Delta Dental of Arkansas
The ACA market reforms have been in effect since 2010.
Some examples of these reforms include:
• Covering dependents up to age 26
• Allowing plan participants to request an external claims review from an independent review organization
• Modifying your plan design to remove applicable pre-existing condition exclusions and annual and lifetime limitations on essential health benefits
• Establishing a patient out-of-pocket maximum for in-network essential health benefits
• Issuing a Summary of Benefits and Coverage to all plan participants
A more comprehensive list and discussion of market reforms is available at: http://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/index.html
Maybe not. An employer sponsored dental plan is exempt from the ACA market reform requirements as long as the dental plan is an “excepted benefit” under HIPAA.
Under HIPAA, dental benefits generally constitute “excepted benefits” if they are either:
• Offered under a separate policy, certificate, or contract of insurance; or
• Not an “integral part” of the employer-sponsored medical benefit plan.
Because fully-insured plans issued by Delta Dental to employer groups are offered under a separate policy, certificate and contract of insurance from medical plans offered by the employer, Delta Dental’s fully-insured plans are considered “excepted benefits” and are not subject to the ACA’s market reform requirements.
However, for employers with self-funded plans, the analysis is more complex. The following excerpt from a question and answer document provided by the U.S. Departments of Health and Human Services (HHS), Labor and the Treasury on October 8, 2010, provides guidance on whether dental benefits are “integral” to medical benefits:
“For dental (or vision) benefits to be considered not an integral part of the plan (whether insured or self-insured), participants must have a right not to receive the coverage and, if they do elect to receive the coverage, must pay an additional premium. Accordingly, if a plan provides its dental (or vision) benefits pursuant to a separate election by a participant and the plan charges even a nominal employee contribution toward the coverage, the dental (or vision) benefits would constitute excepted benefits, and the market reform provisions would not apply to that coverage.”
The ACA includes four new taxes/fees that may generate numerous questions. They are the Health Insurance Industry Fee, Medical Device Excise Tax, Comparative Effective Research Fee and the Transitional Reinsurance Fee.
Here is a summary of these four new taxes/fees:
Health Insurance Industry Fee (also called the ACA Tax):
This fee assesses the health insurance industry for the money that will ultimately be used to pay the premium subsidies for eligible low-income individuals purchasing coverage on Health Insurance Exchanges. Beginning in 2014, those with incomes between 133 percent (138 percent with a 5 percent disregard) and 400 percent of the Federal Poverty Level (FPL) will be able to access this newly available money. The Health Insurance Industry Fee DOES apply to stand-alone dental. The good news is that it only applies to fully-insured business. This tax will not appear as a separate line item on clients’ monthly invoices.
Medical Device Excise Tax:
This is a 2.3 percent excise tax on the sales price (that’s gross sales, not profit) of taxable medical devices. As a result, some dentists may ask for slightly higher fees on services with lab charges attached (crowns, bridges, dentures, implants, etc.) because the lab may be passing on a portion, or the full amount, of the tax to those dentists using their services. There have been multiple calls to repeal the Medical Device Excise Tax over the past several years. The U.S. Senate, in an amendment to the Senate Democrats’ budget, even voted 79–20 to repeal the Medical Device Excise Tax in March of this year. While that budget didn’t pass, it shows growing bipartisan disapproval of the revenue raising measure. Most dental plan sponsors will not need to worry about this tax.
Comparative Effectiveness Research Fee (CERF), also called the Patient-Centered Outcomes Research Institute (PCORI) Fee:
This fee is intended to fund a research institute that will look into various issues around comparative effectiveness (for example, should patients with heart disease be treated with drugs or have surgery, and when does it make sense to shift from one treatment to another). The annual fee is $1 per covered life for policy years ending between 10/1/12 and 9/30/13. The fee increases to $2 annually for policy years ending between 10/1/13 and 9/30/14. The fee is indexed for policy years between 10/1/14 and 9/30/19. If a group is fully insured, its medical carrier will pay the fee on behalf of the plan. If the medical plan is self-insured, regulation requires the plan itself to perform the calculation and make the payment (that is, the carrier will not make the payment on behalf of the group). This fee does not apply to stand-alone dental as long as the dental plan retains its excepted benefit status.
Transitional Reinsurance Fee:
This fee is intended to help offset the anticipated higher costs health plans will experience when health policies become “guaranteed issue” policies with no pre-existing condition exclusions. Essentially, many uninsured people (some with pre-existing conditions) are about to become insured. To help carriers partially offset this cost and let their rates and claims data catch up with the “new normal,” the ACA establishes a fund which will effectively act like stop-loss reinsurance for medical plans. In 2014, the fee is $5.25 per member (not per subscriber) per month, which is a significant cost. The assessment declines over time (and is slated to disappear after 2016), but will be a noticeable hit in 2014. For fully insured medical plans, the carrier will make the payment. For self-insured medical plans, the carrier most likely will make the payment, but the plan itself is ultimately legally liable for the fee. This fee does not apply to stand-alone dental as long as the dental plan retains its excepted benefit status.