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Scott Austin David Mustone Leslie Okinaka Hunton & Williams LLP Health Care Reform – Employer Update 2010
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2 L. Scott Austin, Partner Tax & Erisa Dallas/Atlanta Offices (214) 979-3002 saustin@hunton.com David Mustone, Partner Tax & Erisa McLean Office (703) 714-7509 dmustone@hunton.com Leslie A. Okinaka, Partner Tax & Erisa New York Office (212) 309-1276 lokinaka@hunton.com Presenters
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3 Hunton & Williams’ Health Care Reform Initiative The Firm’s Healthcare Reform Group – The Group’s website -- www.Huntonhealthcarereform.com -- is now fully operationalwww.Huntonhealthcarereform.com Contains – Final consolidated version of health care reform legislation All government guidance issued to date, and H&W client alerts and other client updates
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4 Overview/Introduction Initial Webinar Focus of this Webinar – Significant developments since last webinar Other Issues/Items of interest Opportunity for you to ask questions about matters/issues of concern to you
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5 Compliance Items Compliance/Enforcement -- Government’s announced approach on initial compliance Exempt Programs – Additional Thoughts Retiree plans – Restructure into separate plan (if needed) to take advantage of exemption Separate dental/vision programs Upcoming Notice Requirements – Reminder Availability of adult child coverage, elimination of lifetime limits, maintenance of grandfathered status etc. Chart on notice requirements
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6 Immediate Reforms/Changes -- Recent Developments Adult Child Coverage FAQ guidance on covered “children” -- a “safe harbor” Generally, natural children, stepchildren, adopted children (including children place for adoption), and foster children Requirement also applies to minors Adult child health care costs can be reimbursed under a flexible spending account (even though FSA exempt)
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7 Immediate Reforms/Changes -- Recent Developments (Cont’d) Lifetime/Annual Dollar Limits -- Limited to “essential” health benefits What are essential benefits – Scope/application Ambulatory patient services, emergency services, hospitalization, maternity/newborn care, mental health & substance use disorder services, lab services, prescription drugs, preventive/wellness/chronic disease management & rehab/habilitative services & devices Pending guidance, reasonable good faith interpretation
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8 Immediate Reforms/Changes -- Recent Developments (cont’d) Coverage rescissions -- Recent FAQ guidance on administrative processing & other delays Reimbursement of OTC medicines under healthcare FSAs, HSAs and HRAs – Recent government guidance New W-2 reporting of cost of employer-provided health coverage -- Postponed for 2011 State tax issues
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9 Grandfathered Status Maintaining Grandfathered status -- FAQ guidance/clarifications Impact of plan changes on continued grandfathered status Coverage tier, prescription drug formulary & network changes Roll of wellness programs Impact of “anti-abuse” rule – eliminating a plan option Change in insurance carriers – new gov’t position? Relief for insured/multiemployer plans Application of Notice Requirement
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10 Immediate Reforms/Changes – Recent Developments for Non- Grandfathered Plans Patient protections – Expanded claims review process Must have an internal claims review process that complies with ERISA claims process rules Compliance with additional standards postponed in some respects until 7/1/2011 (DOL Tech Rel 2010-02) Must have an external claims review process For insured (and nonERISA plans) – must comply with applicable state external review rules (that meet certain minimum standards for PYs beg. on/after 7/2011) All other plans (including self-insured ERISA plans) – must follow federal standards “Safe harbor” requirements in DOL Tech Rel 2010-01
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11 Immediate Reforms/Changes – Recent Developments for Non- Grandfathered Plans (cont’d) Patient Protections – No-cost preventive healthcare Limits on usage etc.- reasonable medical management techniques okay New HHS Reporting Requirements Effective date? New nondiscrimination rules for insured plans Generally prohibits providing coverage/benefits for only (or are skewed in favor of) high-paid employees Outstanding issues
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12 Retiree Reinsurance Program – Recent Developments Early retiree reinsurance program – Recent Developments Program now open for reimbursement requests Recent guidance on reimbursable expenses and submission of eligible retiree lists/cost data New participant notice requirement Use of reinsurance proceeds
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13 L. Scott Austin, Partner Tax & Erisa Dallas/Atlanta Offices (214) 979-3002 saustin@hunton.com David Mustone, Partner Tax & Erisa McLean Office (703) 714-7509 dmustone@hunton.com Leslie A. Okinaka, Partner Tax & Erisa New York Office (212) 309-1276 lokinaka@hunton.com Questions
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