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Healthcare Reform

The Greater El Paso Chamber of Commerce has been actively involved in the Healthcare Reform debate over the last several months.  As you may know, Healthcare Reform legislation was recently passed by Congress and signed by the President.  As we move beyond the debate of healthcare reform to implementation, your Chamber is committed to keeping you informed of the process.  We will provide you with as much information as possible so that you can prepare your businesses for the changes ahead.  At the end of March, the Chamber hosted an outreach in partnership with Congressman Reyes’ Office specifically focused on the impact of healthcare reform to small businesses.  The Q&As from that outreach, as well as the presentation given by the congressman’s staff, are included below. 

Documentation: Click on each to view

Federal Health Reform __ Health Reform Breakdown __ Chamber Healthcare Reform Resolution __ Small Business and Heathcare Insurance

Q&A’s – Healthcare Reform Outreach with Congressman Reyes’ Office
Special Meeting of the Healthcare Council
Greater El Paso Chamber of Commerce
March 31, 2010

Are there still Medicare reimbursement reductions for physicians compared to last year’s reimbursements? If so, how much? How will the cost be picked up?
The U.S. Congress is working to pass separate legislation to stop the currently scheduled 21% Medicare reimbursement rate reduction for physicians. Under the law, this particular fix is exempted from the existing “pay as you go” policy so that physicians and seniors participating in Medicare can continue to working with the program.

If you have less than 50 employees and they obtain insurance through the exchange and they do not make at least the 9% does the company still get penalized?
Companies with 50 employees or less are completely exempt from all employer penalties. Starting in 2014, they can chose to purchase a policy for their employees through new small business health insurance exchange and may be eligible for premium assistance tax credits for up to two years after the exchanges open to offset the cost. Or they can also choose to encourage their employees to purchase individual coverage through the new individual market health insurance exchanges where, depending on their income, they may be eligible to receive premium assistance tax credits. Either way, an employer with less than 50 employees is exempt from paying any penalties.

Obama Care has every appearance that it will pit government insurance companies against private insurance companies. What is the probability that private insurance will survive and remain an option, or that American citizens will be forced into socialized healthcare that America does not want?
No new government-sponsored insurance plan was created through this bill. This bill only includes provisions related to the existing Medicare and Medicaid programs and implements new consumer protections in the private insurance market.

Private insurance companies will see an increase in their business due to this legislation given the individual and employer shared responsibility provisions. Additionally, the federal government will provide individuals and small business with premium assistance tax credits in order for them to purchase private health insurance.

Can you clarify the “no co-pay” provision regarding preventive care? On the issue of no co-pay required for preventive care, if the child is sick, is this considered preventive?
The bill refocuses the use of medical system from sick care to preventive care. Therefore, starting in 2011, all preventive care services (annual exams, screenings, vaccinations, etc.) provided under Medicare, Medicaid, and covered through private insurance plans will not require a copayment from patients. The exact definition of “preventive care” will be clarified through the regulatory process.

Does HR3950 or any amendments provide a sample of the national “base plan” that employers can review for planning purposes? If not, how soon will that be available? What is within the scope of preventive care?
"Minimum essential coverage" is defined as coverage under Medicare part A, Medicaid, the Children's Health Insurance Program (CHIP), the TRICARE for Life program, the veteran's health care program, the Peace Corps program, a government plan (local, state, federal) including the Federal Employees Health Benefits Program (FEHBP) and any plan established by an Indian tribal government, any plan offered in the individual, small group or large group market, a grandfathered health plan, and any other health benefits coverage, such as a state health benefits risk pool, as recognized by the HHS Secretary in coordination with the Treasury Secretary.

A required set of benefits provides coverage for essential health care services and items to ensure that consumers will no longer have to worry about being underinsured. The levels of coverage will be defined at a later date by the Secretary of Health and Human Services. Essential benefits must include:
• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance abuse disorder services, including behavioral health treatments
• Prescription drugs
• Rehabilitation and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care

The Exchanges will make available four tiers of benefit packages that will be offered by health plans from which consumers can choose to best meet their needs. Each plan must cover the essential benefits listed above.
• Bronze plan: Includes the essential benefits and minimum cost-sharing protections where the plan covers 60 percent of the full value of benefits.
• Silver plan: Includes the essential benefits with more generous cost-sharing protections than the Bronze plan, where the plan covers 70 percent of the full value of benefits.
• Gold plan: Includes the essential benefits with more generous cost-sharing protections than the Silver plan, where the plan covers 80 percent of the full value of benefits.
• Platinum plan: Includes the essential benefits with more generous cost-sharing protections than the Gold plan, where the plan covers 90 percent of the full value of benefits.

Preventive services can be divided into two general groups. Clinical preventive services are delivered individually by a doctor or other health professional in a standard health setting. Examples include: cancer screenings, immunizations, vision screenings, and hypertension treatment. Community preventive services are delivered to targeted populations by various professionals across multiple settings. Examples include: telephone “quit” lines to help smokers stop their habit or educating diabetics on how to control their blood sugar.

Have you run the numbers to see what the 9% requirement equals to on an hourly wage? How much would an hourly employee have to make so the company does not get penalized through the exchange?
This will depend on how much the policy you would like to purchase for your company will ultimately cost. The new small business health insurance exchange will let you compare the cost of various policies so that you can decide which will best suit your and your employees’ needs. The cost of these plans will depend on what the market will bear. If you employ less than 25 full-time equivalent employees, then you may be eligible for tax credits to offset the cost of your premium. All of these measures were designed to help you find quality, affordable coverage for you and your employees.

