Federal and state agencies are in the process of developing regulations to define how these provisions will work, so it is not entirely clear how some of these provisions will be implemented. One thing is clear however- these dramatic changes will considerably alter our healthcare system.
Humana is committed to supporting our brokers. Learn more in this section about key impacts of reform to your customers including individuals and employers. Access tools to help you guide your customers. For more detailed information on these provisions including what Humana is doing to implement and support our customers, please see our Health Reform Timeline or click on the name of the provision.
Grandfathered Health Plans Show/Hide
Under the healthcare reform law, individuals and employers/employees have the right to keep the coverage they had as of March 23, 2010 and are exempt from many reforms. These individual and group health plans are considered "grandfathered plans". Collectively bargained plans that were ratified before the date of enactment are grandfathered until the date that the last collective bargaining agreement related to coverage ends. Find out more.
Review of Health Plan Premium Increases (federal rate review) Show/Hide
The Department of Health and Human Services (HHS) will establish a process- in conjunction with states - for review of fully insured premium rate increases. The provision also provides grants to states for reviewing premium increases.
Small Business Tax Credits Show/Hide
Provides tax credits to small businesses with fewer than 25 employees and average wages of less than $50,000 for their contributions to buying health insurance for employees. The tax credit starts at up to 35 percent and increases to 50 percent in 2014 when state insurance Exchanges become operational. A full tax credit may be available to small businesses with fewer than 10 employees and average wages of less than $25,000.
Early Retiree Re-insurance Program (ERRP) Show/Hide
Provides re-imbursement to participating employment- based plans for a portion of the costs of health benefits for early retirees.
The federal government will provide $5 billion to fund the program and participating employers or insurers will be reimbursed 80 percent of retiree claims between $15,000 and $90,000. The program will be effective through 2013.
Pre-existing Condition Insurance Plan Show/Hide
Provides a health coverage option if you have been uninsured for at least six months, you have a pre-existing condition or have been denied health coverage because of your health condition, and are a U.S. citizen or are residing here legally. The plan will be operated by the states or the federal government. Enrollment into the federal plan began July 1, 2010; implementation dates for the state-operated plans vary.
Consumer Website Show/Hide
This provision requires the Department of Health and Human Services (HHS) to develop an Internet website for consumers and small businesses to shop for health insurance. To visit the HHS website, please visit healthcare.gov.
Dependent Coverage to Age 26 Show/Hide
Requires plans that offer dependent coverage to make the coverage available until a child reaches the age of 26. Both married and unmarried children qualify for this coverage. This rule applies to all plans in the individual market and to new employer plans. It also applies to existing employer plans unless the adult child has another offer of employer-based coverage (such as through his or her job). Beginning in 2014, children up to age 26 can stay on their parent's employer plan even if they have another offer of coverage through an employer.
Lifetime and Annual limits Prohibited Show/Hide
Individual and group health plans may not impose lifetime limits on the dollar value of essential benefits. Annual limits will be restricted until 2014 and eliminated altogether starting in 2014. Restricted annual limits do not apply to grandfathered individual plans.
Recissions Prohibited Except for Fraud Show/Hide
Prohibits group health plans and health insurance issuers offering group or individual health insurance coverage from rescinding coverage except in the case of fraud or intentional misrepresentation of material fact.
No Pre-existing Conditions for Children Show/Hide
Plans may no longer impose pre-existing condition exclusions for children under 19 (does not apply to grandfathered individual plans).
Preventive Services With No Cost Sharing Show/Hide
New policies must cover the full cost of preventive care as recommended by the U.S. Preventive Services Task Force: recommended immunizations, preventive care for infants, children and adolescents, and additional preventive care for women.
Insurance Plan Appeals Process Show/Hide
New minimum requirements for internal and external claims appeals processes.
Non-discrimination Rules for Employers Show/Hide
Non-discrimination rules that currently apply to self-funded health plans are expanded to group fully insured health plans. Plans cannot base an employee's eligibility or continued eligibility on hourly or annual salary. Under the new rules, plans may be subject to penalties up to $100 per enrollee per day for violating the requirements.
Patient Protections Show/Hide
Requires group health plans and health insurance issuers offering group or individual health insurance coverage to ensure choice of healthcare professionals and greater access to benefits for emergency services. Plans that require or provide for a primary care provider (PCP) designation must allow each member to designate any in-network PCP, or pediatrician for children, accepting new patients. Plans may no longer require an authorization or referral to an Ob-Gyn. Prior authorization or increased cost-sharing for emergency services is also prohibited.
Medical Loss Ratio Show/Hide
Requires health plans to report the proportion of premium dollars spent on clinical services, quality, and other costs and provide rebates to consumers if the share of the premium spent on clinical services and quality is less than 85% for plans in the large group market and 80% for plans in the individual and small group markets. Requirement to report medical loss ratio effective for 2010; requirement to provide rebates effective beginning January 1, 2011.
Rebate Check FAQ's
Large Group MER FAQ
Small Group MER FAQ
OTC Drugs/Spending Accounts Show/Hide
Health savings accounts (HSAs) and flexible spending accounts (FSAs) may no longer be used to purchase over-the-counter drugs unless prescribed by a doctor. Increases tax for nonqualified HSA withdrawals from 10 percent to 20 percent, and for Archer MSA withdrawals from 15 percent to 20 percent.
