CHRISTINA M. TCHENDirector of the White House Office of Public Engagement

Tchen was previously a partner in corporate litigation at Skadden, Arps, Slate, Meagher & Flom LLP. In that capacity, Tchen represented public agencies in

state and federal class actions, including the Illinois Department of Children and Family Services, the Illinois Department of Public Aid, and

the Chicago Housing Authority. Tchen is the recipient of many awards, including the Leadership Award from the Women’s Bar Association of

Illinois (1999); "Women of Achievement" award from the Anti-Defamation League (1996); and Chicago Lawyer "Person of the Year" (1994).

THE OPEN FRONT DOOR TO THE WHITE HOUSE

“Our commitment to openness means more than simply informing the American people about how decisions are made. It means recognizing that government does not have all the answers

and that public officials need to draw on what citizens know.” – President Obama, 1/21/09

OPENNESS AND TRANSPARENCY: The Office of Public Engagement is the embodiment of the President’s goal of making government inclusive, transparent, accountable and responsible.

OPPORTUNITIES FOR DIALOGUE: We create and coordinate opportunities for direct dialogue between the Obama Administration and the American public, while bringing new voices to the table and ensuring that everyone can participate and inform the work of the President. The Office of Public Engagement helps open the two-way dialogue, ensuring that the issues impacting our nation’s proud and diverse communities have a receptive team dedicated to making their voices heard within the Administration, and even more importantly helping their concerns be translated into action by the appropriate bodies of the Federal Government.

ACCESS AND COORDINATION: As part of making the Government accessible to its citizens, the Office of Public Engagement acts as a point of coordination for public speaking engagement for the Administration and the various departments of the Executive Offices of the President. The Office of Public Engagement removes obstacles and barriers for engagement and works to improve public awareness and involvement in the work of the Administration.

The Affordable Care Act was signed into law on March 23, 2010.

On September 23, the Patients Bill of Rights take effect for new plans Prohibits insurance plans from putting lifetime caps on benefits

Prohibits insurance plans from cancelling or rescinding, your coverage

Young adults can remain on their parents plan until their 26th

birthday

Children under 19 will not be able to be denied coverage for pre-existing conditions

Recommended preventive services will be included with deductibles, co-payments or co-insurance

Coverage cannot be denied without a chance to appeal to an independent third party

The Affordable Care Act includes other benefits:

Begins to fill the donut hole coverage gap in Medicare Part D for seniors

Gives Tax credits to make it easier for small businesses to provide coverage to their workers

Creates the Early Retiree Reinsurance Program

Reduces the deficit by more than $100 billion over the next ten years.

For more information, please visit www.healthcare.gov

"It is a priority of my administration to make sure that the doors of this White House are open to all of our citizens, and that our government is open

and honest and that the American people are heard."

–President Barack Obama

Email: Public@who.eop.gov

6

Implementation of the

Affordable Care Act

Steven Larsen

Director, Office of Oversight

Office of Consumer Information and

Insurance Oversight

7

The Office of Consumer Information

and Insurance Oversight (OCIIO) was

created within the Department of Health

and Human Services to implement the

provisions of the Affordable Care Act

8

The Office of Oversight within OCIIO Is Tasked to:

Develop regulatory and sub-regulatory guidance for the

provisions of the Affordable Care Act (ACA)

Work with State Insurance Commissioners in the

implementation and enforcement of the ACA

Enforce the ACA in States that are not substantially

enforcing the provisions

9

ACA Timeline

MARCH 23, 2010

• Section 1251- Grandfathered Plans

SEPTEMBER 23, 2010

• Section 2714- Extension of Coverage to Age 26

• Section 2704- Preexisting Conditions Exclusions for Children 19 and under

• Section 2711- Prohibition on Lifetime or Annual Limits

• Section 2712- Prohibiting Rescissions

• Section 2713- Preventive Services

• Section 2719- Internal Claims and Appeals

• Section 2719A- Patient Protections

JANUARY 1, 2014

• Section 2704- Preexisting Conditions Exclusions (for adults over 19)

