Module 4 Regulatory Issues for Health Benefits Flashcards
Health and Welfare Benefits Terms:
Define Co-insurance
The amount expressed at a percentage that is shared between the participant
and the insurance company once any deductible has been met.
Health and Welfare Benefits Terms:
Define Co-Pay
A standard, flat dollar amount paid for the participant for specified services.
Health and Welfare Benefits Terms:
Primary Care PHysician
A medical doctor who practices/is specialized in internal medicine,
family practitioner, general practitioner, pediatrician.
Health and Welfare Benefits Terms:
Preventive Care
Proactive, comprehensive care that emphasizes prevention and early
detection. It includes physical exams, immunizations and well-woman and well-man exams.
Health and Welfare Benefits Terms:
Annual Deductible
The amount plan participants must pay toward a health claims for services
rendered before the insurance company makes any payment.
Health and Welfare Benefits Terms:
Fully-insured plan
Organization pays premiums to an
insurance company where risk is pooled.
Health and Welfare Benefits Terms:
Self Insured Plan
Organization bears the risk and pays
claims and administration fees directly out of general assets.
Health and Welfare Benefits Terms:
Qualifying Life Event
A change in status as dictated by the IRS that allows you make a changes to your pretax benefits elections during the tax year. These events include:
* Marriage or divorce
* Death
* Birth or adoption of a dependent
* Change in employment status
* Dependent no longer eligible due to age
* Loss or significant change in current coverage
* Judgment, decree or court order
* Enrollment in or loss of Medicare or Medicaid
* Ceasing to be enrolled in Children’s Health Insurance Program
Health and Welfare Benefits Terms:
Pre-existing conditions
Plan limitation or exclusion for a
physical or mental condition of a newly insured individual that was present before joining the plan. Under the Affordable Care
Act, plans and insurers can no longer deny medical coverage due to such conditions.
Health and Welfare Benefits Terms:
Grandfathered Plan
Existing plan that is exempt from certain
new legislation, restrictions, or requirements.
Health and Welfare Benefits Terms:
Annual Limits
Annual maximum amount of out-of-pocket
expenses or number of visits and/or services for a particular treatment for each covered plan participant. Under the Affordable Care Act, annual limits can no longer be applied for what are deemed as “essential health benefits” under the law.
Health and Welfare Benefits Terms:
Lifetime Limits
Maximum dollar amount or maximum number of visits and/or services that a plan will pay for over the covered participant’s lifetime. Under the Affordable Care Act,
lifetime limits can no longer be applied for most medical plans.
Health and Welfare Benefits Terms:
Define HDHP (High Deductible Health Plan
health insurance plan with a higher deductible (as indexed by the IRS to be a qualified HDHP) than a co-pay health plan. Participant pays the full, network-discounted cost of covered medical expenses to the deductible maximum before the co-insurance begins. A HDHP
does not allow for co-pay for services, except for prescription benefits after the deductible has been met.
Health and Welfare Benefits Terms:
Define: HSA (Health Savings Account)
A tax-advantage savings account you establish exclusively for the purpose of paying for your qualified health expenses. Account belongs to the participant, funds remain even after termination, and account
balance can be rolled over from one employer to another.
Has triple tax advantages:
1. Contributions are pretax.
2. Distributions for qualified health expenses are not taxable.
3. Interest-bearing account is not taxable.
A HSA can only be offered in combination with a qualified High
Deductible Health Plan.
What is a Health Maintenance Organization (HMO)?
prepaid group medical service organization that emphasizes preventive health care
What is a preferred provider organization (PPO).
A network of health care providers (e.g., hospitals, physicians, dentists, etc.) that offers volume discounts to employers sponsoring group health benefits plans; most common plan today
Define Consumer Driven Health Plan (CDHP)
A plan that attempts to contain medical benefits costs by empowering consumers to make informed choices regarding the quality and efficiency of their health care;
usually involves some form of health care account
Define a Health Reimbursement Arrangement (HRA)
A tax-free health care reimbursement arrangement that must be associated with a high deductible health plan. Employees use the funds in the account for general health care expenses prior to utilizing traditional health care coverage.
Define Health Savings Account (HSA)
A tax-advantaged trust or custodial account that must be associated with a high deductible health plan
What are the 2 types of Welfare Plans?
Disability Plans
- Sick Leave
- Short Term Disability (usually 6 months)
- Long Term Disability (usually coordinated after STD is exhausted)
Life Insurance
What entities are covered under COBRA
COBRA applies to group health plans for employers with 20 or more employees on more than 50% of its typical business days in the prior year. Both full-time and part-time employees are counted to determine whether the plan is subject to COBRA.
