Health Care Reform

Understanding the New Law and What it Means to You

With the passage of federal health care reform legislation, Network Health is working hard to ensure all necessary changes to its policies and procedures are implemented accurately and on time. As changes are implemented to comply with current provisions of the law, Network Health will continue to evaluate Health Care Reform's future provisions to determine how and when our products and customers are affected.

Network Health will communicate information about the Patient Protection and Affordable Care Act (also referred to as the Affordable Care Act or ACA) to its customers in conjunction with their insurance renewals. These communications will fully explain the changes to your plan that result from the ACA. Your Network Health Account Manager can work with you to help preserve your grandfathered health plan status when changes to your plan benefits are being considered.

The Affordable Care Act is a very complex legislation. Network Health has provided its group health customers with information about some the key ACA changes that became effective for plan renewals that were effective on or after September 23, 2010. This information is not intended as legal advice but to inform customers of what Network Health is doing to comply with this law. Please contact your Network Health Account Manager or Account Executive if you have additional questions.

• Grandfathered Health Plans
• Provision Timeline and Details
• Required Notices

Grandfathered Health Plans

One of the first decisions for large group planholders (those employing 51 or more individuals) is whether or not to make changes that could impact their plan's grandfathered status. Certain large group plans that existed before the Affordable Care Act became law are exempt from some of the requirements. At Network Health, your plan may be a "grandfathered health plan" as long as it meets all of the following criteria:

• Your company is a Large Group, which is defined for ACA purposes as employing 51 or more individuals. Small Groups, or those with 50 or fewer employees, are not eligible as a grandfathered health plan.
• No significant changes have been made to your health plan's benefits on or after April 1, 2010. Such changes include:
  • Increasing deductibles or out-of-pocket limits by more than 15% plus medical inflation
  • Any increase in the rate of coinsurance
  • Increasing copayments by more than the greater of medical inflation plus 15 percentage points or $5 plus medical inflation
  • Decreasing contribution rates (the employer's share of total premium) by more than 5 percentage points
  • Changing from one benefit plan design to a different benefit plan design (i.e. a change from HMO to POS coverage, or vice versa)
  • Eliminating "all or substantially all benefits to diagnose or treat a particular condition." This includes elimination of benefits for any necessary element to diagnose or treat a condition.

Grandfathered plans will continue their existing coverage and be exempt from certain ACA provisions. However, many ACA provisions apply to both Grandfathered and Non-grandfathered plans. Planholders who make significant changes to benefit levels will lose their status as grandfathered health plans and will become subject to all of the ACA's provisions. Large plans will be notified of changes to their grandfathered health plan status at the time of their plan renewals and whenever they make a benefit plan change. Your Network Health Account Manager can inform you if any changes you are considering will result in a loss of your grandfathered status.

Provision Timeline and Details

Many aspects of health care reform legislation have not been finalized by federal and state regulatory bodies. The following chart lists the provisions of the law, including their applicability to Grandfathered and Non-grandfathered plans, and what actions Network Health has taken in to remain in compliance. As new information becomes available, updates will be made to this chart.