10

Grandfathered Health Plans

Section 1251 of the ACA

Interim Final Regulations issued on June 17, 2010

Grandfathered Status is intended to allow people to keep

existing coverage, while providing group health plans and

issuers flexibility to make some changes and retain

grandfathered status

Generally, group health plans and individual coverage that

were in existence on March 23, 2010 are grandfathered health

plans

Grandfathered health plans are exempt from many, but not all,

provisions of the ACA

11

Extension of Dependent Coverage to Age 26

Section 2714 of the ACA

Interim Final Regulations published on May 13, 2010

For plan or policy years beginning on or after September 23, 2010, a group health plan or issuer that makes dependent coverage available, must make such coverage available for dependent children until age 26

If a child is eligible to enroll in an eligible employer-sponsored health plan other than their parent’s group health plan, then grandfathered group health plans do not have to extend coverage to age 26 for these children, until plan years beginning on or after January 1, 2014

Applies to all grandfathered plans

12

Prohibiting Preexisting Condition Exclusions

Section 2704 of the ACA

Interim Final Regulations published on June 28, 2010

Prohibits denial of coverage or benefits due to a

preexisting condition exclusion

Effective for plan or policy years beginning on or after

January 1, 2014, except that for children under 19, it is

effective for plan or policy years beginning on or after

September 23, 2010

Does not apply to grandfathered individual plans but does

apply to grandfathered group health plans

13

Prohibition on Lifetime and Annual Limits

Section 2711 of the ACA

Interim Final Regulations published on June 28, 2010

Lifetime limits:

on essential benefits are prohibited in both group and individual policies for plan or policy years beginning on or after September 23, 2010

The prohibition on lifetime limits applies to all grandfathered plans

Annual limits

Restricted annual limit allowed though 2014*

A temporary waiver process has been established for “limited benefit” policies

* The provisions on annual limits do not apply to grandfathered individual coverage

14

Annual Limit Minimums

For a Plan or Policy

Year Beginning on or

After:

But Before Restricted Annual

Limit on Essential

Benefits

Sept. 23, 2010 Sept. 23, 2011 $750,000

Sept. 23, 2011 Sept. 23, 2012 $1.25 million

Sept. 23, 2012 Jan. 1, 2014 $2 million

AFTER JAN. 1, 2014 Annual limits

prohibited

• The provisions on annual limits do not apply to grandfathered individual coverage but do

apply to grandfathered group health plans

For plan or policy years prior to January 1, 2014,* a plan may

establish restricted annual limits on essential benefits that are no less

than:

15

Prohibiting Rescissions

Section 2712 of the ACA

Interim Final Regulations published on June 28, 2010

Sets a new federal standard for rescissions: Plan and

issuers cannot rescind coverage unless an individual was

involved in fraud or made an intentional

misrepresentation of a material fact

Applies to all grandfathered plans

16

Patient Protections

Section 2719A of the ACA

Interim final rules published on June 28, 2010

Does not apply to grandfathered health plans

Includes provisions regarding designation of a primary

care provider, prohibiting preauthorization for OB/GYN

care, and coverage for emergency services

17

Patient Protections (continued)

Emergency Services

A group health plan or issuer that provides benefits with respect to services in an emergency department of a hospital, must cover emergency services:

Without the need for preauthorization (even if provided out-of-network);

Without regard to whether the provider of the emergency services is a participating network provider;

Without regard to any other terms or conditions of the coverage, other than the exclusion of or coordination of benefits; an affiliation or waiting period; or applicable cost-sharing; and

Without charging different cost-sharing amounts for emergency services provided in-network versus out-of-network (although provider balance billing is allowed in out-of-network cases)

18

Preventive Services

Section 2713 of the ACA

Interim Final Regulations published on July 19, 2010

Group health plans and issuers must provide benefits for

and must not impose cost-sharing requirements for certain

recommended preventive services

Services include: blood pressure, diabetes, and

cholesterol tests; cancer screenings; routine vaccines; and

well baby visits

Does not apply to grandfathered health plans

19

Internal Claims and Appeals and External Review

Process

Section 2719 of the ACA

Interim Final Regulations published on July 23, 2010

Requires group health plans and issuers to have both an internal

and external appeals process that meets specific standards

There is a transition period through July 1, 2011 for plans and

issuers subject to an existing State external review process

For plans and issuers not subject to an existing State external

review process (including self- insured plans), there will be a

Federal external review process

Does not apply to grandfathered health plans

CORNELL UNIVERSITY

HEALTH CARE FOR FACULTY AND STAFF

PLANNING CONSIDERATIONS FOR 2011

BACKGROUND

Cornell University offers five active medical plans for about 6,500 employees and early retirees