* A qualified beneficiary generally is an individual covered by a group health plan on the day before a qualifying event. The individual is either the employee, the employee’s spouse, or an employee’s dependent child. In some cases, retired employees, their spouse and dependent
children may be qualified beneficiaries.
What components of the employers health plan does COBRA cover?
Medical, Dental, vision, drugs, and Healthcare Reimbursement Accounts
Under COBRA what are considered qualifying events
Qualifying events are certain events that would cause an individual to lose
health coverage (e.g., termination of employment, divorce, death, reduction in hours, loss of coverage due to the end of student status*, or attainment of maximum age).
Define the notification procedures under COBRA
– Employers must provide an employee with the initial notification of their COBRA rights within 90 days of the employee becoming covered under the employer’s group health plan. In the case of a covered spouse, they must also receive this
notification. The purpose of this notice is to provide a general overview of COBRA rights and responsibilities. While a single notice may be sent to the employee and spouse if they live at the same address, the regulations provide that the notice
must identify the spouse either by name or by relationship. As an example, the notice would be addressed to “Jane and William Jones” or “Jane Jones and Spouse.”
– A qualified beneficiary must notify the plan administrator of some qualifying events within 60 days.
– Employers must notify plan administrators of some qualifying events within 30 days.
– Plan administrators must provide an election notice, either in person or by first-class mail, within 14 days of learning a qualifying event occurred.
Describe Cobra Election Procedures
Qualified beneficiaries must be given at least 60 days to elect COBRA coverage.
What does COBRA cost to a person?
May be 102% of full health insurance premium cost the employer pays to the
insurance company, the extra 2% is an administrative fee up charge for the employer handling it.
What agencies are responsible for enforcement of COBRA
DOL, IRS, Department of Health and Human Services (HHS)
What is the purpose of the Health Insurance Portability and Accountability Act of 1996(HIPAA)
- Protect individuals who move from one job to another, leave their jobs without taking another job, have pre-existing medical conditions, or are self-employed
- Ensure the security and privacy of an individual’s health information by prohibiting the misuse or disclosure of patients’ health records
- Prohibit group health plan discrimination based on health factors
What entities are covered under HIPAA
- Group health plans with two or more participants who are current employees
- Self-insured group health plans
- Individuals who lose coverage under a health plan
- Individuals subject to pre-existing conditions or other health factor exclusions
what agencies enforce HIPAA
DOL, IRS, HHS
What is the purpose of the Newborns’ and Mothers’ Health Protection Act 1996
- A federal law that includes protection for mothers and their newborn children with regard to the length of hospital stays following the birth of a child.
What entities are covered under the Newbornes and Mothers Health Protection Act?
All group health plans that offer maternity or newborn infant coverage
what are the provisions (protection provided) of the Newborns and Mothers Health Protection Act?
- A normal delivery requires a minimum stay of 48 hours for both the mother and the newborn child.
- A Caesarian delivery requires a minimum stay of 96 hours following delivery for both the mother and the newborn child.
- All group health plans that provide maternity or newborn infant coverage must include a statement in their summary plan description (SPD) advising individuals of the Act’s requirements.
Are there any exceptions to the provisions of the Newborns and Mothers Health Protection Act?
- Early discharge for a mother or newborn is possible if the decision to discharge earlier is made by an attending provider in consultation with the mother (or the newborn’s authorized representative).
- The Act prohibits both positive and negative incentives that could encourage less than the minimum protections.
What agencies enforce the Newborn and Mothers Health Protection Act?
DOL, Department of the Treasury and HHS
What is the purpose of the Women’s Health and Cancer Rights Act of 1998?
- A federal law that provides protection to patients who choose to have breast reconstruction
in connection with a mastectomy.
What entities are accountable to the Women’s Health and Cancer Rights Act 1998
This law applies to both people covered under group health plans and those with individual health insurance coverage.
What provisions (protection) is provided by the Women’s Health and Cancer Rights Act
Coverage requirements — The act requires group health plans to provide coverage for:
– Reconstruction of the breast on which the mastectomy has been performed.
– Reconstruction of the other breast to produce a symmetrical appearance.
– Prosthesis and treatment for physical complications of the mastectomy.
* Notification requirements — Notification of the availability must be delivered upon
enrollment and annually thereafter to participants, including COBRA participants.
What agencies enforce Women’s Health and Cancer Rights Act 1998?
DOL, HHS
What is the purpose of the Notice of Proposed Rulemaking for Bona Fide Wellness Programs - 2001
Clarify that wellness programs may provide a reward to individuals who meet criteria related to a health factor.
