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Group and Health Core > Core - laws and acts > Flashcards

Core - laws and acts Flashcards

1
Q

What does Family and Medical Leave Act do?

A

FMLA guarantees employees up to 12 weeks of protected, unpaid leave per year. Provides opportunity to continue health benefits or resume benefits upon returning to work.

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2
Q

What does Medical Health Parity Act of 1996 do?

A

MHPA restricts imposing more restrictive annual or lifetime dollar limits. Requires parity with respect to financial requirements as cost sharing, visit limits, and treatment limits.

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3
Q

What does Minimum pay health plans Medicare Secondary Payer (MSP) rules do?

A

Requires that group health plans are primary payer with respect to active employees. Prohibits group health plans from denying coverage to otherwise eligible employees

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4
Q

What does Newborns’ and Mothers’ Health Protection Act of 1996 do?

A

Requires group health plans to pay for minimum hospital stays for mothers and their newborns immediately following childbirth

Able to stay 48 hours after a vaginal delivery and 96 hours after a C-section

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5
Q

What does Women’s Health and Cancer Rights Act of 1998 do?

A

Requires health plans to cover post-mastectomy reconstructive surgery.

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6
Q

What does Michelle’s Law do?

A

Generally prohibits the plan from terminating coverage when an enrolled dependent leaves school to take a medically necessary leave of absence.

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7
Q

What does Genetic Information Nondiscrimination Act (GINA) of 2008 do?

A

Prohibits group health plans form setting group premium or contribution amounts based on genetic information. Prohibits requiring genetic test for underwriting purposes.

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8
Q

What did DEFRA do?

A

Deficit Reduction Act of 1984 severely limited the use of welfare benefit funds and insurance company reserves to fund retiree life and health benefits. It also places limits on coverage amounts allowed to be funded for retiree life insurance benefits.

  1. Retirees are taxed on benefits when they receive them. There are limits on amounts that can be contributed on a pre-tax basis.
  2. Employee contributions to purchase group annuity contracts are made with after-tax money.
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9
Q

What does Age Discrimination in Employment Act (ADEA) do?

A
  1. ADEA states that cost of benefits must not decline with advancing age of the EEs
  2. Most companies provide benefits paid until age 65 for disability prior to age 60, and then grading down between ages 60 and 70
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10
Q

What did Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) do?

A

Created Part D OP prescription drug benefit

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11
Q

What did ERISA do when it passed in 1974?

A

Focused on retirement benefits and addressed employers’ pretax employee benefits.

Established appeal rights for denial of benefits and established new regulations for employers that self-funded their benefits plans in order to avoid state regulation and taxes.

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12
Q

What did McCarran-Fuerguson Act of 1954 do?

A

Exempted insurance companies from federal oversight, leaving the obligation to the states.

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13
Q

What did the HMO Act of 1973 do?

A
  1. Authorized startup grants and loans and ensured access to the employer-based insurance market.
  2. Grants and loans available for the planning and for service area expansions for existing HMOs.
  3. State laws that restricted the development of HMOs were overridden for HMOs that were federally qualified.
  4. Dual choice provisions required employers with 25 or more emplyees that offered indemnity coverage to also offer federally qualified HMOs.
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14
Q

What did the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 do?

A

Authorized Medicare to pay HMOs on a capitated basis

Allowed states to impose nominal cost sharing on certain beneficiaries and services but exempted some groups like pregnant women and children

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15
Q

What did Balanced Budget Act of 1997 do?

A

Allowed provider organizations to accept risk and contract directly with Medicare as provider-sponsored organizations (PSOs) if they met certain criteria.

Created Medicare + Choice program

Provided coverage for low income children

Shifted prescription drug responsibility for dually eligible individuals to Medicare

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16
Q

What did COBRA in 1985 do?

A

Allowed individuals who lost eligibility for group coverage to continue group coverage for up to 18 months.

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17
Q

What did Baucus Amendment do?

A

Induced each state to adopt insurance laws that met Congressional minimums for Medicare Supplement policies.

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18
Q

What did Health Information Technology for Economic and Clinical Health Act (HITECH) do?