Do employers have to furnish/offer health insurance to part-time employees?
It would depend on how many part-time employees you have. For the purposes of this bill, a part-time employee is someone who works less than 30 hours per week. Under the reconciliation bill, part-time employees will be counted in terms of full-time employee equivalents for the purposes of determining whether the employer is a large employer. For example, 2 part-time employees who work on average 15 hours per week = 1 full-time employee.

If you have less than 50 full-time employees (or 100 part-time employees who work less than 30 hours a week each), then you are not required to offer health insurance and you will not be subject to penalties.

How much does the employer need to contribute, if anything, for a group of 50-99?
If you employ anywhere between 50 and 99 full-time employees, do not wish to offer them health benefits, and one or more of your full-time employees qualifies for premium assistance tax credits, then you will have to pay an annual penalty of $2,000 per employee, but with an exemption for the first 30 workers. For example, if you have 51 full-time employees, then you will be assessed a penalty based on 21 employees since the first 30 are not counted.

If your employees’ contribution is equal to 8%-9.8% of their gross pay, then you can offer a “free choice voucher,” or stipend, they will be able to use in the new health insurance exchanges to purchase an individual plan. Employers who provide this kind of assistance will not be penalized.

If an employee’s contribution is higher than 9.8% and they qualify for premium assistance tax credits, then the employer may be subject to a penalty.

Is the 9% employer threshold off take home pay or gross pay?
Since health benefits will continue to be considered a pre-tax benefit, this threshold is based on an employees gross income.

Are voucher amounts given to employers taxed as income?
No. Health benefits will continue to be considered a pre-tax benefit.

Who will regulate this complex healthcare system? State or Federal?
This will be the joint responsibility of the State and the federal government. Individual states will be responsible for setting up their own exchanges and multi-state agreements will allow states to work together to develop plans that can cross state lines. The federal government will be responsible for ensuring individuals are complying with their essential minimum coverage requirement.

How will the state’s (TDI) role change?
States have had the primary responsibility for regulating the insurance industry. To the extent that states enacted health insurance standards and requirements prior to the Patient Protection and Affordable Care Act, such state laws will not be preempted by the federal health reform law as long as the state laws do not prevent the implementation of the new health care law.

States will be responsible for the creation and maintenance of individual and small business health insurance exchanges. They will provide oversight of health plans with regard to the new insurance market regulations, consumer protections, rate reviews, solvency, reserve fund requirements, premium taxes, and to define rating areas.

They will also need to enroll newly eligible Medicaid beneficiaries into the Medicaid program no later than January 2014 (states have the option to expand enrollment beginning in 2011), coordinate enrollment with the new Exchanges, and implement other specified changes to the Medicaid program. They must maintain current Medicaid and CHIP eligibility levels for children until 2019 and maintain current Medicaid eligibility levels for adults until the Exchange is fully operational. A state will be exempt from the maintenance of effort requirement for non-disabled adults with incomes above 133% FPL for any year from January 2011 through December 31, 2013 if the state certifies that it is experiencing a budget deficit or will experience a deficit in the following year.

States will establish an office of health insurance consumer assistance or an ombudsman program to serve as an advocate for people with private coverage in the individual and small group markets. Federal grants will be available beginning fiscal year 2010 to assistance with this initiative.

Lastly, starting January 1, 2014, the health care law permits states to create a Basic Health Plan for uninsured individuals with incomes between 133% and 200% FPL in lieu of these individuals receiving premium subsidies to purchase coverage in the Exchanges. Effective January 1, 2017, states will be permitted to obtain a five-year waiver of certain new health insurance requirements if the state can demonstrate that it provides health coverage to all residents that is at least as comprehensive as the coverage required under an Exchange plan and that the state plan does not increase the federal budget deficit.

How does reform impact TriCare/TriWest for life members?
There will be no impact at all on the TRICARE program.

Why are tax credits only given if the employee is in the exchange and not for regular health coverage?
The premium assistance tax credits that will be made available to individuals are meant to help those in the lower and middle income brackets that will make them ineligible for coverage under Medicaid. These credits are intended to make health insurance coverage more affordable, and therefore will only be allotted to individuals looking for policies in the new health insurance exchanges. These exchanges are designed to keep insurers competitive since it will serve as a clearinghouse for consumers to compare policies directly with each other.

Will healthcare reform result in less property taxes required by the county hospital?
The purpose of this bill is to help hospitals like University Medical Center reduce the amount of uncompensated care and increase the reimbursement available through insurance. Whether the county will reduce property taxes will be determined at a later date.

If we are already providing health insurance to our employees (26-49), do we get tax credits?
The tax credits will only be available to employers will 25 employees or less.

How does this healthcare reform affect individuals who have purchased their own long-term care insurance policy?
Nothing in this reform affects existing long-term care insurance policies.

If your company employs only veterans covered by TriCare/VA is the employer still required to offer additional coverage?
No. Your employees’ TRICARE/VA benefits are enough to satisfy their essential minimum coverage requirement.

If a young adult marries and is under 26 years of age, can he continue to be on his parents’ coverage?
No. The option for extended coverage is only for unmarried young adults under the age of 26.

Is there a provision for non-profits regarding requirements for providing insurance?
Non-profit entities will be subject to similar penalties as other small businesses when it comes to providing health insurance for employees, and the will be eligible for slightly lower tax credits given their tax status. It is important to remember that there is no employer mandate included in this law.