These rules were updated under the Affordable Care Act.
What is the purpose of the Nondiscrimination Rules for Health Coverage in the Group Market - 2006
What are the 8 health factors protected?
■ Purposes
* Prohibit group health plans from establishing eligibility rules that would discriminate based on eight health factors listed below
* Prohibit group health plans from charging an individual a different premium or contribution than a similarly situated individual based on the following eight health factors:
1. Health status
2. Medical condition (physical and mental)
3. Claims experience
4. Receipt of health care
5. Medical history
6. Genetic information
7. Evidence of insurability
8. Disability
What s the purpose of the Genetic Information Nondiscrimination Act 2008 (GINA)
Purpose
* Prohibits group health plans from discriminating on the basis of individuals’ (and their family members) genetic information. Genetic information is considered any information about an individual’s or his/her family members’ genetic tests, as well as information related to the manifestation of diseases or disorders.
What is the purpose of the Health Information Technology for Economic and Clinical Health Act (HITECH) 2009
Seeks to improve American health care delivery and patient care through an investment in health information technology (HIT).
* Promotes the adoption and meaningful use of health information technology.
* Addresses the privacy and security concerns associated with the electronic transmission of health information.
What is the purpose of the Omnibus Regulations?
- Provides final HIPAA rules on privacy, security and breach notices; generally effective on Sept. 23, 2013.
What are the 4 final rules of the Omnibus Regulations?
- Business associate mandate requires group health plans’ business associates and their subcontractors to independently comply with certain privacy and security standards. Health plans must update their business associate contracts.
- Data breach notice and reporting states that when PHI* is improperly disclosed, there is an affirmative duty to notify affected individuals of such a breach unless the covered entity or business associate can demonstrate a low probability that the PHI was compromised from job to job.
- GINA — final rule extends protections to genetic information, including a ban on using such data for underwriting purposes; applies to all plans subject to HIPAA privacy rules, except long-term care plans.
- HHS is allowed to move directly to a civil monetary penalty without exhausting informal resolution efforts, especially in cases of willful neglect.
What are advantages of the Affordable Care Act for Low income people?
Low income people can get a subsidy at the state exchanges for free or no cost health insurance.
What is the penalty under the Affordable care act for an employer of 30 or more employees who does not offer health insurance
2,000 a year penalty per full time employee not offered health insurance
What metrics are considered when determining is employer plans are affordable under the ACA?
Employer plans are considered affordable if the cost is less than 9.5% of household income and covers more than 60% of plan costs
What is the tax penalty for a person who does not acquire a health plan under the ACA?
$695/year
Under ACA what must be provided for free under a plan?
Free preventative procedures — This can include annual men’s health check, immunizations, cancer screenings, prenatal care, blood pressure tests, cholesterol tests, and mammograms for example
How does the ACA Define full time employees?
For ACA, any person who regularly works more than 30 hours per week is considered
“full-time”.
how is the Patient-Centered Outcomes Research Institute (PCORI) funded? Established under the ACA…
Funded via a per covered life on health insurers and sponsors of self-insured group health plans (PCORI fee)
* Insured coverage — The insurer is responsible for calculating and paying the fee
* Self-insured plans — The plan sponsor is responsible for calculating and paying the fee
Under the affordable care act what does the term “Pay or Play” mean?
If a company has more than 50 full-time employees, they must offer medical insurance or pay a fine.
What is the Annual Health Insurer Fee under the Affordable Care Act ACA, and what is it’s purpose
- An annual fee or “tax” on insured individual and group health insurance
- Fee is levied based on market share and is intended to generate substantial revenue to help pay for the Affordable Care Act.
Under the ACA employees can not be limited on health plan usage - By lifetime, annual limits, or rescinded for use - when are employees eligible to join the plan after hire…
6 months after hire
Under the ACA how should premium cost be determined across employee groups?
Cost of premium should be consistent across employees (exception Tabaco or family coverage options)
Regarding Health care excise tax (Cadillac tax) under the ACA
How is a High Cost Plan defined?
What percentage of excessive premiums is the tax imposed?
What is the purpose of the Tax?
annual premiums costing more than $10,200 for an individual or $27,500 for a family, including worker and employer contributions to flexible spending or
health savings accounts.
The tax is levied on insurers at 40% on the amount of premiums above the thresholds.
* Example: Individual premium is $11,000 in 2019, the plan will owe 0.4 × ($11,000 — $10,200) = $320
The goal is twofold; to generate revenue to help pay for covering the uninsured; and to make the most expensive plans, which some argue encourage overuse of medical care, less attractive. Auto manufacturers were prime examples of this, hence the name.