A

Strengthened individual’s right to access PHI

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19
Q

Important employment laws

A
  1. Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
  2. Family and Medical Leave Act of 1993 (FMLA)
  3. Health Insurance Portability and Accountability Act of 1996 (HIPAA)
  4. Mental Health Parity Act of 1996 (MHPA)
  5. Newborns’ and mothers’ health protection act of 1996 (NMHPA)
  6. Women’s health and acencer rights act of 1998 (WHCRA)
  7. Medicare prescription drug, improvement, and modernization act of 2003 (MPDIMA)
  8. Working families tax relief act of 2004 (WFTRA)
  9. Heroes earnings assistance and relief tax act of 2008 (HEART act)
  10. Michelle’s Law
  11. Mental health parity and addiction equity act of 2008
  12. Genetic infotmation and nondiscrimination act of 2008 (GINA)
  13. Patient Protection and Affordable Care Act (PPACA)
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20
Q

What did Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 do?

A
  1. Repealed AFDC and replaced it with a block grant to the states, temporary assistance for needy families, severed link between eligibility for cash assistance and Medicaid
  2. Barred Medicaid coverage for most illegal immigrants who entered the US after August 22, 1996
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21
Q

What did Deficit Reduction Act of 2005 do?

A

Required people applying for Medicaid to provide proof of citizenship

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22
Q

What does PACE do?

A

Program of All-inclusive Care for Elderly provides fully coordinated, site-based care and funding for individuals over the age of 55 who are eligible for nursing home care

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23
Q

Filings for the SEC

A

10K: submitted annually and includes comprehensive information such as earnings, cash flow, balance sheet, executive pay, litigation, and management discussion and analysis

10Q: submitted quarterly and is a shorter version of 10K

8K: submitted whenever any development that is material to shareholders and the company happens such as mergers, acquisitions, accounting problems, or hiring and firing of key executives

13D: submitted whenever an individual or corporation acquires a 5% stake

14A: a proxy statement that includes details of issues to be voted on and background on management and Board of Directors

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24
Q

What did the 1942 Stabilization Act do?

A
  1. imposed wage and price controls on businesses, including limiting their ability to pay higher wages to attract scarce workers
  2. the Act did allow workers to avoid taxation on the employer contribution to certain employee benefit plans, including health benefits, which gave impetus tot he growth of commercial health insurance
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25
Q

What did the Medicare Modernization Act do?

A
  1. Created HSAs
  2. only individuals covered by an HDHP may make tax-deductible contributions to an HSA
  3. individuals eligible for Medicare, claims as a dependent on somebody else’s tax return, or covered under another policy are not eligible to contribute to an HSA
  4. any money left in an HSA at the end of the year may be rolled into the next year
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26
Q

What does Labor Management Relations Act do?

A

LMRA requires collective bargaining over wages, hours, and terms of employment

27
Q

What does FAS 106 do?

A

Requires employers to recognize accrued benefit cost of postretirement benefits as a current expense, and to recognize the liabilities

28
Q

Medicare changes due to ACA include:

A
  1. adjustments to annual market basket updates
  2. freeze on the threshold on income used to determine Medicare Part B
  3. reductions in payments for Disproportionate Share Hospitals
  4. Preventable readmissions
  5. certain hospital-acquired conditions
29
Q

Provisions of ACA health insurance exchanges

A

hint: CEO TRQS

  1. each state will have an American Health Benefit Exchange for individuals and a Small Business Health Options Program (SHOP) Exchange for businesses with up to 100 employees
  2. plans in the exchanges must cover essential health benefits, have an OOP limit at or below tiers
  3. risk pooling - insurers must pool all individual market plans (other than grandfathered plans) into a single risk pool. similarly, all small group plans must be pooled together.
  4. participating insurers must meet many qualification requirements such as networks marketing, reporting, and consumer assistance
  5. Exchanges may also offer consumer operated and oriented plans (CO-OPs), which are nonprofit, member-run health insurance companies
30
Q