Provision Topic	Description of Provision	Network Health Actions
Annual Limits	May only impose annual limits on "Essential Health Benefits” (to be determined by the Secretary of DHHS), until they are completely eliminated in 2014.  Applies to both fully insured and self-funded groups including grandfathered and non-grandfathered plans. Benefits may be excluded for a particular condition, but if they are provided, an annual limit may not be applied. Minimum annual limits are increased each year until phased out completely in 2014. $750,000 for plans renewed September 23,  2010 through September 23, 2011 $1.25 million for plans renewed September  23, 2011 through September 23, 2012 $2.0 million for plans renewed September 23, 2012 through January 1, 2014	Effective October 1, 2010 annual dollar value limits were removed on the following “Essential Health Benefits”: Ambulatory patient services Emergency Services Maternity and newborn care Hospitalization Mental health and substance use disorder treatment including behavioral health treatment Prescription drugs Rehabilitative services & devices Laboratory services Preventative and wellness services and chronic disease management Pediatric services including oral and vision care The application of annual frequency limits is still permitted on these benefits (i.e. ten Chiropractic visits a year). Annual dollar value limits may be retained for non-essential health benefits, which have not yet been defined by the Secretary of Health and Human services.
Appeals Process	A new health plan appeals process must be followed. Members will have new rights for appealing decisions to deny or reduce benefits, including the right to an external review of decisions. These rights are broader than those currently required by the Wisconsin Office of Commissioner of Insurance and include: Providing consumers with relevant information needed to appeal an adverse benefit determination.  Certain notices must be translated for individuals with limited English proficiency if they comprise a certain percentage of a plan’s membership. Changes to timeframes and processes for responding to appeals, particularly pre-service denials involving urgent care.  Grandfathered plans may be exempted from the new appeals requirements.	Network Health will have one appeal process for all fully insured plans, including grandfathered ones.  Work is underway to make the necessary changes required under the law. Self funded plans will have a somewhat different appeal process.
Dependent Coverage of Children Who Have Not Attained Age 26	Under the Affordable Care Act, children are entitled to be covered under their parents’ group health plan until they reach age 26.  This includes children who are: Married Not enrolled in college Do not qualify as dependents on their parents’ tax returns. Coverage is not extended to a dependent’s spouse and/or children. Applies to Grandfathered plans except they do not have to allow adult dependent children to be covered if they are eligible for other employer-sponsored coverage. (For plan years starting in 2014, grandfathered plans may no longer exclude dependent children because they are eligible for coverage under another plan). Fully-insured plans must satisfy the federal requirements and the State of Wisconsin requirements regarding the extension of adult dependent coverage. Adult dependents may be eligible under one or both of these laws; please refer to our comparison chart for more information on the eligibility requirements under Wisconsin law and ACA. Self funded plans are subject only to the ACA.	Fully insured plans that renewed during 2010 became subject to the Wisconsin law requiring dependent coverage up to age 27.  Upon a plan’s renewal date on and after October 1, 2010, it became subject to ACA provisions.  For grandfathered plans, children who are eligible for coverage under their employer group health plan will not be eligible for coverage under their parent’s grandfathered health plan.  Non-grandfathered plans are required to provide dependent children with coverage to age 26 regardless of eligibility for their own coverage.  Either federal or state requirements may be applied depending upon the situation; click here to view a state and federal comparison chart.
Early Retiree Reinsurance Program (ERRP)	A temporary reinsurance program for employers providing health insurance coverage to retirees between age 55 to 64 (and their eligible spouses, surviving spouses, and dependents) who are not eligible for Medicare. Program will reimburse approved plan sponsors for 80% of early retiree claims above $15,000 up to a cap of $90,000. Payments from the reinsurance program must be used to lower the costs for participants in the health insurance plan. The program will end at the earliest of 2014 or when the $5 billion fund is fully utilized.	Network Health has assisted employers who choose to participate in this program by providing information needed to complete the ERRP application. Network Health will also provide the data needed to support submission of a reimbursement request under the program. If you'd like more information, please click here to visit the ERRP website.
Lifetime Limits	Prohibits health plans from placing aggregate dollar lifetime limits such as a $5 million cap on all benefits paid under a policy. Applies to both fully insured and self-funded groups including grandfathered and non-grandfathered plans. A notice must be provided to members who reached the lifetime maximum to give them the opportunity to enroll again for coverage.	Effective October 1, 2010 Network Health removed all lifetime dollar value limits on “Essential Health Benefits” (see Annual Limits for what these include). Network Health had no members exceed a lifetime maximum therefore, no notices were required.
Medical Loss Ratio Reporting	New reporting requirements and a medical loss ratio requirement that compels plans in the individual and small group market to spend 80 percent (80%) of premiums on medical services. Plans in the large group market must spend 85 percent (85%) on medical services. Insurers that don't meet these thresholds must provide rebates to policyholders.	Network Health is working on identifying expenses to assure that the appropriate reporting will be done.
Pre-existing conditions for children	Prohibits individual and group health plans (including self-funded and grandfathered plans) from placing pre-existing condition exclusions on children under age 19.	Network Health was ahead of this regulation as it has been our historical practice NOT to deny coverage for our members with pre-existing conditions, regardless of age.
Preventive Care	Requires qualified health plans to provide at a minimum coverage without cost-sharing for specified preventive services.  This includes recommended immunizations, preventive care for infants, children, and adolescents, and additional preventive care and screenings for women. Does not apply to Grandfathered plans.	Network Health has long been a leader in encouraging important preventive care at no member cost so they will seek medical care before a serious condition occurs.  Since Network Health already provided coverage for many preventative services with no member cost sharing, there are few changes. ACA does add some preventive services at no member cost share such as members may receive a colonoscopy once every ten years after age 50, and counseling services relating to obesity and tobacco and alcohol usage.  These changes will be implemented on non-grandfathered plans at their renewal. If you'd like to review a comparison of Preventive Services prior to ACA and after its implementation, please select one of the following links: Adult Preventative Health Care Additional Recommendations for Women Pediatric Preventative Health Care Prenatal Preventive Health Care
Rescissions	Prohibits individual and group insurers (including self-funded and grandfathered plans) from rescinding coverage, except in cases of fraud or when enrollees make an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage. A rescission is a cancellation or discontinuance of coverage that has retroactive effect. For example, a cancellation that treats a policy as void from the time of the individual’s or group’s enrollment is a rescission. As another example, a cancellation that voids benefits paid up to a year before the cancellation is also a rescission for this purpose. A cancellation or discontinuance of coverage with only a prospective effect is not a rescission, and neither is a cancellation or discontinuance of coverage that is effective retroactively to the extent it is attributable to a failure to timely pay required premiums or contributions towards the cost of coverage.	Network Health did not utilize rescission of coverage to retroactively take away coverage from a member.  Therefore, no change was required in our practices.
Coverage of Emergency Services	Mandates coverage of emergency services at in-network level, regardless of provider. Applies to individual and group (including self-funded) plans. Does not apply to grandfathered plans.	Network Health’s market leading practice has already been to not require prior authorization to obtain emergency services.  Therefore, we are already complying with this provision.   Although co-pay and coinsurance amounts must be the same for an out-of-network provider as the in-network amounts, insurers are not required to cover a balance billed amount from an out-of-network emergency room provider.  Network Health exceeds this provision by its current practice of paying these like an in-network claim so there is no balance billing to the member.  This applies to both grandfathered and non-grandfathered plans.