Grants to Small Business Establishing Wellness Programs Show/Hide
Beginning in 2011, the law authorizes grants totaling $200 million over five years for small companies that start wellness programs focused on efforts such as nutrition, smoking cessation, physical fitness and stress management. The grants will be available to companies with fewer than 100 employees but only new wellness initiatives- those launched after March 23, 2010, the date the heathcare reform bill was enacted -are eligible. Additionally, employers can offer higher incentives to employees who participate in group-sponsored wellness programs beginning in 2014.
Funding for Health Insurance Exchanges Show/Hide
Provides grants to states to begin planning for the establishment of insurance Exchanges and Small Business Health Options Program Exchanges (SHOP), which will facilitate the purchase of insurance by individuals and small employers.
Comparative Effectiveness Fee Show/Hide
Starting in 2012, employers sponsoring group health plans must pay $1 per participant. The fee increases to $2 per participant in 2013, then to an amount indexed to national health expenditures thereafter. The comparative effectiveness fee phases out by 2019. Revenue from this fee will fund research to determine the effectiveness of various forms of medical treatment.
Flexible Spending Account Contributions Show/Hide
Starting in 2013 Contributions to flexible spending accounts for medical expenses are limited to $2,500 a year.
Health Insurance Exchanges Show/Hide
As of 2014, creates state-based insurance Exchanges (on-line market places) and Small Business Health Options Program (SHOP) Exchanges, administered by a governmental agency or non-profit organization. In 2014, individuals and small businesses with up to 100 employees can purchase health insurance on the Exchanges. States can allow large employers to participate beginning in 2017.
Individual Requirement to Have Insurance Show/Hide
As of 2014, requires U.S. citizens and legal residents to have qualifying health insurance. There is a phased-in tax penalty for those without coverage, with certain exemptions.
Pre-existing Conditions Show/Hide
As of 2014, individual and group health plans can no longer impose pre-existing condition exclusions for any person of any age (does not apply to grandfathered individual plans).
No Annual limits on Coverage Show/Hide
As of 2014, nnnual limits on essential health benefits are prohibited (does not apply to grandfathered individual plans).
Guaranteed Availability of Insurance (Guaranteed Issue) Show/Hide
As of 2014, health insurers must accept every individual and employer who applies for coverage.
Rating Restrictions Show/Hide
As of 2014, rating restrictions go into effect for new individual and fully insured small group plans. Insurance companies cannot base premiums on health status, claims experience or gender. Premiums can only vary by:
- Family size
- Tobacco use (no more than 1.5:1)
Merged Markets Show/Hide
As of 2014, states are allowed to merge the individual and small group markets.
As of 2014, HHS will establish procedures, which may include rate schedules for broker commissions, for a state to allow brokers to:
- Enroll individuals in any qualified health plans in the individual or small group market as soon as the plan is offered through an exchange in the state
- Assist individuals in applying for premium tax credits and cost-sharing assistance for plans sold through an exchange
Essential Benefits Show/Hide
As of 2014, an essential benefit plan is created, which mandates the level of benefits that must be included in plans offered on the insurance Exchanges, as well as in the individual and small group markets outside the Exchange. Deductibles are limited to $2,000 for individuals and $4,000 for families in the small group market (self-funded plans and grandfathered plans are exempt from this requirement).
Cost-sharing Limits Show/Hide
As of 2014, cost sharing imposed under health plans is limited to current health savings account amounts (does not apply to grandfathered plans).
Wellness Programs Show/Hide
As of 2014, this provision permits employers to offer employees rewards of up to 30%, potentially increasing to 50%, of the cost of coverage for participating in a wellness program and meeting certain health-related standards.
Temporary Reinsurance Program Show/Hide
As of 2014, a temporary reinsurance program will be established for the individual market and funded by individual and group health plan assessments ($25 billion in 2014-2016) to provide payments to plans in the individual market that cover high-risk individuals.
Summary of Benefits and Coverage (SBC) Show/Hide
As of 9/23/12, group health plans and health insurance issuers must provide a Summary of Benefits and Coverage (SBC) document to applicants, policyholders or certificate holders, and enrollees. The SBC document must meet the format and content criteria of the final regulations, in order to provide consumers with a clear, concise summary of their plan benefits and allow them to compare coverage across plans and/or carriers. The SBC must be provided at specified timeframes upon enrollment and at renewal.
For self-insured plans, the employer is responsible to provide the SBC. An employer offering a self-insured plan may make arrangements with the carrier providing administrative services to produce the document.
If a material modification is made to a plan, other than in conjunction with a renewal or reissuance of coverage, and the content of the SBC is changed, notice of the change or an updated SBC document is required to be provided at least 60 days prior to the effective date of such material modification.
Resources and Support
Medicare and Medicaid-related provisions
To learn more, see "How Healthcare Reform changes your Medicare plan in 2010-2011"
Plan D donut hole Beginning in 2011, there is a 50 percent brand discount on drugs in the gap. Members will pay less for generic drugs in the gap as well: 93 percent in 2011, which phases down to 25 percent by 2020. The donut hole is eliminated by 2020.<
Retiree drug subsidy Beginning in 2013, employers may no longer deduct the retiree drug subsidy when offering qualified coverage under Medicare Part D.
Medicaid Beginning in 2014, states are required to provide premium assistance and wrap-around benefits to any Medicaid beneficiary who is offered employer-sponsored coverage, if it is cost-effective to do so.
Medigap The National Association of Insurance Commissioners will create new model plans for benefit packages C and F that include nominal cost sharing. The new models will be available in 2015.