Other ACA provisions

A

hint: Tatay - chicken, milkshake, mashed potatoes
2. small business TAX credits

  1. premium CREDITS and cost sharing subsidies for those with low incomes (effective in 2014)
    a. premium credits for qualified individuals and families with incomes between 133% and 400% of FPL for coverage purchased through the exchanges
    b. cost sharing subsidies for those enrolled at the silver level in an exchange with incomes between 100% and 400% of FPL
  2. MEDICARE provisions
    a. Medicare Advantage plans can receive bonuses or reallocations of rebates based on quality. beginning in 2014, plans are subject to MLR requirements
    b. Medicare Part D - beneficiary coinsurance in the coverage gap will be phased down from 100% to 25% by 2020. retiree drug subsidy payments lost their tax exempt status beginning in 2013.
  3. MEDICAID - expanded to all non-Medicare eligible individuals with incomes up to 133% of FPL. Due to Supreme Court ruling, federal government can’t withhold original Medicaid funding from states who do not expand.
  4. Revenue PROVISIONS
    a. new health insurer tax will collect $8 billion in 2014, grading up to $14,3 billion in 2018, and indexed thereafter
    b. excise tax for high-cost health plans
    c. limitations to tax-favored allowances for FSAs and HSAs
    d. new taxes on certain medical devices
31
Q

Major federal laws governing group health plans

A

hint: ECHA

  1. ERISA - applies to benefit plans sponsored by private sector employers. Includes provisions related to reporting and disclosure, fiduciary standards, civil enforcement and preemption, and claim procedures
  2. COBRA - provides enrollees of an employer-sponsored group health plan the opportunity to keep that coverage for a period of time after employment ends, or after certain other qualifying events
  3. HIPAA - limits the ability of group health plans to impose pre-existing condition exclusions and prevents plans from basing eligibility or premiums on:
    a. health status
    b. medical condition
    c. claims experience
    d. receipt of health care
    e. medical history
    f. genetic information
    g. evidence of insurability
    h. disability
  4. ACA - amended HIPAA rules to prohibit pre-existing condition exclusions. Requires large employers to provide adequate and affordable coverage or pay a financial penalty.
32
Q

Effects of HIPAA on COBRA

A
  1. qualified beneficiaries under COBRA who are determined to be disabled under SS during the first 60 days of COBRA continuation are eligible for an additional 11 months of COBRA continuation
  2. Additional 11 months of continuation is also available to the disabled person’s spouse and dependent children
  3. children born or adopted during the COBRA continuation period are qualified beneficiaries under COBRA
33
Q

Major effects of HIPAA on LTC

A

hint: QTTR (quitter)

  1. defined qualified plans
  2. clarified taxation of premium and benefits - established that a qualified LTC insurance contract shall be treated as an accident and health insurance contract for tax purposes
  3. standardized benefit triggers
  4. allowed tax reserves to be calculated on a one-year preliminary term basis for tax-qualified plans
34
Q

HIPAA reforms related to portability and availability

A

hint: pure girls rarely dance

  1. PRE-EXISTING condition exclusions - may not be imposed except in certain situations
  2. health status UNDERWRITING - eligibility cannot be based on health, and evidence of insurability cannot be required
  3. health status RATING- higher premiums cannot be charged on the basis of health status
  4. special ENROLLMENT periods - to permit eligible individuals who lost other coverage to enroll
  5. GUARANTEED issue - small group carriers must accept all small employer groups and all eligible individuals in those groups
  6. with certain limited expectations, insurers must RENEW or continue inforce coverage for all groups
  7. multi-employer health plans may not DENY a participating employer continued coverage except for nonpayment of contributions, fraud, or noncomplicance with plan provisions
35
Q

What are the most relevant ASOPs to professional actuarial issues outlined in the syllabus?