Regarding the Health Care Excise Tax - how are taxes applied to Insurers vs. companies that are self insured
Tax is imposed on insurers. Companies that self-insure will be required to pay the excise tax themselves.
What are the 2 categories of wellness programs under the Affordable Care Act?
Participatory Wellness Programs
Health-Contingent Wellness Programs
Considering ACA Wellness Programs provide examples of Participatory Programs and Health-contingent Programs
Participatory
1. Reimburse for the cost of membership at a fitness center
2. Provide a reward to employees for attending a monthly, no-cost health
education seminar
3. Provide a reward to employees who complete a health risk assessment without
requiring them to take further action
Health-contingent
1. Do not use, or decrease their use of, tobacco
2. Achieve a specified cholesterol level or weight as well as to those who fail to meet
that biometric target but take certain additional required actions
Under the Affordable Care Act Wellness Programs - what are the five program requirements?
1 Annual Qualification
2 Amount of Reward/Penalty
3 Reasonable Alternative
4 Reasonable design /different alternative
5 Notice of different alternative
- Annual qualification — Must give plan participant the opportunity to qualify at least once per year
- Amount of reward/penalty — No greater than 30% of the total cost of employee-only coverage (including both employee and employer contributions) and 50% in the case of a program designed to reduce or prevent tobacco use
* Example: If employer contribution is $60, employee contribution is $40, total cost is $100. Reward limit = $30, up to $50 for tobacco use - Reasonable alternative — Must be available to all similarly situated individuals and provide reasonable alternative to those who can show it is unreasonably difficult due to medical condition, or medically inadvisable, to satisfy standard
■ Examples:
* If alternative is an education program, plan must make the program available. May not require individual to find own program unassisted or pay for program.
* If alternative is a diet program, must pay for membership or fees; not required to pay for food
* If alternative is to follow recommendations of doctor engaged by plan, may need to
accommodate personal physician
recommendations - Reasonable design/different alternative — If standard is based on measurement, screening,
or test relating to a health factor, such as HRA or biometric screening, must make available a
different means of qualifying for reward
■ Example: Plan pays $50 reward if employee meets target BMI. Alice has a favorable BMI and gets
the reward. Bonnie has a medical condition that makes her medically incapable of meeting the target BMI. Christy has no medical condition; she just does not meet the target BMI. Both Bonnie and Christy must be given an alternative for qualifying for the reward. - Notice of different alternative — Safe harbor language for providing a notice of a different reasonable alternative is provided through government regulations.
- What is the purpose of COBRA?
A. Establish accountability and create uniform controls for management and transfer of sensitive information
B. Require most employers to extend health plan coverage in the event of loss of coverage
C. Require employers to limit the pre-existing condition limitation to 12 months from the enrollment date
D. Establish standard formats and code sets for electronic claims and related transactions
B. Require most employers to extend health plan coverage in the event of loss of coverage
What is the purpose of the Health Insurance Portability and Accountability Act (HIPAA)?
A. Allow employees to move their existing insurance plan to a new employer
B. Require most employers to extend health coverage in the event of loss of coverage
C. Protect individuals who move from one job to another, leave their jobs without taking another, have pre-existing medical
conditions, or are self-employed
C. Protect individuals who move from one job to another, leave their jobs without taking another, have pre-existing medical
conditions, or are self-employed
- Which of the following is a provision of the Newborns’ and Mothers’ Health Protection Act of 1996?
A. A Caesarian delivery requires a minimum stay of 96 hours following delivery for both the mother and the newborn child.
B. Employer plans may offer incentives to encourage less than the required minimum stay for the mother and the newborn child
after delivery.
C. A normal delivery requires a minimum stay of 36 hours for both the mother and the newborn child.
. A Caesarian delivery requires a minimum stay of 96 hours following delivery for both the mother and the newborn child.
What is the purpose of the Administrative Simplification Provisions (Final Privacy Rules) of 2001?
A. Provide protection to patients who choose to have breast reconstruction in connection with a mastectomy
B. Provide procedures and technologies to ensure the confidentiality and security of identifiable health information
C. Prohibit group health plans from establishing eligibility rules that would discriminate based on certain health factors
B. Provide procedures and technologies to ensure the confidentiality and security of identifiable health information
Under the Affordable Care Act, which of the following fees must be paid by employer-sponsored plans as part of the provision to reduce the uncertainty of insurance risk in the individual market by partially offsetting risk for high-cost enrollees?
A. Patient-Centered Outcomes Research Institute (PCORI) fee
B. Annual health insurer fee
C. Reinsurance fee
D. Cadillac tax
C. Reinsurance fee
