% of premium and others).
Questions / Opportunities
- Can health insurance issuers pass on these new fees?
- How will they impact the medical loss ratio requirement?
- The tax change on the retiree drug subsidy will impact those employers who are taxable.
Will employers maintain the drug plan?
- Will employer plan hit the high cost threshold for the excise tax in 2018?
Special Reinsurance and Risk Pool Provisions
Reinsurance for Retirees over age 55 not eligible for Medicare
- National program administered by Secretary of HHS. Funded up to $5 Billion.
- Covers retirees age 55 and over plus their eligible spouses or dependents.
- Reimburses employers or their insurers.
- Reimburses 80% of retiree claims between $15,000 and $90,000.
- Participation limited to program funding.
- Employer to use reimbursement to lower costs from plan.
1. Reduce Premium Contributions
2. Lower Co-pays, Deductible, Coinsurance or Out-of-pocket cost
- Employer must apply for program and be approved.
- Effective 90 days after enactment through 1-1-2014.
Temporary High-Risk Pool
- Establish a temporary national high-risk pool to provide coverage to persons with
pre-existing conditions.
- Must have pre-existing condition and uninsured for at least 6 months.
- Premiums will be subsidized.
- Premiums for pool established for a standard population with a 4 to 1 limit on age variance.
- Benefits
1. Benefit payments > 65% of allowed costs.
2. Maximum out-of-pocket limits are $5,950 single and $11,900 family in 2010.
- Funding - Premiums from participants, plus $5 billion to fund shortfall of premiums for term of
program.
- Term of program Administration
1. Effective 90 days after enactment through 1-1-2014.
2. Directly administered by Secretary HHS or by a State or nonprofit private
entity approved by HHS.
Transitional Reinsurance Program
- Effective for years 2014 through 2016. Established by the states.
- State will establish or contract with one or more reinsurance entities to cover high risk
individuals in the Individual market.
- Reinsurer makes payments to health insurance issuers that cover high risk persons in the
Individual market.
- High Risk individual identified as person with one of 50 - 100 medical conditions identified as
high risk.
- Funded by payments from health insurance issuers and TPAs (for group health plans) that
will aggregate to:
Year Payments
2014 $12 billion
2015 $8 billion
2016 $5 billion
- Health insurance issuer payment in proportion to their revenue and benefit costs of high
risk persons.
- Effective 2014-2016.
Risk Adjustment
- Applies to health plans and health insurance issuers in the Individual and Small Group
markets in a State. (Both in the Exchange and outside the Exchange)
Low Actuarial Risk Plan Actuarial risk of enrollees in the plan < average actuarial risk of
all enrollees in all plans
High Actuarial Risk Plan Actuarial risk of enrollees in the plan > average actuarial risk of
all enrollees in all plans
Low Risk Plan Assessed a charge by the State
High Risk Plan Payment provided by the State
- Effective 2014.
Will not include self insured plans (subject to ERISA) or grandfathered plans.
Questions / Opportunities
- Reinsurance for retirees (55-64) can reduce some of the expense of providing this benefit
but employers need to act quickly.
- The temporary high-risk pool - will funding of $5 billion be enough?
- How does a health insurance issuer adjust for the risk adjustment in their pricing?
Glossary
Actuarial Value
- The percentage of the total covered expenses the health plan will cover.
- Undefined in the healthcare bills. Regulations will hopefully clarify.
CAHPS
- Consumer Assessment of Healthcare Providers and Systems Program
- A public-private initiative to develop standardized surveys of patients' experiences with
ambulatory and facility-level care.
CHIP
- Children's Health Insurance Program
Excise Tax
- Taxes paid when purchases are made on a specific good.
FPL
- Federal Poverty Level
FSA
- Flexible Spending Account
Full Time Employee (FTE)
- Works at least 30 hours per week.
- Part time employees (PTE) converted to FTE using # PTE hours per month / 120.
Grandfathered Health Plans
- Any group health plan or health insurance coverage effective on date on enactment
(March 23, 2010) and in which an individual enrolled.
- Can be insured or self-insured.
- While not completely clear, it would appear that the plan can be changed and not lose
grandfather status.
- This will be one of the ongoing issues of the Reform Q&A and Regulations.
- Loss ratio and reporting requirements may not apply. Regulations will hopefully clarify.
Group Health Plan
- An employee welfare benefit plan as defined by ERISA that provides medical care to
employees or their dependents directly or through insurance, reimbursement or otherwise.
Health Insurance Issuer
- Means an insurance company, insurance service or insurance organization (including an HMO)
which is licensed to engage in the business of insurance in a State and which is subject to
State law which regulates insurance.
HEDIS
- Healthcare Effectiveness Data and Information Set
- Used to measure performance on important dimensions of care and service.
HHS
- United States Department of Health and Human Services
HRA
- Health Reimbursement Account
HSA
- Health Savings Account
Large Group
- Any employer with more than 100 employees.
NAIC
- National Association of Insurance Commissioners
Part Time Employee (PTE)
- Works less than 30 hours per week.
QHP
- Qualified Health Plan
Small Group
- Any employer with at least one employee but not more than 100 employees.
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