A

ASOP 5: incurred health and disability claims
ASOP 18: LTC insurance
ASOP 23: data quality

36
Q

Options to address movement between Medicaid and the exchange

A
  1. allowing a period of continuous eligibility on the exchange and/ or Medicaid
  2. requiring or allowing managed Medicaid plans to participate in the exchange
  3. requiring or allowing commercial plans in the exchange
  4. establishing a basic health plan
37
Q

Important FASB standards

A

SFAS 5: accounting for contingencies - provides criteria for loss/ liability accrual

SFAS 60: accounting and reporting by insurance enterprises

SFAS 91: accounting for nonrefundable fees and costs associated with originating or acquiring loans and initial direct costs of leases

SFAS 97: accounting and reporting by insurance enterprises for certain long-duration contracts and for realized gains and losses from the sale of investments

a. requires a deposit accounting model for premium receipts related to contracts
b. receipts are credited to contract holders’ account balances in balance sheet
c. fees earned by insurance company are charged to the contract holders’ balance and credited to other revenues in income statement

SFAS 113: accounting and reporting for reinsurance of short-duration and long-duration of contracts - requires reinsurance balances be presented gross on the balance sheet

SFAS 115: accounting for certain investments in debt and equity securities

SFAS 120: accounting and reporting by mutual life insurance enterprises and by insurance enterprises for certain long-duration participating contracts

SFAS 133: accounting for derivative instruments and hedging activities and SFAS 138: accounting for certain derivative instruments and certain hedging activities an amendment of FASB 133

SFAS 141: business combinations

a. conclusded that business combinations are acquisitions and as such, the purchase accounting method should be the only method used
b. requires that tangible assets meeting certain criteria be separately recognized

SFAS 142: good will and other intangible assets - goodwill and other intangible assets with indefinite useful lives will no longer be amortized but will be periodically evaluated for possible impairment

38
Q

ACA provides states with $250 million in federal grants to:

A
  1. seek additional authority from legislatures to review rates and require companies to seek advance approval before imposing premium hikes
  2. expand operations like reviewing more rate filings
  3. develop and upgrade technology to speed up rate review process and disseminate information to the public
39
Q

The following are exempt from ERISA requirements

A
  1. government plans maintained by federal, state, or local governments or agencies for their employees
  2. church plans maintained by a tax-exempt church for its employees
  3. plans required by state law, such as worker compensation, unemployment, and disability insurance laws
  4. plans maintained mainly outside of the US which substantially cover nonresident aliens
  5. plans covering self-employed persons such as sole proprietors and partners and their spouses
40
Q

What is a fiduciary and what does ERISA require of fiduciaries?

A

Fiduciary is a party that does any of these things:

  1. exercises any discretionary authority or control respecting management of the plan or disposition of its assets
  2. renders investment advice for a fee or other compensation, direct or indirect, with respect to any money or other property of the plan, or has any authority to do so
  3. has discretionary authority or responsibility in administration of the plan

ERISA requires that a fiduciary:

  1. act in the sole interest of the plan and for exclusive purpose of providing benefits to participants
  2. act with prudence and care
  3. diversify the investments of the plan to minimize risk and loss
  4. adhere to the plan documents in discharging its duties
41
Q

Group health plans sponsored by state and local governments are not subject to ERISA, but htey must comply with these portions of the Public Health Service Act

A
  1. reporting and disclosure - file annual report with IRS and department of labor, known as Form 5500 and provide Summary Plan Description to plan participants
  2. Fiduciary standards - concerned with misuse of assets. associated more with retirement assets.
  3. Civil enforcement and preemption - ERISA does not provide for punitive damages
  4. claim procedures - have procedures to remedy disputed benefit claims. plan participants generally must exhaust the plan’s claim procedures before seeking relief in federal court pursuant to ERISA’s civil enforcement scheme
42
Q

What is maximum tax credit for small employers under PPACA

A

35% of employer contributions in 2013

50% of employer contributions in 2014

43
Q

The HMO Act of 1973 says at least 90% of basic physician services shall be provided through:

A
  1. members of the staff of the HMO
  2. a medical group (or groups)
  3. an individual practice association (IPA)
  4. physicians or other health professionals who have contracted with the HMO for such services
  5. any combination of above
44
Q

Until ACA took effect, the following may have been requested for underwriting purposes

A
  1. physical exams and attending physician statements
  2. prescription drug histories
  3. individual medical questionnaires
  4. ER disclosure listing major health conditions
  5. medical cost experience
  6. no health status information
45
Q