Two traditional PPOs and an indemnity plan Introduced a High Deductible Health Plan with a Health

Savings Account in 2008 Introduced the Cornell Program for Healthy Living in 2008,

provides patient-centered wellness benefits and incentives for maintaining a healthy lifestyle

Plans are self-insured. Medical administrators: Aetna HealthNow (Blue Cross Blue Shield of Western NY) Rx carved-out to Medco

Expected 2010 medical budget is over $60 million

RECENT HEALTH CARE REFORM ACTIONS

Submitted application for reimbursement through the Early Retiree Reinsurance Program Will use funds to reduce plan costs, which in turn will reduce

the cost of health coverage to Cornell and its retirees

Extending eligibility to children up to age 26 effective September 1, 2010 Includes medical, dental and flexible spending accounts

Expect cost to be minimal-- our least expensive age cohort.

Allowing employees to enroll child or children who have coverage through another employer-based plan too difficult to enforce the restriction

Cornell University

22

WHAT HEALTH PLANS MUST DO:

EFFECTIVE JANUARY 1, 2011

Comply with elimination of annual or lifetime maximums on essential health benefits Cornell does not have annual or lifetime maximums on essential

services Reviewing plan limitations on some treatments that may be considered

non-essential: infertility treatment, home health care, hospice and others

Eliminate rescissions– not applicable for Cornell

Eliminate pre-existing condition exclusions for under age 19 – not applicable

Provide required notices to plan participants during open enrollment period

Cornell University

23

GRANDFATHERED STATUS

Cornell will retain its grandfathered status for all of the medical plans in 2011

Continue current plans, employer support and vendor relationships

Considering voluntary compliance with free preventive care coverage for the Cornell Program for Healthy Living Already provide most preventive care items in this program

May also voluntarily comply with new grievance and appeals procedures

Mostly compliant with patient protections – awaiting further guidance to confirm

Will provide required participants’ notification that Cornell has decided to retain grandfathered status

Cornell University

24

HEALTH COVERAGE FOR CORNELL RETIREES

Pre-65 retirees participate in the same program as active employees We will extend all of the health care reform provisions to this

group as with actives

Offer two health plans to post-65 (Medicare-eligible) retirees We believe that the plans do not have to comply with health care

reform law because of the retiree-only exemption

Will extend age 26 dependent eligibility to this group for continuity purposes

Plans largely compliant with the other required health care reform changes

Will not offer free preventive coverage to this group

Cornell University

25

CHECKLIST

Implement: (by January 1, 2011 for calendar year plans) Age 26 dependent eligibility Eliminate lifetime dollar maximum on essential services Eliminate annual dollar maximum on essential services Communication and notification requirements

Decide on grandfathered status If grandfathered – provide notice to participants If not grandfathered – offer free preventive care and adopt patient protections and grievance

and appeal procedures

If insured Understand implications of new minimum loss ratio requirements New rules on nondiscrimination for insured plans that are not grandfathered

Retirees – decide whether plan meets “retiree-only” definition May want to extend certain provisions to retirees (e.g. age 26 dependent eligibility)

Change FSA rules to eliminate over-the-counter (OTC) products

Check-out the Health Care Toolkit at the CUPA-HR Knowledge Center for more resources on ACA compliance. http://www.cupahr.org/knowledgecenter/kc_template.aspx?id=6034

Cornell University

26

PLAN FOR THE FUTURE

2012: measure cost of recent changes 2013: limit FSA contributions to $2,500 2014: “play or pay” mandate

Cornell will likely continue offering coverage to its employees Confirm that medical plan benefit designs meet minimum actuarial

standard Review employee contribution support to assure that plans meet

affordability threshold

2018: excise tax on high cost plans Project current costs to determine effect of tax Review alternatives to reduce cost

Improved employee health Reductions in benefit value

Continue to educate senior administration and other key stakeholders (e.g., faculty)

Cornell University

27

28

QUESTIONS?

CUPA-HR would like to thank today’s webinar sponsor.

VALIC has made a significant commitment

to support our members’ needs for

just-in-time education and training.