Health Care Reform and Concordia Plan Services 2012

Complex set of regulations and requirements Law signed March 23, 2010; upheld by Supreme Court June 28, 2012 –Some plan changes implemented January 1, 2011 –Ongoing communication about various features of law Legislative requirements continue to evolve as effective dates for components draw near The Patient Protection and Affordable Care Act 2

More Change is Coming… Majority of requirements to be implemented by 1/1/2014 Some elements of the law have been modified and others delayed Timeline could be further extended or the requirements could be modified due to: –2012 elections –Lobbying efforts –Legislative and Administrative adjustments 3

Many regulations, guidelines, and rulings have been published to help organizations and insurance companies with implementation of requirements Health Care Reform Legislation 4

CPS is Not Standing Along the Sidelines We have been—and will continue to be—actively researching, interpreting, and preparing to implement the applicable segments of the law as the effective dates require. 5

It’s a joint effort CPS is working with others to ensure we: Understand requirements and implement as appropriate Remain flexible to account for revisions to the law Make appropriate decisions to meet the needs of our customers 6

We have Strategic Partners We’re keeping a pulse on what is happening in Washington, D.C., and in other church bodies that have denominational plans Church Alliance Church Benefits Association 7

We have Strategic Vendor Relationships We’re working with others in the healthcare industry Blue Cross Blue Shield of Minnesota Cigna Express Scripts 8

We Have Access to Experts in Healthcare and Employee Benefits OptumInsight Towers Watson Buck Consultants Gallagher Benefit Services 9

Ensure the Concordia Health Plan complies with the law Share information and provide education to help improve awareness Help LCMS employers understand their responsibilities Help our members understand their options, benefits, and protections Our Pledge to Our Customers 10

Decision to “Grandfather” health plan: −Exempts the CHP from potentially onerous regulatory requirements −Allows CHP to exclude coverage of contraceptive abortifacients Concordia Health Plan Claimed as Grandfathered Status 11

Compliant with all applicable provisions −Eliminated Pre-existing Condition Limitation for any person under age 19 −Eliminated applicable Annual and Lifetime Maximums −Updated enrollment provisions to allow for coverage of adult children up to age 26 Health Care Reform – CPS Actions to Date 12

Small Business Health Care Tax Credit −Small employers in church plans may be eligible −Estimated 2,000 eligible LCMS ministries −Estimated $11,000,000 potential credit annually synodwide −Reports of ministries receiving over $23,000 for one year alone! −Available for tax years 2010 – 2013 −Resources to help understand and calculate the credit are available on our website ( Health Care Reform – CPS Actions to Date (cont.) 13

Early Retiree Reinsurance Program −$1,600,000 applied for and received! −Funds have helped control increases to the CHP contribution rates Health Care Reform – CPS Actions to Date (cont.) 14

Health Care Reform – CPS Actions to Date (cont.) Transitioned to Medicare Part D Prescription Drug Plan for Medicare members −Contract with Express Scripts −Administrative change invisible to member −Allows access to additional discounts provided by large pharmaceutical companies −Result: 8% reduction in Medicare supplemental coverage rates for

4 th Quarter of 2012 New Summary of Benefits and Coverage (SBC) –Easy-to-understand wording for consistent display of plan benefits and member out-of-pocket costs –Helpful tool to evaluate choice of plans –Guidelines and restrictions apply to ensure consistency across carriers New Uniform Glossary of Terms Applies for first open enrollment period beginning on or after 9/23/12 16

What’s New for 2013 New contribution limit of $2,500 on Medical Flexible Spending Accounts New graduated Medicare tax rates (introducing higher rate for highly compensated) Information about health care exchanges and subsidies for coverage scheduled to start January 1, 2014 (notice to workers by 3/1/13) 17

18 Glimpse of the Future...

19 Issues for 2014 and Beyond 2014: –States incented to operate health care “Exchange” or federal government will operate exchange applies for individuals and small employers (<100); states can limit to employers <50 –Coverage mandate on individuals: Have health care or pay tax Individual exchange subsidies – Premium Tax Credit (“PTC”) Individual market reform – no medical underwriting; no pre- existing conditions exclusions; community rating

20 Issues for 2014 and Beyond (cont.) 2014 cont.: –“Play or pay” penalty on large employers with 50 or more employees –No annual dollar limit on essential benefits (applies to grandfathered plans) –No pre-existing condition limitations allowed (applies to grandfathered plans) –Report value of health coverage on W-2 beginning with 2013 tax year

21 Issues for 2014 and Beyond (cont.) 2015 – Auto-enrollment mandate for large employers with more than 200 employees 2017 – Exchanges for large employers (100+) 2018 – Cadillac Plan tax

New Healthcare Environment There’s a lot of change on the horizon We are here to help you through the changes that involve your health coverage 22

23 We Are Here to Help CPS is your resource, assisting both the employers and workers of the LCMS to make appropriate decisions in the changing healthcare environment – decisions that support the worker, the employer, and the related ministry

How to Learn More Call us toll free, Visit our website, –News section –Health Care Reform section Watch your mail for our communications –Benefits Bulletin newsletters –Concordia Plans UPDATE newsletters –Other special mailings 24

25 Questions?

Thank you for participating! 26