Excluded from ERISA if these requirements are met:

A
  1. employer doesn’t make any contributions
  2. participation in the program is completely voluntary
  3. . employer’s sole functions with respect to program are, without endorsing program, to: permit insurer to publicize program, collect premiums, remit premiums to insurer
  4. employer receives no consideration (cash or otherwise) other than for administration services rendered
46
Q

Key PPACA provisions related to health plan communications and their applicability to grandfathered plans

A
  1. Advance notice of material modification (effective 2010) - plan to provide advance notice of a material plan modification at least 60 days prior to effective date of change. This is a change to current ERISA requirement. Applicable to grandfathered plans.
  2. Uniform explanation of coverage documents and standardized definitions (effective for plan years March 2012) - standards for use in providing summary of benefits and explanation of coverage. Explanation of coverage must describe cost sharing, exceptions, reductions, limitations, and illustrate common benefit scenarios. Applicable to grandfathered plans.
  3. Additional information provision (effective for plan years September 2010) - health plans and insurers to provide info to state and federal government including claims payment policies, practices, and enrollee rights. Requires info to enrollees on cost sharing amount for a specific item or service. Not applicable to grandfathered plans.
  4. Summary of quality of care (effective for plan years March 2013) - guidelines to report initiatives that improve health outcomes. Prohibits wellness programs from collecting any information related to lawful possession of firearms. Not applicable to grandfathered plans.
  5. Bringing down cost of health coverage aka medical loss ratio provision (effective plan years January 2011) - report annually the % of premium spent on claims and activities that improve health care quality. Provide rebates to enrollees if does not meet minimum standards. Applicable to insured grandfathered plans.
  6. Appeals process (Effective plan years September 2010) - provide an internal appeals process and comply with external review process standards of federal or state government if applicable. Not applicable to grandfathered plans.
  7. W-2 reporting(effective tax year 2012) - employers report aggregate cost of employer-sponsored health coverage. Applicable to grandfathered plans.
  8. Provide ee notices regarding exchange program - by 2014, states establish individual and small group exchange, but states can opt out. employer must provide ee’s info regarding existence of exchange, eligibility for premium tax credits, and cost-sharing reductions. Requires ers that offer coverage and make contributions to provide free-choice vouchers to qualified ees for exchange purposes. Applicable to grandfathered plans.
  9. Automatic enrollment (effective 2014) - employers with > 200 full time ees to automatically enroll new full-time ees. Give opportunity to opt out of coverage. Applicable to grandfathered plans.
  10. IRS reporting requirements to demonstrate minimum essential coverage (effective January 2015) - issuers that provide minimum essential coverage must report coverage to IRS including any portion of prem paid by ER. Applicable to grandfathered plans.
47
Q

Selected documents required by ERISA

A
  1. statement of ERISA rights
  2. summary plan description
  3. summary of material modifications
  4. summary annual report
  5. notification of benefit determination
48
Q

Additional disclosures required for ERISA for group health plans

A
  1. summary of material reduction in covered services or benefits
  2. COBRA notices
  3. HIPAA notices
  4. wellness program disclosure
  5. women’s health and cancer rights act notices
  6. medical child support other notices
49
Q

Additional disclosures required for ERISA for pension plans

A
  1. periodic pension benefit statement
  2. statement of accrued and nonforfeitable benefits
  3. suspension of benefits notice
  4. domestic relations order and qualified domestic relations order notices
  5. notice of failure to meet minimum funding standards
  6. section 404c plan disclosures
  7. notice of blackout period for individual account plans
  8. qualified default investment alternative notice
  9. notice of funding-based limitation
  10. notice of right to divest
50
Q

Section 1115 research and demonstration projects

A
  1. 1915b managed care/ freedom of choice waivers
    - allows states to implement managed care delivery systems
    - states can waive freedom of choice by enrolling Medicaid consumers into HMOs
  2. 1919c Home and Community-Based services waivers (HCBS)
    - to allow long-term care services to be delivered in community setting
51
Q

SEC rules

A
  1. requires registration of securities prior to the public sale
  2. requires disclosure of financial data
  3. prohibits false representations and disclosures
  4. required reports: 10K annually, 10Q quarterly, 8K whenever any development that is material
52
Q

What is EP3 program?

