Nov web presentation

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The Road Ahead
The Future of Employer Sponsored
Healthcare

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The Road Ahead

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Congressional Calendar for Remainder of 2016
…subject to change
Source: National Journal Research, 2016
House days left in session:
16
Senate days left in session:
20

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Congressional Activity Has Declined…
0
100
200
300
400
500
600
700
800
900
1000
1100
80th Congress:
Harry Truman’s “Do
Nothing Congress”
84th Congress: Passed
more laws than any other
post-WWII Congress with
unified Democratic
control
104th Congress: Reached a
low (at the time) due to
partisan division following the
1995 government shutdown
112th Congress: Least
productive Congress on
record…so far
114th Congress:
Has enacted 228
laws as of October
2016 (195 were
ceremonial)
Source: Library of Congress, “Resume of Congressional Activity;” US Senate, 2013; GovTrack.us, “Statistics and Historical Comparison

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Health Care Issues in the Lame Duck Congress
 Appropriations
 Congress passed a short-term continuing resolution (CR) through Dec. 9
 Of 12 annual appropriations bills, the Senate has passed 3 and the House has passed 5
 No appropriations bills have been completed
 Congress has 14 days to complete appropriations work for FY 2017
 Mental Health Reform
 The Mental Health Reform Act of 2015 has broad bipartisan support, but action during the lame
duck is unlikely

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Health Care Issues in the Lame Duck Congress (cont’d)
 Prescription Drug Prices
 Prescription drug pricing is hot politically, but substantial action most likely slides to 2017
 Affordable Care Act Insurance Issues
 Decreasing participation by insurers in Exchanges, rising premiums have raised concerns
 Most likely outcome could be a hearing or two during the lame duck but no real action

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Key Issues for 2017
 Repeal and Replace Affordable Care Act
 Overhaul promised by incoming President-Elect
 But interest in keeping pre-existing condition protections and 26 and under policy
 Senate Majority Leader McConnell predicts swift action
 “I would be shocked if we didn’t move forward and keep our commitment to the American people”
 Executive Orders possible
 Likely scenario: House passes full repeal bill with broad instructions and direction about
replacement policies; Senate takes up with reconciliation protections later in the year.

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Repeal Using Reconciliation
 H.R. 3762, vetoed by President Obama in 2016 is a possible
model.
 Repealed the individual and employer mandates, terminated most ACA
taxes and fees, and repealed the Medicaid expansion, among other
things.
 After the House first approved H.R. 3762, the Senate parliamentarian
ruled that the bill’s provisions to repeal the individual and employer
mandates were extraneous (and so could not be included under the Byrd
rule), so the Senate version kept the mandates but eliminated the
penalties for noncompliance.
 Kept many other ACA provisions, including the major market reforms.

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ACA Replace Concepts
 Market-oriented approach, with emphasis on consumer driven model
 Specific proposals include-
 Trump plan https://www.donaldjtrump.com/positions/healthcare-reform
 House Republican blue print on health care reform
http://abetterway.speaker.gov/_assets/pdf/ABetterWay-HealthCare-
PolicyPaper.pdf
 The bi-cameral CARE Act, co-sponsored by House Energy and Commerce
Committee Chrmn. Fred Upton (R-MI) (term limited in 2017), Senate Finance
Committee Chrmn. Orrin Hatch (R-UT), and Sen. Richard Burr (R-NC),
http://www.finance.senate.gov/chairmans-news/burr-hatch-upton-unveil-
obamacare-replacement-plan

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 Expand Health Savings Accounts (HSAs)
 Foster defined contribution approach to employer health plans
 Allow small employers to form association health plans
 Provide refundable tax credits for the purchase of health insurance
 Credit amount would be a specified dollar limit; if price of insurance is less than
the credit, the excess could go into an HSA
 A deduction for the cost of health insurance is also possible
 Repeal the Cadillac plan tax, and instead -
 Impose a cap on the amount of health coverage employees can exclude from
income

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 Significantly reduce federal regulation of health insurance. Some federal level
requirements may apply, such as –
 Required coverage of dependent children until age 26
 Prohibition on exclusions for pre-existing conditions
 Prohibition on rescissions
 Prohibition on lifetime limits on benefits (annual limits may be permitted)
 Some limitation on age-rating, such as a 5:1 ratio (ACA is 3:1). States could impose a
different limit.
 Persons with continuous health coverage could have protection from individual
underwriting due to health status
 Allow health insurance to be sold across state lines
 Foster State high risk pools for individuals who find themselves priced out of
coverage
 Transition Issues

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Congressional Review Act
 Allows Congress to “disapprove” final regulations issued by prior
Administration published 60 legislative days before adjournment.
 Requires majority vote, filibuster-proof, and does not need to go
through normal committee process; President’s role is signing the
“resolution of disapproval.”
 Invalidates entire rule, not a single or select provisions of it.
 The Congressional Research Service predicted earlier this year
that any regulation issued after May 16, 2016 could be subject to
resolutions of disapproval in 2017.

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Until then . . . . . .

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Issues Affecting Today’s Landscape
 Compliance/administrative issues—57% of employers surveyed by
IFEBP said administration issues were the biggest ACA challenges
 Employer shared responsibility—Is the excise tax really an enemy?
 ACA Reporting—huh? What? But I thought that . . . . . .?
 Federal agency audits-shades of Orwell’s 1984?
 OCR audits/HIPAA privacy/security
 DOL health plan compliance audits
 Constant stream of regulations/guidance
 External Costs
 PCORI
 Transitional Reinsurance
 Litigation
 Increasing trends/threat of litigation

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Top 10 Compliance Issues Today
1. Mental Health Parity and Addiction Equity Act Compliance
2. Specialty Drugs
3. Wellness program challenges
4. Non-network plans
5. Paying/reimbursing an employee’s premiums for major medical
insurance purchased on the individual market

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Top 10 Compliance Issues Today
6. Employer shared responsibility compliance strategy
7. ACA reporting
8. Gender identity disorder coverage
9. Marketplace notices
10. HSA fiduciary rule

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New Plan Designs Presented to Employers
 Non-network plans
 Individual market premium
payment/reimbursement
 Opt out arrangements for high risk individuals
 “double dip” wellness arrangements
 Private (group) exchanges

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Nov web presentation