Required Notices

The new federal health care reform law requires certain notices to be provided to employees for specific provisions. The following are required notices under ACA and information about Network Health's compliance actions.

Notices Required Related to Enrollment

For adult children under age 26 - the Notice of Opportunity to Enroll in Connection with Extension of Dependent Coverage to Age 26 is in all member materials for renewals from October 2010 through September 2011.

Individuals whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 are eligible to enroll in Network Health. Individuals may request enrollment for such children for 30 days from the date of notice. Enrollment will be effective retroactively to your plan’s renewal date. For more information, please contact our Group Administration department Monday through Friday between 8:00 a.m. and 5:00 p.m.

Individuals who previously reached an overall lifetime benefits maximum must be provided with a notice of the opportunity to enroll for coverage. However this form was not required for existing Network Health members because none had reached a lifetime maximum.

Notices Required Related to Benefits

Grandfathered Plan Notice – This notice alerts participants that their plan is grandfathered. This appears only in the member handbook of a grandfathered plan.

Network Health believes this coverage is a “grandfathered health plan” under the Patient Protection and Affordable Care Act (the Affordable Care Act). As permitted by the Affordable Care Act, a grandfathered health plan can preserve certain basic health coverage that was already in effect when that law was enacted. Being a grandfathered health plan means that your coverage might not include certain Affordable Care Act provisions that apply to other plans. This includes, for example, the requirement for covering many preventive health services without cost sharing (however your plan may cover some preventive care without cost sharing). Grandfathered health plans must still comply with other provisions in the Affordable Care Act, such as covering emergency services without prior authorization, eliminating pre-existing condition exclusions for children, and eliminating annual and lifetime dollar limits.

If you have questions regarding which provisions do and do not apply to a grandfathered health plan or what might cause a plan to lose its status as a grandfathered health plan, please contact our Customer Service department. You may also visit the Employee Benefits Security Administration of the U.S. Department of Labor website or call 866-444-3272. This website includes a table summarizing which protections do and do not apply to grandfathered health plans.

Provider Choice – Where a plan requires designation of a primary care provider, this notice describes a participant's ability to choose a primary care provider, including the ability of a child to choose a pediatrician.

OB-GYN Notice – This notice states that a woman can see a health care professional specializing in gynecology without prior authorization or referral.

The Provider Choice and OB-GYN Notice language is contained in a combined Patient Protection Notice which is shown below and is found in Network Health member certificate booklets.

Network Health generally allows the designation of a primary care provider. You have the right to designate any primary care provider who participates in the Network Health provider network and who is available to accept you or your family members. Children may designate a pediatrician as their primary care providers. To find a participating primary care provider or for a list of the participating primary care providers, use our online provider search or contact our Customer Service department.

You do not need prior authorization from Network Health or from any other person (including a primary care provider) in order to obtain access to obstetrical or gynecological care from an OB-GYN health care professional in the Network Health provider network. The OB-GYN health care professional, however, may be required to comply with certain procedures, including obtaining prior authorization for certain services, following a pre-approved treatment plan, or referral procedures. To find a participating Network Health OB-GYN provider, use our online provider search or contact our Customer Service department.