A
  1. Insurers must place large pharmacy claims from all of their group business in their own self-administered pool
  2. participating insurers cannot experience rate based on pooled claims for a particular plan sponsor
  3. insurers set premiums based on the plan’s experience below the EP3 threshold and experience of the entire EP3 pool
53
Q

Qualities of National Industry Drug Pool (NIDP)

A
  1. pooling attaches on a per-certificate basis
  2. to qualify for the pool, certificate must exceed $50K for 2 consecuitve years
  3. in the 2nd and subsequent years where certificate exceeds $25K, 85% of amount exceeding $25K will be pooled
54
Q

Essential health benefits package will provide:

A
  1. comprehensive set of services
  2. preventive services wihtout cost-sharing
  3. cover at least 60% of actuarial value of covered benefits
  4. Limit annual cost-sharing to the current law HSA limts
55
Q

How did Civil Rights Act of 1964 affect healthcare?

A
  1. sex and pregnancy discrimination prohibited
  2. applies to employers in industry affecting interstate commerce or who employ at least 15 employees
  3. under pregnancy discrimination act, employers treat disabilities and medical claims from pregnancy same as treated for any other disability
56
Q

Options for states to define benchmark plan in the HBE

A
  1. three largest Federal EE benefit programs plans
  2. state’s three largest state EE plans
  3. state’s three largest small group products
  4. state’s largest HMO
57
Q

Describe Health Insurer Tax

A

New tax of $8 billion in 2014, increasing to $14.3 in 2018 and indexed thereafter to be used to fund various ACA provisions

Not for profits pay 50% of the assessment and certain plans pay 0% so we pay 100%

Assessed across all health insurance sector but not assessed on ASO products so applies to individual and small group insured but not on large group ASO

58
Q

Describe Excise Tax for High Cost Health Plans

A

New tax on rich plans equal to 40% of the excess costs over $10,200 single ($27,500 family

Tax is to discourage overly rich coverage

Tax doesn’t apply until 1/1/2018 so not applicable for any of the coverage for 2014 pricing

59
Q

Describe Reinsurer Fee Tax

A

Used to pay for high risk members in the individual products but funded assessed across all products, including ASO

Covers 80% of the expense between $60K and $250K

So, all three products need to include an estimate of this fee in their retention but you should also factor in any expected recoveries on the individual product claims projections

60
Q

Describe Patient Centered Outcomes Research Institute Assessment

A

Fee paid to cover the cost of this new not-for-profit institute on the clinical effectiveness of medical treatments

Assessed on health plans and employers so should be included in retention for all three products

61
Q

Describe Health Benefit Exchange Fee

A

Amount paid to the exchange for its services (marketing, enrollment, subsidy checking, etc.)

Since offering individual and small group products off and on the exchange, need to estimate % that will be sold on the exchange so that you can calculate the average amount to include in retention

Do not need to include in large group ASO retention since it is not sold on the exchange

62
Q

List examples of services covered under a Section 1915c Home and Community-Based services Waiver

A

Adult day care
respite care
personal care
training of a caregiver

63
Q

IPRIC under ACA risk corridor provision formulas

A

target = premiums - administrative cost

total claims = premium x unadjusted loss ratio

net claims = total claims - reinsurance payment - risk adjustment received

Gov’t pays 50% of loss from 103%-108%, 80% of loss above 108%

64
Q

Describe portability provisions of the two major US regulations affecting group health plan portability

A

COBRA

  • allows continuation of group coverage after a qualifying event, such as termination of employment, divorce, child aging out
  • coverage can continue for up to 18 months (36 in certain cases_
  • members pay the full premium plus up to a 2% administrative fee

HIPAA

  • limits a group’s ability to impose pre-existing condition exclusions
  • allows conversion to a uarantee issue individual policy once COBRA coverage is exhausted
  • does not allow plan eligibility or premium payment to vary based on health status
  • requires special enrollment periods in the middle of the plan year under certain circumstances

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